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| Mortgage concerns hit US markets | |
| (about 8 hours later) | |
| US share indexes tumbled amid fears that a wobble in the mortgage market may prompt a global credit crunch. | |
| The Dow Jones fell 199.24 points, or 1.5%, to 13,458.62. The S&P shed 1.7% to 1,472.42, and the Nasdaq lost 1.4% to 2,576.48. | |
| European indexes slumped earlier after the European Central Bank said it was pumping money into the banking market. | |
| Analysts said that the markets would remain volatile in the near future. | |
| The declines in the US came despite attempts by President George W Bush to calm market fears. | |
| Shares have swung wildly on fears that the crisis in the sub-prime lending market will cause a credit squeeze. | Shares have swung wildly on fears that the crisis in the sub-prime lending market will cause a credit squeeze. |
| Speaking after a meeting with his top economic advisers, President Bush acknowledged there had been "disquiet" on Wall Street over the housing slump. | |
| But President Bush said he believed the markets were set for a "soft landing". | But President Bush said he believed the markets were set for a "soft landing". |
| Strong basis | Strong basis |
| The recent collapse of American Home Mortgage, the 10th largest lender in the US, intensified concerns that housing woes could drag down the economy as a whole. | The recent collapse of American Home Mortgage, the 10th largest lender in the US, intensified concerns that housing woes could drag down the economy as a whole. |
| The conditions for the marketplace working through these issues are good President George W Bush | The conditions for the marketplace working through these issues are good President George W Bush |
| But despite the recent turmoil, President Bush said he expected the markets to focus increasingly on the underlying health of the global economy and robust US prospects. | But despite the recent turmoil, President Bush said he expected the markets to focus increasingly on the underlying health of the global economy and robust US prospects. |
| "The underpinnings of our economy are strong," he said, adding that second-quarter growth had been strong, while both inflation and unemployment remained low. | "The underpinnings of our economy are strong," he said, adding that second-quarter growth had been strong, while both inflation and unemployment remained low. |
| "So the conditions for the marketplace working through these issues are good. My hope is that the market, if it functions normally, will be able to yield a soft landing." | "So the conditions for the marketplace working through these issues are good. My hope is that the market, if it functions normally, will be able to yield a soft landing." |
| There have been growing calls in Washington for more financial assistance for people unable to meet mortgage payments and tougher laws to protect people from predatory lending. | There have been growing calls in Washington for more financial assistance for people unable to meet mortgage payments and tougher laws to protect people from predatory lending. |
| But existing laws were sufficient to deal with the sub-prime fallout, President Bush argued. | But existing laws were sufficient to deal with the sub-prime fallout, President Bush argued. |
| "I think we ought to crack down on predatory lending," he told the Fox News Channel. | "I think we ought to crack down on predatory lending," he told the Fox News Channel. |
| "I don't think we need new law, we ought to enforce the law on the books. And then I think we ought to let the market work." | "I don't think we need new law, we ought to enforce the law on the books. And then I think we ought to let the market work." |
| Pressed on the same subject, Treasury Secretary Henry Paulson said that markets had been "unsettled" but argued that economic fundamentals remained "very solid". | Pressed on the same subject, Treasury Secretary Henry Paulson said that markets had been "unsettled" but argued that economic fundamentals remained "very solid". |