The stock market continued its rollercoaster ride on Wednesday morning, with stocks opening up after losing 217 points on Tuesday but giving back gains after data on existing home sales showed continued softness and the Cerberus deal for Chrysler undergoing a significant change in financing, which could indicate a drying up of corporate credit in the bond market.
The home building stocks started strong after being oversold on Tuesday, but they sank after the existing-home sales data release, with most sinking further from yesterday's 52-week lows. Centex, which reported a $131 million loss at market close on Tuesday, was up 0.5% at 11 a.m.
The fear that the housing bust is bound to get worse before it gets better took hold on the street on Tuesday, as did the nightmare that the subprime mess may cause a contraction in corporate lending, which could negatively affect the overall economy. The CEO of Countrywide Financial, the nation's biggest mortgage lender, said on Tuesday that late payments had spread into the prime home-equity market and that he did not expect a turnaround in the mortgage market until 2009.