Late Sell-Off Slams Stocks

Once again, worries about subprime loans sparked selling, as lender American Home Mortgage said it is unable to borrow on its credit facitilites

Renewed worries about subprime loans and credit markets drove stocks lower Tuesday, sending major indexes into a tailspin in the final hour of trading after they had been solidly higher for most of the session. The chief culprit was an announcement from troubled subprime lender American Home Mortgage (AHM), indicating it is unable to borrow on its credit facilities or access its warehouse financing agreements to fund its obligations. The news exacerbated concerns over the deterioration in subprime mortgages and a potential spillover of the troubles into the broader credit market.

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