U.S. stocks head for further pullback By TIM PARADIS, AP Business Writer

U.S. stocks head for further pullback By TIM PARADIS, AP Business Writer
28 minutes ago



NEW YORK - U.S. stocks appeared headed for another sharp retrenchment Thursday as fears persisted of widening problems with some mortgages and tighter access to credit.

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A sell-off overseas offered Wall Street little reason to try to stanch the bleeding early Thursday a day after the Dow Jones industrial average closed below the 13,000 mark for the first time since April and the Standard & Poor's 500 index moved into negative territory for the year.

Overseas, Britain's FTSE 100 fell 2.60 percent, Germany's DAX index fell 2.40 percent, and France's CAC-40 fell 2.54 percent. In Asia, Japan's Nikkei stock average fell 2 percent. Hong Kong's Hang Seng Index fell 3.3 percent, while the often-volatile Shanghai Composite Exchange fell 2.1 percent.

Further weighing on investor sentiment, St. Louis Federal Reserve President William Poole told Bloomberg Television after the closing bell Wednesday it wasn't necessary for the central bank to consider lowering short-term interest rates before the regularly scheduled meeting of its rate-setting committee next month.

Investors' confidence took a beating Wednesday as concerns arose about potential trouble at Countrywide Financial Corp., the nation's largest mortgage lender, and KKR Financial Holdings LLC.

Housing concerns will remain in focus Thursday with a report due on July housing starts. Starts are expected to rise by a slightly smaller amount than in June, and data on building permits are expected to show an increase by about the same amount.

Dow futures expiring in September lost 156, or 1.21 percent, to 12,765, while S&P 500 futures dropped 14.40, or 1.04 percent, to 1,399.70. Nasdaq 100 index futures fell 15.75, or 0.84 percent, to 1,862.75.

Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.67 percent from 4.72 percent late Wednesday. Bond prices move opposite yields. The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell $1.42 to $71.91 per barrel in premarket electronic trading on the New York Mercantile Exchange, giving back Wednesday's gains as storms brewing in the Caribbean didn't appear to pose a threat to energy operations.

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