The surprise resignation of a key official at the ""European Central Bank"":http://www.ecb.int/home/html/index.en.html (ECB) sent stocks and shares plunging in markets across Europe and overseas, furthering fears about a global economic slowdown and the potential for sovereign defaults across the European Union. Mortgage banks saw a wipeout in their gains as debt crises emerged again as issues with which markets and investors need to contend.[IMAGE]
The leveling for stocks and shares among U.S. companies and financial institutions came amid other worries, as the government headed up by German chancellor Angela Merkel made waves with news that it would prepare to bailout Greece, according to ""_Bloomberg News_"":http://www.bloomberg.com/news/2011-09-09/stocks-tumble-worldwide-after-obama-speech.html.
Also earlier Friday, ECB chief economist Jurgen Stark, a member of the ECB's executive board and governing council, ""submitted"":http://www.ecb.int/press/pr/date/2011/html/pr110909.en.html his resignation to Jean-Claude Trichet, the head of the bank, well before his term officially expires in May 2014.[COLUMN_BREAK]
In response, the euro reached a 10-year bottom and a six-year low when compared against the dollar, with 10-year Treasury yields plummeting, according to _Reuters_.
""Bank of America"":https://www.bankofamerica.com/ saw its stocks slide into the red by 3.06 percent, tying off its shares at $6.98. ""Citigroup"":http://www.citigroup.com/citi/homepage/ bore witness to a 4.43-percent decline in stocks alongside a close for shares at $26.74. For ""Wells Fargo"":https://www.wellsfargo.com/, stocks dropped by some 3.61 percent, while its shares tied off at $23.52.
Sagging stocks doubled up woes for Bank of America, whose CEO, Brian Moynihan, announced plans for some 40,000 layoffs as the mortgage giant reassesses its capital position in the market and undertakes restructuring efforts, according to ""_Market Watch_"":http://www.marketwatch.com/story/bank-of-america-drops-on-reported-layoffs-plan-2011-09-09.
Meanwhile, euro zone crises continued to stoke fears across the industry.
""There's that nagging thought that we can continue to have a downward spiral in Europe,""_Bloomberg_ quoted James Dunigan, chief investment officer with ""PNC Wealth Management"":https://www.pnc.com/webapp/unsec/ProductsAndService.do?siteArea=/pnccorp/PNC/Home/Personal/Investments+and+Wealth+Management/Wealth+Management+and+Advice, as saying. ""There's concern of a default, of risk in banks, of a liquidity crisis. In the U.S., even as President Obama made an effort to put that plan together, there's not a whole lot of confidence that Congress will pass.""
For an earlier story by _MReport_, Paul Dales, a senior U.S. economist with ""Capital Economics"":http://www.capitaleconomics.com/, laid claim to the notion that a collapsing situation in euro zone markets could spur investors to buy up more Treasury debt, leading to lower mortgage rates.
At the same time, he added, a perilous financial situation in Europe could crimp U.S. financial institutions with investments overseas, applying downward pressure to still-stagnant credit supply for homeowners.