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Stocks end worst week of the year

The sell-off Friday wiped out most of the gains registered a day earlier and fed the perception among many on Wall Street that share prices could be poised for a deeper decline.

April 13, 2012|By Walter Hamilton and E. Scott Reckard, Los Angeles Times

Wells Chief Financial Officer Timothy J. Sloan said three-quarters of the mortgages were refinances, with about 15% of the home loans handled using the Obama administration's Home Affordable Refinance Program.

HARP allows certain borrowers with little equity or even deeply underwater mortgages to refinance into new, lower-interest loans. The borrowers must have diligently made their payments, and only loans owned or guaranteed by government-supported mortgage buyers Fannie Mae and Freddie Mac are eligible.

Sloan said housing appears close to turning the corner, aided by low rates, beaten-down prices and rising rents. Housing markets in places such as San Francisco, where the percentage of distressed sales is low, already are recovering, he said.

"It seems like we're kind of bouncing along the bottom," he said. "We don't feel good enough to declare that we've hit bottom, but overall it's a lot better than last year."

Despite the better than anticipated earnings, shares of Wells and JPMorgan Chase fell along with the rest of the banking sector, as investors turned their attention to the threats posed by global economic worries and costs that continue to rise at the banks.

An index of large bank stocks fell by 3.1%, with Wells down 3.5% and JPMorgan Chase off by 3.6%.

Other giant banks with declining shares included Citigroup Inc., down 3.5%; Goldman Sachs Holdings Inc., off 4.4%; Morgan Stanley, down 5.2%; and Bank of America Corp., down 5.3%.

Smaller regional banks were dragged down as well, with City National Corp. in Los Angeles off by 3.9% and Pasadena's East West Bancorp down 3.8%.

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