Industry Stocks Hit Hard in Widespread Selloff

Mortgage-related stocks were down sharply Tuesday after the market reacted negatively to the Federal Reserve's decision to cut a key interest rate by 25 basis points rather than 50 basis points (see item below).Mortgage stocks were also spooked by announcements from Washington Mutual and UBS that they would take additional losses related to subprime mortgage assets. Washington Mutual's shares slid $2.60, or 13% on the day. Mortgage insurers were also hard hit, with Triad Guaranty seeing its share price slide by $1.73 to close at $8.80, down 16% on the day. Radian Guaranty, PMI, and MGIC were also each down more than 10% on the day. Freddie Mac's shares slid by $3.71, closing at $31.33, down 11%. Fannie Mae's shares closed at 34.29, down 7% on the day. Countrywide closed at $11.33, down almost 9%. In the overall market, the Dow Jones industrial average declined 294 points, or 2.14%, and other major indices were also off more than 2%.