Wall Street remained volatile on Thursday.
At just past 2 pm New York time, the Dow Jones Industrial Average was down 1.02 percent to 12,730.51, but earlier in the afternoon it had been down as much as 308 points, or 2.4 percent.
Meanwhile, the Nasdaq Composite was down 1.2 percent to 2,429.39 and the S&P 500 had dropped 0.68 percent to 1,397.17.
Earlier, the Nasdaq had been down as much as 2.31 percent and the S&P had been down as much as 2.7 percent.
The Federal Reserve had earlier put another $17 billion into the banking system in an effort to raise investor confidence didn’t seem to have much immediate effect.
Investor fears seemed to be confirmed when Countrywide Financial (NYSE: CFC) was forced to draw down all of an $11.5 billion credit line in order to fund its operations after it could not borrow in traditional credit markets and after Moody’s Investor Service warned that the mortgage lender’s debt ratings could be cut to junk status.
Moody’s said it had cut Countrywide’s senior debt rating from A3 to Baa3, the lowest investment-grade rating.
Countrywide was down 23.63 percent to $16.26 in early afternoon trade.
The Commerce Department said that new home construction dropped to its lowest level in over ten years in July.
The announcement left home builders mixed.
At early afternoon, DR Horton (NYSE: DHI) was still 0.06 percent higher to $15.70, while Lennar (NYSE: LEN) had added 0.07 percent to $30.04 and Standard Pacific (NYSE: SPF) gained 1.57 percent to $9.08.
However, Toll Brothers (NYSE: TOL) was down 1.38 percent to $21.48, while Pulte Homes (NYSE: PHM) fell 1.89 percent to $16.58, Centex (NYSE: CTX) had dropped 4.13 percent to $30.90, and Hovnanian Enterprises (NYSE: HOV) was 12.81 percent lower to $11.16.
In other economic news, the Federal Reserve Bank of Philadelphia announced that its general economic index was at zero in August, down from 9.2 in July, which meant that while the region’s economy is not contracting it is not expanding either.