The S&P 500 [[^gspc]] fell 29.36 points, or 2.2%, to 1,304.34, the lowest closing level since September 2006 on news that home foreclosures rose to a record and Carlyle Capital Corp (a Carlyle Group bond fund) was unable to met margin call requests for four out of seven financing groups. Carlyle Group is one of the world’s biggest private equity firms, so if they are having trouble, others are likely to have deep troubles too with credit losses deepening.

Citigroup (c), the biggest US bank by assets, fell 98 cents to $21.17, its lowest close since November 1998. Bank of America (bac), the second-largest, fell $1.03 to $36.52. JPMorgan (jpm), the third largest, fell $1.37 to $37.37.

Yesterday, Ambac (abk), the bond insurer, announced plans to raise $1.5 billion by selling common shares and equity units to salvage its AAA credit rating. JPMorgan analysts said the shares may fall in the “near term” and the company may need more capital to avoid a downgrade.

Posted in Categories: Stocks.

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