NEW YORK, Aug 23: US stocks lost momentum in the past week as financial woes continued to weigh down Wall Street with investors looking ahead to a busy week of economic news.

Investors sustained fresh losses in the past week as renewed speculation swirled about the financial health of mortgage-finance giants Fannie Mae and Freddie Mac which prop up a substantial part of the ailing US mortgage market.

The Treasury said it was keeping an eye on the firms’ operations as some media reports suggested the government could be poised to offer substantial financial assistance to the two companies.

Other media reports, which said Lehman Brothers was seeking cash infusions to help bolster its balance sheet, also kept the financial sector in focus Friday.

The Dow Jones Industrial Average of 30 blue-chip stocks closed down 0.27 per cent at 11,628.06 in the week to Friday, while the technology-heavy Nasdaq composite index dipped 1.55 per cent to 2,414.71.

The broad-market Standard & Poor’s 500 index lost 0.46 per cent to 1,292.20.

The ensnared banks, in turn, are asking larger players in the market to redeem their long-term borrowings, which could trigger further sales of asset-backed securities. This means credit is about to get even costlier and tighter, Guatieri warned.

The Federal Reserve is also due to release the minutes from its interest rate policy meeting earlier this month when the central bank opted to keep its key interest rate unchanged at 2.0 per cent amid economic uncertainty and concerns about inflation.

Most economists expect existing home sales to tick up to a seasonally adjusted annualized rate of 4.90 million properties in July after sales slipped 2.6 per cent to 4.86 million in the prior month.

Existing home sales have fallen over 15 per cent in the past year, underlining the continuing decline in the housing market.

Healing in the housing market might still be a few quarters away, time that Fannie and Freddie and possibly several others in the financial industry probably don’t have, analysts at RBC Capital Markets said in a briefing note.

The oil markets will also likely remain in the spotlight, especially after Fed chairman Ben Bernanke reiterated the Fed’s belief Friday that inflationary pressures will likely cool in coming months amid lackluster economic growth.

A key New York oil futures contract slumped $6.59 to close at $114.59 a barrel Friday compared with a day earlier. Prices are still relatively high, but have tumbled sharply from record peaks over $147 last month.

Bond prices ended the week to Friday mixed. The yield on the 10-year Treasury bond rose to 3.867 per cent from 3.852 per cent a week earlier, while that on the 30-year bond dropped to 4.463 per cent from 4.473 per cent.

Bond yields and prices move in opposite directions.—AFP