- U.S. stocks dropped, led by homebuilders, as real-estate foreclosures almost doubled in July and Banc of America Securities LLC said rising borrowing costs will reduce sales.
Toll Brothers Inc., Hovnanian Enterprises Inc. and Standard- Pacific Corp. retreated after Banc of America advised clients to sell the shares. Exxon Mobil Corp., the world's largest energy company, declined after oil prices dropped.
The Standard & Poor's 500 Index lost 3.51, or 0.2 percent, to 1,442.04 as of 10:11 a.m. in New York. The Dow Jones Industrial Average retreated 46.01, or 0.4 percent, to 13,075.34. The Nasdaq Composite Index decreased 3.5, or 0.1 percent, to 2,505.09.
``Have we seen the lows in this current market turnaround? I'm not sure,'' said Charles Crane, who helps manage $265 million as founder of Scotsman Capital Management in New York. ``There's still plenty of potholes out there.''
U.S. homes in the foreclosure process climbed 93 percent in July from a year earlier as variable-rate mortgages reset higher, leaving more homeowners unable to make their payments, according to RealtyTrac Inc., a seller of foreclosure data.
Toll Brothers fell $1.26, or 5.7 percent, to $20.76. The biggest U.S. builder of luxury homes may see cancellations increase and sales margins narrow as a credit crunch restricts potential buyers' access to mortgages, according to Banc of America analyst Daniel Oppenheim, who reduced his rating on the stock to ``sell'' from ``neutral'' and cut his price target to $19 from $29.
Hovnanian Enterprises Inc., New Jersey's largest homebuilder, fell 25 cents to $12.05. Standard Pacific Corp. dropped 67 cents to $9.17.
Exxon slipped 31 cents to $84.22. Crude oil fell a second day, dropping 50 cents to $70.62 a barrel, on forecasts that Hurricane Dean will miss oil platforms and refineries along the U.S. Gulf of Mexico coast.
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