U.S. company shares fall after Buffett's denial of interest

2007-10-20 08:11:32

LOS ANGELES, Oct. 19 (Xinhua) -- Investors dumped shares of U.S. largest subprime mortgage lender Countrywide Financial Friday after billionaire Warren Buffett denied his interest in investing in the troubled company.

Shares of the California-based mortgage lender fell more than 8percent to a multi-year low of 15 dollars in the afternoon trading on New York Stock Exchange, marking the stock's lowest price since2003.

Buffett said in an interview on Fox Business Network late Thursday that he never bought any Countrywide stock, and that the company lacked a comprehensive recovery plan that might have attracted him.

Financial media reports speculated in August that the "Oracle of Omaha" might buy a stake in the struggling lender. The reports said Buffett had been increasing his stake in financial services companies with significant exposure to the mortgage market at the time.

Buffett said Thursday he was in contact with Countrywide in August as the company's stock fell amid a cash shortage caused by increasing mortgage foreclosure cases, but decided not to buy any stake in the company.

Problems in Countrywide and other subprime mortgage lenders had prompted the U.S. Federal Reserve Bank to pour billions of dollars into the market and cut the discount rate by 0.5 percent to bail out involved banks and institutions, whose stocks plunged amid panic selling.

Buffett's denial of Countrywide interest came after U.S. Securities and Exchange Commission said it opened an informal inquiry into stock sales by Countrywide Chief Executive Angelo Mozilo, who allegedly sold his holdings several times in the months before the stock began to fall sharply.