AIG, bond insurers move lower as credit woes persist

NEW YORK (MarketWatch) — Shares of insurance giant American International Group
, a member of the Dow Jones Industrial Average, fell about 7% in early trade
Friday after the firm reported a more than $5 billion loss after the close of
trading yesterday. The firm took more than $11 billion of writedowns on its
investments and said the head of its Financial Products business, the unit that
took the hit, was resigning. Bond insurers were active too, as Assured Guaranty
rose more than 15% after investor Wilbur Ross agreed to provide up to $1 billion
of new capital for the firm. Meanwhile, shares of Ambac slipped about 5% on a
news report from CNBC Television that a plan to provide that firm new capital has
hit a snag. And, MBIA shares fell 4% after it said it expects to make loss
payments, before reinsurance, of $700 million to $800 million for 2008, mainly
relating to insured credits in the residential mortgage-backed securities and
home equity sectors. In the broader market, the Financial Select Sector SPDR Fund
[s; xlf], and ETF that tracks the financial stocks in the S&P 500, fell 4.8%,
wiping out all its gains in February.