TWO - Here's Why Mortgage REITs Are Plunging on Friday
The stock market is having a rough day on Friday, but compared with some of the market action over the past few weeks, it's a comparably tame day. As of 1:20 p.m. EDT today, the Dow Jones Industrial Average was down by 1.9% and the S&P 500 benchmark index was lower by 1.8%.
On the other hand, mortgage real estate investment trusts, or REITs, are getting slaughtered. Just to name some of the biggest companies in the subsector, New Residential Investment (NYSE: NRZ) was down by 29%, Two Harbors Investment (NYSE: TWO) had shed 33% of its value, and Annaly Capital Management (NYSE: NLY) was 13% lower than where it started the day. The list goes on: Ladder Capital (NYSE: LADR), Redwood Trust (NYSE: RWT), and Invesco Mortgage Capital (NYSE: IVR) were all down by 25% or more.
And that's just today. Of the six stocks I just mentioned, all but one (Annaly) are down by 80% or more since the beginning of February.