US Depression Tremors: Subprime Lenders in Meltdown

March 20 (Bloomberg) -- U.S. stock-index futures fell before a report that may show new home construction held near a nine- year low last month, renewing concern that the slowdown in the housing market may stall economic growth.

Home Depot Inc., the world's largest home-improvement retailer, slid after saying two directors will step down after an annual meeting in May. Citigroup Inc., the biggest U.S. bank, retreated before the start of a two-day meeting by the Federal Reserve that will likely result in no changes to interest rates.

``I don't think the correction is over as not enough time has elapsed and the background issues are still there,'' said Rupert Della-Porta, who oversees $4 billion as head of U.S. equities at F&C Asset Management in London. ``We are not expecting a rate cut, but the market would like to hear that the Fed is watching the deterioration in housing and credit.''


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Stocks were mixed, trading basically at a standstill as investors waited for comments from the Federal Reserve on the health of the economy. Volatility was low with the Dow trading in a narrow 38-point range.

"The markets really have no leadership right now," Gina Sanchez, portfolio manager for The California Endowment, told CNBC. "Part of what will help is knowing what the Fed is going to do."


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Caught between stubbornly elevated U.S. inflation and signs of weaker economic growth, the Federal Reserve is expected to hold interest rates steady as it wraps up a two-day policy-setting meeting on Wednesday.

While a decision to keep benchmark overnight borrowing costs at 5.25% is widely expected, financial markets are eagerly awaiting word on how the U.S. central bank views the economic outlook.

Most economists expect the Fed to reiterate concerns over inflation when it announces its decision around 2:15 pm New York time.


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