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Stocks Sink on Earnings Woes - CNNMoney.com -- Stocks fell Tuesday in a broad-based selloff, after Alcoa's worse-than-expected profit report and Chevron's profit warning unnerved investors at the start of the quarterly profit reporting period.

The Dow Jones industrial averagesank 37 points, or 0.3%. The S&P 500 index lost 11 points, or 0.9%. The Nasdaq composite slid 30 points, or 1.3%.

Disappointing profit news from Alcoa and Chevron, two big Dow components, was unnerving at the start of a quarterly reporting period that is expected to bring strong growth.

The reports follow last week's weaker-than-expected December payrolls report, which raised worries about growth in the fourth quarter.

At the same time, the financial sector is under pressure as the FDIC, the top banking regulator, considers requiring lenders to pay if they tie compensation to risky practices. Meanwhile, the White House is debating taxing companies that took bailout funds to make sure they pay back the money.

MBA Reduces 2010 Origination Outlook Again  - It was only a month ago that the Mortgage Bankers Association (MBA) projected that the industry would complete about $1.5 trillion in mortgage originations in 2010 compared to $2.0 in new mortgages in 2009. This 25 percent decline was bad news at the time, but the MBA's Mortgage Finance Commentary released this morning paints an even grimmer outlook.

The new figures call for a decline in mortgage originations to their lowest level in a decade, a drop of 40 percent over the 2009 figure. The forecast is now for a total of $1.3 trillion mortgage originations this year compared to an updated estimate of $2.1 trillion in 2009.
In the original estimate released on December 14, purchase originations during the year were estimated to increase from $718 billion to $804 billion. The new report still anticipates an increase in the origination of these mortgages, but only from an updated figure of $742 billion in 2009 to $776 billion this year. This slight increase will be overwhelmed by plummeting originations for refinancing, projected to fall from $1.372 trillion to $502 billion this year. The original projection was for refinancing totally from $1.246 trillion to $693 billion.

The report said that data showing strong existing home sales in November reflected expectations that the homebuyer tax credit was ending but that home sales are likely to continue to adjust downward in upcoming months in spite of the fact that the tax credit was extended.

The Federal Reserve will meet their commitment to purchase $1.25 trillion in agency MBS during the first quarter and will not be likely to raise interest rates this year. The report projects that rates will increase by about a percentage point over the year, ending at just 6.1 percent as a result of widening mortgage spreads and an increase in treasury rates driven by federal budget deficits. Once the Fed stops buying MBS, yields will have to increase before private investors come back into the market.