By Eric Martin
July 31 (Bloomberg) -- U.S. stocks declined, erasing a rally, on concern losses from subprime mortgages are worsening.
Banking shares fell after American Home Mortgage Investment Corp. said it's unable to fund loans and may have to liquidate assets. MGIC Investment Corp. and Radian Group Inc. tumbled after the two home-loan insurers said their combined stakes of more than $1 billion in a subprime mortgage company may be worthless.
``On American Home Mortgage, the news is pretty bleak,'' said Michael James, senior equity trader at Wedbush Morgan Securities in Los Angeles. ``That's lent some renewed concerns about whether we have in fact gotten to the bottom of this subprime mortgage crisis.''
The Standard & Poor's 500 Index slipped 4.37, or 0.3 percent, to 1469.54 at 2:49 p.m. in New York. The Dow Jones Industrial Average fell 41.62, or 0.3 percent, to 13,316.69. The Nasdaq Composite Index slumped 22.52, or 0.9 percent, to 2560.76.
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