WaMu Collapse Adds to Wachovia, NatCity Jitters

Wachovia Corp's stock price slid 27% Friday as investors worried about the company's portfolio of payment-option adjustable-rate mortgages and the uncertainty regarding financial bailout legislation. At the close of trading on Friday, Wachovia's shares were trading at $10.00, down $3.70 from the opening price. Wachovia has an option ARM portfolio that averaged $122 billion in size during the second quarter. National City Corp. also saw its shares tumble on Friday, closing at $3.71, down 26% on the day. Trading volume was more than 10 times higher than the company's average daily volume. National City does not have significant option ARM exposure, but it does have significant mortgage, home equity, and construction loan exposure.