US markets slipped yesterday as after the head of the biggest US mortgage company said the housing downturn could create a recession. Financial stocks were among those leading declines.

In economic news, the Congressional Budget Office reported that the US budget deficit will shrink this year to $158 billion from $248 billion last year. However the office said the long-term budget outlook is "daunting" because of the rising demands of the baby boom generation.

On Thursday; the Dow Jones Industrials was mostly flat closing at 13,236; the S&P500 slipped 2 points ending at 1,463, and the Nasdaq was down 11 to finish at 2,542