Genworth shares fall on loss, capital concerns

NEW YORK (Reuters) - Shares of Genworth Financial Inc (GNW.N) fell more than 30 percent on Friday after the U.S. life and mortgage insurer reported a third-quarter loss, driven by large investment losses, and said it would try to boost capital.

The stock fell $1.59, or 33.8 percent, to $3.11 in morning trade on the New York Stock Exchange after touching $3.08 earlier in the session, its lowest level ever. The company was spun off by General Electric Co (GE.N) in 2004.

After the market close on Thursday, Genworth reported a $258 million net loss for the third quarter. Operating profit missed Wall Street expectations.

The insurer also suspended a share buyback plan, withdrew a previous forecast for 2008 operating profit, and said it was exploring ways to bolster capital.

"In this unprecedented period, we are focused on maintaining appropriate liquidity and taking additional steps to strengthen our capital levels and maximize or flexibility," Chief Executive Michael Frazier said in a statement accompanying the third-quarter results.

Credit Suisse cut its target price for the stock to $5 from $11 and said it seemed likely the company's ratings could be downgraded.

"Questions remain about the longer term competitiveness of its life insurance subsidiaries," Credit Suisse said in a note to clients.

Genworth said it would contribute $500 million to its life insurance operations.

A Genworth spokesman said the company had no comment on its stock price.

(Reporting by Lilla Zuill; editing by John Wallace)