NEW YORK (AP) -- Shares of credit card lenders and issuers slipped Tuesday after American Express Co. said it socked money away to prepare for borrowers missing payments.

The news coincided with a bleak assessment of the mortgage industry from Countrywide Financial Corp. to paint a dimmer picture of how reliably people will repay bills in the second half of this year.

American Express reported what analysts almost unanimously hailed as a solid second quarter. However, the New York-based credit card brand set aside nearly $1 billion -- a third more than the second quarter of last year -- anticipating some clients defaulting on credit card payments.

Also, Countrywide Financial, the nation's biggest independent mortgage lender, said bad credit ate $710 million out of its second-quarter profit.

Sandler O'Neill analyst Michael Taiano said the two reports are scaring investors away from lenders' stocks. In midday trading, the Dow Jones U.S. Financials Index, the Nasdaq Bank Index and the KBW Bank Index were all down roughly 1.5 percent.

"There's just concern about increased levels of credit risk," Taiano said. "It's a function of people being more risk-averse with respect to financials."

Taiano said the conventional wisdom is that people having trouble paying their mortgages will also default on credit card debt. He said the connection between Countrywide and credit card lenders is tenuous, though.

The bulk of the credit problems in the mortgage industry stem from people with credit scores at the bottom rung. Calyon Securities analyst Craig Maurer said American Express caters to higher-end consumers, so few of the company's borrowers are defaulting on their mortgages.

Plus, Taiano said people about to buckle under the weight of adjustable-rate mortgages might opt to lose their house and continue paying off credit card and car loans, Taiano said.

Shares of American Express lost $2.37, or 3.7 percent, to $62.29. Shares of MasterCard Inc. slipped $4.78, or 2.8 percent, to $162.82. Shares of Capital One Financial Corp., which is a credit card and mortgage lender, dropped $1.67, or 2.1 percent, to $76.38.

Shares of Discover Financial Services LLC lost 82 cents, or 3.1 percent, to $25.30. Citigroup analyst Bradley Ball launched coverage of the Riverwoods, Ill.-based company with a "Sell" rating.

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