Financials Under Pressure, Weigh On The Market

The market is trading lower in early trading after Wells Fargo (WFC) and KeyCorp (KEY) both missed consensus estimates. Key also issued an earnings warning for Q4, while WFC said that softness in residential real estate hurt results, and would continue to be a drag into 2008.

The financial sector has the biggest weighting in the S&P 500, so when this group is down, it usually pulls down the averages with it. Oil is surging again this morning, topping $87, which is another headwind for the overall market.

GOOG got another price target bump up, this time by Needham to $690. A handful of big tech stocks are trading higher, which has pulled up the NDX from its lows.

Asian markets were mostly lower overnight, but Shanghai and Taiwan bucked the downward trend. And bond yields are down a bit, with the 10-year yield at 4.65%. It has been consolidating recently underneath its 200-day moving average.

I expect the market to remain mixed today, and choppy overall this week as it is options expiration week. I have not put any cash to work yet, despite the 2-day pullback.

long GOOG, WFC