Bank Stocks Plunge As Investor Angst Surgres
The selloff in the banks and financials today was breathtaking. No other way to sugar coat it. Its odd that investors seemed to have lost all hope on the day that Obama was trying to instill optimism back into the mainstream.
Here is a quick wrap-up of the day:
- Celebration in Washington failed to excite Wall Street. The Dow posted its worst inauguration day drop in its 112-year history.
- Financial shares led the decline on concerns banks will continue to slash dividends, be forced to raise more capital, and face new regulations.
- Bank of America declined 2.08 to 5.10. State Street Corporation plunged 21.46 to 14.89 after unrealized bond losses almost doubled at the firm and it propped up funds to protect investors. Regions Financial reported a record fourth quarter loss, and shares declined 1.47 to 4.60.
- Crude oil prices bounced back from early losses, but failed to lift energy stocks. Exxon Mobil fell 1.81 to 76.29.
- Johnson & Johnson reported better-than-expected earnings, but its forecast was cautious, and shares lost 69 cents to 56.75.
- Barack Obama, in his inauguration address, promised “bold, swift action” but acknowledged the economy is “badly weakened.”
- The Dow closed down 332 points at 7949.
- NYSE volume totaled 1.72 billion shares.
- The S&P 500 was down 44 points.
- The Nasdaq fell 88. Declining issues swamped advancers by 8-1 on the NYSE and by almost 6-1 on the Nasdaq.
- The 10-year Treasury note was down 13/32 to yield 2.36%.
Trading comment: Today's selling looks to be overdone in the near-term, so I didn't make any trades today. But I will likely exit my index ETFs on a bounce. Until the SPX can recapture its 50-day, for starters, I want to remain defensive.