U.S. EQUITIES CONTINUE VOLATILE ROLLERCOASTER, FALLING TO NEW LOWS ON CONTINUING CONCERNS REGARDING FINANCIALS, PULLBACK IN MATERIAL STOCKS ON CHINA COMMENTS.
U.S. Equities resumed their slide ahead of Friday’s jobs data for February. Expectations are for payrolls to drop by 648,000 and an unemployment rate of just under 8%. The continuation of the bleak outlook on the jobs front merged with what appears to be a complete stagnation of solutions to prop of failing financial and industrial institutions. Reports that General Motors is once again out of cash and facing Chapter 11 bankruptcy darkened overall market sentiment and helped push the S&Ps back below the psychologically important 700 level.
Once again, financials led the markets lower. Declines were led by Citigroup, the financial dinosaur which was once the world’s largest financial institution by market value. Citi’s share price fell below $1.00. Pressure on financials increased as Moody’s warned of possible credit rating downgrades on JP Morgan Chase, Wells Fargo, and Bank of America. Perhaps one should question if these potential downgrades are justified or if they are an example of the pendulum swinging too far the other way in order for the rating agencies to try to make up for their apparent lack of supervision which allowed many financial institutions to formulate the overly complex “house of financial cards” which has led to this financial meltdown.
The sell-off in equities was broad based, as sectors which led the indices higher yesterday (energy, materials, and constructions) returned most of their gains after China failed to deliver an expected increase to its stimulus plan of $565 billion. General Electric managed to stabilize its early drop after the company’s chief financial officer reported that the company would not be seeking additional capital. The one sector that did buck the downtrend today was budget retail companies. This sector gained strength after Wal Mart reported better than expected earnings for February.
EQUITY RANGES
OPEN
HIGH
LOW
CLOSE
CHANGE
DJH9 (MARCH DOW)
6730
6785
6540
6631
-199
SPH9 (MARCH S&P)
695.00
703.50
676.50
686.10
-22.20
NDH9 (MAR NASDAQ)
1095.50
1106.00
1070.10
1083.00
-18.00
Prepared by Rich Roscelli & Paul Brittain.
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities.
