Late day selling brought the Dow into the red after holding on to modest gains during the day. Dow down 8, advancers & decliners were even while NAZ fell 5. Banks led the way, this time down again. Bank of America (BAC), Citigroup (C) & Wells Fargo (WFC) sold off 4+% on increased worries about stress test finding that they will need more capital. The S&P 500 FINANCIALS INDEX dipped to the low end of its recent trading range:
Value
139.92 |
Change
-2.61 |
% Change
-1.8% |
The chart below shows MLPs (line graph) have been having a good month compared with the Dow. Today the Index broke thru to a new 2009 high, up 1.43 to 211.25. REITs & junk bonds were also higher but the VIX pulled back pennies, still in the 37s. Oil slid a little, taking it below 50.
Dow Jones vs MLP Index -- 1 month
The Treasury Dept reached a tentative agreement with 4 of Chrysler's major debt holders to avoid Chrysler bankruptcy protection. The banks will forgo claims to $6.9B in debt for $2B in cash at the close of deal. This is viewed as a first step to keep Chrysler alive on Fri. The Fiat deal is also supposed to be near completion. Meanwhile, General Motors (GM) will force more than 1K under-preforming dealers to close.
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Chrysler's Banks, U.S. Government Said to Reach Agreement on Reducing Debt
Pfizer (PFE), Dow stock & former div aristocrat, reported EPS was down a penny on 8% lower sales in Q1. Their numbers were a little under analysts’ expectations. Pfizer CEO Jeffrey Kindler said he is trying to boost earnings by agreeing to buy Wyeth in a deal valued at $62B. Pfizer has been losing sales of Lipitor, the world’s best-selling drug, since cheaper copies of a similarly acting cholesterol pill, Merck & Co.’s Zocor, came on the market in 2006.They were also hurt by the impact of foreign exchange.
In the last 5 trading days, Dow hasn't been able to get very far away from 8K at a time there is growing anxiety about the outcome of the stress tests for the 19 big banks. The S&P 500 FINANCIALS INDEX has been trading sideways in the 140s for 2 weeks. For the rest of the week, stocks also have to contend with survival of the 2 autos & the spreading Swine Flu.
Dow Jones Industrials --- 1 week
