Plenty of problems today, but bank worries were at the top of the list. Dow was down 131, decliners over advancers 3-2 & NAZ down a big 28 as NYSE volume continues at a low 1¼B. Morgan Stanley (MS) & FedEx (FDX) came out with ugly earnings reports, but banks dominated the negative news. Fifth Third Bancorp (FITB) cut its div 66% to raise $1B with a sale of preferred stock & sold businesses to raise another $1B. Div cuts have become common for large banks, especially in the last few days. Banks were weak along with REITs & junk bond funds. Dow just barely held above 12K, tomorrow will be another test. The Alerian MLP index fell 3 to 289, slightly below its important support of 290. That index has held flat all year (excluding 2 quick downturns which were recovered quickly).
Oil rose 2.67 to 136.68 on the inventory report & usual supply worries. President Bush gave a speech asking congress to pass legislation to drill offshore & to encourage more drilling for oil. Congress is not expected to respond & these would have little effect solving today's problems.
Continuing bank problems will weigh heavily on the markets, probably taking Dow below 12K, but I think the FedEx announcement is much more worrisome for the economy.
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