Friday, June 20, 2008

Lower stocks on quadruple witching day

Markets were down on quadruple witching Fri, 4 types of options expire today adding an extra degree of volatility to already volatile markets. Dow is down 145 putting it below the important 12K line, decliners over advancers an impressive 4-1 & NAZ down 43. The Alerian MLP index slipped slightly, still in the 286s. Merrill Lynch (MER) said banks appear to be in a capitulation mode & will trade below fair value with div cuts looming. Ugh!! Div cuts were forecasted at:

Bank of America (BAC)
Regions Financial Corp (RF)
SunTrust Banks Inc (STI)
Wachovia (WB)

The first 2 are on the S&P Aristocrat Div list (more than 25 years of year over year higher divs) & BAC is a Dow stock. The banks mentioned took the gloomy forecasts fairly well with only moderate changes.

Oil was up almost 4 to 136 on today's rumor that Israel had practiced an attack on Iran. Last night Asian analysts said the 18% price hike for fuel in China, 2nd largest oil consuming country, will be absorbed by them. Their last increase of 10% in Nov, didn't cause problems. The terrible winter weather followed by the earthquake probably hurt the economy more. Quadruple witching may produce more wild price swings today.

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