Friday, July 25, 2008

Fluctuating Friday

Stocks could not make their minds up what to do while volume continues low. Dow was up 21, advancers barely ahead of decliners & NAZ was up a big 30 on very low volume, typical of a Fri. NYSE volume came in under 1.2B, low. The VIX fell .70 to 22,74, not telling us much on a slow trading day. The S&P 500 FINANCIALS INDEX sold off 2 to 280 but down from 302 just 2 days ago. Financials are still selling off in profit taking from the recent run-up. Bank of America (BAC) 2 days ago quietly declared its regular 64¢ div. Last year's announcement fan fared a big increase to 64¢ at what turned out to be the beginning of the credit crunch (or whatever it's called). Continuing this rate at this rate will give BAC another record year for divs, allowing them to remain on the S&P 500 Dividend Aristocrat list. But the lack of an increase this year emphasises that all is not well, even at BAC. Bank problems persist. Washington Mutual fell (WM), the largest S&L in the US, was down 21¢ to 3.82 on worries about its liquidity. Maybe that's why financials sold off again today.

Oil fell to levels not seen in a couple of months:

CLU08.NYM........Crude Oil Sep 08......123.26....DOWN 2.23 (1.78%)

The Senate will pass the legislation to help home owners with mortgages & FNM/FRE. Help for homeowners will be limited, affecting only maybe the top 10-20%. FNM/FRE will get a new regulator & gov backing will be better spelled out. Pres Bush said he will sign the legislation.

This has been a bumpy week for stocks. The Dow ran up nicely in the first half, gaining almost 200, but the second half of the week was all downhill ending down 200. Profit taking took its toll. Next week, markets should begin on defense. Q2 earnings are largely over, expect more news about banking problems.

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