Financial turmoil continues

Last night Asian markets followed US markets lower, but not dramatically. Then Bank of America (BAC), Dow stock, announced they would half the div (taking it off the S&P 500 Dividend Aristocrat list) & raise $10B to keep the gov off their back. The div cut was not a complete surprise. The July announcement, when they typically increase the div, was banal, just mentioned an ordinary div. However if they maintained that rate, they would have remained on the Aristocrat list with record payments for 2008. BAC is down almost 5 today. 7 banks remaining were in this elite group in 2005, only US Bancorp (USB) & State Street (STT) are left.

Stocks are a little confused today. Dow is down 33 (not getting from from break even), decliners over advancers 3-2 & NAZ is down 14. S&P 500 FINANCIALS INDEX is down 8 to 235 (bringing it near the 232 low close of July 15) on the BAC news. The Alerian MLP index is down 2 in vastly oversold territory & the Dow Jones REIT Index is down 6.

The BAC div cut brings up another bank which has fared better, USB (also shown in my Yahoo Finance badge on the right). Its track record over the last decade has been mundane, but stockholders are happy with that track record which continued thru the terrible times of the last year. At 34, it's selling not from its high:


US Bancorp -- 1 decade






Oil & gas are having a good day. Oil is up probably on technical reasons & gold clearly benefits from the flight to safety.

CLX08.NYM

Crude Oil Nov 08

...91.72

... 3.91 (4.45%)

GCV08.CMX

Gold Oct 08

...882.80

... 20.10 (2.33%)

For those interested, my article on buying gold via an ETF, it's linked here:

http://seekingalpha.com/article/97160-buying-gold-what-is-high-and-what-is-low

These are wild time because global markets are hurting & hurting badly. This stock markets are confused. The Federal Reserve announced they will buy commercial paper, the idea is to help strained markets. But nobody really knows how much good it will do, sad state of affairs.


•Fed Will Purchase U.S. Commercial Paper in Attempt to Ease Credit Crunch
•Overnight Commercial Paper Yields Fall on Fed Plan; Seven-Day Rates Climb


Tonight Alcoa (AA), another Dow stock, will be the first to report Q3 EPS which is expected to be not very pretty. They are being hurt by the sell-off in commodities & the stock is selling at 18, a ten year low. General Electric (GE), also a Dow stock, reports on Fri. They've pre-announced theirs will not be pretty.