The S&P 500 FINANCIALS INDEX plunged once again, reaching another new multi year low (2 years ago the index was at 500):
| Value 117.80 | Change -12.30 | % Change -9.5% |
Banks are reporting earnings & they are just down right ugly. Foreign banks which get less attention here include HSBC selling at a 10 year low in Hong Kong & the Royal Bank of Scotland which will need their own whopper bailout package. Here the sell-off in banks was led by State Street, the other index S&P 500 Dividend Aristocrat I haven't mentioned very much. They were expected to have 1.14 in earnings in Q4. Instead EPS came in at 15¢ with a very weak outlook for 2009, the stock dropped in HALF. I repeat the stock dropped in half to 18 on the open. The chart below is one of the worst ever for a major company. Their div is modest at 96¢, they may be able to raise it to remain a Dividend Aristocrat -- but now there are doubts. Wells Fargo (WFC), another big bank in which Warren Buffett has a large investment, is down 2½ to 16 with an 8½% yield, on all the nervousness in the bank sector. Meanwhile, 2 banking stocks in the Dow, Citigroup (C) & Bank of America (BAC), have handles of 3 & 5. As hardship for banks go, this has to be one of their worst times since the depression.
State Street --- 2 weeks
Other yield securities are selling off. The Alerian MLP Index is down 2 to 190, the low end of its trading range this year. If the floor holds, that will be a positive sign for the group. REITs & junk bonds are also off while the VIX Index shot up 5 to 52. Fears in the market have shot up sharply this year:
VIX --- YTD
In this financial mess, oil is up 1 to the 37s. At least it represents a ray of optimism on one of the dreariest days in some time. More earnings are coming. General Electric (GE), Dow stock & for the time being a Dividend Aristocrat, reports later this week. They have a very strong presence in the financial field. Get ready for one more very ugly report!
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