With the stimulus package stuck in political mud, stocks are still treading water. Dow is up 47, advancers modestly ahead of decliners & NAZ is up a strong 19.
S&P 500 FINANCIALS INDEX is little changed, near 120. The outlook for Bank of America (BAC) keeps getting drearier. Bank of America, still a Dow stock, is 4.15 (last year the div was 2.56). Now rumors are flying that their $138B bailout package is not working, raising fears the gov may have to take over the bank. Uggh! Such a move could take the index well below 100 not to mention clobbering the Dow.
•Bank of America Tumbles to 25-Year Low on Concern It Will Be Nationalized
The Alerian MLP Index rose 1, just getting over 200 while REITs & junk bond funds were weak.
Last week, weekly jobless claims jumped 35K to 626K, the highest number in 26 years & sharply higher than forecasts of 588K. This dismal news is no great surprise, it merely follows numerous company announcements of layoffs last week.
US Initial Unemployment Claims Jump to 26-Year High
The ECB (European Central Bank) did not cut their interest rate, they have always been reluctant to do so. But the Bank of England lowered its rate ½ point to a record low 1%. Record really means something for them since the bank began in the 17th century. Europe along with the UK has seen thousands of layoffs, reduced worker hours & factory shutdowns, but the ECB always had a cautious approach towards lowering rates.
General Electric (GE), still a Dow stock, dropped to another multi year, this time under 11, as the CEO is resigned to losing their coveted AAA credit rating. That would put the div at even greater risk.
•GE's Immelt Says He's Prepared to Run Company With AA Rating; Shares Fall
Senate bailout bill is being kicked around, maybe it will be voted on tonight. Sadly, this is ALL politics. Helping the economy seems only to be a secondary consideration. Public enthusiasm for a bailout package is sinking fast as the public realizes it will involve massive spending for pet projects which may or may not help the economy recover. Gov debt, however, will increase & higher inflation may follow. If a bill passes tonight, it still will have to be reconciled with the House bill. Despite protests from lawmakers, both bills have plenty of projects which will not make a big difference in getting more people working again or helping businesses recover. Can you spell "pork?"
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