Citigroup (C), still a Dow stock, rose to over 1.30, up sharply after giving an optimistic assessment for 2009 & the future. CEO Vikram Pandit said Citi had an operating profit of $8.3B in Jan-Feb 2009. The first-quarter performance, so far, has been the best since July-Sep 2007, the last time it recorded net income for a quarter. Pandit said Citi has run its own stress tests at levels worse than those being used by the government & is confident about the bank's capital position based on those tests. OK, speculators who bought yesterday at 1.05 are very happy today.
In addition, Ben Bernanke, head of the Federal Reserve, is proposing sweeping banking overhaul. Congress & the administration are also working on plans to fix the banking system. Meanwhile markets have to await news.
•Pandit Says Citigroup Having Best Quarter Since Last Posting Profit in '07
•Bernanke Urges Overhaul of Financial Regulations to Stem Buildup of Risks
S&P 500 FINANCIALS INDEX is having a great day & holding onto gains after the Citi comments.
| Value 91.44 | Change 7.67 | % Change 9.2% |
MLPs, REITs & even junk bond funds had strong gains on enthusiasm from the Citi announcement. At the same time, VIX, volatility index, dropped 5.
Moody's says the number of speculative grade bonds at risk of default has more than doubled to 157 in the last year. Eastman Kodak (EK) & MGM Mirage (MGM) are prominent names on their list. Both, $2 stock, are up in today's market enthusiasm.
•Kodak, MGM Among 283 U.S. Firms at Highest Risk of Default, Moody's Says
Oil continues on its upward march while gold is selling off responding to strong gains in stock markets. As mentioned yesterday, the next few weeks traditionally are favorable for higher oil prices.
| CLJ09.NYM | ..Crude Oil Apr 09 | ...47.69 | ... 0.62 .......(1.3%) |
| ZGH09.CBT | ..Gold 100 oz. Mar 09 | ...900.20 |  15.90 .(1.7%) |
United Technologies (UTX), a Dow stock, is slimming down in response to weak business around the world. They will lay off 11K workers & are cutting back on their stock buyback program.
•United Technologies Will Cut 11,600 Jobs, Reduces Profit, Sales Forecasts
Oversold doesn't begin to describe conditions in the stock markets, they're so bad. This relief rally is welcome by all who are long, but tomorrow will bring more gloomy news. Let's see how the markets react.
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