| Value 148.44 | Change -1.74 | % Change -1.2% |
The big news for financials was Goldman Sachs (GS) reporting earnings last night, a day early. Earnings were more than double the estimates, but that doesn't tell the whole story which is why the stock is down 7. They sold 40M shares today, a drag on the stock price, to beef up their capital which will enable them to repay the TARP money to get Barney Frank off their back. Their conference call today did little for the stock. They highlighted facing "headwinds" related to declining asset values. GS is cautious about the near term outlook, as was Wells Fargo (WFC) last week. What worries investors is that the report shows their basic (traditional) business remains in a slump.
On the heels of the GS report, big banks are generally mixed (up). Bank of America (BAC) & Citi (C) are up big (C is now a $4 stock) but Wells Fargo & JPMorgan (JPM) are down.
Retail sales dropped 1.1% in Mar vs an expected 0.3% increase. The big drop in auto sales hurt plus clothing stores, appliance outlets & furniture stores also suffered declines. Wholesale prices plunged 1.2% last month related to lower prices for gas & food. Core inflation was unchanged.
MLPs continues its recent winning ways, partially attributable to a favorable article in Barron's over the weekend. The Alerian MLP Index is up 2 to 203.
Alerian MLP Index --- 2 weeks
However, the Dow Jones REIT Index dropped 2 & junk bond funds were mixed.
Bank reports will be the big drivers this week, many of the biggies will be reporting. They can be expected to show favorable earnings. Maybe that's why Citi shot up to 4.43 already. But bad loans are a continuing problem & the recession is dragging on, if not getting worse. Dow is trying to advance, but cracking the 8K ceiling is turning out to be one tough nut to crack.
Dow Jones Industrials --- 2 weeks
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