IND S&P 500 FINANCIALS INDEX
| Value 161.92 | Change -0.43 | % Change -0.3% |
The MLP Index was up 1 to the "magic" 220 number while REITs fell. Junk bond funds rose but Treasury bonds were weak. The 10-year Treasury bond dropped, taking the yield up 7 basis points to 3.56% (another recent high).
U.S. “problem” banks climbed 21% in Q1 to the highest total in 15 years according to the FDIC. 305 banks with $220B in assets were considered “problem” lenders in Q1, rising from 252 with $159B in assets in Q4, Because of bank failures, its insurance fund slumped 25 percent in the period. Bank problems are far from over.
•`Problem' Banks in U.S. Climb to 305, Highest Level Since 1994, FDIC Says
Bank of America said it raised $5.9B thru the conversion of preferred shares for common stock as part of its objective to raise a total of $33.9B in capital. Combined with the sale of stock in China Construction Bank & recent common stock sales, BAC has now raised $26B as it works to meet the government requirement. BAC said none of the preferred shares converted to common stock were shares held by the gov & they said they hope to repay gov loans as soon as possible. The big banks look like they will be able to get the gov off their backs.
•Bank of America Has Raised $26 Billion in Capital Since Stress-Test Result
General Motors said its offer to exchange $27B in debt for 10% of the company's stock had failed. The bonds tendered was "considerably less" than the 90% required. GM has 5 days to pull a rabbit out of a hat to avoid bankruptcy. GM has already received $19.4B loans from the gov. Meanwhile Chrysler asked the bankruptcy judge to sell the bulk of its assets to Fiat Group.
•GM Bondholders Reject Offers to Swap Debt for Equity, Hastening BankruptcyGM may be a key driving force for the markets thru the end of May.
Dow Jones Industrials -- 1 month
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