Bad day for Banks at Black Rock

Markets suffered a significant loss after a rough prior day. Dow dropped 213 (bringing its 2 day loss to about 350), decliners over advancers 3-1 & NAZ fell 23. The threat of more regulation over banks, especially the big ones, saw big banks sell off in a major way. The Financial Index is solidly below the magic 200 support line. Declines of 5+% for individual big banks were common. Goldman Sachs (GS) with excellent earnings sold off $6.92+ (4%) on the threats from DC. However, smaller (regional ) banks did well. USBank (USB) rose 13¢, not significant but representing an achievement with all the selling in big banks.


S&P 500 FINANCIALS INDEX

Value 197.35

Change -6.02

% Change -3.0%

The Alerian MLP Index dropped 3 to the 196s while the Dow Jones REIT Index gave up 5½ to the 177s. Junk bond funds were down mildly. Treasuries rose taking the yield on the 10-year Treasury bond down 5 basis points to 3.61%. Gold fell 1.78 to 76 (the 75 support has become important ) & gold fell 18 to 1094.


Alerian MLP Index --- 1 month

















This was one brutal day in a lot of ways. Major averages are down YTD, this is not supposed to happen in Jan with all that new money going into stocks. More federal regulation over the big banks is a kick in the head they don't need. But this is the kind of behavior that could be expected after the same gov bailed them out last year. Banks are supposed to lead the charge forward in the stock markets. But the Financial Index has floundered for 5 months while the averages have been moving higher. Earnings keep coming & none from Dow companies (so far) have been encouraging. High unemployment & a terrible housing market drone on. Bulls have gone back on defense & may have a difficult making Jan an up month (as a leading indicator for the rest of the year).


Dow Jones Industrials -- 1 month