Dreary bank earnings sink stocks

Markets tumbled. Earnings reports are coming & few are getting favorable reviews. Dow tumbled 195, decliners ahead of advancers 4-1 & NAZ dropped 46. Banks are having a tough day as the Financial Index may want to test the 200 floor.

S&P 500 FINANCIALS INDEX

Value 201.83

Change -1.81

% Change -0.9%

In the market sell-off, MLPs are holding up well., The Alerian MLP Index was down only change, still in the 299s. The Dow Jones REIT Index dropped 3½ to the 182, just can't stray far from the 181 level. Like MLPs, junk bond funds only eased off modestly. Treasuries were in demand, the yield on the 10-year Treasury bond fell 6 basis points to 3.65% (lower end of its recent trading range).


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




10-Year Treasury Yld Index - 2 months









Oil & gold joined in the market sell-off.

CLG10.NYM

...Crude Oil Feb 10

...77.49

... 1.53 ......(1.9%)

GCF10.CMX

...Gold Jan 10

...1,110.90

... 28.80 .......(2.5%)

Bank of America (BAC), a Dow stock, lost $5.2B in Q4 as consumers struggled to make mortgage & credit card payments while the bank repaid its bailout money. However, results were boosted by strong results from its Merrill Lynch investment banking operations. Their new CEO, Brian Moynihan, said, "economic conditions remain fragile and we expect high unemployment levels to continue, creating an ongoing drag on consumer spending and growth." BAC lost 60¢ per share in Q4, more than the 52¢ expected. The stock was down 11¢ at $16.21. For the full year, BAC lost $2.2B, or 29¢ per share.

•Bank of America Posts Loss on Repayment of Bailout, Consumer Loan Defaults


Bank of America --- 2 years






IBM (IBM), another Dow stock, had a 9% gain in net income for the qtr. IBM reported earnings of $3.59 a share, up from $3.27 a share last year. Revenues rose slightly to $27.2B. Guidance for Q1 & all of 2010 was only for flattish revenue growth. The report disappointed & the stock dropped $4.70 to $129.44.

•IBM analysts upbeat on 4th-quarter report
at MarketWatch

IBM --- 2 years








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Earnings reports are starting to come & they are not getting good grades. Wells Fargo (WFC) earned a profit in Q4 & Morgan Stanley (MS) EPS was far below estimates in Q4 due to a decline in trading volume. Each stock fell 1%. Not one Dow stock which has already reported had a "good" report. This could be a glum earnings season.


Dow Jones Industrials --- 2 weeks