Selling in bank stocks drags markets down

Stocks began the day under water where they remain. Dow is down 41, decliners over advancers 2-1 & NAZ fell 15. Banks are leading the way down although a few like Citi (C) & Wells Fargo (WFC) have small gains. The Financial Index dropped again, bringing it near the 190 floor that has held for several months. Because banks are on defense, that floor may not hold.


S&P 500 FINANCIALS INDEX

Value 194.34

Change -3.01

% Change -1.5%

The Alerian MLP Index rebounded from earlier losses, dropping only 1 to the 293s. The REIT index fell another 1, but down 10 from its peak on Wed. Junk bond funds were weak but still near recent highs. The yield on the 10-year Treasury bond rose 6 basis points to 3.62%


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks









Another rough days for commodities. Oil is testing the 75 floor on weak demand for oil & looks like it wants to lower while gold is struggling to reestablish the 1100 floor.

CLH10.NYM

...Crude Oil Mar 10

...75.14

... 0.94 .......(1.24%)

GCF10.CMX

...Gold Jan 10

...1,088.20

... 14.50 .......(1.3%)

Google (GOOG) revved up Q4 advertising sales earnings to almost $2B in Q4 (topping estimates). I might add, their results were helped by my GOOG ads. GOOG earned $6.13 per share in Q4, up dramatically (more than 5X) from last year when earnings were deflated by charges to reflect the eroding value of some investments. However, investors were hoping GOOG revenues would accelerate even faster. The stock is down $19 (3%) but above its earlier lows.

•Google's Quarter Beats Forecasts, but Shares Slide
at CNBC


Google --- 1 year






American Express (AXP), Dow stock, reported good Q4 earnings while expressing concern about the growth outlook for credit cards. Revenues were flat, earnings were helped by rising consumer spending & lower credit losses. AXP said growth would remain slow going forward. Net income rose to 60¢ a share from 21¢ a share in the prior year. The lack of revenue gains was disappointing & the stock dropped 1.92 (5%).

•AmEx profit jumps on lower credit losses
AP


American Express --- 1 year

General Electric (GE), a Dow stock, reported net income fell 19% in Q4, but the industrial bellwether is seeing signs of stability as it moves into a key rebuilding year. Overall, GE earnings dropped 37% in 2009 showing how deeply the recession affected the company (GE's worst year in its 117-year history). The drop in profits was smaller than previous quarters on gains in areas such as power plant turbines & oil field equipment. In Q4, GE posted net income of 28¢ per share versus 35¢ last year & beat the average forecast of 26¢. GE Capital -- the source of most GE problems in 2009 -- squeezed out a modest profit in Q4 but was still dogged by problems in its holdings & lending for commercial real estate. The stock rose 45¢ to 16.47.

•General Electric Profit Exceeds Analysts' Estimates as Order Backlog Rises

General Electric --- 1 year









Find out what's inside Trend TV Click Here



Earnings reports continue to receive low grades. So far, GE was the only one to bring a higher stock price. Banks are a large source of earnings concerns & proposed new regulations could keep them weak for some time which would hamper further gains in stock markets. Dow has taken a major body blow in the last half of this week. A common theme in earnings releases is the cautious outlook for 2010, a very discouraging thought for the many who are seeking employment (not to mention investors).


Dow Jones Industrials --- 2 weeks