Weak bank stocks weigh on market

While health and tech stocks are strong, worries about Obama's regulation proposals pull financial stocks lower.

By Charley Blaine Jun 17, 2009 8:52PM

Charley BlaineUpdated: 8:40 p.m. ET.

 

Stocks faded today -- but not by much – as gains in health care and tech stocks were offset by weakness in energy and financial stocks.

 

Plus FedEx’s (FDX) cautious outlook cast a pall on the market.

 

At the close, the Dow Jones industrials ($INDU) finished down 7 points to 8,497. The Standard & Poor's 500 Index ($INX) was off 1 point at 911.

 

But the The Nasdaq Composite Index ($COMPX) added 12 points to 1,808, and the Nasdaq-100 Index ($NDX.X), which tracks the largest Nasdaq stocks, was up 13 points to 1,456.

 

The Dow and the S&P 500 suffered their third straight losses. The gains for the Nasdaq and the Nasdaq-100 was their first after two days of declines.

 

Futures trading suggests, however, that the market will open higher on Thursday. An important earnings report comes after Thursday's close from BlackBerry maker Research In Motion (RIMM).

 

Strength in the market today came from health care stocks such as Pfizer (PFE), up 3% to $14.58, and generic drug maker Watson Pharmaceuticals (WPI), which agreed to buy privately held Arrow Group in a $1.75 billion deal. Watson closed up 5% to $30.27.

Plus, key technology stocks such as Qualcomm (QCOM), Microsoft (MSFT), Oracle (ORCL), news, msgs) and Cisco Systems (CSCO) also moved higher. (Microsoft is the publisher of MSN Money.)Qualcomm

 

Qualcomm was up 3.8% to $45.09 after Goldman Sachs added the stock to its "conviction buy" list while rival Texas Instruments (TXN), upgraded by Banc of America Securities-Merrill Lynch to "buy" from "underperform," finished up 3.3% to $21.41.

 

In addition, a report on consumer prices showed a smaller increase than economists had expected, indicating that inflation is not a threat to the economy just yet.

 

But crude oil did move higher after dropping to as low as $69 this morning. Crude closed up 56 cents to $71.03, its first gain in four days.

 

Energy shares were lower.

 

And metals stocks were lower as well as investors who had pushed materials stocks continue to shrink their positions.

 

Freeport-McMoRan Copper & Gold (FCX) was down 3.7% to $50.48; the stock is down 13.7% this week alone.  U.S. Steel (X) dropped 1.5% to $36.16. It's fallen 7.3% this week.

 

Energy prices -- New York close
  Wed. Tues. Month chg. YTD chg.
Crude oil  $71.03 $70.47 7.12% 59.26%
(per barrel)
Heating oil $1.8630 $1.8250 13.81% 32.53%
(per gallon)
Natural gas  $4.2530 $4.1290 9.87% -24.35%
(per mil. BTY)
Unleaded gasoline $2.0326 $2.0711 5.63% 101.61%
(per gallon)
Retail gasoline $2.6790 $2.6740 8.60% 65.67%
(per gallon; AAA)
 
Financial stocks were mostly lower and worsened at the close. Standard & Poor’s cut its ratings of 22 banks because of the prospect of more regulation and potential market volatility.

 

In remarks this afternoon, President Obama said the overhaul is needed to protect the rights of ordinary consumers and to guard against the practices that led to the financial crisis that nearly derailed the U.S. economy last fall.

 

JPMorgan Chase (JPM) fell 2.3% to $32.73. Bank of America (BAC) fell 3.4% to $12.30.JPMorgan Chase

 

The stocks declined even as 10 big banks and financial companies, including JPMorgan Chase, American Express (AXP), Goldman Sachs (GS), news, msgs) and Morgan Stanley (MS) said they'd repaid about $68.2 billion in federal assistance money that they had received in the fall during the height of the financial crisis.

 

Despite the Dow's fall, 17 of the 30 stocks were higher on the day, led by Pfizer, Home Depot (HD), up 1.9% to $23.65, and Intel (INTC), up 1.8% to $16.14.

Among S&P 500 stocks, 244 were higher, along with 67 Nasdaq-100 stocks.

 

Interest rates were mostly lower. The yield on the 10-year Treasury note was at 3.65% today, down from 3.657% on Tuesday.

 

Rising interest rates in recent weeks had depressed mortgage applications.

 

Elizabeth Strott contributed to this report.

 

Short hits from the markets -- New York close
  Wed. Tues. Month chg. YTD chg.
Treasury yields  
13-week Treasury bill 0.165% 0.165% 26.92% 43.48%
5-year Treasury note  2.658% 2.691% 13.25% 71.37%
10-year Treasury note 3.647% 3.674% 5.25% 62.52%
30-year Treasury bond 4.465% 4.503% 2.93% 65.92%
Currencies    
U.S. Dollar Index 80.575 81.130 1.61% -1.92%
British pound $1.6404 $1.6396 1.30% 11.34%
(in U.S. $)
U.S. $ in pounds £0.6096 £0.6099 -1.28% -10.18%
Euro in dollars $1.3955 $1.3949 -1.47% -0.39%
(in U.S. $)
U.S. $ in euros € 0.7166 € 0.7169 1.49% 0.39%
U.S. $ in yen  95.72 95.65 0.45% 5.59%
Canada dollar $0.884 $0.883 -3.55% 8.07%
(in U.S. $)
U.S. dollar  $1.132 $1.132 3.69% -7.46%
(in Canadian $)
Commodities        
Gold $935.80 $932.20 -4.54% 5.82%
(per troy ounce)
Copper $2.6950 $2.2650 22.64% 91.13%
(per pound)
Silver $14.2800 $14.1300 -8.52% 25.10%
(per troy ounce)
Corn $4.0400 $4.0400 -7.39% -0.74%
(per bushel)
Crude oil  $71.03 $70.47 7.12% 59.26%
(per barrel)

 

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