Bank stocks lead post-plunge bounce
Shares of Citigroup, Bank of America and Morgan Stanley climb despite Moody's credit downgrades. Eurozone leaders meet in Rome to address the debt crisis.
By Andrea Tse
Stocks were rising Friday after the previous session's deep sell-off as investors shrugged off Moody's downgrade of 15 major banks late Thursday.
Stocks suffered their worst single-day drop in three weeks Thursday as investors were spooked by a batch of gloomy global economic data, a bearish trading call by Goldman Sachs (GS) and disappointment over the outcome of the Federal Reserve's latest policy meeting.
On Thursday evening, Moody's downgraded 15 of the world's biggest banks.
The Hong Kong Hang Seng index closed lower by 1.4%, and the Nikkei in Japan closed down 0.29%.
The FTSE in London was slipping by 0.88% and the DAX in Germany was declining by 0.98% as business confidence in the biggest eurozone economy fell to its lowest point in more than two years.
European leaders met in Rome on Friday to discuss a unanimous plan to bring relief to the eurozone debt crisis. One area of contention going into the meetings is the proposal to tax financial transactions and to have banks foot the bill for their own bailouts.
In Spain, independent audits indicate that the country's banks will, under duress, require up to 62 billion euros in financial support, below the earlier foreseen 100 billion euros in eurozone bailouts.
Friday's U.S. economic calendar is empty.
In corporate news, Monster Beverage (MNST) is being added to the S&P 500, replacing Sara Lee (SLE). Standard & Poor's expects the change to take place after the close on June 28. The change was prompted by Sara Lee's decision to spin off its international coffee and tea business to shareholders.
Shares of Darden Restaurants (DRI) fell after the company posted in-line earnings for its fiscal fourth quarter but came in slightly short on the top line.
Arch Coal (ACI) said after Thursday's close that it's laying off 750 employees, roughly 10% of its workforce. The company said it plans to reduce production at mining complexes in Appalachia because of a major downturn in demand for coal-based electricity.
Medtronic (MDT) said its board has approved a 7.2% increase in its regular quarterly cash dividend to 26 cents a share. The medical devices company said the dividend is payable on July 27 to shareholders of record on July 6.
Ryder Systems (R) lowered its fiscal-second-quarter outlook, citing weakness in its fleet management solutions business. The company now sees comparable earnings of 90 to 95 cents a share for the three months ended in June, down from a previous expectation for a profit of $1.07 to $1.12 a share.
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Gee the banks never got a downgrade before the great fall of 2008. How bad must things be now.
If we were down 250 yesterday over "Economic Worries" why are we having a rally today-did the worries and problems go away.
Oh yea- my prediction of Oil at $75 back in April is just about to be fulfilled. Great for the consumer-Bad for the economy.
Don't look for a real move upward until the First Wednesday in November- Bye Bye Barry!!
On this date:
2000 - $5.7 trillion
2004 - $7.3 trillion
2008 - $9.9 trillion
2012 - $15.8 trillion
2000 - $9.5 trillion
2004 - $11.3 trillion
2008 - $13.9 trillion
2012 - $15.2 trillion
Debt as a % of GDP
2000 - 60.5%
2004 - 64.4%
2008 - 71.3%
2012 - 103.8%
Down the crapper we go.......
Captain Obama the 5 forward underwater compartments are flooded and engineering feels the only action left will be to abandon the ship. What shall we tell the passengers? Responding with a grim smile the Captain says ' Tell the band to play something more upbeat to keep them calm so it will appear all is well"
Socialists (DNC) and many on this site think that the government can create/grow wealth. When in reality, all they can do is redistribute wealth – not create it. In order for the government to spend money, it has to first take it from somewhere else (borrow, tax, or print)… You cannot take $20 million from the economy and then get $21 million back. It simply does not work that way. Think about it… If that were the case, our problems would be solved. Liberals confuse this principle all the time. They forget that wealth is created by the free exchange of commerce between two parties. I have an acre of land (worth $5K to me) you have an idea to build something on that land that will make you $50K. You offer me 5K for the land, and go your way – we both benefit. The government gets a piece of that action in the form of taxes, and that funds their existence. However, you cannot artificially create the exchange above… It has to occur naturally.
I might start a Website and see if I can bring the World to it's knees.....
Dreams of my Fathers......Hitler and Genghis are dead.....
What the hell are they teaching kids in schools nowdays ?
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[BRIEFING.COM] The S&P 500 continues hovering near its high, which is a bit surprising considering several noteworthy areas like biotechnology, chipmakers, transport stocks, and retailers underperform.
The biotech space is on its low with the iShares Nasdaq Biotechnology ETF (IBB 264.30, -2.55) down 1.0%. Elsewhere, the PHLX Semiconductor Index trades flat even as the technology sector outperforms with a gain of 0.5%.
Moving on, transport stocks have pressured the Dow ... More
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