Financial Stocks

A few bits of good news were enough to drive a major stock rally Wednesday, vaulting the Dow Jones industrials back above 10,000 and raising hopes that the market had put its recent slump behind it. Share prices rose steadily all day. The Dow finished up 274.66 points, or 2.8%, at 10,018.28. The broader Standard & Poor's 500 index surged 3.1%. It was the second straight advance for blue-chip indexes after they tumbled for most of the previous two weeks. Financial stocks led the overall market up Wednesday after money manager State Street Corp.

NEW YORK - Stocks dropped right out of the gate following JPMorgan  &  Chase Co.'s stunning disclosure that the bank lost $2 billion in “egregious” trading losses. The Dow Jones industrial average was down 25 points, or 0.2%, to 12,830 shortly after the opening bell. The broader Standard & Poor's 500 index was down 4 points, or 0.3%, to 1,355. The benchmark index for U.S. equity markets was dragged down by financial stocks, which were down 1.8%. Bank stocks were down 3.3%.

If the Federal Reserve Board decides to raise interest rates later this month, it could wreak particular havoc with one of the engines of Wall Street's great bull market: financial stocks. Few market sectors have been been hotter in the 1990s. The Standard & Poor's index of 66 major financial stocks, which includes leading banks, insurance firms and brokerages, has rocketed almost 300% since 1990, versus a 140% rise in the blue-chip S&P 500 index.

It might be safe to look at your 401(k) statement again. The Dow Jones industrial average and Standard & Poor's 500 index closed out their best first quarter since 1998. The run-up has sent nearly $1.85 trillion streaming back into stocks since January. The broad S&P 500 rocketed 12% higher during the quarter while the blue-chip Dow surged 8.14%. Technology stocks were even hotter: The Nasdaq composite gained nearly 19% in its strongest launch since 1991. Investors piled into the market amid signs the economic picture is brightening with solid job gains and improving consumer confidence.

Bank and savings and loan stocks have made liars and fools out of more analysts than Wall Street will ever care to admit. So when the stocks turn hot--as they have in recent weeks--it's cause for a lot of suspicion. Is this a real, sustainable surge for these battered issues, or is it just another brief trading rally? The spark for the rally has been the slide in market interest rates since late April.

U.S. stocks suffered their biggest one-day decline in more than three months Thursday as concern grew that the Federal Reserve Board won't lower interest rates soon, corporate earnings growth might slow and the Mexican economy may deteriorate further. At one point, the Dow Jones industrial average plummeted 85.99 points, its worst one-day decline since July 19, before recovering to close at 4,703.82, down 49.86 points, or 1.05%.

Stocks climbed in heavy trading Thursday after fresh government data, countering reports last week, suggested inflation is under control. While the Dow Jones industrial average closed up 17.34 points at 5,586.06, it had been up more than 60 points at one point Thursday. Philip Morris stock fell sharply for the second day amid uncertainty surrounding tobacco litigation. Without the Philip Morris decline of 5 1/2 to 92 1/2, the Dow would have ended the day at nearly 16 points higher.

The stock market suffered a relatively mild wave of profit taking Thursday as bond yields rose ahead of today's November employment report. After three consecutive record closes, the Dow Jones industrial average slumped 39.74 points to 5,159.39, its biggest one-day point drop in six weeks. In the broad market, losers outnumbered winners 16 to 9 on the New York Stock Exchange. But trading volume was 381 million shares, well below the levels of the last seven sessions.

The U.S. banking industry breathed a sigh of relief Monday after international regulators proposed new rules dictating how much capital financial institutions must hold. Most American banks appear to already have more than enough capital to meet the new minimums spelled out in the so-called Basel III accord. The agreement, announced Sunday after being hammered out in the Swiss town of Basel, is aimed at helping prevent future financial crises and bank bailouts. Financial stocks shot up Monday on word that the new requirements would be phased in over a longer period than expected.

Wall Street suffered a broad-based rout Friday, taking key stock indexes back to where they were before the Federal Reserve's Sept. 18 interest rate cut. Fresh concerns about the economy's health sent all 10 major industry groups in the Standard & Poor's 500 lower, with 481 of the index's issues declining. The S&P index sank 39.45 points, or 2.6%, to 1,500.63. The Dow Jones industrials lost 366.94 points, or 2.6%, to 13,522.02. The Nasdaq composite index slid 74.15, or 2.7%, to 2,725.16.

U.S. stocks rallied amid more evidence of a U.S. economic recovery and hopes of a new Greek bailout, sending the Dow Jones industrial average to one of its best days this year. The Dow rose to within 100 points of the psychologically important mark of 13,000, a level last reached in May 2008. Economic data released Thursday showed that the number of people filing for unemployment claims fell last week, while the number of homes under construction rose. The reports helped paint a more upbeat picture about the economy that put Wall Street in a buying mood.

Here's one of Wall Street's unexpected gainers on Thursday's big rally: financial stocks. The Standard & Poor's 500 financials sector, which tracks the nation's biggest banks, was the second-best performer on the day. Only stocks in the materials sector had a better showing as the S&P 500 climbed more than 1% What makes that odd? Well, just hours before the stock market opened for business in New York, Moody's Investors Service had some pretty disparaging things to say about banks in general.

Question: What is the future for my Illinois Tool Works Inc. shares? Answer: This diversified manufacturer that operates in 57 countries is a master of acquisitions and practices conservative accounting methods. It includes scores of decentralized businesses that make specialized types of fasteners, components, equipment and other products. Always on the lookout for new businesses, it recently acquired Despatch Industries, which provides thermal processing equipment for solar and carbon fiber technology.

A selloff in global stocks gathered pace Friday, reflecting mounting concerns that the U.S. economy is heading into another recession. Nervous investors fled to the safety of core government bonds, Swiss francs and gold, which hit a record high, with many seeking to unwind holdings of riskier assets such as stocks, commodities and higher-yielding currencies before the weekend. European shares extended steep losses from Thursday, when they suffered their biggest daily slide in 2 1/2 years, with key indexes in Britain, France and Germany deep in the red. U.S. stock index futures pointed to a sharply weaker open for equities on Wall Street, a day after the Nasdaq shed more than 5 percent and the S&P 500 tumbled 4.5 percent on rising recession fears.

Wall Street's stock traders and investment bankers are putting off their usual August vacations this year. That's great news for the city's pizza delivery guys, the bartenders and hot dog vendors. The stock market's wild roller coaster ride has caused financial workers to postpone trips to the Hamptons and roll up their sleeves at work. This rush of activity has given Manhattan a spark of life in what has historically been a sluggish month for the financial industry. And that's helped the business prospects of places such as The Grotto pizzeria and restaurant, just around the corner from the New York Stock Exchange building.

One of the wildest streaks in Wall Street history came to a tame close with blue-chip stocks not far from where they were when the week began. After four consecutive days of 400-point swings, the Dow Jones industrial average rose a relatively modest 125 points Friday to bring the blue-chip average only 1.5% lower for the week. At one point this week, the Dow was down a dizzying 7.3%. The subdued trading was a relief for investors who have been buffeted by a stream of bad news in recent weeks.

Bank of America Corp. lost a fifth of its stock value in a general market rout amid heightened concerns about its ability to get ahead of the bad mortgages it holds, as well as the billions of dollars committed to resolving soured securities and home loans. Unease about the bank's continued malaise from the mortgage meltdown have grown in recent weeks, and some industry analysts pondered the possibility that the nation's largest consumer bank would have to seek additional capital to shore up its finances — especially if the nation heads into another recession.

Investors in bank, S&L and insurance stocks seem to be trying to tell us where they think that the economy is going. Better hope that they're dead wrong. The financial stocks as a group continue to perform miserably. The New York Stock Exchange index of financial issues closed Thursday at 139.28, down 1.01 points. Year to date, the index has fallen 11%. In contrast, the composite index of all NYSE stocks is down just 5%.

Bank of America Corp. lost a fifth of its stock value in a general market rout amid heightened concerns about its ability to get ahead of the bad mortgages it holds, as well as the billions of dollars committed to resolving soured securities and home loans. Unease about the bank's continued malaise from the mortgage meltdown have grown in recent weeks, and some industry analysts pondered the possibility that the nation's largest consumer bank would have to seek additional capital to shore up its finances — especially if the nation heads into another recession.

Ally Financial Inc., an auto and home lender bailed out by the U.S., moved closer Thursday to regaining its independence as the government converted $5.5 billion of preferred stock into common shares. The swap involves almost half the Treasury Department's preferred stock and boosts taxpayers' stake to 74% of Ally's common shares from 56.3%. The move is "designed to accelerate Treasury's ability to exit its investment," the department said. The government is looking to recover its $17.2-billion investment tied to Detroit-based Ally as Chief Executive Michael Carpenter readies the company for an initial public offering.