Day Traders Diary


As bad as things are, the news just keeps getting worse. The major averages opened modestly lower. The Dow Jones Industrial Average fell 5 points to 8,194. The S&P 500 fell 2 points to 840 while the Nasdaq Composite fell fractionally to 1,489. After the open, the selling accelerated to the downside. Citigroup is down 16%, but the biggest concern is with Bank of America down 21%. The Wallstreet Journal wrote an article indicating that Bank of America went to the Treasury in December looking for more TARP money. That's not good. M&T Bank is down 8% on a downgrade. J.P. Morgan Chase opened higher after beating estimates thanks in part to tax benefits from the Washington Mutual merger, but when the market moved lower so did JP Morgan. Government data indicated that foreclosures fell 81% last year. The low interest rates should help, but Fannie and Freddie put out a report indicating 70% of their borrowers don't qualify for loans or refinancing. In the tech sector, Apple is down 5% as Steve Jobs will leave the firm for health reasons. Disney is also lower as Steve Jobs is the largest shareholder of that entertainment company. Autodesk is down 14% after lowering guidance. Google is down 4% as one analyst expects lay-offs, first time in the company's history. One bright spot, a few retailers are higher, but that's about it for the good news. After the first hour the Dow fell 163 points to the 8000 level. S&P is breaking support levels and the Nasdaq is down 30 points. Through the morning the averages remained weak led by the financials. Wells Fargo is selling off, now down 17%. I don't think any big bank is safe. During the lunch hour the Dow dipped below 8000 first time since November. Bank of America is off the lows on news or rumors they're expected to receive another $15 billion in TARP money. The techs and retailers are improving. Entering the last hour, all the major averages moved into the green. The
big banks are still weak. Now the rumor on Bank of America is they will get a Citigroup type bailout which means the dividend will probably go away. Then why do the Merrill Lynch deal? The rally in the Dow didn't last as the big banks went lower once again. Then in the last hour, a US Airway plane crashed into the Hudson River. Hopefully, everyone is safe. The averages did recover into the close.The Dow Jones Industrial Average finished up 12 points at 8,212. The S&P 500 gained a point to 843, while the Nasdaq Composite rose 22 points to 1,511.
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