Banks dragged the stock market lower on Monday, with losses accelerating late after Bank of America's stock price fell below $5.00 for the first time in nearly three years.
Warnings of deteriorating conditions in the euro zone and concerns about tougher capital rules that could cut into big banks' profits pressured the financials throughout the day.
When BofA, the largest U.S. bank, plunged through $5, it ignited a late-day decline in the sector and the broader market, which fell 1 percent. More than 29 million shares of the stock traded, accounting for about 5.4 percent of the day's total trading.
The Dow Jones industrial average .DJI was down 100.13 points, or 0.84 percent, at 11,766.26. The Standard & Poor's 500 Index .SPX was down 14.31 points, or 1.17 percent, at 1,205.35. The Nasdaq Composite Index .IXIC was down 32.19 points, or 1.26 percent, at 2,523.14.
Adding to worries, Fitch warned on Friday it may downgrade the ratings of France and six other euro zone countries, saying a comprehensive solution to the region's debt crisis was "technically and politically beyond reach".
More than three-fourths of companies traded on the New York Stock Exchange fell while 76 percent of Nasdaq-listed issues closed in negative territory. (commentary & photo courtesy of Reuters)
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RSI issued a buy recommendation Sunday:
- Buy 606 shares of iShares Nasdaq Biotechnology (IBB)
Today I opened a position in IBB because it has exhibited the potential start of a return to the upper trendline. I also like its diversification aspect for portfolio balance.
I subscribe to a newsletter from a group of respected money managers. They are now looking at the equity market as a glass half empty, so they are moving into more risk off trades. This aspect of the RSI portfolio resulted in the portfolio gaining a respectful +0.3% today while the overall market dropped over 1%. RSI is certainly picking risk off candidates.
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