Traders faced gloomy economic news from around the globe, no employment growth in the U.S. for August, a series of weak manufacturing reports and commodities inflation Friday. The Dow answered by dropping about 220 points, or around 1.9%, to under 11,275. The Dow is now down in triple digits two sessions in a row after finishing August with a surge. Losses in the morning session combined with yesterday’s drop have put the Dow back into negative territory for the year. Not a single Dow stock was up in early-morning action. Bearish sentiment is at 54%.
Bank of America (NYSE:BAC) was down about 6%, losing about 50 cents a share to around $7.40. Investors were rattled by a Wall Street Journal article on new scrutiny from the Federal Reserve about how Bank of America will react to dire circumstances. This year seems to demonstrate that, as BAC is down more than 40% for 2011. Bank of America has been selling assets but still is holding onto tens of billions of dollars’ worth of liabilities from bad mortgages. Mentioned in the article also was a spinoff of Merrill Lynch, which will be a tremendous blow to the earnings of Bank of America.
An analyst report yesterday pointing out that JPMorgan (NYSE:JPM) has far more problem mortgages than Bank of America or Wells Fargo has the stock down about 4% to under $34.95, dropping around $1.40. Unflattering articles in the WSJ on JPMorgan’s stock buyback program and mortgage woes also shook investors. For 2011, JPM is down more than 13%, resulting in a $600 million paper loss for its stock buyback program.
Another article in the WSJ was taking Hewlett-Packard (NYSE:HPQ) down about $1, around 4%, to about $25.75. The piece detailed how customers of Hewlett-Packard are losing confidence in the company after it announced plans to spin out is personal computer division. Since that announcement Aug. 18, the stock has fallen about 20%.
Concerns about global economic growth were plowing under Caterpillar (NYSE:CAT) by about $2.50 and 3% to under $86. It has been a good week for The Big Cat, which is up more than 6% during that time, but a bad quarter, off more than 12%. For the year, it is up more than 30%.
Alcoa (NYSE:AA) was lower by about 30 cents and 2.5% to under $12.20 per share. Earlier reports on massive Chinese buying of metals have the aluminum producer up almost 8% for the week. But, for the quarter, it is down more than 20%. Alcoa is a very volatile stock with a beta of more than 2.
Landing about $2 and 3% lower was Boeing (NYSE:BA), trading around $64.15. A massive reported order for the new version of the 737 has Boeing up more than 8% for the week, but doubts about U.S. and global economic recovery have the jet maker flying much lower in the early-morning buying and selling.
Jonathan Yates does not own any of the stocks mentioned in this article.
