Stocks Open Lower After Big Bank Earnings Reports
Stocks fell slightly in morning trading today as investors weighed some better-than-expected earnings with the strong possibility that another big bank would file for bankruptcy.
After rising for four consecutive days, the Dow Jones industrial average lost 9 points, or 0.1 percent, in the first 45 minutes of trading. The Nasdaq shed 8 points, or 0.4 percent, while the Standard & Poor's 500-stock index dropped 3 points, or 0.4 percent.
In a note to clients, Charles Schwab & Co. analysts said, “Markets are struggling to add to weekly gains after stocks rose the first four days of the week and it remains uncertain if CIT Group will become the next bank to fail as a result of the credit crisis.”
Investors have looked for hope in earnings reports this week and found signs of life in the strong earnings of four of the country's biggest banks. Bank of America and Citigroup reported big second-quarter profits this morning. But, as expected, both showed continued weakness in loan portfolios. General Electric Co. beat earnings forecasts, but its revenue fell short of expectations.
Investors also received encouraging news about the housing market this morning. The Commerce Department said construction of new homes and apartments jumped 3.6 percent in June to 582,000, better than the 530,000 economists expected and the highest level in seven months.
Building permits, viewed as an indicator of future construction activity, climbed 8.7 percent to an annual rate of 563,000, above the expected 520,000 .
-- Kim Hart
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