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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Stocks dive following Bank of America news

Stocks spent this morning giving back all of Tuesday's big gains.

Just before midday, the Dow was down 1.8 percent.

The broader S&P 500 was down 1.6 percent and the tech-heavy Nasdaq was down 1.9 percent.

Bank of America kicked off the sour morning by reporting its fourth-quarter earnings, saying it had lost $5.2 billion by paying back its portion of the bailout. Further, chief executive Brian Moynihan said that economic conditions "remain fragile."

On the other hand, Wells Fargo and Morgan Stanley each reported profitable fourth quarters.

The "buy on the rumor, sell on the news" effect may be helping to tank stocks today as well. Wall Street rallied yesterday on hopes that Massachusetts hopeful Martha Coakley would lose her bid to replace Teddy Kennedy in the U.S. Senate, because she has said she would support the health-care reform bill that many businesses think would be very expensive.

Today, Coakley has lost and stocks are tanking. This is not an uncommon occurrence in the markets.

-- Frank Ahrens
Follow me on Twitter at @theticker

By Frank Ahrens  |  January 20, 2010; 11:43 AM ET
Categories:  Corporations , The Ticker , Wall Street  | Tags: Bank of America, Dow Jones, Morgan Stanley, Wells Fargo, nasdaq, s&p 500  
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Next: Coming today: A new look for Economy Watch


Apparently, neither the lib's nor the conservatives at the Post actually get "it". Neither, evidently, does the White House nor the leaders of either party in Congress. Brown won, yesterday, on a POPULIST platform. In every single exit poll, the voters said they wanted the government to curtail job and factory outsourcing, wanted curbs on "free trade", wanted to reign in banks investing in China and India instead of making small business loans here. Well, CHina heard it! China's leaders got the message, and so did India's. They are making it more difficult for U.S. investments, as a consequence. One way or another, we WILL end the free trade Ponzi schemes.

Posted by: mibrooks27 | January 20, 2010 12:43 PM | Report abuse

There is a way to reduce outsourcing of American jobs, to reduce employer incentives to replace American workers with automation, and to tax imports so as to level the playing field for products made in America!

It is a way that over 100 countries use, because of the advantages it provides for their workers, -- the value-added tax (VAT).

A VAT is like a sales tax on every input in the production process, including automation and outsourcing. But, international trade agreements allow the VAT to be refunded when products are exported and to be levied on imports.

We should replace the the FICA payroll tax that funds Social Security and Medicare with a VAT. Employers pay the FICA payroll tax only when they hire a worker, which enourages replacement of workers by automation or outsourcing. With a VAT, both outsourcing and automation would pay into Social Security and Medicare. So would imports.

And, because the VAT would be refunded when our products are exported, American-made cars, etc would be more competitive in the world market.

FICA tilts the playing field against American workers; a VAT would level the playing field!

God Bless America!

Posted by: jamesabush | January 21, 2010 12:05 PM | Report abuse

i am surprised that anybody who knows how B.O. operates ,would be surprised at how he just manipulated the stock market. he knew full well that the market would rise after Mass. so he PURPOSLY drove it down by announcing the bank restrictions. This was apparently after he got done making threatening remarks about the supreme court decision to allow free donations to candidates. this is Chicago style politics at its worst!!!

Posted by: daddmeyer1 | January 24, 2010 12:08 AM | Report abuse

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