Financials took a hit on the news that Merrill Lynch & Co. Inc. (MER) had its earnings forecasts cut by JPMorgan Chase (JPM) and UBS AG, reports Kevin Plumberg for Reuters. Then Merrill turned around and downgraded Bank of America (BAC), PNC Financial (PNC) and SunTrust Banks (STI), saying that the collapse of the housing market will continue to hurt lending and home equity.
Financial ETFs are down slightly intraday:
- Regional Bank HOLDRs (RKH): JPMorgan Chase, 14.7%; Bank of America, 9.1%; PNC, 4.5%; SunTrust, 4.3%
- Financial Select Sector SPDR (XLF): Bank of America, 8.8%; JPMorgan Chase, 6.8%; Merrill Lynch, 2.1%; PNC, 1.1%; SunTrust, 1%
- iShares Dow Jones US Financial Services (IYG): Bank of America, 11.9%; JPMorgan Chase, 9.1%; Merrill Lynch, 2.7%; PNC, 1.4%; SunTrust, 1.4%.
The Conference Board reported this morning that its Consumer Confidence Index fell to 64.5 this month, from a revised 76.4 in February. The reading is a five-year low, and a far cry from the 73 that had been expected by analysts, reports Joe Bel Bruno for the Associated Press.
It’s a strong sign that people are increasingly restricting their spending to the necessities amid fears that we’re in a recession – but the decreased spending will only further weaken the economy.
Retail ETFs that could feel the effects of the news: