U.S. stocks and exchange traded funds (ETFs) were in the red for the first time in five days on concerns of conditions in the financial system and the ambiguity of first quarter earnings.
Many banks were downgraded and shares declined in large amounts on news that the federal government’s measures to bail out the financial institutions may not be enough. The biggest concern is that loan losses will exceed levels from the Great Depression, states Rita Nazareth of Bloomberg.
To help the ailing banks, the Treasury has further extended its deadline for its toxic asset program, which will enable hedge funds and other private investors to buy up “bad” assets with some help. Unfortunately, this measure still hasn’t fired much of a spark. The Financial Select SPDR (XLF), was down about 3% in intraday trading, and is down 22.6% year-to-date.
To add to the negative news on Wall Street, the alleged acquisition of Sun Microsytems (JAVA) by IBM (IBM) has came to a halt. Those familiar with the talks claim that pricing and regulatory issues are making the deal complicated.