U.S. stocks and exchange traded funds (ETFs) retreated into negative territory this morning as investors shunned away from stocks waiting for more reports from the government on bank stress tests.
The federal government is expected to release a report which will outline which financial institutions will be allowed to return borrowed TARP funds. Financial behemoths Goldman Sachs (GS) and JP Morgan Chase (JPM) are among institutions that are eager to pay the government back. To add to this uncertainty, the institutions that were told to raise more capital in last month’s stress test report are to submit their strategic plans on raising the additional capital by today.
The Obama administration plans to require banks and corporations that have received two rounds of federal bailouts to release full disclosure on changes made to executive compensation. This attempt to widen oversight of compensation is a way to prevent these TARP recipients from making use of any loopholes in ambiguous rules and regulations and frivolously spending taxpayer money.
A combination of the aforementioned news sent the Financial Select SPDR (XLF) down nearly 0.3% in early morning trading.
In an attempt to bolster a much ailed labor market, President Barack Obama unleashed a new employment plan, as part of his $787 billion stimulus package, that is expected to create nearly 600,000 jobs. The plan outlines 10 projects and in expected to create new services in the health care industry, improve infrastructure, revamp the nation’s parks and provide funding to hire more educators, states Kim Chipman of Bloomberg.