Pull Back Continues Through Mixed News
Ouch, I think is one of the best ways to think about the last few days of trading. Since Friday, the S&P 500 (.INX) has lost almost 4%. Concerns over real recovery prospects and actual economic growth have started catching up with the recent rally.
We talked about a blow off top last week, and how some pullback was inevitable from the rally. But there have been a lot of other news items coming into play recently. Not all good or bad.
Companies have still been aggressively cutting jobs, which will affect consumer confidence, and explains the increase in productivity. Now productivity gains are a good thing, and even though net output is down, any sustained increase in productivity is a huge economic advantage.
While the financials have been dropping, one bank with good news has barely risen…
Wells Fargo Financial (NYSE: WFC) announced it would be cutting its government indebtedness – like many other bailout recipients – but more importantly, it stated that it would not dilute shareholder equity to do so. Score another win for Warren Buffett’s influence.
Oh, and anyone who agreed that American International Group (NYSE: AIG) had moved too far too fast and got out on Friday morning like we mentioned is looking back at that 35% decrease with some sense of satisfaction. We are.
Symbols mentioned in this article: .INX, WFC and AIG.
Related Investment U Articles:
- The Swiss Franc Still Trumps the Dollar and the Euro
- Corporate America Charges to a Third Quarter Earnings Record
- How to Play Uncertainties in the Eurozone
- A Lesson on Cost-Cutting… From Greece
- Proposed European Bailout Plan Comes Up Short
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