Stocks Down Hard, Led By Financials
Despite some positive economic data, stocks sold off aggressively today with all of the major indices registering losses of at least 2%. The 2.2% slide in the S&P 500 sent the index below the key psychological 1,000 level. Financial stocks were some of the worst hit.
On the economic front things looked pretty solid: the ISM Manufacturing Index rose to 52.9 above the consensus of 50.5; Pending home sales for the month of July came in up 3.2%, vs. consensus of 1.5%; Construction Spending Down 0.2%, Versus the Consensus of 0.0%.
With the start of September, some are calling for a short-term market top. Today they were right.
High-beta financial names, the recent market leaders, were under tremendous pressure today. The key ETF Financial Select Sector SPDR (NYSE: XLF) fell 5.4% today. Some recent high-flying zombie stocks like AIG (NYSE: AIG), Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE) and CIT (NYSE: CIT) registered losses of 20.6%, 18%, 17% and 15.5% respectively. Large banks also felt the pinch today; Bank of America (NSYE: BAC) fell 6.4% despite reports they will repay a portion of their TARP funds; Wells Fargo (NYSE: WFC) fell 4.8% on rumors of a secondary, which the CEO later denied; Citigroup fell 9% giving back a portion of its recent surge.
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