Friday was a bad end to a bad week for the market and for financials in particular, in the wake of President Obama's statements on limiting the risk-taking of large American banks.
Leading the downward march on Friday were shares of American Express (AXP), which lost almost 9%, and Capital One (COF), which fell more than 12%, highlighting how investors reacted wildly to negative information as the week came to a close. New credit card regulations were expected to affect the companies negatively.
In comparison to AXP and COF, credit card company peer Visa (V) shed only a modest 2% on Friday, and even the main target of populist anger against Wall Street, Goldman Sachs (GS), was down only 5%. Stranger still is the fact that AXP's earnings were slightly better than the market expected.
However, after this week, the pattern should no longer be surprising. Important companies have been beating expectations left and right since earnings season began, but even when earnings have been stellar, the market has not seen it as positive enough to placate concerns about the future of the economy.Macroeconomic issues such as China's tightening of lending and Obama's plans for banking regulation have made the market wary of a future slowdown in economic recovery to the point that the success of fourth-quarter earnings and even the whole of 2009 is barely relevant. The market's wariness, when given unsettling future information alongside positive past results, may not be an entirely bad thing. > > Bull or Bear? Vote in Our Poll
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV