Updated from 3:52 p.m. EST
S&P cut its long-term counterparty credit rating on BofA late in the afternoon to "A" from "A+" and reiterated its negative outlook on the bank. The move wiped out the gain BofA had earlier, and it helped send the Dow about 40 points into negative territory. Recently, BofA was down 2 cents at $3.61. Earlier in the day, the stock was as high as $4.08, meaning it's more than 11% below its best level of the session.
We've heard at least some of this before, and on Tuesday we heard it again. Maybe you feel better about keeping your job now, about being able to continue paying your mortgage, about getting out of credit card debt, about not being forced to one day file for bankruptcy. Am I close? Of course not. We're in a terrible time economically, and very little has changed in the past 24 hours, either for us as individual investors or for corporate America. As much as I want to believe that things can turn on a dime, the truth is we're probably a long way from climbing out of this mess, and no one has the answer on just how much more we can drop. The Dow got a small bounce at the open, but it didn't last long. Why would it? A little picking around after the previous session's slide lifted the index early, but there really wasn't much out there to fundamentally alter the perception or the reality that this downturn is the worst the U.S. has suffered in decades. So we're left with hope, hope that better days are right around the corner. Not a good spot to be in. Recently the Dow was up 6 points at 6769. Thus far, it's traded in a fairly tight range of about 6706 to 6849. With around two hours left in the session, 15 stocks were up and 15 were down.
Among the financials, Citigroup ( C), Bank of America ( BAC) and American Express ( AXP) were higher, while JPMorgan Chase ( JPM) was losing ground. AmEx was the strongest stock on the day, up 4%. General Electric ( GE) was the weakest component, falling 7.5% to $7.03, followed by Home Depot ( HD), down 5.4% at $18.84. We've still got two hours. Maybe we can find some reason to get some momentum.
I suppose the good news is we don't appear, for the moment, to be setting up for another cascade downward. Then again, maybe that's exactly what we do need if we're ever going to reach a real bottom, or at least get there sooner rather than later. Though I suppose a break from the seemingly constant drumbeat of pessimism isn't the worst thing in the world. At any rate, futures on the Dow were up 52 points at 6842 just before the open. Banks were looking stronger, with Citigroup ( C), JPMorgan Chase ( JPM) and Bank of America ( BAC) all rising in the premarket. Citi, coming off a session in which it dropped 20% to $1.20, on volume of more than 1 billion shares, was up 11%. GM ( GM) wasn't trading yet, but later in the day the automaker is expected to report its February sales. Already, a report in The Wall Street Journal is out with dour comments from COO Fritz Henderson on the company's U.S. sales. No surprise really. Car sales have been plunging for months as consumers pulled back amid the worsening recession. Elsewhere, a couple of research reports on Dow stocks were issued ahead of the open. In one of them, Caris said it believes IBM ( IBM) is better poised to benefit from recurring revenue than Hewlett-Packard ( HPQ), while Collins Stewart thinks Microsoft ( MSFT) still needs to do some kind of deal with Yahoo! ( YHOO) to bolster its search business. We're now 13 months removed from Microsoft's initial bid for Yahoo! Would be nice to get some kind of resolution already. Anything. A deal. No deal. Just no more speculation and rumor. Please.