Bears Bust Out, VIX Explodes, Banks’ Trading Ban
The slumbering bears busted out of their liquidity-fueled hibernation as the major indexes dropped sharply on the session. Positive earnings from eBay and Starbucks among others were ignored as the market focused on an Obama proposed ban of bank trading. In addition, banks would be prohibited from investing in hedge and private equity funds in an effort to reduce risk taking. The VIX exploded higher climbing over 19% in reaction to the sharp decline. The DJIA collapsed -213.27 to 10389.88, the Nasdaq gave back -25.55 to 2265.70 and the S&P 500 fell -21.56 to 1116.48.
^SBUX^: Climbed 1.66% or 39 cents to $23.68/share after beating analysts earnings estimates for the fourth quarter.
^JPM^: Fell 6.59% or $2.86 to $40.54/share as the banking sector whirled downward on Obama’s proposed risk taking regulation.
^BCS^: Dropped 7.89% or $1.56 to $18.22/share after it was revealed they may need to raise $28 billion to maintain capital requirements.
^EBAY^: Advanced 8.55% or $1.90 to $24.13/share after forecasts beat analysts full year earnings estimates.
Oil fell $1.76 to $75.98, gold gave back $9.60 to $1103.00 and the VIX index shot higher by 19.22% to 22.27.
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