After yesterday's huge downbeat, investors and speculators were hopeful for some upside momentum, or, at least, a dead cat bounce.
Well, the cat bounced, but it turns out it was made of glass, as the major indices could not maintain gains, even though Europe was ecstatic over the second round of QE-Euro, with the ECB scooping up whatever dribs and drabs of debt they could find (liquidity is an issue).
One of the dullest sessions of recent memory was punctuated by bank stocks, which were mostly higher by one or two percent, in advance of the second round of Fed-mandated stress tests, which would determine the readiness of the TBTF banks to offer dividends and return to shareholders.
The results of the tests, released at 4:30 pm EDT, showed that 28 of 31 of the major financial institutions subjected to the Fed's nanny-ism, submitted capital plans that passed muster. The three which failed, were Santander, Deutsche Bank and Bank of America, the last of which must re-submit its plan by the end of the third quarter.
Largely, the tests allowed those which passed to increase dividends and engage in the latest Wall Street scam, repurchasing of shares. To that point, Morgan Stanley (MS) will repurchase $3.1 billion of its own shares; other banks had similar ratios.
Beyond the moribund inter-workings of major financial institutions, what moved markets on the day were dollar strength and euro and yen weakness. The dollar is at its strongest valuation against other currencies in over a decade, while the Yen and Euro are hitting 12-year lows against the greenback. The euro is approaching parity with the dollar, trading in the 1.05 range.
Also of note was the first quarterly report of Wall Street darling Shake Shack, which is trading at some ungodly valuation like $700 million per store. The SHAK returned a five cent loss per share for its most recent quarter. Shake that.
Dow 17,635.39, -27.55 (-0.16%)
S&P 500 2,040.24, -3.92 (-0.19%)
NASDAQ 4,849.94, -9.85 (-0.20%)