"Energy, Financials Lead Market Higher
Always remember, one day market moves aren't indicative of what will happen in the future. Although financials took a beating today, they came back up overall. Can this be the shining light everyone is talking about?[BRIEFING.COM] On Tuesday, stocks got off to a negative start, but eventually ended the day with substantial gains after traders shrugged off record high crude prices, and seemingly bearish headlines out of financials and homebuilders. Specifically, the S&P 500 was down 0.7% shortly after the opening bell, and then steadily climbed higher to finish the day with a 0.8% gain.
Fannie Mae (FNM 30.81, +2.52) said it had a first quarter loss of $2.2 billion, or $2.57 per share, compared with earnings of $0.85 per share in the prior quarter. In an effort to shore up its balance sheet, Fannie is cutting its quarterly dividend by 30% to $0.25 per share and will raise $6 billion in capital. Its shares opened more than 7% lower, but quickly rebounded to finish the day with an advance of 9%. Fannie said that government regulators will be reducing Fannie's capital requirement level to 15% from 20%, which may have aided in the stock's reversal.
UBS (UBS 33.77, -0.54) reported a massive 11.5 billion Swiss francs loss (roughly $11 billion) for its most recent quarter, but the company had preannounced this result so it came as no surprise. UBS did provide some new information, though. UBS is selling $15 billion in mortgage assets to BlackRock (BLK 218.95, +3.55) and plans to eliminate 5,500 jobs by 2009."
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