Financials Fall on Bernanke Announcement

Brittney Barrett |

Ben Bernanke FedThursday erased much of the previous day gains as Federal Reserve Chairman Ben Bernanke failed to inspire renewed confidence in the economy among jittery investors. Bernanke said that the Federal Bank would not be taking immediate steps to stimulate growth.

The Dow Jones Industrial Average began sliding shortly after the announcement as did the following Standard & Poor's 500-stock index and the Nasdaq Composite. Bernanke’s failure to reveal further insight into the central bank’s economic support plans prior to the meeting of the Fed's decision-making body on Sept. 20-21 led most all sectors lower, with the financial and industrial sectors leading the way.



Lingering hope from Bernanke’s last speech in Jackson Hole, Wyo., led to disappointment in the markets today that had a particularly rough impact on banks. Banks have been having a tough run of it and have been among the most obvious victims of volatility. A rise yesterday in major banks made a quick sell even more appealing than it otherwise would be.

Mostly every bank in the sector was impacted by the broader market pull back with J.P. Morgan Chase (JPM) hit the hardest.  For the most part though, the major banks from Bank of America (BAC) to Citigroup (C) were hit in equal measure, between 3 and 4 percent. This, while significant, did not undo yesterdays eight percent gain for Bank of America.

Wells Fargo (WFC) and Goldman Sachs (GS) also retreated for the day on fear that the economic recovery would continue to lag. On the whole, the news yesterday regarding the potential $300 Billion unemployment proposal introduced by President Obama seemed to fade from consciousness. Bernanke’s announcement fast reminded investors of the ongoing challenges the economy is facing domestically and overseas in terms of slowing economic growth.

While recent reports indicate the U.S. is not falling off a cliff just yet, continued growth slowdowns and anxiety over debt contagion in Europe are weighing down the markets and leading Americans to assess the impact that will have on our economy.

The sagging attitudes Thursday also hit insurers, specifically AIG (AIG) and All State (ALL) which were both down on high-volume for the day.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
HBI Hanesbrands Inc. 22.60 0.35 1.57 3,735,839 Trade
C Citigroup Inc. 63.41 -0.21 -0.33 16,395,259 Trade
JPM JP Morgan Chase 86.86 -0.16 -0.18 18,812,029 Trade
GS The Goldman Sachs Group Inc. 217.19 -2.58 -1.17 4,448,992 Trade
BAC Bank of America Corporation 22.82 -0.11 -0.48 85,399,612 Trade
ALL Allstate Corporation (The) 88.08 -0.23 -0.26 3,969,885 Trade
WFC Wells Fargo & Company 52.45 -0.04 -0.08 21,868,452 Trade
AIG American International Group Inc. New 63.02 -0.03 -0.05 8,461,768 Trade

Comments

Emerging Growth

Naked Brand Group Inc

Naked Brand Group Inc through its wholly-owned subsidiary is engaged in manufacturing and selling of direct and wholesale men's undergarments to consumers and retailers.

Private Markets

Initial State

Initial State is an Internet of Things (IoT) data analytics & data management platform company. We turn sensor and event data into information that matters by making it easy to…

8tracks

Our mission is to be the best place for people who care about music to create and discover thoughtfully curated playlists. In essence, 8tracks is a platform for online mixtapes.