From sizzle to fizzle

From sizzle to fizzle

Friday, March 13, 2009

It was all going so well – until analysts at SunTrust Banks just had to go and bring investors back to reality, arguing that credit card companies will announce delinquencies and defaults next week, renewing concerns that there is another shoe to drop as the U.S. financial sector struggles to find stability.

The Dow Jones industrial average was down 35 points, or 0.5 per cent, to 7135 – threatening to cap the index's winning streak at three days. The broader S[amp]amp;P 500 was down 5 points, or 0.6 per cent, to 746.

Financials were the biggest drags, falling 2.6 per cent after turning in double-digit gains during two of the past five days. Industrials fell 1.7 per cent and consumer discretionary stocks fell 0.6 per cent. However, health care stocks remained hot, rising 1.4 per cent, this time with Merck [amp]amp; Co. Inc. in the driver's seat.

In Canada, the S[amp]amp;P/TSX composite index was down 61 points, or 0.7 per cent, to 8221. Information technology stocks were the big laggards, falling 3.5 per cent after analysts at ThinkEquity issued a “sell” recommendation on Research In Motion Ltd., arguing that the stock faces pressures amid growing competition from the likes of Palm Inc.

Financials fell 0.9 per cent after a promising rise at the start of trading. Energy stocks fell 1.6 per cent after early gains in the price of oil evaporated.


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