Financials Force Dow To Close At Three Month Low
The Dow closed at a 3-month low, due to the continuing weakness in financials. New lows expanded at the NYSE to nearly the highest levels in 3 months.
Weighing on markets:
--downbeat commentary from CarMax , FedEx
--capital raising from Fifth Third
--oil remaining in the $130-$140 trading range
CarMax missed earnings and suspended guidance for the year. They noted:
--a 3.6% decline in used selling prices because they cannot sell the gas guzzlers customers are bringing in;
--credit availability is tightening;
--sales and traffic weakened since Memorial Day.
Auto stocks like CarMax, AutoNation , GM and Goodyear Tire hit new lows.
Rather than finding a bottom, selling has accelerated in the regional banks; Fifth Third fell apart in the last hour and ended down 23 percent as they cut their dividend and announced they were raising capital.
Other regional banks hit new lows as well.
All of this is happening in what appears to be slow motion, because neither volume nor fear levels seem to be increasing. The CBOE Volatility Index (VIX), a measure of the cost of buying protection on the S&P 500, has been only slightly elevated in June. This jibes with what sells-side desks are telling me: they are DEAD because they cannot convince clients to either buy or sell stocks.
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