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Short Sale Ban On Financials Is Over: Make A Difference?

Thursday, 9 Oct 2008 | 9:09 AM ET

S&P futures are up 19 points, and while many think this is because Treasury is actively shopping the idea they will take an ownership stake in U.S. banks, bear in mind that the market now routinely swings in 20 plus point ranges in a day, and often overnight, so futures up 15 is not even unusual any more.

The short sale ban on financials is over; financials are among the most actively traded pre-open. Lots of debate on how much of a difference this will make in trading. It appears to have made little difference in how the stocks trade. More on this later.

Elsewhere:

1) Teen and specialty retailers reported September same store sales today, and as with department stores yesterday they are generally below expectations. Abercrombie, TJX, Pier Oneand Men's Wearhouse lowered guidance.

2) Chemical giant Huntsmanup 40 percent pre-open after Apollo said it will contribute $540 m to its Hexion unit to close the acquisition of the company.

3) We get greater clarity about who has exposure to the Lehman credit default swaps tomorrow. The Lehman bonds are practically worthless, trading at 12 to 13 cents on the dollar, according to some accounts. So the sellers of protection are facing massive losses. There will be an auction tomorrow on the bonds, which will determine how much the sellers of protection will have to shell out.

4) IBMpre-announced third quarter earnings ABOVE expectations: $2.05, above First Call estimates of $2.02. Note this is one of the few stocks above last year's third quarter of $1.68. Up 3 percent after the close to $93.75.

5) MetLifepriced its 75 million share secondary at $26.50, closed at $27. The good news is they got the deal done; the bad news is that it was done at a price HALF what the stock was trading at a few days ago.

6) Iceland halted trading on their stock market until Monday and seized control of another bank, the third one it has seized this week.

7) Today is the anniversary of the all-time closing high for the S&P 500: 1565.15 on October 9th. Intraday high was 1576.09 on October 11th.

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  • Questions? Comments? tradertalk@cnbc.com

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    IBM
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    MW
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    PIR
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    TJX
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    • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

    Wall Street