BANKS FALL ON CONCERN ABOUT STOCK SALES
By lunchtime Tuesday, stocks had slipped after Goldman Sachs posted a much higher-than-expected first-quarter profit but said it planned a $5 billion sale of common stock to help pay back government funds.
The financial sector has surged in recent weeks after some major banks said they had made money in the first two months of the year. Meanwhile investors remain positive on Citigroup , which reports quarterly results later in the week.
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I’d still buy Goldman on the dips, counsels Pete Najarian. But don't rush, I think there will be more of a pullback in the stock.
In fact there’s a lot of options action in all the bank stocks, he adds. That tells me it's not just a short squeeze driving shares but also the options action is propelling these stocks to the upside.
If you want to play the whole sector via the Financial Select Sector SPDR , I think you play it for more upside, adds Carter Worth.
The volatility moves tell me to buy the dips and sell the rips, says Brian Stutland.
I think we’re seeing fundamental strength return to these stocks, counters Zach Karabell. Although there will be ebb and flow in share price, the gains in Goldman and Morgan could be locked in and permanent.
An unexpected drop in retail sales dented investor optimism on Tuesday, creating another big drag for stocks. Sales at U.S. retailers fell 1.1 percent in March, snapping two months of increases. Investors had hoped retail sales would show the economic slump was moderating but instead the data underscored worries that consumers are reluctant to spend.
"The retail sales numbers this morning were clearly disappointing, with investors looking for signs that consumers were starting to emerge from their bunker mentality despite very strong headwinds," says Michael Sheldon, chief market strategist at RDM Financial.
It seems to me that the consumer discretionary space is way overdone, adds Carter Worth. I’d let them go.
I'd play the specialty retailers, counters Zach Karabell, but be selective. I think the overall perspective is that spending is not falling off a cliff as previously believed. I’d look at Amazon or Apple. (Karabell considers both names niche retailers)
The RTH is up something like 15% over the past month. Time to sell the retailers, bristles Jeff Macke.
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CNBC.com with wires