This is from their noon update:
The financial sector has come under heavy pressure, currently down 2.9%, after Goldman Sachs lowered its rating on the broker sector and indicated Citigroup (C 17.78, -1.07) may incur additional write-downs and may also raise more capital, according to reports. Reports also indicated Goldman believes Merrill Lynch (MER 33.94, -1.52) may also raise capital. Shares of C were added to Goldman’s Conviction Sell List, according to Dow Jones.
Once again we see financials are a big reason for the problems. As I posed below this shouldn't be a surprise. We are still hearing reports from the financial sector that they need to raise more cash, writedown more assets, cut more dividends and sell more assets.
And then there was oil:
Crude oil jumped above $140 a barrel to a record as Libya threatened to cut output, OPEC's president said prices may reach $170 by the summer and the dollar weakened.
Libya may curb output because of a U.S. law that allows terror victims to seize assets of foreign governments as compensation. OPEC President Chakib Khelil said oil may surge on a European interest rate rise, France 24 reported. Oil, gold and copper climbed today as the dollar dropped because the Federal Reserve gave no signal of higher interest rates yesterday.
At a time when infltion worries are picking up we now have another day when oil hits a record. This is not what the market needed.
GM was downgraded:
Goldman also lowered its opinion of General Motors (GM - Cramer's Take - Stockpickr). Losing 10%, GM, along with fellow Dow component Citi, led the index downward. Every Dow stock was losing ground.
All in all, it was a terrible, horrible, no good very bad day. Let's go to the charts.
Above are the weekly charts for all the indexes. Simply notice that today's action was a clear reversal of direction in a bid way.
The SPYs opened lower and continued to move down for the rest of the day. This is clearly a very bearish chart that does not bode well for the future.
As with the SPYs, notice the clear downward trend of the QQQQs. The index could not find bottom all day and closed near its session lows.
Interestingly enough, the IWMs didn't close at session lows, but still had a terrible day.
The bottom line is today the market realized there were still problems in the economy. The financial sector is still in trouble and the overall economy is lukewarm at best.