MIDDAY LUNCH

Dow 10396.65  -201.85, Nasdaq 2265.98  -25.55, S&P 1118.23  -19.88 

Stocks are having their worst back to back losses in three month.  Both yesterday and today have been underscored with broad-based selling in the face of better-than-expected earnings.

The positive impact of the earnings reports on the market was offset by renewed concern for tighter monetary policy in China.   China yesterday announced that they had instructed some of its banks to curb lending in order to meet capital requirements and prevent the country's economy from overheating.  Many believe that this could cause a double dip recession or at least stall the global recovery.

 

Financials are weak on news from President Obama that under new proposals banks will no longer be allowed to own, sponsor, or invest in hedge funds for proprietary profit.  This comes on earlier news last week to impose a fee on as many as 50 major financial companies to cover as much as $117 billion in losses from the federal government’s TARP program. The levy would not be applied to General Motors, Chrysler and other companies that also received TARP funds, but have not repaid the government. Companies getting hit hard are Goldman Sachs (GS) 158.75 -9.13, -5.46%, JPMorgan Chase 40.77 -2.64, -6.08%, and Bank of America (BAC) 15.56 -0.93, -5.64%

Materials stocks are presently in the worst shape of any major sector. In addition to broader market pressure, materials stocks have been hampered by weaker commodity prices. The sector is currently down -3.6%.

Oil prices have also been dragged down. Despite a surprise inventory draw, oil prices are down -1.9%

to $76.25 per barrel.