Money & Investing – Banks.com

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Investors have sobered a bit yesterday’s big stock market rally. Today, U.S. stocks have remained largely rangebound, hovering around the break-even point. The stock market opened slightly down before heading slightly higher. This session has been see-sawing between slight gains and slight losses as investors try to decide what they believe about the economy. Here are some of the big stories getting play today:

• Initial jobless claims lower: Unemployment figures have been released, and they show that claims are at a low not seen for six months. There is speculation, however, that this news is the result of quirks, rather than any real economic change. A certain amount of volatility is also to be expected in jobless data during the summer.
• Home builder sentiment: Another important segment of the economy is the home builder sentiment index. This month, it appears that the sentiment has jumped. Still, though, conditions are deemed rather unfavorable. But the increase in sentiment is a welcome change — especially since it hasn’t been this high since last September.
• Bank earnings: Bank earnings, led by Goldman Sachs earlier this week, are markedly higher. JP Morgan revealed its second quarter profit earlier today. The news has many hoping that the financial sector will soon be back on its feet.

All of this positive news, though, is being counterbalanced by concerns over CIT Group Inc. CIT is a big lender, and it has failed to get a government bailout. As a result, there is a chance that fourth largest bankruptcy in U.S. history may be in the offing. MarketWatch reports on the CIT situation:

CIT asked existing debtholders for $2 billion and has given them 24 hours to decide whether they want to stump up the cash. If it can’t get the money, the lender will likely have to file for bankruptcy as more customers draw down credit lines, the Wall Street Journal reported Thursday, citing unidentified people familiar with the matter.

The news is spooking investors. Additionally, some are taking a breather after yesterday’s rally. And, of course, the profit takers are moving in. The fact that the stock market has remained in range so far is actually a fairly good sign.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.