Friday begins with advances in the New York Stock Exchange, through the banking sector with the new rescue to Bank of America and the dismantling of Citigroup announcement recover ground. In addition, the inflation data has been better than expected and reinforces the optimism in US markets. So things, the indicators listed on the upside this Friday morning New York. Dow Jones of industrial points a 1.09%, until 8.302 points, the selective S & P 500 progresses a 1.30%, up to 854 points and Nasdaq technology wins a 1.04%, up to 1,527 points.
Quarterly results season had been in the eye of the hurricane to the financial sector throughout the week in the New York floor, while JPMorgan accounts had been better than expected. But doubts about the ability of Bank of America to digest the purchase of Merrill Lynch had turned on the alarm and losses were extended during the latest sessions in all banks. However, the American Government has acted quickly to avoid a new situation as last September when the bankruptcy of Lehman Brothers plunged the indicators and uncovered the precarious state of the American banks, taking ahead the model of investment banking.
Today, the largest bank in United States has received a new injection of 138,000 million dollars by the Treasury and has subsequently published their first loss in 17 years. In particular, Bank of America reported a loss of $ 1,790 million in the fourth quarter of the financial year, or 48 cents per share. These losses contrasted with earnings of 268 million dollars recorded a year ago.
The action of the Government will grant a lifeline of 20,000 million in funding from the American Government and 118 billion in a federal guarantee in toxic assets, to facilitate the absorption of Merrill Lynch. Shares of Bank of America point 4%, less than left glimpse in movers but it is that analysts have been more cautious than expected before this movement.
Citigroup seeks to survive
Meanwhile, Citigroup fires 8% after confirming their decommissioning. Citigroup will be divided into two, Citicorp and Citi Holdings, in a new attempt to ensure their survival. The announcement coincided with the publication of a loss of 8,290 billion dollars in the fourth quarter, well above expected, as seal to the worst year in its history.
In its quarterly results, Citi has lost in the last three months 8,290 dollars, equivalent $1.72 million per share. The forecasts of the market limited this figure to 4,490 million $, 1,31 dollars per share. These numbers make 2008, the worst year in the history of the American Bank.
Meanwhile, JPMorgan gets 3% at the opening meeting, Wells Fargo is listed flat. Before addressing the macroeconomic data, the technological indicator highlights the leading manufacturer of microchips in the world, Intel, who yesterday presented results at the end. In the last quarter, the benefit of the company plummeted 90% and 24% in the annualisation, until a profit of 5,292 million in 2008, or 92 cents per share. However, their actions are targeted 5% on the stock exchange and spread to the its competitor Advanced Micro Devices, which point another 3%.
Better than expected inflation data
As for macro references, the principal of the day has left some optimism on the floor. In the month of December, the American country has managed to dodge its entry official into deflation, as the market expected. His CPI fell in December to 0.7%, a tenth less than expected by analysts, bringing in annual data, inflation registered a rise of 0.1%, the lowest of the last 54 years.
However, it should not be forgotten that this instability in prices is not a symptom of economic improvement and left samples of the real risk of deflation for the coming months, something that the Fed wants to avoid by all means and in his road map is marked as of greater danger than inflation. Another reference has been worse than expected by analysts. Industrial production has become to suffer a contraction in last December and has dropped 2%, far above the 1% advanced by the market.