Financials Down 6.1% - Like the Days of the Tech Bust?

The S&P 500 Financials sector had its worst day of the credit crisis yesterday, declining 6.1%.  The one-day declines in many of the banks reminded us of the worst days during the bursting of the Tech bubble. 

To compare the two, we found the worst day for the S&P 500 Technology sector during the '01/'02 bear and found the worst performing stocks in the sector that day.  On March 28th, 2001, the S&P Tech sector suffered its worst day of the decade, down 8.07%.  As shown below, 26 stocks out of 78 in the index were down more than 10% that day, with Palm leading the way at -48%.  ADCT, MERQ, Nortel and Applied Micro were all down more than 15%.

Monday, 15 of the 89 stocks in the Financial sector were down more than 10%, but 6 were down more than 15%, which is worse than the Tech sector on 3/28.  Washington Mutual was down the most today at -34.75%, followed by First Horizon (FHN) (-25%), ZION (-23%), HBAN (-17%) and RF (-16.5%).  Misery seeks company.

click to enlarge

Comments

[SivBum:]

Nightmares revisited. Recall many other days when some tech stocks fell 30% plus. I once held a big chunk of a stock that tanked 38% when it warned of part shortage in 2000, when tech bubble began to bust.

2008 Jul 15 10:46 AM

[friend:]

Once the financials on the rise , the short sellers pull it down sharply , we can see such on July 2 , 9 , and more obviously July 14 where the after hours trading for FNM / FRE went up 30% while the same went down immediately when the bell rang .

I am talking about all bank stocks be they classified as strong or weak .

Obviously , the short sellers have been so well fed on the expense of the banks' equity by depleting value to sending a panic to the public , that they became much stronger than the defenders working on normalizing the financial pricing .

The " good news " would no longer help to recoup the price .

Everyone seems to know that they should follow the big guy in shorting once seeing any rise eminent .

The profit is taken in the expense of the whole economy .

Fannie / Freddie ( FNM / FRE ) have been running their business successfully for years .

They are well experience and up to today's date after their stock pricing and thereby equity , being depleted by short sellers down to almost worthless , they can still stand up to state in confidence that they can do a good job on what they have been accomplishing .

There is only harm done to the public by undermining the two .

They are the best to handle the now financial crisis .

The treasury ought to set up a trust funds for the taxpayers and buy their shares in the open market in against the short sellers .

The taxpayers would get themselves a terrific investment , FNM / FRE at about or under $ 10 , vow !

The taxpayers would make a big chunk of money when their pricing go back up to over $20 at just 2 weeks ago , in June .

The two would not be diluted since no new stocks would be issued .

The short sellers would lose some money and they are fat enough to afford it .

The two would gain back their equity so that the passing of the mortgage rescue plan can be facilitated .

Once the rescue plan is in place , the housing market would make a turn to gradual stabilization .

The rest of the financials would gain back confidence from investors .

Should the short sellers carry on to cut down any rise whatsoever .

The respective bank should throw in all they have or even borrow to buy against the short sellers .

The public knowing that a rise would not foresee a huge fall , would then buy as well on a rise trend .

The government should encourage banks to buy back their own stock at this time of crisis .

Once the banks got back their equity the vicious cycle would naturally be unspiralled .

Only a concerted effort by the defenders would beat a concerted strength from the short sellers .

Hey , bankers , don't miss this golden opportunity by investing in your own bank ; well , unless you are one of the short sellers .

Make some money for yourself and help USA to recoup financially .

Would you ?

2008 Jul 15 12:51 PM

[Jolly_Rancher:]

The comparison doesn't hold water. Many many of the tech companies didn't even have a product and many that did had no revenue nor prospects of revenue for the foreseeable future. The tech stocks that were viable companies were valued way beyond what they could earn for many years. On the other hand, almost all of the the financial companies are viable companies right now and provide a real business model for profit in the near future as in one or two years out, many of them profitable right now. When the economy turns up, they'll make money again. You can't hold back the bankers because they own everything we have.

2008 Jul 15 04:58 PM