A higher government stake in Citigroup, now up to 40 percent, has raised the risk that more trouble, not less trouble, lies ahead for the banking sector. Banking stocks plunged including a 39 percent loss for Citigroup to $1.50 per share and a 26 percent loss for Bank of America to $3.95 per share. Share prices keep shrinking. GM is at $2.25 per share, down 6 percent on the day. General Electric, once a great blue chip, is at $8.51, down 7 percent on the day. GE slashed its dividend late in the session.
And then there was the economic data. GDP was revised sharply lower to -6.2 percent in the fourth quarter. Many indications are pointing to an even greater rate of contraction in the first quarter. Consumer sentiment remains at rock bottom, and purchasers in the Chicago area say layoffs are getting even worse. The financial markets have discounted a lot and hopefully they've discounted what looks to be this recession's worst employment report yet, data to be released next Friday.
Stocks opened sharply lower, battled back, but ended near their lows, at 735.09 for the S&P 500, down 2.4 percent on the day and a new 12-year low. Money moved into the dollar which ended 1/2 cent higher against the euro to end at $1.2668. Treasuries were narrowly mixed with the 3-month rate at 0.25 percent, not nearly as tight as the worst of last year's panic and a reminder that financial markets are still stable. April WTI oil was little changed at $44.30 but did end the week solidly over $40 after Wednesday's EIA data showed rising demand for gasoline, which is another subtle plus for the outlook. Gold was little changed at $944.40.