The Too Big To Fail Banks Drop After The Bernank
This afternoon, the major stock indexes are declining after the Federal Reserve said that they would implement a $400 billion bond swap called Operation Twist. Most investors and traders expected this news from the central bank. The FOMC also stated that they would keep the Fed funds interest rate at zero to a quarter percent for the foreseeable future which is again no surprise to the markets.
The financial stocks are leading the markets lower. The leading financial stock in the United States is J.P. Morgan Chase & Co. (NYSE:JPM). This financial giant is trading lower by 0.85 cents to $31.40 a share. JPM stock is now trading very close to its low for the year which was made on September 12, 2011 at $31.21 a share. Traders can watch for intra-day support around the $30.95 area.
Other leading financial stocks that are declining this afternoon include Citigroup Inc.(NYSE:C), Bank of America Corp. (NYSE:BAC), and Wells Fargo & Co. (NYSE:WFC). It is important to note that all of these banks were downgraded by the rating agency Moodys earlier in the day. If the too big to fail financial stocks continue to trade lower this afternoon the major stock indexes could see lower prices in the coming days. At this time, the large banks have not broken their recent lows on the daily chart, therefore, a bounce from here is still possible.