you and me are f@cked.
Financials in early advance as Fed widens liquidity plan
9:58 AM ET 5/2/08 | Marketwatch
NEW YORK (MarketWatch) -- U.S. financial stocks posted strong gains Friday, moving higher as the Federal Reserve expanded a program to ease liquidity in troubled debt markets and as employment data showed fewer jobs than expected were lost during April.
The Fed, along with other central banks, said that it's increasing the funding it provides to banks and that, for the first time, it was willing to accept bonds backed by auto loans and credit cards. See full story.
That should translate into more business, and in turn prospects for growth, for financial firms.
Also, the sector took heart from news that job losses slowed in April, suggesting that the nation may experience only a short and shallow economic downturn. See full story.
The decline in nonfarm payrolls was just 20,000 -- far fewer than expected. Economists surveyed by MarketWatch had been looking for job losses of 78,000, in line with the average rate seen over the first three months of the year.
Against this backdrop, Wall Street traded broadly higher, extending Thursday's advance. See Market Snapshot.
In early trading, the Financial Select Sector SPDR (XLF), an exchange-traded fund that tracks the financial stocks in the S&P 500, added 2%.
The Fed's move helped boost credit-card issuers, as it should provide an avenue for investors to monetize assets backed by credit-card debt, theoretically supporting asset-backed securities. If demand returns, credit-card companies are lilely to be more willing to lend to consumers.
Shares of American Express (AXP), Discover Fiancial Services (DFS), Cititgroup (C), J.P. Morgan Chase (JPM) and Bank of America (BAC) all were on the rise.
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