Market Talk

US stocks meander through a quiet session, despite high-profile earnings from GE, Citi and BofA, and a well-received report on housing starts. (Video recap here.)

DJIA adds 32 (0.4%) to 8744, up about 7.3% on the week; S&P slips less than 1 to 940, Nasdaq Comp adds 2 to 1887. Big Board volume tops 5B shares. It’s the Dow’s best week since the 9% gain for the week ended March 13, when the rally started. The Dow rose every day this week, it’s longest winning streak since November.

This week’s sharp gains broke a four-week losing streak, and if you want more evidence that the risk trade is back on, look in the crude pits, where oil futures, down in recent weeks, also rose sharply this week, gaining 6%.

Citi, BofA post profits that were cinched by multi-billion dollar asset sales. Their consumer businesses don’t look so hot either. All in all, the banking sector certainly has returned to profitability, but those profits are coming via massive intervention from the federal government and Federal Reserve. And the ones that are still tied to the consumer have bombs lurking on their balance sheets.

So we wonder how many multi-billion dollar assets they have that they could sell down the road, should something “unexpected” happen, like, you know, unemployment “unexpectedly” rises past 10%, or the economy “unexpectedly” doesn’t recover in the 2H.

Lastly, CIT Group shares rose 70% – to 70 cents – as it scrambles to get some financing deals in place. When companies are this close to bankruptcy, there comes a time when they pass the point of no return. It isn’t clear yet whether CIT’s passed that point; but they’re close.