The markets have been trading in a tight range all week, with any advance being countered with a decline the following day. On the week, the major indices have been trading in a mixed fashion with the Dow and Nasdaq showing modest gains of less than one quarter of one percent and the S&P 500 showing modest losses in the same amount.
Financial firms have made headlines this week as there has been a sudden rush to repay TARP funds. Bank of America (NYSE:BAC) announced last week that it would be repaying the full amount of its outstanding TARP loans and on Wednesday, the company followed through by repaying the full $45 billion to the Treasury. And just this morning, Citigroup (NYSE:C) announced it would also be paying back the $45 billion borrowed from the Treasury. The Treasury has stipulated that the company would have to raise approximately $20 billion in new equity, just as Bank of America had to do last week. And not to be the only major institution with TARP funds on the balance sheet, Wells Fargo (NYSE:WFC) also announced it had received approval from the Treasury to repay the $25 billion it had borrowed last year.
With so many financial firms trying to raise capital in the equity markets, investors have become wary of the financial sector sending the iShares Financial ETF (AMEX:IYG) down almost two percent this week despite today's modest gains.
FedEx (NYSE:FDX) issued encouraging guidance earlier in the week, stating it expects fourth quarter earnings to top both its previous guidance and Wall Street estimates. The shipping company expects profits of $1.10 per share in the quarter, citing substantial month-over-month growth in the domestic overnight shipping unit. The news reinforces the growing belief that the US economy is recovering from the year long recession and could be moving forward once again.
The encouraging news out of Memphis was enough to push the iShares Transportation ETF (AMEX:IYT) into the green this week, as the ETF is showing modest gains on the week.
And Apple (NASDAQ:AAPL) enthusiasts have more reason to cheer in 2010 as the company is expected to launch its new tablet product to compete with Amazon.com's Kindle device. Oppenheimer analyst Yair Rainer said in a report yesterday that Apple is expected to start production in February with a March or April launch date. The product is expected to cost upwards of $1,000 per device, but promises to be much more than Amazon's book-reading device. And like the iTunes store, Apple will take a percentage of every book sold, further boosting the company's earnings potential going forward.
News of the new product release date has helped the iShares Technology ETF (AMEX:IYW) inch higher this week, as the fund is showing modest gains so far.
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