The 6-week rally has had a few down days since it began, but this one feels a bit more real.
The Dow is off about 225 points, and both the S&P 500 and the NASDAQ are off over 3.2%. What’s the problem? Well, there was really nothing to get excited about in the Bank of America (BAC) earnings. The core banking business is bad, and management doesn’t see things turning around anytime soon.
Shares of the bank are decisively lower, dropping 16%. Its compatriot Citigroup (C) is down about 15%.
Then there was the bizarre stress test leak, which is almost certainly bunk, but it does focus the mind on the weird and mixed signals that regulators have given about them.
At this point, given how fast things have run up — particularly in some of the worst industries, like banking — it doesn’t take much to get investors to sell.