Bank of America Corp (BAC)

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Bank of America, JP Morgan Stock Stuck in Tailspins

Techs Microsoft, Cisco and Intel also feel pain

Jul 18, 2011, 12:18 pm EDT | By Jonathan Yates, InvestorPlace Contributor

Concerns about the debt situation in both the United States and Europe had the Dow Jones Industrial Average down more than 150 in early trading to beneath 12,334, about a 1.25% drop to start the second week of earnings season. Every stock in the Dow Jones Industrial Average was down.

Financials, the weakest sector in the market for the year, were dragging the Dow lower, with Bank of America (NYSE:BAC) off by about 3%, a loss of 30 cents to trade around $9.70 and JP Morgan (NYSE:JPM) falling more than 75 cents to about $39.20, shedding almost 2% shortly after the opening bell. Both JP Morgan and Bank of America are trading beneath their 20, 50 and 200 day moving averages. JP Morgan reported strong earnings last week.

Caterpillar (NYSE:CAT) was also treading lower, losing about $2.33, more than a 2.10% plunge, to under $107.04. With the global outlook dimming, there will be less demand for Caterpillar’s construction equipment. Caterpillar is trading above its 20, 50 and 200 day moving averages. With a beta of 1.71, it is much more volatile than the overall market.

Like Caterpillar, Boeing (NYSE:BA) was down about $1.90, around 2.67% lower to under $69.40, on concerns there would be less need around the globe for its aircraft. Boeing is trading beneath its 20, 50 and 200 day moving averages. With a relative strength index of 31.68, Boeing is just above the 30 level for a stock to be considered oversold.

Techs were also feeling the pain as a RBC analyst report predicted lower margins in switching equipment, sending Cisco Systems (NASDAQ:CSCO) down about 25 cents, around a 1.6% loss, to under $15.35. Last week, Cisco Systems performed strongly on announced layoffs of up to 10,000 that were projected to save $1 billion annually. Even with that bump, Cisco is still trading below its 20, 50 and 200 day moving averages.

Microsoft (NASDAQ: MSFT) was off more than 1.15% to under $26.50, shedding more than 30 cents. Microsoft is above its 20, 50 and 200 day moving averages. With a relative strength index of 64.80, Microsoft is close to the 70 plateau, when a stock is thought to be overbought.

Intel Corporation (NASDAQ: INTC) was down more than 0.90%, a loss of about 20 cents to under $22.20. There are doubts about how strong Intel’s numbers will be when reported on Wednesday, July 20. Intel was recently downgraded by Standpoint Research.

Jonathan Yates does not own any of the stocks in this article.

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