Financial Stocks Can’t Hold On To Gains

Financial stocks can’t seem to hold onto gains made earlier. Indeed, today, the stock market opened higher. However, early gains have been erased as concerns about the health of financial companies continue to loom large. Right now, these financial companies rely a great deal on a housing market recovery. While the first time home buyer tax credit was a major player in the housing market recovery, confidence in financial companies was higher.

However, now that it appears that things are snagging with regard to an extension of the first time home buyer tax credit, there are concerns about the cash flow these companies will enjoy. Indeed, without new loans to give out — quality loans from new borrowers — there are concerns about financial companies.

Companies that are big into mortgages, such as Freddie Mac, Fannie Mae, Bank of America and Genworth Financial are some of the biggest losers today as investors show their concern. It will be interesting to see how things play out going forward. However, without continued support to the housing market through some sort of a tax credit, it is likely that corporate finance will continue to struggle.

Image credit: Brian Katt via Wikimedia Commons