22 US Banks Downgraded By S&P, Creating Pressure On Banking ETF’S (FAS, UYG, XLF, SKF, FAZ)

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June 17, 2009 12:19pm ETF BASIC NEWS NYSE:FAS

bankBank stocks were down on Wednesday following the S&P report of bank downgrades, putting pressure on the financial ETF’s  FAS, UYG,  XLF.  On the other hand financial inverse ETF’s FAZ & SKF are enjoying the bad news, which are seeing strong gains not seen for some time.


Business Week reported that the “Standard & Poor’s Ratings Services lowered its ratings and revised its outlooks on 22 rated U.S. banks on June 17. The actions reflect S&P Ratings’ belief that operating conditions for the industry will become less favorable than they were in the past, characterized by greater volatility in financial markets during credit cycles, and tighter regulatory supervision,” Reports Business Week.”

“We believe the banking industry is undergoing a structural transformation that may include radical changes with permanent repercussions,” says S&P credit analyst Rodrigo Quintanilla. “Financial institutions are now shedding balance-sheet risk and altering funding profiles and strategies for the marketplace’s new reality. Such a transition period justifies lower ratings as industry players implement changes.” Possible changes include increased regulatory oversight and lower profitability,” Business Week Reports.

I have included a list of the 22 banks downgraded with their new rating:

  • Associated Banc Corp. (NASDAQ:ASBC) counterparty credit downgraded to BBB/Negative/A-2 from BBB+/Watch Neg/A-2 
  • Astoria Financial Corp. (NYSE:AF) downgraded to BBB-/Negative/– from BBB/Watch Neg/–
  • BB&T Corp. (NYSE:BBT) counterparty credit downgraded to A/Stable/A-1 from A+/Watch Neg/A-1
  • Capital One Financial Corp. (NYSE:COF) counterparty credit downgraded to BBB/Negative/– from BBB+/Watch Neg/–
  • Carolina First Bank counterparty credit downgraded to BB+/Negative/B from BBB/Watch Neg/A-2
  • Citizens Republic Bancorp Inc.(NASDAQ:CRBC) counterparty credit downgraded to BB-/Negative/B from BBB-/Watch Neg/A-3
  • Comerica Inc. (NYSE:CMA) counterparty credit downgraded to A-/Negative/A-2 from A/Watch Neg/A-1
  • Fifth Third Bancorp (NASDAQ:FITB) counterparty credit downgraded to BBB/Negative/A-2 from A-/Watch Neg/A-2
  • First National Bank of Omaha counterparty credit downgraded to BBB-/Negative/– from BBB-/Watch Neg/–
  • Huntington Bancshares Inc. (NASDAQ:HBAN) counterparty credit downgraded to BB+/Negative/B from BBB/Watch Neg/A-2
  • KeyCorp (NYSE:KEY) counterparty credit downgraded to BBB+/Negative/A-2 from A-/Watch Neg/A-2
  • M&T Bank Corp. (NYSE:MTB) counterparty credit downgraded to A-/Negative/A-2 from A-/Watch Neg/A-2
  • PNC Financial Services Group (NYSE:PNC) counterparty credit downgraded to A/Stable/A-1 from A/Watch Neg/A-1
  • Regions Financial Corp. (NYSE:RF) counterparty credit downgraded to BBB+/Negative/A-2 from A/Watch Neg/A-1
  • Susquehanna Bancshares Inc. (NASDAQ:SUSQ) counterparty credit downgraded to BBB-/Negative/– from BBB/Watch Neg/–
  • Synovus Financial Corp. (NYSE:SNV) counterparty credit downgraded to BB-/Negative/– from BBB+/Watch Neg/– 
  • U.S. Bancorp (NYSE:USB) counterparty credit downgraded to A+/Stable/A-1 from AA/Watch Neg/A-1+
  • Valley National Bancorp (NYSE:VLY) counterparty credit downgraded to A-/Negative/– from A-/Stable/–
  • Webster Financial Corp. (NYSE:WBS) counterparty credit downgraded to BBB-/Negative/– from BBB/Watch Neg/–
  • Wells Fargo & Co. (NYSE:WFC) counterparty credit downgraded to AA-/Negative/A-1+ from AA/Watch Neg/A-1+
  • Whitney Holding Corp. (NASDAQ:WTNY) counterparty credit downgraded to BB+/Negative/B from BBB/Watch Neg/A-2
  • Wilmington Trust Corp. (NYSE:WL) counterparty credit downgraded to BBB/Negative/A-2 from BBB+/Watch Neg/A-2

Full Story:  Here


We ran two of these ETF’s through the market club software and found the following results from their chart analysis program.  Feel free to run your own ETF through the program.  IT’S FREE!

SPDR FINANCIAL SECTOR ETF (PACF:XLF)
Smart Scan Chart Analysis indicates a counter trend rally is underway The current up-trend could be changing and moving into a trading range Sidelines Mode.

Based on a pre-defined weighted trend formula for chart analysis, XLF scored +55 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

     
-10 Last Hour Close Below 5 hour Moving Average
-15 New 3 Day Low on Wednesday
-20 Last Price Below 20 Day Moving Average
+25 New 3 Week High, Week Ending May 9th
+30 New 3 Month High in May
+55 Total Score

 

PROSHARES ULTRA FINANCLS (PACF:UYG)
Smart Scan Chart Analysis shows the current downward trend is at a crossroads and has possibly ended. Look for choppy trading action in the nearterm Very Weak Downtrend with very tight stops.Based on a pre-defined weighted trend formula for chart analysis, UYG scored -60 on a scale from -100 (strong downtrend) to +100 (strong uptrend):
     
+10 Last Hour Close Above 5 Hour Moving Average
-15 New 3 Day Low on Wednesday
-20 Last Price Below 20 Day Moving Average
-25 New 3 Week Low, Week Ending June 20th
+30 New 3 Month High in May
-60 Total Score

5 WINNING Stock Chart Patterns

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