D&D Note (4-18-2012) ~ Pain in Spain Rains Again

D&D Note (4-18-2012)

Falling bond yields aren’t enough to keep the Spanish worries out of the markets. A report released by Spain showed that the Spanish banks held more problematic loans than what was earlier thought, making the potential downside now deeper and a bailout more likely.

While Spain can be covered under the Euro “firewall” (the money set aside to bailout countries like Greece) the real issue becomes wether Italy needs a bailout. There simply isn’t enough to bailout Spain and Italy. The one good thing about the Euro crisis compared to the American Lehman crisis is the pace at which it is happening. Here in the states it was a matter of days. Spain has been a worry now for more than two years – so there has been ample time to rein in the crisis.

Tech earnings that came in yesterday after the bell helped weigh down the markets today as well.

Companies that reported today after the bell: Qualcomm (QCOM) was down 6% in after hours after beating estimates bringing Apple (AAPL) down 1% in after hours due to the connection between Qualcomm chips in Apple products. American Express (AXP) was down .05% after beating earnings. YUM! Brands (YUM) was down 2% on strong numbers perhaps some profit taking after the stock as run up a lot of late. EBAY (EBAY) beats and is up over 2% in after hour trading.

A big question now is have we already seen the correction? Does the market still need to fall a bit more (2-5%). With the recent spat of earnings and companies getting sold off even after beating doesn’t paint a good picture going forward. Then there is the other issue of when earnings here in America finish for the quarter will Spain suddenly become the single market driver?

Be sure to have some solid high yield dividend plays in your portfolio, even though its a crowded trade those stocks offer good protection from the volatile swings of the market.

In other random news, Dick Clark passed away at 82. “America’s Teenager” – its actually surprising that he was only 82, thought for sure he was at least a bill.