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Financial Stocks Flop on Weak Earnings From Citi, Goldman Sachs

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Today's financial recap and tomorrow's financial outlook.

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December 2013 Australian employment fell by 22,600, well below the expectations for a gain of 10,000. The poor month capped off the worst year for Australian full-time employment since 1992. As a result, the Aussie dollar fell below $0.88, its lowest level since 2010, and prompted renewed speculation that the Reserve Bank of Australia will revert back to an easing bias rather than one of tightening.

US equities digested their gains from the past two days. The benchmark S&P 500 (INDEXSP:.INX) closed down 0.13% for the session following gains of 1.6% over the prior two. The Dow Jones Industrial Average (INDEXDJX:.DJI) fared worse, losing 0.39%. Utility-sector stocks were the top performers thanks to a sizable rally in US Treasuries. Financials were the worst off following less-than-stellar earnings from Citigroup (NYSE:C) and a sell-the-news reaction to Goldman Sach's (NYSE:GS) earnings.

Initial jobless claims fell to 326,000 from 328,000 in the week prior. More importantly, continuing claims rose to 3.03 million from 2.865 million in the week prior. The January NAHB survey of builders and real estate agents fell to an index reading of 56 from 57 in the month prior. The index has remained relatively steady for the past seven months.

Nu Skin Enterprises (NYSE:NUS) fell by 26.76% after it announced that Chinese regulators were investigating the company for pyramid-scheme suspicions. The company announced that it would likely have a negative effect on its revenues, that it had started a full business review. Herbalife (NYSE:HLF) and USANA Health Sciences (NYSE:USNA) both fell by more than 10% due to the investigation.

Natural gas inventories fell by 287 billion cubic feet, the most on record. However, it was less than what the market had been expecting. Most traders and analysts had expected a draw of 295 to 305 bcf. Natural gas futures had initially been up by 3.4% before paring gains to 1.38% by the close of floor trading.

Intel (NASDAQ:INTC) reported revenues that were in line with expectations, but earnings were slightly below consensus and the stock fell by nearly 3%. The stock had traded up into the report, so investors got ahead of themselves with their expectations.

Tomorrow's Financial Outlook

The Commerce Department will release December 2013 housing starts and building permits data in the morning before the market opens. Economists estimate that starts will fall to an annualized rate of 992,000 from 1.091 million in the month prior. Permits are estimated to rise to an annualized rate of 1.014 million from 1.007 million in November 2013. December 2013 industrial production is estimated to rise 0.3% month-over-month after climbing 1.1% in the month prior. Additionally, capacity utilization is expected to rise to 79.1%, the highest since 2004.

The only two global economic data reports scheduled for tomorrow are UK retail sales and eurozone construction output.

Notable earnings reports in the US tomorrow include General Electric (NYSE:GE), SunTrust Banks (NYSE:STI), Bank of New York Mellon (NYSE:BK), Morgan Stanley (NYSE:MS), and Schlumberger (NYSE:SLB).

Twitter: @Minyanville

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No positions in stocks mentioned.

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