U.S. stocks ended mixed Wednesday after a late-session profit taking almost wiped off a 156-point rally in the Dow average that was fueled by the Fed’s encouraging assessment of the economy and its decision to keep interest rates low for an extended period.  The optimism was short-lived as investors appeared jittery ahead of the October jobs report on Friday. Fresh concerns over bank earnings resurfaced after the House of Representatives passed a bill curbing credit card rate increases.

After the house vote, financials slumped 1.5% and led the decliners among the S&P 500 industry groups.  Analyst Meredith Whitney noted the biggest U.S. banks may face declining values on home-loan bonds with government backing as the Fed moves towards ending its $1.25 trillion purchase program.  Whitney said bank earnings are far from approaching "normalcy," and will reflect regulatory changes for an extended period.  JPMorgan (NYSE:JPM) fell 1.2% to $42.21 and

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Billionaire investor George Soros said yesterday (Monday) that the U.S. recovery would be a slow one because of all the “basically bankrupt” financial companies impeding it.

U.S. Federal Reserve Chairman Ben S. Bernanke and Congress agreed Friday that the financial system – not the American taxpayer – should bear the costs of bank bailouts. Sheila Bair, head of the Federal Deposit Insurance Corp. (FDIC), wants the banks to ante up $45 billion – three years’ worth of deposit-insurance premiums – to bail out the fund that insures bank deposits.

When it comes to bank stocks, we all know that there were a number of Money Morning readers shrewd enough to buy Citigroup Inc. (NYSE: C) shares when the foundering giant’s stock price was below $1 a share.

If you’re one of those investors, good for you: With Citi’s shares now trading at nearly $4.70 a share,

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Friday’s edition of The Wall Street Journal picks up on the theme of the long road of pain ahead for bank shareholders in the US. In ‘Banks on Sick List Top 400,’ the WSJ details several ugly highlights from the latest FDIC Quarterly Banking Profile, published last Thursday.

Here are a few:

1. The FDIC’s Deposit Insurance Fund is now promising to insure $6.2 trillion in deposits with just $10.4 billion in reserves. Expect to see another “special assessment” cutting a few billion dollars out of bank earnings later this year.

2. Credit card losses are at a record: 9.95%

3. 416 banks, or 5% of the nation’s banks, are on the ‘problem’ list.

4. FDIC-insured banks are sitting on $332 billion in loans more than 90 days past due, up from $290 billion in the first quarter.

5. Nonperforming loans now make up 2.77% of the entire banking industry’s assets. This is up from 1.4%

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In the last 18 months, Strategic Short Report readers had the chance to make 432% when Lehman failed, 162% when Allied Capital (NYSE:ALD) came clean, and 220% on PNC Financial (NYSE:PNC)… This month my subscribers are poised to make money on the next bank drop.

And I’m going to give you a chance to join them.

If you think Canada escaped the downward trend in U.S. banking, think again. While the country may not have plunged headfirst into subprime mortgages, it did dip heavily into risky derivatives. The leverage it took on generated impressive returns on equity in good times, but that same leverage is set to wipe out equity today.

Shareholders in one “safe” Canadian bank will have to rethink their loyalty. Its looming solvency crisis practically guarantees a dividend cut. And that’s our catalyst for this month’s short play action - offering us a chance for 200% profit potential.

Accounting

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The Dow Jones Industrial Index on Thursday breached 9,000 for the first time since January and the Nasdaq Composite Index notched up a 12th consecutive advancing day (the first time sine 1992) as favorable reactions to earnings and economics reports propelled stocks and other risky assets higher. Meanwhile, the usual debate on the outlook for the economy and shenanigans of financial institutions again dominated the video channels over the past few days.

Fed Chairman Ben Bernanke’s bi-annual testimony on Capitol Hill (and an expected grilling by Alan Grayson) and other highlights of the week’s trials and tribulations were captured on video and are included in this video-o-rama compilation. Strutting their stuff were a star-studded cast including the likes of Martin Feldstein, Stephen Roach, Bill King, Nouriel Roubini, Sheila Bair, Mario Gabelli and George Friedman.

The compilation starts off with an interview with Harvard’s Martin Feldstein about his “double-dip” economic

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For Immediate Release

Chicago, IL – July 21, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Morgan Stanley (MS), American Express (AXP), U.S. Bancorp (USB), Goldman Sachs (GS) and JP Morgan (JPM).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

3 Things to Watch This Week

1. Reaction to Bank Earnings - Nearly 1 out every 4 reports will be from the financial sector. Many of these are well-known firms such as Morgan Stanley (MS), American Express (AXP) and U.S. Bancorp (USB).

Big

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Just wanted to give a quick update of where we sit as earnings hit full force. br /br /From the tech side of things, IBM reported some pretty solid results. They were down on revenues, but it was a manageable number. They beat on their profits, and raised their full year guidance from 9.20 to 9.70, which was important. They also improved their profit margins. I believe they are an example of a company "managing" its way through this recession, and doing it well. Not only are they performing well now, they are poised to be way ahead of the pack once we return to solid growth.br /br /Google also reported last night. Again, solid numbers. But that's not was the street wants from Google; it wants big numbers. Its true their growth rate is slowing, but I think they deserve a ...

The yen rose today as uncertainty about the global economic outlook and forthcoming U.S. corporate earnings increased the safe-haven appeal of the Japanese currency.

Sterling fell as weak industrial output data reinforced doubts about a UK recovery. The euro dipped against the dollar, but losses were capped by a surprise increase in German factory orders that initially pushed it to a session high above $1.40.

When risk aversion rises, investors often cut holdings of stocks and higher-yield currencies and buy back the yen and dollars that were used to finance the trades.

“We’ve been getting very mixed signals, with some positive data and some very poor data, so it’s extremely difficult to pinpoint direction,” said Fabian Eliasson, vice president of currency sales at Mizuho Corporate Bank in New York.

“As a result, people are backing out of high-yield assets and into the yen and dollar. Now, the focus will turn to corporate earnings as

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Yes, gold is on sale. You don’t have to pay $950 plus a premium to buy an ounce of gold. You can buy gold in the ground for a fraction of its normal price. The same holds true for many other essential natural commodities like silver, oil, uranium or copper.This opportunity has been brought your way by the same thugs that imploded global stock markets in 2008 via an historic combination of fraud and greed. Yep, they did a number on the commodity market as well as the associated stocks were decimated across the board. Select resource stocks are now outperforming.

Many gold stocks are presently priced as though gold was a mere $500 due to the carnage. Excellent companies with proven and growing resources are being largely ignored. This represents nothing short of an opportunity to buy gold at a discount.

I’m not in the habit of making gold price

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Is the crisis really over? Commercial paper spreads have come down dramatically. Libor rates are (hmm - almost) back to normal. Even high yield spreads are narrowing.

It certainly appears as if the credit crisis is well and truly over or, at the very least, the light which most of us think we can see at the end of the tunnel is no longer that of an oncoming freight train.

No wonder equities are currently enjoying one of their best spells ever. And while equities continue to go up and up, most of us are left scratching our heads. Is this the real thing or will it go down in history as ‘just’ another bear market rally? Not so long ago, the entire financial system stared Armageddon in the face. Now, only a few months later, equity markets behave as if all the worries of yesterday have been washed away. How

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