Economic News: Bank of America (NYSE:BAC), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), and ETFs

Once again, there’s been mixed signs from the economy today.  Big banks like Bank of America (NYSE:BAC) and Citigroup (NYSE:C) have a lot to gain from the recently announced employment gains.  The Department of Labor recently announced that there is an improving employment situation in the US, as jobless claims are down across the board.  With the massive snowstorms across the United States grinding the job hunt to a halt, these jobless claims could also be stronger than they initially appear.  High unemployment is closely correlated to mortgage defaults, consumer debt defaults, and lower deposits.  Therefore, a lowered unemployment level is a very positive sign for banks.  – ABN

While the unemployment rate decline is positive for lenders like Wells Fargo (NYSE:WFC), it was announced today that pending U.S. existing home sales declined in January.  Less people borrowing is a bad sign for the economy, as home sales tend to have a very strong money multiplier effect.  The index of purchase agreements declined about 7.6 percent in the beginning of the year, wiping out the 0.8 percent gain in December of ’09.  This comes even in the face of the extended federal tax credit for first time homebuyers, which is a bad sign.  Economists are saying that bad weather could have caused at least some of the dip in sales; If this is the case, they’ll likely be a surge in home sales in the mid-spring to early-summer.  – Business Week

In other economic news, the Commerce Department is reporting that US factory output increased an estimated 1.7% in January.  Though slightly lower than expected, this factory increase (boosted by airplane demand) builds on a similar increase of 1.5% from December of last year.  Core capital orders (a good indicator of business investment) fell 4.6% after months of solid gains, but durable goods orders (cars, washing machines, etc) increase an estimated 2.5% and nondurable goods (food, gasoline, etc) increased roughly 0.9%.  – MarketWatch

In specific trading news, today has been a busy day for ETFs.  Financial Select Sector SPDR (NYSE:XLF) has climbed over 0.7% and has traded roughly 18.5 million times at the time of this writing.  PowerShares QQQ Trust, Series 1 (NASDAQ:QQQQ) saw more moderate gains, up only 0.01 net points after a large gain (0.15) this morning.  Finally, Direxion Daily (NYSE:FAZ) has had a rough morning, declining -1.57% at the time of writing after a strong day yesterday.  Overall, the DOW, S&P500, and the NASDAQ are all up as lunch time nears.