MarketView for March 19

Summary 

New concerns over who will bailout Greece and to what extent had the dollar climbing and the financial markets falling on Friday. Sectors sensitive to dollar moves were hit hard, including materials, chip makers and energy. In addition, commodities futures such as those for gold and crude oil, fell. As a result, Exxon, a component of the Dow Jones industrial average, closed down 0.5 percent at $67.04.

The euro fell to more than a two-week low against the dollar on worries over the debt problems facing Greece's. Driving those concerns was a possible reluctance on the part of the European Union's largest economy, Germany, will hinder efforts to alleviate Greece's problems.

Healthcare insurance stocks were among the rare winners on Friday, ahead of an impending congressional vote to overhaul the healthcare system. Healthcare or no healthcare, Aetna managed to post a gain of 3.7 percent to close at $34.46 after it forecast first-quarter earnings above consensus.

For the week, the Dow rose 1.1 percent, the S&P was up 0.9 percent and the Nasdaq a positive 0.3 percent.

3M, which fell 2 percent to $81.96, was the top drag on the Dow as the diversified manufacturer erased gains made in Thursday's session, when it was one of the top advancers in the blue-chip average.

Weighing on the Nasdaq was Palm, which fell 29.2 percent to $4.00 a day after it warned that quarterly revenues would be far below expectations as low demand for its smartphones left wireless carriers with excess inventory.

SunPower was down 14 percent to $18.96 a day after it gave a weaker-than-expected profit outlook for 2010.

Volume has been thin during the week along with lower volatility. As a result, the CBOE Volatility Index is down 3.5 percent.  In addition, Friday marked the second day of a convergence known as quadruple witching, when four types of options and futures contracts expire, triggering volatility and higher volumes.

Court Says Release Names

A federal appeals court told the Federal Reserve on Friday that it must disclose records on emergency lending programs to banks bailed out by the government in the financial crisis. The Second Circuit Court of Appeals ordered the release of the details of programs adopted by the Fed beginning in late 2007 to shore up the financial system and forestall a complete meltdown of global financial markets.

The Fed argued against disclosure, citing an exemption that it said lets federal agencies keep secret various trade secrets and commercial or financial information. It also said allowing disclosure of participants in the programs and the collateral they posted could cause "competitive and reputational harm," perhaps triggering bank runs, and impede the central bank's ability "to effectively manage the current, and any future, financial crisis."

Writing for a unanimous three-judge appeals court panel, Chief Judge Dennis Jacobs said, however, that to give the Fed power to deny disclosure because it thinks it best to do so "would undermine the basic policy that disclosure, not secrecy, is the dominant objective.

"If the Board believes such an exemption would better serve the national interest," he added, "it should ask Congress to amend the statute."

Fed spokeswoman Michelle Smith said the central bank is reviewing the decision and weighing options for reconsideration or appeal. An appeal could go to the U.S. Supreme Court.

The Clearing House Association, a group of major U.S. and European banks, said it was disappointed with the decision. It said the court did not reach the "fundamental issue" of whether disclosure would have competitively harmed banks, general counsel Paul Saltzman said in a statement.

The media's principal argument included that the public interest in disclosure trumped any potential risk of harm to borrowers, and that the identity of those borrowers was itself not confidential.

Jacobs wrote that the Fed and Clearing House set forth "plausible, and forcefully made" arguments that disclosure "would harm the banks that borrowed (by disclosing their prior distress) and the banking system as a whole (because banks under stress may hesitate to seek relief or rescue)." However, he also said the disclosure sought would not cause Federal Reserve banks "the kind of harm contemplated by the 'privileged or confidential' requirement" of an exemption from FOIA."