Current Futures: Dow +25.00, S&P +2.40, NASDAQ +2.75

U.S. and Asian markets dropped for a second consecutive day, as rumors continue to emerge about the bank’s stress test results and as swine flu continues to claim new territories. However, the Japanese Nikkei was sheltered from some of the declines tonight, as the market is closed to celebrate the Showa Day. 

Rumors circulating in the last period point out that Bank of America and Citigroup will require more funds to survive, according to unofficial results of the recent stress tests. Some analysts go so far and estimate that BofA may need up to $70 billion in new capital, something that may not prove too easy to get right now. 

“The circulating numbers are huge. Very few banks would be able to raise that kind of money without government intervention, and even with it, not too many of them would show the eagerness to actually lend money now,” Trade Team said. “The bank has two options, to raise money by selling its assets, or to issue new shares to raise the necessary cash. A mixed solution may be the best case scenario.,” they added.

“Despite this, positive news came from the consumer sector on Tuesday, which helped a number of shares advance and offset the declines from the banking sector. Consumer confidence advanced more than expected in April, which may be reflected as an up-tick in the general business mode as most likely retail sales rose for the month as well. Two thirds of the U.S. economy is based on consumer spending, so every additional penny might prove to be good support for the economy,” Trade Team said. 

Overnight, the Nikkei was closed for business tonight. The Australian S&P/Asx slipped 16.30 points (0.45%) to 3,692.10. 

Crude oil for May delivery was recently trading at $49.50 per barrel, down by $0.45.

Gold for May delivery was recently trading down $2.40 to $891.20.