Subprime sinks 2 China Banks.

Two large banks - Industrial & Commercial Bank of China and Bank of China - posted higher fourth-quarter profits on Tuesday, buoyed by the country's surging economy. But the state lenders were hurt by holdings in subprime-related securities in the United States.

Bank of China, hardest-hit among the country's big banks by subprime exposure, said it held $5 billion in asset-backed securities at the end of 2007, or 2.13 percent of its investment securities, and booked $1.58 billion in provisions and markdowns on the holdings.

The lender said, however, that it believed that it had booked sufficient provisions and did not expect to incur further losses if it unloads its subprime-related holdings.

Industrial & Commercial Bank said it held subprime-backed securities worth $1.23 billion at the end of December 2007 and booked $400 million as an allowance for potential losses on that portfolio.

Both banks said they expect comparatively muted loan growth this year, while Bank of China said it planned to step up overseas acquisition activity following a year when mainland Chinese financial institutions made several landmark investments abroad.

Tracking the Dow on Wednesday,02/07/08

9:30am--Small Gap-Up 50.0 points,

Mortgage applications for the week ending June 27 increased 3.6% versus a 9.3% decline last week. The ADP Employment Change report showed a loss of 79,000 jobs in June, compared with an expected loss of 20,000 jobs. Notably, the government's June unemployment rate will be released tomorrow.

10:30am--The bearish graveyard spin.

Factory orders for May climbed 0.6%, which is better than the 0.5% increase economists forecast. The Bullish gap-up being filled.Sudden spike up on the news.

11:30am--The bears strike.

The stock market continues to chop along, but has fallen lower as crude prices have moved higher. Each of the major indices are trading at their worst levels of the session.

12:30pm--The Dragonfly Doji.

Will retrace to the morning MAV.In a speech, U.S. Treasury Secretary Henry Paulson stated high oil prices are likely to prolong the current economic slump in the U.S.

1:30pm--Inverted Hammer.

Gold closed its session $1.90 higher at $946.40 per ounce. Gold, which is considered a store of value, often attracts buyers amid inflationary threats.

2;30pm--The Descend after touching the MAV.

Merrill Lynch downgraded shares of General Motors (GM 9.98, -1.77) and lowered the firm’s price target amid cash concerns. The assessment was released just a day after GM announced better-than-feared monthly sales results, which provided a spark during yesterday’s action.

3:30pm--Main candlestick is bearish inverted hammer.

Rising oil prices also continue to weigh on investors’ mood.

4:00pm--A full blown bear.

It's near the shaven bottom.Good sign of a spike up.

Stocks have dipped below their lowest closing prices of the year, they're still above their all-time lows of the year

The June labor report on Thursaday will be the decider of the next session.