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Discover Financial Services (NYSE: DFS), a credit-card company that competes with Visa (NYSE: V), MasterCard (NYSE: MA), and American Express (NYSE: AXP), reported earnings for the second quarter. According to this news summary, Discover beat expectations by posting a loss of $0.18 per share. The market thought that the loss would be as high as $0.29 per share.

If you read the actual press release, you'll see that Discover, on a reported basis, made $0.43 per share. However, we must remember that this profit included an antitrust settlement sourced to Visa and MasterCard. So, once you get rid of that money, you come up with a loss for the quarter.

Not a good day for those looking for green shoots with markets down strongly. And no wonder. Credit card problems with the U.S. consumer are off the hook as CapitalOne (NYSE: COF) charge-offs rose to their highest historical level of 9.91% (via ZeroHedge) and American Express (NYSE: AXP) rose to 10% (via Mish Shedlock).

Higher chargeoffs and retracting credit means further consumer spending retraction. A semi-annual survey by Collier Capital found that 20% of institutional investors plan to downsize their target allocation to private equity, (via PEHub) the largest negative response since the survey started in 2004. An article by two Harvard University economists found that the biggest reason for the growing income inequality is lagging educational improvement in the American workforce (via VoxEU). There is no quick fix for this so its fairly bad news (although better than blaming the inequality on globalization and some neo-capitalist cabal).

Alex Salkever is Director of Research at Piqqem.com, a stock analysis site powered by the Wisdom of Crowds.

Today was one of those days where the overall market direction never felt entrenched nor felt certain. The news of ten banks getting to pay back TARP funds created mixed reactions, as the news was expected. Positive guidance from a chip leader may have kept the wheels on the cart for technology stocks. Oil also spent much of the day flirting with the $70 per barrel mark.

With the swings we are seeing from positive to negative, it is just further evidence that there is a battleground between bulls and bears forming. So far the bulls are managing to keep the high ground. Here are today's unofficial closing bell levels:

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This morning, the U.S. Federal Reserve is expected announce that some banks will be allowed to repay the money lent to them under the Troubled Asset Relief Program (TARP). Some of the banks expected to receive approval are Goldman Sachs (NYSE: GS), JPMorgan Chase (NYSE: JPM), American Express (NYSE: AXP), Morgan Stanley (NYSE: MS), State Street (NYSE: STT) and U.S. Bancorp (NYSE: USB). All of these banks have expressed interest in repaying the government.

What is interesting is that there will be yet another Czar joining the White House, a "Repayment Czar," (what is the deal with the media's fascination with Russian royalty?) or as the administration will call the position, the "Special Master for Compensation."

Well, now it seems that even the big boys have to play by the rules. What do I mean play by the rules? Apparently, if a bank wants to pay back the TARP monies, they must demonstrate that they can raise equity.

JPMorgan Chase & Co. (NYSE: JPM) and American Express Co. (NYSE: AXP) were the only two banks that did not raise equity.

So there was an exchange between regulators and Jamie Dimon, JPMorgan's chief executive, who said that he did not believe that ability to tap capital markets should have been relevant for his bank. He went on to say, "Any argument you can think of, you could assume we made with our regulators. And as you could also expect, they won.The primary reason was access to equity capital markets, and its hard for me to imagine that really applies in the JPMorgan case." So it seems that the exchange was spirited to say the least.

We saw at least five directional changes throughout the day in the stock market, so the close still left people wondering what the day really was. The housing data was weaker than expected, and today marked the first day that the VIX went under 30. Here are today's unofficial closing bell levels:

Dow 8,476.36 -27.72 (-0.33%)
S&P 500 908.34 -1.37 (-0.15%)
Nasdaq 1,734.54 +2.18 (0.13%)

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With Home Depot beating earnings estimates and some financial firms asking to repay TARP loans, U.S. stock futures climbed, as Wall Street was set to open higher Tuesday. While investors are looking to extend the previous session's rally, feeling there are signs of stability in the financial and housing sectors, upcoming housing data could still change things.

[Update: Stock futures reversed course after a disappointing housing report that showed starts and permits unexpectedly fell to record lows in April.]

Not all weeks can end on an a positive note, and this week was just one of those weeks. Maybe the bulls went into hibernation, or maybe it was all just profit taking. The DJIA closed out last week at 8,574.65, so the drop to 8,273.50 shows what sort of week it was. Inflation is still tame and the Empire Manufacturing data was actually close to positive.

Here were today's unofficial closing bell numbers:

Dow 8,273.50 -57.82 (-0.69%)
S&P 500 883.37 -9.70 (-1.09%)
Nasdaq 1,680.14 -9.07 (-0.54%)

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Small biz credit card issuer Advanta (NAS: ADVNA) will shut down accounts to preserve capital and will stop lending June 10, according to Bloomberg. The company has 1 million customers that could be left without credit cards, yet another blow for small businesses suffocating without sufficient credit lines. Shares tumbled 24% on the news to less than a dollar per issue.

Meredith Whitney, bank analyst extraordinaire, reiterated what she's been saying from long before the financial crisis propelled us into the worst recession in most people's memories. Banks are overvalued, she said, and the government enabled them to have better first quarter earnings than they should.

Whitney said that "the underlying core, earnings power of these banks is negligible," and added that as consumer liquidity retracts and consumer credit contracts, "consumer spending is going to be less than people expect going forward."

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Alcatel-Lucent (NYSE: ALU) shares rose even though it reported a wider loss for the quarter.
• American Express Co. (NYSE: AXP) posted better-than-expected Q1 results but warned of challenges.
• Blackstone Group (NYSE: BX) reported a net loss and slumping revenues for the first quarter.
• Center Financial Corp. (NASDAQ: CLFC) was downgraded following its Q1 earnings report.
• Cisco Systems Inc. (NASDAQ: CSCO) posted lower Q3 earnings that still topped analysts estimates.

U.S. stock futures once again climbed Thursday morning, pointing to Wall Street continuing Wednesday's strong rally ahead of the stress test results. Investors were encouraged by Treasury Secretary Tim Geithner, who said no banks are at risk of insolvency. Meanwhile, General Motors (NYSE: GM) results just rolled in with another big loss; investors will also focus on chain store sales.

While results of the tests will only be released this afternoon, more was leaked and for now it seems that Goldman Sachs (NYSE: GS), American Express Co. (NYSE: AXP), JPMorgan Chase (NYSE: JPM) and Bank of New York Mellon Corp. (NYSE: BK) will not be asked to raise more capital. Citigroup Inc. (NYSE: C) will need to raise about $5 billion, Bank of America Corp. (NYSE: BAC) about $10 billion and Wells Fargo & Co. (NYSE: WFC) will also be asked to raise capital. They will have one month to come up with a plan to raise the additional resources, federal regulators said Wednesday.

Has American Express turned the corner? Perhaps not, but an intriguing dynamic warrants a review of the company.

American Express (NYSE: AXP) just posted a strong quarterly performance (Q1) relative to extremely low expectations. Excluding the 12-cent, after-tax benefit from MasterCard (NYSE: MA) and Visa (NYSE: V), AXP earned 20 cents per share, versus analysts estimate of 12-18 cents.

Visa (NYSE: V), whose colleagues include American Express (NYSE: AXP), MasterCard (NYSE: MA), and Discover Financial Services (NYSE: DFS), reported a Q2 profit on Wednesday that was surprisingly strong. On an adjusted basis, earnings came in at 73 cents per share. Analysts were banking on only 64 cents per share, according to Reuters.

Quite frankly, I can see the disparity between Wall Street's thinking and the ultimate reality. I mean, the economy has been bad (to state the obvious), and people aren't spending as much. This means that they aren't using their credit cards like they used to. Ergo, you might expect Visa to post a lower number.

Less-bad housing data from Case-Shiller was trumped after a much more positive consumer confidence report came out this morning. Swine flu was all over the media today, but not with as much financial impact.

Here are today's unofficial closing bell levels:

Dow 8,016.95 -8.05 (-0.10%)
S&P 500 855.16 -2.35 (-0.27%)
Nasdaq 1,673.81 -5.60 (-0.33%)

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