After a strong start to the day, equities quickly reversed course and gave up most of their early gains following a much worse than expected consumer confidence reading. The broader market has since bounced off its lows, but it remains well off the early highs (Dow is now +149, SPX +11, Nasdaq Comp +15). Notably, the financials showed relative weakness in early trading, with sharp losses earlier in the day in MS (now -13%) and GS (now -6%) weighing on the group, although both stocks have since recovered from their lows. While there wasn't any news out on either co, weakness in MS was linked to continued concerns about yesterday's news that Mitsubishi UFJ (MTU) will raise capital, while weakness in GS was attributed to rumors of potential losses stemming from the spike in Volkswagen shares. Specifically, MS traded down as much as 26% this morning with concerns that the co (which recently sold a stake to Mitsubishi) may not have as much access to Mitsubishi's balance sheet as some previously thought, due to Mitsubishi's own need for capital now. GS dropped as much as 11%, with David Faber on CNBC noting that rumors were circulating suggesting the co may have been on the wrong side of the massive short squeeze in Volkswagen shares. GS has since recovered a good portion of its losses after Faber said he is hearing from sources inside GS that the firm has no significant losses stemming from Volkswagen. Earlier he had noted that many hedge funds were short the ordinary Volkswagen shares and long the preference shares or Porsche shares, hoping they would converge. But instead of converging, it went the other way as brokers raised margin rates and short sellers covered... Bloomberg reported that credit default swaps rose on each company, with GS credit default swaps rising 26 bps to 335 bp and MS credit default swaps rising 31 bps to 448 bps... Other than GS and MS it is relatively quiet, although there are a few other names showing notable weakness on no apparent news, including LM (-19%), ING (-17%), FIG (-12%). Note that LM reports earnings tomorrow morning... Other major stocks in the group are performing as follows: JPM -1.9%, USB -0.2%, BAC +0.8%, WFC +1.2%, UBS +5.1%, BK +5.4%; XLF +1.2%, KRE +0.7%.