After the best week in almost 5 years, stocks pulled back. Encouraging news from the Commerce Dept could not bring out the bulls or maybe it was traders cashing in short term profits. Dow was down 108, decliners over advancers 3-2 and NAZ declined 30. NAZ has plenty of problems. Two of the biggest stocks, Microsoft (MSFT) & Google (GOOG), were weak. MSFT was down 26¢ while GOOG slipped 20 putting it under 500, down 1/3 from it's high of 737 just a few weeks ago. The market is still trying to figure out how the Yahoo acquisition would play out (assuming it goes thru).
The President's budget was another mouthful to digest. The deficits in the next 2 years would each be over $400B, essentially at record levels. The budgets include the proposed economic stimulus package with related tax cuts. The large size of the deficits has to put approval of the tax package at risk. Gloomy news will keep markets on defense over the next few days.
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