Another ugly day in the markets. Dow tumbled 239, decliners over advancers 5-2 & NAZ fell 46. The S&P 500 is back to 1234, below what some thought was an important support level of 1270. NYSE volume was under 1.2B, very low signally nothing was decided. This is bleeding & it will continue. Banks/financials led the way down. The 4 financials of the Dow accounted for 50 points of the decline. The S&P 500 FINANCIALS INDEX (on Bloomberg.com) dropped 12 to 265 (5 days ago it was at an interim high of 302).
Nothing really new other than dreariness & realization that ugly days lie ahead for financials. The write-offs at 2 Australian banks didn't help. Sec of Treasury, Henry Paulson, said major banks will start a new lending program. The country's 4 biggest banks will issue covered bonds to help the ailing mortgage market. While this is done in Europe, it's new to the US. There may be a fair amount of scepticism, maybe this is just another way to batch loans together but may not achieve the desired results of helping banks. Meanwhile oil neared 125, up 1.47, on the usual assortment of supply problems. Today they are in Nigeria.
Economists in the White House reduced their forecast for economic growth in the US.
----------- original------- revised
2008.......2.7%..............1.6%
2009.......3.0%..............2.2%
Unemployment rates will tick up, not encouraging. The economy will be struggling for some time, the kind of news investors don't like to hear.
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