Markets were down but pared losses in the rally after 3PM followed by a slight down-tick in the closing minutes. Dow ended down 128, decliners over advancers 7-3 (not as bad as might be expected under the circumstances) & NAZ pulled back 18. NYSE had 773 new lows with volume at a medium 1.5B. Here are the leading new lows in volume:
FRE
FNM
LEH
BAC
C
WB
WFC
JPM
AIG
MER
RAD
NCC
MS
SOV
M
USB
This is petty much a Who's Who for the financials. Oil also contributed to the extremely volatile day. Oil reached 127 before pulling back to "only" 144.42. The VIX, measuring volatility, closed at 27.59 (i.e. VERY high). In the last 6 weeks it's been above 20 indicating volatile markets.
Fannie Mae & Freddie Mac recovered after calmer heads prevailed. Henry Paulson, Treasury Sec, said regulators want to keep Fannie Mae and Freddie Mac in their present form. A congressman on Bloomberg TV, who's on the committee regulating FNM & FRE, just said their mortgage continues & is healthy, i.e. there is no need the panic about their existence. He basically said relax & have a good weekend. Since then, the 2 stocks rallied from their depressed states (FNM was down 3 & FRE down .72), bringing on a recovery in the Dow from about -250 to near break even followed by the sell-off in closing mins. Lehman (LEH) which is viewed as shaky by the many shorts, rebounded more than a point from its low today.
When about all leading financials reach new lows & market indices reach new lows, short term direction is easy to forecast.
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