Financials had another brutal day, getting to be a common occurrence. Dow settled down 180, decliners over advancers almost 3-1 while NAZ dropped 35. Volume continues light, at only 1B, typical low volume expected for end of Aug. Dow had been down 200 for much of the PM, but rallied a bit near the close. The index from Bloomberg tells it all.
S&P 500 FINANCIALS INDEX
Value 275.56____Change.. (10.22)___% Change.. (3.6%)
Worries about financials today revolved around Fannie Mae (FNM), Freddie Mac (FRE) & Lehman (LEH), all down big. A Barron's article raised the possibility of FNM/FRE shareholders may not survive this credit mess while Lehman is writing of more mortgage related debts. FNM & FRE were down 25% to lowest levels in 20 years while LEH fell 1 to 15. It's sad, the credit crisis just drags on & on & on. Oil slipped under 113 as fears of the tropical storm eased, problems of the financials are taking center stage. As shown on my badge on the right, the Alerian MLP index slipped pennies to the 263s remaining near the important 262 resistance level & the 52 week official low in the 258s.
The continuing financial mess is bleeding thru to other thoughts. More are talking about not being able to see the light at the end of the tunnel. Business Week has an article about the inflation threat with a forecast of double digit inflation next year. Ben Bernanke, chairman of the FED was trying to define what institutions the FED might be willing to rescue, not a cheery thought. One positive taken from all this talk is when many experts agree the cloudy future looks grim, maybe they are overstating the case.
I checked with my friend the fraidy cat over the weekend, she was at rest while her son, the very fraidy cat, stayed in a closet. OK!
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