Dow sold off big, down 504 to close at 10917, below the July 15 low. S&P 500 was down 59 to 1192. Can you spell "uh-oh?" 1200 was a critical support line which gave way with selling at the close. All 30 Dow stocks declined, led by American International Group (AIG), Bank of America (BAC), Citigroup (C) & General Motors (GM). Decliners were ahead of advancers 15-1. NYSE volume was 1.9B, very good but short of exceptional. For the bulls, this was supposed to show climactic selling aimed at washing out all the sellers. This volume level does not tell us that story! The very large volume for AIG, now a low priced stock even though it's in the Dow, contributed to the high volume. This was one of those days when it's hard to find a winner. The Yahoo finance badge on the right shows all red!
S&P 500 FINANCIALS INDEX is down 29 to 253 below the post July 15 low of 267 as financials got hammered. This has to be one their largest declines in its history. The next test for the index is the July 15 low of 232. AIG closed at 4.76 on a volume over 737MM shares leading the way down. Bank of America was down 7 (20%) on 273MM shares. Confusion and chaos carried the day as stocks plunged on confusion & chaos, especially for financials!!
Oil was down 5½ to the 95s, first close below 100 in 7 months. Following oil down was the Alerian MLP index (shown on the right) down 13 (one of its biggest daily declines in history) to 236, back to price levels 3 years ago.
What's there to say? Words fail on a day like today. Most Asian markets were closed yesterday for a holiday. The Australian market was open, suffering a big decline. Tonight Asian markets are expected to continue selling off with this very negative tone.
With the FED meeting approaching, a rate cut of 25 points is widely expected (that's called spinning on a dime). However, financials need a lot more than a rate cut. After a day like today, it may seem like the world is coming to an end. Not so!! But we are in very tough times where new rules for financial markets have to be made up on the fly! This is time for research to prepare for buying opportunities as securities sell off to attractive values. Dividends and yields are important to me, helping me get through these tough times.
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