Markets struggle with gloomy news

Asian markets had another terrible day following all the bloodletting in the US, especially in the last hour of trading. Hong Kong & Tokyo, 2 of the bigger ones, were down 1K apiece, reaching new multi year lows. The declines followed an enormous rally on the previous day. European markets also sold off.

Dow is trying to rally after being down more an hour ago. It reduced the loss to 45 & remaining near the 8451 Fri closing low. Decliners are ahead of advancers a solid 10-1 (10-1 has been holding steady as I write) & NAZ is even:


Dow Jones Industrials -- 5 days




S&P 500 FINANCIALS INDEX is down 5 to 205, still above the 184 Fri low. The Alerian MLP Index is down 10 & the Dow Jones REIT Index is up 3½ after getting punished badly yesterday

Oil & gold are selling off again as stocks pull back, don't see that too often. The 10 point drops yesterday for Dow oils, Exxon (XOM) & Chevron (CVX), were responsible for about 130 points of the Dow decline. Today Chevron is down 1.44 but Exxon is up 44¢. The message from these declines is lower worldwide demand for oil & gold is coming from a global recession.

CLX08.NYM

Crude Oil Nov 08

...70.13

... 4.41 (5.9%)

GCV08.CMX

Gold Oct 08

...792.40

... 43.10 (5.2%)

Gloomy news is taking control of the markets, it's getting hard to keep track of all the negative news! These stories tell us that the recession is badly hurting the US economy.

•U.S. Industrial Production Falls Most Since 1974 on Storms, Boeing Strike
•Paulson Signals Hedge Funds Aren't Currently Eligible for Government Money
•Crude Oil Falls Below $70 as U.S. Inventories Rise; OPEC Moves Up Meeting

• Philly Fed factory activity index crashes in Oct- Reuters
• Worries over economy spread; global markets sink- AP

2 enormous, but troubled, financials, Citigroup (C) & Merrill Lynch (MER), reported ugly losses, stocks sold-off 7% & 4% respectively. Since they are low price stocks, percentage changes mean more than changes measured in cents. Now traders are paying more attention to the losses rather than worrying about "beating" lowered estimates.

• Citigroup posts another loss amid credit woes- AP
• Merrill 3Q loss widens on mortgage-related charges- AP

I don't follow specific hedge funds, but a news item caught my eye. This group had $40B in Mar which is down to $33B today (maybe even less, who knows?). This specific fund had $1½B, they've got a lot of stock to sell & fast. Let's see if today's last hour proves to be another selling period for hedge funds.

•Highland to Close $1.5 Billion in Hedge Funds Amid `Unprecedented' Turmoil

Markets are testing lows, looks like the lows may not hold.