Stocks stumble after midday surge

Dow rose more than 550 from the early low, but dropped sharply in the last couple of hours, especially in closing minutes. It pulled back almost 400 in the last 2 hours, ending with a loss of 127. Option expiration days are always difficult to predict, especially in the last hour or 2. Economic news was pretty ugly today, maybe that was the deciding factor. Advancers were ahead of decliners almost 2-1 & NAZ ended with a nominal loss. A big driver for markets was energy. After nice gains earlier in the day, the 2 Dow energy stocks, Exxon & Chevron, slipped back to modest changes. Higher crude prices helped but options & traders closing books before the weekend hurt at day's end. Volatility reigns as the VIX, Volatility Index, kicked around the 60s & 70s today ending little changed at a whopping 68.

S&P 500 FINANCIALS INDEX slipped 5, nearer the low of the 13 point. The Dow Jones REIT Index was about even, still trying to catch up with the brutal day on Wed. Junk bond funds were generally higher & up on the week, but still offer 20% yields for the very brave. The Alerian MLP Index gained 8 to 205½, well above the psychologically important 200 line. Higher oil prices brought out buyers.

After a sharp fall in the last 4 weeks, oil popped for a couple of points while gold was weak all day:

CLX08.NYM

..Crude Oil -Nov 08

....72.46

.. 2.61 (3.7%)

GCV08.CMX

..Gold Oct 08

....785.10

.. 16.40 (2.1%)

700+ point daily swings in the Dow have become common lately. This is a major change that will not help bring back investors who have seen dreams shattered in such a short time. There are a lot new rules we all will have to adjust to.