Stocks trying for 2 straight up days.

Markets in pre-trading were showing a strongly negative opening. However after October showed one of the biggest markets declines in 70 years, it looks to be closing out in a mild manner. In recent mins, buyers returned bidding up prices. Dow is up 69, advancers over decliners 2-1 & NAZ is up 13. Indices I follow are only showing modest changes. The major exception, the S&P 500 FINANCIALS INDEX, is up 6 to 204 taking it above 200 for the first time in 10 days. The VIX, Volatility Index, is down 3 to 60.


Dow Jones Industrials --- 2 months




The Dow started Sep in a meandering way but ran into a brick wall around Sep 15 when the hearings on the bailout package began. Since then it suffered probably the ugliest 5 weeks in history followed by a couple of weeks drifting around the 9K level. In a few days, mailings for Oct 31 statements will be going out to stockholders reminding them how bad the damage was for their portfolios. Tax loss season is approaching, this year many may sell to lock in losses for tax purposes.

Dow history:

Aug 29.....11,544
Sep 30.....10,851
Oct 31........9,203 (as of noon)

With our focus on stocks it is easy to forget about the enormous damage done to other areas, i.e. commodities. 19 raw materials plunged 24% in Oct, the steepest decline in at least a half-century. Oil dropped 36% this month, surpassing a record 30% plunge in February 1986. There is no indication that these prices will rebound anytime soon as worldwide demand is anemic at best.

•Commodities Head for Worst Month in 52 Years as Economies Slow Worldwide


Consumer spending dropped sharply in Sep, probably influenced by all the press on the banking bailout package. Businesses have been warning that demand fell off a cliff after Sep 15 when that news made headlines. Spending slipped 0.3% in Sep after the 2 prior months were flat, making for the worst qtr in 40 years. This is the kind of behavior which precedes a recession.

•U.S. Consumer Spending Falls 0.3%, Capping Worst Quarter in Three Decades


Chevron (CVX), the other Dow oil, also reported excellent earnings, but the stock pulled back 1.36 on a weak outlook.

• Chevron's 3Q profit soars on oil prices- AP