After being down all day on very bad economic news, a lunchtime rally took the Dow up 300 points in a couple of hours, but it was not meant to last. Maybe the hedge funds guys were prompted by higher prices to sell & they sold off big time. In the last hour, Dow pulled back 400 ending down 338 for the day, decliners over advancers more than 3-1 & NAZ declined 80. S&P 500 FINANCIALS INDEX dropped 9 within a couple of points of the multi year low set yesterday, the Alerian MLP Index was of marginally while Dow Jones REIT Index dropped 16 (12%), just off the new lows set yesterday. But the VIX rose 5 to 65, fear is running high. Those 5 points came in the closing mins as stocks sold off
Lost in all the dreary news on the economy & the financial crisis, the price of gas was cut in half during the last 4 months. Yes, they those prices respond to crude oil prices even if it takes a little time. Unfortunately, this is not giving the economy the expected lift.
Gas Prices Drop Nearly $2 in Four Months- CNNMoney.com
Consumers are getting squeezed hard with loss (or threats of loss) of jobs, mortgage problems, etc. They are cutting back sharply on discretionary spending. Retail sales, as expected, are coming in bleak with no significant changes forecasted in the near term.
The 90 day Treasury bill offers an annualized yield of 13 basis points. That means to buy a $100 bill due in 90 days, it costs $100 less 3¢. That's one of the places where frightened money is going after stocks are sold. This was another down week for the markets. The Dow started Nov at 9336 closing today about 850 points lower. Macro economic news will continue to be the primary movers of the markets.
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