Stocks keep drifting down

Dow is down 105 & slipping in a very soggy market, decliners over advancers 3-1 & NAZ dropped 22. S&P 500 FINANCIALS INDEX is down a big 9 to another multi year low below 149. Two months ago, the index had a modest rally taking it over 300. In this short time span, the index has been halved. The Alerian MLP Index is slipping badly after a bear market rally last month took it up to the 225 area. It's down to 6 to 179 & may be heading to test the lows under 160 when added selling was brought on by the Lehman demise & related liquidations:


Alerian MLP Index --- 1 month




Even worse off is the Dow Jones REIT Index, dropping 8 to 116, a 10 year low. They are being punished badly & may see worse times in the coming weeks with tax loss selling. Their dividend yields, like for MLPs, are well into double digits. Speaking of high yields, don't even ask about high yield (junk) bond funds. Some of those may be heading for 25% yields. For the very brave, these high yields provide incentive to lock up dividends for the long term. The VIX, volatility Index, is up only 1, mild in these times.


Dow Jones REIT Index --- 1 month




Oil dropped below 55 as world recession news trumps all other factors which would have brought higher oil prices in ordinary times.

Consumer prices dropped a record 1% last month. The good news on the inflation front was expected although the decline was larger than forecasted. This follows plunging prices for commodities in the last few months. Core prices, excluding food & energy, fell 0.1%, the first drop in over 25 years. However the housing report was more of the same dreary news that has been dragging on for months. The highlight was foreclosures in Oct were up 25% from the prior year.

•Consumer Prices in U.S. Fall Record 1% on Drop in Oil, Retailer Discounts
•U.S. Housing Starts Drop to 791,000 Pace, Lowest on Record; Permits Slide


Congress is still trying to figure out what to do with the big 3 auto companies, whether or not to give them added help. Congress is not expected to pass meaningful legislation in the lame duck session & General Motors (GM) has signaled it may not have enough money to stay alive into next year. If one or more auto makers fail, that can be another big jolt to the markets even that possibility is being factored into prices already.