Stocks lower on profit taking

After stocks surged again on the opening, Dow was up 150, markets are settling back. Dow is down 38, but advancers are ahead of decliners by 25% & NAZ slipped 28 or 2%.

S&P 500 FINANCIALS INDEX started strong but selling is kicking in:

Value 152.32

Change 1.32

% Change 0.9%

Markets are trying to make it 3 days in a row, the first time in a couple of months. But other indices are pulling back, probably related to profit taking following the monster 2 day rally. Even the VIX pulled back 1 to 63½ but remains in very high territory.

Oil dropped sharply nearing the recent low (& lowest prices in 3 years) as traders are weighing gov efforts to shore up a sagging economy:

CLF09.NYM

Crude Oil Jan 09

...51.70

.. 2.80 .......(5.1%)

The Federal Reserve is spending more money buying loans & making credit available to small business. They are supplying $800B which used to be thought of as a tremendous amount of money. The number of problem banks rose to 171 in Q3, up from 117 in the prior qtr. This is part of the make it up as we go along approach, hope it works out. The FED also said problem loans rose sharply in Q3 which helps explains why banks continue to be shy about making loans.

•Fed Commits Up to $800 Billion in New Programs to Unfreeze Credit Markets
•`Problem' Banks Climb 46% as Credit Crisis Takes Toll, U.S. Regulator Says


Revised figures for the economy shows a worse performance in Q3. The economy shrank at an 0.5% rate versus the 0.3% estimated last month. This data dovetails with the comments about demand falling off a cliff around Sep 15 when the original bailout plan was first discussed. The report showed disposable income fell at an annual rate of 9.2% in Q3, the largest quarterly drop on record (going back to 1947).

• Economic tumble worse than expected in 3rd quarter- AP

You know times are tough when Tiffany (TIF) & Saks (SKS) are getting pinched. TIF is down 1.20 but SKS is up pennies (it's a $3 stock). The recent stronger dollar may be may cause foreigners to pull back on their purchases in their stores.

•Saks, Tiffany Sales May Slump as Dollar Keeps European Vacationers at Home


My article on MLPs paying divs was posted at SeekingAlpha. Click on the button in the right widget to read it & other articles.

This is short trading week, not sure when some of the guys take of for a long holiday. Looming in the near term are reports on Black Fri retail sales plus the dark cloud over the 3 auto makers.