Markets tumble on weak retail sales

Dec retail sales plunged 2.7%, down for the 6th straight month. The sales decline was more than double expectations. In 2008, retail sales dropped 0.1% compared with a 4.1% gain in the prior year. This is the first annual decline in the 17 years that figures are available. Figures for the 2nd half, not made available, must be dreadful. The slump in sales is affecting all retailers, even Tiffany (TIF), down 29¢, reported holiday sales dropped 21%.

•U.S. Retail Sales Slump Twice as Much as Forecast on Rising Unemployment
•Tiffany Holiday Sales Plunged 21% Amid Credit Crisis; Forecast Is Reduced


Stocks sold off badly on the news. Dow is down 292 taking it to the low end, a bad sign, of its recent sideways trading range:


Dow Jones Industrials --- 3 months




Decliners were over advancers 9-1 & NAZ was down 55.

S&P 500 FINANCIALS INDEX looks to be heading back down to the 125 low. Banks just can't buy friends these days. Bank of America (BAC) is getting less attention, as attention is all focused on Citigroup (C), both Dow stocks. Each is at a 15 year low.

Value 140.33

Change -8.55

% Change -5.7%

The Alerian MLP Index is down 5 to 190½, the 200 ceiling is even harder to break thru. As expected, REITs & junk bonds sold off. However the VIX shot up 8. It's now over 50, up from 38 just a few days ago as fears are up dramatically:

VIX ----- 2 weeks





Oil is back below 38 on the weak retail sales report.

• Oil slips back below $38 on retail sales data- AP

Citigroup is breaking up, selling its brokerage unit to Morgan Stanley which will dilute their ownership to 49% & maybe zero down the road. Confusion about breaking up is not take well, C is under 5. Now there are 2 Dow stocks under 5 (C & GM).

Dow may be setting up to test 8K shortly. Another one of the stories which just hit & is so common: Walgreen (WAG), down 31¢, an S&P 500 Dividend Aristocrat, is cutting 1K positions in 2009.