Stocks tumble again

Stocks sold off sharply in the AM & remained in the doldrums for the rest of day. More & more are convinced there is no point to invest in stocks in the midst of all this financial confusion. The prospects of $Ts & $Ts of debt being sold by the gov reinforces pessimism about stocks. Dow tumbled 281 to another 12 year (whatever) low of 6594. Just 2 years ago, is there anybody out there who would have predicted the Dow would ever visit the 6Ks again? Even last year, how many predicted 6K? Now the only question is if the 6K floor can hold. Few want to take that bet! A couple of weeks ago, other technical guys were watching 752 (the low last Nov) on the S&P 500. Today that's meaningless, the S&P 500 closed at 682.

Decliners were over advancers 9-1 & NAZ dropped 54.


S&P 500 FINANCIALS INDEX suffered one its worst daily losses in history. The only ray of hope is it closed a point above its low. 2 years ago it peaked at over 500, now it's lucky to be alive.

Value 82.91

Change -9.15

% Change -9.9%

While stock markets were punished badly, Treasuries were strong as money was seeking safety. The 10 year Treasury bond rose sharply, dropping the yield 19 basis points to 2.82%. That yield compares with high yields of 10-25% on MLPs, REITs, junk bonds funds, etc. Such enormous premiums have never before existed. Now that gold has fallen back to 900, it found support maybe getting ready for another move up. Given the pessimism in the markets, some are attracted to gold. I wrote an article about investing in gold available at SeekingAlpha, if anyone wants to learn more about the GLD ETF:

Buying Gold: What is High and What is Low?


The President wants a major expansion in healthcare, costing $Bs & $Bs. I guess this is the first shot across the bow, but if passed will add to the already enormous gov deficits requiring even more Treasury bonds to be sold.

•Obama Brings Together Old Health Foes at Summit to Start Work on Overhaul


Citigroup (C), Dow stock, barely avoided the technically of facing delisting on the NYSE by closing at 1.02. Along those lines, Dow Chemical (DOW) fell to a 24 year low as it is trying to find out if it can take over Rohm & Haas (ROH). Dow is in the 6s while ROH is in the 64s. This is a confusing world.

• Citigroup shares sink below $1 for the first time- Reuters
• Dow Chemical shares drop to 24-year-low- Reuters

The Dow is compared on 3 important days: election day, inauguration & today.

Nov 4.....9,625
Jan 20....7,949
Mar 5.....6,594


Dow Jones Industrials - 6 months





During this time, the major action out of DC was a series of massive gov spending packages. It's no secret, the markets don't like what they see.

I remain a believer in the markets & still have a fondness for divs. This financial mess will get sorted out over time. The problem is living thru it day by day when we are battered by a series of negative articles on the economy. Tomorrow will be the anticipated jobs report.