Friday, March 16, 2007

Stocks Sag Again at Week's End

US equities lost ground in Friday's session, culminating in the third down week in the last four. Today's losses were contained, with the Dow losing just less than 50 points while the NASDAQ and S&P were only down single digits. The Dow was down 166 points for the week. By contrast, the NASDAQ lost only 16. Blue chips are beginning to feel the pain of a weakening economy. Only 9 of the 30 Dow components showed gains on Friday, the highest being a mere 21 cents by both Wal-Mart and Hewlett-Packard.

Dow 12,110.41 -49.27; NASDAQ 2,372.66 -6.04; S&P 500 1,386.95 -5.33; NYSE Composite 8,982.73 -22.52

Market internals were mixed, as declining issues outpaced advancers by better than a 3-2 margin. New highs stayed ahead of new lows, barely, 145-112.

While sub-prime mortgage lending woes taking the better part of the headlines this week, the undercurrents of inflation, reduced investment flows and upcoming 1st quarter earnings and economic reports are keeping investor sentiment in an extremely cautious posture. With only 2 weeks left in the 1st quarter, if market performance is any gauge, we're in for a rough ride the remainder of the year.

While there are still analysts out there touting stocks and sounding cherry, they're voices are becoming fewer and the commentary increasingly couched in more restrained language. The long running of the bulls is over (officially ended on February 20), and the reality of the correction and the possibility of a protracted bear market is beginning to sink in.

The price of crude continued its week-long slide, losing another 44 cents on Friday to end the week at $57.11. Gold closed at 653.90, +6.80; silver finished the week at 13.22, +0.14. A slowing economy would not augur higher petroleum prices, proving that there indeed is a silver lining inside every dark cloud.

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