Tuesday, March 3, 2009

Weary Market Stuck on Red

Stocks zig-zagged across the unchanged line on Tuesday, with investors assessing the damage from Monday's drama.

There were equal amounts of bargain-hunting and hand-wringing as the major indices registers small losses, but overall, there was no good new upon which to launch any meaningful rally.

Housing data - which crossed the wires at 10:00 am - sparked more selling, as the numbers were far worse than even the most dismal expectations. New home sales for January fell 7.7%; construction spending dropped 3.3% for the same period.

Following those figures were numbers from the major auto makers, which posted the worst sales declines since the economy began to really sour in September of 2008.

Compared to the same period one year ago, General Motors (GM) said their light-vehicle sales dropped 53% in February, while Ford's declined 48%, with Toyota posting a 40% drop.

Ford's car sales dropped 48%, with sport-utility vehicles off a whopping 71%. Toyota's car sales fell 36%; GM's were off 50%.

Apparently, traders were too worn out from Monday's rout to engage in yet another sell-off session.

Dow 6,726.02, -37.27 (0.55%)
NASDAQ 1,321.01, -1.84 (0.14%)
S&P 500 696.33, -4.49 (0.64%)
NYSE Composite 4,334.70, -26.28 (0.60%)

Declining issues outweighed advancers, 4274-2343. New lows continued to dominate over new highs, as investors continued shedding outright losers, 1512-15. Volume was still very high, despite the minor movement in the market.

NYSE Volume 1,825,373,000
NASDAQ Volume 2,368,833,000

Oil gained $1.50, to $41.65. Gold tumbled $26.40, to 913.60; silver continued to correct, down 36 cents, at $12.72.

In another note on what I have coined the Post-Government Era, Pat Buchanan recently penned an interestingly-titled essay in which he correctly points out just how brutally federal, state and local taxes are bearing down on working, productive Americans. Mr. Buchanan fails to cross the line - in Pitchfork Time - from conjecture to the outright rebellion the title suggests, placing most of the blame on President Obama's budget proposal rather than rightfully on the monstrous policy decisions at every level of government over the course of the past 30 years.

While Buchanan may be stirring up the spirits of rebellion, he's dead on when it comes to the issue of taxation. Americans are being taxed out of their jobs, homes and security, though this condition has been existent for many years.

The current economic climate has only recently awakened the slumbering US middle class, though by many accounts, it's already too late.

Dow components finished with 17 up and 13 down. All the major indices extended their nearly 12-year lows.

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