A Little Dose of Reality

As opposed to yesterday's PPT-inspired afternoon rally, the US equity markets today reflected something closer to the reality of the functional economy. Once again, the NASDAQ took the brunt of the blows, but the blue chips of the Dow weren't far behind on a percentage basis.

Dow 12,397.29 -71.78; NASDAQ 2,437.43 -18.20; S&P 500 1,429.61 -7.89; NYSE Composite 9,288.79 -52.57

Declining issues overwhelmed advancers by a more than 2-1 margin and the new highs were kept to a 4-session low of 221, while only 78 issues hit new lows. The markets are still mired in a trench between recent high and low marks, awaiting some kind of economic or political news to break out one way or another.

While only the bulliest of the bulls believe that another new top can be put on this market, the bears still seem to be in semi-hibernation. Neither the China chain-reaction nor the sub-prime blow-out seemed to be enough to ignite increased downside pressure. Volume has been particularly tame on days the indices have risen, so there's at least some indication that the perma-bull mentality has been partially put to rest in some quarters.

In an interesting note on market forces, the consumer confidence reading today from the Conference Board (107.2, down a full 4 points from February's 111.2) seemed to be the main driver. That a soft indicator that market movers should be out in front of makes one wonder who's really in charge on Wall Street and whether the traders actually know what they're doing.

Don't answer that until after earnings season is well underway (April 20th should do) and the market has moved past either February's highs or March's lows.

Maybe the real answer lies not so far from the self-service pump at any of the thousands of gas stations in the US, or in the millions of utility bill envelopes on the tail end of a brutally cold winter. No wonder consumers are feeling a little less warm about their economic futures, as property taxes, auto fuel and home utilities continue to eat away at disposable income.

At least oil prices spent the day dithering about the future, gaining only 2 cents to end at $62.93, still a solid $5 higher than where it should be. Perhaps tomorrow's crude inventory reading will dispel any notions of gouging the US population into $3.00 a gallon gas any time soon. Consumers have had just about enough of high energy prices and markets and market makers may be about to wake up to that factoid.

Gold and silver barely budged. They're in a precarious position, much like stocks, with nowhere to go but lower.