Happy $100 Oil New Year

The new year began the same way the last one ended, with investors selling in earnest on fears of recession.

Make no mistake, the price of oil and gasoline at the pump will continue to drive the US economy over the edge and into recession. On Wednesday, traders took little time to drive the price of a barrel of crude to a high $100, backing off slightly to close the day at a record $99.62, a gain of $3.62.

Dow 13,043.96 -220.86; NASDAQ 2,609.63 -42.65; S&P 500 1,447.16 -21.20; NYSE Composite 9,647.50 Down 92.82

Contributing to declines on all indices on the first trading day of 2008 was the Institute of Supply Management's manufacturing index, which fell to 47.7 in December, a drop of 3.1 points from November's reading of 50.8. The number is particularly troubling since any reading below 50 indicates contraction in the manufacturing sector and that number is much further below even the most pessimistic forecasts.

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Notes from the December FOMC meeting of the Federal Reserve were also made available in the afternoon, but did little to temper the bear's enthusiastic selling. The Fed Governors suggested that more rate cuts would almost certainly be needed in 2008 to shore up shaky markets and restore confidence to credit markets.

Volume was stronger than it has been in weeks, signaling that there is still no end to the selling and raising the possibility that new 52-week lows could be reached in short order.

Advancing issues were overwhelmed by decliners, 3952-2420, while new lows remained in control over new highs, 461-125.

Gold priced an incredible $22.00 higher, closing at $860.00. Silver added 37 cents to $15.29.

If there's anything to be read into today's trading, it is that 2008 is certainly not for the faint of heart. On the heels of a weak December, a dour January will only act to fuel fears of economic crisis and near-panic level selling.

NYSE Volume 3,452,640,750
NASDAQ Volume 2,095,550,125