Stocks Trade in Narrow Ranges

The Dow Jones Industrials traded in a narrow, 50-point range for most of the day - between +30 and +80 points - while the NASDAQ carried on a day-long flirtation with the unchanged line.

Despite more disheartening news from the housing sector, investors were content to play wait-and-see on the Fed, whose Federal Open Market Committee (FOMC) began a two-day meeting. On Wednesday at 2:15 the committee will deliver their policy recommendation. Most analysts are calling for a 50 basis point reduction in the federal funds rate, though of late more see a 25% cut a distinct possibility.

The argument is that the Fed may send more of a message with a smaller rate cut, that the economy is not as bad as many fear, and that the Fed has matters under control.

While that may be provide some short-term, superficial salve to open wounds in the markets, the consensus that the economy will fall into recession (or already is in one) is gaining traction, along with the belief that such a recession will be long and deep, extending for as long as 18-24 months.

Dow 12,480.30 +96.41; NASDAQ 2,358.06 +8.15; S&P 500 1,362.30 +8.33; NYSE Composite 9,046.02 Up 67.61

Much of the angst centers around the housing crisis, which continues to dole out pain on a near-daily basis.

In a report issued by RealtyTrac Inc., the number of foreclosure filings in 2007 reached 2,203,295, up 75% from 2006. While the 2007 figures are serious, more troubling is that the trend appears to be accelerating.

A total of 215,749 foreclosure filings were reported in December, up 97 percent from December 2006 and bringing the fourth-quarter total to 642,150 filings on 527,740 properties — up 1 percent from the previous quarter and up 86 percent from the fourth quarter of 2006.

In earnings news, US Steel (X) saw profits trimmed significantly in the 4th quarter due to acquisitions and layoffs. Investors punished the world's 5th largest steel producer with a 7% haircut, pushing shares lower by 7.49 to 102.58.

Naturally, no bad news could derail the PPT-manipulated market from tacking on gains in advance of more money created out of thin air by the Fed. At 3:00, the Dow surged an additional 50 points, briefly piercing the 12,500 resistance ceiling. The other indices followed along dutifully.

Volume, for the second straight day, was laughably light, as prudent bears sat back and watched the unsustainable rally unfurl.

Advancers bettered decliners once more, 3914-2379, and the gap between new lows and new highs tightened considerably, with new lows still on top, 152-71.

Crude oil gained 65 cents to $91.64. Gold lost $2.00 to close at $930.80. Silver gained five cents to $16.80.

NYSE Volume 4,001,153,250
NASDAQ Volume 2,150,718,000