First Quarter Not Good for Stocks

The markets wound their way through the final day of the first quarter on Monday, trying in vain to freshen up an otherwise pig-ugly three months.

For the record, the Dow lost just over 1000 points, the NASDAQ shed 372 points and the S&P dropped 146. Overall, it was not as bad as the worst levels of the quarter, which in general were another 2-3% lower than the March 31 close.

Dow 12,262.89 +46.49: NASDAQ 2,279.10 +17.92; S&P 500 1,322.70 +7.48; NYSE Composite 8,797.29 +35.17

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The indices actually finished higher for the day, mostly in a rejiggering of portfolios and in somewhat of a tepid response to the government's call to overhaul federal regulatory structures. The plan, largely promoted by Treasury Secretary Henry Paulson, calls for more oversight by the Federal Reserve, in the belief that they can somehow cure banks and other financial institutions from acting badly or stupidly or irresponsibly.

We would love to believe that the great and magnificent Federal Reserve Bank can also end poverty, cure cancer and rid people of the shame of psoriasis.

It's a sham, and, thankfully, the congress isn't about to enact sweeping regulatory reform this year, or next, at least.

Stocks mostly meandered in slightly positive territory most of the day, and the internals were similarly dull. Advancing issues outdid decliners, 3806-2453. New lows beat new highs for yet another session, 193-51.

What is remarkable is the abysmally low number of stocks making new highs. Even in the worst of times - like now - there are usually more than just a paltry few dozen every day. Economic conditions are abnormally severe with no real change on the horizon.

Commodities took it on the chin today, with oil down $4.04 to $101.58, gold off an even $15.00 to $921.50 and silver lower by 63 cents at $17.31.

While it may not be exactly the best time to be buying the metals, such a move could prove prudent, if only for the long term value. The temporary setback for gold and silver is not likely to last long, though long-term asset deflation is a looming problem that nobody really wants to notice or discuss.

The markets will adjust as needs. A crucial quarter for the US economy is about to get underway.

NYSE Volume 4,192,029,750
NASDAQ Volume 1,828,315,875