Parsing his words carefully, Bernanke said the deal to essentially liquidate the assets of Bear in a forced sale to J.P. Morgan was engineered to ensure the "integrity and viability of the American financial system..."
It sure sounded like a bailout to most of the congressional members and looked like one to even the most casual observer on the street.
Investors took a look at yesterday's prices and took a little bit of a pause, not only because of the Fed Chairman's words, but with March labor figures out on Friday and corporate earnings for the first quarter coming soon, many felt more like watching rather than participating as the indices delivered a split decision.
Dow 12,605.83 -48.53; NASDAQ 2,361.40 -1.35; S&P 500 1,367.53 -2.65; NYSE Composite 9,104.46 +15.97
Volume was moderate, and stocks were generally split, with advancing issues garnering a narrow win over decliners, 3525-2690, though new lows finished ahead of new highs, 117-105.
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Also spooking the markets was another spike in the price of oil, which had been moderating over the past week. Crude was higher by $3.85, to close at $104.83. Gold also regained some of its recent losses, adding $12.40 to close at $900.20. Silver, also beaten down in recent days, gained 29 cents to $17.18.Edmonton, Vancouver, Bad Credit, Divorced, Bankruptcy OK. Apply online.
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All the street talk seems to be of the "we've hit the bottom" variety, which is really off the mark. There's been no bottoming, and the banking sector still has billions of dollars worth of bad paper to yet discard. The condition of the real estate market is still deteriorating and we've yet to see unemployment figures in line with general economic conditions.
The "powers that be" game plan continues to pitch the "all clear" signal and will likely attempt to do so until the November elections. It's a tough act, and there's more than just a little skepticism about the overall health of the US economy. Chances are that stocks will have to shed more value before all of the excesses of the past 10 years are fully flushed out of the system.
Consumers continue to be tapped out and higher fuel and food prices are certainly not helping matters. While the weak dollar abroad is helpful to the multi-nationals, business conditions in the USA continue to deteriorate at a moderate pace and the credit markets remain virtually frozen, with no respite on the horizon.
NYSE Volume 4,320,442,000
NASDAQ Volume 2,060,430,875
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