Stocks Routed on Housing, Labor Fears

If the stock market and economy wasn't so dreadful, one might say it's a "funny" market, though there doesn't seem to be much news lately that would engender smiles or even a modicum of happiness or contentment.

On Thursday, the National Association of Realtors (NAR) announced that existing home sales in June fell by 2.6% from the prior month and were off 15.5% from a year ago.

The market had already been spooked prior to the open by unemployment data, which showed initial claims rising to 406,000 in the most recent week. When the NAR release hit the streets, the rout was on, as investors began unwinding positions, many of which were just begun a week earlier.

So much for the 650 point rally the Dow staged over the prior six sessions. In one day, nearly half of the gains were eviscerated.

Once again, the troublesome part of all this is that Wall Street - the geniuses who got us all into this mess to begin with - should have been anticipating more bad news and failed to do so. There has been absolutely no talk of a bottom being put in and investors who thought it was safe to venture into the market again were handed their hats and walking papers.

Dow 11,349.28 -283.10; NASDAQ 2,280.11 -45.77; S&P 500 1,252.54 -29.65; NYSE Composite 8,369.91 -210.66

The declines were broad-based, as decliners led advancers by a wide margin - more than 3-1 - 4739-1559. The moderation in new highs-lows was evident once more, however. There were 239 new lows to just 86 new highs, not a very large spread.

Crude oil gained $1.05, to $125.49. Gold lost another 50 cents, to $922.30, while silver gave back 16 cents, at $17.30.

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Corporate earnings continue to come in as a mixed bag, though firms showing exceptional second quarter results are few and far between.

This is a very dangerous market, one that is best avoided by buy-and-hold types at the present time. Wild swings have become the norm, a wonderland for astute and wily day-traders.

The bias is still to the downside long-term, while predicting short-term trends has become a task not even psychics wish to undertake. It's like trying to figure out when a manic depressive's mood will change.

Keeping in touch with trends is more important than ever. These are both exciting and depressing times for traders.

What fun!

NYSE Volume 1,534,348,000
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