Friday, August 29, 2008

Another Downer for the Markets

Amid political rhetoric and slumbering stocks, the major indices managed to work themselves low in the final "unofficial" week of summer.

With the advent of the Labor Day holiday, investors thought better of yesterday's euphoric rally and sold off in get-away fashion.

Dow 11,543.96 -171.22; NASDAQ 2,367.52 -44.12; S&P 500 1,282.84 -17.84; NYSE Composite 8,382.10 -84.02

For the week, the Dow closed 85 points lower, the NASDAQ lopped off 47, the S&P shed 10, while the NYSE Composite was virtually unchanged, adding 9 points.

It truly was a forgettable week in the financial markets. Things should get back to some semblance of normalcy in September. Over the past week, volume was a little better than half of what it normally is. Friday's NYSE volume was the lowest of the year.

A couple of economic reports told the real story of the US economy on Friday. Personal income fell in July, as did consumer spending. No real surprise there, just confirmation of what everybody already knew. Consumers are generally tapped out and doing more saving and conserving than spending.

On the day, declining issues trounced advancers, 3906-2277. New lows nearly doubled new highs, 126-65.

Oil, despite some volatility concerning Hurricane Gustav's effect on Gulf oil production, oil finished 13 cents lower, at $115.46. Gold lost $2.00, to $835.20 and silver was unchanged at $13.71

NYSE Volume 750,671,000
NASDAQ Volume 1,583,494,000

Thursday, August 28, 2008

Sliding Into the Fall

Stocks traded at new volume lows for the year for the fifth straight session on Wednesday. Volume has diminished every day leading up to the Labor Day holiday weekend.

It would be wise to assume that this kind of low-volume trading will continue through the end of the week unless there is some kind of surprise world-shaking event, and even that seems to be out of the equation.

Dow 11,502.51 +89.64; NASDAQ 2,382.46 +20.49; S&P 500 1,281.66 +10.15; NYSE Composite 8,349.84 +86.12

Making any kind of serious changes in trading positions at this juncture is also not a good idea. The markets are still slogging through some serious problems and the bottoms reached in July have yet to be retested. There's bound to be at least one more serious downdraft before the market and the overall economy can begin moving forward. Of course, since stocks are a kind of discounting mechanism, they are likely to move well before the rest of the economy, but we don't seem to be there yet.

On the day, advancing issues outperformed losers, 4250-1724. New lows remained in the lead over new highs, 148-60. The relationship of new lows to new highs has become a permanent feature of this market condition. There are just more bad companies than good ones, though surely, some are already below fair value. That's a story for another day, however. Investors are simply content shedding losers and not in a very sprightly, speculative mood.

To almost nobody's surprise, oil gained slightly, up $1.88, to $118.15, in advance of the American holiday. It's somewhat of a bad joke, how the oil companies manage to get the price of fuel up just when everybody is about to use more of it. That feature of the rigged commodity speaks volumes about the stranglehold the five major oil companies have on the world's economies.

Gold was up $5.90, closing at $834.00, but silver fell 11 cents, to $13.57. This little run-up in commodities is probably going to end badly as the downward trendline has yet to be broken, and like stocks, look to be heading down even further.

What is of interest as we drift into fall, is how markets will respond to the change of season and whether volume will improve after the holiday. There are some who believe this lower volume phenomenon is going to hang around a while longer, possibly until the November elections, being that political change may have more to do with the markets than anyone dares believe.

NYSE Volume 820,385,000
NASDAQ Volume 1,570,050,000

Tuesday, August 26, 2008

Markets Dull on Slowest Trading Day of Year

Trading continued at a dawdling pace as the final week of August dwindles down. Following yesterday's spirited selling, investors sat back once more and watched as stocks traded in a narrow range throughout the day.

Volume was even lower than Monday's, the lowest of the year.

What kept stocks from falling even further into the abyss was the general lack of interest in stocks. A reading on consumer confidence, which improved from 51.9 in July to 56.9 in August, mostly on the basis of decreasing gasoline prices, helped offset another horrid housing report.

New home sales, despite a gain of 2.2% in July over June, were down an astonishing 35.3% from last year. Prices for new homes also declined.

The Standard & Poor's/Case-Shiller U.S. National Home Price Index fell by a a record 15.4% during the April-June period, the largest decline ever recorded.

Why didn't stocks continue to fall? Disinterest. Most of the people and institutions who planned sales for this week already had done so by close of business on Monday. The rest of the week is likely to see little in the way of volatility, though that is certain to change following the Labor Day holiday.

Dow 11,412.87 +26.62; NASDAQ 2,361.97 -3.62; S&P 500 1,271.51 +4.67; NYSE Composite 8,263.72 +34.69

The level of trading over the past couple of weeks is not sustainable and there's a quiet but growing concern that trading volumes may not return to the usual robust levels. The reasons are obvious to anyone who's been paying attention to the credit and various financial markets. Investment houses have become very risk-averse and hedge funds have been taking on losses like the Titanic took on water. The big players are just not playing any more. The consequences could be disastrous and the long term damage to our markets could take years to mend.

On the day, advancing issues led decliners, 3642-2528. New lows beat new highs, 220-54.

Oil gained $1.16, to $116.27. Gold gained $2.40, to $828.10, while silver added 20 cents to $13.68.

It really was as dreadfully slow as one can imagine, with little hope for improvement this week.

NYSE Volume 856,300,000
NASDAQ Volume 1,468,464,000

Monday, August 25, 2008

Investors Still Not Buying

As we wend our way toward falling leaves and cooler weather, Wall Street seems to have taken the lead with a cold attitude toward stocks and falling prices all around.

Monday began in a somber way. On the lightest volume session of the year, most of the activity involved selling, indiscriminate selling, as all sectors were down more than 1%, led, of course, by the battered financial stocks.

Though there was little in the way of actual news, the mood was as dour as it has been throughout the 1+ year since the initial shock waves of the subprime malaise.

Dow 11,386.25 -241.81; NASDAQ 2,365.59 -49.12; S&P 500 1,266.84 -25.36; NYSE Composite 8,229.03 -144.52

The headline numbers matched the internals. Declining issues overwhelmed advancers, 4959-1394. There were 212 new lows to just 63 new highs. The numbers are so low because there have been more new lows than new highs every day for nearly a year now and those losing stocks are already bottomed out.

With markets overall down roughly 20% from a year ago, a huge number of new lows - in the 500-800 range - would be symptomatic of a more catastrophic downturn.

As it is, stocks are already so battered and beaten, investors so burned, that a good deal of money has already exited US markets, seeking gains on foreign exchanges or in other investment vehicles.

Commodities didn't fare much better. Oil gained 52 cents, to $115.11, though that price was largely a rebounding bounce following Friday's $6+ loss. Gold diminished by $7.80, to $825.70. Silver fell 11 cents to $13.48.

With summer winding down, one would expect low volume, but today's massive loss is troubling. The markets simply do not have any life, any measurable bounce. There is almost a certainty that stocks - in the near term, at least - are going to continue heading lower.

Hang on to your cash. Bank failures and other financial cataclysms are on the way.

NYSE Volume 865,190,000
NASDAQ Volume 1,454,557,000

Friday, August 22, 2008

Playing or Being Played?

August has been a month of ups-and-downs with plenty of money sitting on the sidelines. Considering the absurdly low level of participation, via trading volume, one might be under the impression that many professionals have taken the month off.

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While that may explain the low volume to some degree, it also suggests something more sinister: that sparsely-traded markets are more easily manipulated. For instance, regulators, the little pea-brains that they are, already concluded that the overgrown gains in the price of oil earlier this year were simply the result of ordinary supply-and-demand forces. Of course, they came to that conclusion before it was revealed that a few speculators dominate the oil futures trading markets.

To get an idea about how ordinary, individual investors feel about manipulation and the lack of regulation, check out this fairly lame article with excellent reader comments on Yahoo's Tech Ticker.

I make mention of the dubious art of market manipulation from time to time because it is not only plausible in today's mega-billion-dollar environment but also probable and proven to have occurred, especially in the case of the President's Working Group on Financial Markets, a/k/a the Plunge Protection Team (PPT).

Toady's gallop ahead may prove instructional.

Dow 11,628.06 +197.85; NASDAQ 2,414.71 +34.33; S&P 500 1,292.19 +14.47; NYSE Composite 8,373.55 +59.41

Lest we forget, the week began with two consecutive days of declines, but it ended with 3 straight gains. Remember, I said yesterday that the week would be of little consequence.

For the week, the Dow Jones Industrials lost a whopping .... wait for it... 31 points. So, we're just about even. It's all good! Crown me genius!

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(Just a side note: yesterday, oil was up $5 and change and the culprit was the dastardly nation of Russia, causing tensions with the US and its allies over Georgia. Today, oil was down a similar amount, and, what a coincidence, the Russians are leaving. Would nations and traders collude to have little wars and occupations just to move the price of oil? Count on it.)

On the day, advancing issues overwhelmed decliners, 4421-1773. New lows defeated new highs, 153-59.

Oil dropped $6.59, to end the week at $114.59. Gold lost $5.50, to $833.50. Silver fell 25 cents to $13.59. Everything seemed to go absolutely nowhere this week.

Volume on the equity markets was the lowest of a very low volume week.

So, are you playing or being played?

NYSE Volume 888,139,000
NASDAQ Volume 1,395,867,000

Thursday, August 21, 2008

A Day (and Week) to Forget

Trading volume this week has been so dreadfully slow that many on Wall Street have already made their way towards the Hamptons or other relaxing locales. If you're searching for value in this dreadful environment, maybe you should do the same because whatever transpires on the markets this week will be of little importance a month down the road.

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On Thursday, volume hit a low for the year with far less than 1 billion shares changing hands on the NYSE. A normally "slow" day is 1.2 billion shares. The reasons for the slowdown are pretty obvious. Being the second last week of unofficial summer, there are fewer people trading stocks. Add to that the current conditions which lend themselves to taking profit and running away and you have the general idea.

If this kind of non-trading persists after Labor Day, it might actually be the beginning of a horrible trend, though it's probably more the good weather than the bad economic conditions at this point.

Nevertheless, there were a few relatively ugly economic reports on the day, not the least of which was the Commerce Board's Index of Leading Economic Indicators, which fell by 0.7% in July. It was the second decrease in the past three months and worse than expected.

What's worse than the US decline is news from the same organization that similar indices have fallen in Spain, Germany, France, the UK, South Korea, Japan, Mexico and Australia as well. Remember that global recession I've been warning about for the past few months, the one in which all asset classes fall? Well, there's some proof that it's already here.

Dow 11,430.21 +12.78; NASDAQ 2,380.38 -8.70; S&P 500 1,277.72 +3.18; NYSE Composite 8,314.14 +37.23

Amazingly, three of the four major stock indices we track were up, with the NASDAQ the notable exception.

The internals shed more light on the situation, as declining issues outnumbered advancers, 3603-2573, and new lows held sway over new highs, 242-49.

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Commodities made the most of it, with oil pumping up $5.62, to 121.18, gold gaining $22.70, to $839.00 and silver rising 69 cents, to $13.84.

Somebody please inform these speculators in the commodity pits about this global recession thing. Obviously, they did not receive the memo. Oddly enough, the fat rise in the price of oil is being attributed to tensions between the US and Russia over the Georgian conflict. That's entirely laughable, since there are no real tensions of which to speak. Considering the morally bankrupt and militarily-overstretched position of the United States, Russia can and will do as it pleases in its former colony. The posturing by the US, and, to some lesser extent, various European nations, is just for show. All parties know there's no possibility of anyone threatening the Russians with any kind of force.

Politics and media manipulation aside, this is a week better spent working on a tan rather than your portfolio.

NYSE Volume 912,306,000
NASDAQ Volume 1,558,441,000

Wednesday, August 20, 2008

Sellers Take a Breather on Slow News Day

One of the slowest news days of recent memory may have helped investors on Wednesday, halting a two-day slide that threatened to expand into a truly grotesque selling spree. Possibly the best news were two little items: the largest increase in US oil stockpiles since 2001 (9.3 million barrels), and Hewlett-Packard's (HPQ 46.16, +2.47) solid quarter, posting 80 cents a share profit on sales of $28 billion.

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Any news on surplus oil is welcome, as are stellar quarters by sound companies, especially those whose membership includes the Dow Jones Industrials. Hewlett-Packard easily led the 16 other gainers in the blue chip index and itself accounted for much of the gain on the day.

While the US oil stockpile news was significant, it didn't stop traders from upping the price of crude for October delivery in a volatile session. The rise in oil was probably due to a technical situation, one in which the slippery stuff has sold off so much in recent days, that traders are looking for a bounce. Hopefully, for those of us who have felt the pain from higher gas prices, today's gains will be soon forgotten.

Dow 11,417.43 +68.88; NASDAQ 2,389.08 +4.72; S&P 500 1,274.54 +7.85; NYSE Composite 8,276.91 +64.44

Market breadth was nearly non-existent, with gainers outpacing losers, 3181-3020, indicating that today's rise was nothing more than some short covering and minor speculation, rather than the beginning of something more exciting. As further proof, new lows were once well ahead of new highs, 220-43. The most alarming number there is that only 43 stocks (out of a pool of more than 6000) recorded a 52-week high. That's a very, very low number and implying that the general market is going nowhere but down.

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Overall volume continues to be slack and it appears that this week will be the lowest volume stretch of the year, unless, of course, next week is even worse.

Putting today's up-and-down trading into perspective, oil gained $1.02, to $115.56, while gold slipped 50 cents to $816.30 and silver lost 7 cents, closing in New York at $13.15. That the metals did not follow oil's advance may be noteworthy, if only to presage another round of losses for commodities. It will be worth watching commodities closely over the next few weeks, though the most optimistic outlook would be for a small bounce upwards before continuing the trend lower.

With conditions in credit markets still unstable and the general economy looking a little bit putrid, Thursday's unemployment report (new claims) may be more significant than usual. There are few, if any, catalysts for upside momentum, and the bias, despite today's rather unportentious finish, is still rather negative.

NYSE Volume 1,068,481,000
NASDAQ Volume 1,782,049,000

Tuesday, August 19, 2008

Prices Peaking? Stocks Shrivel

The week has not begun well for investors, with the Dow Jones Industrials having shed over 300 points in the first two days and the other major indices following that lead.

On Monday, it was fear of financial firms which led the way, but on Tuesday, prices grabbed the headlines as wholesale prices jumped by 1.2% in July, marking the fastest annual inflation rate in 27 years. The core rate, excluding food and energy, were up a whopping 0.7%, indicating that inflated pricing was seeping into all parts of the economy.

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If rising prices weren't enough to worry about, the Commerce Department obliged by releasing a report on new home construction, noting that builders were breaking ground at the lowest rate in 17 years.

Confused? So are investors.

Home prices are falling, all other prices are rising, but wages are stagnant at best. Meanwhile, the prices of commodities - oil, gold, corn, wheat, etc. - have been going down for weeks.

Dow 11,348.55 -130.84; NASDAQ 2,384.36 -32.62; S&P 500 1,266.68 -11.92; NYSE Composite 8,212.47 -69.39

Here's an explanation, though I offer it only as one of possibly many: prices have peaked. We're likely to see a slowdown in August, if not an outright decrease (a very rare occurrence). In a cooling worldwide economy, prices are not going to rise, and if they do, they won't rise quickly. The years of overexpansion of money supply to accommodate the needs of greedy bankers and corporations are over. We're about to backslide into a general slowdown. If your wages don't go down, or you're able to keep your job, you'll survive nicely.

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The crash in commodities has been telegraphing this all along, so, get over the inflation fear and start dreading deflation, because it's a thornier economic condition. Besides, those inflation figures are compiled by economists and statisticians, who aren't really well known as bargain hunters. They're looking at wholesale prices, which nobody - outside of manufacturers - actually pays.

As with Monday, declining issues overwhelmed advancers on Tuesday, 4494-1724. New lows expanded their edge over new highs, 286-43. The abnormally low number of new highs belies the real weakness in stocks. The number of companies actually thriving in this environment is becoming more minute by the day. The stresses of a long-overdue recession, held in abeyance by politicians with tax rebates and regulators such as Federal Reserve Chairman Ben Bernanke's emergency interest rates and borrowing rules.

Following the briefest of bumps in late July and early August, stocks are now poised to retest those mid-July lows. Get ready for serious drops in the indices over the next 3-6 weeks, during which the president (and the Republican candidate for that office) will assure us that the economy is still basically sound.

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Commodities continued to rebound, though it's hardly a trend. Crude oil for October delivery added $1.65, to $114.54. Gold leapt another $11.10, to $816.80, though silver was unchanged at $13.22 per ounce. The recent run-up in commodities is largely an effect of falling stocks. With nowhere else to turn for profits, speculators are moving into the market of last resort. When the commodities market finally fails, along with the rest of the asset classes, the perfect storm for global recession will be in place.

The news for the past few weeks has been one of a strengthening dollar. What's generally been untold is the story of how the dollar has been beaten down below fair value in relation to other currencies and consequently propped up by foreign governments in a vain effort to avoid a complete economic collapse. The truth is that the economies of other countries - particularly those in Europe - are not all that sound either. Far Eastern economies - China and Japan - are going to fare much better than the West in the coming downturn, which is expected to bottom sometime in late 2009.

With those concepts in hand, investors should be aware that gains in stocks are going to be difficult, if not impossible, to attain.

Once again, volume was on the very low end of the scale, indicating an aversion to US equities - one which has been growing over the past year and is now reaching fruition. Stocks have much further to fall, but much of the big money is already on the sidelines and into fixed investments or other equity markets.

NYSE Volume 1,012,756,000
NASDAQ Volume 1,748,704,000

Monday, August 18, 2008

Truth Hurts: Financials Slammed Again

Sometimes the media actually gets it right.

Unfortunately for investors, Jonathan R. Laing's feature story in Barron's The Endgame Nears For Fannie and Freddie was a truth many did not want to hear, much less see published in one of America's premier business weeklies.

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Laing makes the case for the "inevitable" recapitalization of the two mortgage underwriting giants as they have continued to flounder during the ongoing US mortgage mess.

The article was enough to send financials and the rest of the stock market into a funk on Monday. The selling began early in the financials, but by afternoon had spread to the broader market, resulting in another bloody Monday on Wall Street, wiping out last week's tiny gain in the S&P and a more substantial one in the NASDAQ.

Dow 11,479.39 -180.51; NASDAQ 2,416.98 -35.54; S&P 500 1,278.60 -19.60; NYSE Composite 8,281.86 Down 101.81

With the markets already in a state of suspended animation, volume virtually dried up. Monday's losses would probably have been deeper had more traders not been on vacation or otherwise away from their desks.

If last week's volume data was to be considered anemic, today's was downright desolate and pallid.

Advancing issues were overwhelmed by the number of decliners, with losers ahead, 4375-1845. New lows were also boosted to a larger margin than in recent days, beating new highs 194-84.

If there was any good news, it was the rebound in the metals. Gold shot up $13.60, to $805.70. Silver gained 29 cents, closing at $13.22. Alternately, oil slipped $1.05, to $112.85, which is $35 below its all-time high, set just this past July.

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Any moves in commodities are likely to be short-term and reactionary for the time being. Until the general understanding becomes one in which a global slowdown is accepted, the metals should bounce around, though trend lower. Oil, and, by proxy, gas and petrol, should continue to weaken over the short term on slack demand.

And what about stocks? Well, if all assets classes are going to take a hit, another 15% decline on the indices is not out of the question. The Dow could easily break below 10,000 within the next six months as the presidential race takes center stage and the rhetoric from the left (Barack Obama) becomes more pronounced and understood as the honest reality.

The Republicans - but mostly the Bush administration - has made a shambles of the US economy and increasingly, it looks as though the next president is going to have to clean up the mess. Usually, that's a sure sign that a sea change in Washington politics is coming.

...and not a moment too soon.

NYSE Volume 985,302,000
NASDAQ Volume 1,665,853,000

Friday, August 15, 2008

The Numbers Say No

The Dow gained on Friday. So did the S&P 500. But, the Dow was down for the week and the venerable S&P index was up less than two points. The week's big winner was the NASDAQ, which added 38 points to the upside.

What does this all mean?

Probably not much, except that investors are tired of trading the same stocks and hoping for better results in a quarter, a year, five years. It's just not adding up.

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It was just about a year ago (July 19, actually) that the Dow closed above the 14,000 mark for the first time. In the 13 months since, the blue chip average has fallen by 17%, briefly falling into what is known as "bear territory", glibly described as a 20% loss.

Fools without a great deal of market understanding would say that we've touched a bottom and the markets are beginning to recover. Those more wizened and mature would point out that once stocks break below that 20% threshold, they usually spend more than a few days there, which is all this market has spent in the bear's lair.

Those few days were between July 9 and 15, so we've clearly encountered a bounce of sorts. The price of crude oil has moderated considerably since then, helping stocks, as has the value of the US dollar versus other currencies. These have been positive for stocks.

On the other side of the ledger are some undeniably negative economic readings, most of them being recorded this very week. The consumer price index (CPI) registered its largest gain in 17 years, leaping up 0.8% in July. even the core CPI - which excludes food and energy components - was up 0.3%. But all of this was prior to oil's descent, or just at the beginning of it, so the CPI is now a lagging indicator.

Thursday's initial unemployment claims came in at an astronomical 450,000. There are no good jobs out there. Along those lines, capacity utilization - a broad measure of manufacturing efficiency, fell slightly, to 79.8%, which is well below what would be considered healthy - above 93%.

People aren't working, or buying, much these days. Sooner or later, Wall Street will get a whiff of this and realize that there isn't much demand for the stocks they're pedaling either. Volume has been dead over the past two weeks.

Dow 11,659.90 +3.97; NASDAQ 2,452.52 -1.15; S&P 500 1,298.19 +5.26; NYSE Composite 8,383.67 -2.30

For the day, losers outdid gainers by a small margin, 3122-3092. New lows retained their long-standing edge over new highs, though by a very slight margin, 169-144. We are clearly witnessing a market void of momentum in either direction.

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Commodities, however, are pointing the way, and that way is lower. Oil continued to unwind, losing $1.09, to $113.94. Gold finally crumbled, dropping $22.40, to $792.10. Silver was absolutely crushed, dropping $1.43, to $12.93.

The rout in the metals has been absolutely stunning. Gold was in the high $980s a few weeks ago. Silver was above $18.00. The ramifications of such a rapid unraveling of these commodities is mind-boggling. It is portentous of nothing less than a massive global recession. There is an absolute need for cash if such large amounts of gold and silver are being liquidated.

Were the metals a bubble, and has it popped? Sure, they were overinflated to a degree, and now the froth has been blown away. It will be interesting to see where they bottom out and whether they recover. Best estimates are for gold to retest the $650 level and silver to settle around $11.25, though after today's grinding, nothing's really for sure.

It was an interesting week. Even with commodities unwinding in a big way, stocks failed to gain. That's not a good sign going forward, especially with that ridiculously low volume.

NYSE Volume 1,175,771,000
NASDAQ Volume 1,776,362,000

Thursday, August 14, 2008

Why Stocks, and Why Now?

One often wonders what people are thinking when they make investments such as buying stocks. Simply put, when a trader buys shares of stocks, they are getting in on a piece of a company, in effect, becoming an owner of a sliver of that company, ostensibly without any of the day-to-day headaches that come with actually operating it.

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Nowadays, most people, including supposedly really, really smart people managing hundreds of millions - or even billions - of dollars, think that what they are buying will actually increase in value over time.

In theory, it's not a bad idea. In reality, it's often horrible.

What investors do is finance companies' operations. Usually, money invested in publicly-traded firms does nothing but change hands in the marketplace. For every buyer, there's a seller, and sellers have vastly different rationales than buyers.

Thursday's trading can be taken as an example of more people believing that their purchases will be worth more soon. Stocks were up.

Why? More buyers than sellers, for the most part, but where their money went is an important feature. Largely, money went into financial firms today, on the premise that these companies have gone through a rough period, but have put their problems behind them and those shares should continue to appreciate due to lessons learned.

Wow! If people are buying that whopper, I've got bridges and airplanes to sell you.

The financial firms have committed the most egregious kinds of money mismanagement imaginable over the past few years and are paying the price. Are people so gullible to believe that these very same people will handle other people's money better than they have in the past?

You bet they are.

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Fools. Giving these bankers, brokers and financiers more money is like giving a crack addict another snort, or an alcoholic a bottle of whiskey. One suspects that the money flowing into financials is from other financials - people who share the same addiction and can't - or won't - handle their own money themselves. It's a recipe for disaster and we've bought right into it.

Dow 11,615.93 +82.97; NASDAQ 2,453.67 +25.05; S&P 500 1,292.93 +7.10; NYSE Composite 8,385.97 +10.58

Well, maybe they're right. But, judging solely by the overall volume - the lowest in months - they seem to be out on an island in their perceptions. Foreclosures are up, as is unemployment, and inflation. Meanwhile, home prices are down and going lower. Wages continue to contract. The basic measure of wealth for the average American is going lower by the day. Economic conditions are generally horrible. But the banks... they'll make money. Sure.

Advancing issues on Thursday overwhelmed decliners, 3888-2356. New lows, however, continued to dominate new highs, 172-110.

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Oil lost 96 cents, to $115.03. Gold gave back all of yesterday's gains and then some, losing $17.00, to $814.50. Silver also traded lower, dropping 62 cents, to $14.36.

As much as I'd like to believe that the economic problems caused by, and now being handled by, Wall St. financial firms are abating, the massive day-to-day drops in gold and silver are telling me a decidedly different story. We've turned a corner, for sure, but the street we're headed down doesn't look so friendly.

And there's no going back...

NYSE Volume 1,008,494,000
NASDAQ Volume 1,867,483,000

Wednesday, August 13, 2008

Financials Lead Stocks Lower Again

There simply is no light at the end of the tunnel through which financial companies have been navigating.

Credit conditions have deteriorated to a point at which the entire global financial system is in a seizure while financial firms - banks, brokerages, combined entities - continue to reveal just how poorly managed their monies have been.

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They are now in desperate race to shed toxic assets as they begin to savage each other with downgrades amid lawsuits brought by states, municipalities, funds and investors of all stripes which invested in subprime, alt-a or other non-creditworthy tranches of securitized obligations.

It is an absolute mess, with no end and no solution other than to dispose of assets at fire sale prices and hope for the best outcome, which, in reality, is a severe global recession. Billions and billions of dollars worth of assets are being sold for pennies on the dollar as a result of loose lending standards, lax oversight and naked greed.

Dow 11,532.96 -109.51; NASDAQ 2,428.62 -1.99; S&P 500 1,285.83 -3.76; NYSE Composite 8,375.39 -23.32

Once the financial firms are finally tossed to the curb, the next phase will be an all-encompasing rout of stocks, especially those that are mismanaged, in need of capital or in any business outside of bare necessities. Most stocks will head lower over the next six to eight months. Those which avoid outright liquidation will be shells of their former selves.

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On the day, declining issues fared slightly better than advancers, beating them by a margin of 3253-2999. More stocks hit new lows than new highs, 199-117. Investors are seeking safe havens for their money, though the options in equities are highly risky. Every day seems to bring new horrors to a variety of companies suffering through tough economic conditions.

Oil stopped its slide for a day, gaining $2.86, to $115.99, still well below levels of just a month ago. The metals also gained, with gold higher by $16.90, to $831.50, and silver up 36 cents to $14.98.

The best way to make money in this environment is not to try to pick winners, but losers, and sell them as short as possible until November. Volume has been anemic this week, exemplifying the general lack of enthusiasm for equities in general.

NYSE Volume 1,210,340,000
NASDAQ Volume 2,029,940,000

Tuesday, August 12, 2008

Commodity Dive Continues; Stocks Join the Party

The price-slashing in commodities continued unabated on Tuesday, but with an added twist. Stocks spent the entire session losing value as well.

What contributed to the overall gloom on Wall Street were a number of items from financial firms that reminded investors that the US economy is far from what would be considered stable.

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Morgan Stanley (MS) had its credit rating cut by Moody's, JP Morgan Chase reported another $1.5 billion in writedowns just in July, Wachovia (WB) and UBS (UBS) reported quarterly losses, and even the venerable Goldman Sachs (GSC) was downgraded by Oppenheimer.

Overall, it was a pretty ugly day to be a banker, broker, trader, investor or financier. Most skid row bums had better days than the suits on Wall Street. At least they didn't lose a bundle of money.

Dow 11,642.47 -139.88; NASDAQ 2,430.61 -9.34; S&P 500 1,289.59 -15.72; NYSE Composite 8,398.71 -94.23

Declining issues took back the advantage over advancers, 3911-2341. New lows also regained their edge over new highs after a one-day respite from that long term drubbing, 200-117.

As mentioned, crude oil fell again, down $1.53, to $113.13. Gold gave back $13.70 in value, dropping to an 8-month low of $814.60. Silver lost just 14 cents, closing at $14.49 the ounce.

This kind of continuing price depression does not bode well for companies or individuals. While price relief is welcome in energy-related issues and staples like food and rent, they are being caused by a severe cutback in demand. People and companies are strapped for cash, and banks are loathe to lend to anyone or any company with less than a pristine credit history.

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As I've been attempting to drive home lately, the point is not to contain inflation, but to slow down price depression. It's simple supply and demand economics in the flesh: too many goods are now chasing too few dollars. Inventories are rising and the solution is to lower prices to an acceptable level.

The real kicker is that consumers, which comprise 70 to 75% of GDP, are distressed over high fuel and food prices, actively seeking lower cost alternatives and finding them. It's the magic of the marketplace at work. If prices become overinflated without justice, the market adjusts and the pricing mechanism is tamped down.

What's fueled the spiral to the bottom thus far has been overpricing, especially in oil, gasoline and other essential commodities. Add in the credit malaise and massive gold and silver positions get unwound as companies, governments and institutions need to raise cash.

The winner in all of this is a strengthening of the US dollar and increased exports, reflected in today's Trade Balance figure for June, which came in at -$56.8 billion. Analysts were expecting something along the lines of -$61 billion, so the lower imbalance came as a pleasant surprise.

On the other side of the coin, it meant that US consumers were spending less on imported goods, which is probably not a very welcome signal to the rest of the world. Either that, or the rest of the world is catching the disease we've already got and realizing that the US isn't so bad off after all.

Economics can get pretty confusing, and these days are confounding even to people who are supposed to know their way around all these numbers and conflicting trends. Eventually, some clarity will emerge, but it's probably not going to be very encouraging.

NYSE Volume 1,126,747,000
NASDAQ Volume 2,086,532,000

Monday, August 11, 2008

Stocks Gain on Oil Slowdown, but Metals Drop is Troubling

The price of crude is just about the only element pushing the stock market at this juncture. Having fallen more than $30 per barrel since early July, oil, the energy fuel that drives the world economy, is better when it is cheaper, both for businesses and consumers.

So, banks may fail and consumer spending may sink into the deep blue, but every time crude drops a buck on the futures market, everyone gets a spate of relief and the feeling that all is well.

Dow 11,782.35 +48.03; NASDAQ 2,439.95 +25.85; S&P 500 1,305.31 +9.00; NYSE Composite 8,492.94 +32.62

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As I've been reporting of late, this is not necessarily good news, as other commodities are falling in price along with Texas tea, notably, gold and silver. The precious metals, as they are known, have been in total liquidation mode, as positions are being unwound with head-spinning rapidity.

Monday was no exception. Oil fell 75 cents to $114.45, but gold was off by a huge $36.50, to $828.30, while silver lost an impressive 71 cents, dropping to $14.62. Both gold and silver crashed through support levels established earlier this year.

Note: closing prices are based on NY spot prices at 2:30 pm Eastern time. As of this writing, at 9:00 pm Eastern, Gold has fallen even further, down to $803 in Sydney and Hong Kong.

Crashing prices in any market is not a good sign for economies in general terms. Ideally, prices should exhibit some degree of stability - it is what all economists strive to achieve. When the metals prices erode as quickly as they have been, it is a sign of serious liquidity problems on a global basis. In a market absent of credit - as our global economy has become - often precious metal caches are liquidated in order to raise cash.

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The sharp recent declines in gold and silver can only be seen in the most distressing light. We are on the verge of a global economic meltdown as the commodity bubble is now bursting.

To illustrate, gold soared past the $700 mark in September of 2007. Within 6 months, it had hit $1000. On July 15, after a decline down to around $850, gold sparked back to $980 on July 15. Noting tomorrow's early price, in less than a month, gold has lost nearly $150, or 15% of its value.

For stocks, it was a bullish session. Advancing issues outperformed decliners, 4114-2158. At last, new highs exceeded new lows, 204-191.

Where the unwinding in the commodity markets is going to land stocks is, for now, unknown. Presently, it's seen as a good sign - easing of prices. However, if allowed to continue unabated, these are the same conditions that led to Japan's lost decade of the 1990s, and, of course, the worldwide Great Depression of the 1930s.

NYSE Volume 1,263,452,000
NASDAQ Volume 2,302,385,000

Friday, August 8, 2008

And Away We Go...

So used to say the "Great One", Jackie Gleason, at the start of his weekly variety show in the heyday of television. It's almost as though the ghost of Gleason has brought back the June Taylor dancers and the kaleidoscope dance routines to Wall Street, such is the gaiety at the brokerages these days.

With the wild gyrations - up one day, down the next, and so on - the brokers are booking commissions like mad. Even though volume has been a little off, there are still plenty of players, so the guys who get paid by the trade - even the electronic ones - have got to be rolling in some pretty deep grass right now.

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Volatility being one of the things serious old school investors seek to avoid, a lot of stodgy fund money is sitting around doing nothing while the whiz kids in the startups and hedge funds are wheeling and dealing like mad. The velocity of trading is fueling much of the high and low swings these days, as much as the decline in oil, the mortgage mess and general economic uncertainty.

So, the major indices went ballistic on Friday, even though Fannie Mae came through with a monstrous loss ($2.3 billion), productivity of US workers was not what was expected in the second quarter, coming in at an anemic 2.2%.

The outsize gains were tied largely to improvement of the US dollar against major currencies and an associated drop in the price of oil.

Dow 11,734.32 +302.89; NASDAQ 2,414.10 +58.37; S&P 500 1,296.31 +30.25; NYSE Composite 8,460.32 +121.92

Advancing issues far outweighed decliners, 4574-1711. New lows, however, continued their year-long domination of new highs, 226-131.

In commodity trading, crude oil took another major tumble, losing $4.82, to close at $115.20, a price almost everyone can appreciate. The metals continued to freefall, with gold losing another $13.10, to $864.80. Silver lost a massive 93 cents, dropping to $15.33 the ounce.

While all eyes are fixated on the price of oil, the real story may still be in the metals. Gold's close today is just about $12 ahead of the early May lows, and could be putting in a double bottom, but my hunch is that speculators and institutions in need of cash are tossing in their chips and taking whatever profits are available - and they're probably sizable, with gold nearly quadrupling since 2002.

Silver, meanwhile, has been harder hit, dropping to a point just pennies above where it began the year. The metals are presaging a coming economic slump and general price malaise which will probably decimate retailers in December.

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On the other hand, with politics so prominent in everything these days, could we not have predicted that oil and gas prices would fall into a more palatable range prior to the election? Probably. Big oil is tied to Republican candidates, and they're in trouble because of the high prices, so oil is gratuitously rolling back a bit, at least until November 4.

As for gas, the general rule of thumb is that gas prices drop about 2 1/2 cents for every $1 fall in the price of crude. Well, when oil hit $147, gas jumped to $4.14. Today, oil is at $115, but gas is still $3.85 according to the Daily Fuel Gauge Report. Our mathematical formula tells us, however, that the price of a gallon of petrol should be down 80 cents, not a mere 29. The national average should be right down around $3.24. It's about 60 cents too high. What's up with that?

NYSE Volume 1,245,662,000
NASDAQ Volume 2,225,998,000

Thursday, August 7, 2008

OUCH! Where's That Bottom?

Remember that 330 point gain on Tuesday? Ancient history. The Dow stands just 50 points above where it closed last week after another drubbing on Thursday.

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In case you haven't gotten the memo yet, we're still in a bear market. And it's a nasty one that isn't anywhere near conclusion. That's at least 6 to 12 months away, if not more. The US economy is completely upside-down, but the massive mainstream media simply won't end its love affair with corporate slime.

Too bad. They're leading the American investing public down a particularly thorny garden path at the end of which is a wealth-devouring beast called debt. We're all in it, taking our cue from the absurd federal government, which just can't seem to get a handle on balancing its own books.

One great feature of this ridiculous market is the volatility. It offers in-and-out trading possibilities in both directions. However, it is not a good environment for those seeking solid investments. Nothing is solid anymore, because the foundation - the banks and financial firms - is built on quicksand.

Dow 11,431.43 -224.64; NASDAQ 2,355.73 -22.64; S&P 500 1,266.06 -23.13; NYSE Composite 8,338.40 -163.04

The cause for today's demise was likely more tied to overall market conditions than the ugly unemployment statistics that kicked off the session. Companies are trying to shed jobs and employees as quickly and quietly as possible, but there's no doubt that the recession that really began in the 4th quarter of 2007 is surely alive and well today.

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There is no truer sign of recession than job losses, and we've had month after month of those. So, hang on for another bottom, soon. Trading will take a seriously end-of-summer tone in the next few weeks as the earnings season just passed proved to be a huge flop and the horrors of an economy in deep decline will continue to dominate the headlines.

Thank goodness for preseason NFL games and the Olympics. At least there's something to divert our attention.

On the day, declining issues took out advancers by a 4454-1787 margin. New lows finished ahead of new highs, 216-75.

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Oil was up $1.44, to end at $120.02. The precious metals continued their descent unabated, however, with gold down $5.10, to $877.90 and silver off another 25 cents, to $16.26. Lest anyone believe this is a temporary condition for the metals and a buying situation, think again. Both will be lower 3 and 6 months out.

The conditions of the economy and market have deteriorated to very unsafe levels. A cataclysmic financial event is at hand, probably within the next two-three months, though it will be disguised as a "news" story. A bombing, scandal, war, etc.

Get ready for a plunge back below the 11,000 level on the Dow and 4-year lows on the NASDAQ, S&P and NYSE Composite.

NYSE Volume 1,283,215,000
NASDAQ Volume 2,236,182,000

Wednesday, August 6, 2008

Despite Freddie's Failure, Some Follow-Through for Stocks

Wednesday paled by comparison to the Fed-induced euphoria yesterday. Stocks were battered early on by news that Freddie Mac, the beleaguered mega mortgage aggregator, had fallen on some very lean times in the second quarter of 2008.

Freddie (FRE) posted its fourth consecutive loss and set aside more money for bad loans while announcing that its dividend may be cut by up to 80%. Shares fell sharply, as did those of Fannie Mae (FNM) and most financial sector stocks.

Financials, along with transportation and services were the only three of twelve sectors to register a loss on the day.

The news from Freddie sent another shock wave across the trading spectrum, however. With the GSEs - Fannie and Freddie - in deep trouble and near default, investors are peeling away from the market in droves. Volume has been limited of late, moreso than usual during the normally slow summer months.

Dow 11,656.07 +40.30; NASDAQ 2,378.37 +28.54; S&P 500 1,289.18 +4.30; NYSE Composite 8,501.44 +29.59

Nevertheless, all major indices showed gains on the day, and, at this point, the Wall Street bankers, brokers, moguls and magicians will take what they can get.

Advancing issues outperformed decliners, 3548-2716. Those pesky new lows ranged ahead of new highs, for roughly the 200th time out of the last 210 trading days (the better part of the last full year), 186-109.

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Crude oil slipped another 59 cents, closing at 118.58. The metals continued their precipitous decline, with gold off $3.10, to $883.00, and silver down 7 cents to $16.51.

The non-stop drops in the precious metals continue to flash signs of a long, coming recession, along the lines of the Japanese lost decade of the 1990s. There has been significant pricing pressure on commodities and products of all kinds of late - a sideshow of globalization - from clothes, to rents, to silver and gold coins. This is a very troubling trend, and yesterday's Fed decision to leave rates unchanged, plays right into the scenario.

More than inflation, the Fed fears deflation even more, because there is no generally-accepted remedy except liquidation, stagnation and financial pain. Falling prices are rarely mentioned in the financial lexicon because they are anathema to Keynesian economic principles.

Well, maybe the Austrian school would argue along with me that deflation is a mechanism for cleaning the system. But our financial system is so overweighted with safeguards and interjected with government interference that Austrian school conjecture would barely register on the minds of even the brightest Harvard or Chicago school of financial dunces.

Life is getting cheaper by the day and that's not a good sign for macro-economics.

NYSE Volume 1,200,198,000
NASDAQ Volume 2,262,848,000

Tuesday, August 5, 2008

Stocks Soar as Fed Leaves Rates Unchanged

I really would love to be a Governor of the Federal Reserve, more specifically, a member of the Board of Governors of the Federal Open Market Committee (FOMC) of the Federal Reserve.

Why, you ask?

Well, outside of being a fictional character like Santa Claus or the Easter Bunny or Tooth Fairy, nobody can make more people happy simply by doing nothing, which is exactly what the FOMC did today - they left the federal funds rate alone, at 2%, and stocks went straight up.

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Brokers are happy, investors are happy, fund managers and options traders are happy. Thank you Fed Governors. Thank you, thank you, thank you.

Actually, it's probably the best they could do. Oil prices have cooled. Inflation isn't a huge, out-of-control problem. Banks are still making mortgages - fewer than a year or two ago - but, they're mostly still in business.

Raising rates would have been a mistake at this juncture. Business conditions are not very robust, and prices should continue to fall due to decreased demand. Interest rates, for what they're worth, should be about 5-6% for mortgages, business loans, CDs, just about everything. For now, with their ovrnight rate at 2%, the Fed is still far from the proper mark.

Now, if they would just leave it alone. Take a vacation, boys, and let the market work itself out. Really, I mean it. Take six months off.

Dow 11,615.77 +331.62; NASDAQ 2,349.83 +64.27; S&P 500 1,284.88 +35.87; NYSE Composite 8,471.85 +203.20

Lest I leave the wrong impression, I should point out that big, one-day moves are clear indications of bear markets, which we are in, and will continue to be in, until the primary trend changes. There are more bank failures and another round of Alt-A mortgage defaults on the horizon, plus the next issue will be government deficits, such as states, counties and cities, unable to derive needed tax revenues in a time of devaluation.

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I said it yesterday, and before that. I've been saying it for more than six months. Everything's going to get cheaper. And that includes stocks. The July bottom will be tested by October. Count on it.

On the day, advancing issues held a healthy advantage over decliners, 4462-1798. New lows remained ahead of new highs, 226-116.

Oil for September delivery was down $2.24, to $119.17. Gold took an enormous hit, falling $21.80, to $886.10, the first time gold has fallen back under $900 since May. Silver fell a full 57 cents, to $16.57. Look for silver to fall back below $14 by the end of the year, if not sooner. Gold, too, is about to capitulate. The bull run in the metals, and most other overpriced commodities, is over, over, over. Gas will be under $3.00 by election day. Count on that, too.

For what it's worth, volume was light, so Tuesday's gains should be taken in light of some scrambling by short sellers and a concerted effort by market bulls. It won't last.

NYSE Volume 1,415,935,000
NASDAQ Volume 2,374,429,000

Monday, August 4, 2008

Great Day for Day-Traders

Rather than invest your money in stocks that go up, then down, then sideways, today's market - much like many before it and surely in the future - exemplified the virtues of just plain, good-old gambling, or, as the barons of Wall Street put it, day trading.

If you were on the right side of the market - and active - today, you could have made a killing in either direction, or both, with options, index options or a combination of buying and short-selling. The reason is volatility, and Monday, August 4, was especially volatile.

Take the Dow, for instance. It opened narrowly on the downside, but by 11:00 was at session lows at 11,221, down more than 100 points from the open of 11,326. It spent the rest of the day climbing to a high of 11,382, but just before 3:00, fell another 120 points or so, recovering slightly at the close.

It was a three-move market. Day-traders, which includes just about every trader, hedge fund manager and smart alek on Wall Street, had a blast, mostly at the expense of those stodgy buy-and-hold types.

So, this is today's market, and maybe it always was like this, though if you can find anyone over the age of 60 who still follows financials, they'll tell you differently. Back in the 60s, 70s and even into the 80s (the "me" decade), there were stocks that would make you money if you just bought them and held them for 5, 7, or 10 years.

Those days are probably gone, as are the companies which made all that moolah, like Ford, GM, Xerox, and yes, even Microsoft and Cisco.

Nowadays, it's all about getting in, making a profit and getting out in our high-tech, globalized, flat world economy. That's it. Buy, hold equates to dumb, loser.

But, times do change and change is in the wind.

Dow 11,284.15 -42.17; NASDAQ 2,285.56 -25.40; S&P 500 1,249.01 -11.30; NYSE Composite 8,268.65 Down 110.50

On the day, advancing issues lagged decliners, 4164-2069, and, big surprise, new lows overwhelmed new highs, 276-84.

Oil got slammed again, as a storm in the Gulf of Mexico seemed to be too weak to damage any oil infrastructure. Or, at least that's what the financial press and the oil geeks would have us believe. One would like to know just when the appearance of storms in the Caribbean began affecting the global price of oil. It was probably about the time GW Bush and Dick Cheney took over the highest government offices in the land. Some coincidence there.

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Crude for September delivery closed down $3.61, to $121.41, the lowest closing price in nearly four months. The metals remained in lock step with the overpriced goo, with gold losing $9.60, to $907.90 and silver falling 38 cents to $17.14. The pattern in commodities is just too obvious to ignore.

I've been beating this story for over six months now, so I guess yelling that INFLATION ISN'T THE PROBLEM. DEFLATION IS! might not have any impact. But, a year from now, when gas is $2.75 a gallon, gold is $675 an ounce and you can't afford either because you have no job, don't say I didn't tell you so. The dollar's slide can only go so far, and it's gone a long way in a relatively short time. When the rest of the world begins to feel the same pain that Americans have for the past seven years plus, prices are going to go in the opposite direction.

It's simple supply and demand economics, and I don't have the time to explain it all right now. I have to go gamble... er, trade some stocks.

NYSE Volume 1,193,042,000
NASDAQ Volume 1,958,751,000

Friday, August 1, 2008

Stocks Chilled by GM, Jobs Data

Stocks traded lower for nearly the entire session on Friday, with all major indices pushing closer to mid-July depths after a mid-week run-up.

The damper du jour on the markets was two-fold. General Motors reported a $15.5 billion loss in the second quarter, with July sales falling 32% from a year ago. On the economic news front, the Labor Department reported non-farm payrolls for July down another 51,000, marking the 7th consecutive month of job losses. The "official" unemployment rate rose for the sixth straight month, to 5.7%, the highest in 4 years.

With those items greeting investors this morning, there was little euphoria on Wall Street as the week came to an end and the month of August began with an inauspicious start.

Dow 11,326.32 -51.70; NASDAQ 2,310.96 -14.59; S&P 500 1,260.31 -7.07; NYSE Composite 8,379.15 -59.49

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Advancers and decliners were nearly even in lackluster, low-volume trading, with gainers holding a slim edge, 2972-2969. There were 261 new lows and just 87 new highs.

Crude oil gained $1.02, to $125.10. Gold $5.20, to $917.50, while silver dropped another 27 cents, to $17.52. The metals are still exhibiting signs of cracking, indicative of global recession.

.... and that's the good news for the week. Good luck.

NYSE Volume 1,226,226,000
NASDAQ Volume 2,188,498,000

Despite Earnings Upsides, Markets Tank

A disappointing preliminary reading on second quarter GDP, showing expansion at a 1.9% annual rate (optimistic analysts were expecting 2.3%), sent stocks into another decline on Thursday, though losses were somewhat tempered due to a 2% drop in oil prices and strong earnings from some widely-held companies.

Dow 11,378.02 -205.67; NASDAQ 2,325.55 -4.17; S&P 500 1,267.38 -16.88; NYSE Composite 8,438.64 -126.67

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Jobless claims climbed 44,000 to 448,000, the third time in the last five weeks claims have been above the 400,000 level. The four-week moving average sailed 11,000 higher, to 393,000.

CBS Corp. (CBS), Altria (MO), Motorola (MOT), Disney (DIS), MasterCard (MA), Visa (V), and Tyco (TYC) all reported positive earnings results prior to the opening bell, though those pluses were not enough to stem the waves of selling that engulfed the markets.

Advancing issues were beaten back by decliners, 2656-3617. New lows were, as usual, ahead of new highs, though not by a substantial margin, 225-103.

Light Sweet Crude Oil for September delivery fell $2.69, to $124.08
Gold gained $10.40, to $922.70, and silver also rebounded, up 33 cents to $17.79 per ounce.

Release of July employment data in the Labor Department's Non-farm payroll report has investors somewhat spooked. Analysts are expecting the 6th straight month of job losses, roughly -72,000.

Oddly enough, many on the Street still put faith into the government's massively massaged numbers. For instance, it was revealed today that the economy actually shrank 0.2% in the 4th quarter of 2007, when earlier figures showed a minute gain of 0.6%.

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The employment figures are even more of a statistical shroud, based on faulty data collection measures and a dubious calculation method. The worst feature of employment-unemployment data is where people whose unemployment insurance has expired are taken out of the equation completely, rather than counted as continuing unemployed.

It is ever prudent to interpret government data with a wide berth. No figures are ever finalized until months later, and even then - in addition to being irrelevant due to dating - may be a stretch from reality.

With the current administration's continuing effort to jawbone the economy into better condition, the rule of thumb is to consider all data releases at 10-20% better than what is actual.

Generally speaking, the markets and anecdotal evidence reflect reality better than government figures. Only some federal number-crunchers and a select minority of analysts actually believe that a recession has been avoided. The rest of the world already knew that the final quarter of '07 and the first quarter of '08 were in decline, meeting the classical definition of a recession.

NYSE Volume 1,456,028,000
NASDAQ Volume 2,357,763,000