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