Stocks Continue Relentless Slide

This week begins on the same note as the previous one ended: with stocks taking big losses late in the day. All major indices are once again approaching their October 27 lows with the Dow Jones Industrials just 100 points away, the NASDAQ finishing at a new low (previously 1505.90), the S&P 500 a mere 2 points above and the broadest measure, the NYSE Composite, finishing the day just 127 points above the most-recent low.

Dow 8,273.58 -223.73; NASDAQ 1,482.05 -34.80; S&P 500 850.75 -22.54; NYSE Volume 5,507,580,000 NASDAQ Volume 1,885,847,500 NYSE Composite 5,323.36 Down 129.27

Investors were initially cheered about industrial production figures provided by the Federal Reserve, showing an increase of 1.3% in October. However, closer examination of the methodology revealed that September figures were revised lower, thus affecting the October numbers positively. The net result, according to the Fed, was a reduction of roughly 0.67% for the two months combined.

Also, the seldom-quoted Capacity Utilization figures continued to stagnate at the 76.4% level, suggesting that - for the time being - overall industry will continue to reman flat or decline.

Both the Industrial Production and Capacity Utilization data can be found here.

Those numbers caused a little bit of relief midway through the session, but Citigroup announced 53,000 layoffs, and that bit of news sent shivers through the investing community throughout the day.

Investors now find themselves in a conflicted, malignant state of waiting until a new president and congress takes over the reigns of federal governing on January 20. The current congress and lame duck president don't seem capable of making any kind of useful decisions, and the ones they have made haven't alleviated any of the stresses in the market or credit system. Even the much-ballyhooed G-20 economic summit which took place in Washington Friday and Saturday ended with only a statement of desired objectives and no immediate action.

So, stocks languish, day after dreary day. News continues to erode confidence as everything seems to be spiraling downhill without respite. The list of store closings by retailers (everybody from J.C. Penny to Pep Boys to the Gap to Lowe's) continues to expand. Some malls are concerned that following the holidays there will be an absolute glut of retail space available with nobody to fill it.

Not surprisingly, decliners beat back advancing issues by a wide margin, 4804-1832. Likewise, there were far more new lows than highs: 780-9. Volume was light.

NYSE Volume 1,311,161,000
NASDAQ Volume 1,856,252,000

Oil resumed being a bad bet, losing $2.11, to $55.49. Gold was virtually unchanged, losing 50 cents to close at $742.00. Silver dropped 16 cents to finish the day at $9.33 per ounce.

As far as the eye can see upon this somewhat murky financial horizon is nothing but trouble. Holiday sales are not expected to be merry for most retailers and job losses continue to mount in all sectors of the economy. The key questions being asked are, first, where's the bottom? and secondly, how is the economy supposed to be revived?

Obviously, nobody knows the answers, but here's a couple of guesses: The bottom will be in the 6500-7200 range, occurring either in December or early January. The revival of the economy will begin the moment George W. Bush is shown the White House exit for the final time and President Obama with a new congress can get down to work on fixing the mess with green initiatives, public works programs and sensible government solutions - something this administration seemed not only incapable of formulating, but actually went out of their ways to avoid doing.