April Fool's a Day Early?

Essentially, anyone who bought stocks after 10:30 this morning and held them into the close ended up with a loss. The Dow shot up up over 100 points to the positive at that point, tacked on 100 more by quarter to three, and then fell apart in the final 30 minutes, finishing with a gain, but less of one than had the markets closed 5 1/2 hours earlier.

For those foolish enough to believe portfolio managers were loading up throughout the day, their fate will be told in days ahead. The wisest of the wise bought stocks in the first half hour of trading, before the fools rushed in a day early. Everything that occurred during the session after 10:00 am was fluff and puffery, running in opposition to the economic reports of the day and the news, which was uniformly bad.

The S&P/Case Shiller Home Price Index [PDF] reported the worst month in the history of the series with a record 19% decline year-over-year for the February 2009 20 City Composite. Those numbers came out at 9:00 am, though the market chose to ignore them, opening the trading session with broad gains.

At 9:45 am, the Chicago Purchasing Manager's Index noted a decline for the month of March from 34.2 to 31.4 , its lowest level since 1980.

Finally, at 10:00 am, The Conference Board's consumer confidence reading edged slightly higher, to 26.0 in March, from 25.3 in February. The original February reading of 25 was an all-time low, though the revised reading still registered as the worst ever.

Meanwhile, GM and Ford announced plans to cover car payments for people who buy a new vehicle but lose their jobs, and Fritz Henderson, the new GM CEO, in his first full day on the job, said that more plant closings would be necessary and that bankruptcy would be "more probable" to a government workout. Stocks, in deference to reality, continued to soar through midday.

The Chicago Sun-Times filed for bankruptcy and President Obama flew off to London for a meeting of the G20, which, by most accounts, will accomplish nothing, as the parties are far apart on major issues such as taxation, regulation and stimulus. The conference begins tomorrow, though the demonstrations began in earnest today.

All of this led to a very fractured market at the close of one of the most volatile quarters in market history. Though March will be remembered as one of the best in market history, all major indices are down for the year by anywhere from 7-12%. and even though stocks finished the session with gains, there was a widespread feeling that the bears had actually carried the day.

Dow 7,608.92, +86.90 (1.16%)
NASDAQ 1,528.59, +26.79 (1.78%)
S&P 500 797.87, +10.34 (1.31%)
NYSE Composite 4,978.98, +79.93 (1.63%)

Nevertheless, advancing issues finished well ahead of decliners, 4720-1798, and new lows outnumbered new highs, 75-18, a string of daily wins for new lows which stretches all the way back to October, 2007, with the exception of 5 to 8 sessions with more new highs than lows. This has been the most accurate metric for measuring the market, since the bear market began in August of 2007, now stretching to 18 months, making this one of the longest bears in market history. Volume was off just a touch and seemed especially sluggish though the middle of the session, though very strong in the final 30 minutes.

NYSE Volume 1,638,661,000
NASDAQ Volume 2,145,532,000

Commodities were volatile as well though almost all ended with gains. Crude oil for May delivery ended the day higher by $1.49, at $49.90. Gold gained $7.30, to $925.00, while silver, the only loser of the major commodities, was down a nickel, to $12.99.

Market participants will be greeted early, at 8:15 am, by the ADP Employment survey for March, a precursor to Friday's government non-farm payroll report.

April Fool's Day starts a new quarter and a new month. March was the first month in six in which the Dow Jones Industrials registered a gain.