Seas of Red Ink; Global Collapse In Asset Pricing Underway; US Markets In Denial

Was Apple (AAPL), Amazon (AMZN), or Microsoft (MSFT) ever worth a trillion dollars?

All were, for a while, supposedly worth that high until the market considered the madness of such lofty valuations. Then, they were probably not.

A little quickie math is appropriate. For a company to be worth a trillion dollars, in rough terms, it would have to make a profit of $143 off every person on the planet (we're using 7 billion as an estimate) in a calendar year. Figuring a 15-year capitalization period, it's possible.

However, with the global median individual annual income at about $3000, it's unlikely. And for three companies to be worth that would mean every person on the planet, including babies and the elderly in nursing homes or hospices, would have to spend enough so that combined, Apple, Amazon, and Microsoft would net a profit of $429. So, for three companies to have that kind of valuation simultaneously is something right out of science fiction, because these people would have to spend about $2000 (figuring a rough profit margin of 20%) on products from just those three companies. Were this to happen, a third of the planet would die off because they spent most of their money on smartphones, software and trinkets from Amazon (with much lower profit margins, BYW), instead of food.

And what about all the other companies on the planet? From the corner store to multi-national corporations like General Motors, Nestle, Samsung, etc.? How much money do they extract from every person in the world with these three biggies crowding out everybody else? It simply doesn't add up.

That's why asset prices are collapsing. Companies, or rather, the stock prices representing shares of these companies are not worth what they're selling for, the big money knows it, and they're selling their shares to people less informed or desperate to make their investments pay off in the global rat race.

Let's face facts. US Stocks have more than tripled in value over the past 10 years. That doesn't make any sense. Were Americans suddenly three times as wealthy as they were 10 years ago? No. No. And Hell No.

Today, as stock prices tumbled around the world, US markets barely suffered a scraped knee and a paper cut. The NIKKEI was down 459 points, or, 2.12%. Japan's economy shrank by 2.5% in the third quarter.

Stock markets in Australia, New Zealand, Hong Kong, India, China, Indonesia, South Korea, Germany, France, England, Belgium, Italy, Greece, Spain, Brazil, Argentina, Mexico, and Canada were all down between one and two-and-a-half percent, again, after weeks of declines. Many of these indices are in correction. Germany, South Korea, China, Japan, and others are in bear markets, down more than 20%. That's just a sampling. But the US carries on, though the Dow is less than 325 points away from correction territory. All the other US indices are in correction, down more than 10%.

Dow Industrials were down more than 500 points in the morning, but finished, magically (same as last Thursday) well off the lows, in fact, with a small gain. Magic! Denial! HFT Algorithms! Programmed Trading! Central Bank Intervention! It's only temporary.

US stocks have performed better than the rest of the world, so far, but they are trending in the same direction - lower. Brokers and dealers on Wall Street are living in a La-la Land that would put Hollywood to shame. Many in the financial sphere are in deep denial. They don't believe the US economy can contract, that stocks can be re-priced lower, down 20, 30 or 40 percent or more. It has happened in the past, many times, and it will happen again. It is happening right now.

But, but, but, we can't have a stock market crash during the Christmas season, can we? Maybe stocks will not exactly crash this month, but the performance has been - on a day-to-day basis - underwhelming. Winter is coming (Dec. 20).

According to Dow Theory, the Dow Jones Transportation Index confirmed the primary trend change - from bullish to bearish - that the Dow Jones Industrial Average signaled on November 23. That's the second time this year Dow Theory confirmed a primary trend change. The last was through March (Industrials signaled) and April (Transports confirmed), but stocks bounced back quickly through the spring and summer. By autumn, the bloom was off the rose, however, and the false rally began to unwind, and it continues to unwind.

And, with that, today's musical selection, "Turn, Turn, Turn," released October 1, 1965, written by Pete Seeger, performed by the Byrds.



Dow Jones Industrial Average December Scorecard:

Date	Close	Gain/Loss	Cum. G/L
12/3/18	25,826.43	+287.97	+287.97
12/4/18	25,027.07	-799.36	-511.39
12/6/18	24,947.67	-79.40	-590.79
12/7/18	24,388.95	-558.72	-1149.51
12/10/18	24,423.26	+34.31	-1115.20

At the Close, Monday, December 10, 2018:
Dow Jones Industrial Average: 24,423.26, +34.31 (+0.14%)
NASDAQ: 7,020.52, +51.27 (+0.74%)
S&P 500: 2,637.72, +4.64 (+0.18%)
NYSE Composite: 11,889.29, -52.64 (-0.44%)

Dow Losses Tied To Nothing Other Than Profit-Taking

There's almost no chance - as Yahoo! News blared in a headline late Monday afternoon - that Brett Kavenaugh's Supreme Court nomination had anything to do with the 181-point drop on the Dow.

The continuing false narrative foisted by the financial media is about as fake as fake news can get. Every day, there has to be a reason for stocks rising or falling, there just has to be. Otherwise, how would the 24-hour squawking about stocks, finance, and your money justify its existence.

Sure enough, there are days that movements in stocks is correlated to some economic event, data drop, or newsworthy story, but most of the time trading actions are the result of some analysis, some emotion, and largely, some advance planning. Big firms don't just jump in and out of positions on the news of the day, their positions, and the allocation of their capital, is guided by profit and loss, gauging risk and reward, greed and fear.

There are times in which herd mentality takes over and swings sectors or even entire markets one way or the other, but, by and large, such huge swings are already programmed by the big trading firms, which almost never leave their positions vulnerable to unforeseen events. They are protected by covered calls or puts or any of a variety of risk-reducing strategies. Nobody with any experience trading stocks is rushing to their terminals to buy or sell on whatever nonsense is being cooked up by the crooks running the federal government in Washington, DC, because what happens on Capitol Hill usually has little to nothing to do with real capital being flung far and wide from Wall Street.

Firm in the knowledge that big positions were not being liquidated by major traders, what did cause the dip on the Dow Monday?

Chalk it up to profit-taking on short-term positions. Of the 30 Dow stocks, only seven were winners on the day, leaving 23 in the loss column. Two of the winner - ExxonMobil and Chevron - were tied almost directly to oil prices, which were up not just on the day, but for the past few weeks, as WTI crude hit a four-year high above $72/barrel on Monday. Three were chip or computer-related, as Apple, Microsoft and Intel were up, and the other two, Disney and United Health, were based on some perceived valuation play.

The rest of the stocks were lower, and it's probably a good idea to discount it as nothing more than random noise. The Dow just reached all-time highs this past Thursday and was even higher on Friday, so traders had plenty of time over the weekend to figure their positions, their profits, and how to take them. Since the move was less than one percent there's reason to believe that many traders - who, via groupthink, share many of the same strategies, knowledge, and objectives - saw an opportunity to book profits and move on to the next big thing, whatever that might be.

And, when they discover the next profitable trade, it's a safe bet that you won't be privy to it, but that many of the bigger traders on the street will know. It will have nothing to do with the news, politics, the soybean crop report, or the color of Lady Gaga's hair. You can bet on that.

Dow Jones Industrial Average September Scorecard:

Date	Close	Gain/Loss	Cum. G/L
9/4/18	25,952.48	-12.34	-12.34
9/5/18	25,974.99	+22.51	+10.17
9/6/18	25,995.87	+20.88	+31.05
9/7/18	25,916.54	-79.33	-48.28
9/10/18	25,857.07	-59.47	-107.75
9/11/18	25,971.06	+113.99	+6.24
9/12/18	25,998.92	+27.86	+34.10
9/13/18	26,145.99	+147.07	+181.17
9/14/18	26,154.67	+8.68	+189.85
9/17/18	26,062.12	-92.55	+97.30
9/18/18	26,246.96	+184.84	+282.14
9/19/18	26,405.76	+158.80	+440.94
9/20/18	26,656.98	+251.22	+692.16
9/21/18	26,743.50	+86.52	+778.68
9/24/18	26,562.05	-181.45	+597.23

At the Close, Monday, September 24, 2018:
Dow Jones Industrial Average: 26,562.05, -181.45 (-0.68%)
NASDAQ: 7,993.25, +6.29 (+0.08%)
S&P 500: 2,919.37, -10.30 (-0.35%)
NYSE Composite: 13,162.05, -74.39 (-0.56%)

Stocks Slammed Globally, S&P Under 1900; Dow Drops Below 16,000

Wall Street is, at last, getting the just desserts from seven years of Fed policies that have funneled trillions of dollars into the hands of the wealthiest people in the country.

The kicker is that the American public, the 65-70% that still works for a living, are going to get the worst of it.

Today's carnage in US equity markets was not an isolated event by any means. It began years ago, but, in its most current manifestation, the collapse began in China last night, when the SSE fell nearly 5% in its last session of the week.

The contagious selling fever spilled over into European markets, with the DAX, CAC-40, and FTSE-100 ending the day down by 2.54%, 2.38% and 1.93%, respectively.

Prior to markets opening in the US, however, there was a spate of poor economic data released.

Retail sales for December came in at -0.1. PPI went negative (deflation) in December, at -0.2%. Empire Manufacturing (a gauge for economic activity in the NY Fed district, collapsed from a reading of -6.2 in December, to a ghastly -19.4 in January.

Industrial Production fell 0.4%. Capacity Utilization slumped to 76.5%.

Then came the news from Wal-Mart that they would be closing 269 stores this year, with 154 of them in the United States. The full list of Wal-Mart store closings can be seen here.

By the time markets actually opened at 9:30 am ET, futures were showing the Dow down by more than 350 points and the indices all fell off a cliff at the sound of the opening bell.

By midday, the Dow was down more than 500 points, the NASDAQ had shed close to 150, and the S&P was sporting losses of more than 50 points.

While today's crashing stock indices were certainly bloody, they weren't even close to the 10 worst one-day Dow declines of all time, so all is not lost.

As the session wore on, the signs of a failing economy - both here in the US and globally - were everywhere. The 10-year note fell briefly below 2.00%. With 1/2 hour left to go, declining issues were leading advancers roughly 6:1. Intel (INTC) was down nine percent. Citigroup (C) was posting a 6% loss; Microsoft (MSFT) was clinging to a four percent downside. Bank of America (BAC), which was pushing 17 two weeks ago, sliced through 15 and was trading in the range of 14.40, down 4.0% on the day.

With more companies reporting Q4 and annual earnings next week, the action this week and today might just be an appetizer for what's about to come, and that might be a recession, collapsing corporate earnings, liquidations, bankruptcies and the wholesale destruction of pension funds - heavily invested in equities - nationwide.

For its part, the Fed trotted out William Dudley, president of the NY Fed and vice chairman of the FOMc, who noted that negative rates could be considered in light of the recent market volatility. His tongue-lapping of the markets didn't seem to carry much weight. Investors were only interested in getting out and limiting the damage prior to the long weekend.

The day's closing prices:
S&P 500: 1,880.28, -41.56 (2.16%)
Dow: 15,988.08, -390.97 (2.39%)
NASDAQ: 4,488.42, -126.59 (2.74%)

Crude Oil 29.67 -4.90% Gold 1,088.90 +1.43% EUR/USD 1.0920 +0.53% 10-Yr Bond 2.03 -3.10% Corn 362.50 +1.26% Copper 1.95 -1.57% Silver 13.90 +1.14% Natural Gas 2.10 -1.73% Russell 2000 1,005.44 -1.97% VIX 27.70 +15.66% BATS 1000 20,066.91 -1.99% GBP/USD 1.4255 -1.13% USD/JPY 117.0050 -0.97%

For the week:
S&P: -41.76 (-2.17)
Dow: -358.71 (-2.19)
NASDAQ: -155.21 (-3.34)

Wall Street Weirdness as Dow Makes New Record, NASDAQ Falls

Maybe it's the weather, but investor taste for speculation may be turning, just a day before the hoopla over the Twitter IPO is set to take place. The 142-character internet darling will open tomorrow at a very overpriced $27-30 per share. It could be that some big players in the tech investing (gambling) space just freed up money to get into the hottest IPO since... um, Facebook, though the memory of that magnificent failure is still fresh.

Still, winners just barely edged losers on the day, while the place to be in Dow stocks was in Chevron (CVX), IBM (IBM) and Microsoft (MSFT), an odd grouping there.

The MBA Mortgage Index slumped sadly prior to the open, with weekly applications off seven percent, even as 30-year rates fell to 4.32%.

Crude inventories showed only a modest uptick, which helped oil stage a rally off of five-month lows.

With bond yields settling lower, gold and silver up moderately, it was very tough to get a read on the overall market. Corn made fresh 52-week lows, which is bearish for beef, but bullish for carnivores in general, with beef prices stable and possibly set to decline. Overall, however, falling corn prices is about as good a deflation indicator as one can find, especially priced in silver.

Steady as she goes, though, especially on those safety plays in the Dow, which should consider to out-perform in a flight to dividend comfort.

Tweet that.

Dow 15,746.88, +128.66 (0.82%)
Nasdaq 3,931.95, -7.92 (0.20%)
S&P 500 1,770.49, +7.52 (0.43%)
10-Yr Bond 2.64%, -0.02
NYSE Volume 3,298,818,000
Nasdaq Volume 1,989,898,000
Combined NYSE & NASDAQ Advance - Decline: 2851-2753
Combined NYSE & NASDAQ New highs - New lows: 317-79
WTI crude oil: 94.80, +1.43
Gold: 1,317.80, +9.70
Silver: 21.77, +0.132
Corn: 421.25, -3.75

Stocks End Worst Month Since May 2012; Odds on Syria Strike; Despite Kerry Rhetoric, Still no Proof

We end the month of August on an oddly-down note, since Secretary of State John Kerry made an impassioned speech about the need to punish the Assad regime in Syria for alleged chemical strikes against its own people, but still did not offer any substantive proof that those loyal to the embattled president of Syria were responsible for the attacks.

Odd, it was, that stocks did not rally in patriotic fervor over going to war, insofar as any action the president may take against Syria is entirely without authorization from congress and decidedly unconstitutional. But, in the politics of the new American dictatorship under president Obama, such trifles as the War Powers Act and the constitution - to say nothing of the American public's 91% disapproval of any action being taken against Syria - count for nil when the stakes are so politically high.

Thus, we present the odds for the timing of missile strikes - "tailored" ones, using the president's own vernacular:
Friday (prior to 12:00 pm EDT): 7-5
Saturday: even
Sunday: 4-1
Monday: 7-1
No strike: 40-1

Stocks ended the most brutal month since May of 2012, spurred to the downside first, by talk of tapering by the Fed and general fear, second, by talk of military action from the Obama administration. The time for talk being essentially over, it is expected that Damascus will be in flames shortly, the Fed will nip about $10-15 billion off its monthly bond-buying binge by the end of September and stocks will continue their trajectory to the downside.

On the day, the Russell 2000 and Dow Transports were mashed fairly substantially, and, despite some fierce tape-painting in the final five minutes of trading (about 40 Dow points), stocks finished the week with their third loss in the past five sessions.

For the week - in which the Dow closed lower for the fourth straight week (first time this year) - the Dow Industrials were down 200.20 points, the NASDAQ shed 67.92 and the S&P 500 was nipped for 30.53 points, a pretty severe decline.

Microsoft (MSFT) was the only Dow component to finish positive for the month.

Now we await the weekend's entertainment: College Football and Bombing Syria.

What could be better?

Dow 14,810.31, -30.64 (0.21%)
NASDAQ 3,589.87, -30.43 (0.84%)
S&P 500 1,632.97, -5.20 (0.32%)
NYSE Composite 9,270.70, -45.12 (0.48%)
NASDAQ Volume 1,229,340,500
NYSE Volume 3,001,316,500
Combined NYSE & NASDAQ Advance - Decline: 1822-4668
Combined NYSE & NASDAQ New highs - New lows: 55-73
WTI crude oil: 107.65, -1.15
Gold: 1,396.10, -16.80
Silver: 23.46, -0.627

Reality Catching Up to Wall Street on Earnings Misses, Fears

Around June, this author told a particularly self-absorbed, furtive individual that there would be a market "event" shortly before the presidential election, designed to offer the impression that the economy, under president Obama, was failing in multitudinous ways, designed to usher in Mitt Romney as the next occupant of the White House.

Until today, that prediction seemed somewhat unreasonable, as stocks have risen sharply during the summer months, but, as third quarter earnings - in addition to various warnings from the likes of the IMF and World Bank - are proving, the US and global economies are far from what anyone would consider healthy.

Today's sharp sell-off was the product of many misses and warnings by huge multi-national companies that either missed earnings and/or revenue estimates or issued warnings for the months ahead.

Among those companies that fell short of Wall Street's lowered estimates after Thursday's close and prior to Friday's open were McDonald's (MCD), Microsoft (MSFT), Google (GOOG), high-flying Chipolte Mexican Grill (CMG), and General Electric (GE). The misses came behind similar poor showings from Intel (hit a 52-week low today) and IBM, earlier in the week and proved quite a few sell-side analysts correct in predicting that this quarter would be very rough from an earnings perspective.

Truth be told, even those companies beating earnings estimates are not beating by much, with some exceptions, and are generally hitting targets that are lower than the previous years numbers, which, as the market is a continuous-discounting mechanism, means stocks are going in reverse, with earnings falling, not growing.

That alone should explain today's deep, across-the-board, declines, but also brings into question the entire philosophy behind central bank easing and money printing on a global scale. Sure enough, easy money has propped up banks and companies and a multitude of stocks and indices, but the end result of funny fiat money always reverts to a point at which currencies become worthless and derivative instruments, such as stocks, and, further out, bonds, lose value and we could be nearing the conclusion of the failed stimulative experiment that's fixed nothing since the crash of 2008.

Speaking of crashes, today's drop pales by comparison to what occurred 25 years ago to the day, the well-known stock market crash of 1987, when the Dow Jones Industrial Average fell by 23%. It was a seminal market event that will probably (hopefully) never be repeated, as there are supposedly more safeguards and triggers - to say nothing of the PPT - to prevent such a disastrous one-day event.

That is not to say that markets, stocks and indices cannot fall hard over periods of time, though it is far too soon to call today's action the beginning of such a a downward spiral. However, with tech stocks and industrials feeling the heat from investors in an earnings season that has been short on enthusiasm and long on fear, the coming weeks, especially with the November elections as a backdrop, could produce some calamities such as have already been seen in individual stocks, many of which were grossly overvalued and highly speculative, Chipolte and Apple come immediately to mind.

Checking the charts, it's useful to point out that the Dow and S&P broke through their 50-day moving averages and closed just about right on them, a position last seen a week ago, before Monday and Tuesday's "savior" rallies pushed equities back to something of a triple top, which has now broken down in a dramatic reversal. Today's declines on the two indices were the worst since mid-June. Shortly thereafter, both indices progressed above their 50-day MA, but have now returned to the roost, setting up a very unsettling weekend and a potential breakdown on Monday or further on during the week.

As for the NASDAQ, today's worst percentage loser, that index has been screaming red for a month, having busted through its 50-day MA eight sessions ago. Any further deterioration in the beloved NAZ could trigger a serious correction, as it is already down 7% in the past month.

Looking ahead to next week, earnings reports are due out on some big names, such as Cattepillar (CAT), Las Vegas Sands (LVS), Yahoo (YHOO) and Texas Instruments (TXN) on Monday; 3M (MMM), Coach (COH), Facebook (FB) and United Parcel Service (UPS) on Tuesday; and, on Wednesday, Boeing (BA), Eli Lilly (LLY), General Dynamics (GD), Lockheed Martin (LMT) and O'Reilly Automotive (ORLY).

Those mentioned above are but a smattering of companies reporting, in what will be the busiest week of earnings season. CNBC and Bloomberg will be looking for rays of hope, while investors may have a more wary eye toward more companies missing on earnings and revenue.

One economic data point worth noting was existing home sales for September, falling 1.7% to an annual run rate of 4.75 million, well below most estimates.

Until then, the long weekend waiting game, and, on Monday night, the final presidential debate, followed on Wednesday another FOMC rate policy decision, which will probably be nothing more than a formality.

Naturally, there will be the usual can-kicking and posturing from Europe, which still cannot come up with plans for either Greece or Spain, which may or may not be part of the plan to hold off the bad news until after our elections. One can hardly wait.

That is all... for now.

Dow 13,343.51, -205.43 (1.52%)
NASDAQ 3,005.62, -67.25 (2.19%)
S&P 500 1,433.19, -24.15 (1.66%)
NYSE Composite 8,324.14, -118.68 (1.41%)
NASDAQ Volume 2,194,602,500.00
NYSE Volume 3,851,036,250
Combined NYSE & NASDAQ Advance - Decline: 1168-4339
Combined NYSE & NASDAQ New highs - New lows: 166-117
WTI crude oil: 90.05, -2.05
Gold: 1,724.00, -20.70
Silver: 32.10, -0.771

Economy Worries Overshadow Tech Titans

Stocks slid badly on Friday, marring an otherwise upbeat earnings week by ending marginally lower. The Dow Jones Industrial Average, which crashed through the 10,000 mark on Monday, and closed at the high point for 2008, wavered back and forth all week, finally capitulating on Friday, finishing 24 points in the red for the week. Other averages reacted in similar manner, with the NASDAQ losing just more than two points and the S&P 500 dropping 8 points. The NYSE Composite, the broadest measure, was down by 68 points for the 5 days.

Investor skepticism over the health of the economy dimmed the outstanding results from Amazon (AMZN) and Microsoft (MSFT), both of which blew away analyst estimates when reporting 3rd quarter results. Amazon was by far the biggest winner, gaining 25 points, to 118.49, an historic high for the stock, and a one-day gain of nearly 27% for the world's largest internet retailer. Volume on the stock was 9 times the average daily.

Unfortunately, market participants were taking hard-fought gains in other companies amid speculation that the recovery may not be as robust as previously assumed. Underscoring the market sentiment was the massive downside slide on the Dow Jones Transportation Index (^DJT), which slid 137.73 points, a decline of 3.5%.

The major issue upon which many are dwelling is still unemployment, or the lack of new job creation, and the government's abject refusal to offer programs which would stimulate job creation. The halls of congress and the White House have been focused on a partisan health care debate, no doubt a matter of great importance, but paling by comparison to the general welfare of the American people and their need for steady, solid employment.

Talk of a "jobless recovery" has begun to circulate, though even the most ardent proponents of fiscal stimulus have to admit that a recovery without new jobs is really not a recovery at all. There is also growing impatience with the federal government on their handling of the financial crisis and various "socialist" policies, not the least of which is capping executive pay via proclamation from their "pay czar" Kenneth R. Feinberg, who this week proposed 50-90% pay cuts for executives whose companies received TARP funds and have yet to repay.

If there has been one culprit responsible for any slowness in the nascent recovery, the finger can be pointed directly at he White House and congress, whose plodding pace and partisan bickering have been a detriment, rather than a benefit, to the public welfare. With the huge federal government out of the way, the American people and American businesspeople could surely forge a new way forward, but threats of pay cuts and excessive taxation are killing the attitude of everyone from Main Street to Wall Street and from Skid Row to Beverly Hills.

Then again, stocks have been rocketing skyward for some time now, and the market seems to have run considerably out of steam. even though roughly half the companies in the S&P 500 have already reported, the indices haven't budged out of a range from 9950 to 10,100 for more than a week.

Dow 9,972.18, -109.13 (1.08%)
NASDAQ 2,154.47, -10.82 (0.50%)
S&P 500 1,079.60, -13.31 (1.22%)
NYSE Composite 7,066.80, -116.11 (1.62%)

Simple indicators offer a snapshot of the depth and breadth of Friday's decline. Losers hammered winners, 4881-1566, a better than 3-1 ratio, the worst in some time. New highs were 356, to just 54 new lows. Volume was roughly in line with the pace set Tuesday through Thursday.

NYSE Volume 5,506,861,000
NASDAQ Volume 2,476,571,750

Commodity prices continued to retreat from mid-week highs. Oil slipped 69 cents, to $80.50. Gold was off $2.20, to $1,056.40, but silver bucked the trend, gaining 18 cents, to $17.72.

More companies report next week in what will be the busiest week for earnings reports. It's also a busy week for economic reports, highlighted by Thursday's preliminary release of 3rd quarter GDP, which will be a market mover.

Geithner Passes Committee; Housing, Unemployment Reach Records

Tim Geithner was approved by the Senate Finance Committee (guess we all can cheat on our taxes without worry now!) earlier today, as the process of confirmation as Treasury Secretary now passes to the full Senate. The AP wire lit up with the story at 12:37 pm EST, just about the same time the Dow crossed back above 8000 and started a mini-rally (by 2:15 pm, the Dow snuck past 8200).

Coincidence? I think not. Wall Street's fate is now tied to Geithner and how he and Ben Bernanke, over at the Fed, interact and respond to the ongoing obliteration of the nation's largest financial firms.

The euphoria over having one of their own (Geithner's resume is full of Wall Street, World Bank and NY Fed connections) with his hands nearly on the US Treasury quickly faded as those in the know remembered that the US government is carrying a debt load of close to $11 Trillion, so maybe Geithner won't be able to help in the long run. Shortly after 3:00 pm, the Dow was down 150 points again, and matters didn't improve much heading into the closing bell.

Dow 8,122.80, -105.30 (1.28%)
NASDAQ 1,465.49, -41.58 (2.76%)
S&P 500 827.50, -12.74 (1.52%)
NYSE Composite 5,171.74, -102.25 (1.94%)

On top of this is a growing concern over how stable the Federal Reserve is. Bearing in mind that the Fed is a private bank, albeit with deep tethers to the government, the Fed has been buying up more than its fair share of rotten assets and throwing around money like Bernie Madoff on an investor hunt.

With more and more economists and commentators openly saying that the large banking institutions are insolvent (something I and others have known and written about since 2007), reality is taking a heavy toll on investor sentiment. (I'll have much more about the Fed, the banks, the bailouts and our future in a blockbuster report tomorrow)

While the marketeers were making the most of their man being appointed to Treasury, an earnings miss and announced layoffs by Microsoft and more dismal data from the housing and employment sectors overhung the entire session, acting as the metaphorical ton of bricks weighing down all sectors.

New unemployment claims hit a level not reached since 1982, with 589,000 new applications for the week ended January 16.

New home construction and permits fell to record low levels in December, the Commerce Dept. reported.

Taken together, the news could not have been much worse, though investors are getting used to the endless stream of bad news coming out of government and private analyses. The poor earnings reports for the 4th quarter are a relatively recent add to the mix, but earnings season is getting into full swing. Google reports after the bell today. (Update: Google beat analyst expectations ($4.98), posting Non-GAAP EPS for the fourth quarter of 2008 of $5.10.)

Declining issues outweighed advancers by a wide margin, 4867-1560. New lows: 230. New highs: 12. Volume was consistent with the past few days, generally on the high side.

NYSE Volume 1,554,123,000
NASDAQ Volume 2,347,116,000

Oil finished with a 12 cent gain, closing at $43.67, though US inventories were reported 14% above last year's levels. Oil traded lower for much of the session before recovering into the close. Natural gas fell 9 cents, to $4.65. Gold gained $8.70, to $858.80; silver finished the day 4 cents to the good, at $11.37 the ounce.

A catalyst to propel the bulls has yet to emerge, though at this juncture, small bits, like Google's good report, may be enough to keep what little is left of investor confidence. Today's close on the Dow, however, was the second this week below 8149, the interim low (Dec. 1) following the November 20 collapse and bottom (7552).

The markets have traded sideways for two months running, so a betting man might be inclined to look for a change in dynamics. I make the prospects of closing below the Nov. 20 lows within a month at 70%, and a gain to 8750 in the same time frame almost nil.

Traders Take Profits; Leery Google Cries Foul

A smattering of good news appeared on Wall Street as the week opened, though the comparative numbers still indicated a slowing economy persisting.

On Monday, the Commerce Department reported that US factory orders rose by 2.3% in December, an improvement from November's 1.7% gain and the largest increase since July.

Orders for big-ticket goods were up 5%, but "nondurable" goods, including clothing, textiles and beverages slipped 0.4%.

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For the year, total orders were up just 1.4%, the worst annual performance since 2002. That was a large fall from 2006, when total factory orders rose by 5.1%.

Taken together, the annual numbers carry more weight than the one-month bump in December and investors responded by taking some profits from the previous week off the table.

By 10:00 am, the Dow Industrials were off 75 points and stocks continued to trade in a narrow, lower range for the balance of the session.

Dow 12,635.16 -108.03; NASDAQ 2,382.85 -30.51; S&P 500 1,380.82 -14.60; NYSE Composite 9,202.11 -75.47

Volume was extremely light, an indication that investors are in a wait-and-see mood, with earnings season winding down and only minor economic news scheduled for release this week.

On Wednesday, preliminary 4th quarter productivity figures and crude oil inventories will be released. On Thursday, traders will be watching the initial unemployment claims after a big jump last week. Pending home sales and consumer credit figures are also due for release on Thursday.

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Topping the news is Microsoft's (MSFT) hostile takeover bid for Yahoo (YHOO) and Google's (GOOG) scathing criticism of the potential union of two of the internet's larger players.

The response, penned by one of Google's lawyers, smacks of hypocrisy and fear. Google owns a domineering position in search that borders on a monopoly, though the combination of their two main rivals could pose a serious threat to that dominance.

Yahoo has yet to respond to the roughly $31 per share offer by Microsoft, but analysts are saying it will be difficult to refuse as it represents a 62% premium over Yahoo's price prior to the offer.

With little to move stocks, decliners took command over advancing issues, 3663-2598, though the gap between new lows and new highs continued eroding. New lows held a slim edge on the day, 121-98.

Crude oil priced $1.06 higher, at $90.02, while gold fell $4.10 to $909.40 and silver dropped 9 cents to $16.78. The reduced prices in the precious metals may indicated a prime buying opportunity in these supercharged markets which should only trend higher over the coming months.

NYSE Volume 3,290,565,000
NASDAQ Volume 2,027,786,875