Cacaphony of News Events Sends Stocks Lower

Tuesday was full of news items - most of them bad - which cumulatively took US stock markets down a few notches.

In classic bear market fashion, stocks opened higher, but quickly gave up their gains - the Dow managed to tack on 103 points at the high of the day, just before 10:00 am EDT - and turned negative, where they stayed the remainder of the session, the losses accelerating into the close.

Early in the day, Italy's Prime Minister, Mario Monti, expressed an interest for his country to tap into Eurozone bailout funds, for "bond support," an option previously not mentioned as Monti tries to turn around his country's flagging economy, but prescient, as Italy's banking system is one of the weakest of European nations.

Monti's suggestive remarks blunted a broad rally on European bourses, though most managed to finish with sizable gains, his comments coming late in the trading day.

Not so fortunate were US markets, which received the dispatch around 11:00 am EDT. The first news of the week from Europe that was not all roses and Perrier sent shivers through the exchanges as investors took heed and began selling in earnest.

Italy's woes were lumped on top of news that Patriot Coal, suffering from the lowest coal prices in 24 years, due to mild winters and increased use of natural gas, filed for bankruptcy protection in Manhattan, NY. The company's bonds are under severe pressure, selling for 26-34 cents on the dollar, depending on maturity. The stock (PCX) price ended Thursday at 0.61 cents and did not trade today, though some after hours quotes have it at 0.37 cents.

Adding to the day's malaise, the city of Scranton, PA, under severe financial pressure, cut municipal employees' pay to minimum wage, $7.25 per hour, citing a need to keep costs down and raise capital.

The woes of Scranton, mythical home to the hit series, "The Office," are notable, following the bankruptcy of Pennsylvania's state capitol, Harrisburg, and other municipal bankruptcies in Stockton, California and Jackson, Mississippi.

Just adding fuel to the raft of bad news was J.C. Penny, which announced 350 job cuts at their headquarters in Plano, Texas. The retailer is attempting a turnaround after years of sluggish sales and sputtering growth, though the economic climate hasn't been very cooperative. JCP finished down 1.27, at 20.76, a share price less than half what it was just five months ago.

All of these news items, which seem to be billowing up daily, sent stocks into a tailspin, though short-covering and the PPT managed to keep the major indices from closing at their lows.

There is little doubt that the US and global economies are facing stiff headwinds from an overabundance of debt, fraud and malfeasance, which won't be easily fixed.

The trend continues to be one of losing bets on stocks while legislators sit upon their collective hands - because it's an election year - and the global, criminal banking cartel continues to skim and chip away at the edges of everybody's wealth.

How long the crisis mentality will prevail is unknown, though one has to believe that all hell is about to break loose, both in the US and Europe - to say nothing about the hard landing in China - surely to fracture before the November elections.

It's a mess, and, if you're one of the sheeple who can't see the forest for the trees, it's time to start weeding and cutting some brush. The situation worsens by the day and financial authorities have nothing to offer but more debt, piled upon heaps and loads of the stuff.

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On a personal note, it is with great regret that I note the passing of Helen Mittermeyer, mother of one of my two best friends, Paul Mittermeyer.

Helen left this earth on Monday afternoon, succumbing to complications from cancer after a short illness. She leaves behind her husband, Whitey, and four children, Paul, Ann, Daniel and Cris.

Helen was a noted writer of romance novels who wrote 30 books from 1983 through 1998. In her latter years, health issues prevented her from keeping to her craft. She also penned novels under the names Ann Cristy, Hayton Monteith, and Danielle Paul.

A warm, caring, generous, outgoing person with a permanent smile and a zest for life, Helen will be missed by all.

-- Rick Gagliano

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NASDAQ 2,902.33, -29.44 (1.00%)
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