Wednesday's market held something for everyone it seemed as there were moves in most of the classes we follow. First, let's look at the stock market. With the three or four "important" earnings released on Tuesday evening, the market was about bursting at the seams before it actually opened. When it did open, there was plenty of enthusiasm for stocks with the NASDAQ up 40 points. Of course, that was the high for the day but there was some incredible action to follow before the end of the day.
For the most part the market tried to hang tough in the first couple of hours but then it just let go and fell for two straight hours. After being up 40 at the opening bell, the NASDAQ Comp traded under water about 10 points at it low. But, after dropping 50 points, it managed to rally nearly back to the opening level up 28 points on the day.
Even oil managed to spike to a high during the day, up to $89 a barrel before closing back in the $87 range. Gold was higher during the morning and then dropped all day. Overnight trading seems to have brought it back to life again. Bonds had a pretty good day with rates dropping slightly.
The Fed's beige book and Treasury Sec'y Paulson both agreed with the September housing starts being 10.2% lower. Actually they said that the housing market has the potential to disrupt the economic expansion. Paulson said, "The ongoing housing correction is not ending as quickly as it might have appeared late last year." Meanwhile the CPI indicated well...we can't really understand how this number manages to be about 0.2% every month so it has become a meaningless number. But, social security payments are based on it and those will increase 2.3% next year. Can't wait until we're on Social Security.
We leave you this evening with a pretty good article from CNN Money Fortune. The article describes 5 things that need to happen before the credit crunch is over. The last one is particularly interesting--"let it actually happen".