| Dow -684.81 at 8920.70, Nasdaq -115.71 at 1579.55, S&P -53.77 at 1038.77 : [BRIEFING.COM] It wasn't pretty but the stock market is back after the longest shutdown since 1914. Under very difficulty circumstances, both physical and emotional, the NYSE handled the largest volume in history without a hitch. The end result was also of historical proportions with both the Nasdaq and the Dow (largest point drop in history) pulling back to levels not seen since the fall of 1998. There were several positive developments noted prior to the open including a number of companies announcing/extending buy back programs, SEC waiving rules to encouraging buying, former (?) guru from Goldman Sachs suggesting market still undervalued with no change to asset allocation, a wide spread call for a patriotic rally and last but not least the eighth interest rate cut this year by the Fed. They announced a slashing (50 bp) in the Fed Funds to 3.00% from 3.50% and the Discount rate to 2.50% from 3.00%. All of these developments could not, and were not expected to, prevent a massive slide in early dealings but they likely contributed to the turnaround into midday trading. The sector performance played out generally as expected with airlines the worst performer (-40.3%) followed by hotel, brokerage and several cyclical issues (chemical -9.7%, paper -8.8%). On the upside in times of trouble the gold and defense sectors often perform very well. Also on the plus side were the security, video conferencing, storage and telephone sectors. One sector of interest was insurance. This group was widely expected to come under substantial pressure due to the huge costs associated with the attack. However, this group rebound quickly off the opening low and closed strongly with American Intl (AIG -3.26) ending five points off its worst level. Prudential stated that China's decision to preserve AIG's life insurance branch operations is a big win for AIG and a very strong positive event for the company's future growth. While there were a number of other global interest rate cuts (Canada, ECB, Switzerland and Sweden) the market was unable to build on the recovery with a slow steady erosion noted most of the afternoon. Encouragement should be taken from the fact that the marketplace is back at work. However, there a few reasons to remain concerned. The first it the swirl of uncertainty that still surrounds the economic situation and the second is the fact that the market does not perform particularly well in the aftermath of a one time shocking event if there is no well defined conclusion. In this case the market has to deal with the start of the retaliation process and an open ended conclusion. DJTA -15.1%... DJUA -2.1%... SOX -8.7%... DOT -5.8%... XOI -2.3%... BTK -7.8%... |
