| | DOW | 9310.99 |  | -76.62 | -0.82% | | | NASDAQ | 1779.01 | | -65.24 | -3.54% | | S&P | 998.01 | | -5.34 | -0.53% | | | | | |  | Margaret Brennan, Reporter, CNBC Business News"
If the markets seem a bit bipolar these days, it is because they are. Monday's unbridled enthusiasm in the stock market (+936 points on the Dow) was muted on Tuesday (the Dow closed down 76). The bond traders returned and traders remembered that there is a whole lot of baggage to be dealt with even after some reasonable amount of confidence is restored. The Bush administration's "injection therapy" did help restore some stability to the market. The "unprecedented and aggressive" steps of injecting $250 billion dollars into the nation's banks, guaranteeing new bank debt and expanding insurance for non-interest bearing accounts will help. Still before there is any return to 'normalcy' or creation of a 'new normal', traders and investors have to survey the damage to the underlying economy, corporate profits and the American consumer.
That's what we saw on Tuesday. The market started to look beyond breakdown and toward what will be a tough recovery. From the indications that we're seeing so far, consumers are more than aware of how much wealth destruction has happened over the past few weeks.
How much have consumers priced those shrinking resources into their budgets?
How much have corporations priced those budget cuts into their earnings expectations?
| | | | High-Quality Stocks Are Cheap: Analyst
High quality stocks are on the cheap, said Abhijit Chakrabortti, Morgan Stanley chief global equity analyst. "There is a great advantage for coming into these stocks now at these depressed valuations," he said...read more | | |
| | New Bailout Package Helps, But More May Be Needed
The US government's latest effort to prop up financial institutions and defrost global credit markets takes a big step in the right direction, but it also contains significant shortcomings that show policymakers may still not be ahead of the curve, analysts say. "This is second or third variation of what [Treasury Secretary Henry] Paulson's expected he'd have to do,"...read more | | |
| | Farrell: Market Bottom? Be Careful
Little advertised and poorly understood was the Fed's decision yesterday to provide unlimited dollar funding to the world's financial system through dollar swap lines established with three European banks. There was a limit on the number of dollars that could be accessed before this. To illustrate how tight that market had become the last $20 billion auction... read more | | |
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Tonight: Will the new bailout plan work? A Main Street Mayor, a former Governor and a 66 Billion Dollar Fund Manager weigh in. Plus, get the pulse on tech stocks. "Wall Street Crisis: Is Your Money Safe" Tonight 7p ET hosted by Larry Kudlow | |
| | 1. Dr. Doom: US Needs to Delevarage 
The U.S. government's measures do not solve the fundamental issue within the U.S. financial system -- which is overleveraging, says Marc Faber, editor & publisher of the Gloom, Boom and Doom Report. | | |
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