Faint Optimism After Markets' Wild Week

Wall Street's Tumultuous Week Had Huge Swings, Bad Economic Reports

(CBS/AP)  Wall Street ended a tumultuous two-week run relatively quietly Friday, finishing another back-and-forth session mixed as investors were cheered by signs of easing in the credit markets and managed to absorb lackluster economic news with equanimity.

The expiration of options contracts helped tug the market in different directions throughout the session. Still, the Dow Jones industrial average traded within a narrower range than it had in much of the past two weeks. The Dow ended down 127 but big rallies on Monday and Thursday gave the blue chips an advance of 4.8 percent for the week - the best gain since March 2003.

The market spent the first half of the session vacillating, moving between gains and losses after the government said new home construction dropped by more than expected last month to the lowest pace since early 1991. But investors' mood seemed to pick up later in the session as lending rates for bank-to-bank loans eased, indicating some bank fears about not being repaid by borrowers is easing. Demand for safe-haven investments like Treasury bills also decreased. The final hour of trading again proved pivotal as in much of October; stocks fluctuated as investors squared away positions for the week.

Given the magnitude of most of the recent sessions in October, the indexes' moderate declines Friday seemed barely noteworthy. And advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume came to 1.74 billion shares.

The loosening of credit markets appeared to draw most of investors' attention. The London interbank offered rate, or Libor, for three-month dollar loans fell to 4.41 percent from 4.50 percent on Thursday, the fifth consecutive day of declines.

"I think we're beginning to get a slightly better feeling in the credit market," said Peter Cardillo, chief market economist at Avalon Partners Inc., a New York brokerage house, pointing to the move in Libor. "I'm sure we'll still have a strong bear grip to the market but I do believe the market was way oversold. I do believe we've made a bottom."

It was an erratic week on Wall Street, with the Dow soaring 936 points on Monday, slipping moderately Tuesday, sinking 733 points Wednesday, and then rallying 401 Thursday. The volatility is not providing investors with much relief, but it is a welcome change from last week's relentless plunge, during which the Dow logged its worst week ever and Wall Street lost about $2.4 trillion in shareholder wealth.

According to preliminary calculations, the Dow Jones industrial average fell 127.04, or 1.41 percent, to 8,852.22, after falling 261 points in the early going and rising 302 points - a 563-point range.

Broader stock indicators showed more modest declines. The Standard & Poor's 500 index fell 5.88, or 0.62 percent, to 940.55, while the Nasdaq composite index fell 6.42, or 0.37 percent, to 1,711.29.

Economic readings that appeared to trouble the market early in the session seemed to lose their importance as investors looked to improvement in the credit markets.

The Commerce Department reported that housing starts fell more than 6 percent in September to an annual rate of 817,000 units. The figure is lower than the 880,000 units forecast by Wall Street economists surveyed by Thomson/IFR. Building permits also sank.

The report was yet another piece of evidence that the nation is struggling with a weak economy that, if the financial crisis is not solved, could weaken. President Bush on Friday said in a speech that the credit market - where many companies find funding for their operations - will take a while to thaw, but that Americans should be confident that it will.

"The actions will take more time to have their full impact," Bush said. "It took to a while for the credit system to freeze up, and it will take a time to thaw."

"The market's ability Thursday and today to rise in the face of very bad economic news is encouraging because it indicates that the extreme oversold levels that we've seen over the past few weeks may finally start to push the market higher as has typically happened throughout history," said Michael Sheldon, chief market strategist at RDM Financial Group in Westport, Conn.

Investor sentiment could also be getting a boost from billionaire investor Warren Buffett, who wrote in The New York Times on Friday that he sees opportunity from the sell-off and that has been moving his personal investments from safe Treasuries into U.S. stocks.

[good4always]

PAKISTAN HAS CREATED THE FINANCIAL CRISIS IN USA.

PAKISTAN DOES NOT NEED AMERICA HELP IN ANYTHING ANYWAY. PAKISTAN CAN WIPE OFF AMERICA IN ANY MINUTE ANY TIME IT WISHES.....

....AND THAT IS THE ONLY REASON USA IS SCARED OF PAKISTAN SO BIG TIME THAT IT GIVES MONEY AND ALL KIND OF THINGS TO KEEP THEM FROM NOT ATTACKING USA.

[tpraskac]

Good. Let all the fat cats burn

[easeup-2009]

Good. Let all the fat cats burn

Posted by tpraskac at 11:35 AM : Oct 17, 2008

You think only ''fat cats'' own stock?

Oh well, back to your deep-fryer.....

[lemonskink]

http://www.ronnierayjenkins.com/topics/deathinappalachia/Empty_Chairs/

[tincup356]

Bush commented that with 250 billion injected into the banking system should help matters,then he stated he HOPED the banks would thaw the freeze and start loaning money easier, HOPED? sounds to me like the banks have no intention of thawing out anything.More like you gave us the money and now we will hang on to it until it disappears like the money did before only this time they don''t have to answer to anyone .time to vote out all incumbents up for election next month and send a clear message to congress, you didn''t represent us, you stole from the country to give to thieves that have already proven themselves as scum and now you will pay the price by standing in the unemployment lines like many you have forced there.Both parties of congress are so corrupt they need to be removed

[misha128-2009]

What else can one do when faced with the erratic responses of Senator McCain fueling the panic?

[ilovemydoggy]

Read what they do NOT tell you about the financial crisis:

http://www.vaboomer.com/

[newsjunky5]

"Warren Buffet says BUY. This from a billionaire! Buying "American" stocks, IS a good investment."
-------------------------------
Something tells me you already did.
Not to worry. The Dow chart looks less like jack-o-lantern teeth than it did yesterday.

[pvperson]

I agree with Buffet, I just wish i had money to buy with.

[toshi43]

Ive been doing some thinking about this ''crisis''. I read a story here on cbsnews.com a while ago about the fact that 200 million children world-wide have NO access to healthcare and 10 million of them, yes 10 MILLION, are dying every year. It''s not in the headlines or on any prime-time newscasts, no summit of world leaders called, no crisis declared, and most importantly, no one''s losing any money, and I would guess, sleep over it.

I did a quick bit of math in my head and this is what I came up with. (correct me if I''m wrong here)

$700 Billion (minimum) for bailing-out rich investors and bankers divided by 200 Million children dying from lack of food and medical care equals $3500 for each child. Think of what THAT could accomplish before worrying about your stupid stock portfolios.

[txgrouch2007]

http://www.vaboomer.com/
Posted by ilovemydoggy at 02:09 PM : Oct 17, 2008

Notable quotes from this site:

Rep. Barney Frank (D-Mass.) Sep 11, 2003:
"We see entities that are fundamentally sound financially. . . . And even if there were a problem, the federal government doesn''t bail them out."

Sen. Thomas Carper (D-Del.), later that year: "If it ain''t broke, don''t fix it."

SOOOO - the Democrats didn''t want to do ANYTHING TO FIX THIS PROBLEM. They didn''t even SEE a problem.

YUP, THE DEMOCRATS ARE TO BLAME all right.

[txgrouch2007]

http://www.vaboomer.com/
Posted by ilovemydoggy at 02:09 PM : Oct 17, 2008

More fun facts from this site:

Senators Christopher Dodd, (D-CT), current chairman of the Banking Committee, (among other Senators) refinanced properties through Countrywide Bank''s %u201CV.I.P.%u201D program in 2003 and 2004. The VIP Program gave unusually favorable mortgage rates to those in powerful positions.

YUP, THE DEMOCRATS ARE FILTHY DIRTY ON THIS.

Dirty, very very dirty.

[wickedtwiste]

What I don''t get is the conversation about making up money out of thin air. Hey... they can use the money that disappeared into thin air out of our stock portfolios? Where EXACTLY did THAT money do to? Gone... WHERE... just... disappeared? It''s somewhere...

[wickedtwiste]

This is NOT just a Republican or a Democrat thing. Both parties have plenty of guilt and responsibility to share. This *** non cooperation has to stop.
Our elected representatives make enough money that they do not have to spend a second thinking about how they are going to manage, day to day... howabout we cut their salaries to the bone and drop their benefits and see how well they''ll manage.

[cfin5]

I think you stockholders need to relax and quite peeing in your economic britches. When oil is free falling like this, it is the economic "antonem" of why we are here financially in the first place because of frearful oil speculations.

[hypnotoad72]

Think Obama will save jobs?

http://www.huffingtonpost.com/david-sirota/the-offshoring-of-hope-o_b_67924.html

[atheismwins]

Lazy poor: Hand over the money, little middle class children! I want a house! I want health care! I want babies! I want a car! I want a funded retirement!

[txgrouch2007]

When oil is free falling like this, it is the economic "antonem" of why we are here financially in the first place because of frearful oil speculations.
Posted by cfin5 at 10:16 PM : Oct 17, 2008

Fearful? More like GREEDY!!!

Regular unleaded is selling for $2.699/gal in the Houston area. Prices must be falling in the rest of the country.

WHY NO NEWS ITEMS ABOUT THIS???

And I mean ANYWHERE!!! NOBODY is reporting it.

WHY?

[atheismwins]

We can now focus on a Balanced Budget Amendment.

Poor people don''t want it. They want their bills paid by the children of the middle class.

But there are more of us than there are of them.

The political opportunity sits. Will any politicians call it to its feet?

[xlib]

I''ve looked all over this site and still see nothing on the fact that your own queen nance wants another 300 billion!! Another 300 billion as a "stimulus package". Someone please tell me what that will stimulate. For the life of me, I really don''t know.
This country is not slowly going towards socialism, it is being pushed into socialism. Your dem congress is absolutely a joke. Two years and have they kept one campaign promise. NO!!
So, as the left keeps tallying up the money they will take from us, comrades, we are in trouble.

[iphyt4u]

The democrats agreed to let the republicans fulfill their agenda, as long as, the democrats get to run theirs after the election. The movement started in 2006, and it will come into being on November 5th. Vote Democrat and let the changes begin. Corporate executives and the wealthy have not trickled down the money. The common people need assistance, and the time will soon be here.

[iphyt4u]

The market will bottom out between 6500-7000. There''s no good news out on the horizon. There''s more lay-offs coming, and this situation is independent of the foreclosurer problem.