Markets Start Post-Thanksgiving with Monday Afternoon Slide

The day started with promise after a Friday market session that had stocks broadly up. Some concerns over consumer spending were eased as reports came out estimating the number of shoppers in the US over the holiday weekend actually increased against last year. The markets were battered later after more credit concerns in the banking world came to light. Specifically from Citigroup (C).

The retail shopping data provided an early boost as a tracking data point (of approximately 50,000 stores) showed a 7% year over year increase in consumer spending. The fears that the credit crunch would curtail spending seemed to be forgotten for the time being. The positive vibe of the market was erased in the afternoon as more bad news poured out of the financial sector.

Citigroup announced some cost-cutting plans effective immediately, which led to speculation of job cuts and further write-downs. The major bank may have to include an over $8Billion write-down next quarter. This bad news trickled throughout most of the financial sector and Citigroup shares fell under $30. This company is surely in bad shape these days and a recovery effort will be a bitter pill to swallow for investors but may be a necessity before the $40s are seen again.

The major averages were all down around 2% Monday, with the Dow losing almost 240 points. The S&P benchmark with today's loss dropped into the negatives on the year and as it is the tracking average for most mutual funds Investors will surely be disappointed in their next statements.

I think there's some hope here for a recovery but the time-frames are shifting every month that's filled with continued bad news. We've heard it several times, that things will get worse before they get better, but investors can't shake off bad news with the fragile state the financial sector is in right now. It's got to be a holding pattern investment-wise until someone, somewhere shines a light on the sector.

Disclosure: Author owns C

Consumer Confidence Slips, Market Tumbles from Uncertainty

A second straight day of falling economic metrics gives way to a second straight day of losses for the markets. Fresh off the heels of Monday's Housing report, in which housing sales fell to a 5 year low, came this morning's Consumer Confidence metrics. The Consumer Confidence Index fell from previous month high levels of 111 to around 105 and further economic fears clouded American Markets.

Federal Reserve minutes came out also and pulled markets down further as talk centralized on the possibility of the housing slump being more prolonged than initially thought. Investors took this sentiment from the Fed as a sign to head for the door leaving the Majors (Dow, Nasdaq and S&P) down across the board about 2%.

Will this mean that the Fed will need to provide the market with the needed September interest rate cut? Investors seem to be hoping that the rate cut will come and the markets will more than likely continue in this drifting pattern till the interest rate policy is known. The Financials led the sell off today as earnings estimates are being trimmed left and right for the Investment Banks and Major Financials. Goldman Sachs (GS), Morgan Stanley (MS), Bear Stearns (BSC) and Merrill Lynch (MER) all were sold off substantially today with Lehman Brothers (LEH) being the biggest victim of the selling. Citigroup (C), Bank of America (BAC) and Wachovia (WB) were also sold heavily showing that the dip in the financial sector was widespread.

The selling was broad across North American markets with all sectors seeing red. The Fed revealed that it had hoped the market would, in essence, fix itself but that clearly has not been the case. Now although the American economy is still in good shape, to create market stability here the Fed has really no choice but to interject again and produce an Interest Rate cut soon.

Market Week ends on a High as Fed and Options Expiration Lead Rally

Markets in North America climbed back amongst heavy losses early in the week as the US Fed cut the Discount Interest rat by half a percentage point. This is the rate that banks borrow from the Federal Reserve. The news sent stocks flying early Friday and the rally held steady in the late afternoon led overall by the Financials.

Positive earnings and a positive outlook from Hewlett-Packard (HPQ), Dell's (DELL) internal earnings audit completion and general bargain hunting helped Technology put the Nasdaq ahead by almost 2.5%. Options Expiration also helped fuel some of the buying as several big tech names hit even strike levels. Whole Foods (WFMI) completed another hurdle in its attempt to acquire Wild Oats (OATS) which in turn made company shares jump 7% and 17% respectively.

Thursday's quick climb from the aftermath of a morning 300+ point Dow drop continued Friday and the major indices almost climbed back to even for the week. The TSX in Canada was also led by Financials but the market saw a 400 point gain close to only 200 by the end of the day. Canadian currency gained strong on the US rate cut news and the Bank of Canada went back on its plan for a rate hike later this fall. The markets in North America are still in uncertain and turbulent times, however Friday showed that on positive news buyers are there just waiting to jump in.