Testing New Stock Market Lows

Everybody seemed to expect the Nov. 20 lows would be tested this spring. And they ARE. Question now does the market stay at this level until 3Q 09, when most economist predict the first signs of improvement? I think so.

Stocks slumped to new lows as worries about the economy and the financial sector continued to keep investors on the sidelines.

After coming close twice this week, the Dow Jones Industrial Average set a new bear-market low, finishing down 89.68 points, or 1.2%, at 7465.95, more than 86 points below its close on Nov. 20. It was the Dow's lowest close since Oct. 9, 2002, the trough of the previous bear market.

The Standard & Poor's 500 index slid 1.2% to 778.94, its lowest close since 752.44 on Nov. 20. Its financial sector was down 5.3%. A month of bearish options trading is weighing on bank stocks as options expiration looms Friday.

(via WSJ.com)

The Dow's miserable finish -- its worst since Oct. 9, 2002, when the last bear market hit bottom -- deepened concerns that the markets' downturn is far from over. It also provided a clear sign that investors don't see a quick end to the worst global slowdown in decades despite the unprecedented intervention in economies and markets by governments around the world.

''People just don't know where the bottom is,'' said Desmond Tjiang, Hong Kong-based chief investment officer at Fortis Investment Management, which manages $3 billion in Asian equities.

''The macro indicators are still deteriorating, the companies aren't giving any guidance and the governments don't know what they're going to do,'' Tjiang said. ''Basically nobody has any visibility or knows what's going to happen.''

(Via NY Times)