Flat Day for Wall Street

Wednesday, February 18, 2009

The market bounced back and forth today trading within a 140-point range. At worst the Dow as down 75 points and at best up 65 only to close up 3 points for the day. Obama unveiled the administration's new housing plan to spend $275 billion to help struggling homeowners. The first $75 billion will go to reducing mortgage payments for 9 million Americans and the next $200 billion will be used to expand the balance sheets of Fannie Mae and Freddie Mac. Fannie and Freddie will use the capital to buy more loans on the open market. The market hardly reacted to this announcement. Overall, it was an uneventful day on Wall Street following yesterday's drubbing.

The inability to mount a bounce is discouraging. The market traded within 30 points of the bear market lows at 7,449 before bouncing as sellers gave up the fight. Volume hardly came into the market as we neared the lows. The bounce looked to be much more a lack of selling at lower levels rather than a concerted buying interest defending the levels. The market appears to be trickling lower and lower as stocks fall by their own weight.


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