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Market doesn’t like latest bank bailout rescue plan

Traders slammed the Dow this morning, apparently disappointed that a Messiah did not spring from the head of Timothy Geithner and declare that good times are just around the corner. Actually, the indexes bounced to the same place in their trading range last week where sell-offs have ensued every time since last September. Strength getting sold in the midst of a bear market? Who’da thunk?

Actually this AP story reveals what really happened: the Treasury secretary said nothing new — implying uncertainty over the strength of the financial industry endures — and one key economic indicator tanked, giving everybody a ripe excuse to cash last week’s profits.

A government report that wholesalers cut back on their inventories in December by the largest amount in 16 years also weighed on the market. The reduction means wholesalers ordered fewer new goods, leading to reduced production and potentially more job layoffs.

The Commerce Department said wholesale inventories plunged by 1.4 percent, nearly double analysts’ expectations of 0.8 percent. It also was the fourth straight monthly decline.

Unfortunately, headline risk doesn’t go away till the news starts getting better.

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Tom Mangan posted at 10:07 am February 10th, 2009 |

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