The stock market opened modestly lower after digesting a batch of economic news before the open. The move lower was small and the market quickly reversed higher, which was also a short-lived move as major equity indices quickly pulled back to opening levels and continued to extended further to the downside. About 30 minutes into trading , the market attempted to rally again, but the second rally attempt only lasted ~15 minutes, before falling sharply down to session lows, which were hit around 12:20ET. Back to the econ news that was released before the bell, October Core CPI, CPI, Housing Starts, and Building Permit data were released at 8:30 ET.
The pricing indicators all came in lower than consensus expectations, on both a year-over-year and month-over-month basis. Overall, the data shows broad weakness that reflects sluggish economic demand. Housing Starts actually beat expectations (791K vs. 780K), but Building Permits came in well below consensus (708K vs. 774K), indicating continued weakness for housing starts in the months ahead. Mid-morning, at about 10:35 ET, the Department of Energy released its inventory data, which showed larger than expected builds in crude (1599K vs. 1000K cons.) and gasoline (539K vs. unchanged cons.). However, the initial reaction in Dec crude oil ($54.69 +0.30) was minimal, moving up modestly after the release, before eventually dipping into the red. Also, throughout the morning, upper management of the "Big 3" automakers has been testifying before the Financial Services Committee, attempting to make their case for government financial aid as a lack of a bailout may lead to General Motors (GM, -15.5%) and Ford (F, -22.6%) declaring bankruptcy.
The financial sector is also under extreme pressure today, after Citigroup (C, -12%) announced before the open that it is liquidating its Corporate Special Opportunities hedge fund after it lost 53% of its value last month. The company also announced that in a nearly cashless transaction, it has committed to acquire the remaining assets of the SIVs at their current fair value, estimated to be approximately $17.4 bln, net of cash, as compared to $21.5 bln at Sept 30, 2008. Dow is currently -163 to ~8261; Nasdaq is currently -48 to ~1435; S&P is currently -25 to ~834... From a technical perspective, The major averages remain under selling pressure moving through midday although price has put in a slight countertrend move off the lows & trying to stabilize here. The SPX has formed a broad double bottom pattern seen on the intra day 5 min. chart with today's low connected very closely with yesterday afternoon lows. This pattern bears watching. Should it hold it could lift price in afternoon trading, whereas is the bulls fail to protect this key support level surrounding 830/825 it could leave the door open for a retest of current 2008 lows @ 818. Market internals remain weak with NASDAQ TRIN above the 3.50 level indicating extreme selling pressure in that complex. Decliners outpace advancers by better than 7:1 on the NYSE...
The Bond mkt pushed higher in overnight trading, but reversed course sharply lower at the open of pit trading as equity futures were indicating a higher open. The bond market turned around even harder around 9:40ET, moving beyond its morning high, leaving the 10-yr trading near today's highs. The 10-yr is currently +1-07/32 3.386%... In Europe, mkts fell sharply, dragged down by banks and commodity shares that slipped on persistent worries that a global economic downturn would lower demand for crude oil and metals. FTSE closed -4.8%; DAX closed -4.9%; CAC closed -4.0%, RTS +0.7%...
Note in Asia, the Nikkei closed -0.7%, the Hang Seng closed -0.8% and the Shanghai Composite closed +6.1%... On the Earnings calendar, 11 cos are confirmed to report today after the close. Tomorrow before the open, 25 cos are confirmed to report... On the Economic calendar, nothing remains on the schedule for today. Tomorrow before the open, Initial Claims figures are scheduled to be released at 8:30ET.