Closing Bell 10.17.07

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Sponsored by the Financial Times.
Volume and volatility climbed today, with the major stock indexes swinging wildly up and down. Stocks opened significantly higher than yesterday’s close, cut that gain in by half mid-afternoon, only to recover much of the lost ground toward the end of the day. Both the Dow and the S&P hit the lowest levels this month in mid-day trading before climbing back toward flat for the day, while the Nasdaq managed to stay afloat.
At the end of the day, the Dow Jones Industrial Average had fallen 20.40, or 0.15%, to 13892.54. The S&P 500-stock index climbed 2.71, or 0.18%, to 1541.24. The Nasdaq Composite Index was up 28.76, or 1%, to 2792.67. On the New York Stock Exchange 1,683 stocks climbed and 1,583 fell. One point four billion shares were traded on the exchange.
Financial stocks were down sharply for most of day but climbed sharply as the broader indexes began their recovery after 2 PM. The Amex Broker/Dealer index closed down 0.08 or 0.03% for day.
The real action in financials, of course, was in share of Citigroup. Lots of Citi shares traded hands, as early morning rumors and then reports from CNBC spread the word that CEO Chuck Prince might step down. The stock climbed until just before noon when Citi issued statements quashing the rumors. The stock promptly fell, and resisted the upswing seen in many other financial stocks until someone or something or a bunch of someones and something stepped in and bought heavily at the end of the day, sending the stock up to just a smidge below where it was at yesterday’s close.
Tech did better, with both Intel and Yahoo seeing major gains after their earnings reports.
The government still says there’s no such thing as inflation. Practically no-one was building houses in September. Bond yields fell to the lowest levels in recent memory (meaning, since, like September).
We generally oppose the journalistic practice of assigning reasons for the day-to-day moves of stock indexes or commodities but we’re making an exception for oil today. We’re still not going to assert causality here but we’re going to come closer than usual. Skip the next paragraph is you’re worried that you’ll be contaminated by this kind of journalism.
News that US crude inventories were up was followed by oil prices falling early in the day. But after word spread that Turkey’s parliament approved a motion to invade northern Iraq to pursue Kurdish terrorists, oil prices jumped. This is worse than a mess. It’s clearly bad that the Turks may go to war with our most dependable allies in Iraq, especially while we are occupying the country. But the Democrat controlled House foreign affairs committee passing a resolution calling the Turks genocide perpetrators for the 1915 horrors against the Armenians hasn’t exactly helped improve US influence with Turkey.
Crunch. Crunch. Crunch. Slurp. We're eating FT Alphaville for breakfast. How about you?

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