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The big discussion today revolves around the continuing route in commodity stocks...the decline is so steep and severe that it is fueling theories that a liquidation is occurring due to: 1) another commodity firm going out of business (most likely), 2) prime brokers telling clients they don't want them in commodities, or 3) firms that lend in the commodity markets pulling back.
Just look at the last two days: Freeport McMoran [FCX
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]down 11 percent, Potash [POT
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]down 11 percent, U.S. Steel [X
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]down 11 percent, Barrick Gold [ABX
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]down 9 percent.
And that's just metals and agriculture. In energy, Arch Coal[ACI
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] down almost 25 percent, Foundation Coal [FCL
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]down 16 percent, Bucyrus [BUCY
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]and Joy Global[JOYG
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] (mining equipment) both down about 25 percent.
Oil service stocks are getting clobbered as well: Weatherford [WFT
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]down 11 percent, National Oilwell Varco [NOV
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]down 15 percent, Noble [NE
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]down 9 percent, Tidewater [TDW
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]down 8 percent.
Folks, that seems like a lot more than demand destruction to me.
In the middle of this, oil services giant Schlumberger said that it expects North American natural gas drilling to stay strong through 2009. The reaction? Stock goes from $86 to $87, still down 3 percent. Strange.
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CNBC's Names in the News:
Apple [AAPL
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Home Depot [HDP
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