Worst Day For Markets Since 9/11
Technically, the day was horrible:
1) the S&P 500 broke through its July 15 closing lows of 1,214.91, and the intraday low of 1,200.44.
2) it was the worst day for the S&P since September 17, 2001;
3) new lows expanded to the highest level since the July lows;
4) this was almost certainly a 90% downside day, with 90% of the volume going to stocks on the downside.
We almost certainly would have broken through the important 1,200 level on the S&P 500 had there not been a report that the feds have asked Goldman and JP Morgan to lead a $70 to $75 lending facility for AIG; this took AIGand the markets off their lows just after 3:30 ET.
One of the few bright spots: the CBOE Volatility Index (VIX) moved over 30 today. The good news is that each time it crossed that line--in January, March, and July--we saw market bottoms. The bad news is that each time the rallies did not hold.
While financials were the focus, the decline in energy and material stocks was also brutal, with double digit declines in coal companies like Massey (down 13 percent), refiners like Valero(down 12 percent) E&P companies like Anadarko (down 9 percent), large oil service farms like Schlumberger(down 4 percent).
On concerns that commercial real estate assets may decline, we also saw double-digit declines in big construction and engineering firms like Shaw,Fluor, and KBR.
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