Posted 3:03 PM by Blah blah

It's Official: The Economy Stinks

Yahoo! Finance Update:
"The markets got slaughtered Friday as the Dow, the Nasdaq, and the S&P 500 closed at new lows for the year. In fact, the Nasdaq and the S&P 500 closed at their worst levels since 1997. The Dow Industrials, which closed just over the 8,000 mark, finished at its worst level since October of 1998...
Dow component Johnson & Johnson (JNJ -16.2%) contributed to the pronounced weakness in the averages. The company announced Friday morning that U.S. regulators are conducting an investigation it believes is related to alleged fraudulent record-keeping at a Puerto Rico plant. That plant makes Eprex, the firm's anemia drug that has been linked to serious side effects. While the drug doesn't contribute substantially to JNJ's revenue, worries regarding potential liability served to place pressure on the shares...

Separately, results from Sun Microsystems (SUNW -26.7%) released Thursday night also contributed to the negative market tone. The company lost more than one quarter of its value Friday after it reported in line fourth quarter results, and subsequently reduced its guidance for fiscal 2003. In the wake of its report, CSFB downgraded SUNW to Hold from Buy citing cautious guidance, and inconsistent global IT spending patterns... In the face of broad market sell pressure, the defensively oriented Gold & Silver Index was strong Friday as the XAU managed a 1.1% one-day gain. The relative strength was not entirely surprising as in times of broad market uncertainty, many traders move towards gold in a flight to quality...

Looking towards the week ahead, there are a few potential catalysts worth mentioning. On the economic front, the schedule is relatively light as second-tier reports clutter the schedule. Yet outside of the economic activity, corporate earnings reports will be the real driver of market direction. With the overwhelming number of reports due next week, catalysts are likely to come from some unexpected sources."

Dow Falls 390 Points, Tumbles to Post-Sept. 11th Lows (Yahoo Full Coverage).

Adding to Loss of Investments, a Loss of Faith in the Market (NY Times).

Treasuries Higher as Stock Markets Plunge (Reuters).

2 Brokers Offer Warm Comfort in a Cold Market (NY Times).

Who Can Crow In This Market? Short-Selling Pros Sitting Pretty (Investor's Business Daily):

Diving for stock opportunities in the pile of wreckage (CBS MarketWatch).

Repositioning for a market upswing (CBS MarketWatch).