Capitulation Day Forestalled

When push came to shove, the bulls proved to have a little more energy at the end of the day, but it wasn't for any lack of trying by determined bears.

The indices see-sawed their ways to positive closes, though the gains were negligible and narrow.

The day began on a sour note when Wal-Mart (WMT) reported disappointing January sales and Cisco Systems (CSCO) warned of slowing orders, adding to recession fears.

Wal-Mart, the world's largest retailer posted January sales from stores open at least a year below Wall Street's estimates.

Adding to the malaise nearing mid-day, the Wall Street Journal reported Ranks of Economists Forecasting Recession Grow - an article highlighting the call from forecasting firm Global Insight, which joined economists from Merrill Lynch, Goldman Sachs, UBS, Morgan Stanley and others, in saying the economy is already in recession.

Citing the National Bureau of Economic Research, the private outfit that dates recessions, “a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”

That certainly seems to be the case on Main Street, while Wall Street attempts to figure the best way forward. The Dow is just 276 points above the recent closing low of 11,971.19.

At 3:00, Consumer Credit for December was reported to have contracted sharply, to $4.5 billion, from $17.1 billion in November. This seemed to squelch one of the day's mini-rallies, each of which was met with resistance and spirited selling.

Dow 12,247.00 +46.90; NASDAQ 2,293.03 +14.28; S&P 500 1,336.91 +10.46; NYSE Composite 8,859.04 +40.93

Stocks barely ended a three-day skid, though sentiment remains bearish and gloomy. Even though stocks closed the day on a positive note, the mark is still near the low end of the recent trough and a retest of the lows from two weeks ago seems all but certain.

Advancing issues took the edge over decliners, 3747-2519, though new lows continued to dominate new highs, 282-58.

Commodities also gained on the periphery. Oil rose 87 cents to $88.11, below the key $90 mark. With Winter nearly half over, a spell of early warm weather may mark a turning point for motorists suffering through a season of over-$3-a-gallon gas and are due for a break. We can only hope.

Gold edged up $5.00 to $910.00 and silver added 23 cents to $16.78. The buying opportunity is still available. Six months from now, gold should easily have surpassed the $1000 mark and silver should be $18+.

Friday can't come soon enough for wrangled floor traders. While volume has been somewhat on the light side this week, volatility has everyone on their toes. It may turn out to be one of the tamer sessions of recent vintage as there are no significant economic reports or companies reporting earnings.

Then again, this market doesn't need much to get excited one way or the other. We could see another roller coaster session with no clear direction heading into the weekend.

NYSE Volume 4,279,469,000
NASDAQ Volume 2,952,824,000