Breaking: Stocks Take A Big Slide

The stock market took a slide today, with the DOW losing almost 250 points (2.5%), the S&P500 fell 30 points (2.8%), and the Nasdaq lost 52 points (2.5%). Some experts believe this is the start of a 5% - 15% correction.
http://money.cnn.com/2009/10/30/markets/markets_newyork/?postversion=2009103014

The selloff was broad based, with all 30 Dow components declining and most stock sectors sliding. Energy prices and stocks were hit hard as the dollar turned mixed and the financial sector erased most of the 4% gain it accrued Thursday.

For the month, the Dow ended virtually unchanged, while the S&P 500 and Nasdaq both posted slim declines.

Analysts say the move happened because of reports showing consumer confidence is weaker than expected.
http://www.nytimes.com/2009/10/31/business/31markets.html?_r=1

The drops were led by stocks in banks and financial firms, which investors abandoned in light of a Commerce Department report that showed consumers were still in distress. Consumer spending in September dropped by the largest amount in nine months, the report said, a dreary data point that met Wall Street expectations but reinforced the slow, halting recovery of the United States economy.

The fall in spending was tied to the end of the government’s cash-for-clunkers program, which gave car buyers thousands of dollars in vouchers for the purchase of new vehicles. Overall spending fell 0.5 percent in September, and personal income levels remained flat in light of higher unemployment rates and decreases in wages.

A report released by the University of Michigan on Friday showed consumers had a slightly less optimistic view of the economy in October than they did in September. The survey, based on interviews with 500 households on topics like unemployment and income, predicts consumer spending habits.

The revival of the consumer sector is considered paramount in turning the United States economy around, since purchases by consumers make up about two-thirds of the nation’s spending.

As I've said numerous times, this isn't over yet. If the analysts prediction of a 5-15% correction is accurate, next week we could see the Dow fall another 250 - 1200 points... not good. And as bad as it could be, I believe a downward correction is inevitable... whether it happens next week or months from now, it will happen eventually.

But also keep in mind that this was only a single day's trading, even though it did wipe out the gains from the entire preceding month. And the losses seem tied to consumer confidence, which has been ebbing a bit recently.

We'll see next week if the slide continues, or if the weekend break is enough to reverse the trend. I personally think the market will continue downwards on Monday, but that's just me. Stock market analysts are split... which is understandable, because volatile situations are impossible to predict.

I will tell you one thing... I'm glad this happened on a Friday. Because if it IS something that can be stopped by a little time, the weekend break offers two days of no stock market activity for people to think. We'll see on Monday, though.