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Market Recap: Stocks Fall on Bernanke's Gloom


Today was more of a Valentine's Day Massacre rather than a day of love. Stocks fell.

The bulls received no love on Valentine's Day. The Dow Industrials fell -175 points, or -1.40% to 12,376, the S&P 500 fell -18 points, or -1.34% to 1,348, and the Nasdaq Composite lost -41 points, or -1.74% to 2,332.

Stocks fell today, breaking a three-day winning streak after Fed Chairman Ben Bernanke made gloomy comments about the nation's economic conditions. In testimony this morning before the Senate Banking Committee, Bernanke hinted at further rate cuts saying the Fed would act as needed to support growth and provide insurance against downside risks. Bernanke added, however, that those downside risks were higher, citing the financial markets with banks becoming "more restrictive" in lending. Financial stocks took a beating as a result of the statements. Notable decliners included Bear Stearns (BSC) -2.5% to $78.47, Goldman Sachs (GS) -2% to $176.56, Merrill Lynch (MER) -2.8% to $50.72, and Citigroup (C) nearing new lows -2.3% to $25.74. For more, read Toddo's First Blush on Bernanke. Also check out today's Random Thoughts.

Retail stocks fell as well. Professor Jeff Macke's comments on Liz Claiborne (LIZ) highlighted the general concern in the sector. "LIZ is getting smacked around today. We've had CEO Bill McComb on Fast Money a few times. He's a smart, stand-up guy trying to work a turnaround in the middle of a tsunami for fashion apparel makers. As top-vulture Warren Buffett says, when a good manager meets a bad business, the business keeps its reputation." The Retail Holders (RTH) fell -2.0% to $91.62: Individual stocks included Target (TGT) -2.5% to $53.14, BJ's (BJ) -3% to $32.08, and Sears Holdings (SHLD) -3.4% to $97.50. Get insight into the bear case in Professor Depew's Five Things You Need To Know.

In commodities, crude oil gained +2.18 to 95.45. Silver fell -0.053 to 17.300, and copper fell -3.75 to 348.80. Gold reversed its early losses after Bernanke's comments to settle +1.30 to 907.80.

"Inflation should moderate?" said Professor Lewis, "That's amusing to me and the gold market is smarter than that as we see gold rising on those comments. They have no choice but to inflate, and he's telling you that's exactly what he will do when he says "will provide insurance against downside risks." For another perspective, read Professors Kathy Lien and Boris Schlossberg's article Gold Reaching For The Sky.

For more summaries, click on Minyanville's Buzz Bits.

Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.

Some bullish trade or investment ideas: VMI, AAPL, BSC, C, EUV, CHS, SDS, MSFT, CSCO, AACC, PRAA, CCRT, NVDA, YHOO, XXH, XLF, Gold

Some bearish trade or investment ideas: WB, BSC, LEH, GS, AMAT, NILE, TLT, Financials, dollar

Make sure you check out our Valentine's Day Package. See you tomorrow for Freaky Friday! Have a great night!

No positions in stocks mentioned.

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