A Very Black Friday On Wall Street Looms

David Callaway MarketWatch November 25, 2011

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Nov. 24, 2011, 12:01 a.m. EST

By David Callaway, MarketWatch

SAN FRANCISCO (MarketWatch) "” After six straight days of stock-market declines "” the longest skid since the U.S. debt downgrade this summer "” U.S. investors will be grateful for a Thanksgiving break to take their minds off their portfolios.

But as we learned painfully on Thanksgiving Day two years ago, when the Dubai debt crisis kicked off the latest round of global debt worries, the world doesn't stop just because the Green Bay Packers and Detroit Lions are playing on the last Thursday in November.

The European markets are open Thursday as the crisis continues to deepen. News that it's now affecting German debt sales rattled investors worldwide Wednesday and rocked U.S. stocks for their sixth loss in as many trading days. The declines wiped out a near-term support level of 1,192 on the S&P 500 index, as it closed just under 1,162.

So while a holiday miracle is always possible "” perhaps the IMF steps in to bail out Europe "” if it doesn't happen, then we'll be chasing headlines and European stocks early Friday morning instead of fighting shoppers at the local Walmart /quotes/zigman/245476/quotes/nls/wmt WMT -0.37% .

Two years ago, after Dubai World shocked world markets on Thanksgiving by trying to restructure more than $25 billion of short-term debt, the only thing U.S. investors could do that night was watch futures prices fall. At the open that Friday in New York, the Dow Jones Industrial Average /quotes/zigman/627449/delayed DJIA -2.05% quickly fell more than 200 points before recovering a bit. It ended that day down almost 1.5%.

Well, at least U.S. markets are only open for a half-day Friday, though that could make things worse in terms of price action without decent trading volume behind it. And Wednesday's close, which included a 60-point drop to session lows by the Dow in the last few minutes, shows there isn't a lot of appetite to buy right now.

With so many market pundits shaking their heads this week and waxing gloomy over the outlook for stocks, it's tempting to think they are collectively too bearish "” that, instead, stocks might be poised to leap in December as a solution to Europe's woes is put forward and investors look to a rebound in the U.S. economy early next year.

The Black Friday crowds this year, if anything, are expected to confirm that consumers are still out there, if they can be given any sort of near-term confidence. Still, it's nothing you want to bet the farm on.

/quotes/zigman/4867933/sampled EURUSD 1.3306, -0.0041, -0.3059% Euro's year

The drip-drip-drip of bad news from Europe has finally started to affect the euro, which has had a terrible week so far. And banking stocks, particularly Bank of America Corp. /quotes/zigman/190927/quotes/nls/bac BAC -4.28% , now less than half its price of six months ago, continue to shudder.

Whatever happens, a collapse or a brief reprieve, something big seems to be setting up to occur in the next several sessions.

The holidays are usually not a time for intense corporate or market action. Usually fund managers are busy window dressing their portfolios at this time of year. This year is different. Reports of massive layoffs on Wall Street, coming just as bonus season hits, are shaking the foundations of the industry.

/quotes/zigman/245476/quotes/nls/wmt Add WMT to portfolio WMT Wal-Mart Stores Inc. $ 56.64 -0.21 -0.37% Volume: 8.26M Nov. 23, 2011 4:00p var embeddedchart1240477934Chart = new EmbeddedChart('#embeddedchart1240477934', NormalChartStyleNoDecimals, 240, 80, '1dy', '5mi', null, null, null, 'US:WMT'); jQuery.data($('#embeddedchart1240477934').get(0), 'embeddedchart', embeddedchart1240477934Chart); /quotes/zigman/627449/delayed Add DJIA to portfolio DJIA Dow Jones Industrial Average 11,257.55 -236.17 -2.05% Volume: 152.22M Nov. 23, 2011 4:30p var embeddedchart70394702Chart = new EmbeddedChart('#embeddedchart70394702', NormalChartStyleNoDecimals, 240, 80, '1dy', '5mi', null, null, null, 'US:DJIA'); jQuery.data($('#embeddedchart70394702').get(0), 'embeddedchart', embeddedchart70394702Chart); /quotes/zigman/190927/quotes/nls/bac Add BAC to portfolio BAC Bank of America Corp. $ 5.14 -0.23 -4.28% Volume: 265.35M Nov. 23, 2011 4:00p var embeddedchart728891016Chart = new EmbeddedChart('#embeddedchart728891016', NormalChartStyleNoDecimals, 240, 80, '1dy', '5mi', null, null, null, 'US:BAC'); jQuery.data($('#embeddedchart728891016').get(0), 'embeddedchart', embeddedchart728891016Chart); //$(document).ready(function() { var storywidth = $('#mainstory').width(); var maxwidth = storywidth; $('#maincontent pre').each(function (index, value) { var thiswidth = $(value).width(); if (thiswidth > maxwidth) maxwidth = thiswidth; }); var offset = maxwidth - storywidth; if (offset > 0) { var margin = 13; var blanketwidth = $('#blanket').width(); var contentwidth = $('#maincontent').width(); $('#blanket').width(blanketwidth + offset + margin); $('#maincontent').width(contentwidth + offset + margin); $('#mainstory').width(storywidth + offset + margin); } //}); Page 1 Page 2 var OB_permalink= 'http://www.marketwatch.com/story/a-black-friday-on-wall-street-looms-this-year-2011-11-24'; var OB_Template="marketwatch"; var OB_widgetId= 'AR_1'; var OB_langJS ='http://widgets.outbrain.com/lang_en.js'; if ( typeof(OB_Script)!='undefined' ) OutbrainStart(); else { var OB_Script = true; var str = ""; document.write(str); } Comments on this story 63 Comments Most Popular David Callaway

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David Callaway is editor-in-chief of MarketWatch, responsible for the global news coverage of 100 journalists in 12 bureaus in the U.S., Europe and Asia. A... Expand

David Callaway is editor-in-chief of MarketWatch, responsible for the global news coverage of 100 journalists in 12 bureaus in the U.S., Europe and Asia. A financial journalist for more than 20 years, Callaway has worked for Bloomberg News, the Boston Herald, and assorted television and cable stations as a reporter, columnist and commentator. Collapse

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Loading more headlines... dow /quotes/zigman/627449/delayed 11,257.55 -236.17 -2.05% nasdaq /quotes/zigman/123127 2,460.08 -61.20 -2.43% s&p 500 /quotes/zigman/3870025 1,161.79 -26.25 -2.21% Kiosk 1240934400000 1240934400000

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Thomas H. Kee Jr. Holiday jeer from trusted patterns During this Holiday week, the chart patterns demand that we heed the warnings that point to true market weakness. /conga/kiosk/trading-deck-3.html 179519 1319608800000 1319608800000

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Whatever happens, a collapse or a brief reprieve, something big seems to be setting up to occur in the next several sessions.

A Black Friday on Wall Street looms this year

European stock markets end mostly lower

More than one reason for resilient euro

FTSE 100 closes down after Merkel's comments

Fitch cuts Portugal credit rating to junk status

Black Friday, Blue Stock Market

H-P's CEO has to prove she can execute

Tina Brown's Newsweek is failing

6 turkeys to keep off your investing table

Rep. Giffords Serves Thanksgiving Dinner

Military Widows Forced to Remarry for Benefits

More Potential Upside for Stocks Post Greek Crisis

H-P Beats Estimates

David Callaway is editor-in-chief of MarketWatch, responsible for the global news coverage of 100 journalists in 12 bureaus in the U.S., Europe and Asia. A... Expand

Jon Friedman

Media Web

Tina Brown's Newsweek is failing

Chuck Jaffe

Mutual Funds

6 turkeys to keep off your investing table

Therese Poletti

Tech Tales

H-P's CEO has to prove she can execute

Peter Brimelow

Wall Street Irregulars

Another Christian letter gives thanks

John Shinal

Tech Investor

5 things all Americans should be thankful for

Kristen Gerencher

Vital Signs

Read Full Article »

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A Very Black Friday On Wall Street Looms

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