The stock market needs a liquidity fix something awful.
For the second straight day, stocks are selling off hard -- harder than they did yesterday, in fact -- in a knee-jerk reaction to central banks that seem unwilling to give financial markets more monetary stimulus immediately.
The Dow Jones Industrial Average was recently down about 160 points, or 1.2 percent, to about 13,039, on track for one of its worst days of the year. You'll notice it's not far away from dropping back below 13,000, so you'll get a chance to cheer all over again when it crosses back above 13,000 for the bajillionth time.
The S&P 500 stock index was also down 1.2 percent, while the Nasdaq Composite was off a whopping 1.7 percent. America's Favorite Stock, Apple, was down 1.2 percent.
The selloff started on Tuesday when minutes of the latest Federal Reserve policy meeting contained little in the way of a promise to dump more free money on financial markets. It continued Wednesday morning after a story from Jon Hilsenrath and Matt Phillips, closely followed Wall Street Journal Fed watchers, reaffirmed the message of the Fed minutes.
And then the European Central Bank didn't help things when it also took a no-money-for-you stance, with ECB chief Mario Draghi suggesting he was more worried about inflation than anything else -- despite the region being in a recession.
Meanwhile, Spain's bond market is starting to crumble, putting the country in "extreme difficulty," according to its prime minister, and U.S. service sector sentiment came in mildly worse than expected.
On the upside, a report on job growth from payroll tracking firm ADP matched expectations, helping set us up for what could be a decent jobs report on Friday. But the balance of the news was bad, or at least seemed bad, to stock traders.
Update: Steve Russolillo at my old stomping grounds, WSJ's MarketBeat blog, points out that the stock market had been way overdue for a selloff anyway, and this is as good an excuse as any: "The S&P 500 has surged nearly 30% off its early-October lows without any major stumbles along the way," he writes. "Many market participants have been calling for a short-term pullback that, until today, had yet to materialize."
Gold, too, is taking a vicious beating, tumbling more than 3 percent on the day to $1,618 an ounce. Silver has it even worse, falling more than 5 percent. Old Yeller and other precious metals have thrived in the era of easy money. Not today, though.
One surprising difference between today's market and yesterday's is the fact that Treasury bonds are doing well today. They sold off along with everything else yesterday on disappointment that the Fed wouldn't be backing up the money truck to buy more bonds any time really soon. Today, though, they seem to be expecting that the Fed will come to their rescue eventually.
Of course, if stocks keep selling off like this, then the Fed will come to the stock market's rescue, too.
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