The stock market sold off yesterday, derailing a four day run up as investors worried that the recession was deepening after a fresh wave of bleak labor market and housing data was released yesterday morning.

Canada did hold up better than the United States but the majority of shares were in the red.

Government reports showed the amount of people filing for unemployment benefits hit a record in mid-January, while orders for long-lasting goods fell for the 5th straight month in December. New home sales slid to a record low in the United States.

The TSX dropped a little over 1%, the Dow Jones industrial average dropped 2.70%, the Standard & Poor’s 500 Index dropped 3.31% and the Nasdaq Composite Index dropped 3.24%.

Even as the new Obama administration pushes ahead with plans to stimulate the economy out of recession, investors feared that mounting layoffs, a poor earnings outlook and uncertainty about the financial sector’s health would continue to hurt investor confidence and stock market performance.

There is no silver bullet and there is no single solution that will resolve the current economic slow down. However, it will eventually find a bottom since it can’t go to zero.

Regards,

Wilfred Vos Bcs, FMA, CIM, CFP, FCSI, DMS, CBV, MBA, CFA
SVP & Partner