we will be needing your bunker cjr

Stocks Look To New Lows As March Begins

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With the market slumping to fresh 12-year lows in the last stretch of
February, stocks will kick off the month of March on an increasingly uncertain
footing while investors try to determine where the bottom lies for the economy
and the bear market alike.



"The path to least resistance remains down," said Alec Young, market
strategist at Standard & Poor's. "We need some real capitulation, and for people
to stop buying the dips and let it crash. Then, we could get a new low."



Data on U.S. employment and nonfarm payrolls, due next Friday, might get the
ball rolling.



"Everyone knows it's going to be bad," Young said. "But we need even the most
bullish people to give up and [the jobs report] might be the catalyst."



February sees more record losses



Friday closed the chapter on the worst February since 1933, with the broad
Standard & Poor 500 index (SPX) down 10.9% for the month. The S&P thus stands
down 18.6% in the year to date, making for the worst first two months of a year
on record.



On Friday, the S&P finished at 735, its worst level since December 1996, after
U.S. gross domestic product in the fourth quarter was revised sharply down to
negative 6.2%.



The market also failed to react well to news of the government boosting its
stake in Citigroup Inc. (C), shares of which plunged nearly 40% to trade at $
1.50.



But much further weakness should be expected, according to S&P's Young, who
thinks the S&P 500 benchmark might need to slump at least another 18% -- to 600
-- to find a real low.



"Once we enter the capitulation phases, the market starts to fall very
quickly," he said.



As for the Dow Jones Industrial Average (DJI), it slumped 11.7% in February.
The blue-chip barometer has now fallen for six straight months, for a loss of
38%, its biggest six-month decline since the six months through June 1932, when
it fell 41%. The Dow's longest streak of consecutive monthly losses was the nine
months through April 1942.



For the year to date, the Dow is down 19.5%. The Nasdaq Composite (RIXF) is
off 12.% on the same interval.



No spring in store for market



The market will start the first week of March with what's expected to remain
dismal economic reports.



Monday will bring personal income and spending data and construction spending
for January, followed by the February national manufacturing report from the
Institute for Supply Management.



On Tuesday, there will be data on pending home sales in January and U.S. auto
sales for February.



On Wednesday, investors will key in on the private-sector ADP monthly jobs
survey for February. This will be followed by the ISM's service-sector survey of
the economy and the latest Federal Reserve's Beige Book of economic conditions.



On Thursday, it will be weekly jobless claims, productivity data and unit
labor costs for the fourth quarter, along with January factory orders.



And on Friday, the Labor Department is expected to report the economy shed
another 630,000 jobs in February, lifting the unemployment rate to 7.9%.



"It's going to take at least several years to recover," said Doug Roberts,
chief investment strategist for Channel Capital Research. "And that's what
people are starting to get, now that they're looking past the original euphoria
that the new administration was going to arrive and fix everything quickly."



Stocks may well seem relatively inexpensive at current levels, but while the
outlook for the economy -- along with earnings and dividends -- continues to
deteriorate, the market will be unable to find a solid low, he said.



Many economists don't expect the impact of the billions of dollars in stimulus
measures from the Obama administration to start boosting the economy until the
end of this year, at the earliest.



Meanwhile, the overwhelming concern for the market remains the health of the
financial system, and the toxic assets that still plague banks balance sheet.



Last week, the government provided more details on its rescue plan for the
nation's major banks, in which it the government will conduct "stress tests" on
19 large banks over the next two months to determine which of the big banks
would fail should the recession worsen beyond current expectations.



But "until the banks are repaired, these fundamental economic problems won't
be resolved," Channel Capital's Roberts said.



(END) Dow Jones Newswires
02-28-09 1024ET
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