Sam Collins

Ignore the Bears

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Stocks fell for the third consecutive day on Friday, as investors scrambled to safety. The Wall Street Journal described it as a "sign of extreme aversion to risk," as potential equity buyers settled instead for U.S. bonds with the rate on three-month Treasury bills at 0.02%.

Gold futures closed higher for the sixth consecutive day and gained 2.7% for the week. But the Nasdaq (NASD) fell in response to Dell's (DELL) 10% decline after the company missed earnings estimates of 28 cents, reporting only 23 cents for last quarter.

In economic news, initial jobless claims came in at 505,000, which met expectations. And new housing starts fell 10.6% to 592,000. Analysts were expecting 600,000.

But there was one piece of good economic news: October retail sales rose 1.4%, which topped an estimate of 0.9%.

At the close, the Dow Jones Industrial Average (DJI) was off 14 points to 10,318, the S&P 500 (SPX) fell 4 points to 1,091, and the Nasdaq was down 11 points to 2,146.

On the NYSE, 1.1 billion shares traded with decliners ahead of advancers by about 3 to 2. On the Nasdaq, volume totaled 765 million shares with decliners ahead by 7 to 6.

For the week, the Dow gained 0.5%, the S&P 500 fell 0.2%, and the Nasdaq was down 1%.

December crude oil fell 74 cents closing at $76.72 a barrel, and the Energy Select Sector SPDR (XLE) fell 53 cents to $56.60.

December gold rose $4.90 to $1,146.80 despite a stronger U.S. dollar. And the PHLX Gold/Silver Sector Index (XAU) closed at $184.28, down $1.57.

What the Markets Are Saying

After rising 64% from its March lows in just 176 trading days, the S&P 500, along with its index cousins, has seemingly run into a brick wall. Or is it just a "wall of worry"?

Whatever it is, the ride up has been one of the most arduous that I can recall. At virtually every step higher, the bears have put up such an enormous attack -- directed at those who would own equities as the world teetered on a precipice of disaster -- that even the most ardent bull had to question his sanity for owning any stock at all.

And last week the bears were at it again, this time claiming that since this has been the greatest run up since 1933, then we must be in such rare territory that a collapse is almost certain.