Thornburg Mortgage Inc. (NYSE: TMA) Chief Executive Larry Goldstone said there is a "crisis of confidence" in the mortgage market.

No kidding.

Shares of Thornburg fell about 9% after Goldstone made that insightful comment on CNBC. They are down 45% for the year amid concerns about the subprime mortgage meltdown. Thornburg sold about $20.5 billion in mortgage-backed securities today to return to "business as usual" -- whatever that means.

Worries about subprime mortgages continued to weigh-down the market, as did the drop-off in oil prices caused by weather forecasts that indicated Hurricane Dean wouldn't hit the oil-producing areas of the Gulf of Mexico. The Dow Jones industrial average and the Nasdaq Composite Index managed to hang onto positive territory for now as investors continued to hope -- make that pray -- that Fed Chairman Ben Bernanke will eventually cut interest rates.

The markets saw broad selling pushing the Dow Jones Industrial Average down another 207 points to the bottom of the correction range. From a technical standpoint the DJIA the down broke through support at 13,041; but is still above the numerically significant 13,000 level.

The NYSE had volume of 3.8 billion shares with 440 shares advancing while 2,924 declined for a loss of 174.59 points to close at 9,254.27. On the NASDAQ, 2 billion shares traded, 797 advanced and 2,234 declined for a loss of 43.12 to 2,499.12.

With all the market volatility, options continued to be very active. In options there were 7.6 million puts and 6.2 million calls traded for a put/call open interest ratio of 1.21. Coca-Cola Co. (NYSE: KO) saw heavy volume on the January 45 calls (KOAI) with over 44,000 options trading. General Motors (NYSE: GM) tallied volume on the August 30 calls (GMHF) with over 31,000 options trading. American Express (NYSE: AXP) saw heavy volume on the January 60 calls (AXPAL) with over 28,000 options trading. Home Depot (NYSE: HD) moved heavy volume on the August 45 puts (HDTI) with over 90,000 options trading.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

The market had a correction last week and we saw steep declines. People suddenly ask what is going on? Regardless of whether there is a "reason" for the decline, market commentators will disclose a number of factors with the utmost certainty that they are the cause for the fall.

Markets go up and down and all this analysis is over blown. Ultimately, there is a herd mentality in the market and at times very few people think for themselves. People in the market are like mindless cows at times, blindly following others right off the edge of the cliff.

I am sure there are psychologists and sociologists that have all sorts of explanations for this, but let's talk about animals instead. While I have never been in an honest stampede, I have been in front of a cow that had its mind intently set on going a certain direction. Knowing my weight and the milk cows weight, I have to recommend against ever being in that position. If you are smart you don't get in front of a stampeding cow.

One of my avid readers posed an interesting question after last week's two day 500 point drop; "When will we have our first 4 digit one day move on the Dow – and will it be up or down?"

Usually I would leave the prediction business to Wall Street and Venice Beach palm readers, but I try to respond to direct questions from serious readers as best I can. A four-digit move from a DJIA level of 13,500 would be a 7.4% move. Addressing the timing first, I do not think such a move is imminent. Actually, I think it is not possible at current levels without some extreme unforeseen event, outside of the market. I think it would not only have to be unexpected, but it would have to be of a scale that would rattle the markets down to the core. To me this could only involve two or three things: significant disruption to oil deliveries, a failure of the western banking system, or a biological or nuclear war. Outside of these catastrophic events I do not think it will happen from our current level.

A 5% to 6% move could happen on any given day triggered by a far less drastic event, but to reach the four digits we would have to see the Dow at a much higher level, perhaps 17,000 or more. If we reached this level (which will happen sooner rather than later) we could see a four digit move and if that happened it is far more likely to be a downward move. The reason it would be downward in my mind is that this type of market movement requires large amounts of group think and sheepishness. Also negative events create a need for short term capital and stocks would be sold off. On the other hand I cannot think of a unifying group event that would make investors act together to the degree required to create an equally large upward move.

So enough hypotheticals for now. All of this matters not -- just diversify your investment holdings and rest easy.

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Disclosure: I do not own any crystal balls and have no current plans of acquiring one.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

DuPont (NYSE: DD) is mimicking the lead of the broader market today as it heads sharply lower. The main catalyst behind the stock's 5.5% pullback was its second-quarter earnings, which failed to match the consensus view on Wall Street.

In its latest reporting period, the chemical company said net income edged lower to $972 million from $975 million last year, with per-share earnings flat at $1.04, two cents below analysts' expectations.

Revenue was 6% higher at $7.88 billion, slightly higher than the $7.86 billion Wall Street was expecting. Sales outside the U.S. were particularly strong, with revenue in Europe jumped 12% higher; U.S. sales were up just 1%.

Looking to the future, DuPont reiterated that its full-year earnings should hit $3.15 per share (excluding items). This is three cents below analysts' expected $3.18 per share. In the second half, international growth is expected to aid the company, helping to offset rising ingredient costs and continued struggles in the U.S. housing sector. As CEO Charles O. Holliday Jr. told analysts in a conference call, "I'm not assuming anything improving in North American housing until well into 2008."

Should DuPont fail to pare its losses in afternoon trading, it will suffer the biggest single-day percentage decline since July 2005. A component of the Dow Jones Industrial Average, the company is currently contributing nearly 25 negative index points to the venerable blue-chip grouping.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Whenever big news like yesterday's crossing of the 14,000 mark of the Dow Jones Industrial Average and today's subsequent 100 point decline hits, journalists and pundits always try to prove that they aren't surprised by what's going on.

In fact, Eric Teal, chief investment officer of First Citizens BancShares Inc. in Raleigh, North Carolina, told Bloomberg News: "A market pullback would not be surprising at all to us.'' Teal isn't alone. Spencer Clarke's Chief Market Strategist Michael Sheldon told Reuters that he also wasn't surprised, arguing, "It's certainly to be expected to have some profit taking given some of the earnings reports we had this morning and given the fact Dow closed at an all-time high on yesterday."

No one on Wall Street is ever surprised by anything, except for individual investors who buy and sell stocks. They are surprised all of the time.

To be fair, Teal and Sheldon are trying to feed the media's insatiable lust for pithy quotes on topics ilke the stock market, where there often are no clear cut reasons for why something happened.

Pundits, many of whom relish the spotlight, want to be helpful to the press but at the same time don't want to say anything that might get them in trouble with their bosses. Reporters, too, are under presure to make sense of the sometimes perplexing moves of the market.

The end result is that no one winds up saying much of anything.

The Dow Jones Industrials Average closed at a new record today, gaining 283.86 to finish at 13,861.73. Why? Your guess is as good as mine. But the popular explanation seems to be the combination of M&A activity and better-than-expected retail sales, including a strong June report from Wal-Mart Stores, Inc. (NYSE: WMT).

I am always skeptical of these explanations and believe that the people who know what is really going on -- namely the traders of huge blocks of shares -- are not the ones talking to the press. I would have thought that the market would have declined on the good retail sales numbers because that would mean that the Fed saw the economy as stronger -- and thus more prone to inflation -- leading investors to reduce the odds of a rate cut.

My favorite explanation for today's 232 point gain is that investors who were betting on tepid retail sales had sold short shares of those retailers. And when the report turned out to be better than expected, they scrambled to cover their short positions to pay off their stock loans.

This explanation appeals to me because I saw today that margin debt -- that is borrowing to finance stock purchases and sales -- hit a record $353 billion last month according to the Wall Street Journal (subscription required). Such leverage can magnify up and down movements in the market. That's why private equity firms like to borrow money. Unfortunately, what goes up can also go down.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Wal-Mart.

The Dow Jones Industrial Average rose today by 187 points, a 1.41% rise. The NASDAQ rose by 32 points, or 1.28% and the vaunted S&P 500 Index by 22 points or 1.52%. The markets were relatively benign until the details emerged from the Federal Reserve's Beige Book.

The Beige Book is released eight times per year, and is the collective wisdom of the 12 different Fed Governors. The news was better than expected, and the 10-year treasury note, which was topping out at 5.25%, began to sink and investors re-focused on the equities market.

The details from the Beige Book report was just the music the equity investor wanted -- needed -- to hear. Capital goods orders were picking up and the job market was, indeed, stabilizing. To boot, the real symphony continued when the Fed indicated there was no upward pressure on wage prices, thus stemming one of the legs of inflation. Consumer spending appears to remain in a healthy pattern, with general retail sales up a surprising 1.6%, versus the expectations of 0.8%. The consumer is still in a position to sustain economic growth.

The indicators from the Federal Reserve basically put the "R -word": Recession, back into the closet.

CNBC is all abuzz with dramatic graphics all over the television screen about the Dow Jones Industrial Average crossing over the 13,000 milestone. " History is being made on Wall Street as the Dow hits 13,000" exclaimed Mark Hanes, CNBC's anchorman.

Great, but its only 30 stocks. They are key stocks for sure, but still only 30.

The real measuring stick is the S&P 500 index. The S&P 500's all-time high was 1527 achieved back in the year 2000--you know, the good old days. This is the key index that most professional portfolio managers are benchmarked against. The S&P 500 is obviously a much more complete index. Major bonus structures for portfolio managers are calculated according to their performance versus the S&P 500.

Currently the S&P 500 sits at 1,485, a mere 42 points below its all-time high. It has taken nearly 7 years to climb back up to the frothy levels of 2000. The biggest difference now is earnings have caught up with the valuations. That's the good news--no, the great news.

With the S&P 500 trading at 16 times price-to-earnings multiple, the markets are level and truly reacting to strength of earnings. The "cheapness" of this market is what's propelling a massive amount of merger and acquisition activity. Coupled with relatively low interest rates, the private equity world is having a field day working on financial models, discounted cash flow analysis and projected "real" earnings growth. The huge pots of cash committed in private equity funds will be put to work somewhat effectively as long as S&P 500 companies trade at price earnings multiple below 20 times and interest rates stay low.

So the Dow is at 13,000 and CNBC wants to break out the champagne.When the S&P 500 breaks to new levels, professional money managers will want to break out the caviar with that champagne!!

Georges Yared is the CIO of Yared Investment Research where he explores growth stock ideas.

I received an email from my editor asking me to write a piece on "what stocks people should sell now that the Dow is nearing 13,000." I wrote back that it's against my philosophy to make predictions like that. He told me "write a piece saying that." So here goes.

What exactly does the Dow hitting 13,000 mean? Nothing. It means absolutely nothing. I'm not making the case that the S&P 500 is a more valuable indicator either. That means nothing as well. History has demonstrated amply that market commentators, pundits, and even hedge fund managers don't have an ability to predict the direction of the stock market.

Rather than focusing on the number 13,000 -- which is great example of anchoring -- investors should either buy and hold index mutual funds, or focus on analyzing companies. Jumping in and out of the stock market is not a way to make money. It is, however, a great way to pay a lot of taxes.

So if you're looking at individual stocks, the same question remains: Is the current stock price high or low in comparison to the present value of the company's future cash flows? If you're looking at the indexes -- 13,000 is just a number, and it doesn't change the fact that you can't predict the future of the market.

Bargains are getting harder to find. The Dow seems to reach an all-time high almost daily, although the NASDAQ is still nowhere near its highest in 2000.

Any deals out there?

Altria Group, Inc.'s (NYSE:MO) Kraft Foods, Inc. (NYSE:KFT) is gone. There are rumors that Altria will spin off its highly profitable international business. The company is sticking by its 2007 forecast despite a soft first quarter. The stock still has dividend yield of almost 5%. Tough to beat.

Citigroup Inc. (NYSE: C) -- No one loves a loser. Citi's shares are up 10% over the last year, while cross town rival JPMorgan Chase & Co. (NYSE: JPM) stock is up over 25%. The stock dividend yield is over 4%. If Citi's CEO Chuck Prince can't fix the bank, the odds that he will be replaced are high. That could drive up the shares as could a decision to break the bank apart into separate investment banking and retail units.

Advance Micro Devices, Inc. (NYSE: AMD) -- Another dog. But the bad news is probably all out. A new chip line comes out mid-year and that should help the company in its battle with Intel Corp. (NASDAQ: INTC). The CEO has hinted at a restructuring. If AMD cuts enough in terms of capital expenditures, the stock could rally. Microsoft Corp.'s (NASDAQ: MSFT) Vista also has to kick into PC sales cycle sometime. AMD is now down to $14 from a 52-week high of almost $35.

General Electric Co. (NYSE:GE) -- Another stock that has gone nowhere, but that could be a plus. The calls for dumping the under-performing plastics division and NBC Universal are still in the market, and current management has not moved the stock in five years. At some point, the board is going to have to ask hard questions. GE gives a good dividend yield at 3.2%.

Yahoo! Inc. (NASDAQ: YHOO) -- Takeover bait, restructuring candidate, CEO firing target -- you choose. Yahoo! is still one of the three largest properties on the web. Management and the board can't let the company's poor performance keep going on forever. Would Microsoft buy it? Perhaps, but the idea of firing 15% of the staff ("The Peanut Butter Manifesto") has to be attractive even if its revenue growth remains poor.

Douglas A. McIntyre is a partner at 24/7 Wall St.

The Dow Jones Industrial Average is fast approaching the 13,000 milestone and investors will temporarily celebrate, taking a victory lap shouting "I told you so". That's great and the fun will last for awhile. But let's look at two strong, gotta own names in preparation for the Dow Jones at 14,000!!! It'll happen -- when I don't know, but it will. These two names exhibit the mantra that every investor should always be uttering to themselves "earnings growth, earnings growth, earnings growth."

The first one is Apple Inc. (NASDAQ: AAPL). Not a surprise as I have been recommending this company for the past two years and now, as enthusiastically as ever. The stock is trading at $90 and my price target is $140. Apple is a phenomena, plain and simple. With 100 million iPods already sold, that market is still underpenetrated.

The iPhone will be the next leg of massive growth, dominance and earnings upside. The initial projections for the iPhone are conservative and that's the way Apple wants it. Apple is managing expectations very intelligently. So what if the iPhone is delayed by say a quarter? So what, the numbers will be revised and pushed out a quarter or two. This stock is a buy and put away for a few more years.

This company "gets" the consumer like no other. The momentum in this story has legs and sustainability for the next 3 years easily. Consensus estimates are for revenues of $24 billion and earnings per share of $3.25 for 2007. Couple iPod and iPhone with other accelerants within Apple like the new and improved Mac computer, the software upgrades, CPU enterprise share gains and then top it all off with a super retail store system and 2008 estimates are for revenues of $30.7 billion and earnings per share of $3.92--very conservative and will likely be revised upwards.

Since hitting its March 14th intraday low, the S&P 500 index has gained 6.80% and has this morning touched a six-and-a-half year high. That has gotten many people excited about the prospects for a new upleg in the four-year old bull market.

However, if you look at which sectors have performed best over the past five weeks, it paints an interesting and possibly divergent picture. Rather than economically sensitive groups like industrials, or racy, high-beta sectors like information technology, energy, utilities, health care, and consumer staples are the sectors leading the pack. In fact, the sectors one might expect to see out in front are ensconced at the bottom.

What does it mean? It might be hinting at a change of leadership in the current upside run or even, as some might hope, a broadening of the bull market. Alternatively, it could be a sign that money managers who have been "forced" to put money to work in the stock market are sticking with traditional safe havens at a time when the economic and financial outlook is increasingly uncertain.

Whatever the case, it is yet another curious development of the current investing environment.

Sector	Return in % Since 3/14
Energy	10.32
Utilities	9.20
Health Care	9.10
Consumer Staples	6.80
=================	====
S&P 500 Index	6.80
=================	====
Financials	6.44
Materials	6.07
Telecom Services	5.73
Consumer Discretionary	5.57
Information Technology	5.44
Industrials	5.10

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.

What does Vanity Fair have to do with the stock market? Plenty, according to a tongue-in-cheek item published in Brandweek.

It turns out that when things go well for the glossy magazine, whose cover this month features "Sopranos" star James Gandolfini with a naked woman on his lap, investors should be worried.

"Consider: VF's March 2007 Hollywood edition ("Our Biggest Issue Ever!") clocked in at 500 pages," BrandWeek says. "During the week of Feb 26, 2007, the Dow Jones Industrial Average collapsed, from 12,647 to 12,114. (Remember that the magazine hits the streets the month before its pub date). "

Brandweek senior editor Jim Edwards also found similar connections with record issues in 2001 and 2000.

"The correlation is a good one," Edwards told me in an interview. "It holds."

Though I thought this was almost as stupid as the "Super Bowl" stock market theory, the thinking behind the joke was interesting.

When an economy gets overheated, companies start plowing some of their excess profits into advertising. This is particularly true with high-profile media outlets like "Vanity Fair."

"It makes a lot of sense that advertising would increase at the top of the market," Edwards said.

Remember that Edwards used the term "correlation." As our friends at Wikipedia point out, correlation does not imply causation. In other words what he found was an interesting coincidence.

Vote early and vote often for the official theme song of the market. This tune is what will stick in every investor's head whenver they think about whether stocks will continue their slide downward or whether this was all just a blip.

When I posted this idea earlier today, I couldn't come up with a tune that summed up the mood of investor. "Love Rollercoaster" by the Ohio Players is the early front runner, followed by another disco classic Diana Ross' "Upside Down."

My choices of Fall Out Boy's "Sugar We're Going Down" and Metalica's "Enter Sandman" just didn't seem to resonate with the public. Pity. You people need to get out more.

Maybe I'm thinking about this all wrong. Perhaps we should chose a calming song to sooth the tattered nerves of investors. Gheorghie Zamfir, the master of the pan flute, comes to mind. John Mayer could mellow out even the most agitated Wall Street trader and let's not forget Yanni.

I just realized any of those artists might mellow the market out too much.