Market’s action grabs attention after Friday’s drop

Sharp eyes will be on stock market action today following Friday’s 366.94 point drop in the Dow industrials to 13522.02 on fears about credit and housing sectors, record-high oil prices, a slide in the dollar and what the Fed will do at its Oct. 31 meeting.

The slide continued in early trading today, with the Dow down about 100 points.  But the market turned around in a zig-zag session, advancing 44.95 to close at 13566.97.

Friday’s decline came after media, thriving on anniversaries, brought week-long reminders of Black Monday two decades earlier on the same date, Oct. 19, that saw a 23 percent plunge in the Dow, notes Grumpy Editor.

Sluggish earnings reports contributed to Friday’s sell-off.  Included were some financial institution surprises, affected by the much-in-the-news credit crisis that appeared on the financial scene two months ago, triggered by problems with subprime loans to people with poor credit.

Citigroup, largest U.S. banking operation, fell to a four-year low after profit slid the most in three years.  Bank of America, the second-largest, tumbled after setting aside $2.03 billion for credit losses. Washington Mutual, biggest savings and loan, slid to a five- year low after its earnings slumped.

A bright spot, however, was Google.  Going against the trend, it rose $5.09 Friday to a record close of $644.71.

Overall, things aren’t as bad as print/broadcast media reported.

With the Dow industrials much higher these days, Friday’s 2.6 percent decline compares with the hefty 23 percent drop on 1987’s Black Monday.  Marketwatch, Associated Press and others with handy calculators, figured a decline of similar proportion at the market’s current level would mean a steep slump of 3,100 points.