Bad news in the financial sector today meant the first bearish day for the market in five sessions, as Deutsche Bank’s negative prediction for fourth-quarter earnings pushed Morgan Stanley, Merrill Lynch, and Lehman Brothers downward. The Dow fell 57.15 to 13,314.57, the Nasdaq slid 23.83 to 2,637.13, and the S&P 500 lost 8.72 to close at 1,472.42.
Good vibes from the housing sector buoyed the markets as Treasury Secretary Henry Paulson said the government and top banks would likely reach a deal this week on freezing adjustable mortgages at their initial rates. "Trying to get your arms around all of it is very difficult." one manager told Bloomberg. "I'm more cautious than bullish."