Nationalism = Communism?

Stocks extended losses during midday trading today, pushed down by poor housing data and by lackluster comments from Fed Chairman Ben Bernanke.

At 12:01 pm ET, the Russell 2000 (NYSE:IWM) was down 6.17, or 1.68%, at 361.63, while the S&P 500 is down 0.79% to 695.25 and the Dow is still below 7,000, currently down 0.46% at 6,732.23.

According to new data released by the National Association of Realtors this morning, the number of homebuyers purchasing existing homes fell 7.7% to a new low of 80.4 in January. Economists were predicting a January reading of 85.1.

Also this morning, Bernanke reiterated to Congress that any semblance of economic recovery hinges on the U.S. government’s ability to stabilize ailing financial markets. The comments did little to soothe investor fears.

Small caps seeing solid rises today included Bruker Corporation (Nasdaq:BRKR), up over 6% after releasing Q4 2008 results and issuing FY 2009 revenue guidance above analysts’ predictions. Also Southern Community Financial Corp. (Nasdaq:SCMF) is up 20% on very light volume, and Einstein Noah Restaurant Group (Nasdaq:BAGL) is up 18% after its Q4 EPS beat the Street.

On the downside, ICT Group careened 23% after rejecting Aegis’ acquisition offer.

Lending Profits

It is a strange sight to see the Dow Industrials trading at 6,700. That’s still a level from 1997. And it still indicates that people don’t want to own stocks. At this point, it seems to be as much about available capital for investment as a willingness to invest.

Valuations are low, the Dow is trading with a P/E of around 20. But that’s still not as low as it’s been during past recessions.

Still, it might be helpful to add some flavor to the current P/E ratio of the Dow. Consider that Citigroup and Bank of America don’t have earnings. Neither do Ford, GM, Alcoa. It’s safe to say that earnings at JP Morgan, American Express, . . .

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