Investors fleeing stocks for safer water isn’t a new theme, but the concept was a big part of the story today. The yield on various Treasury notes hit multi-year lows, and in some cases record lows. Benchmark 10-year notes actually saw yields down more than 6% late in the day, an astounding move as investors appeared to give up on anything asset class with risk and poured cash into Treasuries.

The on-again, off-again bailout package for automakers looked like a go at midday, sparking a big recovery rally for shares of GM and Ford, but the rescue package apparently still has to clear some hurdles, which sparked a slide in automaker stocks from their midday peak late in the day. Shares in Ford Motor Co. (NYSE:F) were flat late in the day, while General Motors Corp. (NYSE:GM) was up 6%.

The tone for a rugged day was cast ahead of the opening when the latest data on weekly unemployment claims showed that 542,000 Americans filed for unemployment insurance last week – the largest one-week total in 16 years. What’s more, the number of people unable to find a job and remaining on continuing claims rose to 4.012 million, the highest number in 26 years. There are a lot of people out of work who can’t find a job, and there are a bunch of new people joining their ranks every week. In that type of environment, an economy that is already struggling will continue to sputter – the only question is how much of the negative economic news is already priced into this historic stock market collapse. The market will get a break from any major economic reports Friday, allowing other factors to compete for investor attention.

The energy market was also a big bearish factor for stocks today. Crude oil prices tumbled some 8% to three-year lows as fears of sinking global demand . . .

The U.S. trading session started off on a sour note as the latest weekly unemployment claims spiked to 542,000, which marked the highest point in 16 years. Continuing claims, which represent people unable to find work, rose to 4.012 million, the highest point in 26 years. The labor market is bleak right now, and expected to get even worse over the next couple of months, the only debate is whether or not the economic “bad news” is already factored into the historic collapse in stocks. Since the Russell this morning plunged to the lowest point since May 2003, the immediate answer seems to be “no.” Still, there plenty of market watchers out there who believe that bad economic data is not a surprise and that valuations are very attractive; if the market will only get past the current crisis of confidence, then things could turn very quickly.

Of course, it’s easier said than done. Investors with cash left are piling it into credit products, regardless of how terrible the yield might be. This has become an epic week for Treasury products, with yields on 2-year notes sinking to record lows, while the benchmark 10-year note today tumbled to the lowest point in more than 5 years. The mentality in play seems to be “right now, protect my money; I’ll look for returns down the road.”

Crude oil prices tumbled below $50 a barrel, reaching the lowest point since May 2005 and energy stocks were taking a beating today, acting as a major drag on index products. The Energy Select Sector SPDR Fund was off 6.7% at . . .

There was some sense that the difficulty in crafting a rescue package for domestic automakers was hampering market psychology. It certainly didn’t do any good for General Motors Corp. (NYSE:GM) stock, which was off nearly 12%. Meanwhile, Ford Motor Co. (NYSE:F) was down 25%, trading well below $2 a share. While auto executives grovel for a handout from tongue-lashing lawmakers, the political hot potato bounces about without much progress, leading Senate Banking Committee chair Christopher Dodd to say that the chances for a bailout bill for automakers was “remote.”

In a fitting end to another bruising day in the stock market, the only broad S&P sector with a noteworthy gain was brewery companies. On the downside, automobile manufacturers were smashed, REITS were evicted from portfolios, health care facilities were anemic and former hot commodities like aluminum and coal were running cold.

Elsewhere on the commodities scene, crude oil prices actually edged higher, breaking free of the lock-step equities trade that had been in place of late as the onset of colder weather boosted physical energy prices. Still, it didn’t do much to heat up energy stocks, as the Energy Select Sector SPDR Fund slipped 5.4%. Even the cattle market was slaughtered today, with futures for December delivery collapsing 3.3% to new contract lows, while prices on some continuous charts were at . . .

General Motors Corp. (NYSE:GM) was down 15% on perceptions that this week’s lobby efforts by auto executives in Washington might not yield a rescue package for embattled automakers, or that an aid deal might not get there quick enough to stem a downward spiral through automakers, parts suppliers, etc. Ford Motor Co. (NYSE:F) tumbled 21%, but with the stock trading well below $2 a share, the percentage moves are easily magnified.

Yields on benchmark 10-year notes tumbled more than 3.5% at mid-session as investors made a stampede for Treasury products to try and park cash somewhere safe. The yield on five-year notes already hit five-year lows ahead of the opening this morning. The push for safe-haven outlets has extended into the gold market, where a report from the World Gold Council today said that global demand for the yellow metal soared 18% in the third quarter. While industrial metals such as copper have been pummeled by the economic crisis, which slows demand for building materials, gold stands to benefit by panic in financials and hope from long-term gold hoarders that all these bailout programs will eventually spark inflation.

However, any hope for inflation on the horizon seems like a far-off concern, especially after today’s CPI report showed that consumer prices notched the biggest decline in 61 years of data history. In fact, the deflationary environment right now just makes Treasury products even more attractive because inflation devalues fixed income investments.

Sometimes on days like today it’s interesting to see just what companies are doing well when the rest of the market is sinking. On the small-cap front, . . .

The housing starts report came in at 791,000 units, which was better than the forecast of 780,000. That said, the number was still terrible. Single-family housing starts tumbled to the lowest level in 27 years. Meanwhile, the CPI report came in at minus 1%, which was the biggest drop since the data series began 61 years ago. Even the “core” rate, which excludes energy and food prices, slipped 0.1%, which was the first decline in core rates in 26 years. The dramatic free-fall in prices was also seen at the producer level on Tuesday’s PPI report and could stir up worries of deflation. Earlier today, the MBA Mortgage Application Index dipped 6.2% and continues to hover near eight-year lows. None of these reports contained “good news” for the market, but they were well within the range of expectations and appeared to have little immediate price impact.

The market was already limping into the session following another pullback in stock markets overseas. European shares were off about 1.5% heading into the U.S. session. In Asian trading, Japan was down 0.6%, Hong Kong off 0.7%, Australia down 0.6%, Singapore down 1.5%, South Korea off 1.8% and India down 1.8%.

Energy shares were an important part of the large-cap rally Tuesday, and appeared set to be a bearish element for stocks today after crude oil prices slipped to 22-month lows overnight. However, commodity markets started to rise off the overnight lows about 20 minutes ahead of the stock market open, which helped limit initial losses for equities. The U.S. dollar was down 1% against the euro, which provided some support to the commodities sector. Shortly after the open today, the Energy Select Sector SPDR Fund was up 0.5% as crude oil prices climbed back into positive . . .

Small caps were hammered relative to large caps, with the Dow closing up 1.83% on the day. For the year, the Russell is now down 42%, while the Dow is down 36% and the S&P 500 is down 41%. Just a few weeks ago, the Russell was only down about 2% for the year while the Dow was down 12%; as the market has collapsed investors have clearly shied away from riskier investment fare as there is a perception in times of crisis that big is better.

Speaking of risk aversion, money appeared to moving into credit markets today, with the yield on benchmark 10-year notes down 2.94%. Yields move inverse to price, so the slide in yields reflects demand for the Treasury product. The decline in yields appeared to pick up speed after the National Association of Home Builders/Wells Fargo Housing Market Index stumbled to the lowest point since the index was created back in 1985. The NAHB report effectively cut off at the knees any enthusiasm from a jump in Southern California home sales, especially heading toward the housing starts report Wednesday morning. That separate report on sales in SoCal showed a big surge in volume, but it came at the expense of price as bargain hunters snatched up a large batch of foreclosed homes at a big discount. There are many who say that the genesis of this global crisis dates back to the housing market collapse and they believe that we won’t see a bottom in the market until we see a foundation built for housing prices.

There is also a pocket of market watchers who believe that equities will have a hard time establishing a bullish foothold it is known what steps will be taken to shore up embattled automakers. General Motors Corp. (NYSE:GM) tumbled some 9% today as Treasury Secretary Henry Paulson said on Capital Hill that the $700 billion financial bailout plan should not be applied to automakers. Even as Paulson and Federal Reserve Chairman Ben Bernanke were busy updating progress on the TARP, auto executives were busy telling the Senate Banking Committee that they need a massive bailout to avoid not just a collapse for domestic vehicle firms, but also the nation’s . . .

Energy stocks were among the best performers so far today as crude oil prices reversed overnight losses and investors looked to find bargains in the downtrodden sector. The Energy Select Sector SPDR Fund was up more than 2% at mid-session. Elsewhere on the commodities scene, analysts at JP Morgan said that commodity prices – especially agriculture products – should outperform energy and industrial raw material products in 2009.

Hewlett-Packard Co. (NYSE:HPQ) stunned investors this morning by not only reaffirming the current profit outlook, but by raising guidance for next year, breaking a long string of corporate expectations that were forecasting declines. If the world’s largest computer maker was still looking at greener pastures next year, then investors reasoned it could spread to a host of entities. HPQ was up some 12%. Elsewhere on the big-cap earnings front, Home Depot Inc. (NYSE:HD) topped the profit forecast and jumped 6%.

That’s not to say that everything was rosy among the earnings releases today. Corning Inc. (NYSE:GLW), who makes the flat glass to stick on all those flat-panel television monitors and computer screens, said fourth-quarter revenue will fall short of expectations. GLW stock was off 15% at midday.

In the small-cap universe, DHT Maritime Inc. (NYSE:DHT), a tanker ship operator, jumped 17% after releasing earnings numbers today. Chiquita Brands International Inc. (NYSE:CQB) rallied 17% amid analyst upgrades for the banana producer. Tetra Technologies Inc. (NYSE:TTI) jumped 15% as the oil and gas services company tries to mount a comeback after sinking to fresh lows last week. On the downside, Las Vegas Sands Corp. (NYSE:LVS) slumped 16% as the embattled casino operator hovers near record lows even though auditors recently removed doubts . . .