New Lows on the Dow

In another down session in stocks on Friday where the Dow ended down -100.28 (1.34%) to 7,365.67; The NASDAQ down 1.59 (0.11%) 1,441.23 and the S&P down 8.89 (1.14%)to
770.05

Read the full story here: Yahoo Finance Story

Bank stocks led the way down for the indexes for the most part today on fears of nationalization when Sen. Chris Dodd suggested that nationalization of the banking system may be inevitable. Later in the day the stocks rallied to market open levels when "word surfaced that the White House believes the correct way to run the bank system is through private ownership, which likely helped calm fears of bank nationalization." (yahoo finance story)

What do we take from this? The simple notion of bank nationalization is driving fear into the market. It's like what one analyst said on CNBC, is the cure more toxic than the disease. My suggestion is to let these banks go into bankruptcy and from the ashes, stronger and new banks will arise. Further downward pressure on stocks will continue until we have further clarity on what the fate of such banks driving the markets down such as Bank of America (BAC) and Citigroup (C).