Reacting on undesirable news on the further weaking housing market as well as the start of the government’s tests to gauge their ability to withstand a long and deep recession lowered the market as a whole.  The Dow Jones Industrial Average fell -1.09% to a close of 7,270.89 while the Nasdaq and S&P fell  -1.14% and -1.07% respectively to closes of 1,425.43 and 764.90.  Crude oil was boosted on the day rising $2.48 to a close of $42.44 while gold lost $-17.30 to a close of $952.20.  Sales of previously owned U.S. homes plunged much more than expected January, pulling home builders down 2.1 percent.  The drop in gasoline inventories came in data from the U.S. Energy Information Administration that also showed a 1.7 percent rise in demand for the fuel over the four weeks ending February 20.

U.S. officials unveiled details today of how they plan to convert preferred shares the U.S. Treasury holds in hundreds of financial institutions into common stock that would help banks survive an even worse than projected economic downturn.  Under the plan, which includes “stress tests” aimed at measuring how the banks would hold up under both baseline and extreme economic situations, institutions would have six months to raise private capital before getting a government-issued capital buffer.

- Jason Gibbons

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