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Stocks continued to plunge in late trading Friday, on pace to post losses for the day and the week.

At 2:45 p.m. EST, the NYSE composite was down 2.5%, S&P 500 2.3%, Dow 2.2%. The Nasdaq, down 2.1%, threatened its lows from earlier this month.

Volume was tracking higher across the board. If that trend continues through the close, the indexes will have a new distribution day. It would be the second day of higher-volume selling since the Feb. 13 follow-through.

Declining stocks were running worse than 6-to-1 on the NYSE and about 7-to-2 on the Nasdaq.

HMS Holdings () lost 1.79, or 6%, to 27.51 in heavy trading. Late Thursday, the company reported a 114% surge in Q4 profit, in line with views.

Capella Education () dropped 2.20 to 51.75. The for-profit school now lies 31% off its November peak.

Continental Resources () fell 0.94 to 28.04 in brisk trading as energy stocks eased. The oil producer pulled back after clearing a six-week consolidation Thursday.

Crude oil retreated after it topped $103 a barrel. The April contract slipped 36 cents to $102.23 a barrel.

Gainers remain scared. Advancers were mainly thinly traded, second-tier issues.

1:15 p.m. EST Update: Stocks Down Near Lows; Volume Turns Mixed

By VINCENT MAO

The major stock indexes hovered near session lows in midday trading Friday as worries over the economy and an outlook for more bank losses weighed.

At 12:49 p.m. EST, the NYSE composite was down 1.9%, S&P 500 1.8%. The Dow and Nasdaq gave up 1.7% each.

The day’s losses easily were the worst of the week, which was shaping up as a modest success before today.

Volume was tracking mixed, with NYSE trading lower and the Nasdaq’s higher.

Breadth improved slightly from earlier today. Decliners outpaced advancers by 5-to-1 on the NYSE and about 3-to-1 on the Nasdaq.

Earlier this morning, Swiss investment bank UBS warned that financials faced more pain ahead. Losses from the fallout of the credit markets are slated to top $600 billion from $160 billion thus far.

On Thursday, American International Group () booked $11 billion in write-downs from investments related to subprime mortgages. And Freddie Mac () took $3.1 billion in write-downs.

GFI Group () gave up 3.48 to 77.22 on a big spike in volume. The provider of brokerage services and data analytics continued last week’s downturn. Its Accumulation/Distribution Rating has fallen to D from B earlier this month.

FMC Technologies () dropped 3 points, or 5% to 56.88 in brisk trading. The maker of valves and fittings for the energy industries pulled back after a five-session advance. FMC is forming in a double-bottom base, but it’s a distance away from the possible 66.06 buy point.

Dril-Quip () gapped down and sliced its 200-day moving average. Shares tumbled 5.47, or 10%, to 46.96 on huge volume. The maker of oil drilling and production equipment reported Q1 earnings and sales below views. And it guided Q1 profit below consensus estimates.

Gainers were scarce. But FTI Consulting () gapped above its 50-day moving average. Shares rallied 6.21, or 11%, to 62.09. But it pulled back after hitting an all-time high of 63.41. Late Thursday, the company reported a 20% rise in Q4 earnings and a 29% increase in sales. Both were above views.

11:15 a.m. Update: Indexes See More Red

By VINCENT MAO

Stocks extended harsh losses Friday as a string of reports added to worries over the economy.

At 10:48 a.m. EST, the NYSE composite slumped 2.1% and S&P 500 1.9%. The Dow and Nasdaq dropped 1.8% each. All 30 Dow components were in the red. American International Group () took the hardest hit, as it tumbled 7%.

Volume was tracking higher on both exchanges. Breadth was horrid, with decliners swamping advancers by about 6-to-1 on the NYSE and nearly 5-to-1 on the Nasdaq.

The Chicago Purchasing Managers index came in at a worse-than-expected read of 44.5. The downturn marked a contraction in regional factory activity and provided more evidence of a slowing economy.

Meanwhile, the revised University of Michigan consumer sentiment index rose to 70.8, ahead of estimates. But stocks largely ignored this bit of good news.

China Medical Technologies () gapped down and dived 6.60, 12%, to 47.91 in wicked trade. Late Thursday, the company handily topped views with a 40% rise in fiscal Q3 earnings. Its gross margins, however, fell to 63.2% from 72.6% in the year-ago period.

Central European Distribution () dropped 2.57 to 57.30 in heavy trading. That pushed the liquor distributor about 1% under a 57.91 buy point from a cup-with-handle pattern.

Gafisa () gave up 1.18 to 39.40. The Brazilian home builder pulled back after a six-session run.

On the upside, Greif () added 0.84 to 68.58. On Wednesday, the container maker reported a 93% jump in fiscal Q1 earnings. And it improved its after-tax margin for the fourth-straight period.

10:15 a.m. Update: Stocks Take Early Beating

By VINCENT MAO

Stocks were down hard in early trading Friday. They opened lower and have kept on sliding.

At 9:54 a.m. EST, the NYSE composite tumbled 1.6%, the S&P 500 1.5%, the Dow 1.4% and the Nasdaq 1.2%.

Volume was tracking slightly lower on both exchanges.

Hansen Natural () gapped down and sank 3.14, or 7%, to 41.01. Late Thursday the beverage supplier delivered Q4 earnings and sales ahead of views, thanks to strength in its Monster Energy line. But concerns over its margins pushed the stock down. Hansen’s gross profit as a percentage of net sales slipped to 51% from 53.1% in the year-ago period.

Nokia () gave up 1.15 to 36.75. The cell phone maker’s Relative Strength line is already at a new high a good sign. But big volume has been missing in recent weeks as the stock shapes a new base.

On the upside, Southwestern Energy () climbed 1.69 to 69.34 in fast trade. After Thursday’s close, the oil producer easily beat views with a 105% pop in Q4 profit. It was also the third straight period of accelerating growth. The company also raised its production outlook and announced a 2-for-1 stock split.

Esterline Technologies () jumped 3.01, or 5%, to 51.15. Late Thursday, the maker of aerospace and defense products trounced views with a 65% rise in fiscal Q1 income. Sales growth accelerated for the eight straight quarter to 45%.

9:15 a.m. Update: Stocks Headed For Bad Open

By VINCENT MAO

Stock futures pointed a much lower open Friday on worries over the economy.

Nasdaq futures slumped 24 points vs. fair value, S&P 500 futures dropped 14 points and Dow futures skidded 116 points.

In economic news, personal income climbed 0.3% in January, slightly above expectations of 0.2%. Spending rose 0.4% double economists’ estimates. But the gain was largely due to inflation. Adjusted for inflation, spending was flat.

The Personal Consumption Expenditure index, the Fed’s preferred measure of inflation, ticked up 0.3% as expected. On a year-over-year basis, the index rose 2.2%, or above the high-end of the central bank’s comfort zone of 2%.

The Chicago purchasing managers index for February will be released at 9:45 a.m. EST. A decline to 49.5 is expected for the regional manufacturing gauge. Readings under 50 indicate contraction.

At 10 a.m. EST, the revised University of Michigan consumer sentiment index will be out.

Several Fed members are slated to give speeches throughout the trading session.

American International Group () dropped 4% in pre-market trading. Late Thursday, the financial services giant reported a Q4 loss of $5.29 billion, or $1.25 a share, hurt by credit-related derivatives. This was much worse than analysts’ expectations for a loss of 60 cents.

Assured Guaranty () surged 16% in pre-open trading. Financier Wilbur Ross will invest up to $1 billion in the reinsurance firm.

But its group mates took heat. Ambac Financial () fell 7% in the pre-market. CNBC reported that a bailout plan for the troubled bond insurer hit a roadblock. Apparently, rating agencies are demanding more money from the consortium of banks involved in the rescue.

MBIA () dropped 4% in the pre-open. In a regulatory filing, the bond insurer said it expects further write-downs due to the continued fallout in the housing market. The company also said that it’s booking new business.

Meanwhile, Deckers Outdoor () tumbled 9% in pre-open trading. The footwear maker reported Q4 profit and revenue above views, but it gave a weak Q1 earnings forecast.

Stocks extended harsh losses Friday as a string of reports added to worries over the economy.

At 10:48 a.m. EST, the NYSE composite slumped 2.1% and S&P 500 1.9%. The Dow and Nasdaq dropped 1.8% each. All 30 Dow components were in the red. American International Group () took the hardest hit, as it tumbled 7%.

Volume was tracking higher on both exchanges. Breadth was horrid, with decliners swamping advancers by about 6-to-1 on the NYSE and nearly 5-to-1 on the Nasdaq.

The Chicago Purchasing Managers index came in at a worse-than-expected read of 44.5. The downturn marked a contraction in regional factory activity and provided more evidence of a slowing economy.

Meanwhile, the revised University of Michigan consumer sentiment index rose to 70.8, ahead of estimates. But stocks largely ignored this bit of good news.

China Medical Technologies () gapped down and dived 6.60, 12%, to 47.91 in wicked trade. Late Thursday, the company handily topped views with a 40% rise in fiscal Q3 earnings. Its gross margins, however, fell to 63.2% from 72.6% in the year-ago period.

Central European Distribution () dropped 2.57 to 57.30 in heavy trading. That pushed the liquor distributor about 1% under a 57.91 buy point from a cup-with-handle pattern.

Gafisa () gave up 1.18 to 39.40. The Brazilian home builder pulled back after a six-session run.

On the upside, Greif () added 0.84 to 68.58. On Wednesday, the container maker reported a 93% jump in fiscal Q1 earnings. And it improved its after-tax margin for the fourth-straight period.

10:15 a.m. Update: Stocks Take Early Beating

By VINCENT MAO

Stocks were down hard in early trading Friday. They opened lower and have kept on sliding.

At 9:54 a.m. EST, the NYSE composite tumbled 1.6%, the S&P 500 1.5%, the Dow 1.4% and the Nasdaq 1.2%.

Volume was tracking slightly lower on both exchanges.

Hansen Natural () gapped down and sank 3.14, or 7%, to 41.01. Late Thursday the beverage supplier delivered Q4 earnings and sales ahead of views, thanks to strength in its Monster Energy line. But concerns over its margins pushed the stock down. Hansen’s gross profit as a percentage of net sales slipped to 51% from 53.1% in the year-ago period.

Nokia () gave up 1.15 to 36.75. The cell phone maker’s Relative Strength line is already at a new high a good sign. But big volume has been missing in recent weeks as the stock shapes a new base.

On the upside, Southwestern Energy () climbed 1.69 to 69.34 in fast trade. After Thursday’s close, the oil producer easily beat views with a 105% pop in Q4 profit. It was also the third straight period of accelerating growth. The company also raised its production outlook and announced a 2-for-1 stock split.

Esterline Technologies () jumped 3.01, or 5%, to 51.15. Late Thursday, the maker of aerospace and defense products trounced views with a 65% rise in fiscal Q1 income. Sales growth accelerated for the eight straight quarter to 45%.

9:15 a.m. Update: Stocks Headed For Bad Open

By VINCENT MAO

Stock futures pointed a much lower open Friday on worries over the economy.

Nasdaq futures slumped 24 points vs. fair value, S&P 500 futures dropped 14 points and Dow futures skidded 116 points.

In economic news, personal income climbed 0.3% in January, slightly above expectations of 0.2%. Spending rose 0.4% double economists’ estimates. But the gain was largely due to inflation. Adjusted for inflation, spending was flat.

The Personal Consumption Expenditure index, the Fed’s preferred measure of inflation, ticked up 0.3% as expected. On a year-over-year basis, the index rose 2.2%, or above the high-end of the central bank’s comfort zone of 2%.

The Chicago purchasing managers index for February will be released at 9:45 a.m. EST. A decline to 49.5 is expected for the regional manufacturing gauge. Readings under 50 indicate contraction.

At 10 a.m. EST, the revised University of Michigan consumer sentiment index will be out.

Several Fed members are slated to give speeches throughout the trading session.

American International Group () dropped 4% in pre-market trading. Late Thursday, the financial services giant reported a Q4 loss of $5.29 billion, or $1.25 a share, hurt by credit-related derivatives. This was much worse than analysts’ expectations for a loss of 60 cents.

Assured Guaranty () surged 16% in pre-open trading. Financier Wilbur Ross will invest up to $1 billion in the reinsurance firm.

But its group mates took heat. Ambac Financial () fell 7% in the pre-market. CNBC reported that a bailout plan for the troubled bond insurer hit a roadblock. Apparently, rating agencies are demanding more money from the consortium of banks involved in the rescue.

MBIA () dropped 4% in the pre-open. In a regulatory filing, the bond insurer said it expects further write-downs due to the continued fallout in the housing market. The company also said that it’s booking new business.

Meanwhile, Deckers Outdoor () tumbled 9% in pre-open trading. The footwear maker reported Q4 profit and revenue above views, but it gave a weak Q1 earnings forecast.

Investors wary of slumping stock markets poured money into commodities Thursday, at one point pushing gold to record highs above $950 an ounce and copper to a 21-month peak.

Agricultural markets in wheat, corn and soybeans and soft commodities like sugar, cocoa, coffee and orange juice rallied as well, while all three major U.S. stock indexes fell by more than 1%.

The Reuters-Jefferies CRB and Dow Jones-AIG commodity indexes both settled higher after hitting record levels during the session.

Before 2008 began, commodity prices already had surged to new highs on worries about shortages and expectations of strong demand. A weakening dollar also prompted producers to protect margins by raising prices.

But analysts say this year’s rise has been fueled mostly by new money looking for high returns and a home away from the turmoil in equity and credit markets.

“There’s been no new news,” said Frances Hudson, global thematic strategist at London fund manager Standard Life. “They (investors) may be backing away from things like credit derivatives and playing in commodity markets instead.”

U.S. gold futures hit a record, then backed off to finish 1% higher on the day. A sharp decline in crude oil halted a gold rally prompted partly by fears of oil-driven inflation.

Gold for April delivery on the Comex division of the New York Mercantile Exchange settled up $11.40, or 1.2%, at $949.20 an ounce after scaling an all-time peak of $958.40.

Gold is also seen as a hedge against financial market turbulence. It has gained more than 40% since last August, when the U.S. credit market crisis erupted.

U.S. copper futures closed almost 3% up. Comex copper for March delivery ended 10.20 cents higher at $3.8105 a pound after touching $3.8465 the highest level for a second-month contract since May 30, 2006.

Oil closed more than $1 down, backing off Wednesday’s record of $101 a barrel as U.S. economic concerns and growing inventories offset expectations that producer group OPEC will cut output when it meets next month.

U.S. crude futures for April delivery settled down $1.47 at $98.23 a barrel after government data showed a sharp build in crude stockpiles in the U.S. last week that nearly doubled analyst forecasts.

London Brent crude settled $2.18 lower at $96.24.

The stock has surged in recent weeks on the back of interest from firms such as boutique investment house , private equity group Blackstone, and Indian conglomerate Tata.

But Close shares tumbled 13% - down 95p to 655p - after it said it is ‘no longer in discussions in relation to an offer for the group or any of its divisions’.

Cenkos dropped a proposed 1025p-a-share takeover last month, which valued Close at 1.5bn. Cenkos wanted Close’s corporate finance and asset management units, leaving bid partner Landsbanki with the banking division.

It blamed stock market turbulence and the credit crunch for its decision to walk out on the deal, leaving Blackstone, which was planning a joint bid with investment bank Collins Stewart, as the front-runner. Tata and Japanese group Orix were also in the frame.

The Blackstone proposal is thought to have involved a bid at more than 1000p a share but it was thwarted by uncertainty at Collins Stewart, which was interested in taking control of Winterflood Securities as part of the deal. Winterflood is the biggest of stocks on the junior Alternative Investment Market.

Other stories:
Yesterday’s trading: Pair on brink of Close Bros deal
Carr barred as KKR eyes pubs takeover
Private equity aims to beat Punch to M&B
Non-doms tax ‘to drive out tycoons’
Punch plans to merge with M&B
Peloton fund forced into shock liquidation
Record 817m profits at WPP
Rogue trader’s 71m loss on wheat deal
Chairman out as Rentokil profits slump
Housebuilder warns of tough year

As traders or more importantly, as human beings, often we can’t help but make something out of nothing. As it relates to the markets we’re programmed to find reason or logic behind every tick and statistic. And while often enough that can be a productive pursuit, assigning or attempting to feign clarity from every single trade or event encountered, isn’t likely to provide our accounts with added profitability.

I stumbled onto this thought Wednesday as I couldn’t help but notice all the taking of sides going on in various financial outlets. What was the meaning behind the session’s activity? Who was in control? What’s the mixed volume mean? Is it profit-taking? Are the shorts reloading their positions? And so on and so on.

Those questions of course, if answered, are important ones to be certain. However, aside from the obvious percentage gainer from Tuesday making itself a profit-taking target; confusing matters more, traders may want to remember that November options are coming off the board this week. Hence increased activity, which typically reaches a crescendo midweek, makes dissecting the pin action all the more tenuous. As well, sometimes it might also be smart to realize that there are two sides to every trade, with most folks going in with the aim of being the smarter money.

Case in point, during the session I came across some heavy pin action in Atheros Communications () and its derivatives. While many traders are currently focused on exiting or adjusting front month and soon-to-expire positions, ATHR saw its heaviest activity in December. Specifically, well as far as my sleeve-rolling ways were willing to investigate, it appears a spread on the 30 Strike was initiated on 1,000 contracts. That’s good information, right? Well, on this particular occasion, I couldn’t really assign any “tell” to the trade.

My own diagnosis, which is admittedly incomplete, doesn’t mean others can’t glean some type of clue. However in allowing for an educated guess, my thoughts are that a Reversal / Conversion was put up. While a Straddle was certainly possible, there is a slight skew in the implieds of the Puts. Additionally, Short Interest in the stock is a tad below six days. While that’s not an extreme reading, maybe that stat has been severe enough in the past as to make being “called in” on short stock positions a problem. Combining the evidence, a synthetic stock position on the 30 Strike (Long Call / Short Put or vice versa) against the physical underlying does appear the more likely trade candidate.

If the above reflections are bordering on the truth, then we can expect that the person or persons doing the Conversion lost theoretical edge since they would have “paid up” for the right to have stock ownership. So, why do the trade? The bottom line for those involved would be to gain a real world edge and additional value on other spreads down the road, which might not be possible otherwise without Long Stock in inventory. In conclusion, while some ideas have been promoted, clarity isn’t 100%. More to the point, the biggest trade of the day (in ATHR) is far from adding to our own bottom-lines, although admittedly, food for thought and learning something new perhaps, are thought a good thing overall.

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