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etail Federation. Investors mulled record-high oil prices, weak earnings from Bear Stearns and a Congressional hearing on the sub-prime mortgage fallout.

Today, the Dow Jones industrial average closed down 48.86 or 0.35% to 13,766.70, the broader S&P 500 closed down 10.28 or 0.67% to 1,518.75, and the tech-heavy Nasdaq composite closed down 12.19 or 0.46% to 2,654.29.

Market breadth was negative. On the New York Stock Exchange, losers topped winners by over 2 to 1 on volume of 1.3 billion shares. On the Nasdaq, decliners topped advancers by 9 to 5 on volume of 1.8 billion shares.

Stocks ran into some resistance as investors struggled to sort through the longer-term impact of the rate cut. The slump in treasury prices following the rate cut, boosted the corresponding yields on worries that lower borrowing rates will drive up inflationary costs. Federal Reserve Chairman Ben Bernanke told Congress that the credit crisis has distressed financial markets and that the central bank will take steps to help the situation.

In economic news, the regional read on manufacturing rose to 10.9 from a previous flat reading. The index of leading economic indicators dropped 0.6% in August, topping forecasts. The number of Americans filing claims for unemployment dropped last week, which surprised economists.

Shares of Bear Stearns lost after reporting a big drop in third-quarter profit that missed estimates, due to the impact of the sub-prime mortgage fallout and financial market turmoil. It posted a sharp decline in net income for the third quarter - a period during which two of its hedge funds heavily invested in sub-prime securities blew up, helping to fuel a global credit storm.

Shares of Nasdaq Stock Market closed up $0.49 or 1.36% to $36.51, after it struck a multifaceted deal with Borse Dubai involving equity interests in the London Stock Exchange and Scandinavian bourse operator OMX.

Shares of Goldman Sachs posted a rise in earnings and revenue. Quarterly profit rose to $2.85 billion, compared to $1.55 billion a year earlier. Revenue soared 63% to $12.33 billion from $10.18 billion last year. Stock trading also racked up a record $3.13 billion of revenue during the period.

Stock of Circuit City lost 18% after reporting a quarterly loss versus a year-ago profit, a decline in sales at stores open a year or more versus a year-ago rise, and a drop in revenue from the previous year.

Shares of FedEx lost $3.06 or 2.85% after warning that second-quarter and full-year earnings won’t meet expectations, due to uncertainty about the economic outlook and housing market. It earned $494 million, compared with $475 million in the year-ago quarter. Revenue increased 8% to $9.2 billion, compared with $8.55 billion.

U.S. light crude oil for October delivery rose $1.39 to settle at $83.32 a barrel on the New York Mercantile Exchange, ending at an all-time high for the fourth session in a row. However, the record price remains below inflation-adjusted highs hit in the early 1980s, which would be equal to at least $95 a barrel today.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter