Gravity Is Still A Harsh Mistress

After a 200 point gain yesterday on the Dow thanks to the GDP data and everyone screaming 'RECESSION OVER MISSION ACCOMPLISHED!" the cold reality set in for a 250-point loss.

Stocks tumbled Friday, more than erasing the previous session's gains, as investors dumped a variety of shares at the end of a rough week and choppy month on Wall Street.

The Dow Jones industrial average (INDU) lost nearly 250 points, or 2.5%, according to early tallies. The Dow lost as much as 278 points earlier. It was the Dow's biggest one-day selloff on a point basis since April 20.

The S&P 500 (SPX) index fell 30 points, or 2.8% and the Nasdaq composite (COMP) shed 52 points, or 2.5%.

The selloff was broad based, with all 30 Dow components declining and most stock sectors sliding. Energy prices and stocks were hit hard as the dollar turned mixed and the financial sector erased most of the 4% gain it accrued Thursday.

"We might finally be seeing the 5 percent to 15 percent correction that many people have been calling for since the summer," said Ron Kiddoo, chief investment officer at Cozad Asset Management.

"I think the run has just gotten tired," he said. "A lot of people who wanted to get in over the last two months have done that, so maybe we need to sell off more to get more people back in."

The fundamentals of our economy have not improved. It's all been band-aids, smoke, mirrors and trillions in bailouts. Reality will catch up and when it does, it will be quite painful.