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Dow again holds above its 2008 lows, just barely

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After flirting with a new bear-market low for a second day, the Dow Jones industrial average again showed a little resilience when it counted.

The 30-stock Dow finished up 3.03 points to 7,555.63, marginally above its 2008 closing low of 7,552.29 reached Nov. 20.

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The market overall was broadly lower as President Obama unveiled his $75-billion mortgage-rescue plan, although most major indexes remained comfortably above their November lows.

The Standard & Poor’s 500 eased 0.75 of a point, or 0.1%, to 788.42 today, leaving it 4.8% higher than its 2008 closing low of 752.44 set Nov. 20.

The Nasdaq composite eased 2.69 points to 1,467.97. It is 11.5% above its November nadir.

After Tuesday’s dive, the market was mostly stuck in neutral today. The Dow dipped as low as 7,480, then meandered around the 2008 closing low for much of the session.

As long as major indexes hold above their 2008 lows, Wall Street can cling to hopes that the bear market isn’t about to begin a devastating new down leg that could drive more buy-and-hold investors away for good.

Market bulls may have been encouraged today that Obama’s plan to stem home foreclosures didn’t spook investors the way that Treasury Secretary Timothy Geithner’s detail-light bank-rescue plan did Feb. 10, when the Dow plummeted 4.6%.

But Obama’s program obviously didn’t excite investors either. And many analysts still see plenty to be worried about with the Dow so close to last year’s low, and with the economic news unrelentingly grim.

‘It’s kind of troubling when you consider that we hit a new low in November -- and then the government realized the severity of the economic problems and has with each passing month tried to bring on a greater solution -- and yet despite all of that the market is essentially back where it was in November,’ said Joe Battipaglia, market strategist for the private-client group at brokerage Stifel, Nicolaus & Co.

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Sam Stovall, chief investment strategist at Standard & Poor’s, told clients today that ‘we think there is a good chance that a new bear-market low will be seen.’

Bear-market bottoms, he said in a note, ‘are typically volatile affairs, nothing like the relative calm we have seen lately. We believe a break below the November lows [would] open the door for another leg lower in the S&P 500 to the 625 to 675 range.’

A drop to 625 would be a 21% decline from today’s close.

In case you were looking for a reason to go on living.

-- Walter Hamilton and Tom Petruno

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