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The big story of the day today was the Ben Bernanke testimony and whether he would provide some relief for our market. He didn't. Sure Bernanke said he supported a stimulus plan, but most economists believe that falls far short of what is necessary. The market is calling for massive rate cuts, and many expected that we could get more hints of just how aggressive the Fed will be, but it didn't happen. On the heels of this, and more bad news from the financial sector, the Dow plunged 307 points today. The Nasdaq lost 48 points and the broader S&P 500 lost 40 points, or 2.91%.

Every major sector fell by at least 1.5%, so there was no place to hide from today's selloff. Some of the hardest hit sectors were basic materials, capital goods, and financials.

The financials just continued to be blasted day after day. Today it was Merrill Lynch (NYSE:MER) which reported earnings that were a lot worse than anyone had expected, and took a massive writedown of $14.1 billion. MER shares lost more than 10% on the trading session. Lehman Brothers (NYSE:LEH) fell 5.86% during the session and then after the trading day announced it will cut 1,300 mortgage jobs. It certainly wasn't just the brokerage sector that was under pressure. Wachovia Corporation (NYSE:WB) fell 7.01% to lead the major banks much lower on the day. Fannie Mae (NYSE:FNM) fell 6.06% on the day. PNC Financial Services (NYSE:PNC) lost 7.15% after reporting disappointing earnings and putting its stock repurchase program on hold. Exchange stocks were very weak today as well. NYMEX Holdings (NYSE:NMX) plunged 13.54% lower on the day on more than 4 times its normal volume. NYSE Euronex (NYSE:NYX) lost 8.07% on session, but traded higher after the bell after it announced it will acquire the AMEX.

Basic materials, which were so strong for so long had another day to forget today. Mosaic (NYSE:MOS) shares lost 11.68% on three times its normal daily volume. Monsanto Company (NYSE:MON) shares plunged 11.61% on more than four times its normal daily volume. Agrium (NYSE:AGU) and Potash (NYSE:POT) also plunged by 10% and 10.73% as the whole agricultural sector was trashed today. Freeport McMoran (NYSE:FCX) lost 8.06% on more than double its normal volume. US Steel (NYSE:X) lost 7.02% as steel stocks also showed significant weakness.

Another area that was hit hard today was the capital goods group. Deere and Company (NYSE:DE) fell 9.98% as the agricultural equipment producer followed the trend of the agriculture sector as a whole. Infrastructure stocks were also very weak today. Fluor Corporation (NYSE:FLR) lost 8.53% on twice its normal volume while Jacobs Engineering (NYSE:JEC) lost 5.94% on the day. Terex Corporation (NYSE:TEX) and Manitowoc Company (NYSE:MTW) lost 9.36% and 9.63% as the heavy equipment producers continued their recent weakness.

Notable 52 week lows

• Alcoa Inc. (NYSE:AA) Fell 6.01% on double its normal volume.
• Alliance Data (NYSE:ADS) Shares plunged 16.4% as rumors swirled that their deal with Blackstone may be in trouble.
• XL Capital (NYSE:XL) Shares fell 13.17% as this global reinsurer hit a new low.
• Masco (NYSE:MAS) It has been a long and slow steady decline for Masco and today shares lost another 3.5%.
• Bristol Myers Squibb (NYSE:BMY) Shares fell 3.72% today. It was a surprise to see a drug stock like this on the list since they are usually seen as recession proof.

The market action is just getting worse and worse by the day, leading many to believe that is indeed a bear market. It depends on how you define a bear market as to whether we could technically be in one yet, but it sure is the worst market conditions in years.

I believe it is important to note the huge volume selloffs in previous leaders like the agricultural stocks. Market leaders are generally the last ones to go, and in the kind of market we are in now, they are fading fast.

Keep watching for a big intraday reversal day for signs of a short-term bottom.

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