June 23, 2009 (FinancialWire) (By Philip Holmes) — Stocks ended down on Monday after the World Bank scared investors by cutting its global growth forecast and warned of a prolonged recession. And while falling oil futures didn’t help energy giants Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX), consumers might benefit.

The Dow Jones industrial average closed at 8,339.01, down 200.72 points, while the Standard & Poor’s 500-stock index lost 28.19 points on the trading session, to finish at 893.04. The Nasdaq composite index dropped 61.28 points to finish at 1,766.19.

Blame the World Bank, which released a report on Sunday that predicted that the global economy is set to contract by 2.9% this year. That’s significantly worse that the already dire 1.7% contraction the bank forecast in March.

The bank, which funds projects in the developing world, also predicted a slower pace of recovery worldwide than the little Green Shoots” crowd has been selling. The World Bank said that capital flight will particularly hurt poor countries, but that overall economic recovery may begin in 2009.

While investors shunned stocks on Monday, they liked dollars. The greenback was up against the euro and the British pound, but fell against the yen. Much of the dollar demand stemmed from reports that a $61 billion T-bill auction had been well-attended.

The Fed is also on investors’ minds. Ben and Co. will finish a two-day meeting on Wednesday, where they will discuss plans for near term open market operations. Fed watchers expect the key federal funds rate target to remain in the 0 to .25% range.

One key question on investors’ minds is whether the Fed will continue its aggressive policy of buying long-term Treasuries in the open market. Some point to an inflation risk in continuing the practice; others see it as necessary to hold down interest rates and keep credit markets moving.

A robust Treasury auction signals that, perhaps, the inflation doomsayers might have to wait awhile to feel validated.

Also sensing validation on hold: people who traded in SUVs for Vespas this year. Crude oil prices are on the march back down. July Nymex crude headed back toward $67 on Monday, as futures traders weigh the grim news from the World Bank, never mind the non-existent rise in demand that fuelled the very real rise in futures prices.

The Investrend Economics Calendar lists Weekly Chain Store Sales (8:55 a.m.), 2-Day FOMC Meeting Begins, Existing Home Sales for May (10 a.m.), Treasury auctions 2-year notes (1 p.m.).

The Investrend Events Calendar showcases FII at New York Society of Security Analysts Wall Street Forum; IHS at WJB Capital Group Denver Energy Bus Tour; S, D, MET, TOL at Wachovia Annual Mid-Year Equity Conference.

The Investrend Money Index is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ 50 Most Actives indicate the direction in which the mass of money is flowing. Last session’s trading showed seven advancers versus 43 decliners. Advancers were led by Level 3 Communications, Inc. (NASDAQ: LVLT) up 15.83%, Financial Bear 3x (NYSE: FAZ) up 15.50%, Medarex, Inc. (NASDAQ: MEDX) up 12.50%, Ultrashort Financial (NYSE: SKF) up 10.78%, Ultrashort Real Esta (NYSE: SRS) up 10.26%. Decliners followed Financial Bull 3x (NYSE: FAS) down 15.75%, Dryships Inc. (NASDAQ: DRYS) down 10.66%, Ultra Financials Pro (NYSE: UYG) down 10.50%, Las Vegas Sands Corp (NYSE: LVS) down 9.95%, Bk Of America Cp (NYSE: BAC) down 9.68%, Huntington Bancshares Incorpora (NASDAQ: HBAN) down 9.47%, Keycorp (NYSE: KEY) down 9.39%, Ultra Real Estate Pr (NYSE: URE) down 9.30%, Amer Intl Group Inc (NYSE: AIG) down 9.15%, Alcoa Inc (NYSE: AA) down 8.91%, Vale S.A. Ads (NASDAQ: VALE) down 8.41%, Fifth Third Bancorp (NASDAQ: FITB) down 8.04%, Palm, Inc. (NASDAQ: PALM) down 7.68%, Regions Financial Cp (NYSE: RF) down 7.02%, Wells Fargo & Co New (NYSE: WFC) down 6.95%, Yahoo! Inc. (NASDAQ: YHOO) down 6.90%, Research In Motion Limited (NASDAQ: RIMM) down 6.42%, JP Morgan Chase Co (NYSE: JPM) down 6.09%.

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Quote of the Day: “Develop your eccentricities while you are young. That way, when you get old, people won’t think you’re going gaga.” David Ogilvy

Today is: National Columnists Day.

Happy Birthday: Pharaoh Ptolemy XV, Alfred Kinsey, Alan Turing, David Ogilvy, Bob Fosse, Jun. Carter Cash, Clarence Thomas, Wilma Rudolph, Stuart Sutcliffe, Frances McDormand, Colin Montgomerie.

Today in History:

William Penn signed friendship treaty with Lenni Lenape Indians in Pennsylvania in 1683. John Jacob Astor formed the Pacific Fur Company in 1810. The U.S. Congress established the Government Printing Office in 1860. Christopher Sholes patented the typewriter in 1868. The Civil Aeronautics Act was signed into law in 1938, forming the Civil Aeronautics Authority in the United States. Convicted Manhattan Project spy Klaus Fuchs was released in 1959 after only nine years in prison and allowed to immigrate to Dresden, East Germany (where he resumed a scientific career). In 1969, Warren E. Burger was sworn in as chief justice of the United States Supreme Court by retiring chief Earl Warren. Sonic the Hedgehog, one of the most popular video game characters in history, made his debut in 1991 in his self-titled video game.

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