The major indexes declined for the second day following news that failures of prime mortgages in the real estate market are rising. The Dow lost 93 points, the Nasdaq declined 36 and the S&P 500 fell 14. Only three of the Dow's 30 components gained ground. Volume was light and declining issues outnumbered advancers by almost four to one. Following a downgrade of Intel's shares (INTC), semiconductor stocks led the retreat with a decline of 3%. The prices of Treasuries strengthened while gold futures edged higher by 0.09% to $1,142.20 an ounce. The price of crude oil on the New York Mercantile Exchange lost 2% to $77.46 a barrel.

In Earnings News

- Sears Holdings announced earnings improved from a loss of $1.16 a share one year ago to a loss of $1.09 a share in the latest quarter. The company, which owns the Sears and Kmart department store chains, said the improvement is the result of cost-cutting measures and growth of 0.5% in sales at the Kmart division, which hasn't experienced an improvement in sales in four years. Still, the price of the shares (SHLD) lost 3% in today's session.

- Following the closing bell on Wall Street, Dell reported earnings of 23 cents a share in the latest quarter, which was 5 cents a share below Wall Street's expectations.

In Other Business News

- The Conference Board announced its Index of Leading Economic Indicators, which attempts to forecast the strength of economic activity in a period of three to six months in the future, grew by 0.3% in October. The Index grew by 1% in September and economists were expecting somewhat greater expansion of about 0.5%. The slow expansion in October appears to confirm concern that economic recovery could be sluggish.

- New claims for jobless benefits were unchanged at 505,000 last week according to the Labor Department. However, the four-week running average of initial claims fell for the 11th consecutive week reaching 514,000, the lowest level in almost a year. The level of new claims, while it is slowing down, still indicates that the economy is losing existing jobs faster than it is creating new jobs.

- The International Monetary Fund said the U.S. dollar would remain the world's primary reserve currency for many years or even for decades. During the recent financial crisis, there has been some speculation that the dollar might be replaced as the world's preferred reserve currency. "During this last financial crisis, people actually found the dollar a safe haven and preferred to move into dollar assets when risk aversion was very high," a spokesperson said. "That suggests there's very solid demand, based on the U.S. economy's strength and size and liquidity of its financial markets."

- Testifying before Congress, Treasury Secretary Timothy Geithner urged Congress to quickly pass financial regulatory reform, saying that the largest companies should be regulated by a single strong regulatory body. "The regulation of the largest, most interconnected firms requires tremendous institutional capacity, clear lines of authority, and single-point accountability. This is no place for regulation for council or by committee," he said.

- Pinnacle Brands, which is owned by the private equity firm Blackstone Group, announced it would acquire Birds Eye Food for $1.3 billion from a group of private owners including a New York agricultural cooperative. A spokesman for Pinnacle, which already owns Swanson (frozen dinners) said the deal "creates a leader in both the frozen and shelf-stable business segments."

- For the second time in 15 months, a computer failure in Salt Lake City forced widespread disruption and delay in the landing and takeoff patterns at the nation's airports. Senator Charles Schumer of New York said the nation's airport system is "in shambles" and called for more federal funds to upgrade the system.

*****

Why are we so darn sure we're right all the time, even when evidence piles up that says we're wrong? In an article called "How to Ignore the Yes-Man in Your Head," The Wall Street Journal reported last week that we are all vulnerable to what psychologists call "the confirmation bias," which is a tendency to see only evidence that confirms what we already believe and to rationalize away evidence to the contrary. (The Journal related the confirmation bias to investing and quoted money managers who admitted to hanging on to bad choices against the weight of the evidence.) According to the report, psychological studies made with 8,000 participants confirm that people are "twice as likely to seek information that confirms what they already believe." Not only that, but The Journal quotes one psychologist as saying: "We are very good at thinking up post-hoc explanations of why our predictions didn't work. We interpret our failures as near misses." Concludes the report: "Your own mind acts like a compulsive yes-man who echoes whatever you want to believe."

Interesting concept: A little, built-in Yes-Man. Come to think of it, I may have sensed at times there's someone up there cheering me on – a little booster guy in my skull – faithful, loyal, and dependable, too. A real team player, but with a good little mind of his own, of course. And this guy, we'll call him "Yes-Man," is different from my conscience, who resides somewhere else. (In my heart?) My conscience – let's call her Granny – is more like my 7th grade teacher…stern and hard to fool. I wonder, do these two ever argue when I'm not listening? And when things get contentious, I guess Yes-Man sides with me against Granny and it's two against one, which is unfair, of course, and may be the reason why I sometimes do things I shouldn't. I wonder what would happen if Granny and the Yes-Man ever ganged up on me? Not likely, since Yes-Man has no spine.

Now here's where it gets complicated: Other people like to weigh in on my decisions, too. My kids, for instance usually side with Granny, bless them, but my wife Kathy is less predictable. And then there's the family dog, Billie: Because I walk her, feed her, and discipline her, whatever I decide is fine with Billie. Then there are my siblings, friends, etc. When everyone weighs in at once – Kathy, the kids, Billie, Granny, friends, and relatives – it feels like Congress is in session in my brain – very noisy, very confusing. And I figure I'm up against the entire federal government; I need a good Yes-Man. Am I right?

"Of course you are right, Peter. Right as rain, as always."

Thanks. Wha…? Hey, who said that?

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