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Investors are using the morning strength as an opportunity to pare back risk, despite signs that Bernanke will be reconfirmed.   High beta names are particularly weak as the tech heavy Nasdaq is in the red and the Russell 2,000 loses more than 0.5%.  Dow futures were up well over 100 overnight despite selling in Asia where investors continue to worry about the sustainability of the recovery.

Existing home sales disappointed to the downside this morning as sales fell 16.7% versus last month.  Total sales were 5.45M vs expectations of 5.9M.  The negative seasonal trends continue despite massive government aide.  Prices increased 5%, but supply remained high at 7.2 months.   The housing market remains very weak.

Earnings were light this morning, but the indices are getting a big boost as investors buy shares of Apple which now makes up over 15% of the Nasdaq 100.  Shares are up 2.5% ahead of this afternoon’s earnings report which is likely to mirror past reports – a massive beat with a sandbagging that continues to confound analysts.   Eaton corp reported earnings this morning and continues to see tepid signs of a recovery.   They reported better than expected numbers and raised their guidance.  They feel that they are well positioned following the cost cuts of the last year.  Eaton’s CEO, Alexander Cutler sees improving visibility in the coming year:

“Our forward visibility is improving as the global market conditions have stabilized and are beginning to improve.”