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Stocks Down But Bulls Shouldn't Cry

No love from the stock market today, and frankly, not even the most rabid bulls (and I am bullish) can complain. Think about it:

--September retail sales were even worse than was thought; many retailers lowered earnings;
--energy stocks lowered earnings yesterday.
--financials lowered earnings last week.
--third quarter S&P 500 earnings estimates have gone to ZERO (the lowest in five years).
--and the Dow and the S&P are at new highs???

Never mind the "it will all be better in Q4" argument. There is a bit of a disconnect here, and on a day like today--where you had low volume and low volatility for most of the day and the contradiction of poor earnings and stock indices at new highs--it's little wonder you get short, sharp corrections.

The correction is rational too: the sectors that had the biggest gains recently--techs, materials, energy--were the ones that had the most notable profit taking.

Techs were a particular mess. Blame some of this on the analysts: as one trader noted to me, this tech carnage is what happens when all these analysts keep raising their price targets without raising their estimates, instead of just downgrading on valuation like they used to.

Stocks like RIMM, Apple, Google, Baidu, and Amazon had momentum-driven price target raises this month. Rimm down 7%, Apple down 3%, Google down 1%, Baidu down 10%, Amazon down 5%.

Symbol
Price
 
Change
%Change
VOW3
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BIDU
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GOOGL
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BB
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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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