Why the rally? Let me count the ways:
1) Stocks oversold (financials in particular over-shorted).
2) Oil drops(helping overall market).
3) Wal-Mart does not lower guidance for the fourth quarter (retailers rally).
4) Sept. pending home sales, a measure of contract signings of existing homes, rose a better than expected .2% vs expectations of a drop of 2%. 5) Banks and brokers, speaking at the Merrill Lynch conference, generally reported good news.
The last point is key. Jamie Dimon at JP Morgan said "We're fine" on CDOs and subprime exposure, B of A's CFO said losses in mortgages were "manageable," and Goldman Sachs CEO said there would be no significant asset write-downs.
Tomorrow: can Macy's follow through with Wal-Mart and affirm its Q4 guidance?
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