Stocks Need A "Mild Push"

The good news: yesterday's volume was about the heaviest we have had all month, and the selloff in energy and materials was long overdue. The rotation into financials was much more debated, however. The skeptics asked, has the systemic risk of owning financials really been reduced thanks to all the capital raising and writedowns?

Also, note that the S&P gave up nearly half its gains in the last hour, and more importantly could not crack the old February highs.

So we need some mild push here--dollar continues to strengthen, bonds weaken, and a modestly positive day for stocks.

Elsewhere:

1) AmEx up about 4 percent as they beat, but again there was slower spending growth in the U.S., up 8 percent, but excellent strength in international, up 21 percent. Management reaffirmed its EPS expectations for 2008 of 4-6 percent growth over 2007. However, loan growth slowed, and loan loss reserves rose because there was an increase in delinquencies and write-offs. So even though it was a good report, most of the commentary is fairly cautious and nobody is raising guidance.

2) Speaking of international, Goodyear Tire beat, and here too international shined: North American sales decreased 1 percent, while Europe, Middle East and Africa hit a record, increasing 16 percent; Latin America also clocked record sales, up 29 percent. Up about 6 percent pre-open.

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