Stocks improved midday as oil could not hold its gains, but gave up much of the gains toward the close. Three stocks advanced for every two that declined.
Airline stocks, which are now microcaps (United has a market cap of about $800 m), gyrated all over the place; United moved in a 12 percent trading range.
After a month of having the stuffing knocked out of them, financials traded a bit better. The Lehman conference call went as well as could be expected, with a lot of detail.
Speaking of Lehman, you wonder why analysts drive me crazy? How about Guy Moszkowski at Merrill Lynch? The banking analyst downgraded Lehman when it was about $24 on Wednesday and upgraded it when it was about $33 in the beginning of June. So what happens? It is closing today at $27 and change; that call was the short-term bottom.
In fact, it might be possible to use analysts as contrarian indicators. Have you noticed how many analysts have suddenly gotten all gloomy over their space, even though they have taken down numbers? The theory here is that with the exception of a small group of aggressive analysts (perhaps 10 percent of the total), most analysts are slow to change their worldview; when many begin doing it all at once, it's a sign of capitulation.
Today a number analysts issued gloomy reports on their universe, even though prices are down significantly. For example:
--UBS noted that a 50 percent decline in KeyCorp'sstock in one month (!) "doesn't necessarily imply KEY is cheap;"
--JP Morgan seems convinced that a weak consumer and rising steel prices will cause Whirlpoolto miss or lower guidance;
--Unilever,Danone and Cadbury were downgraded at UBS, citing slowing growth in emerging markets;
--UBS downgraded AT&T and Verizon, saying the weak economy would hurt wireline and broadband.
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