What happened to our rally? Stocks rallied going into the vote. The rescue bill passeda little after 1 pm ET, floor traders broke into applause and then spent the next half hour processing sell orders.
What happened is that that traders executed the only trade that has consistently worked this year: sell into any rallies. To boot, there were actually modest profits in the major banks this week, as JP Morgan, for example, closed yesterday at a 52-week high.
The attacked along predictable lines: sell financials, then consumer discretionary stocks like Macysand Whirlpooland Lennar, and airlines.
Adding to the difficulty is the fact that credit markets have posted only modest improvements today.
The good news is that the Ben/Henry Capital Management team is now open. Well, not open, but they are moving in the furniture, and they have a $350 b check.
The question is, what's the bid-ask for this stuff? It's not all the same stuff, of course, but Merrill was disposing of stuff at $0.22, other firms were selling in the mid to high $0.60 range, so let's call it 22 bid, 55 ask for starters.
That means those deposits will have real value now, and Wachovia'svalue has increased in the past two weeks.
Where's the bottom in housing? The Wells Fargo Chairman, on our air, said people will be surprised at how fast money comes into housing industry after it hits bottom. Sure didn't help housing stocks today.
Next week, economic news is light, but it's earnings that will matter. After the close on Tuesday: Alcoa. Before the open on Friday: our parent, General Electric.
For the week: Industrials down 7.3 percent, Transports down 12.8 percent, S&P 500 down 9.3 percent, NASDAQ down 10.7 percent.
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