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Rate Cut Big Help Or Not?

S&P futures have been positive only briefly late in the morning, however there has again been a 40-point swing from the high to the lows. Bottom line is that pre-open volatility continues.

Futures got a brief pop on a surprising durable goods number (up 0.8 percent, vs. expectations of a decline of 1 percent), however August was revised downward.

Oil is up 6 percent, its biggest gain in a month, on a weaker dollar. Other commodities are also rallying: silver up 10 percent, copper up 7 percent. Commodity stocks, however, are only up modestly.

The Fed is expected to cut rates by at least 50 basis points, even though most agree a cut in rates is not going to be a big help in this environment.

    • Fed Prepares to Cut Rate to Fight Financial Crisis
    • Poll: How Much Should the Fed Cuts Rates

Elsewhere:

1) Earnings:

--The good news on earnings is that both P&G and Kraft came in essentially in line with expectations, and both affirmed their full year guidance. The bad news is that much of the gain came on price increases rather than volume growth. Procter and Gamble emphasized their double-digit growth in developing regions. Organic sales, which exclude the impacts of acquisitions, divestitures and foreign exchange, were up five percent for the quarter.

--Corning, the biggest maker of glass for liquid crystal display (LCD) televisions, said earnings in the current quarter would be well below expectations. Volume in the upcoming quarter is expected to be down 10 to 20 percent.

A restaurant boosting guidance? Huh? Denny'sdid it...stock is up almost 50 percent pre-open (bear in mind it closed yesterday at $1.28)

2) Our parent General Electricup 3 percent and Siemensup 11 percent pre-open as Iraq's electricity minister said they are expected to sign deals with both companies worth between $7 billion to $10 billion.

3) Mortgage rates remain well over 6 percent (6.26 percent, vs. 6.28 percent last week)...this is one area where lower rates would be a real help.

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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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