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Tuesday's Midday Bounce

Stocks have rallied off their lows late in the day, partly on word that Senate Majority Leader Reid believes he has the necessary votes to approve the additional $350 billion of the TARP plan.

Financials: Once again, the Street can't figure out the numbers.

It's happening again: At the start of every quarter last year, traders in financial stocks got agita as they could not figure out if they had adequately accounted for losses; in every case, they continued to underestimate, financials dropped, then rebounded after earnings came out.

They're dropping again, but the list of worries is even longer now:

1) Credit losses (credit cards, commercial real estate)

2) Capital ratios under pressure

3) Lack of earnings visibility

4) Bank failure concerns

5) More dividend cuts looming

There are a few positives:

1) Deposits growing

2) Aggressive accounting charges may help on the upside if things turn around.

Pretty short list of positives, eh?

Another one drops guidance. CSX became the latest large company to abandon guidance. The good news is that it's not necessarily a bad thing to abandon guidance when no one--even the company--has any visibility. Providing guidance in this environment only serves to weaken credibility when the company misses or brings down numbers.

The bad news is that this leaves analysts and reporters with even less clue as to what to expect, and may well increase volatility rather than decrease it.

True, they're not the first. Our parent, General Electric, stopped providing guidance in December. McDonalds famously abandoned guidance in 2003, as did Coca-Cola in 2004, and Dell has also abandoned guidance.

I will keep an eye on this. Not willing to call it a trend yet.

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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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