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BEHIND THE MONEY: Financials Still Dictating Where Whole Market Will Trade

BEHIND THE MONEY: Financials Still Dictating Where Whole Market Will Trade

Many of us were wondering this morning how the market could possibly be trading higher in the face of an incredibly dire warning from Caterpillar, another round of monster job cuts and a 5 percent-plus drop in Pfizer on a perceived ill-fated merger.

The answer...the Financials. After Barclay's (keeper of Lehman) said in London that it didn't need anymore capital, the banks stocks, including Bank of America, caught a bid.

But lo and behold after the financials, as measured by the Select Financials SPDR ETF , fell into the red at 1:37 pm, the whole market promptly followed, with the S&P 500 going red around 2 pm.

We pointed out last week that the financials at their height, made up more than a fifth of the total value of the S&P 500. Today, the sector's market value is just 12% of the benchmark index. But what they've lost in mathematical weight, the stocks have gained in emotional weight. Recent behavior suggests that without a sustainable bottom in the financials, the market will have trouble making any headway.

SIDE NOTE: We'll take a moment in tonight's show to talk about a different kind of finance...Microfinance. The father of this movement and Nobel Prize Winner, Dr. Muhammad Yunus, will explain his vision to the Fast Money guys: bringing a business approach to alleviating poverty by treating credit as a fundamental human right. After seeing capitalism do so many destructive things in the last year, it will be nice to see how it can still do some good.

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