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Is "Less Bad" Becoming "Much Less Bad?"

Futures popped about 10 points when the ADP report, at a loss of 491,000jobs for April, was well below the loss of 645,000 expected. March had a loss of 742,000 jobs, so the rate of loss is definitely slowing....faster.

Bullishness is increasing, bearishness is decreasing...and that is bad news for stocks. I said yesterday that my biggest worry is the increase in bullishness I have seen in the last week or so.

Today, Investors Intelligence reports that bulls are 40.4 percent of financial newsletter writers they survey each week, while only 37.2 percent are bearish. That is the lowest level of bearishness since June of last year.

High levels of bearishness in rising markets is very desirable, since it means a large number are still skeptical of the rally. Bull markets slow down when bullishness increases and usually die when bullishness is at its peak.

Bulls will say these worries are way premature; there is an ocean of money on the sidelines and sitting in bonds that can still come into stocks.

Elsewhere:

1) Bank of Americaup 5 percent on huge volume, on reports it may have a $34 billion capital shortfall. As we have pointed out, this DOES NOT mean that B of A has to go out and raise money. What they need is common capital. Do they sell assets, convert preferred into common, go out and raise it?

Citigroup has noted that B of A already has $33 billion in non-cumulative private preferred stock, so they could convert that and put the whole issue behind it.

They also have the potential to sell assets, including ICBC, a Brazilian bank, and other assets.

While this is not great news (converting preferreds is certainly dilutive), consider that this drama will be over shortly, and the reduced uncertainty may well be a benefit to the stock.

This morning Citigroup raised B of A's price target to $14, after closing at $10.80.

2) Dow component The Walt Disney Companyis up 6.5 percent in pre-market trading. Despite a large 46-percent drop in profits, results managed to beat analystforecasts by 3 cents.

Revenues fell 7 percent, led by weakness at its theme park (revenues down 12 percent) and studio (revenues down 21 percent) units. Those declines, however, were somewhat offset by the 2 percent rise in revenues at its television networks, with good results out of cable networks ESPN and Disney Channel.

While CEO Bob Iger said "it is too early to make predictions about the timing and pace of (an economic) recovery," he saw "some sign the economic downturn has stabilized."

3) These margins stink! Fertilizer company Agriumtrades 3 percent lower pre-open after it saw results fall short of Wall Street estimates. Margins were strongly pressured by "significant" drops in nitrogen and phosphate prices in addition to weak fertilizer demand.

However, the company's CEO expects demand "to recover in the second half of 2009."

4) Shares of Dow Chemicalare 2 percent lower pre-open following its announcement of $1.625 billion stock offering. Most of the capital raise will be used to help Dow pay down the $9.2 billion in loans for the pending Rohm & Haas deal.

5) The Mortgage Bankers Associationsaid purchases rose 5 percent after 3 weeks of declines. Refinancings rose 1.2 percent. Still pretty small numbers.

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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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