Trader Talk

Pisani: Markets Need to 'Calm Down'


So we are approaching the end of the earnings season, earnings are better expectations, but the market is not reacting as well as it did in July, when earnings were also beating expectations.

Technical talk this morning is full of comments punctuated by "Bear Confirm" and "Bull Top" as the percentage of stocks above their 10- and 30-week averages on the NYSE and NASDAQ has begun dropping notably.

Despite this gloom and doom talk, we are only 3 percent off our recent highs! The average correction since the March lows is 4 percent! Calm down!


1) SAP is down 8 percent after its Q3 results missed expectations and its full year revenue forecast was cut. Earnings and revenues for the past quarter fell short of estimates as the German business software maker saw weaker demand in emerging markets and Japan.

As a result, the company now expects 2009 revenues to fall 6 percent-8 percent compared to its prior expectation of a 4 percent to 6 percent decline.

2) Ashland (ASH) up 14 percent beat on top and bottom line. "Demand appears to be showing some signs of growth in many end markets."

3) Shares of International Paper rise 3 percent after Q3 earnings and revenues topped estimates as "modest improvements in demand" in some paper and packaging operations helped.

Despite the better-than-expected results, sales were still 13 percent below last year's levels. While industrial packaging sales were only down 4 percent, weak revenues from printing paper (down 18 percent) and distribution (down 20 percent) continued to weigh heavily.

4) Allied Irish Bank and Bank of Ireland down on worries that plans to create a "bad bank" could be delayed.

5) The Mortgage Bankers Association reported mortgage applications fell for the third straight week, slumping 12.3 percent in the last week despite the 30-year mortgage rates remaining steady at just over 5 percent.

Refinancing applications dropped 16.2 percent to a two-month low while purchase applications fell 5.2 percent to their lowest level since May as the looming expiration of the first-time homebuyer tax credit weighed.

6) It's been a tough couple months for IPOs, but Vitamin Shoppe priced above its offering: 9.1 million at $17 a share, above the price talk of $14-$16.

More importantly, a much bigger deal should price tonight: AEI , which operates power and natural gas infrastructure in Latin America, Europe and Asia, is looking to raise about $750 million: 50 million shares at a price range of $14.00 to $16.00.



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