Market Bottom Finally In Sight?

Are we at a bottom? Still not clear, but when you have rallies like yesterday, when you have Lowry, the oldest technical analysis service in the U.S., say to their clients, "The last two days appeared to represent a possible selling climax," you do get a lot of people nibbling, and today we are helped by Jamie Dimon and friends.

A Dow triple play--Coke,UTX,and JP Morganall beat expectations, but it is JP Morgan that is most important here.

We needed a follow-up after Wells Fargo helped ignite a rally in financials yesterday, and we got it from JP Morgan, which reported $0.54 vs. $0.48 expected (they reported $1.20 for the same period last year). No dividend increase, but Commercial Banking, Card Services, and Retail Financial Services were all up. Provisions for credit losses was $1.33 b, on the low end.

Mike Mayo at Deutsche Bank summed it up: "JPMorgan showed this quarter that it is one of the few financial firms

that are playing offense and showing revenue growth while many others are not."

JP Morgan up nearly 5 percent; Freddie Macand Fannie Maeboth us about 11 percent, Lehman up 9 percent pre-open.

To top it off, an important Northeast regional bank--PNC--also reported earnings well above expectations.

Elsewhere:

1) Futures also rose a few points when housing starts and building permits were both higher than expected.

However, a change in NYC building codes effective July 1st appears to have caused a spike in building; ex-Northeast the numbers are still weak. In theory, this is not bad news; we want fewer permits in order to work off the high level of inventory. Remember, Ben Bernanke said this week that stability in the housing market was the key to stability in the economy.

2) United Technologiesbeat and raised full year guidance.

3) Coke also beat, and even though volume in North America was flat, Eurasia and Latin America were both us 7 percent.

4) Continental up 4 percent, reported a loss of $0.25, half the loss of $0.48 expected. All right, a year ago they reported a profit of $2.10 a share, but it was still better than expected. Surprisingly, the company did note that it is comfortable with its forward bookings over the next six weeks. Remember, there are lots of capacity cuts coming from all the airlines. Offsetting this are the high jet fuel costs ($3.50 a gallon).

5) YUM! Brandsdown about 6 percent, as they reported earnings below expectations, large due to higher inflation.

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