Som midday observations:
1) Despite being grilled on the weak dollar, higher inflation, and the subprime crises and what he is doing about it, Bernanke has said little new. He says that economic activity has remained "resilient" but that "financial market volatility and strains have persisted." He seems to want to keep all his options open for December.
2) The Big Mo stocks getting hurt here. Blame it on Cisco (which said international was strong but the U.S. enterprise part of the business was weak--they did not raise guidance), but techs with the big momentum buyers in them are weak today. Google and Baidu down almost 5%, Apple down 2%, IBM down 4% for second weak day.
3) Airlines a mess. Many down nearly 20% in last six trading sessions. UBS summarized the problem in a note this morning: "Outside of hopes for industry consolidation, we find no compelling reason to own the US airline stocks right now. Fuel prices are well above what analysts are forecasting and we expect demand to soften. This could make fare increases more difficult going forward. EPS ests are at great risk, particularly Q4 and early 2008."
4) Retail:U.S. retailers missed October same storesales expectations again (second time in as many months). However, it is guidance that matters most, and here there were some surprises, with companies like Pacific Sunware,New York & Co, Talbots, the Gap,Aeropostale, and Gymboree guiding higher. Ann Taylor and Chico's guided lower; Chico's at a 4-year low.