Retail Rally Fades

Early morning rally fading as financials, retail and energy lead the markets lower.

Retail reports very mixed. Shoppertrak said sales at 50,000 outlets up 8.3% more than expected. Everyone agrees electronics sales have been strong, but past that it is a little murky.

JP Morgan noted that digital cameras, game consoles, GPS devices and gaming peripherals appeared to be the hottest sellers.

Other headlines are more subdued: Citi's analyst said excitement was lessened by early promotions; Piper Jaffray said "Traffic Steady But Baskets Light."

One thing for sure: retailers not bouncing. Bernstein noting this morning that the difference between analyst estimates for key retailers and the embedded estimates (the earnings based on where they are trading now) is very large: either analyst estimates must come down or these stocks have to move up.

Elsewhere: What is it with oil? All other commodities are down, but oil still sits near $100. How weak are other commodities? Look at the metals -- copper down 15% since beginning of October... lead down 5% over the last month... nickel down 30% since the late summer... zinc at two year lows...but crude oil still remains close to $100. Traders note a high correlation between base metal prices and industrial production, so the weakness in metals have a lot of traders nervous.

Questions? Comments?