What Happened To Market? Financials Run Out Of Steam

If you're wondering what happened to the stock market today, it's simple: financials are running out of steam. Yes, Bank of America had a great report, but we are now going into a whole raft of lesser-quality financial names in the next two weeks (I'm talking regional banks) and that clearly has the Street nervous.

On top of that, where's the support from the rest of the market? Techs, consumer staples and telecoms have done nothing for several days. Last week's move up in retailers, autos and home builders also lasted two days (Wednesday and Thursday) and then died.

Skeptics correctly point out that last week's trifecta of news (bank earnings above expectations, new limitations on naked short selling for select financials, and the Fed/Treasury helping out Fannie/Freddie), primarily benefited financials. What's changed for everyone else since then, skeptics ask? Not much.

Finally, skeptics point out that there may still be tougher times for financials...not just writedowns, but there has been a lot of talk about a Financial Times article over the weekend quoting Sheila Bair, FDIC chairman, that it is "likely" they will be raising premiums for deposit insurance due to the FDIC takeover of IndyMac.

Some are calling this a "stealth tightening" because it increases costs and lowers the amount of money that could be lent out.

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