The search for the elusive bottom continues, but stability is foremost on everyone's mind. That's what we have been getting for the past couple days, and into this morning: the S&P 500 has swung in a roughly 10-point range this morning, downright quiet compared to the prior two months.
And the beaten-up market certainly has room for modest moves up. A good example is Oshkosh, which makes heavy duty vehicles for the fire, construction and defense industries. This morning they beat expectations for their fourth quarter, but also announced they were cutting 10 percent of their workforce, and that 2009 fiscal earnings would be below expectations.
None of this sounds good, but the stock has gone from $30 in June to $7 and change. Beating earnings expectations through September is still worth something, and the stock is trading up 15 percent pre-open.
Still, there is still little enthusiasm for a major rally; traders note that corporate and insider buying remains on the weak side.
Elsewhere:
1) Two largest banks in Brazil merge: Unibanco being bought by Itau, the combined bank will now have assets of roughly $265 b, making it the largest bank in South America. Unibanco up about 16 percent pre-open (it trades in the U.S. under the symbol UBB).
2) Circuit City will close 155 of their 712 stores, about 27 percent of their stores. Their vendors are setting more restrictive terms, including in some cases requiring payment befores shipment.
3) Delayed IPOs: 1) KKR and 2) AMC Entertainment. Eighty-one IPOs have been withdrawed this year, according to Reuters, and there have been none in the past three months.
4) Ethanol producer Verasun down about 70 percent after filing for bankruptcy on Friday, due to a failed hedging strategy that saw them lock in costly contracts for corn. They are trying to stay in operation through debtor-in-possession financing.
- Fed Rate Must Not Be Low for Too Long: Lacker
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