Simply put, there is still too much negative sentiment - and sideline money is afraid to step in.
What's happened this morning:
1) Shorts attacked along the usual lines: wait until 10 AM ET, then press financials. One important point about today: the volume is not nearly as strong as the middle of the week, so shorts are showing signs of exhaustion.
2) Right after 10 ET, real estate investment trusts (REITs) were under pressure as Standard and Poors cut credit ratings on two REITs (Camden Property and First Industrial), and put 9 others on watch for possible cuts...concerns over tenant stress for retail properties, impact of the recession on apartment fundamentals, etc.
3) Techs were also weak this morning, with Google and IBM both downside standouts
4) The final downside push came as GM began a late-morning slide to move below $1.60.
Despite the inability to rally, some are insisting we are groping for a bottom. They cite:
1) Payrolls: awful, but bottom around 600-650,000 the past four months
2) Commodities showing signs of a bottom
3) Housing starts well below household formations
4) Both the TALF and the stimulus plan will come on in the second quarter
5) Some insiders buying stock, including our parent company GE , Wells Fargo , and Bank of America .
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