The latest robust market surge is over, and the pros tackled the question of where we are in the rally, and what it's going to take to bring back the bulls on a more permanent basis. Strength in financials and in the consumer sector will be necessary for more substantial recovery, and there was general agreement that although the earnings season that begins tonight will be terrible, it has already been discounted.
Consolidation under way; earnings likely to disappoint
Alan Gayle of RidgeWorth Capital Management said the market is undergoing a consolidation after four weeks of rallying (25 percent in the S&P 500). With a limited amount of economic data coming out, the focus is on earnings, and there's little question that it will have been a tough quarter. Wachovia's Mark Vitner said he expects that after some encouragement in February, business weakened again in March. It will be a very long road out of the recession. Retail sales were deceptive, because the holiday shopping season was so soft that they didn't have far to fall.