A rather strange two days...the mantra all through January was, SELL THE EARNINGS...good or bad, sell the earnings.
Now, in the first two days of February, companies that beat earnings are trading UP and staying UP.
One thing’s for sure: there’s more going on than just the start of a new month.
Look at today's crop:
DR Horton ,
Ann Taylor ,
Archer Daniels Midland ,
Crown Holding ,
Emerson Electric ( — 52 week high!),
and Cummins .
All up today on earnings and commentary above expectations.
Why the change in sentiment? In order of importance:
1) strong ISM report yesterday and more positive comments on conference calls;
2) the Volcker rule and the TARP tax getting pushback from the Senate;
3) stocks oversold in January;
4) high levels of shorts in certain sectors (homebuilders);
5) Australia taking a pause in tightening implies other countries may take tightening slower as well.
Cynics (there are many around) note that the trading has been on relatively light volume; this implies that there is not big money being put to work.
Maybe. But if you don't notice that something is different the last two days, you're not paying attention.
More Market Views:
- Art Cashin: Oversold Stock Markets 'Entitled' to Bounce
- Traders' Market, Not for Investors?
- Big Banks 'in Pain' For Most of 2010: Strategist
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