A Rally, but Some Stocks Hampered by Oil

Most stocks are recovering today after a drubbing earlier in the week, but some are not...with good reason. Because if $100 oil is the new normal, there's a whole new round of cost hikes and margin squeezes coming.

Take Helen of Troy , down 2.3 percent today. They make personal care products (think Vidal Sassoon, Revlon, Helen of Troy) and appliances...they use large amounts of resin (plastics), a petroleum byproduct. Wedbush estimates a 5 percent increase in plastic resin prices would take $0.16 off annual EPS...they are only going to make $2.81 for the current fiscal year ending in February.

Airlines are up only fractionally today. Jet fuel prices are up 20 percent in the last two months, analysts note. Numerous price hikes may hurt demand and capacity. Note also that aerospace giants like Goodrich are also up only fractionally.

On the other hand, companies that have Fuel Surcharge Programs (like railroads)...may be in much better shape. "The rails feel the pain from price spikes in the short-term, but FSC programs smooth the volatility and, over time, end up eliminating most of the fluctuations in fuel costs," UBS wrote in a note.

Why are financials outperforming today (I have been asked on numerous occasions)? I'm afraid there is less here than meets the eye.

1) financials — particularly regional banks — are short favorites. This week, the short were put back on, and are now being taken off.

2) a few got analyst upgrades today: Fifth Third from FBR ("should be in a position to return capital to shareholders at a higher pace than most banks over the next two years) and Wells Fargo from Goldman, who noted that WFC could surprise with both a dividend and a buyback.

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