Why are stocks up today? You can thank the long reach of Fed Chairman Ben Bernanke. Love him or hate him, love QE3 (quantitative easing) or hate QE3, Mr. Bernanke has gotten good at this game.
Mr. Bernanke said the Fed "remains prepared to do more" to help the economy should there be further deterioration. We don't know what will trigger QE3, but it's clear it's still out there.
By any rights, we should be down today:
1) the euro was weak going into our open,
2) initial jobless claims were disappointing for a second week in a row, and
3) for the first time this earnings season we had several high-profile misses (ExxonMobil, UPS, Waste Management, Aetna).
But midday, the Dow is up 60 points. You know my rule: don't yell at the stock market. Don't tell it that it should be doing something just because you think so.
But, damn. We should be DOWN 60 in the Dow, not up.
The better March Pending Home Sales number helped, and excellent order growth from big builders Pulte and Ryland are making everyone more comfortable with the idea that the publicly traded builders are capturing more market share, which explains why their numbers are good, even while "official" sales numbers for New and Existing Home Sales have been somewhat disappointing.
But here's two warning signs: 1) Transports are DOWN 1.6 percent (only 4 of 20 components are up), and 2) the bond market is having another rally, with 10-year yields near the lowest level in a couple months.
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