The Pullback That Was Overdue

The market seems to be pulling back from its extended uptrend and overbought condition. You can look at the headlines (PPI) and blame it on that, or you can just accept that this pullback was overdue. Of course, it's still early, so we will have to see how the market closes.

Despite what looked like a big headline inflation figure (+0.6% vs. +0.2% consensus), the yield on the 10-year is dropping, down 5 bps to 4.74%. Go figure.

The Nasdaq and tech stocks are taking it on the chin, with several downgrades ahead of earnings season. Tonight we hear from YHOO, INTC, IBM, etc.

In other news and notes:

• Are you still pretending you don't watch The Bachelor?
• NCC beats EPS by 11 cents
• UTX beats by 3 cents, raises guidance; stock down
• EMC to cut over 1000 jobs
• MER beats EPS handily, ups stock buyback
• CME announces merger with CBOT for $8 billion
• ICOS being bought by LLY
• BWNG being bought by LVLT
• JNJ beats EPS and revs; stock up
• Net foreign purchases = $116.8 billion vs. $53B consensus
• NVR misses EPS, lowers guidance

long JNJ, UTX