Pressure On Financial Sector Weighs On Market

The market is opening under a lot of selling pressure today. There were some high profile earnings reports that certainly didn't help, but dont' discount the pounding that the financial sector is taking.

Google (GOOG) missed earnings by a bit, and the stock is down over -5% today. I am not worried longer-term, as most of the miss was due to high spending at the company associated with massive hiring. I think if they slow hiring, they can beat estimates again going forward.

Microsoft (MSFT) reported in-line results, but that was not enough to keep the stock from selling off. And CAT missed its earnings which is really hurting its stock today. So all of these earnings reports are not helping the market today.

But beyond that, there is a concerted effort by the bears to knock down the financials. The brokers are under the most pressure, because the bears know that many investors look for the financials as a sign of strength in the overall market. So if they can knock that group down, they can shake the faith of the bulls and maybe get the whole market going lower.

We've seen this whole campaign at work in each of the last few summers. How did those play out? The bears' put up a good fight, and each time a selloff ensued. But after pressing their bets, the market eventually bottomed and went on to reach new highs again. I would not be surprised to see this episode unfold in similar fashion.

long GOOG