Market Bounces, But Freddie Weighs On Financials

The market closed basically at its lows yesterday, and this is a patter we need to see reversed. Yesterday's decline wiped out Friday's gains, but did not take out last week's lows. The Nasdaq again found support at its 200-day moving average, while the S&P 500 is well below its 200-day.

Asian markets bucked weakness in the U.S. yesterday and closed mostly higher. Also, HPQ and Nordstrom (JWM) both reported better-than-expected earnings last night. This helped our futures point to a much stronger open early this morning.

The market did open higher, but a report of large losses from Freddie Mac (FRE) dampened the enthusiasm. It is also weighing on the financial sector, for a change, right?

FRE recorded losses for the quarter totaling $2.7 billion. They also said they are considering reducing their dividend, and have hired investment bankers to look at capital raising alternatives. Fed, are you listening?

Oil is back up above $96, which is giving a big boost to the energy complex. Also, XOM got a nice upgrade to Buy from Neutral at UBS. And the 10-year yield is still very low at 4.10%, up slightly on the day.

long XOM