Consumer Confidence Low, As Expected

Yesterday, the market rallied nicely into the close. Today, the market got a small bounce at the open, but the Consumer Confidence report took some wind out of the market's sail. It was reported at 87.9, down from 90.6 in December.

There were some solid earnings reports last night and this morning from American Express, 3M, EMC , etc. The big disappointment was VMWare (VMW), which lowered guidance just a bit but its highflying stock got crushed.

The Fed is starting their 2-day meeting today, with the announcement on rates coming tomorrow. Currently, the fed funds futures imply a 76% chance of a 50 basis point cut, although that might have gone down after this morning's durable goods report, which was better than expected.

Asian markets bounced back overnight from their large losses on Monday. Bond yields are firm, with the 10-year yield up 7 basis points to 3.65%. Oil is flattish, just below $91, but the energy sectors is firm. Retail stocks are weakest so far, followed by semis.

Tech has lagged so far this year while last year's laggards, retail and financial, have been the strongest. Those sectors were certainly due for a bounce, but I am skeptical that they can continue to lead the market intermediate-term.