Market Wrap: Late Day Rally Trims Losses

The market was down pretty big midday, and with the weekend looming, it looked like it could get ugly. But a late day rally brought the market off of its lows. The S&P 500 finished down -0.84%, while the Nasdaq closed -0.36%. I suppose it could have been worse, given the poor jobs data.

Investor anxiety was high all day. The ISEE closed at a terribly depressed level of 65, which is the equivalent of a put/call ratio of 1.53. That's a lot of pessism. For those folks who have said that pessimism isn't as high as previous corrections, I would point out that the 10-day ISEE just hit a new all-time low today, at 87.

I suspect that a lot of the buying late in the day was short covering, as people covered their shorts ahead of the weekend in case there is any surprising good news. There was chatter about an emergency Fed rate cut, but I don't think we will see one.

Banks, brokers, and semis actually finished higher on the day, while energy and commodity stocks lagged. Commodity stocks have been up so much, that they were overdue for a bout of profit taking.

The market is pretty oversold at these levels, and should bounce. But it is hard to see what that catalyst is that makes it bounce. Maybe the Treasury can come up with something creative to help the ailing housing market. Wishful thinking? Prolly.