Earnings Reports Continue to Buoy The Market

We got some additional good news this morning, and the market is picking up right where it left off last night, and rallying.

Lawmakers agreed on a bill to aid Fannie and Freddie, and those stocks are nicely higher. This is also helping to boost the housing index, which is up +3.66% currently.

Energy stocks are under pressure again, as crude oil prices are down further to the $127 level. Oil prices have now pulled back nearly -17% from their July 11th highs. On a technical basis, crude has also broken its 50-day support, while natural gas is testing support at its 200-day average.

Costco (COST) warned that its earnings would be "well below" consensus estimates, owing to high energy costs as well as some accounting charges. The stocks was down as much as -10%, although most other retailers are higher.

Other solid earnings reports came from Pfizer (PFE), McDonalds (MCD), Pepsi (PEP), General Dynamics (GD), and WellPoint (WLP). Wamu (WM) missed its estimates by a wide margin, but the stock is still up a bit, reflecting the change in sentiment regarding financials. A week ago, Wamu's report would have probably sank the whole market.

Asian markets were up across the board overnight, led by a +6% surge in India. The dollar is higher this morning vs. the Yen and Euro, and gold is lower. The 10-year yield is higher at 4.16%. And the put/call ratio opened at a very low level of 0.64. This could signal that bullishness is too high in the near-term, and the market might be susceptible to a pullback.