Market Bounces Amid Optimism Plan Gets Done

The odds of the big Plan getting done rose yesterday (on Intrade.com), and are higher again this morning. The market seems to be breathing a sigh of releif, although you know I am always nervous of a market that opens higher. Let's hope this rally holds into the close. The Dow is up +200 points as I write.

The market is higher despite some weak economic news. August new homes sales were down -11.5%, substantially below the -1.0% consensus expectations. Durable goods were also weak, falling -4.5% in August (vs. -1.9% consensus). Bill Gross said that the unemployment rate could hit 7% in 2009, which would not be good.

Nike (NKE) is +8% higher after reporting better-than-expected earnings last night. Bed Bath & Beyond is also higher despite reporting in-line earnings. But GE is trading lower after lowering its outlook for Q3 and FY08. The company also suspended its stock buyback program.

Asian markets were mixed overnight. The dollar is lower after a 2-day bounce. Oil is slightly lower at $105. The 10-year yield is higher at 3.84%. And the VIX is down -5% to 33.46.

The biggest gainers so far are the bank stocks (+2.26%), followed by drug stocks (+2.25%). Housing stocks are lagging, -0.30%.