Early Look: France Joins The Bailout Parade

The markets are lower in early trading, but not materially so in light of yesterday's outsized advance.

Credit markets continue to show improvement, with the TED spread falling for the 7th consecutive day. Also, the Fed announced a new facility to improve liquidity for U.S. money markets, which are having difficulty selling commercial paper assets.

France said it will inject $14 billion into six of its largest banks. Also, the Bank of Canada cuts its benchmark lending rate by 25 basis points to 2.25%.

Asian markets were mixed overnight. The dollar is higher again, and has been up for 5 days in a row. Commodities are lower. Gold is down near $775, and oil is back down below $72.

The VIX came down -24% yesterday, a good sign. But it is still hovering around 53.4, a very elevated level. Until the VIX gets back down below 30, we should continue to expect big swings in the market, in both directions.

There were several more solid earnings reports this morning, including: 3M, Pfizer, American Express, Lockheed Martin, Schering-Plough, and Biogen. Semis are lower after Texas Instruments reported a larger-than-expected drop in earnings. Banks and brokers are higher so far.