Bank Worries Trump Economic Reports Today

The bank index is trading sharply lower again after Moody's downgraded the outlook for JPMorgan (JPM), and said it is reviewing Wells Fargo (WFC). These concerns are trumping some better than expected economic reports this morning.

First, jobless claims for the week came in slightly below expectations. Second, factory orders for January fell -1.9%, less than the -3.5% expected. And finally, the Monster Employment Index actually rose 4 points in February, halting the downtrend seen in that index since last October.

In overseas news, China's Premier reaffirmed its economy would grow 8% in 2009, as the govt. will step up its stimulus measures to ensure this. In Europe, the ECB cuts its benchmark interest rate 50 basis points to 1.50%, and the Bank of England cut its rate to 0.50%. This should provide more monetary stimulus to those economies, albeit it with the normal lag.

Last, Wal-Mart (WMT) bucked the trend and reported an increase in Feb. same-store sales. The stock is +4% higher. There is also chatter that GM is closer to Chapter 11 after its auditors expressed concern.

Trading comment: I sure expected more than a one-day bounce, but maybe today is just one of those "misdirection" days that keep most traders off balance. We are still very oversold, so that hasn't changed. I have not made any changes to our hedges today or yesterday.