Treasury Extends TARP Funds To Life Insurers

In a move that is not all that surprising, the Treasury is extending the availability of TARP funds to life insurance companies that qualify as bank holding companies. Details have not been finalized, but the insurance stocks are rallying on the news, and this should help the group avoid further ratings downgrades which have been rolling in.

Yesterday's TALF auction by the Fed drew less demand than expected, which is a slight negative. The minutes of the last FOMC meeting will be released at 2pm, but I suspect most already know that the Fed governors will likely have made comments about further economic weakness.

There is also a meeting going on right now with the SEC about the uptick rule, so we should expect some comments to come out of that meeting with the potential to move the market. The SEC chair said she is under severe pressure to revisit the uptick rule and modify it in some way.

Earnings season kicked off last night with Aloca (AA) and Mosaic (MOS). Both commodity-related companies missed consensus estimates and their stocks are lower. Conversely, value retailers Bed, Bath & Beyond (BBBY) and Family Dollar (FDO) beat expectations, and their stocks are nicely higher (BBBY is up huge).

Also, in the housing industry Pulte Homes (PHM) will merge with Centex (CTX). This type of consolidation is healthy, and good for the housing industry overall.

Asian markets were lower overnight; the dollar is mixed so far; oil is trading lower, while gold is slightly higher; the 10-year yield is lower at 2.87%; and the VIX is also lower near the 40 level.

Trading comment: I used the brief dip this morning to start adding to some of my long positions (SSO), and will likely look to use any further weakness today to add more. I was hoping the S&P 500 dipped closer to 800, but maybe 814 is all we are going to get right now. I am looking for another push higher, but realize this rally could need a bigger breather sometime in April considering we are already 4 weeks off the bottom.

long SSO