Tuesday featured a strong early morning rally on the back of Dow component HPQ earnings and more hopes for interest rate cuts. Then more financial sector reality and Fed minutes hit the tape and markets quickly retreated. With the August 16th low at hand, bulls bid the headline indexes higher in the last half hour.
But breadth was terrible for an “up” day and the below table may need some updating:
But aside from HPQ and shenanigans to defend important support, the overall news was terrible. Target posted crummy and worse than expected results, oil reclaimed much higher prices, the dollar faded further as gold rose, Freddie Mac and Fannie Mae stocks were slaughtered, Goldman’s lead hedge fund may report a 60% loss or $6 billion, and a Cerberus $4 billion bond sale can’t get done. Do you really think HPQ’s good quarter and another possible interest rate cut will save the day?