The bears finally managed to put some points on the board as we sold off hard in the last hour of trading. Fed member Bullard come out with a comment that just because unemployment was high, that wouldn't preclude the Fed from hiking interest rates. That certainly wasn't very helpful, but the major issue today was the inability of banks to rally after the news of BAC's desire to pay back TARP funds.
There also was nervousness over tomorrow's jobs report and growing concerns over weak retail sales, as a number of major retailers, like COST and TGT posted seemingly lackluster numbers.
If we get this BAC deal priced over $15 and the jobs numbers aren't too bad, then the dip-buyers may show up again, but they weren't interested in stepping in front of that news in the final. Market players were looking for a sigh of relief on the repayment of TARP funds, and it turns out that it isn't all that simple, because BAC still needs to raise the funds, and demand for its shares wasn't as great as was initially hoped.
Technically, the breach of 1100 by the S&P 500 is a negative development, but volume fell and breadth wasn't that bad at around 2 to 1 negative. We still have some major technical support at 1090 or so, but the biggest complaint about this market lately has been its narrowness, and if we lose key groups like banks, energy and retail, it is going to be very tough. We need some leadership other than just AMZN.
We'll see what the jobs report brings in the morning.....
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