Tuesday, July 26, 2011

Debt Ceiling Chatter; All Day And All Night

Despite the bleak picture of debt-ceiling negotiations painted by President Obama last night, the market held up fairly well today. Though the close was weak and breadth was much poorer than the indices indicated for the second day in a row, there were no signs of panic and no rush for the exits.

Market players appear to be sanguine about some sort of deal before the deadline, though there hasn't been any news of substantial progress. In fact, there doesn't seem to be any bill that has a chance of passing right now, but market players are unperturbed.

Despite continued focus on debt-ceiling news, it was a very uneventful day for the market. MMM pressured the DJIA and steel stocks were particularly ugly. Big-cap technology names like AAPL, BIDU and GOOG did well, and financials continued to bounce.

AMZN's earnings report is solid and attracting buyers, but the market has not been sensitive to earnings reports this quarter. It has been company-specific action and hasn't led to any clear market themes. Most market players would be happy not to hear about the debt ceiling any further; unfortunately, it is likely to drag out for a least a few more days.