Market Grinds Higher Without Financials

Tuesday, February 03, 2009

The market added 141 points today in spite of broad weakness in the financial sector. President Obama's promise of a new bank plan to be announced next week has scared investors. Participants are unwilling to step into the depressed shares with the uncertainty surrounding Congress' plan. In an interview Obama hinted that the plan may involve a "bad bank" but he offered no details. The potential for the government investment diluting shareholder value is high and is currently diminishing the bottom-fishers' appetite for banking shares. Notable strength from the healthcare sector bouyed the market as Merck gained over 6% after reporting better-than-expected earnings this morning.

The market continues to drift around the 8,000 level with no direction. This is a market for stock-specific trading looking for very small scalp trades. The extended, follow-through trade is not being offered.


Post a Comment