NASDAQ Slides in (Unfounded) Apple Anticipation Fears; FOMC Meeting Concludes Wednesday

US markets rebounded from Monday's sharp selloff, though the S&P and NASDAQ were weighed down on fears that Apple (AAPL) would not deliver the usual stellar results after AT&T reported a decline in Apple iPhone activations in the first quarter.

The mercurial company founded and made famous by the recently-deceased Steve Jobs had been ramped up to become the most wealthy company on the planet earlier this year, though investors have been ravenously taking profits in recent weeks. Apple shares, which hit an all-time closing high of 636.23 on April 9th, has sold off viciously over the past two weeks, leading up to today's first quarter earnings announcement, after the closing bell.

Shares have fallen more than 15% to today's close at 560.28, the 10th day the stock has traded lower in the last 11.

After the bell, earnings were released, showing that Apple blew away estimates, as usual. Analysts were looking for earnings per share of $10.04 on revenue of $36.8 billion. Apple's first quarter results were $12.30 per share on $39.2 billion in revenue. Shares were up more than 40 points in after-hours trading, putting AAPL back above $600 per share.

Besides the interest in Apple, there were other issues on the minds of investors, primarily the ongoing FOMC meeting which concludes Wednesday afternoon, at which time the Fed governors are expected to keep interest rates where they have been for more than two years, approaching zero, though market analysts and Fed watchers will be poring over the text of the release and dissecting Fed chairman Ben Bernanke's new conference following the policy statement for any hints that may indicate the Fed leaning toward more QE, without which US markets would likely contract in a big way.

Currently in the final weeks of "Operation Twist," which expires in June, investors are hungry for more free money from the Fed and a continuation of the policy of easy money which has supported stocks since the financial collapse of 2008.

They'll all have to wait until 2:15 pm on Wednesday and thereafter for the news conference, though most see a continuation of QE in some form as a distinct possibility, though the Fed has let some time go by after the first two rounds - QE1 and QE2 - before embarking on further easing.

Dow 13,001.56, +74.39 (0.58%)
NASDAQ 2,961.60, -8.85 (0.30%)
S&P 500 1,371.97, +5.03 (0.37%)
NYSE Composite 7,988.01, +47.28 (0.60%)
NASDAQ Volume 1,691,154,875
NYSE Volume 3,592,090,500
Combined NYSE & NASDAQ Advance - Decline: 2715-1920
Combined NYSE & NASDAQ New highs - New lows: 109-61
WTI crude oil: 103.55, +0.44
Gold: 1,643.80, +11.20
Silver: 30.75, +0.22

Apple Bifurcates Markets on Big Sell-off; Spain, Housing in Focus

Before getting to why the major indices were all over the map today, a couple of key economic data points:

The NAHB Housing Market Index fell for the first time in seven months, from 28 in March to 25 in April. A figure of 50 is considered "break even" wherein more builders are more confident. Obviously, this latest dip leasves new hoe builders nowhere close.

Regionally, the Northeast posted a four-point gain to 29 (its highest level since May of 2010), the West saw no change at 32, the South declined three poins to 24 and the Midwest was the weakest, posting an eight-point decline to 23.

With new home sales on tap for tomorrow, housing appears to be as weak as it ever has.

Retail sales for March posted an unexpected 0.8% gain on expectations of just a 0.3% rise, somewhat of a surprise considering high fuel costs and other issues facing consumers (no jobs, no homes, high debt, etc.).

On the downside, the Empire Manufacturing Index nose-dived from 20.21 in March to 6.56 in April. The collected wisdom of forecasters expected a decline - to 17.6. New orders and shipments were down, while the employment situation was mixed with more jobs, but for shorter durations.

Taken together, these data sets reveal a US economy that is crawling along and possibly sputtering to stall speed.

Investors in Apple (AAPL) took some long-overdue profits on Monday, sending the world's largest company by market cap down 25.10 points (4.15%), to close at 580.13, the worst decline for Apple in more than six months. Investors were buoyed by a 45% gain in the company stock since October, however.

The weight of Apple on the various indices was obvious, with the NASDAQ the most severely affected, the S&P less so. Meanwhile, the Dow registered a strong showing, with 24 of the 30 components sporting gains, led by Travelers (TRV), Proctor & Gamble (PG), Wal-Mart (WMT) and DuPont (DD).

Otherwise, it was a straightforward session, with much of the focus centered on Spain's 10-year note, which spiked back above 6% on the day and sent bond holders scrambling for the safety of the German Bund, which is nearing historic lows. The pressure on Spain's funding continues to fuel speculation that the country will need a Greek-style bailout soon.

Dow 12,921.41, +71.82 (0.56%)
NASDAQ 2,988.40, -22.93 (0.76%)
S&P 500 1,369.57, -0.69 (0.05%)
NYSE Composite 7,949.57, +18.47 (0.23%)
NASDAQ Volume 1,566,279,375
NYSE Volume 3,444,850,000
Combined NYSE & NASDAQ Advance - Decline: 3083-2500
Combined NYSE & NASDAQ New highs - New lows: 109-106
WTI crude oil: 102.93, +0.10
Gold: 1,649.70, -10.50
Silver: 31.37, -0.02

US Stocks Bounce Back, But Close Flat on Weak Volume

Yesterday's deep decline was followed on Wednesday by the typical knee-jerk, snap-back, dead cat bounce rally, which occurred at the market open but quickly ran out of steam.

For the remainder of the session after 11:00 am EDT, stocks drifted about in a narrow range and volume was noticeably tepid, considering that Tuesday's volume was among the highest of the year. It was also confirmed that Monday's incredibly weak showing was the second lowest volume day of the year, yet another example of how, despite the best efforts of Wall Street hucksters and Federal Reserve pumping, individual investors and practically anybody who is not a fund manager or professional of some ilk simply does not want to be in this market for equities.

Today's lackluster showing was in spite of Alcoa's strong earnings report after the bell on Tuesday, a pleasant earnings kick-off surprise that was promptly disregarded.

For a day, at least, there was no imminent threat of currency or sovereign collapse coming from across the Atlantic where almost all European bourses registered modest gains.

There was little new with which to move markets, a condition which may change on Thursday, as initial unemployment claims and the March PPI figures are released prior to the opening bell. On Friday, JP Morgan Chase (JPM) and Wells-Fargo (WFC) announce first quarter earnings before the open.

In one of the more absurd wastes of taxpayer money, the nearly-invisible Attorney General, Eric Holder, unsheathed a his DOJ sword with a price- fixing antitrust lawsuit against Apple (AAPL) and five book publishers for colluding to fix prices of e-books sold on the iPad platform. Three of the named publishers have already agreed to a settlement, though several states are pursuing civil actions of their own. The suit seeks monetary damages. Apple had no comment.

Clearly, the Department of Justice is completely inept, pursuing nothing other than sure-win, low-hanging fruit variety lawsuits and the federal government is desperate for dough, though what they'll gain from this silly effort is akin to a teaspoon from a barrel of debt.

Dow 12,805.39, +89.46 (0.70%)
NASDAQ 3,016.46, +25.24 (0.84%)
S&P 500 1,368.71, +10.12 (0.74%)
NYSE Composite 7,905.74, +63.82 (0.81%)
NASDAQ Volume 1,504,835,625
NYSE Volume 3,724,551,250
Combined NYSE & NASDAQ Advance - Decline: 4435-1196
Combined NYSE & NASDAQ New highs - New lows: 58-59
WTI crude oil: 102.70, +1.68
Gold: 1,660.30, -0.40
Silver: 31.52, -0.16

March Market Madness: BofA's Own to Rent Plan; Apple Flash Crash, BATS batty IPO

College basketball's 68-team NCAA national championship tournament (AKA March Madness) has nothing on US stock markets in terms of sheer insanity and hair-raising antics.

Just when you think it can't get any weirder in our manipulated, over-hyped markets, along comes a day like today to convince you that the absurd is now the new normal.

To start things off, Bank of America announced a plan to "invite" roughly 1000 homeowners in default on their mortgages the chance to rent the home they formerly owned.

Think of it. BofA can now use the catchy, "Rent a Piece of the American Dream" as the tag line for what they're calling, subtly, the Mortgage to Lease Program. No lie. The bank that bought Countrywide Financial and all their horrible sub-prime, Alt-A, no-doc and NINJA loans, now wants to slither out from under the rock of the robo-signing scandal, fraudulent mortgage documentation and a host of other evils, by forgiving the original loan and renting the house back to the (former) mortgagor.

The absurdity of this plan, whereby people who can't afford their mortgage payments, are somehow supposed to be able to afford rent, or even want to, in the very same home they've been living in for free for two or three years or longer, is so over the top, some people might even buy into it. The Bank of America plan is to take title to the homes, tear up the old documents (supposedly before said homeowners rush to the nearest federal courthouse, documents in hand, and file fraud charges), pay the property taxes, rent the property back to the homeowners (or squatters, if you like), at - get this - rent that's less than the original monthly mortgage payment, then flip the house, along with the paying (below market rates) tenants to some investment gang. Are there real estate investors that dumb out there?

There are so many flaws to this abhorrent plan that it is hardly worth discussing, though actual landlords - real people who own and manage rental properties - have been laughing about it all day long. And, of course, the bank won't sully its pristine reputation by dirtying its hands with the mundane tasks of landlording, like maintaining the lawns, fixing leaks and making modest improvements. No, for that, they'll hire professional property managers, adding even more cost.

The plan is supposed to roll out shortly in the states of Nevada, Arizona and New York as a pilot program. Pilot, indeed. This plan is going to crash and burn on the runway. All of this sound and fury is designed for only one purpose: to save face and costly lawsuits, now that people have awakened to the criminality and fraud that Countrywide started and Bank of America openly perpetuated. They'd be much better off and propbably millions of dollars ahead if they'd just give the properties to the people living in them and simply walk away.

With that as a background, the housing market made more ugly noises on Friday when the Commerce Department reported that new home sales fell for the second straight month, dropping 1.6% in February, despite unusually warm weather, great for home-hunting and generational low mortgage rates.

Then there was Apple's flash crash, blamed on a fat-finger trade for 100 shares well below the market price on a trading platform known as BATS, which, incidentally, went public today, but after all of one trade, shut itself down due to technical difficulties, canceling its IPO indefinitely, which, if today's performance was any indication of the quality and integrity of its service, will likely be forever.

As if that wasn't enough, today marked the absolute thinnest volume in the last ten years. It was completely dreadful, yet stocks still finished with meagre gains, though down for the week. Ouch!

Dow 13,080.73, +34.59 (0.27%)
NASDAQ 3,067.92, +4.60 (0.15%)
S&P 500 1,397.11, +4.33 (0.31%)
NYSE Composite 8,180.05, +38.72 (0.48%)
NASDAQ Volume 1,400,164,125
NYSE Volume 3,395,163,250
Combined NYSE & NASDAQ Advance - Decline: 3848-1709 (that's WACK!)
Combined NYSE & NASDAQ New highs - New lows: 133-28
WTI crude oil: 106.87, +1.52
Gold: 1,662.40, +19.90
Silver: 32.27, +0.93

Numbers Racket: Greece, Euro, Apple, Transports and 100 Dow Points

Let's get real here.

Raise your hand if you think Greece is NOT going to default.

Very well. Maybe the rest of you with hands on hips or in pockets will appreciate the news out of Europe this morning, which somehow managed to pump futures toward a strong positive opening.

What's that? Even though Dow futures were up more than 80 points before former Treasury Secretary Hank (martial law) Paulson appeared on CNBC for the usual softball interview and were up 47 points just seconds before the open, the Dow only managed an initial gain of... hmmmm, less than 20 points.

Eurozone's 17 nations' (non) growth rate for the 4th quarter of 2011 was -0.3, the only countries showing gains in GDP growth being France and Slovakia.

Five countries in europe are already in recession. No surprise here, as Greece, Belgium, the Netherlands, Portugal and Italy have experienced two consecutive quarters of GDP decline. The one country everyone has an eye on is Germany, where output for the quarter fell by 0.2%, because the Germans have been the only country in the region showing any sign of elasticity and ability to weather the financial storms.

However, the rest of the Eurozone is dragging Germany's usually strong industrial sector down with the rest of the continent, a development that could prove disastrous as the EU plods through a troubling 2012.

Stocks took a spanking today in the US after the aforementioned recession news and then the communique out of Brussels from the esteemed EU finance ministers (a Baptist minister, a Catholic priest and an EU finance minister walk into a bar... oh, never mind) reminded the assembled money watchers worldwide that they are experts at procrastination and posturing.

While yesterday's commitment letter from Greek conservative leader Antonis Samaras stated that he would go along with the proposed - and passed by the Greek parliament - austerity measures, the potential future leader of Greece (give him about 6 months before he is bought off and retires, if he even wins the April race for Premier) contained a small caveat, saying he might reconsider, once, of course, the authorities deliver the 130 billion (or maybe it's more like 202 billion) Euros promised by the supra-government of the EU.

What happened today could best be described as controlled demolition. While the Dow was subsumed, hovering from 15 to 35 points in the red, the NASDAQ was wildly positive, though 90% of the gain was due to just one stock, Apple (APPL), which exploded in a number of ways on the day.

First, Apple rocketed to an all-time high of 526.29, but closed the day at the somewhat pedestrian level of 497.67. That's a pretty big round-turn, even for a stock with such a heady valuation. The decline was magnificent, falling 20 points in just the noon hour, and stumbling to a nearly 12-point loss in the remainder of the day. Volume was more than four times the average daily volume (12 million shares) at 53,457,212.

But Apple was just the NASDAQ story. The Dow charted its own path, guided by the Euro-dollar trade. The Euro slumped and finished below the psychotic 131 level, a number which is absolutely meaningless unless you're swapping currencies or considering travel to the doomed continent. But, stocks have followed the Euro-Dollar relationship like clockwork this year. Euro up, US stocks up, with the converse also true. The real value of the ephemeral Euro is all in the mind and to which equally worthless paper currency to which you compare it. If one would be so bold to compare it to some commodity - say, gold - well, a Euro won't buy you a single grain and it's gotten worse throughout its 11+ year life with each turning of the calendar.

So, the Dow set down at the close with its worse loss of 2012, which is not so much a surprise, being that the index (and all the other majors) has overheated in what has been an unusually-warm winter. But the Dow could just not surrender 100 points on the day, despite it being down 125 points at its worst level and down 108 points only one minute prior to the close. Perhaps that number (-100) has meaning to some people, but for the rest of us, -97.33 will just have to do.

What is alarming and scary (like Europe isn't enough of a fear factor) is the action in the Dow Transports, which suffered a two percent decline on the day, easily outstripping the widely-followed indices.(please have a gander at the 1 year chart with the 80% down-spike in November)

Another unpleasant thought concerns the timing of this week's reversal of fortune, just two days prior to options expiry, normally the strongest and upward-tilted week of any month in this Ponzi-like market scheme. Today's volume was also quite strong across all indices.

If stocks aren't making gains just prior to options expiry, then something very wrong is happening behind the scenes. It could be as simple as the market being overbought, or waking up to the awful European reality or the threat of war with Iran which looms larger each passing day.

Then again, it could just be that the low level of market participation has the major traders now drooling over each other's lunches. US stocks have been on a tear since October and the time and sentiment are ripe for a nasty correction.

A clue could come the day the Dow closes with a loss of more than 100 points, though that might prove to be a day too late and many billions of dollars short. Today's near-100-point loss should provide more than enough caution to everyone.

Keep a close eye on gold, and especially, silver, which has underperformed for the past two weeks. Any sustained gains in the precious metals should serve notice that there's something big brewing.

Dow 12,780.95, -97.33 (0.76%)
NASDAQ 2,915.83, -16.00 (0.55%)
S&P 500 1,343.23, -7.27 (0.54%)
NYSE Composite 7,998.65, -30.97 (0.39%)
NASDAQ Volume 2,036,710,750
NYSE Volume 4,045,495,750
Combined NYSE & NASDAQ Advance - Decline: 2267-
Combined NYSE & NASDAQ New highs - New lows: 264-23
WTI crude oil: 101.80, +1.06
Gold: 1,728.10, +10.40
Silver: 33.41, +0.06

Greece Passes Austerity Measures; Obama Budget Goes to Congress; Apple Closes Above 500

Any angst over Greece's passing of their mandatory austerity measures was quickly dispelled by the markets on Monday. Most European bourses finished the day solidly in the green, and US markets followed suit, posting gains which pretty much eviscerated Friday's fear-induced declines.

Even though the austerity in Greece is a death-knell for the country and widespread rioting took place in the capitol of Athens and elsewhere, the globalist elements of the EU, ECB and IMF viewed the vote as a positive referendum on the overall health of the Euro system.

Realistically, Greece will never be able to repay its debts nor will it be able to accommodate all of the cuts to social welfare programs and government employment, but the parliament did what was most expeditious to secure financing from its feudal masters in Germany and keep the game going.

The scheme - from the view of the IMF, ECB and Angela Merkel - seems to be to keep Greece functioning as a neo-slave-state to keep the Euro from collapsing, and, thus far, it seems to be working. A disorderly default by the Greeks might just be the catalyst that destroys whatever unity is left in the EuroZone, an outcome the supra-governmental EU leaders will fight bitterly with truckloads of money (it doesn't matter how much, they'll just print more) and the current kind of kabuki theatre that is disguised as "austerity" for the free-spending Greeks.

Their fear is that Greece's demise could foment similar outcomes in Portugal, Ireland and elsewhere, particularly Spain and Italy, and the continental currency experiment of the Euro would come crashing down upon their collective heads. Problematic as it may be, the monetarists in Brussels are committed to spending whatever it takes to keep the EuroZone intact by relentless money printing and worry about the consequences of widespread poverty, inflation, social unrest and ultimately, a continent-wide depression, later. We wish them luck, mostly because they'll need it, as desperate as the situation has become.

Here in the States, President Obama submitted his 2013 budget to congress, where it was deemed by many (mostly Republicans seeking to unseat the president this fall) as dead on arrival. Obama's 3.8 Trillion monstrosity would reduce military outlays while hiking outlays to infrastructure projects and features higher taxes for the wealthy and a $1.33 trillion deficit, marking the fourth straight year that the federal budget deficit would top one trillion dollars, despite an Obama campaign promise from 2008 to cut the deficit in half by the end of his first term.

Investors shrugged off the details and went about their task of re-inflating the corporate sector, sending stock prices close to their highest levels of 2012, though volume on the NYSE was the lowest for a non-Holiday session in over a decade.

Oil closed above $100 per barrel, despite US gas consumption being historically weak and Apple (AAPL) closing above 500 per share for the first time in its history. Apple is currently the largest company in the world by market cap, surpassing oil giant ExxonMobil for the top spot.

The major indices followed their now-routine pattern of a gap-up open followed by a mid-morning decline and rally and a flat-lining finish.

Dow 12,874.04, +72.81 (0.57%)
NASDAQ 2,931.39, +27.51 (0.95%)
S&P 500 1,351.77, +9.13 (0.68%)
NYSE Composite 8,056.25, +64.22 (0.80%)
NASDAQ Volume 1,613,612,250
NYSE Volume 3,462,219,000
Combined NYSE & NASDAQ Advance - Decline: 4236-1411
Combined NYSE & NASDAQ New highs - New lows: 262-12 (par-tay!)
WTI crude oil: 100.91, +2.24
Gold: 1,724.90, -0.40
Silver: 33.72, +0.12

Market Pops on Bogus ESFS Euro Report; Apple Misses, Tanks

You've got to love this market.

Any little statement or rumor that European Union leaders might throw significant money at their pan-continental debt crisis sends stocks soaring into the stratosphere, and today was one for the record books.

An unusually quiet day, stocks had regained a foothold after Monday's sudden reversal. But, shortly after 3:00 pm EDT, the UK's Guardian reported that France and Germany had agreed to boost the Euro bailout fund - the ESFS - to EURO 2 Trillion, a significant rise, and one that might just help kick the debt can down the road a few months, or even years.

Shortly after the story broke, however, Dow Jones reported that the 2 Trillion Euro figure was actually "still under debate," so, who really knows? At least the market machines and mechanics got what they wanted, a nice 100-point spike in the Dow in about ten minutes time and an S&P close over 1224. Mission accomplished. Now, move along, folks, nothing to see here.

In a day (week, month, year) full of bogus reports, before the open, Bank of America (BAC) reported 3Q earnings of 57 cents per share, but, because of the new math, which includes such exotic flavors as fair value adjustments on structured liabilities and trading Debit Valuation Adjustments (DVA), according to our friends at Zero Hedge, who usually have the best and most-believable dirt, BofA actually had earnings of 0.00, otherwise known as ZERO, Zilch, Nada, Nothing.

Of course, when CNBC and the rest of the supine financial media report, bare-faced, that the nation's largest bank by deposits more than doubled the analyst estimates (0.21) for the quarter, it was off to the races, with somebody shocking BAC shares up 10% by day's end, a stunning 0.61 gain, to the imposing figure of 6.62. While it's technically a 10% gain, it's still rather silly, considering the accounting nonsense being roundly applauded by the criminal bankster elite, and hardly any comfort to those who bought BAC when it was 7, or 8 or even 12. Make no mistake, we've entered the Twilight Zone of financial accounting and there's no turning back.

Along those lines, the Giant Squid otherwise known as Goldman Sachs (GS), also reported before the bell, but it's results were almost believable, showing a loss of 84 cents per share, with losses spread across the company's proprietary trading division, to the tune of $2.5 billion. Ouch. The market's response to the trending data of a company heading decidedly south: a gain of 5.25 (5%) to 102.25 and the financials led all other sectors in the faux rally du jour.

Also before the bell, PPI was reported to be up 0.8% in September on expectations of a rise of only 0.2%, which just happened to be how much the core PPI was up for the month. Somebody obviously missed the memo from the Fed that inflation was transitory, or something along those lines. Inflation in the US is running at an annual rate well over 6%, something the mainstream media hopes you don't notice.

One company which may be adversely affected by the loss of its CEO - the truly brilliant Steve Jobs - is Apple, which announced today after the bell that the company had an outstanding quarter as usual, but, uh, oh, they missed the estimates of 7.39 per share by a bit, reporting earnings for the quarter of 7.05 per share and also came up about a billion dollars short on the revenue end.

As of this writing, Apple shares were trading at 394.13, -28.11 (-6.66%). Not a very pretty picture there.

So, to recap, Goldman Sachs reports a massive loss, Bank of America releases what amounts to a fraudulent earnings report, inflation is about ready for lift-off into hyper-inflation and the market gets a jolly from a questionable report on the size of the European bailout fund. All good fun, no?

With Apple's miss in the after-hours and another couple of big banks - Morgan Stanley (MS) and PNC Financial Services (PNC) - due to report tomorrow, somebody might want to take a closer look at the number of companies that have missed or merely met estimates this earnings season, and maybe add in those who just plain fudged the numbers. But, not to worry, Cheesecake Factory (CAKE) and Buffalo Wild Wings (BWLD) are also reporting tomorrow and should provide sufficient caloric excess to fuel another rally in the markets.

Wow! You cannot make this stuff up.

Dow 11,577.05, +180.05 (1.58%)
NASDAQ 2,657.43, +42.51 (1.63%)
S&P 500 1,225.38, +24.52 (2.04%)
NYSE Composite 7,341.73, +153.07 (2.13%)
NASDAQ Volume 1,988,896,750
NYSE Volume 5,669,232,500
Combined NYSE & NASDAQ Advance - Decline: 5211
Combined NYSE & NASDAQ New highs - New lows: 52-65 (Really? No kidding. extremely bearish)
WTI crude oil: 88.34, +1.96
Gold: 1,652.80, -23.80
Silver: 31.83, +0.01

Last Hour Rally Boost Stocks for Third Straight Session; Occupy Wall Street Legions Growing; Steve Jobs Dead at 56

OK, this is getting a bit ridiculous.

For the third day in a row, stocks staged a final hour ramp-up, this one good for only 100 points on the Dow, but that came after stocks had been given an initial lift-off around 10:00 am, resulting in a nearly 200-point rise on the Dow.

News from the Eurozone was once again scant, as EU ministers and leaders of the nations comprising the EU proved they will not take a back seat to the US President and congress when it comes to foot-dragging and kicking the proverbial economic can down the road.

There was some discussion of "re-capitalization" of the major banks, meaning nothing more than egregious money printing and bailouts for those with the most capital who have not yet learned how to manage it wisely.

Considering the penchant for late-day moves, perhaps the directors of the various exchanges might consider opening the market later in the day, say, 3:00 pm, locking out sellers as the computer algorithms simply ramp up the stocks they like. Being that "banker's hours" are legendarily short as it is, this would give said elite bankers more time to count their profits and have their nails manicured.

It's worth pointing out that the past three day's worth of last hour rallies began off fresh lows, set in place on Tuesday's ripped decline. On that day, the Dow bottomed at 10362.26, a low point not seen since September 9, 2010. The S&P and NASDAQ made similar moves, setting new, 12-month lows before the "Merkel miracle" when German Chancellor Angela Merkel first uttered the word, "re-capitalize." The S&P had already entered official bear market territory, obviously something the power-mad bankers simply could not tolerate.

The legacy of the current short-run rally will depend greatly upon the figures released Friday morning when the BLS issues its monthly non-farm payroll data. Anything over 50,000 new jobs created is certain to be seen as a win for equity holders, though there are no hard and fast estimates that can be trusted after last month's zero reading.

While in the short term, propping up markets - as has been occurring since late 2008 - may seem a noble and prudent activity, the longer-term consequences of unbalancing markets are not well known, although the examples available (Weimar, Zimbabwe, Dutch Tulip Bubble) all seem to have ended very, very badly.

On that note, here's a couple of Wall Street Whiz Guys who think the "new" level to watch is 1070 on the S&P. Listen carefully and you'll hear them advise to buy low and sell lower. Obviously, these guys are fresh escapees from the zoo for unfit hedge fund manglers.

Legendary gold bull, Peter Schiff of Euro Pacific Capital, doesn't think we're headed for a double-dip recession, he believes we're headed straight into "a complete economic collapse." Schiff's entertaining and caustic video can be seen here.

Not to put too fine a point on the doom and gloom aspect, Aftershock author, Robert Wiedemer, opines that we'll see "another meltdown within 2 to 4 years."

Well, Bob, thanks for the warning, though two to four years seems a long time to be waiting for the Apocalypse.

Meanwhile, outside the granite, steel and glass elitist enclaves of the big Wall Street firms, the Occupy Wall Street (OWS) movement continues to aggravate the paymasters and grow in depth and volume, spreading to over 500 cities and even getting the attention of President Obama during a news conference on Thursday. The corner of Broadway and Wall Street is beginning to resemble Cairo's Tahir Square in many ways.

Dow 11,123.33, +183.38 (1.68%)
NASDAQ 2,506.82, +46.31 (1.88%)
S&P 500 1,164.97, +20.94 (1.83%)
NYSE Composite 6,997.64, +153.48 (2.24%)
NASDAQ Volume 2,263,897,750
NYSE Volume 5,586,015,500
Combined NYSE & NASDAQ Advance - Decline: 5253-1294
Combined NYSE & NASDAQ New highs - New lows: 15-69
WTI crude oil: 82.59, +2.91 (WTF?)
Gold: 1,653.20, +11.60
Silver: 32.00, +1.65

Finally, it is with great regret to report that Apple co-founder Steve Jobs has died at the tender age of 56. In a tribute to Jobs' brilliance, we present the Super Bowl "1984" ad which aired on Super Bowl Sunday, January 22, 1984, during the third quarter of Super Bowl XVIII, heralding the launch of the Macintosh computer that revolutionized computing and our lives in general. Jobs was a thinker and inventor along the lines of Benjamin Franklin and Thomas Edison, a man of such greatness that we will likely not see another like him for decades. It would be remiss not to point out that this blog, and many other online ventures, is run off a seven or eight year old e-Mac, purchased used for $50 more than three years ago and that the Mac PowerBook G3 that was purchased in 1998, is still running strong on system 8.9, and has been operational, without the need for upgrades or any repairs for thirteen years.

People who invent and produce products of such lasting and functional value don't come along too often. Jobs, and his unique understanding of technology and its interaction with people, will be sorely missed.

Greece Will Not Default... This Week, Maybe Next

The Markets

All you need to know about today's "out of the blue" rally.

According to a Bloomberg report:

"Greece is an integral part of the euro area and recent decisions to meet budget targets will help shield the economy," the Greek government said in a statement today following a call between Greek Prime Minister George Papandreou, German Chancellor Angela Merkel and French President Nicolas Sarkozy.

...and with that, it was off to the races for the algo-spitting machines which double for a perfectly-functioning market.

Seriously, there was nothing other than that, oh, well, both PPI and retail sales figures were unchanged from the prior month, so nothing to see, there, really, move along. Something (not sure what) spooked the machines at about 3:30, just after the major indices hit their highs of the day and were careening toward an even bigger ramp up, but whatever it was, it took 140 points off the Dow and made today's extraordinary rally look... ordinary.

So, if reading the Wall Street tea leaves correctly, all that has to happen is for Greece not to default and we'll see Dow 20,000 in a matter of months. That appears to be the general herd mentality.

Just for a reference point, take a look at how far below the April highs the S&P, NASDAQ and Dow are and then rethink that strategy of buying everything that has momentum, like Netflix or Apple or maybe LuluLemon. Here's a hint: the Dow closed at 12810.54 on April 29, the high for the year, and, since we're checking, the close on Decembre 31, 2010 was 11557.51, so we're down for the year and about 1500 points off the high.

So, when Greece does default - because they surely will at some point - whether it be orderly or not, what will stocks be worth then?

Dow 11,246.73, +140.88 (1.27%)
NASDAQ 2,572.55, +40.40 (1.60%)
S&P 500 1,188.68, +15.81 (1.35%)
NYSE Composite 7,199.12, +89.17 (1.25%)
NASDAQ Volume 2,300,166,500
NYSE Volume 4,961,128,500
Combined NYSE & NASDAQ Advance - Decline: 4804-1800
Combined NYSE & NASDAQ New highs - New lows: 52-110
WTI crude oil futures: 88.91, -1.30
Gold: 1819.70, -14.50
Silver: 40.69, -0.44

Uncle Warren to the Rescue of Bank of America; Jobs Steps Down at Apple

Two luminaries of the corporate world made moves that affected the overall markets, but a couple of stocks in particular.

Late Wednesday, Apple (AAPL) founder and CEO, Steve Jobs, announced that he was, effective immediately stepping down as CEO of the company due to health reasons and will now take up duties as Chairman of the Board.

Jobs' contributions to computing and high tech in general are the stuff of legend. Not since the heyday of Thomas Edison has the world been so influenced by one man's innovations. Jobs was a pioneer in personal computing and communications, first, with the Apple I and II, then the Macintosh, and more recently, the creation of the iPod, iPhone and iPad.

While Jobs will still have a hand in the operation of the company he founded in Cupertino, California (where it is still headquartered today) in 1976, most of the day-to-day operations will be left to newly-named CEO, Tim Cook and his staff.

Today, amid a firestorm of controversy concerning the fiscal health of Bank of America, billionaire Warren Buffett stepped up and injected $5 billion into the bank via a private offering which will net one of the world's richest men a 6% dividend over five years.

Buffett's holding company, Berkshire Hathaway, also received warrants to buy 700 million shares of common stock at just over $7.14 per share, with an unusually long 10-year exercise period.

The deal answers the question of whether Bank of America (BAC) was indeed in need of additional liquidity with a resounding "yes." Otherwise, Buffett's offer would have been turned down, as it is somewhat expensive for the bank.

The deal really solves none of BofA's liquidity and solvency issues. They are highly-levered, beset on all sides by the mortgage mess that has evolved since their purchase of Countrywide Financial in 2008, and in need of funds to meet new capital requirements. A paltry $5 billion from a rich uncle isn't going to cut it, and Buffett's bold maneuver may turn out to be another bad bet. Buffett made similar deals at the height of the financial crisis, taking out stakes in Goldman Sachs (GS) and General Electric (GE).

Inital reactions to both events were highly-charged. Apple stock fell nearly 7% in after hours trading on Wednesday, but, by the market close on Thursday, the stock was only down 2.46, or less than 1%.

On the news of Buffett's investment, Bank of America stock spiked as high as 8.80, after closing Wednesday at 6.99. At the end of the Thursday session, most of the froth had been sold off, with the nation's largest bank by deposits closing at 7.65, nearly a 10% gain.

The broader market fared less well, putting an end to the three-day winning streak which began on Monday. Uncertainty over just what Fed Chairman Ben Bernanke will say in his Friday morning speech at Jackson Hole had traders on the edge of their seats, with many deciding to take a wait-and-see position.

Bernanke is scheduled to give his keynote address at 10:00 am EDT.

On Friday morning, prior to the Chairman's speech, the government will announce its second estimate of second quarter GDP, which is expected to be revised down to 1.0% after the initial reading of 1.3%.

Most analysts are not expecting Bernanke to make any great policy pronouncements, though some are still clinging to hopes that he will announce another round of quantitative easing.

For the most part, traders were selling off positions in advance of the speech.

Dow 11,149.82, -170.89 (1.51%)
NASDAQ 2,419.63, -48.06 (1.95%)
S&P 500 1,159.27, -18.33 (1.56%)
NYSE Composite 7,149.67, -123.46 (1.70%)

In a broad retreat, declining issues outpaced advancers, 5044-1552. The NASDAQ had just eight (8) stocks making new highs, with 65 hitting new lows. Over at the NYSE, there were 14 new highs and 53 new lows. The combined total of 22 new highs and 118 new lows continues to signal risk to the downside. Volume was light.

NASDAQ Volume 1,812,493,625
NYSE Volume 5,741,944,000

Oil gained 14 cents, to $85.30. Gold, in a dramatic reversal, picked up $22.20, to $1773.50, but silver was the big winner, adding $1.39, to $41.08.

Despite Buffett's "calming effect" markets are still very shaky, as none of the issues which ignited the volatility of the past two weeks have been resolved. Bernanke's speech will likely only add some fuel to the fire, especially if, as many believe, he will not open the door to QE3. On top of all that, Wall Street is bracing for a water-logged Monday, as Hurricane Irene races along the US Eastern seaboard.

The outlook for days and weeks ahead is still quite uncertain.

NASDAQ Sells the News

On Monday, we heard that Apple CEO Steve Jobs was going to take a six-month medical leave of absence. On Tuesday, after the closing bell, Apple announced another smashing quarter with great earnings and revenue. On Wednesday, Apple stock got hit with the classic "sell the news" earnings aftermath sell-off.

The decline actually began with the Jobs press release on Tuesday morning, but after earning were released and the stock was initially rebounding, it opened lower on Wednesday and dragged the rest of the NASDAQ down 40 points. Though Apple has only lost 10 points over the past two days, the damage is being felt in other big tech names such as Cisco (CSCO), Dell (DELL), Amazon (AMZN) and Google (GOOG). Of course, it's far too early to tell, but, considering the way stocks have appreciated over the past 4 1/2 months, this could be the beginning of a significant correction, one probably overdue and timed perfectly for post-earnings profit-taking. As usual, the smart money may be getting out while the getting is good.

With tech sliding, the rest of the market didn't fare well, though major industrials on the Dow maintained a sense of stability. Another point of focus should be stock options, which expire on Friday. After that, markets could be in for a free-for-all.

Dow 11,825.29, -12.64 (0.11%)
NASDAQ 2,725.36, -40.49 (1.46%)
S&P 500 1,281.92, -13.10 (1.01%)
NYSE Composite 8,104.92, -85.99 (1.05%)

Losers beat gainers by an unhealthy margin, 5161-1411, indicating that the decline, though well-masked on Apple's move, was certainly not contained to tech stocks alone. On the NASDAQ, there were 147 new highs, but just 12 new lows. The NYSE reported 186 new highs and a mere 22 new lows, though the high-low indicator is somewhat of a lagging one, especially after a huge rally such as that seen since September. It will take a while for new highs to fall off in the case of a real correction and an even longer time period for fresh new lows to be plumbed. Volume was at its best level of the week, another disturbing data point.

NASDAQ Volume 2,106,258,500.00
NYSE Volume 5,298,377,000

Crude oil was relatively flat, dipping 52 cents on the front-end futures contract, to $90.86. Gold gained late in the day, up $2.70, to $1370.40 at last look. Silver continued to slide, however, down 12 cents, to $28.76.

Thursday will be a big day for earnings, with nearly 100 companies reporting, including big names such as Capital One (COF), Southwest Airlines (LUV), Morgan Stanley (MS), Coach (COH), Freeport-McMoRan (FCX) and Advanced Micro Devices (AMD).

Stay tuned. This may become interesting again.

Clueless? You're Not Alone on Turnaround Tuesday

From the most grizzled veterans to the baby-faced nubians, nobody was able to put any kind of story or spin on the dramatic turnaround stocks made Tuesday.

After IBM and Texas Instruments both reported revenue misses for the second quarter Monday after the close, Goldman Sachs continued the trend with an earnings report that had traders scrambling for the exits before the market had even opened. When stocks did begin trading, they fell off a cliff, with the Dow down by more than 145 points within the first 15 minutes.

Stabilizing in the red, all indices were trading lower, but gained strength throughout the morning and accelerated into the afternoon session. As 2:00 pm approached, stocks had staged a stunning reversal on nothing but momentum. By the close, all of the major indices sported solid gains, keeping hopes alive that this earnings season would offer some value and momentum for the second half of the year.

Even though IBM ended lower for the day (-3.24, 126.55, -2.50%), it had pared losses substantially, after it had opened with a loss of more than 5%. Goldman Sachs, on the other hand, possibly the true catalyst behind the entire market rally, ended the day higher (+3.23, 148.91, +2.22%) after initially trading down by more than 3 1/2 points from its previous close.

Dow 10,229.96, +75.53 (0.74%)
NASDAQ 2,222.49, +24.26 (1.10%)
S&P 500 1,083.48, +12.23 (1.14%)
NYSE Composite 6,820.04, +80.40 (1.19%)

Headline numbers were supported by strong internals, with advancing issues beating back decliners, 4846-1552. New highs remained atop new lows, 214-136, though once again the disturbing trend in the NASDAQ - more new lows than highs, 67-26 - appeared for the second straight day. Volume was light, but much better than Monday's dismal showing.

NASDAQ Volume 1,944,221,875
NYSE Volume 5,323,317,000

Crude oil closed out the August futures contract up 90 cents, at $77.44, the highest price in a month. Gold rallied for a gain of $9.80, to $1,191.50. Silver added 15 cents, to $17.68.

After the bell, Yahoo! and Apple reported, with Yahoo missing on revenue though beating consensus bottom line EPS by a penny at 15 cents per share. Apple beat on almost all metrics, including gross revenue and earnings per share, setting up a potentially powerful open for tech shares on Wednesday.

Market Gains on Low Volume

A quick overview of Monday's trading follows. More on Tuesday after the bell.

Awaiting the 3rd quarter earnings report from Apple (AAPL), investors were encouraged by the number of S&P companies which reported earnings better than estimates (78%) last week and further weakness in the dollar as the session unfolded.

Dow 10,092.19, +96.28 (0.96%)
NASDAQ 2,176.32, +19.52 (0.88%)
S&P 500 1,097.91, +10.23 (0.94%)
NYSE Composite 7,222.21, +88.25 (1.13%)

Advancing issues led losers, 4415-1889. There were 819 stocks making new 52-week highs, to 100 new lows. Volume was exceedingly low, signaling a large degree of caution at the very start of the biggest week of earnings reports. If the low volume pattern continues through the next few days, it could be indicative of a short-term market top. However, most companies have not yet reported, so not much can be read into one day's trading volume.

NYSE Volume 3,816,968,500
NASDAQ Volume 1,725,801,875

Oil reached a new high for the year, trading up $1.08, to $79.61. Gold advanced $7.90, to $1,066.00. Silver tacked on 21 cents, to close at $17.63 per ounce.

Besides Apple reporting after the close, five Dow components will report prior to Tuesday's opening bell. Caterpillar (CAT), Pfizer (PFE), United Technologies (UTX), Coca-Cola (KO) and DuPont (DD) are the companies reporting.

Another Banner Day as Dow Crashes through 13,000

Wednesday was just another day on Wall Street in this exceptionally energetic earnings season. Apple reported outstanding numbers and stocks soared on a wave of unbridled optimism.

It's becoming so routine to the point of boredom, just watching everything go up, up, up all the time, day after day, la dee da...

If you're in the right stocks it's a marvelous time to be invested. The question is why, if all is so damn wonderful in the world of high finance and corporate profitability, did only 22% of respondents to a new NBC/Wall St. Journal poll say that America was moving in the right direction. There seems to be a high level of dissatisfaction afoot, but none of it could be found on Wall Street.

Still, the mood of the public raises an interesting question. Are these anonymous poll respondents seeing something we're missing? Are the profits on Wall Street more fleeting and illusory than we have been led to believe? Or are the investment returns isolated to an emerging, small class of wealthy individuals who reap most of the gain from soaring stocks?

Food for thought, which we're not going to bite on right now.

Dow 13,089.89 +135.95; NASDAQ 2,547.89 +23.35; S&P 500 1,495.42 +15.01; NYSE Composite 9,746.57 +98.07

Apple was the key driver for the day, reporting profits of $770 million, or 87 cents per share, up from $410 million, or 47 cents per share, in the year-ago period. The stock breached the $100 mark on the news, up 2.11 on the session. Analysts were looking for 64 cents per share, so they, like everyone else, were absolutely shocked at Apple's incredible performance.

Corporate news took precedence over the scourge of the street, crude oil, which jumped back up to $65.84/bbl., up $1.26 on the NY Mercantile Exchange. In what continues to be a counter-trade, gold and silver both lost ground again, though gold at $387.40 and silver at $13.90 are close to the higher end of the range. There may be some consolidation at this level, anticipating a break out. However, there have been a number of false flags like this, so it could just turn out to be more of the same as no catalyst seems capable of taking the metals to new highs.

Speaking of new highs, there were an astounding 602 of them, versus only 69 new lows, the bulk of those on the NASDAQ.

Volume was exceptionally strong, one of the top 5 volume days this year and advancing issues drubbed decliners by nearly a 2-1 margin.

The question for tomorrow and the succeeding sessions leading up to the May 9 FOMC meeting is, how high is up?