In his morning note, well-known floor guy Art Cashin coins a great term:
The Newtonian Rally Continues – A mild paraphrase of one Sir Isaac Newton’s laws of force and motion (inertia) says that a body in motion will stay in motion unless acted upon by some counterforce. That seems to be the guiding rule for the QE2 rally since it started with the Jackson Hole speech before labour Day.
Yesterday, the Dow rallied for the sixth straight day. Simultaneously, treasuries fell for the sixth straight day.
There were some event influences. The morning saw several deals. There was also a boost from some earnings reports. Notable among these were Loews. It saw earnings rise despite a fall in revenues. That, we think, is symptomatic of today’s corporations who are focused on cutting costs and then cutting some more.
The stronger influence was the evident calm in the streets of Cairo. Shopkeepers were interviewed as they re-opened shops. Taxis cruised the streets. TV shots were of meetings rather than mobs. That gave stock buyers courage.
It was a low volume levitation, however. The NYSE volume failed to make it to 900 million shares.
Late in the day Consumer Credit hit. It was up more than expected, and, as my friend, Kevin Ferry, pointed out, revolving credit popped up for the first time in two years. Yet, the report failed to inspire the bulls and stocks edged back slightly from the highs. Nonetheless, a sixth up day in a row.
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