Very much like yesterday: Some optimism early on. Big-time fizzle.

But first, the scoreboard:

Dow: -54.64
NASDAQ: -33.73
S&P 500: -8.75

And now, the top stories:

  • Recall yesterday: Ben Bernanke made some comments about QE3 being a possibility and stocks rallied initially. By the end of the day, a lot of that had fizzled, especially as the realisation sunk in that there was no debt deal.
  • And the news on the debt deal front got even worse after hours: First, Moody’s came out with a warning on the US Aaa rating. And then at around 7:30, the talks between The White House and the GOP hit a level of acrimony, when Cantor accused Obama of storming out of meetings in a huff. Today Jamie Dimon explained why nobody on Wall Street really cares yet about this story >
  • The mood overnight was mostly negative. The dollar really got smashed, especially against The Swiss Franc.
  • The European scene wasn’t too dramatic today, though there was a fair bit of news. Italy passed its austerity bill. Irish yields hit new records. Everyone is bracing for Friday’s stress tests.
  • In the US, futures were higher in the early going, and a flood of economic data at 8:30 didn’t really change the course of anything. Initial claims came in a bit better than expectations (just a touch). Retail sales and the PPI were both a mixed bag.
  • Also pre-market: JPM earnings were a bit better than expected, and the stock gained.
  • Then after that, it was all Bernanke and debt talk headlines. Unlike yesterday, Bernanke made more clear that QE3 was not in the immediate offing, and stocks faded. Oil really got hammered on the news.
  • And then on the debt ceiling front, there wasn’t really anything, except there was this weird brief flurry of hope of a deal based on wire reports that mostly turned out to be total fiction. Talks are ongoing. Tim Geithner, really sounded the alarm, when he said that “we’re running out of time.”
  • And that was that, by the end of the day, it was fairly negative, especially on the tech front. A few other corporate notables: News Corp. got smashed on news that the FBI is opening a preliminary investigation into allegations that it may have hacked the phones of 9.11 victims. Google is coming out with earnings, there’s talk of a RIMM competitor to Apple TV. Netflix, which has defied gravity, finally had a rough day.
  • For an interesting lok at the gold market, check out this report from Nomura >

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