You can't deny that while parts of the credit market are going up in flames, there remains plenty of money for deals, stock buybacks, dividend increases etc in corporate America. There was a bevvy of company to company M&A today and few LBOs as corporations are flush with cash and the LBO artists are catching their breath and trying to keep previously announced deals from coming undone. There were also enough decent earnings reports to send the market higher on the day as well including blowout numbers from companies like Merck and Hasbro.
It's going to be a day to day manic trading picture until one side or the other can conclusively prove that the credit market fires won't turn into an all out credit crunch. The market managed to bounce back above S&P 1540 and this range from the 1530s to the 1550s is likely to hold until something rip roaring comes along either bullish or bearish. Certainly, it will be important for Friday's intraday lows to hold if we get another bout of selling. Can you say, Range bound? The backing and filling may turn into more of an up or down trend once we get housing data and GDP later this week.