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Mostly decent corporate results are failing to lift bulls’ focused on harboring increased recession concerns. As of 9:20 ET the “Cubes” (QQQQ) and “SPYder” (SPY) are off 1.15% to 2.10% on more volatile and pressured “business as usual.”

Is it a little too little (or much), or simply just too late? Bulls seem to voting that way in Wednesday’s pre-market. Futures are being pressured despite generally decent earnings reports as worries of government efforts aimed at containing the credit scandal / crisis will still fail to avert a global recession.

On the corporate side, shares of semiconductor giant Intel (INTC) and fellow Dow component Coca Cola (KO) are trading very mixed following their better-than-expected or “b-t-e” results. For its part, Intel beat views by a penny in posting $0.35 per share on a 1.3% increase in year-over-year revenues. In the premarket, shares of Intel are holding on to slight gains of .20 at 16.13 in the bulls’ attempt to buck the overall market and made slightly more difficult by management’s tempered near-term outlook.

For its part, Coke is doing a better job of being “it” with bulls after posting profits of $0.83 and six cents above views. The performance has the added (or additive) technical incentive of shares having turned less-than-bubbly on Tuesday due to a sympathy-related disappointment from Pepsi (PEP) and despite issuing a slightly cautious view going forward. Shares are up a delicious 5% at 46.25.

Anchor Banker JP Morgan (JPM) saw its third quarter profit drop 84% due to credit-related portfolio holdings and loan losses. The results though were well-above estimates as the company put together profits of $0.11 per share versus an expected loss of -$0.21 on a sales drop of 8.5% according to First Call.

The firm’s outlook muted a quick and early bid of about 3%, as management said it’s “reasonable to expect reduced earnings for our firm over the next few quarters” due to general economic and market-related malaise. In front of the Opening Bell shares are off .50 at 33.

Separately, brother-in-arms, Wells Fargo (WFC), also exceeded analyst views. The company managed to beat the Street by eight cents in delivering $0.49 per share on falling revenues of 9.4%. Shares are also being pressured slightly by 3% near 32.45.

And finally, shares of State Street (STT) surprised with its four cent profit topper of $1.24 and coming in a full 33% above last year’s mark. Sales for the quarter also did well by registering a 12.4% increase, although helped along by a one-time sale of CitiStreet. Management also reaffirmed its FY08 outlook. Unfortunately, the translation per today’s bulls is a “Sell the News” wake-up call as shares of STT are sinking by nearly 7% at 52.90.

Helping bulls harbor those increased recession woes; a pressured pre-market has received further incentive following worrisome reports on producer inflation, retail sales and manufacturing. The PPI showed an in-line drop of 0.4%, while core prices which exclude energy and food came in two-tenths above views with an increase of 0.4%. Net-net, trader reaction has sided with caution and the simplified argument of cheaper oil being the result of poor economic conditions and other items soon to follow.

Separately, retail sales also disappointed, worried or forced bulls to generally cave in with the bears. September’s data showed a sharp drop of 1.2% and five-tenths below views. Further, the weakness wasn’t related to relief at the pump either, as that figure rose slightly. And finally, regional manufacturing out of New York and courtesy of the Empire Index plummeted to -24.6 versus last month’s -7.4.

All told, bulls have their work cut out for themselves as we enter the session; although that’s somewhat dependent on whom one asks. After scoring the “Mama Bottom” and going on to forge a an incredible “business as unusual” bout of relief; conditions may be getting somewhat back to normal—or at least the type where daily chartists can operate without having to worry about those quite often pesky five-minute and ten percent wide candlesticks. As it stands, many of those same bullish traders should be taking today’s “worrisome setback” as hopefully “business as usual” and a situation defined by the sometimes simple technical pullback.

Chris Tyler
Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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The information offered here is based upon Christopher Tyler’s observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual. 

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