FRIDAY OCTOBER 16, 2009

The Market's Mixed Bag

The euphoira of Dow 10,000 was short-lived and the market is down over 100 points this morning. The cause of the sell-off is "disappointing" (more accurately, good but not as good as hoped) earning's report from a few bellweather stocks such as IBM, GE and BAC.  Also, the Reuters/Univ. of Michigan Consumer Sentiment index decreased from 73.5 to 69.4, representing  a modest decrease in consumer confidence.  Certainly, these statistics provided fodder for those calling for a correction. 

On the other, more positive, hand, the aggregate earnings picture continues to improve, with 3rd quarter S&P 500 earnings so far being better than expected.  Perhaps the market is getting greedy, because now the expectations are for companies to exceed the street's forecast for earnings.  Simply meeting the earnings expectations doesn't seem to be sufficient.  Regardless of the market's expectations, the earnings picture continues to improve.  Also, the Industrial Production report released this morning was significantly better than expected, up .7% in Spetember.  This blow out numbers shows that the manufacturing sector is recovering nicely.

I continue to believe that a slow, plodding recovery is underway, despite today's mixed bag of news.  Dow 10,000, just a number that we have crossed several time, both up and down, in the last few days.  Investor's should mange their expectations accordingly.  However, the market's rise will not be linear, it never is.

POSTED AT 1899-12-30 11:14:00.0

KEN ENTENMANN, CFA
SENIOR VICE PRESIDENT AND
THE DIRECTOR OF INVESTMENT MANAGEMENT SERVICES

Ken is a Senior Vice President and the Director of the Trust and Investment Services at Alliance Bank, N.A. He has 23 years of investment experience and oversees the management of assets totaling $1 billion. He holds a B.S. in Applied Economics and Business Management from Cornell University and an M.B.A. from the William E. Simon Graduate School of Business Administration at the University of Rochester. He has also earned his Chartered Financial Analyst designation. He is a member of the Executive Committee of the Trust Division of the New York Banker's Association. He is also a director of the Central New York Community Foundation.

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