Rally is ending in 2nd day

Stocks rose in early trading on encouraging news from JP Morgan (JPM), a Dow stock. Since then the averages pulled back. Dow is down 8, advancers over decliners almost 2-1 & NAZ is down 7. JP Morgan reported earnings of 54¢ down from 1.20 last year but beat estimates of 44¢ sending the stock up 4. Buyers jumped on most bank stocks, although Bank of NY Mellon (BK) fell 2½ on lower earnings which did not beat expectations. Interesting, both banks had similar lower earnings but beating expectations is what counts for the stock price. 2 other Dow stocks reported different results. Coca Cola (KO) had lower earnings when a one time charge from its main bottler is included. That lower number did not beat estimates, stock down 2. United Technology (UTX) reported better earnings exceeding analysts forecasts, up 3+. KO repeated the common theme in earnings reports, overseas business is good while domestic is sluggish (at best).

Oil was down 1 (3 down days in a row) to the 133s for the usual assortment of reasons. A smaller price decline for oil is helping MLP's. The Alerian MLP index rose 2 to the 265s, getting away from the 262 low it touched yesterday. Hurricane season & its impact on MLPs will start to get more attention in the next few weeks.

The markets went thru a lot yesterday. Bank of America, another Dow stock, one I like, is up 6 (that's SIX dollars) or 30% from its low yesterday AM. The VIX, volatility index, has been in the high 20s in recent days, but is now down to 24.69 (still very high). Enthusiasm for bank stocks should diminish as oversold conditions are corrected. Kimberley Clark (KMB), reporting negative guidance a couple of days ago, was down yesterday. Earnings news & guidance will guide stock prices, glum ones will not be treated well.