Bump Again

The DOW and S&P closed up 95 and 8 respectively. We have had a decent rally these past few days.

Goldman Sachs, Intel, and now JP Morgan have shown impressive quarterly gains. IBM has not, and CIT is about to go belly up.

Right now the fear about quarterly profits being less than the expected bad, has eased. Can we now find compelling reasons for the DOW to hit 9,000. With unemployment climbing, foreclosures climbing, and default on personal loans and credit cards rising, you would have to think no.

"Investors have ratcheted up expectations for earnings almost across the board, so that optimism is still there even if today's action is rather muted..." source

JP Morgan posted higher quarterly profits mostly based on trading. They are still losing money on credit cards and loans. This is all directly linked to rising unemployment.

JPMorgan expects its credit card business to lose money this year and next, and sees higher commercial real estate losses for several quarters.

"We're still obviously in a pretty big recession..."

...rising unemployment will put upward pressure on credit losses. source

Finally, Harley Davidson is laying off 1,000 employees. The company makes a nice bike but people are spending money on the essentials not on the goodies. source