Volatility is the name of the game these days. As if yesterday\'s more than 300-point reversal in Dow was not enough, the market had another triple-digit reversal today and closed the day again relatively flat. Being the first major brokerage firm reporting its quarterly results, Lehman Brothers provided the market with a mixed report. On the earning\'s front, the company appeared to beat the estimation. However, its fixed income sector saw a huge 60% drop in revenue compared to one year ago, indicating tough market conditions in the future. In addition, the company indicated it may need to further write down its mortgage backed assets. Not surprisingly, the financial sector continued to slide after the open and several firms even challenged their November lows. But by the end of the trading session, most financial companies were well off their lows and appeared to have experienced a capitulation day. I would like to emphasize here it\'s until we see stabilization in the financial sector before we can see the general market to stablize, so it\'s worth paying special attention to the sector. Although several major indices managed to close the day in green, the internal of the market was decisively negative as evidenced by almost 2 to 1 decline/advance ratio in NYSE.

The economic news is also mixed this morning. On the positive side, we got a much stronger retail report for November. This surprising report will greatly boost Q4 GDP number and indicate less chance of an imminent recession. On the other hand, the PPI number also surprised the market and renewed fears about inflation, which may handicap the Fed from cutting interest rate. The surprisingly high PPI number also gave a boost to US dollar, which in turn caused many commodity prices to tumble. Both gold and oil closed the day down by roughly 2%. Treasury bonds continued to sell off as some asset rebalancing appears to be ongoing before year end. Finally we got some good news on the LIBOR. The rate that banks charge each other dropped accross the yield curve and if the trend can continue, it may really mean something.