This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Market Preview: A Rally on Fumes

Updated from 5:12 p.m. ET to include latest share price for Xyratex and news on Intermune.

NEW YORK (TheStreet) --The final calendar quarter of 2012 has begun and there's some worries setting in that stocks may not have much more oomph left to move higher.

Venerable market watcher Ed Yardeni opined earlier Tuesday that the S&P 500 may not be able to get much more mileage out of the Federal Reserve's pledge of unending easing.

"Whether he [Fed Chairman Ben Bernanke] is right or wrong about the stock market as a transmission mechanism between QE and the economy, no one can deny that the 'Bernanke Put' has contributed greatly to the bull market," he said in emailed commentary. "The question is whether the law of diminishing returns might be setting in already. A case can be made that the S&P 500 peaked for the year at 1465 on September 14, the day after the FOMC voted to implement QE3."

While Yardeni gives Bernanke credit for stock prices doing so well, he's much less enthused with the impact the central bank's efforts have had on the economy, calling the recovery since the financial crisis "woefully unimpressive." And he doesn't think the central bank has anything left in the toolbox to make investors feel better about the fiscal cliff.

"There certainly isn't much more the Fed can do over the rest of the year even though investors are likely to get increasingly jittery about the coming fiscal cliff," he said. "Recent data on factory orders and personal income and consumption suggest that concerns about the cliff are already depressing business and consumer spending."

Meantime, Wells Fargo chief macro strategist Gary Thayer highlighted Wednesday night's presidential debate as a potential market mover later this week.

"Investors will be watching the upcoming presidential debates to determine which political party is more likely to control Congress and enact policies to avoid the fiscal cliff," he added. "If one party appears to be doing better than the other the uncertainty over the fiscal cliff could diminish. The biggest risk would be if there is a political stalemate preventing Congress from taking action. When election uncertainty diminishes, investors are likely to look beyond the election and focus on prospects for economic growth in 2013."

The debate will surely color trading on Thursday, especially if Republican presidential candidate Mitt Romney can win the day. The latest Wall Street Journal/NBC News poll showed the incumbent President Barack Obama is still ahead, 49% to 46%, but that's narrower than the advantage of five percentage points that Obama enjoyed coming out of the party conventions last month.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,912.11 -70.48 -0.42%
S&P 500 1,969.95 -8.96 -0.45%
NASDAQ 4,442.6980 -2.2110 -0.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs