The Relief Rally Unravels

Index	Close	Change
Dow	9096.69	-91.46
S&P 500	973.80	-2.93
Nasdaq Composite	1681.48	-27.02
Nasdaq 100	1240.78	-19.13
Russell 2000	475.17	-7.59
Semiconductor Index (SOX)	375.97	-7.74
Bank Index	885.31	-11.34
Amex Gold Bugs Index	149.55	+5.28
Dow Transports	2572.55	-3.74
Dow Utilities	233.56	-4.03
NYSE advance-decline	-1,403	-2,552
Nikkei 225	9527.73	+28.87
10-year Treasury Bond	4.17%	+0.205

Editor's note: This column, which reflects market activity from the day before, originally appeared July 21 on RealMoney.com. To sign up for RealMoney, where you can read Bill Fleckenstein's commentary every day, please click here for a free trial.

Overnight, the markets were rather quiet, as were our futures heading into the bell. We stumbled at the open, as Merck(MRK Quote) missed the number by a penny. That stock was penalized for two bucks, even as 3M(MMM Quote) got five bucks to the upside for doing a penny better. As I said last week, this game of beat the number is so stupid that we should completely stop talking about it. Making or missing an inconsequential estimate that you set for yourself via the dead fish means nothing in the big scheme of things, except for the fact that you couldn't steer them to the number you'd previously agreed on.

3M Enters Emerald City: Probably more important, at least to the tech tape, was that Lexmark(LXK Quote) fell a couple cents short of its target. Specifically, the company cited corporate/consumer weakness, as well as some competitive pressure. The latter should hardly have been a shocker, because competition's been on the horizon there for quite some time. In any case, Lexmark was clobbered for better than 15% in the early going, and that weighed on tech across the board, while over in Dow land, 3M's strength was helping to prop things a bit.

The early-morning slide continued until about midday. Next we had a bounce, then went nowhere. With about an hour to go, the market was back on its lows, with the Nasdaq down about 2%, and the S&P and Dow down a bit less. The Rap was put to bed an hour early. I'm not sure where the close is going to be, but my guess is, no matter what happens, today we will see that the market was under a good deal of pressure.

Stocks, Bonds Take Communal Bloodbath: I must emphasize that I do not recall having seen a day, certainly in the last 10 years, when fixed income would get hit and equities would not lift. In the past, people would say, well if things are bad in bond land, it must be because they're good in equity land. Or, equities would get hit and bonds would lift, because folks usually figure that stocks going down is good for bonds. Today, both declines appeared to feed on themselves, rather than one market helping out the other market.