Bulls Trample Credit Fears

Beyond the balance sheet, investors in these companies must contend with bigger questins. Bove notes that with the collapse of the market for so-called structured finance deals -- collateralized debt obligations and the like -- the firms will lose what has been a source of strong profit growth. He believes it is doubtful brokers will lend to hedge funds at the heated clip they have been. And the firms' private equity business will be considerably dampened as deals dry up.

So even as Wall Street applauds another red letter day, some people are urging investors not to get caught up in the celebration.

"From a trader's perspective, when you're dealing with companies facing big balance sheet issues, you're trying to judge how bad shape the company's in and if it's playing for time," says David Merkel, an investment consultant and contributor at RealMoney.com, TheStreet.com's investment-ideas site. "If things are bad, you [the company] write down a little, make it look like you put down a lot and play for time. If things are good, you mop up and move on."