Market Lurching To-and-Fro

Rotblut of Zacks didn't fully agree, saying the administration deserves some praise for being creative in the face of a crisis. "Considering there's going to be a transition in the administration I do think he's trying to allow for some flexibility," he said. "Despite all the criticism, I think it's important that we have some action. In a crisis situation, action's always better than non-action."

Rotblut said that any solution to turmoil in the financial markets would be an educated guess at best, and declines in Libor rates and improvement in the Treasury-Eurodollar spread indicate that lending markets have been calmed somewhat by recent government initiatives.

Jeff Saut, chief investment strategist at Raymond James Financial, said that the Oct. 10 lows in the major averages marked capitulation and a price panic. He said that since then, the market largely survived a retest of those lows Nov. 13 and now appears to be forming a triple bottom, which is typically followed by a short-term move to the upside.

"That doesn't mean that we've started a new secular bull market, but it does mean we could begin the fabled Santa rally," said Saut, referring to a rise in stock prices that sometimes occurs in late December.

The automakers, also lately on the ropes, were once again on investors' radar, as Mazda Motor said Ford (F Quote) was reducing its stake in the Japanese company to 13% from 33%. Ford, along with General Motors (GM Quote) and Chrysler, are facing mounting cash-flow problems on declining vehicle sales, credit crunch -related financing troubles and substantial legacy costs.