Wall Street Bulls Take the Win

Meanwhile, the National Association of Realtors said Tuesday that the pending home sales index declined in the face of job losses and an eroding economy after holding fairly stable for a year. The index, based on contracts signed in November, fell 4% to 82.3 from 85.7 in October, and is 5.3% below a year prior. It's the lowest reading since the series began in 2001, according to the NAR.

"December's housing market activity could be comparably lower due to ongoing problems in the economy, so a real estate-focused stimulus plan is urgently needed," said Lawrence Yun, NAR chief economist.

The Commerce Department reported that November factory orders fell 4.6%, double the expected decline.

One bright spot in Tuesday's data, the Institute for Supply Management said its December index of non-manufacturing activity, rose to 40.6 from 37.3, four points higher than expected.

"This is a mildly pleasant surprise but it is likely nothing more than noise; the trend in the index is still downwards, following the meltdown in retail sales," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Meanwhile, Bank of America (BAC Quote) made water-cooler talk on two fronts Tuesday. Some of Merrill Lynch's high profile talent is slipping through BofA's fingers days after it closed the acquisition. Bob McCann, who previously led Merrill's retail brokerage has stepped down. The brokerage is considered a primary reason for the acquisition.

Also, CEO and chairman Kenneth Lewis in an internal memo said he expects final results for the year to come in below expectations and suggested that he and his top staff not reap bonuses for 2008, according to a report in The Wall Street Journal. Shares added 2.2% to $14.28.