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Early on, stock proxies looked to extend last week's impressive gains but the momentum petered out at about 11 a.m. EST. However, the downturn was subdued as well, and major averages were lately trading right near break-even.

After trading as high as 8866.82 and as low as 8756.02, the

Dow Jones Industrial Average

was up 0.1% to 8818.14 as of 2:15 p.m. The

S&P 500

was higher by 0.02% to 930.70 vs. its earlier best of 937.15 and nadir of 923.31. Meanwhile, the

Nasdaq Composite

was up 0.5% to 1475.59 after having traded as high as 1486.90 and as low as 1461.10.

The stock market's hesitation notwithstanding, the dollar moved to a three-week high vs. the euro after the National Association of Realtors reported existing home sales rose 6.1% in October to an annual rate of 5.77 million units vs. expectations for a pace of 5.37 million.

Meanwhile, September home sales were revised upwards. The greenback was also getting a boost from expectations that Tuesday's preliminary third-quarter GDP report will be revised upward to 3.8% growth from the 3.1% advance report. The U.S. Dollar Index lately was up 0.32 to 106.44.

Stocks of HMOs were among the big drags on the S&P 500. Following a downgrade from SG Cowen,

UnitedHealth Group

(UNH) - Get UnitedHealth Group Incorporated Report

was lately off 9.5%,

Wellpoint Health Network


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was down 9.2%,



was off 8.5% and


(CI) - Get Cigna Corporation Report

was lower by 2.6%.

Elsewhere, there were a lot of fractional moves for big-cap stocks;


(MMM) - Get 3M Company Report

was the only Dow component down by more than $1 while

General Motors

(GM) - Get General Motors Company Report



(MRK) - Get Merck & Co., Inc. Report

were the only two up by more than $1.

There were, as always, a few names with drastic changes, such as small-cap



, down 12.8% after disclosing late Friday that the FBI had raided its offices; it's unclear whether the FBI action was in conjunction with an ongoing

Securities and Exchange Commission

investigation of the firm's accounting.

The broader market's lethargy was not terribly surprising, given the big run-up since the Oct. 9 lows and the holiday atmosphere already prevailing on Wall Street in anticipation of Thanksgiving Day. From 1952 to 1987, the Wednesday before and the Friday after Thanksgiving were positive for the Dow every year save two (1964 and 1965), according to

The Stock Trader's Almanac

. Since 1987, however, the trading days on either side of Thanksgiving have only been positive half the time, although the track record improves if the following Monday's performance is also included.

This year, I suspect most money managers and traders would be thankful if the market's trend is merely flat this week. Once the big gains last Wednesday and Thursday pushed major averages beyond important technical resistance levels, chatter began about how the market was "tired" and "due for a rest" (or wildly overextended for the hard-core bears). Early Monday, there's a lot of talk about traders "not wanting to chase" the rally, which probably makes sense here.

Housecleaning, Part 1

Which brings us back to a scenario raised here

Friday, when I suggested the market could stay "mainly in rally mode until year-end, at least, the potential for short-term pullbacks notwithstanding."

That comment generated a lot of emails from readers who, in summary, observed that the least-expected scenario right now is for the market to suffer a sharp year-end selloff. That may very well be true, but sentiment is a tricky thing and sometimes we all get "too cute" with it, as my friend John Roque of Arnhold & S. Bleichroeder often says. That is, if "everybody" gets near-term bearish because they think "everybody else" is wildly bullish, then sentiment -- which is often a contrarian indicator -- really isn't so optimistic after all.

Notably, few, if any, of the contributors at

were terribly bullish about stocks in their Monday morning offerings. For example, technicians Gary B. Smith and Helene Meisler each wrote cautious-to-downright downbeat columns; Jim Cramer is talking about the market deserving to take a break; Alan Farley had a nice piece about rationality and the truth being somewhere in the middle of the bull or bear extremes, and do I really have to tell you what Herb Greenberg and Bill Fleckenstein are thinking? Over at

, Seabreeze Partners' Doug Kass writes: "My view remains that we are making a relatively important top in the markets."

Just something to chew on.

Secondarily, I wrote Friday that the "inevitable correction" from the post-Oct. 9 rally will "most likely occur by springtime," which really got some readers' dander up. Many interpreted this comment to mean I think the market could continue rallying until April showers bring May flowers, or thereabouts, which was not my point.

Rather, I was extrapolating the comparisons between the current rally and the one which began in late September 2001. That move, you'll recall, peaked on Dec. 5, 2001, with the S&P closing at 1170.35. Thereafter, the index went sideways, revisiting and marginally exceeding that peak level in early January and again in late March, after which the market starting sliding with the harsh selloff beginning in mid-May.

Point being, if the comparisons so many market players are making between the post-Oct. 9 and post-September 2001 rallies are accurate, the steep correction won't occur before springtime. That's a big "if", of course, but I hope that clears up any confusion about the point I was trying to make.

Housecleaning, Part 2

Meanwhile, I'm still getting a lot of feedback to a piece here last week about


Several readers wondered at what price-to-earnings ratios past bear markets have ended, and how the trailing 12-month P/E of around 20 I cited in my story compares.

Monday morning,


Arne Alsinaddressed this issue, reporting that while the 1973-74 bear market ended with P/Es under 10, bear markets in 1957, 1962, 1970, 1982, 1987, and 1990 ended with P/Es between 13 and 17. (There were no earnings in 1932, he noted, meaning P/Es were actually quite high.)

Of course, the midteens is lower than 20 and there weren't as many questions/qualms about the quality of earnings -- the denominator in the P/E formula -- in those past eras as in the current cycle. Bottom line, P/Es, on a trailing basis, are higher today than at any other bear market bottom, and Treasury yields were comparable in some of the past comparisons.

Speaking of Treasury yields, another significant portion of the feedback to the valuation story was about the so-called Fed model, which compares the earnings yield (or earnings divided by price) of the S&P 500 to the yield of the benchmark 10-year Treasury in order to determine whether stocks are under-, over-, or fairly valued.

Several readers wanted to know more about this metric and its history as a market prognosticator, as well as whether comparing stocks to Treasuries is really a fair measure. A forthcoming column will seek to address these and related issues, presuming market action allows.

Aaron L. Task writes daily for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

Aaron L. Task.