Early Look: Tech Relative Outperformance Continues

The market was briefly higher in early trading, but has since dipped back into negative territory. Actually, the SPX is lower on the day right now, but the Nazz is still barely in positive territory.

Tech is handily outperforming today, and continuing the relative sector outperformance that we have seen of late. Materials are taking it on the chin so far this morning. The poster child for the group could be Freeport McMoran (FCX) which is down more than -5% as copper prices have plunged recently and there is chatter of slowing demand from big players like China.

In corporate news, solid earnings reports from ORCL, ADBE, and GIS have boosted all three of those stocks this morning. Also, Microsoft raised its quarterly dividend by 25%, but so far its not helping the stock.

In economic news, new home sales came in better than expected at 5.03 million units in August, which is up from last months rate of 4.67 million units. Not bad for a month like August, when it seemed like bad news was everywhere.

Asian markets were mixed overnight, but China was able to rally 2.7%. Europe's markets are down again this morning despite EU officials saying they believe progress is being made on Greece's debt.

The dollar is higher this morning, and commodities are mixed. Oil prices are higher near $87.88, while gold prices are lower to $1797.

The 10-year yield is lower again to 1.91%, and getting close to hitting new lows in yield. The VIX is bouncing higher from its 50-day average, up 4.5% to 34.38.

The Fed will make its policy statement today and there is a ton of chatter about "Operation Twist", where the Fed might sell short-dated Treasuries and buy long-dated ones. With yields on the 10-year already below 2.00%, I'm not sure how big of an effect this could possibly have. If it spurs more bank lending, I'm all for it, but it would seem there might be a better solution if increased bank lending is truly the aim. Let's see what the Bernank has to say about it.