Weak guidance comments in the earnings announcements of CAT and MSFT, plus a larger decline in durable goods orders spooked traders this morning. SPX opened down about $10 and within an hour or so, the losses had widened to about $35. SPX traded as low as $2020 before beginning to recover, closing at $2030, down $28. RUT closed at $1195, down $6. Volatility bounced up a bit, but not as much as I would have predicted, with the VIX closing up two points at $17.9%. Suddenly everyone is a bear.

The durable goods orders report for December dropped 3.4%, worse than the 2.1% decline in November. But other reports today were more positive. The Case Schiller housing price survey came in at +4.3% for November, down a bit from the previous reading of +4.5%. Similar to the University of Michigan numbers, the Conference Board's consumer sentiment survey hit a high note of 102.9 for January, the highest report since August of 2007. The annualized rates of new home sales for December came in at 481 thousand, up from the previous 431k.

AAPL and YHOO were both trading higher in after hours markets after their earnings announcements; maybe that will improve the moods on the street tomorrow.

My Feb iron condor on RUT continues in the black with a net P/L of +13%. We sold the AAPL 97/102 and 120/125 iron condor on AAPL in our trading group today as a play on the earnings announcement. So far, so good...