An indisputable way to describe yesterday's market is that it was an up day.  Was it a good day?  For the most part, it was a good day.  However, a broad-based retreat in the final 20 minutes that lopped off about 140 points from the Dow's larger gains left a lasting impression that this is still a skittish market.

Everyone is well versed by now on why the market is skittish, so we won't rehash the marquis reasons here. 

This is a day-to-day market, so the single point worth rehashing here is that participants yesterday, for reasons that might be totally invalid by the end of today, coalesced around the thought that global leaders are not going to allow another Lehman Bros. experience when it comes to dealing with the eurozone debt crisis.

That sentiment was borne out of some authoritative comments from Treasury Secretary Geithner heard in a CNBC interview and a joint statement from President Sarkozy of France and Chancellor Merkel of Germany later in the day that Greece is going to remain in the eurozone.

Of course, neither Sarkozy nor Merkel said anything along the lines that they will absolutely not let Greece default on its debt, so be aware that the road they paved with good intentions is bound to have some potholes that could cause a few breakdowns still on this seemingly never-ending journey to debt resolution.

The latter point notwithstanding, yesterday's trading action had a feel to it that there was a fear of missing out on further gains that would be catalyzed by more hopeful headlines of solidarity in dealing with the debt crisis.  At the least, it probably put short sellers on notice that they run a high risk of being overrun in a hurry by underinvested participants aiming to get back in the market on the belief that the recent selling has created great relative value opportunities for long-term investing.

In other words, it is possible we may see a softening of the propensity to sell into strength in the near term, assuming the incoming economic data don't exacerbate double-dip recession concerns and European officials can convey a functionally, pro-active approach to dealing with their fiscal and monetary issues.

There have been a number of economic release this morning and there are more to follow, namely the Industrial Production report for August (Briefing.com consensus 0.0%; prior +0.9%) at 9:15 a.m. ET and the Philadelphia Fed Index for September (Briefing.com consensus -10.0; prior -30.7) at 10:00 a.m. ET.

The early reports included the CPI Index for August, initial claims for the week ending Sept. 10, the Empire State Index for September, and the Current Account Balance for the second quarter.

The headlines themselves for these reports didn't trumpet a lot of good news.  The Current Account Balance, which showed a deficit of $118.0 bln, was the only report that topped expectations (Briefing.com consensus -$121.0 bln; prior -$119.3 bln).

CPI was up 0.4% (Briefing.com consensus +0.2%), pushed higher by broad-based price increases that were led by the gasoline, shelter, food, and apparel indexes.  The August report left the CPI Index up 3.8% over the last 12 months before seasonal adjustment.

Core CPI rose 0.2%, with the shelter and apparel indexes serving as the biggest contributors to the increase.  Core CPI, which is up 2.0% over the last 12 months, is at its highest point since November 2008.

The Fed is apt to take some comfort in core CPI being up 2.0% year-over-year, cognizant that deflation is not a battle it wants to be fighting.  On the flip side, though, the rising trend here is why the bar for QE3 remains quite high for some members.

Having said that, the initial claims report for Sept. 10 could be viewed by more dovish members as another marker for why the Fed needs to take further steps with monetary policy to try and stimulate economic growth.  Claims rose 11,000 to 428,000 (Briefing.com consensus 410,000), bringing the 4-week moving average up to 419,000.  These claims levels are inconsistent with payroll growth exceeding 100,000.

Continuing claims for the week ending Sept. 3 fell 12,000 to 3.726 mln, yet that was higher than the 3.700 mln expected by the Briefing.com consensus.

The Empire State Index produced a reading of negative 8.8 (Briefing.com consensus -4.0).  New orders held fairly steady at -8.0, but the bigger point is that a negative number still connotes contraction in this manufacturing region.

The S&P futures took the economic reports in stride, though they dipped a bit from higher levels prior to the releases.  Just moments ago, however, a headline crossed that the ECB is going to offer European banks dollar loans, which have been coordinated with the Fed and other central banks.  This headline provided a pop to the S&P futures, which are trading 0.5% above fair value.

--Patrick J. O'Hare, Briefing.com

Patrick J. O'Hare is Chief Market Analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial, please email researchsales@briefing.com.