The market is extending its gains this morning after the government announced it is willing to provide up to $800 billion to help the market for consumer debt and mortgage loans. The goal is to help make loans cheaper and more available for the companies that issue credit cards, make student loans and finance car purchases so that they can get the credit markets going. Credit lenders have been charging higher rates and are being more stringent in making loans.

As a result all the indexes have opened higher but the bulls have got to be frustrated. Before the announcement, the futures had been pointing to a lower open and while they will take it, the bulls have to be worried that the only reason the market has been rallying is because of bailout news.

In early action, the Dow is up over 120 points to 8,564. The index is up 1,000 points from last Thursday’s close of 7,552 but there have been no other real catalysts that have helped fuel the market higher.

The S&P 500 is up 18 points, to 866.20 while the Nasdaq is higher 5 points, to 1,477.

The government’s latest effort to jump start the economy is being cheered by the market but we can’t ignore the fact consumers slashed spending by the most in nearly 30 years. The nation’s overall economic output shrank in the July-September quarter faster than initially estimated and it shows that we are all hoarding cash.

Maybe some of this “savings” will flow in the marketplace but I really don’t expect consumers to be spending as much on the holidays like years past. In fact, I think the retail numbers will be lousy when companies start to report earnings in January.

Rick Rouse