GE is the key to this market right now. As we discussed in greater detail in our 13:19 comment, the primary fear is that expectations for massive losses in GE Capital could prompt one or more of the ratings agencies to downgrade GE's debt below the coveted AAA rating. The fear that this could be imminent is what took the stock down 20% this morning.
Yet GE has put together an extremely impressive rebound from its 5.73 session low, clawing its way all the way back to 6.88 -- not too far from the unchanged level.
If GE can manage to close near unchanged -- or even in the green -- after the brutal forced selling we saw this morning, this would provide an important psychological boost to a market that is searching for a reason to bounce. (As an aside, a strong close by GE today would not mean that investors think a ratings downgrade is unlikely; rather it would suggest that they think that the stock at $6-7 already prices much of that risk in.)