After 2 days of rather euphoric bullish trading, the major market indices are flatlining today as traders digest activity from the past couple of sessions. Adding a bit of upside bias to today's trading was an improving report from the Philadelphia Fed. According to the City of Brotherly Love, manufacturing activity in the region accelerated as the Philly Fed index rose to 10.9 from zero in August. Readings over zero indicate expansion. The new orders index jumped to 15.1 in September from 7.1 in August, while the expectations index was virtually unchanged at 35.7.

Elsewhere, Federal Reserve Chairman Ben Bernanke told the House Financial Services panel today that the Fed's 50 basis-point rate cut was designed to forestall potential effects of tighter credit conditions. We took that action to try to get out ahead of the situation, Bernanke told the panel, noting that the central bank's economists would constantly review their internal forecast. There is quite a bit of uncertainty, so we're going to have to continue to monitor how the financial markets evolve and how their effects on the economy evolve and try to keep reassessing our outlook and adjusting policy to meet the Fed's goals of price stability and low unemployment.