Two opposing forces left the market rather flat on the day. Both were market leaders in the recent rally. Energy fell in the wake of Schlumberger’s acquisition of Smith International. Buying a company with stock is often interpreted as saying your own stock is fully priced. Meanwhile, increasing nervousness over the Fed’s decision to raise the discount rate, and what that might do to the tenuous recovery, also weighed on Energy stocks. On the plus side, the Financials did well to extend recent modest gains. Yesterday, Bank of America settled with the SEC over the Merrill acquisition. Putting that uncertainty to rest was bullish for the stock. Add an upgrade for PNC and Financials offset the weakness in Energy. The other key sector, Technology, was treading water yesterday, offering no guidance in direction. There are a few minor economic reports out this week, but investors will be listening to Bernanke’s testimony on Wednesday. He will insist that the increase in the discount rate is not a precursor to the start of an “exit strategy”. However, his appearance on Capital Hill is just fodder for politicians ahead of the election. They have no intention of asking the Fed Chairman anything positive. Obama will be hosting a healthcare summit. The Republicans have declared any and all proposals DOA. It simply isn’t worth putting oxygen in the room. Investors should tire of the fighting and we expect the first misstep to start the whispers about a “test” of the recent low.