STOCK MARKET WATCH, Tuesday 1 February

[ozymandius]

Tuesday February 1, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 353 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 52 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 106 DAYS
DAYS SINCE ENRON COLLAPSE = 1167
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

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AT THE CLOSING BELL ON January 31, 2005

Dow... 10,489.94 +62.74 (+0.60%)
Nasdaq... 2,062.41 +26.58 (+1.31%)
S&P 500... 1,181.27 +9.91 (+0.85%)
10-Yr Bond... 4.13% -0.01 (-0.14%)
Gold future... 424.10 -4.00 (-0.94%)





GOLD, EURO, YEN, Dollars and Loonie

---

PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

[katinmn]

1. Want to comment on how Wall Street

responded to the resounding success of the Iraq elections?

I see lots of + signs and I imagine that's what much of this is all about.

[RawMaterials]

3. IMHO I was allmost positve

that the markets were going to go up on monday just like they went down on friday in fear of the worst posible situation in Iraq. Who knows though, M&A seam to be good for markets but horible for jobs. I still am waiting for stocks that i like to get abit cheeper before i would think about buying anything.

[54anickel]

32. That brings up the old discussion here on SMW -

If the markets are truly forward looking futures devises, does the news really move the markets or are the headlines scanned for news that fits the movement?

[RawMaterials]

38. That could be a long philosophical discussion

Do you see truth,or do you see what you want to see, or do you see what you are comfortable understanding and accepting.

[54anickel]

2. Good Morning Ozy and great toon. I was wondering if we'd have

any of the analysts point to the groundhog as the reason for changes in oil prices today. Seems it's all about the weather forecast these days. :eyes:

[RawMaterials]

5. when the groundhog's on the take

everything is really screwed. mornin Oz & 54anickle

[happyslug]

40. Punxsutawney Phil denies taking money

It was that new Groundhog pushing the PA Lottery!!!!
"I should sue him for slandering my good name!!!!"


Official Punsutawney Phil Web Site:
http://www.groundhog.org/

http://www.punxsutawneyphil.com/

This is the EVIL Groundhog:

http://www.palottery.state.pa.us/

[ozymandius]

20. Good morning all.

:donut: :donut: :donut: :donut:

I have just a few minutes to spend here. It's good to see you all again - without any shenanigans from my computer.

Is there any good news on the table today?

Ozy :hi:

[54anickel]

24. Hi Ozy!

Hmmm, good news? Can't think of any off the top of my head. :evilgrin:

[RawMaterials]

4. Wall St.'s Fed watch, day 1

Two-day meeting starts with investors awaiting signs of pace of future interest rate hikes.U.S. stock futures were little changed in early trading, indicating a flat opening for stocks.

While the Fed Open Market Committee starts its meeting Tuesday, it's not expected to release its statement or interest rate decision until around 2:15 p.m. ET Wednesday. Another quarter-percentage point interest rate hike is widely expected; what investors will be waiting to see is comments in the statement that could indicate more aggressive hikes are ahead.

snip..

Bond prices were little changed, leaving the yield on the 10-year treasury at 4.13 percent in early trading Tuesday. The dollar edged higher against the euro and the yen.

Economic reports due Monday include the first reading on the state of manufacturing in January from a survey of supply managers. The Institute of Supply Management index is expected to fall to 57.0 from 57.3 in December, according to economists surveyed by Briefing.com.

Any reading above 50 indicates growth in manufacturing.

The government report on December construction spending is also due, with economists forecasting a 0.5 percent gain, compared with a 0.4 percent decline in November.

http://money.cnn.com/2005/02/01/markets/stockswatch/index.htm

[54anickel]

9. Fed Voters Face `More Difficult' Task in Greenspan's Final Year

http://www.bloomberg.com/apps/news?pid=10000103&sid=aRrq3AxfcyfM&refer=us

Feb. 1 (Bloomberg) -- Alan Greenspan's final year as Federal Reserve chairman may be marked by more disagreement among policy makers than he's grown used to, former Fed officials said.

big snip>

``The chairman will sort of tacitly ask for and receive the political capital he's built up over the years if there comes a point that divisions crop up,'' said Tom Schlesinger, executive director of the Financial Markets Center, a non-profit central bank research center in Philomont, Virginia.

From 1983 through 1994, there were an average of eight dissents a year on policy votes, according to a study by Daniel Thornton of the St. Louis Fed bank. There have been only six in the last five years, and Governor Edward Gramlich is the only one of those dissenters who still has a vote on the committee.

``Clearly they're not as capable of dissenting as they were in my time,'' Angell said. ``My last year at the Fed, I dissented at five of the eight meetings, suggesting that we ought to be moving the rate higher.''

The former Fed governor said he's troubled by the lack of public dissent, especially when minutes of the December FOMC meeting released on Jan. 4 showed some members were more worried about inflation than the Fed's post-meeting statement suggested.

``I get the impression from the minutes that people are willing to express their views,'' Angell said. ``It's just that after they express their points of view, no one seems to be willing to say I'll put it on the line with regard to my vote.''

more...

[RawMaterials]

6. Paying back jilted investors

Long-awaited plan to distribute $433 million to investors hurt by Wall Street is made public.NEW YORK (CNN/Money) - It's been nearly three years since Wall Street's giants agreed to pay $1.4 billion to end accusations that they issued tainted research during the late 1990s stock boom in the hopes of winning lucrative investment business from the companies they were supposed to cover objectively.

snip..

To date, the regulatory crackdown that began with Enron's late 2001 implosion has led to nearly $5 billion worth of settlements. Roughly half of that amount has been earmarked for investors, although very little has been distributed as courts grapple with the difficulty of identifying investors and calculating their losses.

snip..

The little guy gets ahead

"The process of designing a distribution plan in connection with the global research analyst settlement has been extremely complex and sensitive," McGovern said late Monday. His plan, he said, aims to treat investors fairly given the practical limits.

The plan is based on some key principles. Investors who lost less than $100 on any given stock covered in the settlement are out of luck, victims of the need to dole out the money quickly and efficiently once the plan is approved.

Two, investors had to have bought stock in a given company through one of the Wall Street firms and at some point during a specified period of time. They also had to lose money as a result, although they don't have to show whether they bought the stock based on the biased research.

For instance, an investor who bought AT&T stock through Citigroup between late Nov. 1999 and late January 2000 could have a claim. The same goes for investors who purchased Global Crossing shares through Goldman Sachs from late March to mid-June of 2000. Or anyone who purchased Inktomi stock from Morgan Stanley during a one-month period in late 2000.

snip..

A court hearing to address any comments has been set for April. Once approved by the court, McGovern has nine months to cut $433 million worth of checks.



http://money.cnn.com/2005/01/31/news/fortune500/research_settlement/index.htm

[54anickel]

13. Retail investors could win big in banks deal

http://news.ft.com/cms/s/29979524-73e6-11d9-b705-00000e2511c8.html

Retail investors may be more likely than institutional investors to get significant compensation under a settlement between regulators and 12 investment banks that were accused of abuses, according to a plan filed with the courts on Monday.

The plan is part of the global settlement that the banks made with regulators between 2002 and 2004 after research analysts were accused of privately disparaging stocks they had publicly recommended to investors.

Regulators accused some analysts of abandoning their independence as part of efforts to drum up investment banking business with clients.


snip>

The plan document also suggests retail investors may be more likely to get significant compensation than institutional investors. “Investors who make larger purchases of stock are more likely to have both greater and more diverse informational resources than smaller investors,” says the plan document.

snip>

The banks which were parties to the settlement are: Bear Stearns, JPMorgan, Lehman Brothers, Merrill Lynch, US Bancorp Piper Jaffray, UBS, Goldman Sachs, Citigroup, Credit Suisse First Boston, Morgan Stanley, Deutsche Bank and Thomas Weisel Partners.

more...

[54anickel]

7. U.S. Stock-Index Futures Decline; JPMorgan, Microsoft Fall

http://www.bloomberg.com/apps/news?pid=10000103&sid=aoZi3eRtpsfI&refer=us

Feb. 1 (Bloomberg) -- U.S. stock-index futures fell before the Federal Reserve starts a two-day meeting that will probably result in the sixth straight interest-rate rise since June. JPMorgan Chase & Co. and Microsoft Corp. declined in Europe.

``The question is whether the Fed thinks the rate increases are sufficient to curb ballooning consumer debt,'' said Rudi Van Den Eynde at Dexia Asset Management in Brussels, which oversees about $12.2 billion in assets, including U.S. stocks. ``If they have to hike faster, that would be negative for stocks because it may curb spending.''

Walt Disney Co., the second-largest U.S. media company, rose after reporting fiscal first-quarter profit and revenue that beat analysts' expectations. Google Inc., the most-used Internet search engine, slid before reporting earnings.

Standard & Poor's 500 Index futures expiring in March fell 1.1 to 1180.80 as of 10.22 a.m. in London. Nasdaq-100 Index futures slid 1.5 to 1524, while Dow Jones Industrial Average futures lost 13 to 10,475. Eighteen of the 25 Dow stocks trading in Europe declined.

more...

[RawMaterials]

8. FOREX-Dollar moderately stronger, eyes Fed and G7

LONDON, Feb 1 (Reuters) - The dollar edged up against major currencies on Tuesday, but kept to tight ranges versus the euro ahead of an expected Federal Reserve rate hike and a meeting of Group of Seven industrialised nations later in the week.

The yen lost some ground on waning expectations for a revaluation of the Chinese yuan after a G7 source told Reuters on Monday the meeting is not looking for an abrupt change in China's currency policy.

"Positions are square now and people are sitting back and waiting for the events later this week," said Paul Mackel, currency strategist at ABN AMRO in London.

"The China comments affected the yen but in general there is more trading in crosses than euro/dollar."

snip..

WEEKEND ACTION

The Fed is widely expected to decide on another quarter percentage point hike in the fed funds rate on Wednesday.

But traders will be looking for any signs that the central bank could accelerate its campaign of "measured" monetary tightening in coming months.

"We expect a rate hike but no new language," said Tim Fox, market strategist at National Australia Bank in London.

"Once the factors we are waiting for, like the G7, are over, the dollar could trade more positively because rate hikes will be positive for the dollar," he said.

If the Fed raises rates to 2.5 percent as expected, that would lift returns on U.S. deposits further above those in the euro zone. The European Central Bank is expected to leave rates unchanged at 2.0 percent in a policy meeting this week

snip..

YUAN DIRECTION

Dealers said that in the short term the yen could come under mild pressure on receding expectations that China will soon relax the peg of its currency to the dollar, a move that would likely buoy Asian currencies.

The Japanese currency shot up to a five-year high of 101.65 yen versus the dollar in mid-January on speculation that such a move was imminent.

The Group of Seven economic powers does not expect China to announce any change to its currency regime at this week's talks in London and is not looking for an abrupt change in policy, a European G7 source said late on Monday

http://www.reuters.com/financeNewsArticle.jhtml?type=usDollarRpt&storyID=7498186

[RawMaterials]

10. European Manufacturing Growth Accelerates for Second Month on Weaker Euro

European Manufacturing Growth Accelerates for Second Month on Weaker Euro

Feb. 1 (Bloomberg) -- Manufacturing growth in the dozen countries sharing the euro accelerated for a second month in January as the single currency and oil prices retreated from records and German consumers became more optimistic.

An index based on a survey of about 3,000 purchasing managers compiled by NTC Research Ltd. for Reuters Group Plc rose to 51.9 from 51.4 in December, according to figures available on the Internet today. A reading above 50 shows expansion.

The euro's 4.6 percent decline against the dollar in the past month has helped ease concern about sales abroad. A 12 percent drop in oil prices since an October high and rising consumer confidence in Europe's largest economy suggest domestic spending may pick up. Axel Heitmann, chief executive officer of Lanxess AG, the chemicals unit spun off by Bayer AG, said yesterday he expects ``strong'' growth in Europe.

``The euro has stopped appreciating and companies seem to be looking into the future with more optimism,'' said Patrick Muhl, head of market research at Siemens AG's investment unit in Munich, which manages the equivalent of about $13.6 billion for the largest German engineering company.

snip..

Unemployment Concern

European companies may keep hiring plans on hold until they see more signs growth is picking up. The unemployment rate in the euro region rose to 8.9 percent in December, close to a five-year high, a report by the European statistics office showed today.

An index in today's PMI report measuring employment dropped to 48.1 from 48.3, suggesting companies aren't yet optimistic enough about growth to take on more staff.

Recent reports have been mixed. European business confidence fell to a seven-month low in January, the European Commission said yesterday. Consumer confidence stayed at the highest in more than two years. German executives' confidence rose to an 11-month high in January and Italian manufacturers also grew more optimistic. In France, manufacturers' confidence was unchanged last month.

In Germany, the purchasing managers index rose to 52.4 in January from 51.7 the previous month. In France, the index was little changed at 52.6 from 52.5. Italian manufacturing returned to expansion last month, with the index rising to 50.1 from 48.6

snip..

Oil Price Drop

The U.S., the world's largest economy, grew the most in five years in 2004, expanding 4.4 percent. China's economic growth accelerated to 9.5 percent from 9.3 percent in 2003.

Renault SA, France's second-largest carmaker, expects 2005 sales to match last year's. In 2004, worldwide vehicle sales of the Boulogne-Billancourt, France-based company rose 4.2 percent.

``I see Renault growing in 2005 as we grew in 2004,'' said Renault Chief Executive Officer Louis Schweitzer in an interview at the World Economic Forum in Davos, Switzerland on Jan. 30. ``We are not only present in Europe, we are expanding in the markets of the worlds and hopefully expanding faster


http://www.bloomberg.com/news/economy/economies.html

some positive news coming out of Europe

[54anickel]

11. Shorter-dated Treasuries dip ahead of Fed meeting

http://news.ft.com/cms/s/c43dee3c-73f7-11d9-b705-00000e2511c8.html

Shorter-dated Treasury bond yields rose and prices fell yesterday as investors waited for an expected interest rate rise from the US Federal Reserve this week.


The rise took the spread between two-year and 10-year notes to its lowest since April 2001, at 81 basis points.

"Curve flattening" trades - selling shorter-dated paper in favour of longer-dated notes - have been popular recently as investors become more confident that interest rate rises now will limit inflation in coming years.

"Our technical analysts believe the spread can easily tighten to 75bp," said Kim Rupert at ActionEconomics. "Beyond that, 50 would be a big psychological level." :wow:

snip>

There was little reaction to Treasury plans to borrow $147bn in the first quarter. Although it would be the largest quarterly borrowing on record, it was expected by the market and was just $1bn more than the amount loaned last year. :crazy:

more...

[RawMaterials]

14. when inflation hits its going to be huge

this much borrowing is going to really hurt down the road.

[54anickel]

17. Yep, and it really can be considered an indirect tax. The gubbermint

keeps borrowing to pay their "cronies" whether it be in the military and defense industry or Wall St. Meanwhile the rest of us lose purchasing power with our bucks. So, the interest of the well to do are taken care of by both the tax cuts and inflation.

Now, just think of the boom SS privatization makes, borrowing the transition money needed. Sheesh, it's almost as if they are splitting up the spoils of the nation. The elite that live off of their unearned income got their tax cut. The military industry are getting their cut. Now they need to take care of the bankers on Wall St. :crazy:

Meanwhile, I've purchased a new wheelbarrow.

[54anickel]

12. Judge Approves United Pay Cuts

http://news.airwise.com/story/view/1107251440.html

United Airlines on Monday won court approval for wage cuts for its pilots and flight attendants worth USD$311 million annually, clearing a hurdle in its bid to exit bankruptcy protection.

snip>

The rulings move United a step closer to achieving the USD$725 million in annual labor savings it says it needs to exit Chapter 11.

The deals cut the pilots' pay by 11.8 percent and the flight attendants' pay by 9.5 percent.

Mechanics' salaries will be cut by 9.8 percent over four months, savings worth USD$21 million, paving the way for a possible clash with their union which has rejected wage cuts and voted to strike if the court alters its contract.

snip>
United now has tentative deals with four of the six unions from whom it needs wage concessions. Labor groups have already approved USD$2.56 billion in concessions.

more...

[54anickel]

15. Exports to China surging for firms

http://seattletimes.nwsource.com/html/businesstechnology/2002166449_chinaexports01.html

Boeing, which just won a $7.2 billion order from China for jetliners, isn't the only U.S. company whose exports to the world's most-populous nation are flying high.

In 2000, exports to China accounted for just 1 percent of sales at Santa Clara, Calif.-based Applied Materials, the world's biggest maker of computer-chip equipment. By last year, says Executive Vice President David Wang, the figure zoomed to 12.5 percent — almost $1 billion.

snip>

The growth of U.S. exports to China is overshadowed by the political debate about cheap imports, which labor groups say contributed to the loss of 2.6 million manufacturing jobs in the U.S. since March 2001. The U.S. probably imported a record $195 billion of goods and services from China during 2004, producing a bilateral trade deficit of about $160 billion, NAM estimates.

The Bush administration has made raising exports to China a priority, in part to ease the trade deficit. The administration is encouraging China to let its currency float against the dollar, making exports to China more competitive; leading trade missions; and trying to help manufacturers increase sales.

"We're trying to go after the barriers they're facing," Al Frink, the administration's newly appointed "manufacturing czar" at the Commerce Department, says in an interview. "Our manufacturers, especially our smaller ones, are fearful of getting into China because they are fearful of market access and intellectual-property protection."

more...

BFEE has an awful lot of ties to China...:shrug:

[RawMaterials]

16. Don't Let Dismal January Barometer Bring You Down: Chet Currier

Don't Let Dismal January Barometer Bring You Down: Chet Currier

Feb. 1 (Bloomberg) -- A bad first month is an ugly omen for the year in the stock market.

So warns a staple of investment folk wisdom called the January barometer. ``As January goes, so goes the year,'' say Yale Hirsch and Jeffrey Hirsch in the 2005 edition of their Stock Trader's Almanac.

``The indicator has registered only five major errors since 1950 for a 90.7 percent accuracy ratio,'' declares the almanac, a delightful compendium of statistics and financial lore I have read and quoted from regularly for most of its 38 years.

This year, with a 2.5 percent decline in the Standard & Poor's 500 Index, the January signal looks bleak. But recent history says that, in and of itself, is not necessarily cause to give up all hope for the remaining 11 months of 2005

snip..

Auto-Destruct

Experience shows, though, that a credible story isn't enough to make an indicator useful. Built into markets is a mechanism that tends to diminish the reliability of indicators as they increase in popularity -- the old ``what everybody knows is no longer worth knowing'' problem.

Markets don't wait for something that is expected to happen. They adjust for it immediately. So the better an indicator worked in the past, the more suspect it may become for future application.

My latest personal experience with market augury dysfunction, or ``MAD'' for short, began about this time last year when I proposed an indicator of my own. In modern U.S. presidential election years, research I looked at suggested, the party in power faced trouble at the polls if stock prices didn't post a substantial gain through the first nine months of the year.

The indicator had gone like clockwork in 1988, 1992, 1996 and 2000, and had a tidy logic behind it. Over the last couple of decades, with the rise of mass investing through mutual funds and retirement accounts such as employer-sponsored 401(k) plans, everyday people had acquired the means to express their feelings in the stock market. More and more, the investors were the voters.

Pratfall

That made a perfect setup, as it turned out, for a flop in 2004. Though the S&P 500 barely gained any ground from New Year's through September, prefiguring trouble for the incumbent at the polls, President George W. Bush won re-election, prevailing in the popular tally by 3 million votes.

There are a couple of lessons here. First, markets evidently can't forecast what people will do any better than people can forecast markets.

Second, in either finance or politics, all signs that purport to foretell the future are to be distrusted. That goes especially for indicators that sound smart and happened to be right in the recent past.

Pay not attention to the man behind the curtain.

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_currier&sid=aADz_VunkTdo

[54anickel]

18. Pre-opening blather

9:15AM : S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +3.0.
9:00AM : S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +3.5. Futures trade ticks a bit higher, setting the stage for a flat to slightly higher open for the cash market... BSX, VLO and PCAR have been the latest S&P 500 components to beat analysts' estimates while oil prices have stabilized below $48/bbl... Companies in focus following some notable ratings changes include upgrades on T, XOM, WYE, FON and MCK while SBC, MCD, MEL and TIF have been downgraded

8:30AM : S&P futures vs fair value: +0.7. Nasdaq futures vs fair value: +2.0. Still little enthusiasm seen in the futures market as current indications suggest the indices will start the day on a relatively flat note... Walt Disney (DIS) has made headlines after it beat analysts' Q1 forecasts by $0.05 last night while reports suggest United Technologies (UTX) is close to buying Boeing's (BA) Rocketdyne unit for more than $500 mln...

General Motors (GM) should also be in focus as U.S. car makers report monthly auto sales sometime during market hours while Microsoft (MSFT) has formally launched its new Internet search engine

8:00AM : S&P futures vs fair value: -0.2. Nasdaq futures vs fair value: +1.0. Futures market suggesting a relatively flat open for the cash market... Contributing to the subdued action is the beginning of a two-day FOMC meeting that is widely expected to raise interest rates 25 bp tomorrow as well as upcoming readings on manufacturing and construction spending (10:00 ET)... Investors are also sifting through another batch of earnings reports that have so far revealed better than expected eanings from ASD, HCA, IR, EMR, GP, LLL and XEL and in line results from TYC

6:19AM : S&P futures vs fair value: -1.0. Nasdaq futures vs fair value: flat.

6:19AM : FTSE...4871.10...+18.80...+0.4%. DAX...4268.65...+13.80...+0.3%.

6:19AM : Nikkei...11384.40...-3.19...-0.0%. Hang Seng...13578.26...-143.43...-1.1%.



edit to add INO

The March NASDAQ 100 was slightly higher overnight as it extends Monday's breakout above the 10-day moving average crossing at 1513.40. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible. Multiple closes above the 10-day moving average crossing at 1513.40 are needed to signal that a short-term low has been posted. If March extends its rebound off last week's low, the 20-day moving average crossing at 1539.05 is the next upside target. A resumption of this year's decline could lead to an eventual test of the 75% retracement level of the September-January rally crossing at 1453.38. The March NASDAQ 100 was up 1.00 pts. at 1525 as of 5:44 AM ET. Overnight action sets the stage for a steady to higher opening by the NASDAQ composite index later this morning.

The March S&P 500 index was slightly lower overnight and is working on a possible inside day as it consolidates above the 20-day moving average crossing at 1180.72. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Multiple closes above the 20-day moving average crossing at 1180.72 are needed to confirm that a short-term low has been posted and would then open the door for a possible test of the mid-January high crossing at 1197.50. The March S&P 500 Index was down 0.10 pts. at 1181.60 as of 5:47 AM ET. Overnight action sets the stage for a steady to lower opening when the day session begins later this morning.

[54anickel]

19. Dollar Watch

Last trade 83.71 Change +0.11 (+0.13%)

Settle 83.60 Settle Time 23:37

Open 83.47 Previous Close 83.60

High 83.77 Low 83.42


The March Dollar was slightly higher overnight in subdued trading as it consolidates below the 25% retracement level of the May-December decline crossing at 83.71. Multiple closes above the 25% retracement level of the May-December decline crossing at 83.71 are needed to extend the short covering rally off December's low. Stochastics and the RSI are turning neutral hinting that sideways prices are possible near- term. Closes below the 20-day moving average crossing at 83.29 would confirm that a short-term top has been posted while opening the door for a larger-degree decline. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

The March Euro was slightly higher overnight as it consolidates above the 38% retracement level of the April-December rally crossing at 129.550 and the 10-day moving average crossing at 130.315. Stochastics and the RSI are neutral hinting that a short-term low might be in or near. However, closes above the 20-day moving average crossing at 130.886 are needed to confirm that a short-term low has been posted. If March renews January's decline, the 50% retracement level of the April- December rally crossing at 127.290 is the next downside target. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

snip>

The March Canadian Dollar was slightly higher overnight and is working on a possible inside day. Stochastics and the RSI are oversold and are turning neutral hinting that a low might be in or is near. If March extends January's decline, the reaction low crossing at.8018, then the 38% retracement level of the May-November rally crossing at .7988 are the next downside targets. From a broad perspective March needs to close above .8369 or below .7988 to confirm a breakout of this winter's trading range. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

The March Japanese Yen was slightly lower overnight as it extends Monday's decline. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the 25% retracement level of last year's rally crossing at .9629 would open the door for a possible test of January's low crossing at .9549 later this winter. Closes above last Tuesday's high crossing at .9773 would temper the near-term bearish outlook in the market. Overnight action sets the stage for a steady to weaker tone in early-day session trading.


FX Consolidates Ahead of CB Meetings
http://www.forexnews.com/NA/default.asp

At 10:00 AM US December Construction Spending (exp 0.5%, prev –0.4%) US December Manufacturing ISM (exp 57.0, prev 57.3)

The majors continued to trade within range in the overnight session, as traders await central bank meetings from the RBA, the FOMC, and the ECB later this week. Also in focus will be Friday’s key US jobs report. The dollar held steady against the majors, trading near 1.3030 versus the euro and 103.75 against the yen.

In the coming session, markets will look ahead to US December manufacturing ISM. The figure is expected to slip marginally to 57.0, down from 57.3 – which compares to a slightly better than expected showing in Europe and a softer reading in the UK.

Euro Mired Within Range

The Eurozone manufacturing PMI data edged out forecasts, improving to 51.9 in January, above the 51.4 reading from December. The new orders index improved to 52.9, up from 51.6, while output edged up to 53.3, up from 52.3. However, the employment index remained dismal, slipping to 48.1, down from 48.3 in December, marking its 44th consecutive month of contraction. Also, the Eurozone’s December unemployment rate increased to 8.9%, up from a revised 8.8% in December.

snip>

Dollar/Yen Inches up Toward 104

USDJPY edged higher overnight, climbing just shy of the 104-level. Japan’s Finance Minister Tanigaki spoke earlier in the session, saying that more care was needed in managing the nation’s FX reserves due to its extremely large size. He said that liquidity, stability and avoiding losses were important for FX reserves. Tanigaki spoke of the upcoming G7 FinMin in Boca Raton, saying that he expects the G7 to share a similar view on forex as Japan. While it remains up to China to determine its currency policy, Japan hopes for more appropriate steps. He also said that Japanese firms are now more resilient to yen strength than they were in the past. However, further growth in the US current account deficit would be worrisome to the global economy and that the burgeoning deficit cannot be resolved through currencies alone. Lastly, Tanigaki said that sudden and volatile forex moves were undesirable.

USDJPY edged up higher overnight, with resistance 104 and 104.20. Subsequent ceilings will emerge at 104.60, backed by 105 and 105.40. Support begins at 103.20, backed by 103 and 102.60. Additional floors will emerge at 102.35, backed by 102 and 101.70.

more...

[MARALE]

21. Oil rises on worries of a March OPEC cut

http://money.cnn.com/2005/01/31/markets/oil.reut/index.htm


snip>
The White House Monday said it believes it is important for OPEC to act to ensure affordable energy supplies. "We don't comment on specific OPEC actions per se, but we believe it's always important that they act in a way that continues to further economic growth and allows there to be affordable, abundant supplies of energy available," White House spokesman Scott McClellan said.

In Iraq, insurgents killed 35 people when millions went to the first multi-party polls in half a century, but oil exports from the southern terminals of Basra and Khor al-Amaya ran smoothly at 1.7 million bpd on Sunday, industry officials said.

Keeping a lid on gains, frigid temperatures in the heating oil-consuming U.S. Northeast are forecast to return to normal this week and remain warmer than usual the rest of winter, easing pressure on sub-par fuel stockpiles.
World Can Handle $50 Oil

OPEC ministers meeting in Vienna sent their clearest signal yet that higher prices are here to stay as producers grow more confident that higher fuel costs are not damaging the world's economic health.

<snip

[54anickel]

26. Crude Prices Fall As OPEC Fears Fade

Crude oil futures prices dipped below $48 per barrel Tuesday as traders shook off fears of possible OPEC production cuts to focus on U.S. petroleum stocks data due out this week.

Analysts said the decision by oil ministers this weekend against cutting production levels appeared to have contributed to falling prices, along with the end of a cold snap in the Northeastern United States and anticipation of weakened demand in the spring.

snip>

The Organization of Petroleum Exporting Countries decided Sunday not to cut production, but said it would give its president the power to call a telephone meeting to cut output if market conditions demand it. The 11-member cartel also warned that oil prices would remain high through the Northern Hemisphere spring.

"The oil market firmed mainly because the producer group put the world on notice that it thinks higher oil prices are here to stay," Energyintel's Jane Collin said in a research note.

The head of the International Energy Agency disputed assertions from OPEC members that high oil prices won't hurt the world economy, saying developing countries would suffer.

more...

[MARALE]

22. Crawford & Co. net income skyrockets in 2004

http://atlanta.bizjournals.com/atlanta/stories/2005/01/31/daily7.html


snip>
Crawford & Co.'s profit soared more than 200 percent in 2004, boosted significantly by increased property claims following the hurricanes that ravaged the Southeast last fall.
<snip>
"During the fourth quarter, we continued to benefit from the sharp increase in property claims referred to us due to the hurricanes that hit Florida and other southeastern states during August and September," said Thomas W. Crawford, CEO. "Claim referrals from the U.S. insurance company market were up nearly 23 percent during the 2004 fourth quarter. This surge in claims drove the highest quarterly revenues from our insurance company clients since the third quarter of 1998 and also contributed to the first year-over-year increase in total U.S. revenues since 2001."
<snip

Just thought this was interesting.

[54anickel]

23. The Future of Gold As Money

http://www.321gold.com/editorials/hultberg/hultberg020105.html

snip>

If gold is to regain its place in the future monetary systems of all nations, there is a major misconception held by today's pundits and academics that must be cleared up. It is the belief that gold can never provide the necessary liquidity to function adequately as money in a modern economy. According to Keynesian doctrine there is not enough physical gold in the world to act as a medium of exchange for the billions of sophisticated economic interactions that take place. This, Keynesians assert, is why government must always control money. It is why government must establish a centralized system of banks to provide a generous and continuous supply of paper notes and credit. It is why the free marketplace and its choice of gold can never work in a modern world.

snip>

Contrary to popular opinion among hard money thinkers, the evils of the system were not brought about by the policy of "fractional reserve banking" per se, but by the intervention of government authorities to convey special legal privileges to bankers that violated the basic laws of fraud. Such privileges took the form of allowing banks to suspend specie redemptions in the face of runs. They created a double standard in contract law whereby the bank cannot be sued for non-performance if it fails to pay gold on its sight liabilities. They permitted banks to illicitly loan out demand deposits rather than requiring them to warehouse such monies. They relaxed accounting standards for banks that allowed them to overstate their assets and understate their liabilities with impunity. These and other illicit practices were the problem.

As we will soon see if fractional reserve banking is restricted to short-term, self-liquidating credit -- specifically, bills of exchange payable in gold coin in 91 days or less, drawn on marketable consumer goods that move sufficiently fast from producer to consumer -- such credit is not inflationary and thus not dangerous.

It is government conveyed privileges (that allow banks to operate beyond this restriction and indulge in inflationary loan practices) that are fraudulent and dangerous. It is this conveyance of special privileges that set the stage for the exploitation and boom/bust instability that pockmarked the 19th century. The resultant exploitation and instability then led to public opinion being stampeded into accepting the centralization of banking under the Federal Reserve in 1913 as a "solution." But this was an attempt to fight pus with poison. As we now know, the cure was much worse than the disease. The boom/bust instability has not been diminished; it has been horribly exacerbated.

What most of today's pundits miss is that there are two forms of "fractional reserve banking." There is a benign form that springs up naturally in a free-market to extend short-term, self-liquidating credit. And there is a fraudulent form that is spawned by government intervention into the free-market to exempt bankers from the contractual laws of fraud, which allows them to "borrow short to loan long." This gives banks the ability to loan recklessly with impunity from bankruptcy. It is this latter form that needs to be outlawed.

more...

[54anickel]

25. China Helped Rosneft Buy Yukos's Oil Unit With $6 Bln Loan

http://www.bloomberg.com/apps/news?pid=10000080&sid=aGgh9ZJssSQk&refer=asia

Feb. 1 (Bloomberg) -- China, which wants to cut its reliance on Middle Eastern oil, helped Russia's state-run OAO Rosneft fund a $9.3 billion purchase of OAO Yukos Oil Co.'s biggest unit, in exchange for five years of oil supplies, Russian officials said.

Rosneft borrowed $6 billion from Chinese banks through state- owned Vnesheconombank in December, Russian Finance Minister Alexei Kudrin said, without naming the banks. Russia's stabilization fund had risen 218 billion rubles ($7.8 billion) in January, he said.

``This is a massive increase and perhaps indicates inflows resulting from the sale of Yuganskneftegaz,'' said Timothy Ash, managing director of Bear Stearns International in London.

snip>

Oil to China

Rosneft has agreed to send oil to China National Petroleum Corp. for five or six years in exchange for an advance payment of $6 billion, Sergei Oganesyan, the director of Russia's Energy Agency, said today. He declined to give details of the contract, calling it a commercial secret.

more...

[54anickel]

27. Sun Opening a Global Grid

http://www.eweek.com/article2/0,1759,1758166,00.asp

Sun Microsystems Inc. is ready to unveil its Sun Grid.

At its quarterly product rollout on Tuesday, the Santa Clara, Calif., company will announce that it is opening six grid centers around the world, according to Sun officials.

Sun has been doing utility computing for more than two years, but until last year that was little more than adding usage pricing to some products, said Aisling MacRunnels, senior director of utility marketing at Sun. Last fall, the company put together a plan to create data centers around the world that customers could access and pay for on a per-use basis—$1 per hour of CPU usage.

snip>

"We thought would have cultural hurdles to overcome" before accepting the grid concept, MacRunnels said. "For now, we're using all of the CPUs on proof-of-concepts with large banks or on RFPs with large financial services institutions and oil and gas firms."

more...

[54anickel]

28. 10:35 numbers and yada

NADAQ and S&P got a nice little 10:00 bounce, though it shows up better on the Yahoo charts.

Dow 10,511.23 +21.29 (+0.20%)
Nasdaq 2,065.91 +3.50 (+0.17%)
S&P 500 1,183.34 +2.07 (+0.18%)
10-yr Bond 4.126% -0.006
30-yr Bond 4.58% -0.01
NYSE Volume 355,294,000
Nasdaq Volume 458,436,000


10:30AM : Major indices still vacillate in roughly the same ranges as investors digest the latest read on manufacturing conditions... While the January ISM index has dipped to 56.4, from 57.3 in December and below economists' forecasts of 57.0, the data have still shown an increase in manufacturing activity as any number above 50 suggests expansion... New orders, which account for roughly 30% of the total survey, fell to 56.5 in January from 62.6 in December, but the employment index, which could act as a good indicator ahead of Friday's non-farm payrolls data, rose to 58.1 from 53.3 in December...NYSE Adv/Dec 1653/1232, Nasdaq Adv/Dec 1291/1380
10:00AM : Market fluctuating around the flat line as the blue chips and Nasdaq now trade in opposing directions... Financial, health care, energy, homebuilding and transportation remain influential leaders to the upside while modest strength in semiconductor struggles to offset modest weakness in software and disk drive... Also under early pressure have been retail, consumer staples, airline, brokerage and biotech... Meanwhile, the Jan ISM Index has just check in at 56.4 (consensus 57.0) while Dec Construction Spending has come in at +1.1% (consensus +0.5%)...

Market response, however, has so far been rather uneventful following the data...NYSE Adv/Dec 1550/1048, Nasdaq Adv/Dec 1249/1191

9:40AM : Stocks show modest follow through from yesterday's solid performance, opening to the upside, as the bulk of notable earnings reports come in better than expected... BSX, HCA, EMR, GP and IR have been some of the headliners beating analysts' forecasts this morning following strong results from DIS after last night's close... TYC has matched Q1 expectations and issued in line Q2 & FY05 guidance while UCL has also posted in line results but guided Q1 earnings above expectations... Separately, the Jan ISM Index and Dec Construction Spending will be out at the top of the hour...

[54anickel]

29. U.S. January ISM Manufacturing Index Falls to 56.4 From 57.3

http://www.bloomberg.com/apps/news?pid=10000103&sid=aq21jJej8ldU&refer=us

Feb. 1 (Bloomberg) -- The growth rate of U.S. manufacturing slowed for a second month in January, an industry survey showed.

The Institute for Supply Management said today its factory index dropped to 56.4 from 57.3 in December. Last month still was the 20th in which manufacturing grew, marked by readings higher than 50.

``After a big spurt out of 2003 and 2004, things are slowing down,'' Kevin Logan, senior market economist at Dresdner Kleinwort Wasserstein in New York, said before the report. ``The question of course is how much will they slow down this year.''

A drop in the factory index reinforces expectations that the U.S. economy will expand less this year than in 2004, when gross domestic product increased the most since 1999. Companies may be wary about adding too much to inventories in case consumers cut back on purchases.

more...

[54anickel]

30. U.S. Dec. Construction Spending Rises 1.1%, More Than Expected

http://www.bloomberg.com/apps/news?pid=10000103&sid=aqLpX22IQrhs&refer=us

Feb. 1 (Bloomberg) -- U.S. construction spending rose 1.1 percent in December, more than expected, to $1.032 trillion at an annual pace, as residential, office and highway building increased, a government report showed.

The gain came after a revised 0.3 percent gain in November that was first reported as 0.4 percent drop, the Commerce Department said in Washington. Total construction spending for the year rose 9 percent, the biggest annual gain since 1996, to a record $998 billion from $916 billion in 2003.

The December gains were driven by projects delayed by wet weather the previous month. Increases in commercial and public construction this year may offset slower residential activity as interest rates rise, economists said.

``I expect construction to add more to gross domestic product this year,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi Ltd. in New York. ``The economy has really kicked into a higher gear thanks to the improvement in hiring and this will be the year that businesses lay the groundwork for more factories, warehouses and office space.''

Bwahahahaha, I've got to clean the coffee off my monitor after reading that paragraph in the snip. Spit-take!

more...

[54anickel]

31. American Express Plans to Spin Off Brokerage Unit

http://www.bloomberg.com/apps/news?pid=10000087&sid=aFLCNG1hGfYE&refer=top_world_news

Feb. 1 (Bloomberg) -- American Express Co., the world's No. 4 credit-card issuer, plans to spin off its 12,000-adviser brokerage unit in the company's biggest reorganization since the 1994 spinoff of Lehman Brothers Holdings Inc.

American Express Financial Advisors, which generated 21 percent of the New York-based company's net income last year, will become an independent firm competing with Merrill Lynch & Co., Citigroup Inc.'s Smith Barney and Morgan Stanley. American Express expects to complete the spinoff in the third quarter.

Chief Executive Officer Kenneth Chenault said in an interview that American Express needs to focus on businesses with ``superior returns,'' such as payment and network processing. As a stand-alone business, the brokerage won't have to compete for capital with the company's more profitable units.

``The financial-adviser network was a drag on earnings,'' said Alan Devlin, an analyst at London-based Atlantic Equities who rates American Express ``overweight.'' ``The reason you want to buy this stock is for the card business.''

more...

[54anickel]

33. SBC-AT&T deal to affect Mich. jobs, rates (higher bills)

MPSC commissioner expects less competition, higher bills

http://www.freep.com/money/business/sbc1e_20050201.htm

The landscape of Michigan's telecommunications industry stands to change significantly following the Monday announcement of SBC Communications Inc.'s proposed purchase of AT&T Corp. for an estimated $16 billion.

Besides creating the nation's largest telecommunications company, the purchase could jeopardize job security for thousands of Michigan workers, as well as possibly raise rates -- particularly for business customers -- if the deal goes through, according to some observers.

"Based on the fact that AT&T has a large share of business customers in this state and SBC will now reap the benefits of those customers, I think the merger will lessen the competition in the Michigan market and ultimately drive up rates," said Robert Nelson, a commissioner with the Michigan Public Service Commission.

"In my view, when you have a significant player like AT&T with thousands of business customers in the state, that's going to change the dynamics and I think you'll see far less choice."

snip>

As with any corporate merger or acquisition, there are no guarantees that jobs won't be lost as the combined entity cuts back duplicated operations and assets. In November, SBC announced it planned to lay off as many as 1,000 workers in Michigan as part of a company-wide reduction of 10,000 workers by the end of 2005. To date, SBC has more than 165,000 employees worldwide. More Michigan jobs could be at risk as SBC absorbs AT&T.

more...

[54anickel]

34. Taser Buyers to Get Background Checks

http://www.ajc.com/business/content/shared-gen/ap/Finance_General/Tasers_Background_Checks.html

SCOTTSDALE, Ariz. — Taser International Inc. is hiring a company to conduct criminal background checks and verify the identity of private citizens trying to buy its stun guns.

snip>

He said the checks confirm Taser's commitment to ensuring its devices, "designed for personal safety and citizen defense, are purchased for those very reasons."

Taser sells its stun guns primarily to law enforcement agencies but has more recently been marketing them to the public. The company has advertised on billboards and in newspapers in the Phoenix area.

snip>

Several newspapers have also raised concerns about the safety of Taser devices, though the company has said its stun guns never have caused serious injury or a death. The Arizona Republic has linked Tasers to 11 deaths and to several injuries involving police officers.

snip>

The background checks will focus on criminal history and verifying that would-be buyers are who they claim to be, ChoicePoint spokesman Chuck Jones said.

And this supports that statement in the second paragraph - How?
ensuring its devices, "designed for personal safety and citizen defense, are purchased for those very reasons."

more...

[54anickel]

35. Venture Capitalists' Fundraising Surges

http://www.latimes.com/business/la-fi-wrap1.2feb01,1,4479298.story?coll=la-headlines-business

Emboldened by a recent market upturn, venture capitalists ended 2004 with their biggest fundraising quarter in 3 1/2 years — a resurgence likely to raise concerns about whether the industry is setting itself up for another mortifying fall.

Venture capitalists raised $6 billion during the three months that ended in December, the busiest period since the second quarter of 2001, when the industry collected $10.2 billion from its investment partners, according to data released Monday by Thomson Venture Economics and the National Venture Capital Assn.

The level of money pouring into venture capital funds rose progressively higher in each quarter of 2004, propelling the total for the year to $17.6 billion — more than the industry raised in 2002 and 2003 combined.

Those two years reflected a sobering decline for venture capitalists, who spent little time raising more money because they were too busy dealing with the massive problems caused by the dot-com bust.

[54anickel]

36. States buying in bulk to stretch Rx dollars

http://www.stateline.org/stateline/?pa=story&sa=showStoryInfo&id=428505

Wisconsin Gov. Jim Doyle (D) wants to expand a bargain shopping strategy – buying in bulk – to help 500,000 uninsured residents get better prices on their prescription medicine.

His plan would let uninsured Wisconsinites pay a small enrollment fee to join BadgerRx, the state’s prescription drug bulk-purchasing pool, which currently is limited to state employees and private businesses.

Doyle, who unveiled the plan Jan. 12 during his state of the state address, said program participants would get the same lower drug prices negotiated for state employees and “benefit from the full buying power of state government.”

Doyle’s proposal to include regular citizens who lack prescription drug coverage in a state bulk-buying pool is an innovative tactic among efforts in a growing number of states to leverage the purchasing power of large groups of consumers, such as state employees, retirees and Medicaid patients, to get more affordable prices on prescription drugs. The pool saved Wisconsin $25 million on prescription drugs in 2004, said Melanie Fonder, Doyle’s press secretary.

more...

[54anickel]

37. Merger Activity Picks Up Steam

The takeover spree that began last year is a sign of confidence in the economy, analysts say. :eyes: I thought it was because they are rollin' in the dough, have shareholders screaming at them to do something with that money go maintain growth and buying the fruits of somebody elses labor is a hell of a lot easier than actually "growing" it.

http://www.latimes.com/business/la-fi-merger1feb01,1,3141076.story?coll=la-headlines-business

snip>

"December was the big bang to end 2004, and it hasn't let up," Mergerstat analyst Jason Ghassemi said. "The investment bankers we talk to expect 2005 to be even bigger than last year. It may not be 1999 and 2000 again, but this is a robust market."

December and January marked the first back-to-back months of more than $100 billion in acquisitions involving U.S. companies since the fall of 2000, Mergerstat said.

The volume for December was $128.4 billion, the most since October 2000.

Analysts said this could be the first year of more than $1 trillion in deals since 2000, when the stock market downturn and a softening economy made companies leery about gambling on acquisitions.

snip>

Potential sellers are scrambling to take advantage of valuations relative to corporate earnings that had risen at least 20% in the last three months, Freedman said. "The supply of companies for sale increases dramatically whenever that happens. They tend to crawl out from under the rocks."

[54anickel]

39. ECONOMIC DINOSAURS

http://www.kitco.com/ind/Denning/jan282005.html

Apparently, boring old-economy dinosaurs going to outperform this year. Why? There are two simple reasons and one slightly more complicated one. The first reason is that these companies have tangible assets. When you sell paper and buy stuff, you buy assets that have enduring value and that don't fluctuate in perceived value when interest rates rise (as financial stocks, REITs, and some mortgage lenders do).

The second reason is that certain industrial stocks are in sectors of the American economy that are ALREADY running a trade surplus. That's right, a surplus! If the dollar falls even more in 2005 (in the second half of the year, I'm forecasting), these firms will become even more competitive. If the current account deficit comes back into balance, or even adjusts below 6% of U.S. GDP, it will do so through a falling dollar, reduced imports, and rising exports. It's these industrial exporters that will generate the largest trade surpluses on dollar weakness.

However, the biggest reason industrials are set for a revival is a rediscovery of an economic truism: You make money selling things you produce, not buying things other people sell. Manufacturing - and not services - has tremendous economic multiplier effects. It creates higher employment, higher incomes, more efficient use of savings, and trade surpluses.

But the point is not without some controversy. Nor is it well understood. And until it's understood well, America's economic competitiveness will continue to go the way of the dodo. America will turn into a has-been industrial power with weakened economic and military influence across the globe. The latter side effect of American decline might be good. But the former isn't. Not for working Americans. And not for investors.

It doesn't have to be that way. We'll begin at the beginning and with a simple question: What American firms profit more when the dollar declines?

more...

[54anickel]

41. 12:09 lunchtime check

Dow 10,547.74 +57.80 (+0.55%)
Nasdaq 2,070.22 +7.81 (+0.38%)
S&P 500 1,187.81 +6.54 (+0.55%)
10-yr Bond 41.40 +0.08 (+0.19%)
30-yr Bond 45.99 +0.09 (+0.20%)
NYSE Volume 737,396,000
Nasdaq Volume 857,720,000

12:00PM : Stocks continue to climb higher midday, ahead of tomorrow's FOMC meeting, following decent economic data and better than expected earnings reports... Despite the Jan ISM index coming in at 56.4, below forecasts of 57.0, the reading still showed expansion in manufacturing activity (as it was above 50) while a stronger than expected rise to 58.1 (from 53.3 in Dec) in the employment component also provided some buying support ahead of Friday's non-farm payrolls data...
Also, Dec construction spending showed a stronger than expected rise of 1.1% (consensus +0.5%) and an upward revision of +0.3% to Nov's original decline of 0.4%... Meanwhile, 11 of 16 S&P constituents, from the likes of BSX, HCA, EMR and ASD to name just a few, have beaten analysts' expectations compared to 3 large names matching forecasts and only 2 disappointments (ASN and MBI)... Homebuilding (+1.6%) has helped pace equities to the upside while semiconductor and managed health have also posted gains in excess of 1.0%... Energy (+1.8%), despite modest pressure on crude oil prices ($47.66/bbl -$0.54), has also surged following strong earnings from VLO, UCL, BJS and XEL and an upgrade on XOM...

Financial has also climbed following news that AXP plans to spin off its financial advisors unit while gains in materials, telecom services, utility and transportation have offset modest weakness in brokerage... Treasuries have remained under modest pressure following this morning's economic headlines, as the 10-year note is off 3 ticks to yield 4.13%...DJTA +0.3, DJUA +0.3, SOX +1.2, NYSE Adv/Dec 2039/1082, Nasdaq Adv/Dec 1603/1308

11:30AM : Stocks continue to trade at improved levels as market internals hold a modestly bullish bias... Advancers on the NYSE hold a 19 to 11 edge over decliners while advancing issues on the Nasdaq hold a slim 15 to 13 margin over declining issues... The ratio of up to down volume also reflects a similar lead at both the Big Board and the Composite, where up volumes outpace down volumes...

Meanwhile, the Dow continues to probe its 20-day moving average and last week's recovery high between the 10522/10531 range while the Nasdaq has regained its footing, steadily advancing over the last hour and testing key technical resistance at 2066/2068...NYSE Adv/Dec 1944/1114, Nasdaq Adv/Dec 1548/1304

11:00AM : More of the same as equities cling to modest gains... Gaining the most ground in the last hour of trading has been homebuilding (+1.6%), which has basically shrugged off yesterday's weak Dec New Home Sales data after a stronger than expected rise of 1.1% (consensus +0.5%) in Dec construction spending was reported...

The Commerce Dept.'s data, which was rather overshadowed by this morning's ISM figures, also showed that Nov's original decline of 0.4% has been upwardly revised to a gain of 0.3% and that total construction spending in 2004 recorded the largest gain since 1996, climbing 9% to a record $998.4 bln...NYSE Adv/Dec 1839/1144, Nasdaq Adv/Dec 1468/1274

[54anickel]

42. A Euroland Growth Surprise?

http://www.prudentbear.com/internationalperspective.asp

"One of the issues that clearly is there is that the dollar has been a risk for the global economy in the past year. A lot of focus in financial markets has been the current account deficit in the U.S. I expect even in the next year that situation on the current account will not change fundamentally; therefore, the dollar risk will probably remain with us. The dollar exchange rate can play a part in that adjustment process, but surely the adjustment cannot just take place just by movements in relative price.”
- European Central Bank Governing Council member Axel Weber, Jan. 30, 2005



It’s been repeated so often that it’s almost become axiomatic: the US is a comparative bastion of economic reform, flexibility, and dynamism, whilst the Euroland economies remain sclerotic, slow-growth museum pieces, destined for economic irrelevance in the globalised 21st century (except perhaps as a favoured destination for increasingly prosperous Asian tourists). The latest alleged blow to growth was last year’s sharp rise of the euro, particularly against the dollar, which supposedly snuffed out the incipient beginnings of a tentative, export-led growth revival in the eurozone.

It sounds persuasive. There’s only one problem: the facts are proving uncomfortably accommodative to the theory.

To be fair, it’s hard to make the case that Euroland is on the threshold of a major economic boom. The sheer rapidity of the euro’s rise last year did have an adverse short term impact on economic growth, particularly in the eurozone’s largest economy, Germany. But economies learn to adapt to varying exchange rates (as the UK has learned to live with a stronger pound), and the most recent data suggests that Euroland’s economic “collapse” is not all that it is cracked up to be, notwithstanding the incessant chatter by those anxious to play up the “deflationary” impact of an stronger currency.

In fact, for all of the talk of a region supposedly on the threshold of a recession, the aggregate numbers released in the past few weeks have been reasonable to surprisingly good, and largely eradicated the perception that the European Central Bank would move imminently to lower rates (and, parenthetically, might also explain why the euro has persistently disappointed the expectations of dollar bulls, who were confidently forecasting further declines when the currency hit $1.30 against the greenback last month after reaching a record high of $1.3665 in December). Whilst the data by no means suggests an imminent rise in ECB rates (particularly as eurozone inflation figures remained reasonably quiescent), it ought to put paid to the notion that Euroland remains the terminally sick man of the global economy. If anything, with its moderate growth, higher repository of national savings (in comparison to the US), and a current account broadly in balance, Euroland exhibits far fewer of the economic weaknesses which characterise debt-bloated America, or emerging Asia (where ongoing problems of banking stability pose a persistent threat to growth).

more...

Heh-heh, it's when I come across articles like this that I most miss Frodo. ;-)

[54anickel]

43. Oil stocks higher, led by Valero

http://cbs.marketwatch.com/news/story.asp?guid=%7BCBE04EDC-4EE6-49C1-947F-70E4773BB211%7D&siteid=google&dist=google

DALLAS (MarketWatch) -- Oil stocks moved higher at midday, led by gains in shares of Valero Energy, which reported a quarterly profit well ahead of analyst expectations.

Valero Energy (VLO: news, chart, profile) , the nation's leading independent refiner, said Tuesday that its fourth-quarter net income more than tripled, as the company's ability to refine sour crude drove a three-fold increase in profit from the refining business. See full story.

Shares jumped $4.03, or 7.8 percent, to a new 52-week high of $56.06.

In other earnings news, BJ Services said its fiscal first-quarter net income rose 54 percent on the strength of increased demand for its pressure pumping services.

more...

Shell, Exxon, Unocal, Valero. Yep, seems energy was the place to be the past year.

[ozymandius]

44. Greetings! 1:10 numbers

------------------------------------------------------------------------
 Market Summary
------------------------------------------------------------------------
Dow 10,546.32 +56.38 (+0.54%)
Nasdaq 2,067.62 +5.21 (+0.25%)
S&P 500 1,187.69 +6.42 (+0.54%)
10-Yr Bond 4.132% 0.00
NYSE Volume 932,989,000
Nasdaq Volume 1,065,514,000

[54anickel]

45. Hello again Ozy! Good to see you. How's that new job going?...n/t

[ozymandius]

52. It's busy and all's well.

We just unloaded some marble statuary pieces. I am in the midst of preparaing the reinforced shelves upon which to display them. Thanks for asking!

How goes your political preparations?

Ozy

[54anickel]

54. The are going splendidly. Mailing is done, getting the signs out and

hitting the local establishments to get the word out and meet with people. Primary is in 2 weeks, hope we don't get a sudden fast spring thaw, as the signs are currently in the snowbanks!
Thank you for asking!

[RawMaterials]

50. some blather

1:30PM: Holding steady at modestly higher levels as the major averages trade sideways in positive territory... Posting losses, however, have been employment services (-1.8%) stocks following Manpower's (MAN 43.36 -5.29) latest quarterly report... While MAN posted a 39% in Q4 profits on stronger than expected revenues, as earnings of $0.73 were in line with forecasts, the company said Q1 earnings would come in at $0.34-0.37, below analysts' forecasts of $0.45...

Monster Worldwide (MNST 30.71 -0.58), which reports earnings after the close tonight, has also fallen as have competitors RHI (-1.3%), ADO (-0.6%) and KFRC (-2.4%)... NYSE Adv/Dec 2081/1145, Nasdaq Adv/Dec 1598/1390

1:00PM: Little change since the last update but buying remains widespread across most areas... Even the dollar has jumped in on the action, maintaining early gains against both the euro (1.3024) and the yen (103.78) following mixed economic data... Trading lower at the expense of the strength in the greenback, which has firmed ahead of the Fed's interest rate decision and the G7 meeting which will begin at the end of the week, has been gold ($422.50/oz), which has fallen roughly 0.4% and remains near three-week lows...NYSE Adv/Dec 2170/1035, Nasdaq Adv/Dec 1636/1335

http://finance.yahoo.com/mo

[54anickel]

46. TiVo President Resigns on Heels of CEO

http://www.ecommercetimes.com/story/TiVo-President-Resigns-on-Heels-of-CEO-40198.html

"It looks like both the CEO and president are saying, 'We've taken the company as far as we can, and let's find somebody who can take TiVo to the next level,'" said April Horace, an analyst at Janco Partners Inc.

snip>

Monday's resignation of Yudkovitz, an NBC executive who joined TiVo in May 2003, comes two weeks after chief executive Mike Ramsay said he would be stepping down from the helm as soon as a replacement is found.

Competition Heating Up
Yudkovitz, who said he was leaving for personal reasons, will remain on for a period of time as a consultant for certain matters, the company said. No replacement was named.

Alviso, Calif.-based TiVo, founded in 1997 by Ramsay and Jim Barton, the company's chief technology officer, helped introduce digital video recorders to consumers in 1999, and has since become the industry's leading brand name.

But others are fast encroaching, namely cable and satellite operators which are introducing their own digital recording features in their set-top-boxes. Digital video recording is also being built into media-oriented computers and other consumer electronics devices like DVD recorders or televisions themselves.

more...

[54anickel]

47. Bush on Social Security and Clinton on Health Care: Oh, Those Devilish Det

Bush on Social Security and Clinton on Health Care: Oh, Those Devilish Details

http://www.nytimes.com/2005/02/01/national/01assess.html?pagewanted=1&oref=login

WASHINGTON, Jan. 31 - Thirteen years ago, Bill Clinton campaigned on the promise of universal health care, an immensely popular idea until he was elected and confronted the public with the costs of actually providing it - in new regulations, new mandates, wrenching change.

Now, some analysts say, President Bush faces the risk of something similar happening on Social Security: the general idea of creating private investment accounts, a reliable applause line on the campaign trail last year, foundering on the details. It is a nightmare possibility for the Republicans, a potentially sweet karmic payback for the Democrats.

At the urging of anxious Republicans, Mr. Bush plans to use his State of the Union address on Wednesday and a campaign-style swing through five states on Thursday and Friday to sell his plan to allow younger workers to divert part of their Social Security payroll taxes into their own investment accounts. This comes after a month of political backlash as the administration tried to turn this general promise into an actual policy, and the troublesome details, like how much it would cost, began to emerge.

Some Republican leaders, like Representative Bill Thomas of California, the House Ways and Means chairman, have been floating ideas to begin the legislative deal-making, only to find that those ideas have further stoked the anxiety and given Democrats more to criticize. Republicans trooped to the White House last week to urge the president to make his case more effectively and intensely with the voters.

snip>

Republican consultants are urging Republican officials, many of whom gathered at a Congressional retreat last weekend, to keep their message simple. "It is key to teach your constituents that Social Security is hurting, but the way in which you go about communicating the problem and the need for reform is critical," a Republican briefing book advises.

more...

[54anickel]

49. (Meanwhile) Healthcare Overhaul Is Quietly Underway

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1199103

http://www.latimes.com/news/nationworld/politics/la-na-health31jan31,1,7750807.story?coll=la-news-politics-national

WASHINGTON — Emboldened by their success at the polls, the Bush administration and Republican leaders in Congress believe they have a new opportunity to move the nation away from the system of employer-provided health insurance that has covered most working Americans for the last half-century.

In its place, they want to erect a system in which workers — instead of looking to employers for health insurance — would take personal responsibility for protecting themselves and their families: They would buy high-deductible "catastrophic" insurance policies to cover major medical needs, then pay routine costs with money set aside in tax-sheltered health savings accounts.

Elements of that approach have been on the conservative agenda for years, but what has suddenly put it on the fast track is GOP confidence that the political balance of power has changed.

With Democratic strength reduced, President Bush, Senate Majority Leader Bill Frist (R-Tenn.) and House Ways and Means Committee Chairman Bill Thomas (R-Bakersfield) are pushing for action.

more...

[RawMaterials]

53. distract everyone with SS and slip through Medicare reform n/m

[54anickel]

55. Sneaky, and snakey little Bastards, ain't they? n/t

[54anickel]

48. WrapUp by Jim Puplava 01.31.2005

http://www.financialsense.com/Market/daily/monday.htm

A Google-Eyed Market

Speculation is back, day trading is on the rise, and margin debt is increasing. After taking a shellacking in the markets between 2000-2002 investors are showing a penchant for highfliers again. One only has to look at the recent batch of IPO’s to see a familiar pattern. Risk taking is back in vogue. Evidence of risk can be seen everywhere. It can be seen in narrowing credit spreads between junk debt and Treasury’s or in the yields offered on emerging market debt. It is visible in P/E multiples on tech and Internet stocks and the returns on IPO’s. The average IPO rose 11% in the first day of trading last year. While the markets eagerly awaited the arrival of Google it underperformed its peers. From its initial public offering Google shares soared by 126%. As good as those returns sound they were dwarfed by the returns from Chinese online game maker Shanda Interactive which closed out the year with a 286.4% gain. The IPO market is hot again and experts expect it to remain hot this year. The once shy and shaken investor is back in the game again, looking to make a fast buck.

While nobody is saying last year’s market is reminiscent of the heady days of the late 90’s, there are similar characteristics. The percentage of unprofitable companies coming to market is increasing. Close to 40% of the companies going public last year didn’t make a profit. That is up from 2001 and 2002. This year that percentage is expected to increase. According to one investment banker, “The ducks are quacking again so we need to feed them.” The backlog of companies coming to market in the past few years were concentrated in energy and real estate which were profitable. On the docket last year and this year are more healthcare and technology companies which are losing money.

Venture capitalists are returning back to the technology and Internet sector. Last year they boosted their investment in Internet companies by more than $20 billion. There is a sense in Silicon Valley that the good times are back. Companies are leasing space and a few former employees of high tech start-ups are finding work again. However, robust job growth is absent this go- around. The State of California is down over 200,000 jobs since 1999.

Another feature of this market similar to the late ‘90s is that mergers are back in style. Today SBC announced plans to buy AT&T for $16 billion; MetLife is buying Travelers Life & Annuity for $12 billion, and Kodak is buying Creo for $980 million in cash. Other deals are in the works but it looks like 2005 is off to a great start with over $110 billion in deals announced in January.

While the investment bankers on Wall Street and investors appear excited, another institution is less sanguine. The Federal Reserve looks at narrowing credit spreads and the increase in IPO’s and mergers as signs of excessive risk taking and they don’t seemed too pleased, judging by statements made at the last FOMC meeting. The Fed is not in a party mood. Although short-term rates have risen with five rate hikes last year, long-term rates have remained low, locked in a narrow trading range. With long-term rates remaining stable, monetary tightening hasn’t had an effect on the economy. The cost of home mortgages and corporate debt offerings has actually declined. The numerous mergers announced this month point to growing confidence amongst companies and their willingness to take on more risk.

Not all Fed governors are cautious. Fed governor Ben “Helicopter” Bernanke recently played down speculation concerns in a speech given on January 19th where he said, “I disagree with the view that low interest rates promote a sort of moral hazard in financial markets.”...

more...

[54anickel]

51. 2:45 number and blather (Volumes seem up a bit?)

Dow 10,565.53 +75.59 (+0.72%)
Nasdaq 2,071.18 +8.77 (+0.43%)
S&P 500 1,190.17 +8.90 (+0.75%)
10-yr Bond 4.126% -0.006
30-yr Bond 4.583% -0.007
NYSE Volume 1,262,387,000
Nasdaq Volume 1,397,177,000

2:30PM : Equities continue to hold their own and sport solid gains for the day... One group showing resilience in the face of declining oil prices has been energy as many issues, like XOM (52.93 +1.33) and VLO (56.20 +4.17) have touched new 52-week highs... Crude oil futures ($47.15/bbl -$1.05), which swung more than 4.0% yesterday in volatile trading, have steadily hit new session lows amid concerns that OPEC producers may cut supplies before the end of Q1 and ahead of Wednesday's weekly oil inventories report... XOI +1.6, NYSE Adv/Dec 2168/1114, Nasdaq Adv/Dec 1673/1375
2:00PM : Stocks show little vigor, having moved little in the past hour with not much to move the indices in the late afternoon... Automakers have been in focus much of the day in anticipation of monthly auto sales data... General Motors (GM 36.78 -0.03) has been the latest to report Jan sales figures, posting US sales growth of 1.0% versus forecasts of +1.5%, while Ford (F 13.04 -0.13) has also missed expectations, reporting a Jan US sales decline of 12.4% (consensus -2.2%)...

DaimlerChrysler (DCX 46.22 +0.71), however, despite posting 1.0% sales growth in its US Chrysler Group (consensus +2.2%), has found buying interest after it was upgraded to Overweight from Neutral at JP Morgan... JP Morgan has also upgraded their sector rating to Neutral from Underweight, citing attractive valuations and that most of the headwinds facing the sector are cyclical rather than secular in nature...NYSE Adv/Dec 2108/1138, Nasdaq Adv/Dec 1626/1393

1:30PM : Holding steady at modestly higher levels as the major averages trade sideways in positive territory... Posting losses, however, have been employment services (-1.8%) stocks following Manpower's (MAN 43.36 -5.29) latest quarterly report... While MAN posted a 39% in Q4 profits on stronger than expected revenues, as earnings of $0.73 were in line with forecasts, the company said Q1 earnings would come in at $0.34-0.37, below analysts' forecasts of $0.45...

Monster Worldwide (MNST 30.71 -0.58), which reports earnings after the close tonight, has also fallen as have competitors RHI (-1.3%), ADO (-0.6%) and KFRC (-2.4%)... NYSE Adv/Dec 2081/1145, Nasdaq Adv/Dec 1598/1390

Advances & Declines
NYSE Nasdaq
Advances 2217 (64%) 1675 (52%)
Declines 1067 (31%) 1383 (43%)
Unchanged 151 (4%) 122 (3%)

--------------------------------------------------------------------------------

Up Vol* 816 (68%) 795 (59%)
Down Vol* 337 (28%) 524 (38%)
Unch. Vol* 35 (2%) 26 (1%)

--------------------------------------------------------------------------------

New Hi's 340 110
New Lo's 12 36



And the buck returning on a round trip journey

Last trade 83.50 Change -0.10 (-0.12%)

Settle 83.60 Settle Time 23:37

Open 83.47 Previous Close 83.60

High 83.79 Low 83.42

[54anickel]

56. Gold tallies 4-day loss of more than $6

http://www.marketwatch.com/news/story.asp?siteid=mktw&dist=moreover&guid={2F28BD9F-B99B-4FC1-896C-AA6F36A7954E}

SAN FRANCISCO (MarketWatch) -- Gold futures fell Tuesday to tally a four-session loss of more than $6 an ounce and close at a fresh three-week low as traders looked to movement in the U.S. dollar.

Gold for February delivery closed at $420.80 an ounce, down $1 for the session. The contract, which has now lost a total of $6.10 over four sessions, ended at its lowest level since Jan. 10. April gold closed at $422.90 an ounce, down $1.20.

"Gold remains on the defensive on the belief the U.S. economy can miraculously boom despite a plethora of deficits and a consumer awash in debt," said Peter Grandich, editor of The Grandich Letter, an investment advisory publication.

"Friday's employment release is setting up to be the most likely influence on gold's near-term direction," he said.

But "the fact that the short position of large funds on the is the highest since 2001 and bullish sentiment has all but disappeared in the gold community, suggest we could see a major bottom in gold within days," he said. A drop all the way to the $410 level can't be ruled out, he added.

more...

[54anickel]

57. 3:40 and charging to the home gate

(edit for html)

Dow 10,538.50 +48.56 (+0.46%)
Nasdaq 2,065.91 +3.50 (+0.17%)
S&P 500 1,187.99 +6.72 (+0.57%)
10-yr Bond 4.136% +0.004
30-yr Bond 4.592% +0.002
NYSE Volume 1,522,308,000
Nasdaq Volume 1,687,834,000

:30PM: Market continues to maintain a solid advance heading into the close... While another large batch of earnings is expected tomorrow, the FOMC meeting will take center stage before, during and after the Fed issues its policy announcement around 2:15 ET... The market will be looking for any signs that the Fed could accelerate its pledge of "measured" monetary tightening... Most recently, the Fed funds futures have shown a 96% chance of a 25 bp increase in short-term interest rates to 2.5% tomorrow and have only indicated a slim 4% chance of a 50 bp point increase...
Meanwhile, earnings reports from 14 S&P constituents (i.e. BA, CFC, CVS, NOC and NWS) are expected before the bell while notable earnings reports after the close will come from ACE, ALL, FLR, PHM, UNM and AMZN...NYSE Adv/Dec 2224/1088, Nasdaq Adv/Dec 1663/1417

3:00PM: Much the same as stocks continue to trade in a narrow range near session highs... Meanwhile, news of several share repurchase plans has added an extra boost to a handful of select companies... American Standard (ASD 43.16 +3.12), which beat Q4 expectations by $0.04, issued upside FY05 guidance and initiated a quarterly $0.15 dividend, has approved a buyback of up to $400 mln (or about 4.7%)...

Avon Products (AVP 43.71 +1.49), which matched Q4 estimates and guided Q1 earnings in line with analysts' forecasts, has announced plans to repurchase $1 bln (or about 5%) of its shares over the next five years while Ball Corp (BLL 43.51 +0.79) has agreed to buy back roughly 2.6% of its common shares, or about $125 mln in stock...NYSE Adv/Dec 2223/1074, Nasdaq Adv/Dec 1730/1339

[54anickel]

58. SBC to Cut 13,000 Jobs After Buying AT&T

http://biz.yahoo.com/ap/050201/sbc_at_t_2.html

NEW YORK (AP) -- SBC Communications Inc. said Tuesday it expects to eliminate about 13,000 jobs after its $16 billion acquisition of AT&T Corp. closes, but executives emphasized that many of those positions can be cut through attrition rather than layoffs.
The projection came during an occasionally heated meeting with investors a day after SBC announced plans to buy AT&T, its former corporate parent.

The cuts would come in addition to existing plans at the two companies to eliminate jobs before the merger is finalized at least a year from now.

SBC said the operations which would have excess staffing following the merger included 5,100 from sales, order provisioning, network management, billing inquiry, and customer support. The company did not, however, outline all of the expected cuts.

[54anickel]

59. Simple Multiplication - The Real Problem Behind The US Trade Deficit?

http://www.contraryinvestor.com/moprinter.htm

Spread Em'...There are some "behind the scenes" trends in latest US trade deficit numbers that we believe are worthy of discussion. Remember, all we're after here is trying to anticipate how global economic reality of the moment will influence specific investment sectors as we move ahead. Ranting and raving about the magnitude of the current macro trade deficit is a waste of time over the very short term. In terms of the macro, it will ultimately matter when it matters. Until then, we just want to make sure we get the specific and more short term equity sector influence right.

snip>

There is another issue that we believe is super important and corroborates completely our bifurcation of wealth in the US investment theme for 2005 (we discussed this in the January piece). Really, it can all be boiled down to simple multiplication. Here's the thinking. In typical historical economic recoveries, the usual stimulation provided to the economy by both the Fed (monetary policy) and the Administration (fiscal policy and tax cuts) acts to lower borrowing costs and stimulate both corporate and personal spending. Historically, through the multiplier effect (money turning over in the economy), corporate capital spending has positively influenced increased domestic job creation and wage acceleration. The greater the magnitude of job creation and wage acceleration, the more the kick up in personal spending, and the virtuous circle created by this multiplier effect reinforces the self sustaining nature of the economic recovery itself. But this time it's different. Much different. And we believe this is the heart of the matter.

You already know from our discussions that absolute payroll headcount and wage recovery in the current post recessionary economic environment is the weakest of anything seen over the last three and one half decades at least. In our minds, THE key ingredient missing is the very multiplier effect itself. First, it is clear that US corporations are spending, but the capital expenditures are largely happening in foreign economies, not in the US. Jobs are being created and wages are accelerating meaningfully, but that's happening primarily in China and other Asian countries. So, during the current economic recovery cycle, US corporations have not just outsourced jobs and physical plant and equipment, THEY HAVE EFFECTIVELY OUTSOURCED THE MULTIPLIER EFFECT!

As you know, a very good chunk of our US imports are goods being produced by US companies via foreign manufacturing operations. And, as we've already mentioned in past discussions, this is one of the major reasons corporate profitability stateside has gone to record levels via this structural cost cutting. Again, as we have mentioned in the past, stock prices are up as a result of corporate outsourcing and US consumer debt spending positively influencing bottom line corporate results. US monetary and fiscal stimulation has accrued to the foreign economies and US capital (as we discussed in January), but not to US payroll and wage growth. The trade deficit is the transmission mechanism by which this is happening. As we stated when we discussed Wal-Mart Christmas results, it's our bet that the hollowing out of the bottom of the wealth and income strata among the US consumer base is and will continue to happen. They would be the very folks that would be the primary and most visible beneficiaries of a US multiplier effect that is non-existent stateside in the current recovery.

So what's going to change this set of circumstances and theoretically bring the very much needed multiplier effect "back home"? We wish we had a good answer. Let's suppose the global economies really begin to slow, as is exactly being implied in the below the headline dynamics of the current trade deficit numbers. Won't the push for US corporate outsourcing/cost cutting only increase? Isn't it a natural that US corporations would look to further reduce costs? If indeed something like this happens, we would expect our trade deficit to only worsen. At least initially. Putting the recapture of the multiplier effect even further out of reach. In one sense, the changing nature of the global economy is making the US trade deficit situation the ultimate catch-22. It is now becoming clear that perhaps the only way for the US to begin to reconcile its foreign trade deficit, given current global circumstances of the moment, is through a domestic recession where there occurs a drop in aggregate demand, plain and simple. Unfortunately the recession scenario also implies more corporate cost cutting and further outsourcing. Without sounding melodramatic or perennially pessimistic, we really can't see any orderly way the US trade deficit can be reconciled without both domestic and global economic pain. Pain that almost by default will spread to the financial markets. Why? Very simply, because of the changing nature of structural globalization. As you know, we're just trying to think globally like never before. And when we do, this is what we see.

more...

[DoBotherMe]

60. Final Numbers and Blather

Dow 10,551.94 +62.00 (+0.59%)
Nasdaq 2,068.70 +6.29 (+0.30%)
S&P 500 1,189.41 +8.14 (+0.69%)
10-Yr Bond 41.36 +0.04 (+0.10%)
NYSE Volume 1,708,016,000
Nasdaq Volume 1,904,253,000

Close: Stocks extended yesterday's gains following another round of solid earnings reports and respectable economic data... Better than expected quarterly results from the majority (11 of 16) of large-cap names (i.e. BSX, HCA, EMR, ASD, XEL and IR) out with results this morning helped overshadow only 2 disappointments (ASN and MBI)... Avon Products (AVP 43.56 +1.34) matched estimates, as did TYC and UCL, but guided Q1 earnings in line with forecasts and announced a $1 bln stock buyback...

Speaking of buybacks, reports citing more than $30 bln in share repurchase programs, coupled with over $120 bln in M&A deals, announced in January alone, also contributed to strong market internals that kept sentiment positive throughout the session and maintain gains in virtually every sector... In economic news, the ISM manufacturing survey fell to 56.4 in January, from 57.2 in December, which was roughly in line with economists' forecasts of a decline to 57...

New orders, which account for roughly 30% of the total index, fell to 56.5 in January from 62.6 in December, but the more closely watched employment component was strong, rising to 58.1 in January versus 56.1 in December, ahead of Friday's non-farm payrolls figures... Dec construction spending showed a stronger than expected rise of 1.1% (consensus +0.5%) and an upward revision of +0.3% to Nov's original decline of 0.4%, as total construction spending in 2004 posted the largest gain since 1996, climbing 9% to a record $998.4 bln... Stronger than expected earnings from Valero Energy (VLO 56.76 +4.73) and an upgrade on Exxon Mobil (XOM 53.08 +1.48) pushed both stocks to new 52-week highs and helped the energy sector shrug off a 2.2% decline in oil prices...

Crude oil futures ($47.12/bbl -$1.08) erased all of yesterday's gains following worries that OPEC may cut production earlier than anticipated (before the end of Q1)... News that American Express (AXP 56.70 +3.35) will spin off its personal finance unit to shareholders in Q3 helped the Dow outperform the Nasdaq and provided a lift to the financial sector (+1.2%)... Homebuilding (+1.6%) also surged, as several housing stocks (i.e. HOV, MTH, TOL) touched new 52-week highs while gains of more than 1.0% in semiconductor and disk drive paced the way for technology...

Solid gains in health care, materials, telecom services, utility and transportation helped offset modest, late-day weakness in retail... The dollar held relatively tight ranges against major currencies most of the day ahead of the G7 meeting later in the week, pushing gold futures ($422.90/oz) to a new three-week low... Treasuries, which were relatively unchanged ahead of this morning's economic reports, were under modest pressure into the close, keeping the benchmark 10-year note off 2 ticks to yield 4.13%... But bonds spent most of the session drifting unenthusiastically as traders prepared for tomorrow's FOMC meeting, unanimous that the Fed will boost rates another 25 bp to 2.5%...NYSE Adv/Dec 2260/1082, Nasdaq Adv/Dec 1770/1353

[54anickel]

61. WHAT? $30 bln in share repurchase programs?!?!?...n/t

[DoBotherMe]

62. What is that?

Remember, I'm totally ignorant re economics and markets. That's why I surf this thread ALL DAY LONG.:hi:

[54anickel]

63. First, it means the companies have a helluva lot of cash on hand.

A repurchase could be thought of as a one-time distribution or one-time dividend. A dividend is a promise of a recurring payment to shareholders. A repurchase is a one-time dump. (If they thought they were gonna do this well over the longhaul they'd offer a recurring dividend.)

This is an offer to buy back their stock from shareholders at a higher price than current market value.

Basically, it means they are rolling in cash-o-la and rather than investing it into infrastructure and expansion into things that will create value to the shareholder (and jobs) they're doing a one time dump of the excess cash. What if they don't have any such projects in the works? Then this could be view as an omen that the future doesn't look too bright.

Perhaps they are doing these buybacks now and will invest repatriated bucks from overseas later (remember they can't use those repatriated funds for buybacks and still get the tax-break).

Does that help? UIA would be much better at explaining this.

[DoBotherMe]

65. Yeah, it makes sense

hoarding and hiding. Same old tune. I really wish that business leaders would become enlightened because the way we do business is a death spiral. Have you read Natural Capitalism? http://www.natcap.org/
Oh that we would listen to these people. Dana ; )

[54anickel]

66. I haven't read that one. Thanks for the link. Wouldn't it be great if

this, along with Socially Responsible Investing started to really take off?

I'll have to bookmark this to read when I have a bit more free time. Great that they make the book available on-line.

[54anickel]

64. Here's a link to a "better" explanation.

http://www.northeasttimes.com/2001/0808/stockrepurchase.html

It could just be related to all the M&As going on...

snip>

Many businesses that are expanding do so through mergers and acquisitions. Companies initiate stock-repurchase plans to build currency for acquisitions.

A company would increase its amount of treasury stock so that it could use those shares to acquire another company. For this reason, a stock-repurchase program could be considered a sign of growth.

[DoBotherMe]

67. I've lost all faith in the business world

thanks for all your good info. D ; )

[54anickel]

68. Heh-heh, well people WERE catching on to the idea of P/E ratios

being through the roof lately. See, now the earning per share will go up and the P/E will look like a bargain again.

See why I personally stay away from the markets and would never consider giving any advice (beyond the fact that it's a SMW thread no no) on investing? It's just a friggen game to them. Place your bets, spin the wheel, welcome to the Casino where the dealer always wins.

A person needs to do a LOT of homework before making any investment decision these days, and unfortunately that now includes separating fact from fiction, lies from truths. A far cry from my father's market where you researched a company and the info available was pretty much on the up and up.