STOCK MARKET WATCH, Tuesday 12 July

[ozymandius]

Tuesday July 12, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 193 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 204 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 268 DAYS
DAYS SINCE ENRON COLLAPSE = 1325
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90

AT THE CLOSING BELL ON July 11, 2005

Dow... 10,519.72 +70.58 (+0.68%)
Nasdaq... 2,135.43 +22.55 (+1.07%)
S&P 500... 1,219.44 +7.58 (+0.63%)
10-Yr Bond... 4.10% -0.01 (-0.17%)
Gold future... 426.30 +2.50 (+0.59%)

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

[ozymandius]

1. WrapUp by Rob Kirby

THE RUNNING OF THE BULLS

This past week, the world was treated to one of the familiar ‘rites of summer.’ Every year at this time, one of the true spectacles in the world plays out in the narrow streets of Pamplona, Spain. Even if you have never been lucky enough to witness it first hand, who hasn’t seen this exhilarating event replayed on televised news accounts in the comfort of their living rooms around the world?

-cut-

This past week, the world witnessed another gruesome example of what has become an all too familiar sight – that being the terrorist bombings this past Thursday in London, England. In the minutes following the bombings becoming news, European stock markets and bourses immediately plummeted and the price of gold spiked about 4 bucks. By the time news spread to North America, who were just beginning to arrive at their offices and trading desks, pre-market futures trade indicated the DOW was poised to open roughly 200 points lower prior to the Thursday morning stock market opening. But then something happened - something that has become an increasingly familiar occurrence when North American equity markets encounter, for lack of a better word, ‘turbulence.’ What happened is best described by Jim Puplava in this past weekend’s, July 9th FSO radio broadcast <1st hour> as, “the stock market fairies showed up just prior to the DOW opening,” the futures rallied, the stock market opened weak – but did better throughout the day and DOW closed bullish - up on the day!

As the stock market fairies were doing what they do best, the gold market elves for some reason decided to pummel gold to the point where it was barely registering gains at the 8:20 a.m. ET COMEX opening. The price of gold closed unchanged on the day, Thursday.

-cut-

On Friday, the stock market fairies were at it again - busy herding the equity bulls again to the tune of another breathtaking 147 point DOW gain. I sure hope this bull-run doesn’t turn out to be as short lived as its half mile cousin in Pamplona, Spain. Oh, and I sure hope there isn’t one of these waiting for it when finally arrives at the ring .

more...

http://www.financialsense.com/Market/wrapup.htm

[54anickel]

2. Economists Boost U.S. Growth, Fed Rate Forecasts, Survey Shows

Heh-heh, does that mean there will be a lot of surprised economists again later this year?

http://www.bloomberg.com/apps/news?pid=10000103&sid=ad40OufO8_ZQ&refer=us

July 12 (Bloomberg) -- Economists raised their U.S. economic growth forecasts for this year's second half and said they expect the Federal Reserve to lift its interest rate target more as a result, a Bloomberg News monthly survey showed.

The world's largest economy will grow at a 3.5 percent annual rate this quarter and 3.4 percent in the year's final three months, based on the median estimates of 65 forecasters surveyed from June 30 to July 11. Each figure is a 10th of a percentage point higher than economists predicted a month ago. The central bank's rate target now may reach 4 percent by year-end, a quarter-point higher than in the previous survey.

Rising home prices and an improved job market are giving consumers the willingness and the means to keep spending even as gasoline costs surge to a record, economists said. Auto sales rebounded in June and same-store sales at retailers from Wal-Mart Stores Inc. to Nordstrom Inc. rose more than expected, industry reports last week showed.

``Rising oil prices have been more than offset by the good news from the housing sector,'' said Ethan Harris, who is chief U.S. economist at Lehman Brothers Inc. in New York and among the forecasters who raised growth and Fed predictions. ``The end of rate hikes from the Fed isn't in sight yet.''

:eyes: Didn't we just read that Greenspin is trying to take the "froth" out of housing?

more...

[54anickel]

3. Feds no longer dismiss talk of housing bubble

Regulators focus on role of 'exotic' loans in propping up prices

http://www.msnbc.msn.com/id/8514801/

snip>

There are growing signs that federal regulators would like to rein in some of the worst excesses of the current boom, including the increasing dependence on interest-only loans and other non-traditional lending products that can leave borrowers overextended, especially if interest rates rise or housing values drop.

What's all the fuss about? Consider:

snip>

* Ten states and the District of Columbia have seen prices rise more than 70 percent over the past five years, and prices have more than doubled in 23 markets in California, Florida and Massachusetts, according to federal figures. In the same time frame, ordinary consumer prices have risen just 13 percent, and personal income has risen 23 percent.
* A cover story in the Economist magazine this month calls the global rise in housing prices “the biggest bubble in history” and warns of economic pain to follow. Declining prices in formerly red-hot markets of Britain and Australia offer a cautionary tale for what could happen in the United States, the magazine's editors argue.

snip>

Federal Reserve Chairman Alan Greenspan, who as recently as last year dismissed talk of a speculative housing bubble, now acknowledges that there are “a lot of local bubbles” in the housing market, although he sees nothing along the lines of a NASDAQ-type asset bubble that could deflate suddenly with national economic consequences.

In May, the Fed and four other regulatory agencies issued an unusual joint statement, warning that financial institutions “may not be fully recognizing the risk” inherent in aggressive lending secured by rapidly rising home values. These home equity loans and cash-out refinancing deals have been a major engine for consumer spending in an economy characterized by relatively slow job and income growth.

more...

[UpInArms]

8. Beware of Property Bubbles

http://www.dailyreckoning.com/Featured/Beware.html

Pondering the U.S. economy's prospects, the dramatic aggravation of the economic and financial imbalances is most critical. With them, there can never be normal economic growth. The other crucial aspect is the obvious fact that U.S. economic growth depends entirely on the continuation of the frenetic housing bubble.

All bubbles essentially end painfully, housing bubbles in particular. They are an especially dangerous sort of asset bubble, because of their extraordinary debt intensity. The debt numbers speak for themselves: In 1996, U.S. private households borrowed $332.2 billion; in 2000, their borrowing was up to $558.6 billion. With the housing bubble in full force, it hit $1,017.9 billion in 2004.

This debt intensity has its compelling reason in the particular way that accruing "wealth" has to be converted into cash. In the case of an equity bubble, in general, the owner realizes capital gains simply through selling a part of his stock holdings. No bank and no debt are involved. He directly exchanges stock for cash.

In this respect, a property bubble is a totally different animal. Since homeowners normally want to stay in their house, "wealth effects" have to be extracted through additional borrowing against the inflating property value; that is, through mortgage refinancing. In essence, twofold borrowing is needed: first, to boost housing prices; and second, to withdraw equity.

But this debt intensity finds very little or no attention at all. Yet there is a second, even more dangerous, aspect to housing bubbles: They heavily entangle banks and the whole financial system as lenders. For this reason, as a matter of fact, property bubbles have historically been the regular main cause of major financial crises.

...more...

Rickebacher has been right about 99% of the time. One of the few economists that is rarely "surprised".

[54anickel]

14. Yep, from the article in post 3 (they put the scary stuff on page 2)

http://www.msnbc.msn.com/id/8514801/page/2/

snip>

The concern is that loan losses could rise if home prices level off or even decline, and that aggressive interest-only loans could create a vicious cycle of declining prices as homeowners scramble to get their equity out before a foreclosure.

“I think the case is circumstantial but it’s well accepted there is a link” between rising housing prices and non-traditional lending practices, Brown said. “Certainly some households could be using those innovative credit structures to qualify for homes that they really can't afford. For those households there could be a day of reckoning down the road.”

snip>

"It is a bubble, and it will pop but it’s not prices that pop — it’s market activity that pops," said Christopher Thornberg, an economist at UCLA's Anderson business school. "Prices just go down glacially, but market transactions collapse."

snip>

If the prospect of flat housing prices seems insignificant compared to a stock market bust, consider the range of industries that would be affected by a slowdown in housing activity, including construction workers, material suppliers, brokers and mortgage bankers. All told, the industry accounts for about 16 percent of the nation's economic activity. And that is not counting the billions of dollars spent on furniture, appliances, paint and carpeting in the first few years after a home is purchased.

snip>

"You don’t have to have prices fall for the wealth effect to have a bite," said Thornberg, of UCLA. "If houses stop appreciating, then that consumer spending goes away. The very process of prices going flat is sufficient to have a real impact."

more...

[54anickel]

20. My, seems the bubble is global

Soaring home prices worldwide driven by variety of factors such as Asian financial crisis, rising oil prices, shifts in capital

http://www.signonsandiego.com/news/reports/20050711-9999-lz1n11warming.html

If you think home prices are skyrocketing in San Diego, try living in Cape Town. Or Barcelona. Or Hong Kong. Or Auckland.

While median home prices have risen 30 percent in San Diego in the past two years, they have shot up more than 50 percent in South Africa, more than 35 percent in Hong Kong and New Zealand, and about 30 percent in Spain and France, according to a study last month by The Economist magazine.

"In terms of real estate, there's not just a herd mentality in the United States. There's a global herd," said Joseph Quinlan, chief market strategist at Bank of America Capital Management. "It's surprising how global the run-up in housing prices has become."

Although real estate runs on the motto that "every market is a local market," it seems that every market is also governed by global trends, ranging from the Asian financial crisis of the late 1990s to the rising price of oil in the past year.

more...


Check out the related article on the page:

Opposite sides of the real estate fence

http://www.signonsandiego.com/news/reports/20050711-9999-lz1n11realest.html

snip>

More than 1,000 miles west of Wichita, Park's sister, Laurie Nicholson, is happily riding Southern California's real estate roller coaster. Nicholson, who operates an Irvine property management company, owns several homes. Unlike Park, who focuses on the benefits of homeownership, Nicholson sees buying and selling real estate as a means to build wealth. She's preparing to convert one of her homes to cash.

"There is too much equity not to jump on it," she said. "In a couple of years, I will sell another. I will get to bolster my lifestyle and my bank account."

The sisters' opposing views of real estate reflect the growing divide between cities where prices have increased dramatically and areas where they have risen modestly.

In booming South Florida, real estate analyst Jack McCabe is putting together an investment group to buy homes cheaply when the sizzling Miami-Dade County condo market cools.

Although he hopes to profit from the volatile market, McCabe understands people who prefer the certainty of stable prices.

"It's steady," he said. "It's like money in the bank. It is not subject to the roller-coaster ride we have in major cities. You don't see the fortunes made or the fortunes lost."

more...

How does that hold up to the Original Use test?

How to Detect a Bubble? Try the Original-Use Test

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_currier&sid=avotuFj8VcXs

July 12 (Bloomberg) -- In 17th century Europe, some people hocked everything, including their houses, to invest in tulip bulbs.

In the early 21st century, some people around the world are hocking everything to invest in houses. Same story, different details?

snip>

As one authoritative writer on the subject, the late economist Charles Kindleberger, described them, participants in a bubble are ``generally speculators interested in profits from trading in the asset rather than its use of earning capacity.''

snip>

Motivation

So investors can begin an informal test for bubble conditions by examining their own motives for buying a stock. If we are working from some reasoned appraisal of what the company might earn in five or 10 years, based on a study of its business model, we can hope we are on solid ground. If it's because ``they're talking about a price target of $500,'' probably not.

So too with houses, which in their essence are places for people to live in, not price-appreciation vehicles. It's a reasonable certainty that people will always need a roof over their heads; price appreciation is a wish, not a need.

There was a time, just a couple of generations ago, when the standard advice given to new homeowners was to depreciate one's investment by, oh, 3 percent or 5 percent a year in doing one's family accounts. Like cars and many other consumer durable goods, houses lost value as they aged. My grandfather passed along that advice to me in 1974 as we sat on the back porch of a small place my wife and I had just bought.

more...

[UpInArms]

28. Mortgage bankers see US home sales record in 2005

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-12T141253Z_01_N12420817_RTRIDST_0_ECONOMY-HOUSING.XML

WASHINGTON, July 12 (Reuters) - The hot U.S. housing market will hit records in 2005 but begin to cool off in 2006, the Mortgage Bankers Association said on Tuesday in a forecast that changed earlier predictions of a slowdown this year.

The group said sales of both new and existing homes will hit new highs for the fifth consecutive year as long-term, fixed mortgage rates climb gradually through the end of 2005.

Existing home sales should increase 2 percent this year but decline by 3 percent in 2006 while new home sales rise 2 percent in 2005 and then drop 4 percent in 2006, Mortgage Bankers Association Chief Economist Doug Duncan said.

Fixed 30-year mortgage rates should climb to an average of 5.7 percent in the fourth quarter of 2005 and continue pushing higher to hit about 6.3 percent in 2007, he said. The 30-year fixed-rate mortgage averaged 5.62 percent last week, according to mortgage finance company Freddie Mac.

Duncan's projections follow previous predictions of a slowdown in housing this year after more than four years of robust activity.

...more...

[UpInArms]

32. Housing Bust Would Be Painful, But U.S. Might Weather Shock

http://www.investors.com/editorial/general.asp?v=7/12

Lois Lane is falling from the top of a Metropolis skyscraper. Superman, whom she has never seen, flies up and catches her in midair. "Don't worry, Miss Lane, I've got you." In midair, she looks at the flying man in the funny costume and spurts out, "You've got me? Who's got you?"

That's how many see the U.S. real estate market today. Except there may not be a Superman.

<snip>

A property plunge would be felt well beyond the construction industry, its suppliers and overextended speculators. We could expect a flight to quality, as defaults soar among builders and homeowners. Mortgage-backed securities would be shunned, as would other nongovernment debt. The rush into Treasury bills would widen those crucial spreads.

As the impact rippled out, consumers would quickly cool their heels. And what's bad for the U.S. is awful for countries that rely on robust American spending.

...more... (it goes on to cheerlead)

[54anickel]

37. Thanks for the laugh, UIA. I need to clean the coffee from my monitor -

the cheerleading section was a bit over the top.
:spray:

[UpInArms]

47. for more sick humor, check out this Q&A

Can you save yourself by turning over home deed?

http://www.marketwatch.com/news/story.asp?guid=%7BCA4D7D0C%2D9EB6%2D4DB8%2DBCC6%2DBFDC118F5CFA%7D&siteid=mktw

WASHINGTON (MarketWatch) -- Issues on people's minds: What can be done to save your credit when you owe more on a mortgage than your house is worth and is investing in new construction with the idea of flipping before closing a good idea?

Q. If someone is underwater, can they just grant the deed to the house to someone and save their credit? Without any trouble from the lender? Steve

<snip>

Q. What do you know about programs that advertise putting down $3,000 now on a house that will be completed in seven months? Is that safe? My friend did it in Washington State and he is expecting the value of the house to increase in price substantially during that period. Is this a wise idea? Michael Babiy

A: I know nothing about the specific program you mention. From what you describe, though, it sounds to me like your pal is playing a dangerous game of speculation. If he's not careful, he could lose everything.

...more...

Gack!

[54anickel]

53. Ewww, must be a lot of folks underwater for all those scams to start

popping up.

[UpInArms]

4. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 88.86 Change -0.60 (-0.67%)

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2129&Itemid=39

Dollar Jackpot Misses

"By announcing its policy changes in real-time and by adopting a smooth pattern of interest rate adjustments, the Greenspan Fed enhanced the understanding of the direction and purpose of policy actions, helping to improve the predictability of policy. When the central bank is predictable, it can be somewhat inactive as market responses carry much of the stabilization burden."
William Poole, St. Louis Fed President. Thursday, July 7, 2005 09:35 GMT

Dollar Jackpot Misses

Did you know that unemployment rate in the US rose to 9.0% last month? That of course would be U-6, the broadest measure of unemployment which includes: total unemployed, plus discouraged workers, plus all other marginally attached workers, plus total employed part time for economic reasons. Of course popular business media did not mention that statistic focusing instead on the idea that U-1 unemployment dropped to 5.0% - a four year low. Yet, the fact that Non-Farm Payrolls missed expectations by a considerable 50K, printing only 146K for the month of June, may start to undermine dollar’s bull thesis that US economy is operating on all cylinders. This is the second month in a row that results have come in below the 188K 3 month average and suggest that the Fed headfirst rush to 4% Fed funds rate may be premature.

Next week the dollar faces more hurdles as focus shifts to May’s Trade Balance numbers which given the rise in oil prices may surprise to the downside. The negative effect, however, may be partially offset by a strong up tick in Retail Sales.

...more...

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2131&Itemid=39

Majors Continue Battle Of The Bulge Against Dollar

EUR/USD – Euro bulls continued to push the dollar longs back toward the 1.2300 mark as a broad based anti-greenback rally continued to sweep the majors. As the pair maintains upward momentum, euro traders will most likely se the pair run out of steam around the 1.2250 mark, with a breakout above aiming for 1.2350 offers. Indicators favor a move to the upside, even though ADX signals trending conditions.

<snip>

USD/JPY – Japanese Yen trades finally decided its time to catch up with the rest of the pack and pushed the pair toward the 111.00 figure. As the pair continues to head lower, yen traders should expect the pair to bottom out around the 109.00-109.50 zone, which is marked by a number of minor swing highs. Indicators favor a continuation to the downside with oscillators on daily and 4 hour charts neutral and ADX signaling maturing trend.

...more...

No Reports today.

Have a Great Day Marketeers!

[54anickel]

10. Rising Dollar May Trim Repatriations (DOH! time for plan B)

http://www.cfo.com/article.cfm/4170687/c_4170707?f=homex_todayinfinance

The euro now buys about 12 percent fewer dollars than it did when many companies first announced plans to take advantage of a one-year U.S. tax amnesty.

Craig Schneider, CFO.com
July 12, 2005

Plans to repatriate hundreds of billions of dollars in foreign earnings may be in jeopardy thanks to the rapidly strengthening U.S. dollar, according to the Financial Times.

For 12 consecutive quarters, a weakening dollar had inflated year-on-year comparisons for multinational companies, the FT reported. The dollar's steep rise against the euro and other currencies since January, however, means that foreign profits will translate at roughly the same rate as last year's second-quarter figures. Indeed, added the newspaper, the euro now buys about 12 percent fewer dollars than it did when many companies first announced their repatriation plans.

snip>

While there doesn't appear to be a consensus on the numbers, "people have been frustrated that they missed the opportunity ," Graham told the FT. "We are beginning to have a lot more hedging discussions, and in the last two or three weeks there has been a definite pick-up in awareness of this issue."

more...

Guess they built that cushion up based on their over confidence that they could get China to move on the Yuan. Didn't happen, time for plan B - let's just hope it doesn't include another 9-11 scenario. :scared:

[UpInArms]

33. a peek at the buck (falling)

Last trade 88.60 Change -0.86 (-0.96%)

Settle 89.46 Settle Time 23:36

Open 89.02 Previous Close 89.46

High 89.59 Low 88.58

Last tick: 2005-07-12 10:09:14 ET
30-min delayed quote.

[UpInArms]

49. another peek - falling faster

Last trade 88.45 Change -1.01 (-1.13%)

Settle 89.46 Settle Time 23:36

Open 89.02 Previous Close 89.46

High 89.59 Low 88.44

Last tick: 2005-07-12 13:29:20 ET
30-min delayed quote.

[54anickel]

5. Hurricanes may allow insurers to up fees

http://biz.yahoo.com/rb/050711/financial_dennis_insurers.html?.v=2

NEW YORK (Reuters) - If Hurricane Dennis signals the upcoming hurricane season will be brutal, insurers could have more luck in boosting policy premiums and possibly long-term profits, analysts said on Monday.

Dennis, which killed 32 people in the Caribbean last week and hit Florida on Sunday, may trigger insurance payouts estimated to be as high as $5 billion.

snip>

In Florida, where insurers paid the most damages from last year's hurricanes, companies have so far had little success in getting regulators to allow higher premium prices.

snip>

"If Florida regulators do not allow higher prices, major insurers could threaten to withdraw. Having fewer insurance companies there would definitely raise prices," Paisan said.

Typically after a big hurricane, a company's shares fall before rising and buying on the dips might be the best strategy, Paisan said.

A spokeswoman for Florida's Office of Insurance Regulation said insurance companies can charge rates that are actuarily sound, not excessive, not inadequate and not discriminatory. Insurers cannot recover past losses with a rate increase, she added. :spray:

more...

[UpInArms]

6. Jobs Disappoint...Again!

http://www.dailyreckoning.com/Writers/Butler/Articles/711.html

Good day. Well, I hope your weekend was grand. Mine was low-key, as I was hoping. This coming weekend though, I'll be in Los Angeles to speak to the American Association of Individual Investors. A good crowd is expected, so I've got that going for me, eh?

The Jobs Jamboree disappointed once more last Friday, only coming in at 146K. And the birth/death model added about 180K. So the actual jobs created number would have been negative. But, there aren't many out there in the media reporting that number. Instead, they focused on the fact that the jobless rate dropped from 5.1% to 5%. Huh? Yes, grasshopper, recall that once the unemployment benefits run out, the U.S. no longer counts them as "unemployed." So, you can have jobs still below the level they were before the last recession, and the unemployment rate falling. Unbelievable, eh?

<snip>

"The U.S. dollar has been strengthening this year based on rising U.S. short term interest rates and relative growth rates of the U.S. compared to Europe and Japan. But this recent strength of the U.S. dollar - as well as low long term interest rates in the U.S. - will increase the U.S. current account deficit rather than shrink it as it would be needed to reduce global imbalances. So, the global current account imbalances will become worse and, on top of it, the balance sheet losses of U.S. residents on their foreign assets will be large and leading to a ballooning of the U.S. net foreign liabilities by the end of 2005. Once the scale of the potential current account and net foreign debt increase of the U.S. sink in the markets you can expect the dollar to start falling again. With such a large and growing current account deficit and increase in net foreign liabilities the dollar can head only in one direction: south!

...more...

[54anickel]

12. Heh-heh, 2nd verse same as the first (only worse)

The same pattern occurred in 2004 when the US dollar held up until the summer and started sinking again when the awareness of the staggering scale of the U.S. external balance started to sink in the mind of investors. And once China moves its currency some time in the fall, a snowball effect on the dollar can be expected: other Asian currencies that were effectively fixed via forex intervention (as long as the Chinese peg held) will also be allowed to appreciate once China moves. Then, the U.S. dollar weakening will be exacerbated as, on top of reduced central banks intervention in Asia, private Asian investors who invested in U.S. dollar assets - based on positive carry trades and low risk of capital losses from movements of their pegged currencies - will also have a huge incentive to dump dollar assets to avoid such capital losses."

Don't we get trade deficit numbers tomorrow?

[UpInArms]

19. this week's Reports begin tomorrow - there's a whole slew of them

http://biz.yahoo.com/c/e.html

Jul 13	8:30 AM	Export Prices ex-ag.	Jun	-	NA	NA	-0.4%	-	
Jul 13	8:30 AM	Import Prices ex-oil	Jun	-	NA	NA	-0.3%	-	
Jul 13	8:30 AM	Trade Balance		May	-	-$56.0B	-$57.0B	-$57.0B	-	
Jul 13	2:00 PM	Treasury Budget		Jun	-	$21.0B	$28.0B	$19.1B	-	
Jul 14	8:30 AM	Core CPI		Jun	-	0.2%	0.2%	0.1%	-	
Jul 14	8:30 AM	CPI			Jun	-	0.1%	0.3%	-0.1%	-	
Jul 14	8:30 AM	Initial Claims		07/09	-	325K	NA	319K	-	
Jul 14	8:30 AM	Retail Sales		Jun	-	0.9%	0.9%	-0.5%	-	
Jul 14	8:30 AM	Retail Sales ex-auto	Jun	-	0.6%	0.5%	-0.2%	-	
Jul 15	8:30 AM	Business Inventories	May	-	0.2%	0.4%	0.3%	-	
Jul 15	8:30 AM	Core PPI		Jun	-	0.2%	0.1%	0.1%	-	
Jul 15	8:30 AM	NY Empire State Index	Jul	-	10.0	9.0	11.6	-	
Jul 15	8:30 AM	PPI			Jun	-	0.2%	0.4%	-0.6%	-	
Jul 15	9:15 AM	Capacity Utilization	Jun	-	79.7%	79.6%	79.4%	-	
Jul 15	9:15 AM	Industrial Production	Jun	-	0.5%	0.4%	0.4%	-	
Jul 15	9:45 AM	Mich Sentiment-Prel.	Jul	-	95.0	94.5	96.0	-

[54anickel]

22. Should make for a lively show. I'll bring the popcorn...n/t

[UpInArms]

7. Fed publishes code for deciphering minutes

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-07-11T181655Z_01_N11480724_RTRIDST_0_PICKS-ECONOMY-FED-MINUTES-DC.XML

WASHINGTON (Reuters) - Attention Fed watchers. Bored by the increasing transparency of the U.S. central bank? Longing for the good-old days when the Federal Reserve's policy stance could only be discerned through careful monitoring of money market conditions? Well don't read this.

In a move that will no doubt make your life even more joyless, the Fed has issued tips on how to parse the minutes of the closed-door meetings of the Fed's policy-setting Federal Open Market Committee -- further lifting the veil of secrecy that had cloaked the secretive panel for years.

In an article in the latest Federal Reserve Bulletin that provides an overview on the history of FOMC minutes and how they are prepared, two Fed staffers offer guidance on how to gauge the depth of support for various policy-maker views expressed in the minutes.

"To give an indication of how widely expressed a particular view is at a meeting, the minutes use common quantitative wording: 'all,' 'most,' 'several,' 'few,' or 'one,' in descending order," they wrote.

<snip>

The short article, available on the central bank's Web site at www.federalreserve.gov/pubs/bulletin/2005/spring05_fomc.pdf, also notes that the minutes distinguish between "meeting participants" and "members," which the Fed deems to be the smaller subset of officials who actually vote at the meeting.

...more...

[54anickel]

16. Man, they really are walking on egg shells these days. Greenspin

wants absolutely no surprises or speculative moves in the markets. Looks to me like they are trying to regain some control over the situation since jaw-boning is the only tool left.

[UpInArms]

9. Sara Lee Announces New Job Cuts

http://www.wfmynews2.com/news/local_state/local_article.aspx?storyid=44795

Winston-Salem, NC -- Sara Lee Branded Apparel has announced that the company is cutting almost 800 positions in North America

About half of the 775 cuts will be in North Carolina, primarily at operations in Winston-Salem.

According to a news release, about 400 of the net position reductions will come from this state.

...more...

and this companion article:

Last Day For Many Sara Lee Workers

Monday was the last day at work for several employees at Sara Lee.

Workers told WXII 12 News they weren't surprised by the layoffs, since they knew about it two months ago when the company announced it was eliminating 350 people.

But some employees said they were told the minute they arrived Monday that they no longer had a job. They said they were sent to the human resources office and told that Monday was their last day.

Afterward, they were asked to gather their belongings and some employees said they were escorted out of the building.

Company officials say the reason for that was because the positions were highly sensitive for competitive reasons.

...more...

[UpInArms]

11. China car sales soar nearly 50 pct in June

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-07-12T070448Z_01_SHA301168_RTRIDST_0_AUTOS-CHINA-SALES-UPDATE-1.XML

SHANGHAI, July 12 (Reuters) - June passenger car sales in China, the world's third-largest vehicle market, leapt by nearly half to 375,500 units from a year earlier, the country's official auto industry association said on Tuesday.

From January to June, car sales climbed a more moderate 10.6 percent to 1.843 million units, the China Association of Automobile Manufacturers said in a statement sent to Reuters.

For the first six months, General Motors Corp.'s (GM.N: Quote, Profile, Research) main joint venture in Shanghai led the country's car-making companies with 32,500 sedans sold, followed by Hyundai Motor Co. (005380.KS: Quote, Profile, Research) venture in Beijing with 22,400 and Volkswagen AG's (VOWG.DE: Quote, Profile, Research) venture in Shanghai with 21,300.

The German company's smaller venture in the northeastern city of Changchun moved 20,600 sedans to take fourth spot.

...more...

[UpInArms]

13. India, Bechtel strike $160 mln Dabhol deal-sources

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-12T115306Z_01_BOM278380_RTRIDST_0_ENERGY-INDIA-BECHTEL-UPDATE-1.XML

BOMBAY, July 12 (Reuters) - India has reached a $160 million settlement with U.S. engineering and construction firm Bechtel Corp. on its claims on the mothballed Dabhol power plant, a government source involved in the deal said on Tuesday.

Maharashtra Power Development Corporation, owned by the Maharashtra state utility, which owns 14 percent of the power project, will pay the sum to Bechtel, the source said.

The settlement brings the parties one step closer to ending a four-year dispute which has embarrassed the government, given that the $2.9 billion plant was once a record foreign investment in India and the fast-growing country is perpetually short of power.

<snip>

Dabhol was designed to produce 2,184 megawatts of power but shut down in May 2001 after a dispute between previous owner Enron Corp. and Maharashtra State Electricity Board (MSEB), its sole consumer.

...more...

[UpInArms]

15. 9:39 EST numbers and pre-opening blather

Dow 10,505.22 -14.50 (-0.14%)
Nasdaq 2,131.53 -3.90 (-0.18%)
S&P 500 1,218.29 -1.15 (-0.09%)
10-Yr Bond 4.118 +0.16 (+0.39%)

NYSE Volume 75,493,000
Nasdaq Volume 81,339,000

9:15AM: S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -1.0.

9:00AM: S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -1.0. Futures market still unable to gain much traction as some profit-taking following the recent run-up in equities weighs on pre-market trading... With the Dow up 3.6% (359 points) from Thursday's low, the S&P sitting at four-month highs and the Nasdaq up 4.0% in three days, it appears investors may be locking in some profits ahead of key earnings and economic data due later in the week

8:30AM: S&P futures vs fair value: -0.1. Nasdaq futures vs fair value: -0.5. Still shaping up to be a relatively flat open for the indices, as futures indications continue to hover right around the unchanged mark... A rebound in oil prices ($59.47/bbl +$0.55) - which had fallen for three straight days - may be taking some of the steam out of a respectable three-day run for the major averages

8:00AM: S&P futures vs fair value: +0.6. Nasdaq futures vs fair value: flat. Futures market versus fair value suggesting a lackluster open for the cash market... While there are no scheduled economic data to provide a more definitive tone to trading, investors may get some relief following better than expected Q2 earnings and encouraging FY05 guidance from Genentech (DNA) last night... Other notable names out with results - PepsiCo (PEP) and Ameritrade (AMTD) - have also posted solid results

[UpInArms]

18. updating blather (LOL!)

9:40AM: Market opens modestly lower as investors consolidate gains following a three-day rally in stocks... Since slipping to their lowest levels early Thursday morning, after several explosions rocked London's financial district, the major indices have surged an average of 3.5%... While the market's resilience following the terrorist attacks has been remarkable to say the least, investors may feel stocks are somewhat overbought at current levels, showing their reluctance to hold onto such sizeable gains ahead of more influential earnings and economic data over the next few days...

[UpInArms]

17. U.S. Treasuries down in light, technical move

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-12T133652Z_01_N12346294_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, July 12 (Reuters) - U.S. Treasury debt prices fell on Tuesday morning in very light and choppy trade, as technical factors dominated a market still waiting for important data on inflation later in the week.

In the very early going, prices were turning higher, but that move ran its course and prices resumed their downward move seen on Monday, in part because some traders were dumping benchmark Treasuries in favor of German Bunds, the proxy for euro zone government debt, traders said.

"You can see that the participation is very light, so the moves are going to be exaggerated," said one Wall Street bond trader at a primary dealer.

Some traders said some of the early upside move in the market was possibly related to companies that were issuing debt and needed to hedge interest rate risk by buying Treasuries.

Prices on benchmark 10-year notes were 5/32 lower and yields were 4.12 percent, after rising to an intraday high of nearly 4.16 percent during Monday's session.

...more...

[UpInArms]

51. US Treasuries slip ahead of auctions

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-12T173813Z_01_N12445027_RTRIDST_0_MARKETS-BONDS-UPDATE-2.XML

CHICAGO, July 12 (Reuters) - U.S. Treasury debt prices drifted lower on Tuesday in cautious trading ahead of an auction of five-year notes on Wednesday.

However, the market pared losses as crude oil prices reversed Monday's decline to climb back above $60 per barrel.

Trading volumes were slim, with many dealers looking ahead to major reports on June inflation and retail sales due on Thursday and Friday for clearer guidance.

Beyond this week's data, semiannual testimony on the economy by Federal Reserve Chairman Alan Greenspan on July 20 could well set the market's mood for at least the next few weeks.

Tuesday's slightly soft tone was tied to dealers' tendency to cheapen prices ahead of the auction of new supply -- Wednesday $13 billion in five-year notes.

...more...

[UpInArms]

21. Confidence in US economy slips in July- report

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-07-12T135943Z_01_NAT001689_RTRIDST_0_ECONOMY-CONSUMERS-IBD-URGENT.XML

NEW YORK, July 12 (Reuters) - U.S. consumers' were less optimistic about the economy in July as gasoline prices edged higher, according to a survey released on Tuesday.

Investor's Business Daily and TechnoMetrica Market Intelligence said their economic optimism index slipped 1.9 points to 48.6 from June's 50.5. A reading above 50 indicates optimism while a reading below 50 indicates pessimism.

"The across-the-board decline is not surprising given that gasoline prices kept rising throughout the month of June," said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner.

...very short blurb...

Guess they wouldn't want to really make that into an article worth reading :eyes:

[studiovoltaire_us]

25. Long Term IBD-referenced Index Graphic?

Investor's Business Daily and TechnoMetrica Market Intelligence said their economic optimism index

Thanks for this thread. It's very informative and well-moderated
"in my opinion". <-- from Michael Savage's CYA (in case Mr. Right
is wrong) Kit.

Is there a reference source that would avail me of a longer
term chart or some other graphic display of this consumer
confidence index?


:donut:

[UpInArms]

31. the IBD is a

subscriber only for those charts :(

http://www.investors.com/default.asp

thanks for dropping in to the SMW and welcome to DU!

:hi:

[UpInArms]

23. Crude moves up 93 cents to $59.85

10:05am 07/12/05 AUG CRUDE RISES 93C TO $59.85/BRL IN EARLY NY TRADE

10:05am 07/12/05 AUG NATGAS JUMPS 4.2% TO $7.81/MLN BTUS

[UpInArms]

29. Oil climbs back above $60; natgas jumps to a 3-wk high

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38545.4250444676-838261865&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Crude futures climbed back above $60 a barrel and natural-gas prices tapped their highest level in three weeks as traders digested the production shut ins for the Gulf of Mexico following Hurricane Dennis. About 96% of daily oil output and 62% of daily natural-gas output in the region was shut in as of Monday, according to the Minerals Management Service. August crude is up $1.13 to $60.05 a barrel. August natural gas is at $7.80 per million British thermal units, up 30.5 cents, or 4.1%.

[UpInArms]

24. 10:17 EST numbers and blather

Dow 10,487.73 -31.99 (-0.30%)
Nasdaq 2,130.15 -5.28 (-0.25%)
S&P 500 1,217.57 -1.87 (-0.15%)
10-Yr Bond 4.119 +0.17 (+0.41%)

NYSE Volume 329,240,000
Nasdaq Volume 298,529,000

10:00AM: Major indices now trade in split fashion as sector leadership remains mixed... Pacing the way higher has been Consumer Staples, following better than expected Q2 earnings from PepsiCo (PEP 54.99 +1.14) and reports that P&G shareholders have approved the Gillette acquisition... Energy has also traded higher, benefiting from a rebound in oil prices while strength in the banking group has helped the Financial sector shrug off rising bond yields for the time being...The Materials and Industrials sectors, however, have succumbed to some consolidation...

Despite analyst upgrades resulting in strong gains for FRX (+3.9%) and BMET (+2.5%), selling pressure on key drug names (i.e. PFE, MRK and BMY) and consolidation in hospital stocks (i.e. HCA and THC) has weighed on Health Care... DJTA -0.4, NYSE Adv/Dec 1192/1417, Nasdaq Adv/Dec 1055/1330

[UpInArms]

26. UAE considering shift of reserves into euro

http://www.marketwatch.com/news/story.asp?guid=%7B761293C6%2D1650%2D48D1%2DB434%2D6AF4DB264768%7D&siteid=mktw

CHICAGO (MarketWatch) -- The dollar hit a three-week low against the euro Tuesday as comments from central bankers dashed expectations for a European Central Bank interest-rate cut and the United Arab Emirates said it was considering a shift to holding more euros in reserve.

U.S. trade data due Wednesday was also expected to bring a new round of selling pressure on the dollar.

The euro rose 0.8% against the dollar, last at $1.2171 in early U.S. trading. It reached a high of $1.2203 in overnight trading, the highest level seen since June 21.

European Central Bank Governing Council member Nicholas Garganas said Tuesday that high oil prices may force the bank to raise its inflation forecast, perhaps to above 2% in coming months.

The relatively hawkish comments came in an interview with Bloomberg News and were cited by several analysts as pushing the euro higher Tuesday.

...more...

Ruh-Roh

[UpInArms]

63. Oil-rich central bank buying could revitalize euro

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-07-12T130938Z_01_L12380487_RTRIDST_0_PICKS-MARKETS-CURRENCIES-RESERVES-DC.XML

LONDON (Reuters) - Signs that central banks in oil-rich nations are considering buying euros again to diversify their huge official reserves could aid the single currency after falling more than 10 percent against the dollar this year. Oil prices' surge to a record high above $62 a barrel last week also suggests oil exporters such as Russia or those in the Middle East will have more dollars in their coffers to sell than before, which could help the euro regain ground, analysts say.

After hitting a 14-month low below $1.1870 last week, the euro staged a rally above $1.22 on Tuesday. The move came as the United Arab Emirates said it might convert five percent of its foreign exchange reserves to euros from dollars.

Qatar said last month it is considering shifting some of its foreign exchange reserves back into the euro given its fall, highlighting the increasingly pro-active way for oil-rich countries to manage their holdings.

"It shows in terms of valuation reserve managers might be finding the current euro level attractive," said Shahab Jalinoos, senior currency strategist at ABN Amro.

...more...

edited to add:

Late to the party again :D

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=1620554&mesg_id=1622055

glad to see that 54anickel has returned to the fray! :hi:

[54anickel]

27. Racing to file for bankruptcy?

Report: Changes in law may trigger more Chapter 11 filings, corporate liquidations before Oct. 17.

http://money.cnn.com/2005/07/12/news/economy/bankruptcy_filings/index.htm

NEW YORK (CNN/Money) - Changes in the bankruptcy law could force more companies seeking protection from creditors to close and could prompt a rush to file under the existing law, according to a published report.

USA Today reports that experts in the field of corporate bankruptcies say they're expecting a number of filings in September, ahead of the Oct. 17 effective date of the law passed earlier this year.

"Taken together, these changes will doom some companies to fail in Chapter 11," says New York lawyer D.J. Baker of Skadden Arps, who is representing supermarket chain Winn-Dixie in its reorganization. Chapter 11 is the provision of the bankruptcy law that allows a company to continue operations, while Chapter 7 covers liquidations.

The changes will make it tougher for companies filing bankruptcy to find financing they need to fund operations during reorganization, bankruptcy lawyer James Sprayregen of Kirkland & Ellis in Chicago told the newspaper.

"I think there will be more liquidations," he said.

snip to WTF, I didn't know they did that>

Companies also will not be able to offer top executives retention bonuses unless they present proof of another job offer, the newspaper reports.

more...

[54anickel]

30. One fool. . .(Inflation/deflation)

http://www.321gold.com/editorials/russell/russell071205.html

I spent a good deal of the weekend reading (as usual), and pondering what I consider THE economic question of the day, the week, the month and maybe even of the decade. I'm talking about the momentous question of -- INFLATION or DEFLATION. Older subscribers know that I've been using the expression, "Inflate or die" to dramatize the incredible position the US now finds itself in.

Debt in the US plus unfunded liabilities is now running into the multi-trillions. Nobody denies that. The only arguments have to do with how the nation is going to deal with all this debt. So far, nobody has the answers. In fact, nobody, except certain academics, is even talking about the question.

I've been reading some very bright people on both sides of the equation. My friend, A. Gary Shilling, was one of the very first to take the deflation side. Gary even wrote a book entitled "Deflation." Gary has been joined by other bright people, the latest to join the deflation-club being none other than Morgan Stanley's Stephen Roach and Pimco's Bill Gross. On the inflation side, I just read the latest paper by the brilliant Stephen Leeb, editor of the new service, the "Complete Investor."

snip>

"To the extent that inflation is always, and everywhere, a monetary phenomenon, the Fed's easy stance has had an important impact. It has shown up in rising house prices, rather than conventional consumer price indexes. . . The housing bubble is likely to get bigger before it inevitably bursts. However, when the housing bubble does burst, it will represent a huge deflationary shock to the economy.

"Looking ahead, the risks facing the US and global economies will remain more deflationary than inflationary. Other than burst housing bubbles, there is also the lingering concern that global investors will, at some point, be unwilling to finance US profligacy, forcing a major retrenchment in demand."

more...

[TrogL]

34. Loonie Watch (and scream and shout)

http://members.shaw.ca/trogl/looniewatch.html

Highlights.



http://www.x-rates.com/d/USD/CAD/data30.html

Detailed analysis (http://quotes.ino.com/exchanges/?r=CME_CD)

Up-to-the-minute graph (http://quotes.ino.com/chart/?s=CME_CDY&v=i)

Current TSE:




2005-06-13 Monday, June 13 0.795039 USD
2005-06-14 Tuesday, June 14 0.796559 USD
2005-06-15 Wednesday, June 15 0.806647 USD
2005-06-16 Thursday, June 16 0.808016 USD
2005-06-17 Friday, June 17 0.809717 USD
2005-06-20 Monday, June 20 0.811754 USD
2005-06-21 Tuesday, June 21 0.812348 USD
2005-06-22 Wednesday, June 22 0.809651 USD
2005-06-23 Thursday, June 23 0.812282 USD
2005-06-24 Friday, June 24 0.811096 USD
2005-06-27 Monday, June 27 0.812546 USD
2005-06-28 Tuesday, June 28 0.812348 USD
2005-06-29 Wednesday, June 29 0.815461 USD
2005-06-30 Thursday, June 30 0.815927 USD
2005-07-01 Friday, July 1 0.805283 USD
2005-07-04 Monday, July 4 0.805283 USD
2005-07-05 Tuesday, July 5 0.804052 USD
2005-07-06 Wednesday, July 6 0.808734 USD
2005-07-07 Thursday, July 7 0.813802 USD
2005-07-08 Friday, July 8 0.819202 USD
2005-07-11 Monday, July 11 0.825423 USD




The loonie is on an absolute tear against all major currencies. It is close to matching six month highs for all involved (see Loonie Watch main site (link below)) for details.

[54anickel]

35. Resilience in a Vulnerable World (Roach)

http://www.morganstanley.com/GEFdata/digests/20050711-mon.html#anchor0

Notwithstanding the tragedy of London, there can be no mistaking the apparent resilience of the global economy and world financial markets in the face of such adversity. The free world seems more determined than ever to cope with such visible manifestations of the soft underbelly of globalization. We need to be careful, however, in confusing post-attack resilience with an all-clear signal for the global economy. With oil prices at $60, current account imbalances in uncharted territory, and protectionist risks mounting, a precarious world still has plenty on its plate. Moreover, with equity-market volatility remaining at rock-bottom levels and spreads in fixed income markets still extraordinarily tight, an eerie state of complacency pervades world financial markets. It would be foolish to minimize the potential consequences of this mismatch between event risk and a complacent, yet still unbalanced world.

It’s tempting to conclude that terrorism has now become a way of life -- and that we have now learned to live with it. Hopefully, at least the first part of that statement will never be the case. Yet the coping mechanism of the global economy and world financial markets in dealing with such shocks looks increasingly robust. That the shocks, themselves, seem to have diminished in the nearly four years since 9/11 certainly tempers the “fear factor” that might have otherwise been associated with successive blows. This may well be an important sign of success in the war against terrorism. That’s not to diminish the ever-present risk of a new setback or the increasingly burdensome sunk costs of anti-terrorist efforts -- government-sponsored homeland security programs, increased defense outlays, and private business spending on perimeter and internal security. But there appears to be less “sand in the gears” of globalization than many of us thought might have been the case in a post-9/11 world (see my 28 September 2001 editorial comment in the Financial Times, “Back to Borders”).

Shocks, of course, are only one part of the global macro story. Even more important, in my view, is the inherent stability of the underlying economy itself. Borrowing from physics, it seems safe to surmise that a shock that hits a stable system is likely to have less of a serious impact than a shock that hits an unstable system. Such are the mounting perils of today’s increasingly unbalanced global economy. Over the past four years, our calculations suggest that the disparity between the world’s current account deficits and surpluses has widened from 3% of global GDP to a record 4%. Over the same period, the underpinnings of the American consumer -- by far, the most powerful engine on the demand side of the global economy -- have drawn increased support from the wealth effects of overvalued property markets. Complete with a record surge of household sector indebtedness spawned by this equity extraction, the emergence of America’s second major asset bubble in five years hardly speaks of inherent resilience in the US or in a US-centric global economy.

The consensus sees it differently with respect to the US consumer, maintaining that domestic demand is now drawing increasingly solid support from improving labor market conditions and a concomitant pickup in organic labor income generation. Yet another disappointing monthly employment report draws that interpretation into question, in my view. The shortfall of payroll-based job creation in June (+146,000 versus consensus estimates of around +200,000) was all the more disturbing in the immediate aftermath of a weak May report (an upwardly revised increase of only 104,000). This is hardly anything new for the weakest hiring recovery on record. Over the entire 43 months of this economic recovery, private nonfarm payrolls have increased only 2% -- far short of the 11.5% increase recorded, on average, over comparable periods of the preceding five business cycles. At the same time, the hourly wage rate held at its 2.7% y-o-y trajectory -- slightly less than the CPI-based inflation rate and fractionally below the level recorded at the trough of the last recession in November 2001. This does little to correct the serious and highly unusual mismatch between vigorous productivity growth and persistently weak trends in worker rewards. According to our estimates, total hourly compensation in the nonfarm business sector increased only 7.5% in real terms in the first 13 quarters of this recovery (ending 1Q05) -- far short of the 13.0% cumulative gain in productivity over this same interval (see my 7 July dispatch, “Back to the Drawing Board”). Contrary to the post-release spin on the June employment report, the vulnerabilities of the income- and saving-short, wealth- and debt-dependent American consumer remain very much intact.

more...

[UpInArms]

36. Challenger: 120 CEO changes announced in June

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38545.4400746759-838262740&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

BOSTON (MarketWatch) - June marked the fifth consecutive month of 100-plus chief executive officer departures with 120 CEO changes announced in the month, Challenger Gray & Christmas said Tuesday. The Challenger CEO turnover report hit a milestone last month, as the global outplacement firm recorded the 5,000th CEO departure since August 1999, when its tracking began.

[UpInArms]

38. Morgan Stanley gives out over $88 million in severance to execs

$88 Million, And Counting

http://www.forbes.com/home/2005/07/11/morgan-stanley-crawford-severance-cx_lm_0711mwd.html

NEW YORK - The turmoil in Morgan Stanley's executive ranks has cost the firm at least $88.8 million in severance payments to departing senior bankers so far this year, and that's just what has been disclosed.

Monday, the firm said Stephen Crawford was leaving, triggering a $32 million cash settlement as agreed to by the terms of a renegotiated employment contract that was disclosed by the company last week. The amount represents two times his salary and bonus for this year. The new contract said he would be entitled to the payment if he left the firm by Aug. 3.

Crawford would be the first casualty of the new management being led by John Mack, the former president of the company who agreed last month to take over as chief executive. Mack on Friday gave up guarantees that he would get $25 million in pay this year and next, in an attempt to quell a new furor among shareholders who have been vocally disgruntled for months about the firm's board of directors and top management.

Compensation experts said the experience at Morgan Stanley (nyse: MWD - news - people ) illustrates a problem on Wall Street. While departures of mid- and lower-level executives are common, dealing with senior departures is done pretty much on a case-by-case basis. Because of that, the payouts are higher than they might have been.

...more...

[UpInArms]

39. Mogambo: Hairshirt Economics

http://www.dailyreckoning.com/Issues/2005/DRUS071105.html

Oscar Wilde once commented on a man who knew "the price of everything and the value of nothing."

Most Americans would be surprised to realize that there is a difference. And yet, with the advance of the U.S. housing bubble, the gap between the two widens.

A housing bubble is very different from a stock market bubble. A stock market bubble is a financial phenomenon; a real estate bubble is an economic one. When a stock bubble explodes investors are hurt. When a property bubble pops, ordinary people feel extraordinary pain. That is when prices collapse back to real value and we will find out what stuff we are made of.

We say that because it will come as a great disappointment to many people to discover what their houses are really worth. When tech stocks crash, most people read the news with approval; they never bought the stocks anyway and are pleased to find that they weren't such idiots after all. But when property goes down, the shock of it is likely to upset them deeply.

<snip>

"A new class seems to be developing. I call it the 'House Poor.' In this over-heated real estate market where homes are selling above list prices and speculative buyers are quickly flipping properties at a record pace, the House Poor are keeping up with the rising cost of living by paying the bills through home equity extraction, home-equity loans and cash-out refinancing. While many homeowners believe they can live like the upper class and appear to be wealthy, they'll be the first to end up in the poor house. Those easy money real estate speculators who purchased several investor properties are now beginning to see that renters are more difficult to find these days but the bills to maintain their properties keep coming in.

...more...

[ozymandius]

43. 'Housing Bubble' has entered the mainstream consciousness.

Therefore it exists. I do not see why we still have economic pundits denying its existence. Perception among a consensus is everything - exemplified by this real estate bubble fueled by the perception of cheap loan money and easy wealth through flipping and borrowing.

[UpInArms]

40. 11:08 EST numbers and blather

Dow 10,503.30 -16.42 (-0.16%)
Nasdaq 2,134.62 -0.81 (-0.04%)
S&P 500 1,219.30 -0.14 (-0.01%)
10-Yr Bond 4.129 +0.27 (+0.66%)

NYSE Volume 607,415,000
Nasdaq Volume 532,733,000

11:00 ET Dow -18, Nasdaq +1, S&P -0.13
More of the same for equities as the market continues to trade with a tinge of caution... As is typical every quarter, there is often a great deal of nervousness seen early in earnings season until a clear trend in the reports emerges... Perhaps providing more direction over the next few days will be reports from Abbott Labs (ABT 49.57 -0.08), Advanced Micro Devices (AMD 19.12 +0.11) and Apple Computer (AAPL 38.09 -0.01) tomorrow, Q2 earnings from UnitedHealth Group (UNH 52.52 +0.09) on Thursday and earnings on Friday from the second Dow component - General Electric (GE 35.00 -0.11) - to report quarterly results... ..NYSE Adv/Dec 1365/1596. ..NASDAQ Adv/Dec 1191/1471.
10:30 ET Dow -27, Nasdaq -3, S&P -1.72
Still little enthusiasm seen in the market as stocks continue to chalk up modest losses... Oil prices recently surpassing $60/bbl, and trading higher for the first time in four days, has also left investors little incentive to hold onto recent market gains... The commodity has rebounded amid reports of the record fifth named storm in the Atlantic - Tropical Storm Emily - for this point in the hurricane season ahead of tomorrow's weekly inventories data... It appears traders are betting that crude inventories fell due to disruptions in the Gulf of Mexico from Tropical Storm Cindy and Hurricane Dennis... ..NYSE Adv/Dec 1275/1603. ..NASDAQ Adv/Dec 1027/1584.
10:00 ET Dow -4, Nasdaq -1, S&P +0.68
Major indices now trade in split fashion as sector leadership remains mixed... Pacing the way higher has been Consumer Staples, following better than expected Q2 earnings from PepsiCo (PEP 54.99 +1.14) and reports that P&G shareholders have approved the Gillette acquisition... Energy has also traded higher, benefiting from a rebound in oil prices while strength in the banking group has helped the Financial sector shrug off rising bond yields for the time being...The Materials and Industrials sectors, however, have succumbed to some consolidation... Despite analyst upgrades resulting in strong gains for FRX (+3.9%) and BMET (+2.5%), selling pressure on key drug names (i.e. PFE, MRK and BMY) and consolidation in hospital stocks (i.e. HCA and THC) has weighed on Health Care... ..DJTA -0.4%. ..BTK -0.5%. ..NYSE Adv/Dec 1192/1417. ..NASDAQ Adv/Dec 1055/1330.

[loudsue]

41. Good Morning, Marketeers!!

:donut: It looks like it's going to be a bust of sorts in the casino today! I doubt we'll fall below yesterday's gains, but ya just never know anymore. Whatever it is that has kept this market up is magic to me...I just don't get it.

Everyday, more layoffs.
Everyday, more government lies.
Everyday, things cost more, and people make less.

:shrug: But the market can still go up at times?

What am I missing here?

:yourock: Thanks to all of you for keeping us informed! :yourock:

:kick::kick::kick:

[UpInArms]

44. Hiya loudsue!

:hi:

How's the work assignment?

Hope all is well with you and yours :thumbsup:

[loudsue]

65. Hi UIA!!!

:hi: So far so good with the work assignment. Can't tell if we're on shaky ground or not, however....these days it's hard to tell.

Thanks for asking! :hug:

I was just checking in w/ the Market Thread while I'm working...so... back to work for now!

:hi: Seeya!

:kick::kick::kick:

[specimenfred1984]

55. Market Manipulation, Sometimes

Like an hour ago in the mini S&P futures, the most actively traded S&P.

There was 8 minutes of very large volume, most of it buying at 1:50-1:58 then, it's followed by an hour of nothing, nothing being very low volume and no up or down movement.

Some big fund(s) is buying, there was a technical level broken to the upside that was just yesterday's and today's high. Still, there is usually some follow up buying or if not, some selling. The fact that it just sits there suggests fear, fear of who did the buying and that they might buy more.

It is fear and not confidence, because confidence would be followed up with more buying. This has been happening in the Mini S&P since last May, May of 2004. It also happened post 9/11/01 but was accompanied then by a complete shutdown of the financial markets.

And just as a matter of perception, the markets aren't really going anywhere, they are at April 1999 levels. I think stocks and bonds are being "propped" up, illegally or pseudo-illegally by the Fed, as exemplified by the volume I just cited.

[54anickel]

59. Hmmm, Account 990N at it again?...n/t

[specimenfred1984]

61. Maybe, Maybe Not

I can't prove it so to me it is a theory. It is not a conspiracy theory though because I can prove that fund(s) are doing the buying, it is happening.

But who's behind them and what are their reasons? That's what I do not know the answers to. It could be simple greed, derivative-related unloading of hedges, FED manipulation or all 3 and more.

I do agree with the original poster, it just doesn't make any sense with oil going through the roof, employment sucking and not paying much and real inflation - measured by what people actually need to buy - being outrageous.

As I'm typing, the S&P is dropping fast and the Dow is neg. again. Whoever pumped the S&P is dumping it now.

[ozymandius]

42. Bush adviser: Housing boom appears to be mostly market driven

WASHINGTON – The Bush administration is closely watching the housing boom, though so far the surge appears to be driven mostly by basic market forces and not speculation that could lead to instability, Ben Bernanke, the president's top economist, said Tuesday.

Federal Reserve Chairman Alan Greenspan and some private economists have raised concerns that the market may be getting too hot.

Speculative buying and selling seem to be cropping up in some areas, but other forces also are feeding the hot market and the surge in house prices, Bernanke suggested.

"While speculative behavior appears to be surfacing in some local markets, strong economic fundamentals are contributing importantly to the housing boom," said Bernanke in his first speech as the new chairman of the White House's Council of Economic Advisers.

more...

http://www.signonsandiego.com/news/business/20050712-0807-bush-housing.html

Oooh! How much for you, Ben?

[Roland99]

50. **COUGH**bullshit**COUGH**

[54anickel]

56. Bastard! Get new job skills, take control of your retirement finances,

use good sense in borrowing. For cripes sake - a bit late with all of this wonderful advice, ain't ya Ben? Hasn't the advice for 4 years been to go out and shop?

Bernanke's comments on housing were contained in a broader speech delivered to the American Enterprise Institute on the need for Americans to gain economic security in a fast-changing, competitive global marketplace.

He highlighted the importance of workers refreshing job skills to remain competitive and emphasized the importance of improving education, especially in math and sciences. He also stressed the need for Americans to gain more control over their economic security – themes consistent with the Bush administration's message.

[UpInArms]

45. Oil, gas prices to remain high: DOE

http://www.marketwatch.com/news/story.asp?guid=%7B823D3F50%2D9798%2D4A24%2DBCCF%2D7C071FB5C4DE%7D&siteid=mktw

WASHINGTON (MarketWatch) -- Oil and gasoline prices will likely remain high through 2006 at least, the Energy Department said Tuesday.

Crude-oil prices will likely average more than $55 a barrel through the end of next year, while retail gasoline prices will likely remain above $2.20 a gallon, according to the Energy Information Agency's short-term monthly outlook released Tuesday. Read the full report.

The estimated prices are up significantly from last month's estimates.

Gasoline prices will likely average $2.25 a gallon this summer, up 8 cents from last month's estimate and 35 cents higher than last summer's average price.

Last week, the average price of retail gasoline rose to a record $2.369 a gallon, the EIA said Monday. Prices have surged 10.6% in the past six weeks.

Crude-oil prices are likely to average $59 a barrel this quarter, up $6 from last month's estimate and $15 more than last summer's price, the EIA said. On Tuesday, crude oil futures were up $1.75 to $60.67 in mid-day trades. See Futures Movers.

...more...

Where oh where is Meanspin on this??? He was sooooo concerned when gasoline was $1.35 a gallon back in 2000. I wonder if he is a bit concerned about the average citizen and their ability to pay this price and how his inflation hawk self is worrying itself sick :argh:

[UpInArms]

46. 1:33 EST numbers and some old blather

Dow 10,506.51 -13.21 (-0.13%)
Nasdaq 2,136.94 +1.51 (+0.07%)
S&P 500 1,220.22 +0.78 (+0.06%)
10-Yr Bond 4.126 +0.24 (+0.59%)

NYSE Volume 1,085,647,000
Nasdaq Volume 920,942,000

1:00PM: Little changed since the last update as the major averages continue to vacillate in roughly the same ranges... Even though blue chips continue to outpace their Nasdaq counterparts to the downside, nine Dow components have managed to catch a bid... Home Depot (HD 41.33 +1.03) has paced the way higher after Jefferies upgraded the stock to Buy from Hold on valuation... IBM (IBM 79.92 +0.96), still roughly 20% off its 52-week high, has also surged while Walt Disney (DIS 25.38 +0.20) has climbed amid plans to spin off its radio business... NYSE Adv/Dec 1594/1553, Nasdaq Adv/Dec 1272/1605

12:30PM: Market continues to sport modest losses but is so far showing little reaction to a recent spike in oil prices to fresh session highs... Within the last 30 minutes, crude oil futures have surpassed $61/bbl - a level not seen since July 8, a day after terrorist attacks in London spiked oil to a record high of $62.10/bbl... Perhaps offsetting the recent surge has been leadership in the Energy sector, which continues to provide a few pockets of strength for the broader market... ..XOI +0.9%. ..OIX +0.9%. ..OSX +1.7%. ..OIH +1.7%.NYSE Adv/Dec 1494/1623, Nasdaq Adv/Dec 1175/1690

12:00PM: Market still struggling to gain much traction midday as modest consolidation on the heels of a three-day rally in stocks stalls follow-through buying efforts and leaves sector leadership mixed... Since last Thursday's bomb blasts in London hammered markets worldwide, major U.S. indices have averaged gains of about 3.5% - no doubt showing remarkable resilience but perhaps advancing a bit too far too fast, prompting investors to lock in some profits...

While a rebound in oil prices to over $60/bbl also remains a headline concern, a lack of notable economic data and more influential earnings reports to perhaps set a more convincing tone to overall participation has also underpinned a sense of apprehension... Investors are awaiting key inflation data and retail sales figures as well as quarterly reports from the likes of ABT, AMD, AAPL, UNH and GE over the next few days... Meanwhile, Energy has paced the way higher amid a 3.1% recovery in crude oil futures ($60.80/bbl +$1.88)...

Oil has regained some upside momentum amid concern of further supply disruptions with the recent development of Tropical Storm Emily - a record fifth named storm in the Atlantic - and speculation of a large draw in crude inventories tomorrow due to disruptions in the Gulf of Mexico from Tropical Storm Cindy and Hurricane Dennis last week... Consumer Staples has shown relative strength after PepsiCo (PEP 54.85 +1.00) reported better than expected Q2 earnings and Procter & Gamble (PG 54.34 +0.44) shareholders approved the Gillette (G 52.03 +0.40) acquisition... Technology has been mixed, as strength in networking and software struggle to offset weakness in hardware and storage...

Despite a weakening dollar making commodities more attractive, the Materials sector has paced the way lower after Merrill Lynch cut earnings forecasts for U.S. Steel (X 37.46 -0.32) and AK Steel (AKS 7.34 -0.05)...The interest-rate sensitive Financial sector remains modestly weak as benchmark yields sit at their highest levels since mid June... The 10-year note is off 7 ticks to yield 4.12% as traders square positions ahead of key inflation data (i.e. CPI and PPI) and upcoming bond auctions which will add more supply to the market... The Industrials sector has been under modest pressure as rising oil prices weigh on transportation stocks...

Health Care has also lost ground as consolidation in hospital stocks (i.e. HCA and THC), as well as weakness in large-cap drug stocks and biotech, continue to offset strong gains from FRX (+3.6%) and BMET (+2.4%) after being upgraded at Smith Barney and Morgan Stanley, respectively... DJTA -0.8, DJUA +0.3, DOT -0.1, Nasdaq 100 -0.2, Russell 2000 -0.4, S&P Midcap 400 -0.2, XOI +0.7, NYSE Adv/Dec 1505/1562, Nasdaq Adv/Dec 1240/1576

[UpInArms]

48. 1:58 EST and straight up spikes

Dow 10,535.22 +15.50 (+0.15%)
Nasdaq 2,144.73 +9.30 (+0.44%)
S&P 500 1,224.05 +4.61 (+0.38%)
10-Yr Bond 4.122 +0.20 (+0.49%)

NYSE Volume 1,190,183,000
Nasdaq Volume 1,020,148,000

1:30PM: While widespread profit-taking has largely been behind the Dow's inability to extend gains for a fourth consecutive session, renewed buying efforts have recently helped the Nasdaq inch back into positive territory for the first time this afternoon... Notable movers to the upside include Symantec (SYMC 23.21 +0.60), which has surged roughly 9% since closing its $10.5 bln acquisition of Veritas a week ago today, and Ameritrade (AMTD 19.30 +0.39), which has hit a new 52-week high after reporting better than expected Q3 earnings...NYSE Adv/Dec 1557/1604, Nasdaq Adv/Dec 1259/1648

[UpInArms]

52. SEC eyeing hedge fund leverage, warns of risks

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-12T173208Z_01_L12638019_RTRIDST_0_FINANCIAL-HEDGE-SEC.XML

LONDON, July 12 (Reuters) - The U.S. Securities and Exchange Commission (SEC) is aware of the need to watch the amount of leverage hedge funds use to magnify returns although it had no desire to regulate this, a senior SEC official said.

Leverage -- using borrowed money to enhance bets in a market -- is a key hedge fund technique but can go badly wrong, as in the collapse of Long Term Capital Management (LTCM) in 1998 after Russia's debt default, which spread shockwaves through markets.

"We have potential huge bets being made and if they are wrong and we have a serious domino effect ... we can realise that student loans could be affected by something happening in Russia," Roel C. Campos, SEC commissioner, told a Managed Funds Association symposium.

Some funds can borrow two or three times their capital to enhance returns, he said.

<snip>

For months market analysts, economists and others have been concerned stresses may be brewing in the $1.0 trillion industry as managers borrowed money when it was cheap, but could be squeezed as interest rates go up.

...more...

[54anickel]

54. In the Short Term, Devaluation Trumps Bombs…but in the Longer Term?

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

snip>

To be sure, the bombings in the UK came at a different stage in that country’s economic cycle. The attacks in London had coincided with a period of uncertainty about the direction of the UK economy. Even if these “incidents” (as the British like to call them) merely cause logistical disruption for the next six months, they came at a bad time for the UK specifically because there were clear signs of deceleration in the economy. The Bank of England will almost certainly be cutting rates soon and this, rather than the bombings per se, largely explain sterling’s recent weakness.

By contrast, in the euro zone, it is less clear, but it is not self-evident that these attacks will constitute the final nail in the coffin for the euro zone. Which largely explains why the London bombings did not bounce the European Central Bank into an immediate rate cut last week. As confirmed by ECB President Trichet's latest press conference, the European Central Bank’s monetary policy remains on hold.

And well it should be, as the latest constellation of data continues to surprise on the upside. In June, the overall euro zone’s manufacturing Purchasing Managers’ Index (PMI) rose to 52.3 in June from 52.1 in May, its second consecutive rise. An improved PMI manufacturing index pushed up the index, even though the PMI services index surprisingly fell to 53.1 in June, after a sharp rebound in May. Similarly, Euroland retail sales rebounded in May, rising by 1.1% mom, driven primarily by a 2.2% mom rise in sales of food products; sales of non-food products also rose by 0.5% mom.



Going country specific, Spanish industrial production grew for a sixth month in seven in May, signaling that Europe’s fifth-biggest economy remains on track to expand at a faster pace than the European Union for an 11th year. Production at factories, farms and mines gained 0.6 percent compared with a year ago, up from 0.0% in April.



Even in Germany, long plagued by sub-par growth, there are signs of a re-emergence: retail sales rebounded 1.2% mom in May, following a 1.5% mom decline in April. This was stronger than expected but still leaves sales down 1.0% qoq for Q2 to date. But it is also worth noting that preliminary German factory orders rose by 2.7% mom in May, far exceeding expectations and more than offsetting the -2.6% mom April decline. Capital goods showed the maximum rebound and intermediate goods followed, while consumer goods growth slowed down. And, in perhaps the clearest sign that the euro’s recent fall is having a marked economic impact, German exports, the mainstay of the nation’s economic expansion last year, gained more than expected in May, rising the most in four months Exports, adjusted for work days and seasonal changes, rose 3.8 percent after declining 0.5 percent in April.


The data by no means conclusively demonstrates that the euro zone has turned the corner, but it does suggest that the euro’s recent decline against the dollar is enabling the region to emerge from the economic doldrums, much as sterling’s sharp fall post its ejection from the Exchange Rate Mechanism in 1992 set the stage for years of superior growth relative to the continent. The stage may not be set for rate rises yet, but a cut seems out of the question at this juncture.

more...

[54anickel]

57. Utility Sued over Pension Conversion

Damned frivolous lawsuits, constantly getting in the way of profits. :sarcasm:

http://www.cfo.com/article.cfm/4170259/c_4170707?f=homex_todayinfinance

Two employees of Southern California Gas Co. filed suit against the utility on Friday, alleging the company discriminated against older workers when it changed its traditional pension to a cash-balance plan in 1998, and violated a federal provision that workers be notified in advance of changes that reduce benefit accruals, according to The New York Times.

The age-discrimination claim, filed in Federal District Court in Los Angeles, argues that the plan's changes that made the alleged discrimination apparent did not come into effect until 2003, the paper reported. The plaintiffs are requesting that the court nullify the changes and reinstate the earlier pension plan.

The claim centers on an issue known as "wearaway" that can occur when employees are switched from the traditional plan to the new one. In 2003, a federal judge ruled that similar pension changes at IBM Corp. illegally discriminated against workers on the basis of age, but the judge's decision did not directly address the wearaway issue, and it is being appealed.

The age discrimination issue arises because in a traditional, defined-benefit pension plan, workers build up their benefits fastest in their final years at a company. Benefits are calculated according to a formula that typically multiplies each worker's pay and years of service by some factor.

snip>

If the plaintiff's prevail, the case could be "very costly," for Southern California Gas, a subsidiary of Sempra Energy, the Times noted. Companies that convert their pension plans generally achieve accounting gains that can be spread across several years, the paper explained.

more...

[54anickel]

58. Oil-rich central bank buying could revitalize euro

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-07-12T130938Z_01_L12380487_RTRIDST_0_PICKS-MARKETS-CURRENCIES-RESERVES-DC.XML

LONDON (Reuters) - Signs that central banks in oil-rich nations are considering buying euros again to diversify their huge official reserves could aid the single currency after falling more than 10 percent against the dollar this year. Oil prices' surge to a record high above $62 a barrel last week also suggests oil exporters such as Russia or those in the Middle East will have more dollars in their coffers to sell than before, which could help the euro regain ground, analysts say.

snip>

OPEC producers Qatar and the UAE hold less than US$20 billion of foreign assets combined -- a fraction of global reserves which at near $4 trillion make up an increasingly important sector in the $1.9-trillion-a-day FX market.

"It's not that these banks have so much reserves. But it's the thinking process - if they are thinking like that other central bank community might see a value in the euro," Jalinoos said.

In the three years to 2004, the euro gained nearly 60 percent against the dollar, due partly to expectations central banks in the Middle East and Asia are diversifying away from the falling dollar into the euro.

But in recent months higher U.S. interest rates have boosted the dollar's yield advantage over the euro with concerns about the future of the political and monetary union in Europe weighing on the single currency.

more...

[54anickel]

60. Eurex to launch credit default swap trading

http://news.ft.com/cms/s/d6814e2e-f23a-11d9-8e69-00000e2511c8.html

Eurex, the world’s largest derivatives exchange, on Monday said it would launch the first exchange-traded credit default swap instrument this year, signalling the coming of age of a rapidly developing market.

Eurex said it had signed an exclusive agreement with International Index Company to license its European iTraxx indices, which are based on 125 CDS contracts – instruments that allow investors to take protection against default by a specific borrower.

The announcement attests to feverish development in the CDS market, given that the iTraxx indices themselves were launched only last year.

“An exchange-traded contract is widely considered to be a major step in the shaping of the global credit derivatives market,” the parties said in a statement.

snip>

CDS contracts have risen to prominence recently, a trend that has been highlighted by dramatic credit events, such as the downgrade of US carmakers GM and Ford from investment grade to junk. Currently, CDS contracts are traded exclusively over-the-counter (OTC) between two parties.

more...

[specimenfred1984]

62. Interesting Article

Thanks for the link. I think any attempt to legalize derivatives or make them appear more visable won't work to stop the usage of invisable or under-the-table derivatives.

Not to mention, how many people could even begin to understand what a derivatives futures contract is? I meet a lot of people who can't even understand the idea of shorting something or selling a futures contract.

If the new derivatives futures were accompanied by enforcement against users of illegal derivatives it'd be OK, but I don't see that happening, especially in the U.S..

I guess the idea that people are coming up with this stuff is at least proof of how prevalent derivatives are.

[54anickel]

64. Stocks Up, Dismissing Rising Oil Prices

http://biz.yahoo.com/ap/050712/wall_street.html?.v=23

NEW YORK (AP) -- Bullish investors sent stocks modestly higher Tuesday as Wall Street welcomed the prospect of a strong earnings season and looked past a sharp jump in oil prices.
Even though there was little news to give the markets a clear direction, the three-session rally that added roughly 3 percent to the major indexes continued eking out gains. Strong earnings from PepsiCo Inc. and others helped bolster the buying mood.

That helped investors overcome another surge in crude futures. Oil prices hovered around the $61-per-barrel mark as traders worried about another active hurricane season in the Gulf of Mexico. A barrel of light crude was quoted at $60.62, up $1.70, on the New York Mercantile Exchange.

"On balance, things are going well, but the mood is still very, very guarded," Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors, said of stocks. "Confidence in the market is improving, but it's improving in very small steps because there's still risks out there, like oil prices."

snip>

Analysts were pleased that the market did not sell off heavily after the previous sessions' gains, especially with oil prices climbing sharply.

"Really, the market is behaving well, just backing and filling after three big days," said Bryan Piskorkowski, market analyst at Wachovia Securities. "What we need now is good economic data and good earnings if we want this rally to keep going."

[ozymandius]

67. at the close

Dow 10,513.89 -5.83 (-0.06%)
Nasdaq 2,143.15 +7.72 (+0.36%)
S&P 500 1,222.21 +2.77 (+0.23%)
10-Yr Bond 41.41 +0.39 (+0.95%)
NYSE Volume 1,932,014,000
Nasdaq Volume 1,657,520,000

Close: The market continued to show its resilience, this time around in the face of early profit-taking and surging oil prices, as the S&P and Nasdaq extended gains for the fourth consecutive session... The Dow, which touched its best intraday levels (10544) since June 23 and was up as much as 3.8% from Thursday's lows, slipped into negative territory heading into the close, but losses were minimal at best... Meanwhile, stocks opened slightly lower as investors felt the need to lock in some profits after the major indices averaged gains of about 3.5% over the last three days...

Not even better than expected earnings from blue chips like Genentech (DNA 85.90 +2.40) and PepsiCo (PEP 54.57 +0.72) was enough to sideline widespread nervousness - as is often the case early in the earnings season until a clearer trend emerges in the reports... Perhaps investors were waiting for quarterly reports from the likes of ABT, AMD, AAPL, UNH and GE over the next few days, as well as key inflation data and retail sales figures, to provide a more distinctive tone to trading...

But similar in fashion to the recovery efforts witnessed last week in the wake of Thursday's bomb blasts in London, the market demonstrated its toughness despite the enticement to book profits, even as oil prices surged 2.9%... Crude oil futures closed at $60.60/bbl (+$1.68) as tropical storm Emily strengthened ahead of a weekly oil report that may show a larger than expected draw of crude inventories due to disruptions in the Gulf of Mexico from Tropical Storm Cindy and Hurricane Dennis last week... With regard to sector strength and weakness, Technology paced the way higher, benefiting from broad-based gains in Software, Semiconductor and Networking...

[54anickel]

66. Closin' time

Dow 10,513.89 -5.83 (-0.06%)
Nasdaq 2,143.15 +7.72 (+0.36%)
S&P 500 1,222.21 +2.77 (+0.23%)
10-Yr Bond 41.41 +0.39 (+0.95%)
NYSE Volume 1,932,014,000
Nasdaq Volume 1,657,520,000

Close Dow -5.83 at 10513.89, S&P +2.77 at 1222.21, Nasdaq +7.72 at 2143.15: The market continued to show its resilience, this time around in the face of early profit-taking and surging oil prices, as the S&P and Nasdaq extended gains for the fourth consecutive session... The Dow, which touched its best intraday levels (10544) since June 23 and was up as much as 3.8% from Thursday's lows, slipped into negative territory heading into the close, but losses were minimal at best... Meanwhile, stocks opened slightly lower as investors felt the need to lock in some profits after the major indices averaged gains of about 3.5% over the last three days...
Not even better than expected earnings from blue chips like Genentech (DNA 85.90 +2.40) and PepsiCo (PEP 54.57 +0.72) was enough to sideline widespread nervousness - as is often the case early in the earnings season until a clearer trend emerges in the reports... Perhaps investors were waiting for quarterly reports from the likes of ABT, AMD, AAPL, UNH and GE over the next few days, as well as key inflation data and retail sales figures, to provide a more distinctive tone to trading...

But similar in fashion to the recovery efforts witnessed last week in the wake of Thursday's bomb blasts in London, the market demonstrated its toughness despite the enticement to book profits, even as oil prices surged 2.9%... Crude oil futures closed at $60.60/bbl (+$1.68) as tropical storm Emily strengthened ahead of a weekly oil report that may show a larger than expected draw of crude inventories due to disruptions in the Gulf of Mexico from Tropical Storm Cindy and Hurricane Dennis last week... With regard to sector strength and weakness, Technology paced the way higher, benefiting from broad-based gains in Software, Semiconductor and Networking...

Chip stocks got a lift after Micron Technology (MU 11.83 +0.10) was upgraded while Networking surged after Alcatel (ALA 12.16 +1.08) raised Q2 guidance... Energy was strong amid rising oil prices and upbeat comments out of CIBC, which initiated coverage of APC, BR and DVN with Sector Perform ratings... Consumer Discretionary traded higher, as a 1.1% surge in retail offset weakness in homebuilding ... The S&P Retail Index (RLX 456.08 +6.11) closed just shy of a historic high, getting a boost from Home Depot (HD 41.33 +1.03) after Jefferies upgraded the stock to Buy from Hold on valuation...

Consumer Staples showed relative strength following better than expected Q2 earnings and strong revenues from PepsiCo and reports that Procter & Gamble (PG 54.34 +0.44) shareholders approved the $57 bln acquisition of Gillette (G 52.03 +0.40)... Despite benchmark yields on the 10-year note (-12/32) closing near session highs (4.14%), pushing up borrowing costs for consumers and corporations, the Financial sector posted a modest gain... Bonds were weak as traders squared positions ahead of key inflation data (i.e. CPI and PPI) and upcoming bond auctions which will add more supply to the market...

Providing the bulk of support was Brokerage, as evidenced by the AMEX Securities Broker/Dealer Index (XBD 167.77 +0.55) closing at historic highs, while Banks got a lift amid reports of new M&A activity... Hudson United (HU 41.64 +4.14) agreed to be acquired by TD Banknorth (BNK 29.10 -0.86) for $1.9 bln in cash and stock...DJTA -0.7, DJUA +0.5, DOT +0.6, Nasdaq 100 +0.5, Russell 2000 -0.1, SOX +1.0, S&P Midcap 400 +0.2, XOI +1.0, NYSE Adv/Dec 1881/1401, Nasdaq Adv/Dec 1593/1489

3:30PM : Major averages continue to trade near their best levels of the day, as buying remains widespread across most areas going into the close... The dollar, however, has recently closed near session lows, falling to a two-week low against the euro (1.2232) and losing ground against the yen (110.93) amid worries the Commerce Dept. will show at 8:30 ET tomorrow morning that the U.S. trade deficit (consensus -$57.0 bln) in May held steady near record levels...NYSE Adv/Dec 2072/1192, Nasdaq Adv/Dec 1713/1319

3:00PM : Buyers still remain an active bunch although the recent recovery effort seems to have stalled... Despite losing some steam, however, several indices continue to trade near historic highs... The S&P Retail Index (RLX 456.08 +6.11) has surged 1.3%, getting a boost from the analyst upgrade on Home Depot (HD 41.38 +1.08), while a 2.9% rebound in oil prices has helped the CBOE Oil Index (OIX 517.92 +6.10) and the PHLX Oil Service Sector Index (OSX 153.98 +2.64) surpass their best levels ever...

Even interest-rate sensitive indices like the AMEX Securities Broker/Dealer Index (XBD 168.06 +0.84) and the MSCI U.S. REIT Index (RMZ 856.80 +1.86), despite benchmark yields closing near session highs (4.13%), have hit new highs...NYSE Adv/Dec 2017/1213, Nasdaq Adv/Dec 1616/1365


:hi: Have a great evening!

[ozymandius]

68. Hoo Haaa! We konked ourselves in the head reaching for the shiny coin.

Have a good evening!

:hi:

Ozy