STOCK MARKET WATCH, Monday 1 August

[ozymandius]

Monday August 1, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 173 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 224 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 288 DAYS
DAYS SINCE ENRON COLLAPSE = 1345
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 29, 2005

Dow... 10,640.91 -64.64 (-0.60%)
Nasdaq... 2,184.83 -13.61 (-0.62%)
S&P 500... 1,234.18 -9.54 (-0.77%)
10-Yr Bond... 4.29% +0.09 (+2.14%)
Gold future... 435.80 +2.50 (+0.57%)

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 Tim W. Wood

THE DOW REPORT
Bull and Bear Market Relationships

Recently, I received a call from one of the newer FSO listeners asking me to go through the Bigger Picture issues concerning Dow theory and its relationship to the secular bull and bear markets. It has been quite some time since we did this, so for the benefit of newer listeners, we will walk through these issues today.

Obviously, the definitions of Bull and Bear markets differ from person to person. My definition is based on the works of the great Dow theorists, Charles H. Dow, William Peter Hamilton and Robert Rhea. Understand that Cycles are not a part of Dow theory, but when I combine my findings from Dow theory with my findings from my cycles work, some very obvious conclusions about both the occurrence and nature of Bull and Bear markets become very clear.

-cut-

Where Are We Now?

I know that many continue spouting that we are in a new bull market. I know that many believe that the Dow theory is obsolete and no longer applicable. I know that many believe that “they” can control the markets forever. I know that many believe this time is different for this reason or that. I know all the arguments, but I don’t believe them. No, these Bull and Bear market periods have grown in time. The 2002 low did not fit according to the Phasing of Dow theory, nor according to the normal Bull/Bear market relationship or according to the historical Value measures seen at true secular Bear market lows according to Dow theory.

more...

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

[AnneD]

39. Morning Ozy

:hi: Funny you should post that. I was watching PBS last Fri, trying to catch up on things. I caught one of what I think is a new show, Wall Street Opinion (I almost tossed my dinner-gads the right wing take over of PBS is gathering steam). I kept saying to myself...they are not only drinking the kool-aid they are swimming in it. One of the topics discussed was 'why does this .good economy get no respect'. In essence they were pulling up those bogus numbers and dissing the public for stating in opinion polls that they thought the economy was bad. Jobs were being created and employement was going down, companies were making record profits, people were paying less in taxes (rah, rah, rah-go team go). I recently read "The Great 401K Hoax". One of the gems I took away from the book was the statement that the same con artists that took over the political media have taken over the economic media. Well, with my newly opened eyes (and this thread) I now see the economic news through new eyes. Tim Woods is spot on. First they pic our gov, then they pick our wallets. The only thing left is to pick our minds. I read with great interest the research using MRI's to discover the brain differences between GOP and DEM (yes, there are differences). Kind of makes you wonder where they plan to get the new stem cell lines. Kool aid anyone??????

[radfringe]

2. Hi all - have to post and run off to work...

might want to take a quick read at this editorial:


Triumph of the Machine
By PAUL KRUGMAN -- Published: August 1, 2005
http://www.nytimes.com/2005/08/01/opinion/01krugman.html?

The campaign for Social Security privatization has degenerated into farce. The "global war on terrorism" has been downgraded to the "global struggle against violent extremism" (pronounced gee-save), which is just embarrassing. Baghdad is a nightmare, Basra is a militia-run theocracy, and officials are talking about withdrawing troops from Iraq next year (just in time for the U.S. midterm elections).

On the other hand, the administration is crowing about its success in passing the long-stalled energy bill, the highway bill and Cafta, the free-trade agreement with Central America. So is the Bush agenda stalled, or is it progressing?

The answer is that the administration is getting nowhere on its grand policy agenda. But it never took policy, as opposed to politics, very seriously anyway. The agenda it has always taken with utmost seriousness - consolidating one-party rule, and rewarding its friends - is moving forward quite nicely.

-------
meanwhile........

[AnneD]

38. Love the toon

:donut: Morning Marketeers. Good to be back. I am wraping up job training for job #2. I really love it. I don't know how long I can do this, but it will help get my financial house in order. I have tried to catch the thread when I had time (great as always). Boy, I leave the thread and miss the running of the bulls. Well, missed you guys and watch out for the bears.

[UpInArms]

3. daily dollar watch

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

Last trade 88.66 Change -0.69 (-0.77%)

Dollar falls on gloomy outlook

http://news.ft.com/cms/s/dd7f11a2-0275-11da-84e5-00000e2511c8.html

The US dollar fell in European morning trade on Monday, despite a lack of consensus as to why the greenback was being sold.

Some analysts drew attention to a report released late on Friday by the International Monetary Fund, which said the level of the dollar was still above that necessary to avoid a further widening of the US external deficit.

However, as Derek Halpenny, senior currency economist at Bank of Tokyo-Mitsubishi, pointed out: “this has been cited by the IMF for many years and can hardly be viewed as surprising.”

There were also signs that the short-term traders that have helped the dollar rally from $1.345 against the euro in March are starting to lose faith in the greenback’s ability to push higher from here.

Data released from the Commodity Futures Trading Commission on Monday showed that in the week to July 26, net long-dollar speculative positions fell by $2.5bn to $9.5bn, the smallest net-long since May 10.

Several commentators said that the dollar was no longer being helped by talk of ever higher interest rates in the US, a key factor in its rally in recent months, allowing the dollar-negative structural twin deficits to drift back into the market’s thinking.

...more...

Yuan racks up another post-reval high

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2005-08-01T111158Z_01_SHA6314_RTRIDST_0_BUSINESS-MARKETS-CHINA-YUAN-DC.XML

SHANGHAI (Reuters) - China's yuan closed at a post-revaluation high against the dollar for a third straight session on Monday, with many dealers seeing increasing leeway to allow the currency to gain but some economists saying it was too early to tell.

The central bank remained absent throughout, traders said, as the currency closed at 8.1046 to the dollar, up from Friday's rate of 8.1056 and showing a 0.07 percent appreciation since July 21, when Beijing revalued the yuan by 2.1 percent to 8.11 per dollar.

Dealers say the People's Bank of China (PBOC) has been keen to give the impression that market forces are at work, by allowing creeping gains against the greenback. But no particular official strategy for dealing with the currency's daily fluctuations has appeared.

The daily ranges remain narrow not because the central bank is directly controlling the market but because traders, operating in uncharted waters, fear buying the yuan at high prices that might prompt official selling, driving the thinly traded currency lower again.

"This is a regime shift. You're going into the unknown. This is not only true for the traders but also the PBOC," said JPMorgan currency analyst Claudio Piron.

...more...

Have a Great Day Marketeers!

[54anickel]

18. Sheesh, don't they think some of the headlines might have something

to do with it? Buck trading is a game of confidence. Confidence in the growth potential of the US economy, confidence in the stability of the buck, confidence in the US gov't.

Perusing the headlines of late last week through the weekend can't possibly be supportive of that confidence. The buck is expected to resume it's decline. Growth was weaker than first reported and weakening. The buck is expected to resume it's decline. The Bushco agenda continues to be ram-rodded through, investigations, lies and more investigations, Shrub down in the polls reflecting the slow awakening of the public which threatens domestic unrest in the future (we can only hope!) The list goes on and on and on.

With Congress now in recess, Bolton's on deck before the pig-farm vacation. I've got this strange feeling that rather than things quieting down during this "down time" it might start getting hotter. There were a lot of long-burning fuses lit in the weeks before. I'm hoping for indictments by the end of this week myself.

[54anickel]

31. Dollar falls as economic help fades

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B97670BB9%2DF4AB%2D49B1%2D95BA%2D348C87F3B1BC%7D

CHICAGO (MarketWatch) -- The dollar fell against its chief rivals Monday as currency traders questioned whether strong domestic economic data would be enough to fuel a flagging dollar rally in light of signs of revitalization outside the United States.

snip>

The greenback has rallied to multi-month highs as the U.S. economy had been outshining those of the other major industrialized nations. But the dollar had trouble gaining traction on upbeat reports issued last week, leading analysts to suggest that the yield advantage afforded the dollar may not matter as much to currency investors.

"Uncertainty over the state of the U.S. economy continues to weigh on the dollar, although manufacturing data due out later in the session may yet stimulate a small rally for the greenback," said Nas Nijjar, senior foreign-exchange dealer with London-based CMC Group.

"Consensus, however, seems to be that there's a correction underway and this could continue for some time as traders lock in the profits that have been picked up in recent months. The high price of oil and wide trade deficit continue to cause a degree of concern and these two factors could well keep a lid on any further dollar gains."

snip>

Deutsche Bank pointed to rumors from late last week of about $500 billion being shifted into both the euro and the yen to optimize Asian reserve portfolios.

more...

[UpInArms]

4. Oil Climbs as Saudi King's Death Adds to Concern About Supplies

http://www.bloomberg.com/apps/news?pid=10000086&sid=aOrOLWGQI__Y&refer=latin_america

Aug. 1 (Bloomberg) -- Crude oil rose above $61 a barrel in New York after Saudi Arabia's King Fahd, ruler of the world's largest oil exporter, died, heightening concern about supplies following refinery disruptions in the U.S. and Europe.

The Saudi throne, held by Fahd for 23 years, will pass to his half-brother, Abdullah bin Abdulaziz al-Saud, Saudi State Television said. The Crown Prince has been running the kingdom's day-to-day affairs since 1995, when Fahd suffered a stroke. Prices had already gained after BP Plc shut a refinery unit in Texas.

``It's a combination of today's news about the king's death and all these refinery outages that just keep coming,'' said Edward Meir, a commodity analyst at Man Financial Ltd. in Darien, Connecticut. ``It's hard to make the case for a substantial retreat'' in oil prices this week.

Crude for September delivery rose as much as 66 cents, or 1.1 percent, to $61.23 a barrel on the New York Mercantile Exchange, its highest since July 13 and within $1 of a record $62.10, reached on July 7. It was up 50 cents at 12:15 p.m. London time and has gained 39 percent from a year ago.

<snip>

As idle refining capacity dwindles, some processing plants are breaking down. Murphy Oil Corp. had a fire at its Mereaux, Louisiana, plant last week, after Russia's OAO Novo-Ufimsky refinery experienced a pipeline blast. Royal Dutch Shell Plc shut its Pernis refinery and chemicals plant in the Netherlands for four days last month after a power cut.

...more...

[WhiteTara]

24. death everywhere this weekend

seems to have soured the mood of the world. Look for riots, more social unrest and higher prices all around. I wonder when the riots will begin in the U.S.

[AnneD]

40. The protests are happening

you just have to check the Indie Media......"the revolution will not be televised".......

[54anickel]

46. Tensions remain among Saudi royals

http://news.bbc.co.uk/2/hi/middle_east/4735505.stm

snip>

Also the new king, Abdullah, is rumoured to get on very badly with his designated successor, Prince Sultan.

In any case, they are both members of the same generation as King Fahd - all are sons of the founder of modern Saudi Arabia, King Abdul Aziz.

That means thoughts are already turning to the next generation, and who will succeed these ageing Royals.

In one hint of the jostling for position, Saudi Arabia's long term ambassador to Washington, Prince Bandar, left his job and returned home recently - perhaps to secure a position in the new administration.

snip>

And in the background there's always the question of whether the Islamic militants who have been waging a sporadic campaign in Saudi Arabia will take the opportunity to revive their attacks.

more...

[UpInArms]

5. Japan to slap levies on U.S. goods

http://money.cnn.com/2005/08/01/news/international/japan_trade.reut/

TOKYO (Reuters) - Japan will impose retaliatory levies of up to $50 million on U.S. steel and other goods beginning in September to counter subsidies paid to U.S. companies ruled illegal by the World Trade Organization.

Japan also said Monday it will slap additional duties of 15 percent on 15 U.S. imports including steel products, ball bearings and forklifts.

This would be the first time Japan has imposed such retaliatory duties.

The levies will stay in place until the U.S. anti-dumping program that provides the subsidies, known as the Byrd amendment, is repealed. The amount and items subject to the levy will be reviewed yearly.

Tokyo had been considering imposing retaliatory duties to pressure Washington to repeal the Byrd amendment after repeatedly urging it to do so.

"We have concluded that further effective pressure was needed by imposing these counteractive measures to press the U.S. Congress into repealing this amendment," Trade Minister Shoichi Nakagawa said in a statement Monday.

...more...

[54anickel]

30. Japan declares US trade war

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=1667554

http://www.theaustralian.news.com.au/common/story_page/0,5744,16114783%255E1702,00.html

snip>

Japan and other six other countries -- Brazil, Canada, Chile, India, Mexico and South Korea -- as well as the EU took the issue to the WTO, which last year authorized sanctions amounting to 72 per cent of the sums reaped by the US law.

Japan is one of the closest political allies of the United States but the two countries have a number of trade disputes.

Japan banned US beef imports in December 2003 after a case of mad cow disease was discovered in Washington state. Japan, the biggest importer of US beef before the ban, is under intense US pressure to resume the imports but has insisted it will wait until its scientists complete a review.

snip>

Prime Minister Junichiro Koizumi, a steadfast friend of US President George W. Bush, last week downplayed the impact Japanese sanctions would have on relations between the countries.

more...



And on that comment "Japan is one of the closest political allies of the United States".

Japan stockpiles plutonium as threat of nuclear escalation spreads across Asia


http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=1667169


http://news.independent.co.uk/world/asia/article302724.ece

As Japan prepares to commemorate the 60th anniversary of the atomic bombings of Hiroshima and Nagasaki, the dwindling band of survivors say they fear the country's long-standing taboo against developing nuclear weapons is finally ending.

Defence experts say much hinges on the outcome of the current six-party talks in Beijing on defusing the nuclear threat from North Korea, but among older residents in these once devastated cities there is pessimism that as other nations in Asia go nuclear, Japan will follow. They will express these fears over the next few days, when the significance of the anniversary is expected to draw much larger numbers than usual to the annual commemoration ceremonies in Hiroshima and Nagasaki.

snip>

Politicians have more recently become bolder in challenging the nuclear taboo. A senior opposition figure, Ichiro Ozawa, said in 2002: "We have plenty of plutonium in our nuclear power plants, so it's possible for us to produce 3,000 to 4,000 nuclear warheads." The same year the chief cabinet secretary, Yasuo Fukuda, stunned the nation by claiming Japan's "pacifist" constitution did not prohibit nuclear weapons.

The survivors are also incensed at US plans to develop smaller, "tactical" nuclear weapons, about one-third the size of the Hiroshima bomb. The city's mayor, Tadatoshi Akiba, said in 2004 that Washington was "ignoring the United Nations and international law" and had "turned its back on other nations".

[UpInArms]

6. Today's Reports:

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

Aug 1	10:00 AM	Construction Spending	Jun	-	0.7%	0.5%	-0.9%	-	
Aug 1	10:00 AM	ISM Index		Jul	-	55.0	54.1	53.8	-

[UpInArms]

19. U.S. June construction spending falls 0.3%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38565.4167566319-839744603&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - Spending on U.S. construction projects unexpectedly fell 0.3% in June to an annual rate of $1.1 trillion, the Commerce Department said Monday. Economists surveyed by MarketWatch forecast a rise of 0.8%. This is the fourth consecutive month that construction outlays have fallen.

10:00am 08/01/05 U.S. JUNE CONSTRUCTION SPENDING BELOW EXPECTATIONS

10:00am 08/01/05 U.S. JUNE CONSTRUCTION SPENDING FALLS 0.3%

More "surprised" economists.

[UpInArms]

22. U.S. July ISM strengthens in July (more bedpan changers?)

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38565.4206933102-839744946&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The U.S. factory sector strengthened in July, growing for the 26th straight month, the Institute for Supply Management reported Monday. The ISM index rose to 56.5% in July from 53.8% in June. Economists were expecting an increase to 54.5%. Readings over 50% indicate growth in the manufacturing sector. The new orders index rose to 60.6% from 57.2% in June. The production index rose to 61.2% from 55.6%. The employment index rose to 53.2% in July from 49.9% in June. The prices paid index fell to 48.5% from 50.5% in June, indicating buyers had more pricing power than sellers.

10:02am 08/01/05 U.S. JULY ISM 56.6% VS. 54.5% EXPECTED

10:03am 08/01/05 U.S. JULY ISM PRODUCTION 61.2% VS. 55.6%

10:03am 08/01/05 U.S. JULY ISM NEW ORDERS 60.6% VS. 57.2%

10:03am 08/01/05 U.S. JULY ISM PRICES PAID 48.5% VS. 50.5%

[WhiteTara]

27. I was thinking bullet makers myself (eom)

[UpInArms]

7. Job losses might herald bigger woes

http://www.projo.com/business/content/projo_20050801_1dimart.8844236.html

(free registration or try www.bugmenot.com)

excerpt:

Announced job cuts in May and June alone were nearly 200,000. This summer's cuts could easily surpass the total for the first four months of the year, when it is much more typical to see heavy downsizing.

The number of job cuts announced between May and August is typically 20 percent lower than in the first four months of the year, according to Challenger.

This break with the typical pattern has John Challenger, whose Chicago firm has been tracking layoff announcements since 1989, looking for a deeper meaning in the numbers.

"We haven't seen mega-layoffs like this in years," Challenger said. "If the summer surge proves to be the first sign of an eventual economic slowdown, this would be the weakest expansion in recent times."

You need look back only as far as the last two recessions. It took 20 months after the 2001 recession ended before unemployment stopped rising, 5 months longer than in the "jobless recovery" that followed the 1990-91 recession.

...more...

[UpInArms]

12. a bit more

from the link:

That being said, many companies are sitting on loads of cash. Some are using it to buy their competitors, something that has in no small way added to the snowballing number of layoffs.

"You have to wonder if it makes sense for these companies to be buying each other, especially in growing industries," Challenger ventures. "Disruptive mergers hamper the ability to create a unified corporate culture; the damage that occurs can be irreversible."

A company's stock tends to jump when a big layoff is announced. The market should keep in mind all the company stock these laid-off white-collar employees are going to be dumping so they can keep putting food on the table.

[UpInArms]

8. Job cuts to play major role in Duke-Cinergy savings

http://msnbc.msn.com/id/8783232/

Labor-force reductions will account for about 40 percent of expected savings resulting from Duke Energy Corp.'s proposed $9 billion acquisition of Cinergy Corp., the company said in filings with state regulators.

About 1,500 jobs among the combined companies' 29,350 posts are likely to be axed as part of the merger, which requires approval from federal authorities and agencies in five states.

Most job cuts are expected to occur in Cincinnati, where Cinergy has about 7,800 employees. However, neither Cinergy or Duke officials have provided information as yet on possible layoffs.

Duke said the resulting company will be among the nation's five largest electric utilities. It contended merger-related savings will help hold down electric rates because of increased efficiencies.

Skeptics say such promises haven't panned out in previous utility industry mergers such as Raleigh, N.C.-based Progress Energy Corp.'s acquisition of Florida Power Co. in 2000. Duke cited that deal as precedent for its acquisition.

"I'm extremely skeptical that these utility combinations do anything but cost jobs and a loss of local control," said Harold McLean, Florida's public counsel. "If the Progress deal has worked, I sure wish it had worked a lot better."

...more...

[UpInArms]

9. Entergy profit aided by (regulatory) rate rulings

http://www.marketwatch.com/news/story.asp?guid=%7B77A05B73%2D4122%2D4FE1%2DA594%2DBD0DA5F0F5EA%7D&siteid=mktw

WASHINGTON (MarketWatch) -- Entergy Corp. said Monday that profit rose 7.9%, helped by a number of beneficial regulatory rulings.

The New Orleans energy company (ETR: news, chart, profile) reported that second-quarter net income rose to $286.2 million, or $1.33 a share, from $265.2 million, or $1.14, in the same period a year ago.

"An unusually busy regulatory agenda was substantially cleared with very positive results across the board," said CEO J. Wayne Leonard.

Analysts surveyed by Thomson First Call had expected profit of $1.30 a share.

Revenue rose nearly 9% to $2.71 billion from $2.49 billion.

Entergy, the second- largest operator of nuclear power plants in the U.S., delivers electricity to 2.7 million customers in Arkansas, Louisiana, Mississippi, and Texas.

Entergy's utility business benefited from higher revenue and use across all customer groups -- residential, commercial, and government customers -- in the company's service area. Earnings rose to $226.8 million, or $1.05 a share, compared with $192.7 million, or 83 cents a share, a year earlier.

...more...

[UpInArms]

10. Donaldson ups dividend, to repatriate $80M in earns

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38565.3414389699-839739980&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Donaldson Co. (DCI) raised its dividend by 2 cents, or 33%, to 8 cents a share, payable Sept. 9 to shareholders of record on Aug. 19. The company also said it would record a $5.6 million, or 6 cents a share charge in its fiscal fourth quarter for the repatriation of $80 million in foreign earnings. The filtration systems maker's stock closed Friday up 24 cents at $32.58.

Donaldson Company, Inc. Website Annual Report
1400 West 94th Street Phone: [phone]
Minneapolis MINNESOTA 55431

Fax: [phone]


Donaldson Company, Inc.. The Group's principal activity is to manufacture filtration systems and replacement parts. The Group's operation is divided into two segments namely, Engine Products and Industrial Products. Engine Products include air intake systems, exhaust systems, liquid filtration systems and replacement filters. Industrial Products include dust, fume and mist collectors, static and pulse-clean air filter systems and specialized air filtration systems. General Electric Company and Caterpillar, Inc are the Group's major customers. The Group has international operations in over 19 countries and regions including Asia-Pacific, Europe, Canada, Mexico, Central America and South America. Original equipment manufacturers and various industrial end-users mainly use the Group's products. On 10-Oct-2003, the Group acquired the assets of the LHA industrial hydraulic business of Berendsen Fluid Power, Inc., located in Marietta, Georgia, for $4.4 million in cash.

I wonder when they will announce job cuts.

[UpInArms]

11. Japan firms pay more wages, hire more full-timers

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-08-01T053654Z_01_T160806_RTRIDST_0_ECONOMY-JAPAN-UPDATE-2.XML

TOKYO, Aug 1 (Reuters) - Wages earned by Japanese employees posted healthy gains in June and firms continued to hire more full-time staff, providing another bright sign for the job market as benefits from a recovering economy spread gradually to households.

Total cash earnings, which include regular pay, overtime payments and bonuses, rose 1.1 percent in June from the same month a year earlier to 467,814 yen ($4,152), government data showed on Monday.

Japanese firms, which had been cutting jobs and replacing full-time staff with part-timers as part of their restructuring efforts in recent years, increased their full-time employees by 1.0 percent in June -- the sixth straight month of gains.

In contrast, the number of part-time workers fell 0.2 percent year-on-year following a 0.1 percent rise in May. In April, the figure fell 0.5 percent, the first decline since June 1995.

...more...

Looks like Japan backed the winning horse (China).

[UpInArms]

13. Steady, unspectacular job growth ahead

http://www.marketwatch.com/news/story.asp?guid={c02e5bf4-aab1-4e11-aaee-d143956d5f58}&siteid=mktw&dist=SignInArchive&archive=true¶m=archive&garden=&minisite=

(free registration or try www.bugmenot.com)

excerpt:

The Pollyannas say the labor market is fully healed now that the jobless rate has fallen to 5%. They say anyone who wants a job can find one. After all, 3.7 million jobs have been added in the past two years.

The Cassandras say the jobless rate is misleading, because so many folk have just given up looking for work.

"Employment growth has been moderate by historical standards and the drop in the unemployment rate to 5 percent appears to have largely reflected lower participation," the International Monetary Fund said.

Other signs also point to weak job market: Average wages are falling behind inflation and long-term joblessness remains very high. A large number of consumers say jobs are hard to find.

"We have four of five indicators telling us that the state of the job market is not that good," wrote Brad DeLong, an economics professor at the University of California at Berkley. "Only one -- the unemployment rate - reading green."

...more...

[WhiteTara]

28. I love these contradictory reports

the job cuts are greater, but we have steady employment gains. I feel like Linda Blair my head is spinning round so fast.

[UpInArms]

14. pre-opening blather

briefing.com

9:00AM: S&P futures vs fair value: +2.8. Nasdaq futures vs fair value: +3.5. Positive bias persists in pre-market trading, pointing to a higher open for the cash market, as investors await a report that may show a second consecutive uptick in national manufacturing activity, when July ISM Index (consensus 54.1) is released at 10:00 ET... Early action may also be taking notice of modest gain in overseas markets

8:30AM: S&P futures vs fair value: +2.8. Nasdaq futures vs fair value: +3.0. Futures indications still trading above fair value, suggesting the major indices may start out the week on a strong note... Even in the face of rising oil prices ($60.89/bbl +$0.32), following the death of Saudi Arabia King Fahd, overall sentiment with regard to owning equities remains positive... Note that the early favorable bias comes on the first trading day of the month, typically a strong day for stocks as new inflows hit the market

8:00AM: S&P futures vs fair value: +2.8. Nasdaq futures vs fair value: +3.5. Futures market versus fair value suggesting a higher open for the cash market as investors remain confident about earnings and economic growth... Procter & Gamble (PG) has beaten Q4 forecasts by a penny and issued in-line FY06 guidance while Humana (HUM) has matched analysts' Q2 expectations and reaffirmed its FY05 outlook...

Also providing some additional support has been reports that, while Friday's Q2 GDP was initially weaker than expected, many economists have since raised forecasts for the second half of 2005 due in part to the drop in inventories

ino.com

The September NASDAQ 100 was steady to slightly higher overnight as it consolidates some of last Friday’s decline and remains above the 10-day moving average crossing at 1610.55. If September extends this summer’s rally, weekly resistance crossing at 1645 is the next upside target. However, stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 10-day moving average crossing at 1610.55 would signal that a short-term top has been posted. The September NASDAQ 100 was up 3.50 pt. at 1615 as of 5:56 AM ET. Overnight action sets the stage for a steady to higher opening by the NASDAQ composite index later this morning.

The September S&P 500 index was steady to slightly higher overnight as it consolidated some of last Friday’s decline. If the rally continues, the 62% retracement level of the 2000-2002 decline crossing at 1265.95 is the next upside target. However, stochastics and the RSI are overbought and have turned bearish signaling that a short-term top might be in or is near. Closes below the 10-day moving average crossing at 1236.89 would signal that a short-term top has likely been posted. The September S&P 500 Index was up 2.80 pts. at 1239.60 as of 5:58 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

[UpInArms]

15. wheels of fortune in play

Dow 10,661.13 +20.22 (+0.19%)
Nasdaq 2,191.63 +6.80 (+0.31%)
S&P 500 1,236.75 +2.57 (+0.21%)
10-Yr Bond 4.302 +0.16 (+0.37%)

NYSE Volume 22,028,000
Nasdaq Volume 43,385,000

[ozymandius]

16. markets are open for bidness

9:34
Dow 10,668.12 +27.21 (+0.26%)
Nasdaq 2,193.66 +8.83 (+0.40%)
S&P 500 1,237.59 +3.41 (+0.28%)
10-Yr Bond 43.02 +0.16 (+0.37%)
NYSE Volume 44,341,000
Nasdaq Volume 63,635,000

[UpInArms]

17. Treasuries off as market braces for ISM-index rise

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-01T133857Z_01_N01338206_RTRIDST_0_MARKETS-BONDS.XML

NEW YORK, Aug 1 (Reuters) - U.S. Treasury debt prices fell on Monday as the market prepared for what many analysts predict will be be relatively robust data on the U.S. manufacturing sector.

The fall in prices extended Friday's price tumble on suggestions of stronger economic growth, according to economists' analyses of components of second-quarter growth.

Also adding to losses was San Francisco Federal Reserve President Janet Yellen's comments that said it made sense to keep raising interest rates, and monetary policy remained simulative even after nine U.S. rate rises.

Traders said Treasury yields were catching up to the reality of higher rates, especially on the two-year note, the most sensitive to changes in the interest rate outlook.

"We're following through," said one bond trader at a primary dealer, citing a litany of factors including the report on second-quarter growth, the central bank comments and lower euro debt prices as well as.

...more...

[ozymandius]

20. additional blather

9:40AM: Stocks kick off a new month to the upside amid a strong underlying sentiment - one more focused on the fact that economic growth remains solid despite rising rates and higher energy prices... Even with benchmark yields near 3 1/2 month highs (4.30%) and oil prices above $61/bbl, strong earnings data (e.g. P&G beat by a penny and Humana issued encouraging guidance), as well as reports that many economists have raised Q3 and FY05 GDP forecasts upon further analysis of last week's Q2 GDP report, appear to be providing an early floor of support for stocks...

Separately, July ISM Index (consensus 54.1) and June construction spending (consensus +0.7%) will be released at 10:00 ET...

[UpInArms]

25. Treasuries move lower, ISM stronger than forecast

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-01T141306Z_01_NYG000013_RTRIDST_0_MARKETS-BONDS-ISM-URGENT.XML

NEW YORK, Aug 1 (Reuters) - U.S. Treasury debt prices extended early losses on Monday after an influential survey on U.S. factories showed activity in July rose above analysts' expectations.

The Institute for Supply Management's July survey came in at 56.6 in July, above both economists' expectations of a 54.5 result and June's result of 53.8.

Still, the market's reaction was muted, largely because expectations of the ISM report were heavily weighted to the upside and prices had already moved lower early on Monday.

...more...

[ozymandius]

21. 10:06 and not looking too healthy

Dow 10,647.52 +6.61 (+0.06%)
Nasdaq 2,194.86 +10.03 (+0.46%)
S&P 500 1,237.31 +3.13 (+0.25%)
10-Yr Bond 43.13 +0.27 (+0.63%)
NYSE Volume 238,030,000
Nasdaq Volume 237,236,000

[UpInArms]

23. Allied Holdings files for Chapter 11 bankruptcy - auto industry fallout

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-01T134220Z_01_N01240605_RTRIDST_0_TRANSPORT-ALLIED-UPDATE-1.XML

NEW YORK, Aug 1 (Reuters) - Allied Holdings Inc. (AHI.A: Quote, Profile, Research), which transports new cars from manufacturers to dealerships, has filed for bankruptcy after struggling with mounting debt and labor and fuel costs and with weaker car delivery volumes.

The company filed for Chapter 11 protection on Sunday in U.S. Bankruptcy Court for the Northern District of Georgia in Atlanta, according to court records.

Allied, based in Decatur, Georgia, filed for bankruptcy as a result of a sharp decline in new vehicle production, rising fuel costs and increasing labor costs, the company said in a news release.

It secured up to $230 million in debtor-in-possession financing from GE Commercial Finance, Morgan Stanley Senior Funding Inc. and Marathon Asset Management to fund its continuing operations, the company said.

...more...

[WhiteTara]

29. guess those so called discounts couldn't persuade

people to buy those gas guzzling tanks that only work on city streets, rather than the battlegrounds.

[UpInArms]

26. Moody's revises DaimlerChrysler outlook to negative

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-01T135348Z_01_WNA5582_RTRIDST_0_AUTOS-DAIMLERCHRYSLER-MOODY-S-URGENT.XML

(all US carmakers now closer to Junk status)

NEW YORK, Aug 1 (Reuters) - Moody's Investors Service on
Monday revised the outlook DaimlerChrysler AG's (DCXGn.DE: Quote, Profile, Research) debt
ratings to negative from stable, citing tougher price
competition in the U.S. car market and weak margins in its
Mercedes unit.




Downgrades usually raise a company's borrowing costs.




DaimlerChrysler currently holds an "A3" long-term rating
and a "Prime-2" short-term rating from Moody's.

...very short blurb...

[54anickel]

32. The Fallacy of International Comparisons (Roach)

http://www.morganstanley.com/GEFdata/digests/20050729-fri.html#anchor0

snip>

Both the US and China repeatedly emphasize the lessons of Japan. America’s Federal Reserve insists that the mistakes of Japan shed considerable light on how to avoid post-bubble shakeouts (see the Fed research paper, “Preventing Deflation: Lessons From Japan's Experience in the 1990s” by Alan Ahearne; Joseph Gagnon; Jane Haltmaier; Steve Kamin, et. al., June 2002). Meanwhile, China maintains that it has learned a different lesson from Japan -- the need to resist US-led political pressure for currency appreciation. After all, it was the “endaka” (yen appreciation) of the late 1980s that many believe set the stage for Japan’s liquidity-induced asset bubbles. The last thing China wants is to go down that road -- placating US politicians on the currency front while, at the same time, sowing the seeds of an increasingly dangerous liquidity bubble of its own.

But how relevant is the Japanese experience to the challenges now facing the United States and China? While asset bubbles in both the US and Japan suggest that the two economies have many risks in common, there are some key differences that need to be stressed as well. In particular, Japan’s excesses were concentrated in the corporate sector -- financial and nonfinancial businesses, alike. America’s excesses, on the other hand, are concentrated in the consumer sector. For example, during its pre-bubble run-up, Japanese capital spending peaked out at 20% of GDP in 1990 -- well in excess of the 12.5% capital spending peak hit in the US in 2000. Moreover, Japan’s corporate debt kept surging in the early years of its post-bubble shakeout, peaking at 197% of GDP in 1996; by contrast, the US nonfinancial business debt ratio hit a high at 67% in 2000. At the same time, the consumption share of US GDP has averaged about 70% since early 2002 -- well above the 67% norm of 1975 to 2000. By contrast, in Japan, the pre-bubble consumption share of its GDP peaked at just 56% in 1983 -- actually slightly below the 57% average share recorded over the preceding 25 years.

These contrasts between the extreme positions of Japanese corporates and US consumers paint a very different picture of post-bubble perils. Japan’s subsequent fallout was concentrated in its banking and corporate sectors. By contrast, the US corporate sector -- banks and nonbanks, alike -- emerged relatively unscathed in America’s post-equity-bubble era. However, the saving-short, asset-dependent, and overly-indebted American consumer looks to be in much worse shape than the Japanese consumer was in the latter half of the 1980s. Largely for those reasons, I would argue that the travails of post-bubble Japan may well provide little insight into what lies ahead for the US economy.

snip>

One key conclusion emerges from all this: Be wary of extrapolating from the experience of the “straw man.” Just because America isn’t Japan doesn’t mean the US economy can’t lapse into deflation. Similarly, the Japanese endaka has little relevance for the foreign exchange reforms China must now face. Nor can we presume that the post-bubble experiences of UK and Australian property markets reveal what lies ahead after the US real estate bubble bursts. Prospects in China and America are unique in many respects, and forecasters need to treat them that way. The fallacy of international comparisons tells us to be wary of blindly relying on precedents elsewhere in the world in divining the future of these two key economies.

more...

[54anickel]

33. How Wall Street Wrecked United's Pension

http://www.nytimes.com/2005/07/31/business/yourmoney/31pension.html?

snip>

So who is Doug Wilsman? He is a retired pilot and a former fiduciary of United's pension plan for pilots, and in 1987 he discovered that the company had abandoned its older, tried-and-true approach of investing retirees' money in bonds timed to pay when the pensions came due. Instead, it had bought into the promises of Wall Street that it could put less money into the plan - and take out more later - if it just put most of the assets into the stock market.

Hey, isn't that what BeelzeBush is promising SS piratization will do?


Mr. Wilsman was skeptical of such promises, and soon after learning of the change in strategy, he filed a grievance with his union, the Air Line Pilots Association. "Hey, you guys are really building yourselves a trap," he recalled warning them at the time. "Someday, at the worst possible moment, when the bottom falls out of the stock market, the plan is going to have to come up with new money, and it's going to be enough to kill the company."

"Everybody knows stocks are cyclical," Mr. Wilsman said last week. So is the airline business. All along, he said, he thought it was almost inevitable that both would one day go south at the same time, with catastrophic results - which is just what happened this year.

Given Mr. Wilsman's prescience, one might think that experts would be examining how United's investment strategies contributed to the demise of its pension funds - and whether similar scrutiny elsewhere could prevent more pension plans from crashing.

Not a chance. Congress, regulators, lobbyists and the news media are all scrambling to find out what has gone wrong with the pension system. Hearings have been convened in the wake of United's default, chief executives examined under oath, bills introduced in Congress, numbers crunched. But virtually everyone is looking at the rules covering how much money a company puts into a pension plan every year - not at what happens to the money after that.

While the money managers and other pension professionals who ran United's pension plan walked away from the wreck unscathed - indeed, they collected about $125 million in fees over the last five years alone, records show - the ones who will have to pick up the bill for the advisers' collective failure will be the airline's 130,000 employees and pensioners, the federal pension guarantor and probably, someday, the taxpayers.

more...

[54anickel]

34. Superyachts of the CEOs

http://money.cnn.com/2005/07/28/news/funny/ceo_yachts/index.htm

From miniature submarines to multiple helipads, boats of the business elite keep getting fancier.
July 29, 2005: 12:13 PM EDT
By Steve Hargreaves, CNN/Money staff writer

NEW YORK (CNN/Money) - Imagine yourself cruising the high seas in a lavish, super-secret ocean-faring vessel complete with a remote controlled undersea rover, a 12-man submersible and a personal crew of 60, including several former Navy Seals and a recording studio.

No, you're not 007's nemesis in some 1970s James Bond flick. You're aboard Microsoft (Research) co-founder Paul Allen's $200 million private yacht.

snip>

But according to various reports, Allen's Octopus is what's called an expedition boat, its high bow allowing for better handling in rough seas and icy waters and equipped for travel to remote places. It has two helicopter pads (where else would guests land their chopper?), one on the bow and one astern. A garage near the rear deck houses a four-wheel drive vehicle, which can be transported to shore via a specialized landing craft.

The submersible -- yes that's right, submersible -- which is said to be able to stay under water for up to two weeks, launches through a hatch in the bottom of the hull. The former Navy Seals are presumably there to fend off pirates, or just in case you run into a real-life Dr. No in some forlorn corner of the South China Sea.

Of course, Octopus has more refined amenities as well, including a pool, a basketball court, a movie theatre and a full assortment of watersports toys that can launch from a seaside compartment. And what mega-billionaire's pleasure ship would be complete without a bar and hot tub?

The rivalry

more...

[loudsue]

42. Those kinds of toys are frikkin' OBSCENE when so many can't

even buy FOOD in this country!

I hate to even HEAR about this! :argh:

:kick::kick::kick:

[UpInArms]

44. mmmmm....

http://www.charlotte.com/mld/observer/news/local/states/north_carolina/counties/catawba/12267975.htm

Nonprofits see surge in aid requests

With rising health-care costs and unemployment rates, some area nonprofit organizations are seeing an increase in people who need counseling services and who are joining support groups.

Officials at two Hickory nonprofits, the Family Guidance Center and the Women's Resource Center, say they've seen an increase in demand for counseling and other types of help. Both organizations serve the uninsured and underinsured.

"Mental health is just as important as your physical health ... and your mental health can affect your physical health," said Ann Peele, executive director of the Family Guidance Center in Hickory.

Peele has seen an increase in people served in programs in the last three years.

"We have noticed with the turbulence in the area with unemployment, people are more depressed. When someone loses their job, it affects the whole family. Those who are already having problems feel it's too much to handle," Peele said.

...more...

http://www.chicagotribune.com/news/local/north/chi-0507280255jul28,1,4152836.story?coll=chi-newslocalnorth-hed

Charity's funds drying up
Lake County's needy face halt in services

Leah Lowe, 70, can't imagine how she would get by without assistance from Catholic Charities, but officials of Lake County's largest social service provider warned that needs are outstripping funds and people are going to be told no help is available.

A gloomy mix of economics, demographics and budget priorities was spelled out by the agency Tuesday to state legislators, who learned that no money remains this fiscal year, which started in October, to offer transportation, utility payments and respite care services to the poor and elderly in Lake County.

"The state of Illinois' budget has been very hard on people struggling in Lake County," said Michael Knight, chairman of Catholic Charities' board of advisers for Lake County. "To sum it up, Catholic Charities has nine months of funding for 12 months of needs and 12 months of services."

Lowe, of Beach Park, had surgery on both knees in 1997, forcing her to quit her job as a home health-care worker. She had to concede that she needed help with the laundry, housekeeping and taking a bath.

Catholic Charities has "done everything for me," she said Wednesday. "They've kept me out of the nursing home, and I can live in my own house."

She is among a rising number of senior citizens who need help and are pushing many elder programs to the brink of running out of money.

...more...

http://www.dailycamera.com/bdc/county_news/article/0,1713,BDC_2423_3951826,00.html

(free registration or try www.bugmenot.com)

Homeless numbers in Boulder up

Study shows nearly 70 percent increase between 2004 and 2005

Her eyes were covered with large sunglasses, and the woman known simply as Graci stood under overcast skies Saturday afternoon near the U.S. 36 off-ramp at Baseline Road.

"My God, I'm not one of those people who likes being out here," said Graci, 57. "I'm so embarrassed standing here. I can't look in their faces and ask for money."

Underneath her hanging head was her cardboard sign: "Obviously Desperate."

The homeless population in Boulder increased nearly 70 percent between 2004 and 2005, according to a recently published study. Professionals who work with transients say there is a combination of reasons people are becoming homeless, including high housing prices, loss of jobs and medical problems.

The "point-in-time" study was done by the Metropolitan Denver Homeless Initiative in collaboration with several organizations, including some in Boulder County.

...more...

I do so hope that Mr. Allen finds a nice warm place by the fires of Hell when he exits this world.

[ozymandius]

35. lunchtime check-in

12:04
Dow 10,632.47 -8.44 (-0.08%)
Nasdaq 2,195.08 +10.25 (+0.47%)
S&P 500 1,236.53 +2.35 (+0.19%)
10-Yr Bond 4.342 +0.56 (+1.31%)
NYSE Volume 739,300,000
Nasdaq Volume 664,112,000

11:30AM: More of the same for stocks as the major indices continue to trade in split fashion... Aside from the July ISM report making headlines, investors have also sifted through the latest construction spending data... Earlier, the Commerce Dept. showed that spending on U.S. construction projects fell 0.3% in June - the fourth consecutive monthly decline - well below an expected 0.7% increase, as the May figure was revised lower (to -1.7% from -0.9%)... However, since the monthly changes are volatile and subject to huge revisions, the data has had little impact on overall trading... NYSE Adv/Dec 1646/1362, Nasdaq Adv/Dec 1552/1285

[54anickel]

36. A cautionary tale and a 'classic script'

NEW YORK (MarketWatch) -- The dollar finished out last week weak -- and, despite this year's bounce, at least one respected service is still predicting a dollar disaster.

http://www.marketwatch.com/news/print_story.asp?print=1&guid={31421FEE-FE61-4E57-93D4-F2C8EF9FFC12}&siteid=google

Bridgewater emphasizes that "this is a regime change, not just an exchange-rate change."

It argues that "due to the Chinese peg, Asian monetary policy has basically been locked into a dollar system. No Asian country wants to lose competitiveness to China."

China's official removal of the dollar-peg system in favor of a basket of currencies "means that the Asian dollar-based monetary system is about to collapse," Bridgewater warns.

Bridgewater makes a powerful analogy to the international economic situation in the late 1960s and the early 1970s -- fascinating to me because the resulting disruption, and the discrediting of a conventional wisdom that was at least as entrenched as today's free-market triumphalism, spelled a spectacular boost to the investment-letter industry.

snip>

"We believe the odds of a dollar/U.S. debt crisis in the next 12 months are elevated (say 50%)."

It puzzles me that so few commentators seem aware of Bridgewater's type of analysis, not just on Wall Street but even among investment letters. An arguable exception: the really hard-core gold bugs who remember the 1970s, like Dow Theory Letters' Richard Russell

more...

[ozymandius]

37. 12:51

Dow 10,628.47 -12.44 (-0.12%)
Nasdaq 2,193.29 +8.46 (+0.39%)
S&P 500 1,235.98 +1.80 (+0.15%)
10-Yr Bond 43.30 +0.44 (+1.03%)
NYSE Volume 876,944,000
Nasdaq Volume 777,843,000

12:30PM: Not much changed since the last update as the Dow and Nasdaq continue to trade in opposing directions... On the Dow, shares of Home Depot (HD 42.78 -0.73) have fallen after receiving a grand jury subpoena related to hazardous waste handling... After hitting a 52-week high on Friday, profit-taking has weighed on Honeywell (HON 38.56 -0.72) while DD, MRK, PG and UTX have also lost more than 1.0% today...

Of the 14 Dow components catching a bid, Johnson & Johnson (JNJ 64.89 +0.93) has paced the way higher amid an FDA approval for a top-selling Guidant implantable while Pfizer (PFE 26.65 +0.15) has gained ground after the FDA approved a new use for Celebrex... NYSE Adv/Dec 1758/1317, Nasdaq Adv/Dec 1676/1235

[DoBotherMe]

41. KICK n/t

[UpInArms]

43. 3:24 EST numbers and blather

Dow 10,646.28 +5.37 (+0.05%)
Nasdaq 2,201.01 +16.18 (+0.74%)
S&P 500 1,238.18 +4.00 (+0.32%)
10-Yr Bond 43.19 +0.33 (+0.77%)

NYSE Volume 1,417,468,000
Nasdaq Volume 1,219,256,000

3:00PM: Stocks continue to trade at improved levels but it appears recovery efforts have hit a wall... Perhaps providing some of the recent support for equities has been the fact that, even though oil prices finished up 1.7% on the day, the close of commodities trading (and oil off intraday highs above $62/bbl) has provided some relief and allowed investors to refocus on the continued stream of upbeat economic and earnings data...

While it remains a foregone conclusion the Fed will raise rates 25 basis points to 3.5% next Tuesday (Aug. 9), favorable reads on inflation last Friday (e.g. Q2 PCE index rose just 1.8% while the employment cost index increased a manageable 0.7%) may at least stall more aggressive Fed tightening...NYSE Adv/Dec 1875/1321, Nasdaq Adv/Dec 1753/1309

2:30PM: Market pares some of its losses as the Dow crosses into positive territory for the first time this afternoon... Notable blue chips reversing course include AIG, HPQ, IBM, KO and MCD... However, reaping the brunt of the renewed buying interest, due in part to less pressure from high oil prices, have been small caps, as evidenced by a 0.8% advance in the Russell 2000 versus a slim +0.1% gain for the Dow... NYSE Adv/Dec 1818/1352, Nasdaq Adv/Dec 1741/1288

2:00PM: Major averages continue to languish near their lows of the session as the Nasdaq continues to post the day's best performance despite minimal assistance from technology...

fly-by post

:hi:

[ozymandius]

45. closing numbers - and remember to gas up on your way home today

because the prices are going up tonight.

Dow 10,623.15 -17.76 (-0.17%)
Nasdaq 2,195.38 +10.55 (+0.48%)
S&P 500 1,235.35 +1.17 (+0.09%)
10-Yr Bond 43.19 +0.33 (+0.77%)
NYSE Volume 1,716,825,000
Nasdaq Volume 1,453,045,000

blather later

[UpInArms]

47. closing numbers and blather

(oops! double posted after Ozy's closing numbers)

Close: The major averages closed in split fashion as investors' views varied about whether or not more encouraging economic data would be enough to carry July's momentum into August amid rising interest rates and record oil prices... Since economic data had taken a backseat to a few weeks worth of better than expected earnings, which could result in Q2 operating EPS growth for the S&P 500 of about 12% (or about 4 1/2% above initial forecasts), the focus began shifting to economic data...

Initially providing a floor of support for stocks were reports that several economists had raised Q3 GDP forecasts to between 4-5% after further analyzing the impact depleting inventories had on last week's Q2 GDP report... Just after the bell, July ISM index rose to 56.6 (consensus 54.5) - the highest reading since Dec. 2004 - from 53.8 in June, as the new orders component climbed to 60.6 from 57.2 and the prices paid index fell to 48.5 from 50.5 in June, showing inflation remains contained...

However, even though the bullish ISM figures validated the ongoing recovery in manufacturing, the data subsequently raised worries of further rate hikes, closing benchmark yields on the 10-year note (-9/32) above 4.3% for the first time since April 14th... And since higher rates invite concerns about the pace of economic growth and the stock market's return prospects, six out of ten economic sectors closed lower... To that end, the interest-rate sensitive Utilities sector paced the way lower, losing additional ground following a Q2 disappointment from Public Service Enterprise Group (PEG 62.64 -1.66)... Consumer Staples also lost ground following a CSFB downgrade on Archer-Daniels-Midland (ADM 21.68 -1.26) and disappointing guidance from Procter & Gamble (PG 54.90 -0.72)...

See you all tomorrow!

:hi: