STOCK MARKET WATCH, Tuesday 2 August

[ozymandius]

Tuesday August 2, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 172 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 225 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 289 DAYS
DAYS SINCE ENRON COLLAPSE = 1346
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 August 1, 2005

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... 4.29% +0.09 (+2.14%)
Gold future... 437.70 +1.90 (+0.43%)

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

FREE TRADE: AT WHAT COST?

I recently penned a piece, Texas Hold 'Em or Know When to Fold Them?, where the concept of free trade was briefly mentioned. Feeling that was not the appropriate forum to have a more lengthy discussion on this topic, I decided to devote an article exclusively to this important – often emotional and thought provoking topic.

-cut-

How Everyone Is Supposed To Benefit

The claim at the heart of pro free traders arguments is that everyone benefits. The reasoning for this is articulated masterfully by John Williams in his interview with Jim Puplava on The Financial Sense Newshour July 23rd, 2005 – 2nd hour. Anyone with an opinion on this subject owes it to themselves to listen to this candid and informative interview. Williams points out that the premise which most people understand, that makes free trade a win – win situation, rests in each party to the agreement specializing at what they do best. As such, if my specialty is making buggy whips and I make them cheapest, it is advantageous for me to ‘trade’ with someone whose specialty is making buggies cheapest – that way, both parties subject to the ‘free trade’ of buggies and whips benefit from the specialization of doing what they do best.

In a universe where there is one buyer and one seller, like the example outlined above, it should be clear to anyone that both parties benefit from trade in this case. In the real world, however, where the universe is compiled of many buyers and many sellers of a host of different goods and products, another important consideration comes into play. Like Williams, I would contend that this very important consideration is either assumed or overlooked by proponents of free trade. The assumed consideration is that both parties to a free trade agreement are at or near full employment. Without this condition being met, the manufacture of goods and outsourcing of associated jobs will necessarily flow toward the lower or lowest cost regime.

more...

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

[UpInArms]

2. daily dollar watch

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

Last trade 88.58 Change -0.22 (-0.25%)

Not Enough Good News

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2561&Itemid=39

"Because only new production is counted in GDP, Friday's initial estimate of second quarter growth may come in below the 3.8 pct growth rate achieved in each of the last two quarters. The good news is that slimmer inventories should set the stage for stronger subsequent growth in production, and many economists consequently would expect strong growth in the third quarter."


Ben Bernanke, top White House economic adviser.
Wednesday, July 27, 2005 09:15 GMT

Not Enough Good News

For the second week in a row positive US data resulted in nothing but declines for the dollar, suggesting that the greenback may be priced for perfection. On Wednesday US Durable Goods rose 1.4% against an expectation of a drop of -1.0% on Thursday Jobless Claims reported a very muted 310K applications pushing the 4 week average down to 318K and finally on Friday Chicago PMI posted a blow out number of 63.5 against expectations of only 53.5. The only mild disappointment was the 3.4% gain in GDP versus a consensus call of 3.5%. Still this is the 18th consecutive quarter of 3%+ growth for US – a record not matched since 1986.

Despite all of the seemingly good news the dollar bulls could not muster even a small up move, as the unit ended the week 52 basis points lower against the euro. What gives? Dollar rally has clearly been overdone and new US eco data must exceed all expectations in order to make any further impact on price.

...more...

Dollar Remains On Receiving End Of Majors Advance

http://www.dailyfx.com/index.php?option=com_content&task=view&id=2608&Itemid=39

EUR/USD – Euro bulls continued to push their way above the 1.2200 level following an unsuccessful bid by the dollar longs to reestablish their dominance. As single currency longs push deeper into the dollar held territory, traders on both sides will most likely see the pair aiming to take on the greenback offers above the 1.2300 figure. Indicators support a move to the upside with momentum indicator above the zero line, while the neutral oscillators provide the euro longs with additional maneuvering room.

<snip>

USD/JPY – Japanese Yen longs finally came to their senses as the price action in other majors was hard to ignore and pushed the pair deep below the 112.00 figure. As the pair contuse to head lower, yen bulls will most likely smash their way though the dollar defenses and make their way toward the psychologically important 110.00 figure. Indicators favor a move to the downside with ADX declining to 26.47 and with both MACD and momentum indicator sloping downward toward the zero line.

<snip>

GBP/USD – British pound longs continued to assault the dollar bulls during the latest bout of the anti-dollar bearishness with the pair keeping the psychologically important 1.8000 figure firmly in their sights. As the pair breaks above the 1.7800 handle and sweeps aside the greenback defenders, their next move toward the 1.8000 handle will most likely be unopposed by the dollar bulls. Indicators favor a move to the upside with momentum indicator above the zero line and MACD sloping toward the zero line with neutral oscillators giving pound longs enough room to maneuver before the pair becomes oversold.

...more...

Have a Great Day Marketeers!

[UpInArms]

34. Dollar still lower; only fleeting help from U.S. data

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38566.4323955208-839789624&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- The dollar briefly pared its broad decline after a U.S. report showed a modest gain in factory orders in June followed a sharply upwardly revised May figure. The dollar hasn't gotten much lift from a string of mostly upbeat U.S. economic statistics over the past several days, largely as European and Japanese data have improved. The greenback was changing hands at 111.41 yen in recent trading, after gaining to 111.44 after the factory report. The dollar remains down 0.8% against the yen vs. late Monday. The euro dipped to $1.2202 after the report from $1.2216, but remains up 0.3% against its U.S. counterpart on the day.

[UpInArms]

3. Today's Reports:

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

Aug 2	8:30 AM		Personal Income		Jun	-	0.4%	0.4%	0.2%	-	
Aug 2	8:30 AM		Personal Spending	Jun	-	0.9%	0.8%	0.0%	-	
Aug 2	10:00 AM	Factory Orders		Jun	-	1.1%	1.0%	2.9%	-
Aug 2	12:00 AM	Auto Sales		Jul	-	5.7M	5.7M	5.1M	-	
Aug 2	12:00 AM	Truck Sales		Jul	-	8.7M	8.8M	8.9M	-

[UpInArms]

9. Reports coming in:

8:30am 08/02/05 U.S. JUNE DISPOSABLE INCOME UP 0.5%

8:30am 08/02/05 U.S. JUNE PROPRIETORS' INCOME UP 2%

8:30am 08/02/05 U.S. JUNE WAGES, SALARIES UP 0.2%

8:30am 08/02/05 U.S. JUNE SAVINGS RATE FALLS TO 45-MONTH LOW 0%

8:30am 08/02/05 U.S. JUNE CORE INFLATION RATE FLAT

8:30am 08/02/05 U.S. JUNE CONSUMER SPENDING UP 0.8% AS EXPECTED

8:30am 08/02/05 U.S. JUNE PERSONAL INCOME UP 0.5% VS. 0.4% EXPECTED

[UpInArms]

11. Savings rate falls to 0% for first time since 2001

http://www.marketwatch.com/news/story.asp?guid=%7B26166EAB%2D089F%2D441B%2DBA3B%2D4CFDC93DD312%7D&siteid=mktw

WASHINGTON (MarketWatch) - U.S. consumer spending grew 0.8% in June, offsetting the sizable 0.5% gain in incomes, the Commerce Department said Tuesday.

The personal savings rate fell to 0%, the lowest since the spending binge in October 2001 and the second-lowest since the Great Depression.

It was the largest increase in inflation-adjusted spending since last July

Meanwhile, inflation was calm, with both headline and core inflation measures flat for the month. Core inflation is up 1.9% in the past 12 months, the smallest gain since last August.

Economists were expecting incomes to rise 0.4% in June, with spending up 0.8%, according to a MarketWatch survey.

Incomes rose 0.2% in May, while spending was flat.

...more...

[UpInArms]

12. U.S. June consumer spending up 0.8%, incomes up 0.5%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38566.3542102546-839785089&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - U.S. consumer spending grew 0.8% in June, offsetting the sizable 0.5% gain in incomes, the Commerce Department said Tuesday. The personal savings rate fell to 0%, the lowest since the spending binge in October 2001. It was the largest increase in inflation-adjusted spending since last July. Meanwhile, inflation was calm, with both headline and core inflation measures flat for the month. Core inflation is up 1.9% in the past 12 months, the smallest gain since last August. Economists were expecting incomes to rise 0.4% in June, with spending up 0.8%, according to a MarketWatch survey.

[UpInArms]

17. here's the spin: US June consumer spending strong, inflation absent

http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-08-02T125452Z_01_N02600829_RTRIDST_0_ECONOMY-WRAPUP-1.XML

WASHINGTON, Aug 2 (Reuters) - U.S. consumer spending advanced a robust 0.8 percent in June as shoppers took to auto showrooms to enjoy sales incentives that helped keep inflation steady, a government report showed on Tuesday.

Income in June rose 0.5 percent, the Commerce Department said, a touch stronger than the 0.4 percent gain analysts on Wall Street had expected. The increase in spending, which was already reflected in a report on second-quarter economic growth released on Friday, was as expected.

An inflation index contained in the spending and income report showed prices steady, both overall and excluding volatile food and energy costs. Economists had expected the non-food and energy gauge to edge up 0.1 percent.

Prices for U.S. government bonds trimmed earlier losses on the flat core inflation reading, which traders saw as suggesting the Federal Reserve could continue on its "measured" course of interest rate rises without much fear of inflation.

Over the past year, the core price index -- eyed closely by Fed policy-makers -- is up 1.9 percent, at the high end of the central bank's perceived comfort zone. However, a narrower measure that looks only at prices that can be observed in markets, showed a more moderate rise of 1.6 percent.

...more...

Yeah, right :banghead:

[ozymandius]

27. Am I correct to deduce that income growth still consistently lags behind

the CPI? Meaning: happy reports are meaningless because buying power is dwindling?

[UpInArms]

30. Who needs money??? Let's rearrange the deck chairs on the

RMS USofA!

[UpInArms]

23. U.S. June factory orders rise 1.0%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38566.4168044329-839788842&siteID=mktw&scid=0&doctype=806&

Notice how they have to "exclude transportation" in this spin

WASHINGTON (MarketWatch) -- Orders for U.S.-made factory goods increased 1.0% in June, the Commerce Department estimated Tuesday. Economists surveyed by MarketWatch had been looking for a gain of about 1.1%. Excluding transportation, orders climbed 1.3%. Excluding defense, orders rose 0.5%, the Commerce Department's data showed.

and the orders would have fallen if not for DEFENSE SPENDING

10:00am 08/02/05 U.S. JUNE FACTORY ORDERS EX-TRANSPORTATION UP 1.3%

10:00am 08/02/05 U.S. JUNE FACTORY ORDERS RISE 1.0%

[UpInArms]

4. Insurance Scammers: Marsh & McLennan 2nd-qtr profit falls amid charges

http://today.reuters.com/investing/financeArticle.aspx?type=marketsNews&storyID=2005-08-02T114531Z_01_N02284420_RTRIDST_0_FINANCIAL-MARSHMCLENNAN-EARNS-UPDATE-1.XML

NEW YORK, Aug 2 (Reuters) - Marsh & McLennan Cos. (MMC.N: Quote, Profile, Research), the world's largest insurance broker, on Tuesday said its second-quarter profit plunged amid charges for restructuring, employee retention and regulatory expenses.

The New York-based company said net income fell to $166 million, or 31 cents a share, from $389 million, or 73 cents, a year earlier.

Excluding items, earnings fell to 43 cents a share. On that basis, analysts polled by Reuters Estimates on average had expected earnings of 40 cents.

Quarterly revenue rose 2 percent to $3.1 billion, as Marsh & McLennan's consulting and investment management businesses posted stronger results.

Marsh in January agreed to pay $850 million to settle a lawsuit filed by New York Attorney General Eliot Spitzer that accused it of rigging bids, fixing prices and steering insurance business to carriers paying the highest "commissions" or fees -- all unbeknownst to clients.

...more...

[UpInArms]

5. Brokerage Scammers: Amvescap's Q2 profit falls, assets decline

http://today.reuters.com/investing/financeArticle.aspx?type=marketsNews&storyID=2005-08-02T113128Z_01_L02439060_RTRIDST_0_FINANCIAL-AMVESCAP-UPDATE-1.XML

excerpt:

Amvescap said its funds under management were $373.2 billion at the end of June from $382.1 billion at the end of December last year. Net outflows were $8.2 billion over the six-month period.

Fully diluted earnings per share were 4.8 pence in the second quarter, below a consensus forecast of 4.9 pence. The company declared an interim dividend of 4 pence a share.

"Amvescap has the right leadership, resources and people to take advantage of the significant industry opportunities available globally for an independent company focused solely on investment management," Amvescap chairman Charles W. Brady said.

The company, which is parent of the Invesco and AIM fund brands, has been suffering a steady drain of money from its U.S. portfolios after a damaging financial scandal last year.

The company agreed a $450 million settlement with U.S. authorities over charges it allowed improper trading practices in some of its funds.

...more...

[UpInArms]

6. 2nd half of year projections were too rosy

MBIA 2Q net drops, says op EPS target hard to achieve

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38566.3421960648-839784534&siteID=mktw&scid=0&doctype=806&

LONDON (MarketWatch) -- MBIA Inc. (MBIA) reported an 8% decline in second-quarter net income to $187.6 million, or $1.37 a share, after last year's results were flattered by $27.4 million of net gains. Total insurance revenues rose to $399.3 million, from $360 million last year. The company said that, given current market conditions, low interest rates and increased regulatory expenses, it expects it will be hard to achieve the 10% to 12% adjusted operating earnings per share growth for 2005, which it said it expected at the beginning of the year. However, it does continue to anticipate operating return on equity at the lower end of a 12% to 14% range percent range.

[UpInArms]

7. Tyco sees profit below Wall St views; shares drop

http://today.reuters.com/investing/financeArticle.aspx?type=marketsNews&storyID=2005-08-02T122441Z_01_N01532432_RTRIDST_0_MANUFACTURING-TYCO-EARNS-UPDATE-3.XML

BOSTON, Aug 2 (Reuters) - Tyco International Ltd. (TYC.N: Quote, Profile, Research) on Tuesday said earnings through September 2006 would miss analysts' estimates as rising steel prices crimp profits at its industrial businesses, sending its shares down 8 percent.

The company, whose products range from hypodermic needles to electronic components, also reported higher quarterly earnings just above what Wall Street expected, boosted by the sale of a unit.

Net income in the third quarter ended on June 30 rose to $1.19 billion, or 56 cents per share, from $922.6 million, or 43 cents per share, a year earlier.

<snip>

Tyco already lowered its full-year earnings and cash flow outlook in May, prompting some investors to question the pace of progress with its restructuring.

The company forecast fourth-quarter earnings of 45 cents to 47 cents per share from continuing operations, compared with Wall Street estimates of 52 cents.

Under Chief Executive Ed Breen, the company has been working to recover from a scandal involving the looting of funds by former management.

...more...

[UpInArms]

8. Cooper Tire reports $6.8M loss for recent quarter

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38566.3510921412-839784968&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Cooper Tire & Rubber Co. (CTB) on Tuesday reported a second-quarter loss of $6.88 million, or 11 cents a share, compared to $33 million in net income, or 46 cents a share, for the same period last year. Revenues fell less than 1% to $509 million, down from $511 million during the same period last year. The Findlay, Ohio-based tire maker was expected to earn 3 cents a share, according to a survey of analysts by Thomson First Call. Shares of Cooper rose 65 cents on Monday to closed at $20.77.

[UpInArms]

10. U.S. manufacturers' outlook turns negative-report

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-02T123058Z_01_N01561161_RTRIDST_0_ECONOMY-MANUFACTURING.XML

SAN FRANCISCO, Aug 2 (Reuters) - A survey of U.S. industrial manufacturing executives released on Tuesday points to rapidly deflating expectations for economic growth, casting doubt on emerging signs that the economy has firmed from a weak period in the spring.

The report, PricewaterhouseCoopers' quarterly Manufacturing Barometer, breaks what had been a string of positive economic indicators, including Monday's better-than-expected factory survey by the Institute for Supply Management and healthy second-quarter gross domestic product.

Fewer than half of the surveyed executives said they were optimistic about the world economy, down from 70 percent in the first quarter, a decline stemming largely from deep concerns about the rising price of oil.

The percentage of respondents who remain optimistic about the U.S. economy in particular over the next 12 months fell to 54 percent, from 71 percent in the first quarter.

The survey also showed marked declines in expectations for capital investments and job growth. The percentage of respondents planning to add workers in the next 12 months fell nine percentage points to 43 percent from the first quarter to the second quarter.

<snip>

The conclusions were culled from interviews with 150 senior executives, including 70 from multinational industrial manufacturers, conducted between May and July.

...more...

[54anickel]

20. Sheesh, so much for passing the baton from the consumer to business -

Latest excuse: If only the price of oil wasn't so high. :eyes:

...the newfound pessimism was being driven by the price of oil

We've been reading about that baton pass for over 4 years and it just ain't gonna happen. It's looking like corps have already written off the US as a place to build their manufacturing base. They're hoarding the cash, waiting for the big global crash so they make their capital investments at fire sale prices.

[UpInArms]

13. Treasurys trim decline in delayed reaction to data

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38566.3634255671-839785722&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

CHICAGO (MarketWatch) -- The benchmark 10-year note briefly extended losses after a report showing a gain in incomes and spending before trimming that decline as the tame inflation figure within the report was scrutinized. The note was last 3/32 lower at 98 13/32. Its yield ($TNX) stood at 4.32% vs. 4.31% Monday.

[UpInArms]

35. Treasurys scrap back to trade mildly positive

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7B14BD2944-786C-4000-BB87-56F54F27B6F1%7D&

CHICAGO (MarketWatch) -- The benchmark 10-year Treasury note had reversed to trade moderately higher in late-morning dealings, a move that traders termed a mild correction and increased demand for higher yields after price declines had pushed benchmark yields to their loftiest in more than three months. A report on factory orders showed a nearly as-expected rise in June, following a sharp upward revision to May. The 10-year note, which began the day lower, was last up 2/32 at 98 18/32, yielding ($TNX) 4.31% vs. 4.32% at Monday's close.

[UpInArms]

14. Too Poor to Buy Beer?

Molson Coors profit falls, will restate1Q results

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38566.3648750232-839785777&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Molson Coors Brewing Co. (TAP) on Tuesday said second quarter net income fell to $38.5 million, or 45 cents a share, down from $72 million, or $1.90 a share, for the same period last year. The company was expected to earn $1.61 according to a survey of analysts by Thomson First Call. Sales rose to $2.19 billion from $1.55 billion during the same period last year. The Denver, Colo.-based brewer also said it will restate its first quarter earnings to reflect a tax adjustment. Molson shares rose $1.12 on Monday to close at $63.82.

[ozymandius]

19. I remember the first Bush recession (GHWB) when beer was a luxury.

Circumstances were so dire that I resorted to Pils beer. Cost: $7 per case. I grew to tolerate the taste. Of course, a year after Clinton turned the economy around, I traded up.

[UpInArms]

15. U.S. seen reinstating 30-year bond sales Wednesday

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-02T130036Z_01_N02601668_RTRIDST_0_ECONOMY-TREASURY-BOND.XML

WASHINGTON, Aug 2 (Reuters) - The U.S. Treasury Department is likely to revive the 30-year bond on Wednesday in a bid to lock in low financing costs and satisfy market demand for longer-dated debt, financial analysts said.

The Bush administration ended 30-year bond sales in October 2001 in anticipation of lower borrowing needs in an era of budget surpluses. Bond dealers and investors have since clamored for its return to help deepen and anchor markets for long-term debt like mortgage-backed securities.

In a nod to Wall Street pressure, and facing large budget deficits that followed a recession, stock market collapse, tax cuts and huge war costs, the Treasury Department said in May it was considering bringing back the 30-year bond to give the government more borrowing flexibility.

Analysts said traders and dealers, who normally watch the Treasury's quarterly refunding statements to learn the size of upcoming auctions, will focus instead Wednesday morning on the long bond's expected return.

...more...

With the Idiots at the helm of the Ship of Fools, I'm not certain that this country has a 30 year future.

[UpInArms]

22. Commentary: Just in time, the return of the 30-year bond

http://www.marketwatch.com/news/story.asp?guid=%7BB6B0A1BA%2D6BC5%2D44B3%2DB0DF%2D2634B2D4EE45%7D&siteid=mktw

HEMPSTEAD, N.Y. (MarketWatch) -- The revival of the U.S. Treasury's 30-year bond, expected to be announced on Wednesday, is just what the doctor ordered. It was also inevitable.

Back in October 2001, when the Treasury stopped selling this issue, the government's fiscal outlook was bright. Although the budget surplus was shrinking under pressure of the ongoing recession, virtually no one expected it to disappear and be replaced by record deficits starting as early as 2002.

That being the case, it made sense from the government's perspective not to lock itself in to high interest rates by issuing long-term debt. After all, surpluses "as far ahead as the eye could see" would logically be expected to result in lower interest rates across the board.

The shape of the yield curve provided an added bonus.

Having been negative in the last few months of 2000, the curve turned steeply positive starting in early 2001, as the Federal Reserve began the first of what subsequently became 13 rate cuts in 2-1/2 years' time. This provided an added inducement for the Treasury to shorten up the average life of its debt.

...more blow at link...

[UpInArms]

16. pre-opening blather

9:15AM: S&P futures vs fair value: +2.3. Nasdaq futures vs fair value: +2.5.

9:00AM: S&P futures vs fair value: +2.2. Nasdaq futures vs fair value: +2.0. Stage remains set for stocks to start the session on an upbeat note as futures indications hold steady above fair value... Aside from more strong earnings reports (i.e. COH, THC, TXU) and a pullback in oil providing some early support, modest improvements in bonds following a tame inflation read may also be offering investors some reprieve ahead of more economic data...

At 10:00 ET, June factory orders (consensus 1.0%) will be released while July Auto Sales (consensus 5.7 mln) and Truck Sales (consensus 8.8 mln) are also expected during market hours

8:33AM: S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +1.5. Futures trade holds relatively steady following economic data, still indicating a slightly higher open for the indices... June personal income rose 0.5%, slightly above expectations (+0.4%), while personal spending rose 0.8%, matching expectations... More notably, the core PCE deflator came in unchanged from 0.2% to leave a 1.9% year-over-year rate, suggesting inflation remains under control... Bonds have extended early losses as the 10-yr note is now down 7 ticks to yield 4.33%

8:00AM: S&P futures vs fair value: +1.7. Nasdaq futures vs fair value: +2.0. Futures market suggesting a slightly higher open for the cash market as falling oil prices provide some relief while investors digest a fresh batch of earnings reports ahead of economic data...

[54anickel]

18. World turning its back on Brand America

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=1668857

http://news.ft.com/cms/s/77868922-0228-11da-9481-00000e2511c8.html

The US is increasingly viewed as a "culture-free zone" inhabited by arrogant and unfriendly people, according to study of 25 countries' brand reputations.

The findings, published online today, will add to concerns that anti-Americanism is hurting companies whose products are considered to be distinctly "American".

The Anholt-GMI Nation Brands Index found that although US foreign policy remained a key driver of hostility, dissatisfaction with the world's sole superpower might run deeper.

"The US is still recognised as a leading place to do business, the home of desirable brands and popular culture," said Simon Anholt, author of the survey. "But its governance, its cultural heritage and its people are no longer widely respected or admired by the world."

Keith Reinhard, president of Business for Diplomatic Action, a group of business leaders dedicated to improving the US's image overseas, said help from the private sector was needed to repair Brand America.

more...

[UpInArms]

21. 9:57 EST numbers (everybody's happy!)

Dow 10,657.55 +34.40 (+0.32%)
Nasdaq 2,201.76 +6.38 (+0.29%)
S&P 500 1,238.75 +3.40 (+0.28%)
10-Yr Bond 4.320 +0.01 (+0.02%)

NYSE Volume 215,912,000
Nasdaq Volume 206,836,000

[ozymandius]

24. Maybe they can share some joy with Delta and United airlines.

Northwest, Delta expected to file for bankruptcy soon

WASHINGTON — Northwest and Delta Air Lines are likely to file for Chapter 11 bankruptcy protection in mid-September, a month before a more-restrictive bankruptcy law goes into effect, bankruptcy experts and airline insiders say.

-cut-

Northwest and Delta continue to post significant losses while trying to cut costs and adjust to record high fuel prices.

more...

http://seattletimes.nwsource.com/html/businesstechnology/2002415409_airlines02.html

[UpInArms]

26. More privatizing of profits and socializing of losses?

Won't that enable them to shove their (employee funded) pension responsibilities off on to the taxpayers' backs?

[ozymandius]

29. That would be a charm for the ivory tower crowd - but the law is not on

their side. Take this excerpt:

Under the new law, companies in Chapter 11 are barred from paying retention bonuses to executives unless the executives prove they have job offers elsewhere.

The provision aims to stop companies from taking money from employees hit by wage and benefit cuts to enhance packages for managers, said Lynn LoPucki, a law professor at the University of California, Los Angeles.

I would think that in this day when everyone on a board is on someone else's board - a job offer would be easy to come by, at least to fabricate.

[UpInArms]

25. Crude falls to $61.30 bbl - WE'RE RICH! RICH, I TELL YOU!

10:01am 08/02/05 SEPT CRUDE FALLS 27C TO $61.30/BRL IN EARLY NY TRADE

10:01am 08/02/05 SEPT NATGAS CLIMBS 5.6C TO $8.21/MLN BTUS

[54anickel]

36. Oil... The life blood... "The Prize"

http://www.321energy.com/editorials/russell/russell080205.html

snip>

Today I am showing a point & figure chart of oil, and here the boundaries are clear and decisive. On the P&F chart below oil most recently gave a bullish signal in July. That month saw oil rise to the 62 box. Next came a corrective row of 0s down to the 57 box. Most recently, oil has climbed back to the 60 box. It will take a rise to the 63 box to reconfirm the bullish trend of oil. For a bearish reversal, oil would have to decline to the 55 box.

This is what is so interesting -- the upside target or "count" for oil is now 83.

snip>

But, I wonder, what if the P&F target comes to pass? What if oil goes over 70, then over 75, then over 80, and the price of gas rises to 3.75, 4.00 or even higher? Will that put a clamp on the US economy as millions of car people decide that they have to "cut back somewhere in their spending?"

I honestly don't have the answer, but it's a thought that's on my mind. Therefore, we'll keep our eye on "the prize," which is oil.

There are a number of puzzling things about the oil picture. One is the varied performances of the oil companies. Some are doing great, going to new highs -- APA, SUN. MRO, BR. But the biggies like XOM, RD, CVX, are lagging. What's with the biggies? Are they running out of reserves? Are their reserves in politically dangerous areas? It's really a puzzle. Oil at a record high and Exxon and Chevron lagging?

more...

[UpInArms]

28. 10:09 EST - IT'S PARTY TIME!

Dow 10,676.18 +53.03 (+0.50%)
Nasdaq 2,205.61 +10.23 (+0.47%)
S&P 500 1,241.26 +5.91 (+0.48%)
10-Yr Bond 4.319 0.00 (0.00%)

NYSE Volume 297,240,000
Nasdaq Volume 279,745,000

9:40AM: Market opens modestly higher, in line with futures indications, as investors embrace more good fundamental news regarding inflation... Earlier, the Commerce Dept. showed that June personal income rose 0.5% and personal spending rose 0.8%, both basically matching economists' forecasts...

More importantly, however, was the fact that the core PCE deflator - a broad based measure of inflation - was unchanged and is now up just 0.1%, 0.2%, and 0.0% over the past three months, representing a slowdown despite the strong economy and leaving core inflation up 1.9% year over year, the smallest gain since last August... The inflation components confirm the deceleration in PPI and CPI core rates in recent months, which makes both stocks and bonds more attractive...

[UpInArms]

31. updated blather

10:00AM: Equities are still on the offensive as the bulk of sector leadership remains positive... Pacing the way higher has been the Materials sector, led by a 2.5% surge in Alcoa (AA 28.62 +0.71) and a Morgan Stanley upgrade on NUE (+3.5%) while Utilities has surged following an analyst upgrade on Dominion Resources (D 75.13 +1.80) as well as strong Q2 reports from TXU (+2.8%) and PPL (+3.6%)... Despite falling oil prices, better than expected earnings (i.e. RIG, RDC) have also helped Energy while Technology has benefited from a 1.3% surge in semiconductor following MXIM's (+6.6%) upbeat guidance...

Industrials, however, has been under pressure following downside guidance from TYC (-8.9%) and MAS (-4.0%) while losses in retail and homebuilding have offset gains in autos and a strong Q2 report from CMCSA (+1.1%)...DJTA -0.1, DJUA +1.3, DOT -0.1, Nasdaq 100 +0.3, Russell 2000 +0.2, SOX +1.3, S&P Midcap 400 +0.2, XOI +0.6, NYSE Adv/Dec 1599/942, Nasdaq Adv/Dec 1432/1005

[54anickel]

33. "...despite a strong economy". What strong economy? ...eom

[54anickel]

32. Wall Street's New Raiders

http://www.thestreet.com/markets/hedgefunds/10235843.html

snip>

"More and more hedge funds are becoming activists," says Michael Hawthorne, a partner at Mellon HBV Alternative Strategies, a hedge fund that took a 9.9% position in Exide Technologies (XIDE:Nasdaq - news - research). "They are finding out that their investments tend to be more profitable than when they just are passive investors."

Distaste for passivity characterizes the activist funds, which, broadly speaking, are those willing to take and disclose big stakes in publicly traded companies while pressing for changes in corporate governance. Their demands, backed with the threat of a proxy war, are shareholder-centric, including board declassification, higher dividends, pricey buybacks and the removal of executives they think are failing.

snip>

One reason for the growth of activist strategy is the decline of merchant banking on Wall Street. According to Charles Gradante, managing principal of advisory firm Hennessee Group, investment banks such as Goldman Sachs, Lehman and Lazard have been less inclined to take long-term stakes in public companies since going public themselves. And where investment houses once exerted influence as agents for mezzanine finance, that type of lending is now often handled by private equity funds.

Hedge funds have been able to join the fray as their cash piles have increased and investors grow more willing to tie up money for the long-term. Late last year, for example, Eric Mindich got $3 billion for his new hedge fund, a record start-up launch. The former Goldman Sachs star was able to impose investor lockup provisions and early withdrawal penalties that were previously unheard of in the hedge fund world. About one-third of the Mindich fund's strategy is supposed to be straight-up private equity, further blurring the line between trader and owner.

Still, most activist hedge funds remain oriented to short-term gains simply because they face the time pressure of their peers, a problem that private equity shops are immune from, says McConnell. Because they are generally disinclined to acquire companies outright (even Lampert shies away from buyouts), hedge fund activists have sometimes been forced into tactics that can smack of Barbarians at the Gate ruthlessness. More problematically, they are subject to the same entrenched disadvantages faced by any investor who wants to change a company without controlling it.

more...

[54anickel]

37. U.S. to seek textile cap on China

http://www.iht.com/articles/2005/08/02/business/textile.php

snip>

Chinese Commerce Ministry officials on Tuesday declined to comment on the U.S. plan.

Some trade specialists in the United States said the announcement was broader than they had expected and could lead to higher prices for socks, shirts, skirts, trousers, swimwear and many other categories of clothing.

snip>

The administration was already considering restrictions on many of those products, but it made additional promises last week to two Republicans who abandoned their opposition to the Central America trade pact at the last minute. The House approved the pact by a two-vote margin on Thursday.

Representative Robin Hayes, Republican of North Carolina, long a staunch opponent of the trade pact, switched his vote to yes after House Republican leaders promised that new safeguard quotas would be approved for men's trousers, knit fabrics, brassieres and the like.

Representative Robert Aderholt, Republican of Alabama, abandoned his opposition a few hours before the vote when the administration promised to seek new protection against imported socks. Aderholt's district includes Fort Payne, which, with nearly 100 sock mills in the area, calls itself the sock capital of the world.

Gary Hufbauer, a senior fellow at the Institute for International Economics, said the administration was in danger of paying too high a price for a victory on the Central American agreement, known as Cafta. "This is truly a payoff for Cafta, and it is potentially a bigger payoff than I had expected," Hufbauer said, noting that the Bush administration had long made it clear that it did not want to create a new version of textile trade restrictions that had just expired.

more...

[54anickel]

38. What Comes After King Fahd?

http://www.forexnews.com/AI/default.asp

snip>

Although US oil consumption from Saudi Arabia has now fallen below that from Canada, Mexico and Venezuela, bilateral relations remain more than cordial. Upon his visit to the US last April, King Abdullah discussed the salient topics of oil supply, war on terrorism, the war in Iraq and the Israeli-Palestinian peace initiative, which was proposed by Abdullah in 2002. While the US remains dependent on Saudi oil, Saudi Arabia remains dependent upon US support for its application to the World Trade Organization. The US continues to press Saudi Arabia for developing longer range investments in its oil sector so as to improve to its ability to stabilize world prices. Ryadh responded that it would aim at production target of 12.5 million bpd by the end of the current decade from the current 9 million bpd.

Saudi Arabia’s efforts to diversify its energy wealth have led it to place increased focus on natural gas. These efforts also include the intention to strengthen ties with China and Russia. Out of the 6 companies expressing interest in developing Saudi gas sector last year, the 3 winners were China’s SINOPEC, Russia’s Lukoil Holdings, and a consortium of European firms.

snip>

Geopolitics & Petroeconomics

Saudi investments in US securities have spilled much media ink in the aftermath of the September 11 attacks. None of the reports arrived at accurate figures of capital repatriation by Saudi and other Arabic/Muslim investors, but some have suggested ranges of estimates from $1 to $3 billion. Considering the rising number of non-US banks from the Western world catering for Islamic Banking, the Federal Reserve is undertaking supervisory efforts to work with institutions seeking to implement Islamic Banking practices in the US that minimize the use of interest. Such moves by the leading bank supervisory body in the US could help stem the tide of capital repatriation that could have originated on ideological motives or averseness to excessive scrutiny from regulatord.

Despite Saudi Arabia’s efforts to diversify its energy initiatives to other nations such as Russia and China, and the simultaneous efforts by the US to rely on sources from Canadian sources, the bilateral monetary flows remain intact. The chart below shows that holdings of US Treasuries by OPEC hovered over $60 billion in May, not far from the record high of $67 billion reached in January. But unlike in the days of the petro-dollars of the 1970s, OPEC’s windfall gains from the current oil rally are being recycled back USD as well as euro-denominated accounts. Many have attempted to claim a connection between falling US bond yields and rising oil prices. But the causality could very well be a result of the bond markets’ concerns with the contractionary impact of rising energy prices.

On a relative basis, the Bank of International Settlements found that OPEC reduced the proportion of US dollar-denominated deposits from 75% in Q3 2001 to 61.5% in Q3 of 2004. Middle Eastern central banks have reportedly shifted reserves to euros and sterling assets to avoid the loss from the dollar’s declines in 2002-4. But this finding is largely comparative in basis. Thus, even though the proportion of OPEC’s currency reserves may have been altered, the absolute amount of dollar assets remains on the rise.

Another issue related to the world of currency geopolitics is the impending risk that Gulf nations would begin pricing oil in euros. Whether that would entail a total abandonment of the US dollar or a dual pricing in both currencies, either move would trigger the next phase of the dollar bear market. In 2000, Saddam Hussein decreed that Iraqi oil would be sold for euros. Two years later, Iran converted most of its currency reserves to euros in 2002-3 and still weighs options to price its oil revenues in euros. Venezuela’s Cesar Chavez mentioned a similar possibility but has not acted on it.

more...

[54anickel]

39. 12:47 everything's comin' up roses

Dow 10,687.08 +63.93 (+0.60%)
Nasdaq 2,213.83 +18.45 (+0.84%)
S&P 500 1,242.85 +7.50 (+0.61%)
10-Yr Bond 4.335% +0.02
NYSE Volume 1,051,438,000
Nasdaq Volume 939,645,000

12:30PM : More of the same for the major averages as sellers remains scarce across the board... Homebuilders, however, continue to languish near session lows... Aside from the link between mortgage rates and rising bond yields prompting some consolidation in leaders like KBH (-0.8%) and LEN (-0.8%), it is worth noting that of the 21 components that make up the PHLX Housing Sector Index, 9 companies are not builders but rather providers of building supplies/insurance, in particular, Masco (MAS 32.19 -1.43), which has weighed most heavily on the group...NYSE Adv/Dec 1987/1128, Nasdaq Adv/Dec 1648/1304
12:00PM : Market trading at session highs midday, as tame inflation data following upbeat economic news, a pullback in crude and strong quarterly earnings reports help virtually every sector trade in positive territory... June personal income rose 0.5% (consensus +0.4%) and personal spending rose 0.8% (consensus +0.8%), but the better news has come from another encouraging read on inflation, as the core PCE deflator was unchanged, leaving core inflation up just 1.9% year over year...

June factory orders rose 1.0% (consensus +1.0%) while May's figure of +2.9% was upwardly revised to +3.6%, reiterating strong economic growth... Utilities has paced the day's gains following strong Q2 reports from TXU Corp (TXU 89.78 +4.03) and PPL Corp (PPL 64.42 +3.05) as well as an analyst upgrade on Dominion Resources (D 75.98 +2.65)... Also surging more than 1.0% has been the Materials sector, as a weaker dollar has helped shares of Alcoa (AA 28.87 +0.96) surge while Nucor (NUE 58.37 +2.70) has soared after Morgan Stanley upgraded the stock to Overweight...

Technology has been strong across the board, as a 2.2% surge in semiconductor, amid upbeat guidance from Maxim Integrated Products (MXIM 45.29 +3.28), has offset a 2.4% decline in Adobe Systems (ADBE 28.75 -0.71), which failed to raise its outlook... Despite some consolidation in record high crude oil prices ($61.10/bbl -$0.47) ahead of tomorrow's weekly inventories, better than expected earnings (i.e. RIG, RDC) have also helped Energy surge more than 1.0%... Financial has shown resilience in the face of higher borrowing costs, as strength in brokerage (i.e. MWD, GS, LM) and insurance (i.e. AIG, HIG, CINF, LNC) offset a Q2 disappointment from MBIA Inc. (MBI 59.53 -0.63)...

Bonds have been somewhat volatile all morning despite a benign read on inflation, as the benchmark 10-year note is off 4 ticks to yield 4.32%... Consumer Discretionary has posted a modest gain, as a strong Q2 report from Comcast (CMCSA 31.15 +0.54), strong follow-through in eBay (EBAY 44.83 +1.22) and an extension of General Motors' (GM 37.19 +0.33) Employee Discount program have offset weakness in homebuilding... Industrials, however, remains the worst performing sector... Earlier, Tyco International (TYC 27.81 -3.01) and Masco (MAS 32.19 -1.43) both beat analysts' expectations by a penny, but downside guidance from each has weighed on the entire sector... DJTA +0.1, DJUA +2.0, DOT +0.7, Nasdaq 100 +1.0, Russell 2000 +0.3, SOX +2.2, S&P Midcap 400 +0.3, XOI +0.8, NYSE Adv/Dec 1927/1124, Nasdaq Adv/Dec 1584/1328

11:30AM : Stocks continue to hold their own and sport noticeable gains, spearheaded by widespread strength in Technology (+1.0%)... Sure, Utilities and Materials have so far turned in stronger performances of 1.5% and 1.3%, respectively, but even the two sectors combined only account for about 6.0% of the S&P, nearly one third of tech's influence on the broader market... Providing the bulk of support has been continued momentum in chip stocks amid several upbeat analyst comments about Maxim Integrated Product's (MXIM 45.27 +3.26) better than expected guidance...

A turnaround in Software, which had been weak all morning after Adobe Systems (ADBE 28.50 -0.96) failed to raise its Q3 outlook, has also improved sentiment... SOX +2.2, NYSE Adv/Dec 1877/1135, Nasdaq Adv/Dec 1529/1329

11:00AM : Holding steady at modestly higher levels as buyers remain an active bunch in the early going... Meanwhile, investors have recently sifted through another report from the Commerce Dept., as June factory orders rose 1.0%, in line with forecasts, while May's figure of +2.9% was revised to +3.6%... Durables orders were also revised upward, to +2.0% from +1.4%, on the heels of yesterday's July ISM new orders component (60.6) sitting at its strongest level of the year...

Even though the data reiterate that U.S. economic growth remains strong, the predictability of the report has had much less of an impact on trading than last month's stronger headline read of 2.9%...NYSE Adv/Dec 2031/899, Nasdaq Adv/Dec 1636/1148

10:30AM : Major indices continue to strengthen, perhaps taking a bullish cue from a turnaround in the Treasury market... Within the last 30 minutes, the 10-year note (+2/32) has inched into positive territory, catching a flight-to-quality bid amid reports of smoke pouring from bus in London, pushing benchmark yields back to around 4.3%... The reversal in bonds has helped the interest-rate sensitive Financial sector, which accounts for more than 20% of the weighting on the S&P, provide even more leadership to the upside... Benchmark yields were as high as 4.34% in early trading...NYSE Adv/Dec 1972/857, Nasdaq Adv/Dec 1629/1046

[54anickel]

40. Economists warn against Fed's policy

http://www.freep.com/money/business/housing2e_20050802.htm

snip>

The economists say the Fed must act for a simple reason: The United States has become so dependent on real estate and construction to fuel growth and jobs that an eventual, wrenching correction has the potential to sink the entire economy.


"Act now and cut off the pinky, or wait till later and risk slicing off the entire hand," Rosenberg said last week. "Either way it hurts, but you can still type with nine fingers."


Greenspan disagrees. While he said July 21 that home prices might be unsustainable in some regions of the United States, the Federal Open Market Committee he leads decided in June that it wouldn't use interest rates to address "possible mispricing," according to minutes of the meeting made public July 21.


Rosenberg credits housing with 40% of the 2.3 million jobs added since the 2001 recession. In a report to clients last week, Lehman Brothers Inc. said related industries accounted for more than a third of the nation's economic growth over the four quarters that ended in March. Fed data show appreciation helped add $5.2 trillion to consumers' balance sheets during the current expansion, or 68% of all wealth creation.

snip>

Roach recommends the Fed use its bully pulpit as a bank regulator to tighten lending practices. "We're in a dangerous place," he said.

more...

[54anickel]

41. Late-Stage Bull Markets - Overvaluation, Divergence and Speculation

http://www.hussmanfunds.com/wmc/wmc050801.htm

snip>

In recent weeks, one of the things that has constantly “felt funny” has been the disconnect between the NYSE advance-decline line, which has advanced persistently, and my subjective impression of market action from watching the behavior of individual stocks and industry groups day-by-day. Thankfully, my back doesn't start killing me when this happens. It's just that the A-D line has been looking strange, even “foreign” to me. Since I'm not a big fan of “analysis by feeling,” I've been asking myself whether there's objective evidence behind my discomfort with the cheery disposition of the A-D line. For reference, here's a chart (the NYSE advance-decline line is the running total of advancing issues minus declining issues each day on the New York Stock Exchange). Thanks to Bill Hester for his assistance preparing the data and graphics in this update.

The clear “look” of this chart is that the market is “in synch” and that there is no evidence of internal turbulence. Now, in late-stage bull markets, we tend to observe two events. One is a loss of what I call uniformity – breadth (on various measures such as the advance-decline line) typically “rolls over” and starts to diverge from the action of the major indices. The second is that we tend to observe what's called a “speculative blowoff,” as investors become increasingly impatient with anything but fast money.

Last week, it struck me that these two events might be occurring here, despite the “look” of the NYSE advance-decline line. Though my day-to-day observation of individual stocks gives me the impression that market internals are, in fact, divergent and sloppy, maybe the A-D line is masking that somehow. Maybe the strong advance-decline line isn't a picture of uniformity at all, but is being driven higher because investors and institutions are chasing performance in speculative stocks. Maybe the behavior of the A-D line has gotten mixed up with a small-cap “blowoff.”

How could you tell? You could explicitly separate the breadth of the largest stocks from the breadth of smaller ones. That insight is owed to Richard Russell, who in the late 90's devised a “big money breadth index” consisting only of the largest 10 stocks of the market, in order to focus on the behavior of the market's most dominant stocks during the bubble.

In the present case, we can look at the largest 30 stocks in the S&P 500, the 30 stocks in the Dow Industrials (only some which overlap the S&P 500 group), and the largest 30 stocks in the small-cap Russell 2000 index. If in fact, the market is “in synch,” we should observe the same basic uptrend in each of these groups that we observe for the NYSE advance-decline line as a whole. Instead, we observe nothing of the sort.

snip>

Rather than uniform strength, we've been observing persistent distribution in large capitalization stocks ever since December 2004. Large capitalization breadth has glaringly failed to confirm the recent advance. In effect, the apparent strength in market breadth is little more than a speculative chase after small-cap momentum. No matter that small caps are overextended – this is where the “fast money” wants to be.


more...

[ozymandius]

43. Jeebus! If the reliance is on small caps for the markets' momentum then

we could be looking at another dot-com crash. Different this time in that the tech bubble will not just bleed on everything else - the whole shebang would hemmorhage. "Fast money" is antithetical to a sustainable market.

[54anickel]

44. Yep, markets are looking very scary these days. More and more

risk being assumed in that search for a decent return.

[ozymandius]

42. 1:33

Dow 10,683.58 +60.43 (+0.57%)
Nasdaq 2,212.96 +17.58 (+0.80%)
S&P 500 1,242.61 +7.26 (+0.59%)
10-Yr Bond 43.34 +0.15 (+0.35%)
NYSE Volume 1,208,670,000
Nasdaq Volume 1,065,966,000

1:00PM: Major indices are off their highs but not even a retracement in Treasurys to earlier lows can take steam out of the soaring interest-rate sensitive Utilities sector... The 10-year note is up 6 ticks to yield 4.33%... Providing the latest spike in the group has been news that Dynegy (DYN 5.66 +0.13) will sell its Midstream natural gas business to Targa Resources for $2.5 bln in cash... Despite DYN's exclusion as one of the 15 most notable utility companies, the Dow Jones Utilities Index has just hit a new 4 1/2-year high... DJUA +2.3, NYSE Adv/Dec 2087/1049, Nasdaq Adv/Dec 1691/1286

[54anickel]

45. 2:39 and a bit of glitter has come off

Dow 10,667.90 +44.75 (+0.42%)
Nasdaq 2,210.98 +15.60 (+0.71%)
S&P 500 1,241.82 +6.47 (+0.52%)
10-yr Bond 43.24 +0.05 (+0.12%)
30-yr Bond 45.30 +0.20 (+0.44%)
NYSE Volume 1,471,086,000
Nasdaq Volume 1,298,139,000

2:30PM : Market retraces earlier highs, so far showing little reaction to the recent turnaround in oil prices... Preventing stocks from slipping on crude oil's ($61.85/bbl +$0.28) recent recovery effort has been leadership in the Energy sector, which accounts for roughly one third of the growth in aggregate Q2 earnings for the S&P... The Energy sector, which has hit another all-time high, is currently expected to turn in Q2 earnings growth of about 41%, well above the 13% growth forecasted on April 1...
The AMEX Oil index (XOI 962.16 +8.97), CBOE Oil Index (OIX 526.26 +4.61) and the PHLX Oil Service Sector Index (OSX 165.97 +2.44) all trade at historic record highs...NYSE Adv/Dec 2035/1161, Nasdaq Adv/Dec 1714/1334

2:00PM : Blue chip indices pull back a bit, losing ground amid a reversal in GM shares following July auto sales figures... General Motors (GM 36.44 -0.42), which had climbed earlier amid reports that it will extend its "Employee Discount for Everyone" incentive program through Sept. 6, has reported July U.S. sales growth of 20%, above Street expectations of between 14-18%, but well below last month's record 44% increase... Other auto makers in focus have been Ford Motor (F 10.86 +0.1), which reported a 29% increase in U.S. sales. versus an expected 23.5% rise, ending 13 straight months of declines...

Shares of DaimlerChrysler (DCX 50.34 +0.97) have surged after it posted a better than expected 32.0% in total adjusted sales, versus an estimated 20.1% increase...NYSE Adv/Dec 2073/1117, Nasdaq Adv/Dec 1674/1345

1:30PM : Little changed since the last update but market breadth still indicates a positive tone to trading... As reflected in the A/D line, advancers outpace decliners on the NYSE by a 20 to 11 margin while advancing issues on the Nasdaq hold a 16 to 13 edge over declining issues... A more than 2-to-1 ratio of up to down volumes, however, suggests an even more bullish bias at both the Big Board and the Composite...

Meanwhile, the Dow, S&P and Nasdaq continue to trade well above initial support levels as broad-based buying interest amid better than usual volume has left the major averages within striking distance of breaking through resistance near 10700, 1245 and 2219, respectively...NYSE Adv/Dec 2015/1139, Nasdaq Adv/Dec 1642/1347

[54anickel]

46. IPO Pipeline Percolating

At least 24 companies are scheduled to go public over the next two weeks--a marked difference from the 14 such launches in all of July.

Stephen Taub, CFO.com
August 02, 2005

http://www.cfo.com/article.cfm/4244042/c_4244141?f=homex_todayinfinance

At least two dozen companies are slated to go public in the next two weeks, according to The Wall Street Journal.

By way of contrast, just 14 companies launched IPOs in all of July. In June — the first month this year that the IPO market showed signs of coming alive — 20 companies issued stock for the first time, according to the paper. In the entire month of August 2004, 20 IPOs were also issued.

"The IPO market has significantly improved over the last couple of weeks, and transactions are trading better in the after-market," Craig Farr, co-head of U.S. equity capital markets for Citigroup Inc., told the newspaper. "At the same time, there's more appetite among portfolio managers to look at new transactions, because they'll have gotten through the earnings season."

Investors as well as issuers are encouraged by the fact that last week, five companies saw their stocks finish up after their first day of trading, according to the Journal. Indeed, more IPOs reportedly priced above their expected range in July than in any other month in 2005.

Two of the most anticipated IPOs in the next two weeks are likely to be Baidu.com Inc., a Chinese Internet-search engine that's sometimes compared with Google Inc., and WorldSpace Inc., an operator of satellite-based digital-radio services that was one of the founding shareholders of XM Satellite Radio Holdings Inc., according to the newspaper.

more...

[54anickel]

47. Washington Politics Shock Chinese

http://www.forbes.com/2005/08/02/china-takeover-cnooc-cx_pm_0802chinaoil.html

NEW YORK - Chengyu Fu, chief executive of the China National Offshore Oil Corp. (CNOOC), is shocked—shocked to find there is politics going on in Washington, and that it can derail takeover bids. The oil company, which is 70% owned by the Chinese government, has said it is dropping its $18.5 billion bid for California-based Unocal because of "the political environment in the U.S."

Critics of the bid contend the acquisition might imperil U.S. energy security, and a raft of legislation intended to derail it has been batted around both houses of the U.S. Congress.

CNOOC's (nyse: CEO - news - people ) withdrawal clears the way for Chevron (nyse: CVX - news - people ) to buy Unocal (nyse: UCL - news - people ) with a bid it raised last week to $17.4 billion from its original $16.7 billion. Free of a potentially six-to-nine month long and bruising regulatory review, that bid has been backed by the Unocal board ahead of a shareholder vote due Aug. 10.

But if to the winners go the spoils, then to the losers come a lot of questions. And China's attempts to expand its global corporate footprint through a series of high-profile, cross-bordermergers and acquisitionshas seen more losers in recent months than Beijing will have liked.

The big question they raise goes way beyond politics, even though there is no doubt that China is a sensitive nerve among the American public and politicians alike these days. That question is this: Just how good are Chinese companies at the global M&A game and especially when they run up, as they invariably must, against competing foreign bidders for whom this isn't the first time in the rodeo?

more...

[54anickel]

48. Closin' time - Shazammmm! 10,700 tomorrow?

Dow 10,683.74 +60.59 (+0.57%)
Nasdaq 2,218.15 +22.77 (+1.04%)
S&P 500 1,244.12 +8.77 (+0.71%)
10-yr Bond 4.336% +0.02
30-yr Bond 4.54% +0.03
NYSE Volume 2,042,801,000
Nasdaq Volume 1,771,013,000

Stocks closed higher across the board, led again by strength in tech, as the major averages showed resilience in the face of record oil prices, getting a lift from strong economic and earnings data... While today's reports overall were very good, lending further support for a 13th consecutive quarter of double-digit EPS growth, the market's focus continues to switch to the importance of key economic data, as the trend is already clear and participants gradually put Q2 in the rearview mirror...
June personal income rose 0.5% and personal spending rose 0.8%, both basically in line with economists' expectations; but the better news came from another encouraging read on inflation, as the core PCE deflator was unchanged, leaving core inflation up just 1.9% year over year... Another report from the Commerce Dept. garnering attention and reiterating strong economic growth was June factory orders, which rose 1.0% (consensus +1.0%), while May's figure of +2.9% was upwardly revised to +3.6%...

With regard to sector strength and weakness, the Utilities sector turned in the day's best performance, getting a boost following better than expected Q2 earnings from TXU Corp (TXU 89.43 +3.68) and PPL Corp (PPL 65.10 +3.73) as well as upside FY05 guidance from Sempra Energy (SRE 42.80 +0.78)... Also helping the Dow Jones Utilities Index close at a new 4 1/2-year high was a Goldman Sachs upgrade on Dominion Resources (D 77.10 +3.77) to Outperform... Energy also surged, benefiting from a late-day rebound in oil prices ($61.89/bbl +$0.32), better than expected earnings Transocean (RIG 59.65 +1.76) and Rowan Companies (RDC 35.00 +0.62) and Kinder Morgan's (KMI 94.73 +6.13) $3.1 bln bid to tap into Western Canada oil reserves...

The sector was also in focus all day as CNOOC Ltd.'s (CEO 73.49 +4.15) confirmed exodus from the Unocal (UCL 64.53 +0.16) bidding war cleared the way for Chevron's (CVX 59.56 +1.13) $17.5 bln deal to be completed next week... Providing the bulk of the leadership, however, was Technology, getting a huge boost from chip stocks... The PHLX Semi Index hit a new 52-week high following upbeat guidance from Maxim Integrated Products (MXIM 45.50 +3.49)... Tech also got a lift from a midday recovery in Software, as a 3.4% surge in shares of Microsoft (MSFT 26.81 +0.89) helped offset a discouraging Q3 outlook from Adobe Systems (ADBE 28.62 -0.84)...

The Materials sector also surged, finding support from a weaker dollar and upbeat analyst comments... Alcoa (AA 28.76 +0.85) and Phelps Dodge (PD 111.69 +3.69) were two of the sector's best performers, as a continued decline in the greenback made dollar-denominate commodities like aluminum and copper (which hit another record) more attractive... Also providing a boost to mining stocks was a sector upgrade at CSFB while steel stocks got an additional boost after Nucor (NUE 58.43 +2.76) was upgraded at Morgan Stanley to Overweight...

Even in the face of higher borrowing costs, Financial closed higher, as gains in brokerage (i.e. MWD, GS, LM), insurance (i.e. AIG, HIG, CINF, LNC, PGR) and offset a 57% decline in profits at Marsh & McLennan (MMC 28.56 -0.40) and a Q2 disappointment from MBIA Inc. (MBI 59.22 -0.94)... Despite a benign read on inflation, benchmark yields (4.33%) closed higher on the 10-year note (-5/32) for the third day in a row amid the likelihood of additional supply and fears of stronger than expected payrolls data on Friday...

Consumer Discretionary also posted a modest gain, as a strong Q2 report from Comcast (CMCSA 31.00 +0.39) and strong follow-through in eBay (EBAY 44.75 +1.14) offset weakness in homebuilding... The bulk of weakness in the PHLX Housing Sector Index (-0.2%), however, came not from a builder but from building products provider Masco (MAS 31.95 -1.67), which cut its FY05 EPS outlook... Auto makers were also in focus following July auto sales figures... General Motors (GM 36.53 -0.33), which extended its "Employee Discount for Everyone" incentive program through Sept. 6, reported July U.S. sales growth of 20% (consensus 14.6%) but below last month's record 44% increase...

Ford Motor (F 10.88 +0.03) reported a 29% increase in U.S. sales (consensus +23.5%), ending 13 consecutive months of declines, while DaimlerChrysler (DCX 50.75 +1.38) posted better than expected total adjusted sales growth of 32.0% (consensus +20.1%)... Industrials, however, finished lower, dragged down by a 9.6% drubbing in shares of Tyco International (TYC 27.86 -2.96), which beat analysts' Q3 estimates by a penny but issued downside Q4 and FY05 guidance... DJTA +0.2, DJUA +2.5, DOT +0.8, Nasdaq 100 +1.1, Russell 2000 +0.8, SOX +2.5, S&P Midcap 400 +0.5, XOI +1.2, NYSE Adv/Dec 2151/1113, Nasdaq Adv/Dec 1881/1215

3:30PM : With only a half hour left in the trading day, positive breadth figures and strong industry leadership to the upside continue to bode well for equities... Bonds, however, have extended recent weakness, as concerns of stronger than expected July payrolls data (out on Friday) and the likelihood of new debt offerings continued to weigh on the Treasury market... The benchmark 10-year note has finished off 5 ticks to yield 4.33%... NYSE Adv/Dec 2073/1148, Nasdaq Adv/Dec 1739/1343

3:00PM : Market continues to put together a solid advance as the indices hold steady at modestly higher levels... But even though the Dow and S&P have posted respectable gains of 0.5% and 0.6%, respectively, the Russell 2000 has again positioned itself going into the final hour of trading with a better performance (+0.7%)... Perhaps helping the Russell 2000 hit another historic high has been the recent rebound in oil prices, since small caps are less dependent on energy than large caps... NYSE Adv/Dec 2043/1167, Nasdaq Adv/Dec 1713/1341

Have a great evening :hi: