STOCK MARKET WATCH, Friday January 12

[ozymandius]

Friday January 12, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 738 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2208 DAYS
WHERE'S OSAMA BIN-LADEN? 1913 DAYS
DAYS SINCE ENRON COLLAPSE = 1874
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 7
Enron execs conveniently deceased = 3
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
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON January 11, 2007

Dow... 12,514.98 +72.82 (+0.59%)
Nasdaq... 2,484.85 +25.52 (+1.04%)
S&P 500... 1,423.82 +8.97 (+0.63%)
Gold future... 613.90 +0.50 (+0.08%)
30-Year Bond 4.82% +0.05 (+1.09%)
10-Yr Bond... 4.74% +0.06 (+1.17%)






GOLD, EURO, YEN, Loonie and Silver


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. Sorry, no new WrapUp today. n/t

[NC_Nurse]

2. Yeah, but the toon's great!

:)
Thanks for always starting out right!

[ozymandius]

4. Thank you.

I may recall that you're a fan of Pat Oliphant, right?

[ozymandius]

3. Today's Reports-a-plenty

8:30 AM Export Prices ex-ag. Dec
Briefing Forecast NA
Market Expects NA
Prior 0.1%

8:30 AM Import Prices ex-oil Dec
Briefing Forecast NA
Market Expects NA
Prior 0.7%

8:30 AM Retail Sales Dec
Briefing Forecast 0.7%
Market Expects 0.7%
Prior 1.0%

8:30 AM Retail Sales ex-auto Dec
Briefing Forecast 0.5%
Market Expects 0.5%
Prior 1.1%

10:00 AM Business Inventories Nov
Briefing Forecast 0.6%
Market Expects 0.3%
Prior 0.4%

2:00 PM Treasury Budget Dec
Briefing Forecast $40.0B
Market Expects $24.0B
Prior $11.2B

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

[UpInArms]

11. 8:30 reports:

01. U.S. Dec. imported natural gas prices rise 10.1%
8:30 AM ET, Jan 12, 2007 - 1 minute ago

02. U.S. Dec. non-petroleum import prices rise 0.4%
8:30 AM ET, Jan 12, 2007 - 1 minute ago

03. U.S. Dec. petroleum import prices rise 4.8%
8:30 AM ET, Jan 12, 2007 - 1 minute ago

04. U.S. Dec. import prices rise 0.2% excluding fuels
8:30 AM ET, Jan 12, 2007 - 1 minute ago

05. U.S. Dec. import prices rise 1.1% vs. 0.8% expected
8:30 AM ET, Jan 12, 2007 - 1 minute ago

06. U.S. retail sales up 6.0% in 2006, down from 6.9% in 2005
8:30 AM ET, Jan 12, 2007 - 1 minute ago

07. U.S. Dec. retail sales ex-auto and ex-gas up 0.7%
8:30 AM ET, Jan 12, 2007 - 1 minute ago

08. U.S. Dec. retail sales ex-gasoline up 0.6%
8:30 AM ET, Jan 12, 2007 - 1 minute ago

09. U.S. Nov. retail sales revised to up 0.6% vs 1.0 prev
8:30 AM ET, Jan 12, 2007 - 1 minute ago

10. U.S. Dec. retail sales ex-autos up 1.0% vs 0.5% expected
8:30 AM ET, Jan 12, 2007 - 1 minute ago

11. U.S. Dec retail sales gain highest since July
8:30 AM ET, Jan 12, 2007 - 1 minute ago

12. U.S. Dec. retail sales up 0.9% vs 0.7% expected
8:30 AM ET, Jan 12, 2007 - 1 minute ago

[UpInArms]

13. Business inventories up 0.4% in November

http://www.marketwatch.com/news/story/economic-report-us-business-inventories/story.aspx?guid=%7B8E4D0E49%2D4326%2D45E9%2DBC8E%2D361FAAD895DA%7D

WASHINGTON (MarketWatch) -- U.S. business inventories remained at a high level relative to sales in November, data released Friday by the Commerce Department showed.

U.S. business inventories increased 0.4% in November, while sales rose 0.5%.

The inventory-to-sales ratio held steady at 1.30 in November for the second consecutive month. This is the highest ratio seen since February 2005.

The rise in inventories was slightly above estimates. Economists surveyed by MarketWatch had expected inventories to rise 0.3% in November. See Economic Calendar.

Sales are up 4.0% in the past year, while inventories are up 6.9%. The figures are not adjusted for price changes. Read full report.

The monthly inventory report rarely moves financial markets. Its main interest is to economists, who need the data to fill in some of the blanks on their quarterly growth forecasts.

<snip>

Total wholesale inventories rose 1.3% in November, while manufacturing inventories climbed 0.2%.

...more...

[54anickel]

16. U.S. Treasury Yields Highest Since October After Sales Data

http://www.bloomberg.com/apps/news?pid=20601087&sid=aABC..pgkrqs&refer=worldwide

Jan. 12 (Bloomberg) -- U.S. Treasuries fell, pushing yields to the highest since October, after a stronger-than-forecast retail sales report prompted traders to pare bets that the Federal Reserve will lower interest rates this year.

Benchmark 10-year notes fell for a sixth straight day in reaction to the latest sign that the U.S. economy is growing fast enough to keep Fed policy makers worried about inflation. The slump is the longest since June 2006 when 10-year yields rose for nine consecutive days, their worst stretch since 1974.

``The U.S. economy is continuing to show more impressive results that what's generally been the consensus in the marketplace,'' said Daniel Shackelford, part of a group that manages $10 billion at T. Rowe Price Group Inc. in Baltimore.

snip>

Ten-year yields extended their climb from a 10-month low of 4.40 percent on Dec. 1 as crude oil futures fell more than 7 percent for a second straight week, a harbinger of lower fuel costs for companies and consumers. Also this week, an index of mortgage applications surged, challenging forecasts that last year's residential real estate slump will deepen this year and curb consumer spending.

``The view coming into this year was that we are going to see significant growth deceleration,'' said Amitabh Arora, head of U.S. interest-rate strategy at Lehman Brothers Holdings Inc. in New York, one of the 22 primary U.S. government securities dealers that trade with the central bank. ``Consistently strong growth data, particularly on the consumption side, undermines that view.''

Boosting Estimates

Economists at primary dealers Lehman Brothers and Barclays Capital Inc. today raised their estimates of fourth-quarter U.S. economic growth. Lehman Brothers lifted its estimate to 3.3 percent from 2 percent. Barclays raised its forecast to 2.5 percent from 2 percent.

more...

[ozymandius]

5. Oil prices rebound above $52 a barrel

LONDON - Oil prices rose more than $1 a barrel Friday as traders bought up contracts after a plunge in the previous session sent crude to its lowest price in more than a year and a half.

Light, sweet crude for February delivery gained $1.01 to $52.89 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract had fallen $2.14 to settle at $51.88 a barrel on Thursday after touching a low of $51.80 a barrel, a level not seen since May 2005.

Brent crude on London's ICE Futures exchange rose $1.05 to $52.75 a barrel.

"We can expect some short-covering before the weekend. Therefore, it's possible to rebound to $53 (a barrel)," said Ken Hasegawa, a broker at Himawari CX in Tokyo. In short-covering, traders who had expected an even steeper decline in prices are forced to buy back their positions.

http://news.yahoo.com/s/ap/20070112/ap_on_bi_ge/oil_prices_76

[ozymandius]

6. Oil price worries tanking

Fears of superhigh-priced oil, including petroleum reaching $100 a barrel, are receding, at least for now, as crude's cost continues to plunge.

Petroleum prices started falling last autumn and have yet to stabilize, bringing cheaper gasoline and a small but welcome boost to the economy.

-cut-

A slowing U.S. economy also has dampened demand. Meanwhile, natural gas and oil production lost from Hurricane Katrina in 2005 has been restored, while producers here and around the globe have upped output.

Motorists have yet to see the full benefit, as gasoline prices traditionally fall more slowly than they rise. But a gallon of regular gasoline in Chicago sold for an average of $2.338 on Wednesday, according to the AAA auto club. In August it hit a record $3.287 a gallon.

http://www.chicagotribune.com/business/chi-0701110054jan11,0,2556753.story?coll=chi-business-hed

[Tandalayo_Scheisskopf]

10. Inevitable.

A big tanking always seems to follow an over-speculated oil market. Look for more drops, as the hedge funds run for the hills and the small speculators get crushed.

[UpInArms]

7. (sometimes daily) dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DX&v=i

Last trade 85.23 Change -0.05 (-0.06%)

Dollar Put In Motion By Surprise Rate Hike In UK

http://www.dailyfx.com/story/currency/eur_news/Dollar_Put_In_Motion_By_1168548488327.html

Interest rates and capital flows dominated the dollar’s day Thursday, even though there was no Fed meeting or market-moving indicator on deck. Instead, traders took their cue from rate decisions in Europe and the United Kingdom to weigh the value of the greenback. And, for those that believed these two events were outside the scope of the other majors, the volatility felt throughout the dollar lot presented an opportunity lost.

For the benchmark EURUSD, an initial 40-point rally to 1.3020 quickly reversed course with a 135-point plunge that cleared out many of the major support levels technical traders were banking on. Holding true to its large negative correlation, the Swiss franc started with a 60-point slide to 1.2410 before climbing all the way to 1.2510. Enjoying the biggest surprise for the day, GBPUSD was launched from an Asian session low around 1.9325 on a 210-point rally to 1.9535 before profit-taking led to a substantial retracement. Finally, the Japanese yen put up little fight to the dollar as the pair took out big resistance on a move to 120.65.

Few traders were expecting volatility outside of the EURUSD and GBPUSD Thursday morning. However, the interconnectivity of the currency market proved too strong. With the questions of if and when the Federal Reserve will move to cut interest rates in the US, the sensitivity to the carry has increased. The differential in short-term interest rates between the dollar and the British pound has essentially been cut to zero. Catching the currency market off guard, the Bank of England decided to hike the nation’s overnight lending rate by 25 basis points to 5.25 percent. This means there are now two liquid currencies that can be used interchangeably for the buy side of a carry trade. However, expectations for future rate policy will continue to play its part in direction. On this front, futures show the market expects the Fed to eventually cut rates, while the Monetary Policy Committee is favored for a second hike before the end of the quarter.

...more...

US Dollar (USD) Rally Now Contingent Upon Retail Sales

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar__USD__Rally_Now_1168551989195.html

US Dollar - It has been a very exciting trading day today and for once, the news flow was not dominated by US data. Everyone in the FX market was focused on the developments across the Atlantic, which we cover in more detail in our Euro commentary. In the US, we look ahead to the retail sales report on Friday, which is probably the single most important piece of data this week. After the strong non-farm payrolls report last week, many economists have revised their retail sales forecasts upwards on the belief that a strong labor market should translate into healthy holiday spending. Given the lines that we have seen in late November, December and even January for hot items such as the new game consoles by Sony and Nintendo, we doubt that consumer spending during the holiday season could have been that weak. In addition, the stabilization in the housing market and the warm weather should also help to fuel spending. Import prices are also due for release with a projected up tick due to a rebound in oil prices. One way or the other, tomorrow’s economic releases will probably not do much to sway the Federal Reserve from their stable monetary policy. Even though Federal Reserve Presidents Bies and Geithner refrained from speaking directly about interest rates, they were both fairly optimistic about the economy. According to the Fed fund futures, the odds are next to zero for a first quarter rate cut at the moment and there is still a less than 50 percent chance of a cut in the first half of the year. The sharp drop in jobless claims below 300k confirms the health of the labor market, which is helping to boost the US dollar. All the market needs now to take us back into the summer of 2006 trading range is a strong retail sales report.

...more...

[54anickel]

18. So, the dollar supposedly dropped this morning due to profit taking?

That's the only "explaination" I can find so far. :shrug:

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=edac6763-09b6-4a43-8efe-92fd987ed2c5

"The retail sales report was solid. It suggests that the Federal Reserve's assessment of strength in the economy is turning out to be more accurate than the bond market's expectation of weakness," said Alan Gayle, senior investment strategist, TrustCo Capital Management in Richmond, Virginia.

U.S. Treasury debt prices were lower, with the benchmark 10-year note <US10YT=RR> down 7/32 to yield 4.77 percent. The 2-year note <US2YT=RR> was down 2/32, with the yield at 4.89 percent. The 30-year bond <US30YT=RR> was down 17/32, with the yield at 4.86 percent.

snip>

The dollar briefly jumped after the retail sales data, but soon fell from a 1-1/2-month high against the euro as traders sought to lock in profits after a three-day rally and ahead of the long weekend.


http://quotes.ino.com/chart/?s=NYBOT_DX&v=s

Last trade 85.01 Change -0.27 (-0.32%)

Settle Time 13:00 Open 85.29

Previous Close 85.28 High 85.40

Low 84.93 2007-01-12 12:43:21, 30 min delay

[ozymandius]

8. Stocks flat ahead of retail sales report

LONDON - U.S. stock futures were little moved on Friday ahead of the release of figures on December retail sales, while shares of Advanced Micro Devices looked set to tumble after the Intel rival warned fourth-quarter profit and sales wouldn't grow as fast as analysts had predicted.

S&P 500 futures edged down 0.8 of a point at 1,430.10 and Nasdaq 100 futures eased 0.25 points at 1,849.50. Dow industrial futures slipped 2 points.

-cut-

Also in focus on Friday will be data on December's retail sales, which probably rose 0.7 percent, or 0.5 percent when excluding auto sales. Also to be released will be figures on import prices in December and business inventories in November.

Boston Fed President Cathy Minehan, who's about to become a voting member of the FOMC, is due to speak on the economic outlook.

http://news.yahoo.com/s/ap/20070112/ap_on_bi_st_ma_re/wall_street_214

[ozymandius]

9. Have a wonderful day and a fabulous weekend!

:donut: :donut: :donut:

Time to go to work. I'll check in when all's said-n-done.

Ozy :hi:

[AnneD]

17. Morning Marketeers......

:donut:and lurkers. Thanks guys for kickin' the tires and lightin' the fires.

How things are playing in Peoria...or "Hanging with my Fogies"

I love where I live. I am one of the younger out there. I got a kick out of these folks. Right now we have a lot of snow birds. They are fairly well to do retired professional. The other day, I was in the Rec Room and Bush came on to give the SOTU speech. My God at the cat calls until the channel was changed. It was music to my ears. I guess Bush can write of this group. I love hanging with my fogies.

Happy Hunting and watch out for the bears.

[texpatriot2004]

12. K & R nm

[Roland99]

14. Lunchtime numbers

DJIA 12,548.38 +33.40 +0.27%
Nasdaq 2,494.79 +9.94 +0.40%
S&P 500 1,428.72 +4.90 +0.34%
Dow Util 446.16 -2.03 -0.45%
NYSE 9,123.49 +60.40 +0.67%
AMEX 2,056.83 +19.26 +0.95%
Russell 2000 791.23 +2.78 +0.35%
Semcond 478.99 -3.37 -0.70%
Gold future 619.30 +5.40 +0.88%
30-Year Bond 4.86% +0.03 +0.71%
10-Year Bond 4.77% +0.03 +0.68%

Treasury yields have been slowly climbing back toward 5%.

[54anickel]

15. Gold Rises on Speculation of Inflation, Jewelry-Related Buying

http://www.bloomberg.com/apps/news?pid=20601012&sid=alD02A1Z22yc&refer=commodities

Jan. 12 (Bloomberg) -- Gold rose in London, heading for a weekly gain, on higher jewelry purchases and speculation that investment demand may rise because of accelerating inflation.

The Bank of England yesterday cited expectations of quickening inflation when it raised its benchmark interest rate to a five-year high of 5.25 percent. Gold rose to a record $850 in 1980 when the U.K. benchmark rate was at 17 percent.

``People are concerned about rising prices,'' said Mario Innecco, a futures broker specializing in precious metals and fixed income at Man Financial Ltd. in London. ``Investors would buy gold to protect their purchasing power.''

snip>

The metal is heading for a weekly gain even as the dollar climbed against the euro. Gold often moves in the opposite direction to the dollar.

`A lot of people are confused because there has been no connection the last few days,'' said David Gornall, head of bullion and foreign exchange in London at Natexis Commodity Markets. The market is getting support because of jewelry-related purchase from India, the world's biggest gold buyer, he said.

snip>

The dollar's gains may be temporary after widespread criticism of President George W. Bush's decision to add troops to Iraq, Innecco said.

``If the U.S. government is losing support at home, that means it's losing credibility and that could hurt the dollar,'' he said.

more...

[54anickel]

19. Low volatility does not equal low credit risk

http://www.prudentbear.com/articles/show/128

snip>

The value of underlying assets underpinning derivatives contracts is estimated to exceed $200 trillion and is still rapidly growing. To be sure that value is extremely unlikely to represent the value of counter-party financial obligations (for the world would literally have to end for that to happen). But nonetheless, we can safely assume that a small percentage of that amount would represent the value of counter-party financial obligations. Even if that percentage were as low as 1%, this would represent a value of $2 trillion, which by itself is a staggering number. The key thing to remember is that number will swell up into a value of several trillion more than that should financial market volatility increase.

There is one new category of derivative that appears to be particularly problematic. That being what we call the credit derivative. This instrument entails someone selling credit protection on the debts of a corporation in exchange for a premium paid. We can call this credit insurance if you will. The problem with this type of derivative is that the notional underlying value is 100% at risk, for if the company defaults on its debts, the "losing" derivatives counter-party will be required to pay the entire amount of the notional value of the derivatives contract (rather than a small percentage as is the case with most other types of derivatives). What that means is when statistics of total credit derivatives contracts outstanding are disclosed amounting to several trillion dollars, it is literally the entire value of that which is at risk.

The overwhelmingly predominant use of derivatives today is for the purpose of protecting against changes in interest rates. It appears that roughly 90% of total derivatives contracts outstanding today are interest rate related. When attempting to ascertain what kind of event would place the derivatives system under particular stress, it would appear that it would likely be an interest rate dislocation in the bond market. And what might result in such an interest rate dislocation?

Foreigners currently own in excess of 50% of all outstanding tradable US Treasury securities on the market (which is the product of a prolonged period of growing US trade deficits which necessitated borrowing from the rest of the world in order to fulfill excessive consumption requirements). If foreigners were to lose confidence in the strength and stability of the US economy, they will be motivated to withdraw their capital from the US financial market. This would result in a liquidation of their investments in US Treasuries and put great upward pressure on interest rates. As we have observed repeatedly and with remarkable consistency with countries dependent on external borrowing in the past, when foreign investors start to lose confidence in the borrowing country's economy, this has resulted in a "snowball" effect, whereby each foreign investor tries to anticipate the other one in trying to withdraw their capital from the borrowing country (in order to avoid further losses due to currency depreciation resulting from other investors withdrawing their capital before them). The outcome has generally been sharply rising interest rates simultaneously accompanied by a sharp decline in the value of the borrowing country's currency.

The second flawed element of our risk redistribution mechanism pertains to asset-backed securities in that they are dependent on credit rating agencies to measure the credit risk for the lender (investor) and assign a credit rating to the security. There is a division of labour implicit in the asset-backed security. The original lender is no longer assigned the task of assessing the credit-worthiness of the borrower (as was formerly the case when banks were the primary conduit of credit in the past). In the past, the fear of credit loss ensured that the bank was very diligent in assessing credit risk. This responsibility has now been delegated to a credit rating agency.

more...

[54anickel]

20. It's time for a new approach when it comes to deciphering Fed

http://www.suntimes.com/business/currency/206362,CST-FIN-Terry11.savagearticle

snip>

Greenspan came to represent the Fed's power over the economy, steering a course through the 2000 stock market crash, the post-9/11 economic slowdown, and even the housing bubble. How did he do it? As long as he was successful, no one much cared whether he used a divining rod, a Geiger counter or some secret economic calculations.


In fact, a few economists did care that there seemed to be no objective way to target inflation and to understand Fed policy in reaction to the monthly inflation numbers.

In 1999, Ben Bernanke and three other economists wrote a book called Inflation Targeting: Lessons From the International Experience. The purpose of the book was to point out a way to actually "target" an appropriate inflation rate, and then craft a policy that would not lock the Fed into an arbitrary interest rate scenario. They also proposed that the Fed could target inflation rates without impacting its other important responsibility: maintaining employment.
Fast forward to today, and that same Ben Bernanke is now Fed chairman. One of the other authors of that book is now a Fed governor. And so a new era dawns in Fed-watching.

Forget the smoke rings and the mutterings of the oracle. Get ready for inflation targeting. And, more specifically, get ready for OLIR. That's shorthand for Optimal Long-run Inflation Rate. According to well-known economist Edward Yardeni, "The OLIR is the long-run inflation rate that achieves the best average economic performance over time with respect to both the inflation and output objectives."

snip>

As in every era, Fed watchers will now have to learn some new tricks. Instead of watching the money supply, or wondering when the fed funds rate will change, Wall Street will have to ferret out the components of that OLIR target, and try to predict how long the Fed's patience can be stretched.

more...

[54anickel]

21. AMT: Keep it or kill it, you'll pay for it

Everyone with a pulse in D.C. says they want to fix the alternative minimum tax. But there will be a price to pay whether the fix is temporary or permanent.

http://money.cnn.com/2007/01/11/pf/taxes/amt_reform_options/index.htm?postversion=2007011112

NEW YORK (CNNMoney.com) -- If lawmakers repeal or fix the alternative minimum tax (AMT), taxpayers are likely to foot the bill, even if tax rates aren't raised explicitly.

Taxpayers with high incomes and taxpayers who live in high-tax states may be among those who bear the biggest burden, depending on which "fixes" are chosen. And if none are chosen, middle-income taxpayers will take a hit.

Take away AMT or just reduce its impact, and suddenly the U.S. deficit looks a whole lot worse. That's because federal budget projections are based on current law, under which the AMT is scheduled to bring in an estimated $1 trillion during the next 10 years.

"That's even real money in Washington," said Clint Stretch, managing principal of tax policy at Deloitte Tax LLP.

The AMT is easy to hate. First imposed in 1969 on the wealthy few to ensure they pay tax, it now threatens to catch tens of millions of taxpayers who are not wealthy. That's because the AMT disallows key breaks such as the state and local income tax deduction and child tax credits, and its exemption levels were never indexed for inflation.

If nothing is done, 23 million taxpayers will be hit with AMT in 2007, and 39 million by 2017, according to the Tax Policy Center. That assumes President Bush's tax cuts expire as scheduled in 2010. If they're made permanent, 53 million taxpayers will be hit up by 2017.

more...

[AnneD]

22. Consumers see brighter future in 2007

WASHINGTON — Consumers greeted the new year in a much more optimistic frame of mind, with their confidence rising to a nearly one-year high in January.

And, their outlook for the economy's prospects and their own financial situations over the next six months turned considerably brighter. This improvement comes after a long, angst-ridden period about future economic activity.

<snip>
That's particularly important because this measure, which had turned negative after the deadly Gulf Coast hurricanes in the fall of 2005, had been pretty much mired in a weak zone ever since.

"I think it's very impressive that the expectations component, which was stuck in the mud for quite a while, took a noticeable leap," said Stuart Hoffman, chief economist at PNC Financial Services Group. "This is a bullet through the heart of the doomsday crowd."


http://www.chron.com/disp/story.mpl/ap/business/4466140.html

All it takes is one good hurricane or a change in the interest rate to turn it on it's ear...another suprised eCONomist blames it on the weather:eyes:

[54anickel]

36. Let's see how it holds up now that Idgit has banged the war bongo again.

Next month's numbers may reveal some interesting insights into the consumer mindset no matter which way the numbers go. WOnder if confidence drops while spending increases. Afterall, post 911 we have been conditioned..."when the going gets tough, the tough go shopping". :eyes:

[54anickel]

23. The impending private equity pile up

http://www.dailyreckoning.co.uk/article/110120073.html

Private equity is not just an accident waiting to happen. It’s more like financial joyriding. The enthusiastic drivers are new to the game, but have turbocharged their returns with high-octane debt. They don’t know whether an economic downturn is around the corner, but it won’t take much of one to send them skidding into disaster. The trouble is that bystanders are likely to get caught up in the carnage.

snip>

To see where the danger lies we need to delve a little into the intricacies of private equity and its advantages over public equity. At one level it’s quite simple. The interest cost of debt is deducted from taxable profits. The same is not true of dividends. Giving up PlC status has its attractions for senior management too, with the insistent calls from analysts and journalists, the grind of quarterly or half yearly earnings expectations, and increasingly onerous governance requirements. In a private firm, managers can concentrate on operational matters to the exclusion of all else.

However, while that might describe some of the permanent advantages, the real driving force is a temporary one. We are at a juncture where financing is cheap and corporate balance sheets healthy relative to share prices. As brokers Credit Suisse have noted, the gap between the earnings cash flow yield on US shares and the corporate bond yield is three percentage points wider than its historic norm. That leaves an awful lot of room to make money, and if you are a private equity capitalist, why put your own money down when you can borrow it so cheaply?

Loading up the target company with debt is easy when its existing borrowings are low, hence the attractions of healthy balance sheets. However, when private equity firms have finished doing their work, the companies are often obese with debt. Take Debenhams, which was refloated in May at a value of £1.7bn. This is about the same as it was bought out for in 2003, but what buyers were getting this year was less firm and way more debt than they had previously owned. The private equity firms which bought Debenhams sold off its entire property portfolio, covering 23 freehold stores, to British Land in February 2005 for £495m. It now pays market rents on all its property. Despite this cash infusion, borrowings have soared from £100m in 2003 to £1.8bn. This wasn’t just the purchase cost, £1.3bn of the borrowings were to pay the private equity owners an early dividend uncovered by existing cash flows, well before their actual exit in May.

The cocaine of private equity

This process is known as a leveraged recapitalisation, and is about as sensible as remortgaging your home to go on a lavish holiday. Nevertheless, according to credit agency Standard & Poors, it had been used in 63 buyouts worth a total $25bn in the first eight months of 2006, including Burger King, MGM, Eutelsat and CoralEurobet. Though dangerous, it is so tempting to issuers that one US buyout chief described it “the cocaine of private equity”. The high-yield payment-in-kind paper is attractive to buyers because of its potential income, and big fees offered to investment banks means that it has been heavily marketed to hedge funds. These in turn can book much of the profits up front.

There are other little tricks the private equity firms have up their sleeves. One is that having raised cash through sale and leaseback, they offer generous long-lease terms to the freehold buyers which commits the occupier to onerous rent increases for years into the future but maximises the upfront take. The private equity firms don’t care because they plan to exit after a couple of years and sell, as in the case of Debenhams, back to a gullible investing public.

more...

[Ghost Dog]

41. Who Rules the United States?

http://www.thepeoplesvoice.org/cgi-bin/blogs/voices.php/2007/01/12/p13638#more13638
James Petras

In the broadest and deepest sense, understanding how the US political system functions, the decisions of war and peace are taken, who gets what, how and why, requires that we address the question of ‘Who rules the United States?’ In tackling the question of ‘ruling’ one needs to clarify a great deal of misunderstandings, particularly the confusion between those who make governmental decisions and the socio-economic institutional parameters which define the interests to be served.

...

Ascendancy of Financial Capital

‘Finance capital’ has many faces and cannot be understood without reference to specific sectors. Investment banks, pension funds, hedge funds, savings and loan banks, investment funds are only a few of the operative managers of a multi-trillion dollar economy. Moreover each of these sectors have specialized departments engaged in particular types of speculative-financial activity including commodity and currency, trading, consulting and managing acquisition and mergers. Despite a few exposés, court cases, fines and an occasional jailing, the financial sector writes its rules, controls its regulators and has secured license to speculate on everything, everywhere and all the time. They have created the framework or universe in which all other economic activities (manufacturing, retail sales and real estate) take place.

‘Finance capital’ is not an isolated sector and cannot be counterposed to the ‘productive economy’ except in the most marginal ‘local activity’. In large part finance capital interacts with and is the essential driving force in real estate speculation, agro-business, commodity production and manufacturing activity. To a large degree ‘market prices’ are as influenced by speculative intervention as they are by ‘supply and demand’. Equally important, the entire architecture of the ‘paper empire’ (the entire complex of inter-related financial investments) is ultimately dependent on the production of goods and services. The structure of power and wealth takes the form of an inverted triangle in which a vast army of workers, peasants and salary employees produce value which becomes the basis for near and remote, simple and exotic, lucrative and speculative financial instruments. The transfer of value from the productive activities of labor up through the ladder and branches of financial instruments is carried out through various vehicles: direct financial ownership of enterprises, credit, debt leveraging, buyouts and mergers. The tendency of ‘productive capitalists’ is to start-up an enterprise, innovate, exploit labor, capture markets and then ‘sell-out’ or go ‘public’ (stock offerings). The financial sector acts as combined intermediary, manager, proxy-purchaser and consultant, capturing substantial fees and expanding their economic empires and… preparing the way to higher levels of acquisitions and mergers… ‘Finance capital’ is the midwife of the concentration and centralization of wealth and capital as well as the direct owner of the means of production and distribution. From exacting a larger and larger ‘tribute’ or ‘rent’ (commission or fee) on each large-scale capital transaction, ‘finance capital’ has moved toward penetrating and controlling an enormous array of economic activities, transferring capital across national and sectoral boundaries, extracting profits and dumping shares according to the business, product and profit cycle.

Within the ruling class, the financial elite is the most parasitical component and exceeds the corporate bosses (CEOs) and most entrepreneurs in wealth and annual payments. It falls short of the annual income and assets of the super-rich entrepreneurs like William Gates and Michael Dell.

The financial ruling class is internally stratified into three sub-groups: at the top are big private equity bankers and hedge-fund managers, followed by the Wall Street chief executives, who in turn are above the next rung of senior associate or vice-presidents of a big private equity funds who is followed by their counterparts at Wall Street’s public equity funds. Top hedge fund managers and executive have made $1 billion dollars or more a year – several times what the CEO’s make at publicly traded investment houses. For example in 2006 Lloyd Blankfein, CEO of Goldman Sachs, was paid $53.4 million, while Dan Ochs, executive of the hedge fund Och-Ziff Capital paid himself $220 million dollars. That same year the Morgan Stanley CEO received $40 million dollars, while the chief executive of the hedge fund Citadel was paid over $300 million dollars.

/continues...

[Joe Chi Minh]

24. Hilarious cartoon... until you realise the jokes on us...!

[citizen snips]

25. Dow, Nasdaq Rise in Midafternoon Trading

NEW YORK (AP) -- Wall Street rebounded from an early loss Friday, sending the Dow Jones industrials into record territory as investors embraced robust economic data and shrugged off several profit warnings. Bond prices fell on concerns about interest rates.

Stocks held gains after trading erratically throughout the morning following a profit warning from chip maker Advanced Micro Devices Inc. that shook some confidence from a market that hit highs on Thursday. However, continued low oil prices and a migration by investors into technology stocks helped drive buying in the current session.

The market also advanced on a Commerce Department report that retail sales rose in December at their strongest pace in five months -- an indication that holiday sales might have turned out better than expected. The Labor Department said December import prices climbed 1.1 percent in its largest increase since May.

The reports were another signal that the economy remains healthy, and could persuade central bankers to keep interest rates where they are. Stock and bond investors have been hoping the Fed might lower rates in the near future.

more...
http://biz.yahoo.com/ap/070112/wall_street.html?.v=32

[citizen snips]

26. Oil Prices Rebound Above $52 a Barrel

NEW YORK (AP) -- Oil prices rebounded above $52 a barrel Friday, as the possibility of more production cuts by OPEC incited traders to take the market's recent plunge as a buying opportunity.

If crude oil keeps climbing in the coming weeks, it could mean that drivers won't see the market's recent plunge reflected in gasoline prices, which have fallen by about six cents, on average, since the year started.

Oil distributors are loathe to cut retail costs too much based on short-term fluctuations in the market -- the market price of crude would have to stay at current levels for consumers to see significant savings at the gas station.

"Prices at the pump have only inched down, even though prices at the wholesale level have fallen down dramatically," said James Cordier, president of Liberty Trading Group in Tampa, Fla. "The oil companies are holding their premiums, and then some."

more...
http://biz.yahoo.com/ap/070112/oil_prices.html?.v=13

[citizen snips]

27. Supreme Court Accepts Philip Morris Case

WASHINGTON (AP) -- The Supreme Court agreed Friday to consider whether tobacco companies can be protected from state court judgments since cigarettes are regulated by the federal government.

In one of four appeals accepted Friday, justices had been asked to decide whether lawsuits that accuse cigarette-makers of wrongdoing can be shifted out of state court and into federal court, under a special provision.

That's what happened in Arkansas, where Philip Morris was sued in a class-action case claiming that the company violated state law in marketing its "light" cigarettes. The suit claimed the cigarettes were more dangerous than the company advertised. Tobacco companies have faced similar suits around the country.

The suit covered people who used Marlboro Lights and Cambridge Lights.

more...
http://biz.yahoo.com/ap/070112/scotus_smoker_suits.html?.v=2

[citizen snips]

28. Walt Disney Hits New 52-Week High

NEW YORK (AP) -- Media conglomerate Walt Disney Co., which operates television networks, theme parks, and a film studio, hit a new 52-week high on Friday.

Shares added 7 cents to $35.06 in afternoon trading after earlier in the day hitting a new 52-week high of $35.16 on the New York Stock Exchange. Previously, the stock traded in a 52-week range between $24.90 to $35.03, and is up 36 percent in the same period.

Credit Suisse analyst William B. Drewry in a client note dated Thursday reiterated an "Outperform" rating on the stock.

The analyst noted that Disney Chief Executive Bob Iger earlier this week gave a keynote address at the International Consumer Electronics Show in Las Vegas, and emphasized the company's focus on technology, including online partnerships and online content distribution.

more...
http://biz.yahoo.com/ap/070112/walt_disney_mover.html?.v=1

[citizen snips]

29. Holiday Sales Rise 4.4 Percent

NEW YORK (AP) -- The National Retail Federation announced Friday that holiday sales rose 4.4 percent from the year-ago period, below the 5 percent forecast.

The holiday results, which encompass the November-December period, came up short amid the Commerce Department's downward revision of November sales, announced Friday.

"Unseasonably warmer weather and the slower housing market had a clear impact on consumer spending," said NRF chief economist Rosalind Wells, in a statement.

According to the NRF, the results, which exclude automobiles, gas stations, and restaurants, rose 3.9 percent unadjusted for December over last year and increased 0.4 percent seasonally adjusted from November. But November's sales compared to a year ago were revised down from 6.3 percent unadjusted to 5.1 percent unadjusted.

more...
http://biz.yahoo.com/ap/070112/apfn_holiday_sales.html?.v=1

[citizen snips]

30. AMD, Napster Among Wall Street's Movers

NEW YORK (AP) -- Stocks that were moving substantially or trading heavily Friday on the New York Stock Exchange and Nasdaq Stock Market:

NYSE

Advanced Micro Devices, down $2.06 at $18.12.

The microprocessor maker warned falling prices for computer chips would hurt fourth-quarter results.

Owens-Illinois Inc., up $1.45 at $21.59.

The maker of glass bottles and other products announced it was considering the sale of its plastics business, which produces prescription bottles, tamperproof closures and medical devices.

more...
http://biz.yahoo.com/ap/070112/wall_street_stocks.html?.v=2

[citizen snips]

31. House Approves Medicare Reform Measure

WASHINGTON (AP) -- The House approved legislation Friday requiring the government to negotiate with drug companies over the price of medicines for Medicare participants.

Despite a veto threat from the president, Democrats used their majority status to push through another of House Speaker Nancy Pelosi's priorities for the first 100 hours of the new Congress. The vote was 255-170, mostly along party lines.

The idea behind the bill is using the sheer size of the Medicare program to generate steeper discounts than private insurance plans can muster.

"Forty-three million people can have the purchasing power to perhaps encourage these drug houses to give the government and the American retirees a better price," said the bill's author, Rep. John Dingell, D-Mich.

more...
http://biz.yahoo.com/ap/070112/medicare_drugs.html?.v=1

[citizen snips]

32. Baker Panel to Report on BP Refineries

HOUSTON (AP) -- A report on BP PLC's U.S. refinery operations, twice delayed, is expected to be released Tuesday, a spokesman for the panel said Friday.

The scheduling of the news conference comes on the same day that BP Chief Executive John Browne announced that he would retire at the end of June. He will be succeeded by Tony Hayward, the head of exploration and production, the company said Friday.

Browne, who has headed BP since 1998, said last July that he would retire from BP, one of the world's largest oil companies, at the end of 2008.

BP asked former U.S. Secretary of State James A. Baker III to review its refinery operations after the company was heavily criticized for its U.S. operations after a unit of its Texas City refinery exploded in March 2005, killing 15 and injuring more than 70 others.

more...
http://biz.yahoo.com/ap/070112/apfn_bp_baker_report.html?.v=1

[citizen snips]

33. Report: Feds Probes Jobs' Options Grant

SAN FRANCISCO (AP) -- Federal investigators are still examining whether any of the accounting shenanigans at Apple rose to the level of criminal behavior, according to a news report, even though the company has cleared CEO Steve Jobs and all current executives of any wrongdoing in an internal stock options backdating probe.

Federal authorities are actively investigating the circumstances surrounding one award to Jobs for options on 7.5 million shares, an award that carried a false October 2001 date when it was actually approved in December of that year, The Wall Street Journal reported Friday, citing anonymous sources.

The Journal also reported that investigators with the U.S. Attorney's Office in San Francisco and the Securities and Exchange Commission are trying to question a former Apple Inc. lawyer, Wendy Howell, who was in charge of stock-option administration and was quietly dismissed last month.

Howell is believed to have falsified documents related to Jobs' grant, the Journal reported, citing the anonymous sources. Her lawyer, Thomas Carlucci, did not immediately return a phone call from The Associated Press early Friday.

more...
http://biz.yahoo.com/ap/070112/apple_options.html?.v=7

[citizen snips]

34. U.S. stocks rise as energy, techs join forces

NEW YORK (MarketWatch) - U.S. stocks were rising towards a higher close for the session and the week on Friday, as gaining energy shares helped fuel positive momentum while technology shares remained the favored destination for investors, even after a profit-warning from Advanced Micro Devices Inc.

Stronger-than-expected December retail sales were also being weighed by bulls and bears.

On the one hand, they might hint at a resilient consumer and economy, and on the other, they might prevent the Federal Reserve from cutting interest rates as early as some had hoped to stave off a slowdown.

"Everybody has been focusing on how soon the Fed can cut interest rates but the bond market might be signaling that this day might be postponed," said Ken Tower, chief market strategist at Cyber Trader. Still, "signs of economic strength are good overall for the

more...
http://biz.yahoo.com/cbsm-top/070112/81928cee23dc99db2ec3ee775f163f72.html?.v=1

[citizen snips]

35. Corporate Bond Market Not Seen Slowing

NEW YORK (AP) -- Corporate bondholders had a pretty good 2006 -- less risky debt such as investment-grade corporate bonds were in demand as robust company profits made these investments a pretty safe bet. Analysts believe that trend will continue in 2007.

Corporate bonds rallied last year as companies tapped the debt markets to raise cash because interest rates were relatively low despite two years of rate hikes. And investors were encouraged that defaults were less likely as companies like the Standard & Poor's 500 reported solid earnings.

"There still seems to be very strong demand," said Sharon Stark, chief strategist with Stifel Nicholas. "The U.S. bond market is the deepest in the world, and we're seeing a combination of demand from a lot of the mutual funds and pension funds."

While investment-grade bonds did well last year in a strong economy, Wall Street typically turns to these investments along with Treasury issues when economic conditions begin to sour. Signs of inflation, high unemployment, and waning corporate profits drive investors to the more steady -- though lower -- returns seen in the bond market.

more...
http://biz.yahoo.com/ap/070112/market_spotlight_bonds.html?.v=1

[citizen snips]

37. Dow Ends Up 41 on Robust Economic Data

NEW YORK (AP) -- Wall Street rebounded from an early loss Friday to send the Dow Jones industrials to their second straight record close as investors embraced robust economic data and shrugged off several profit warnings. Bond prices fell on concerns about interest rates.

Stocks held on to their gains despite a profit warning from chip maker Advanced Micro Devices Inc. The market also got a boost from lower oil prices and a migration into technology stocks.

Another catalyst was a Commerce Department report that retail sales rose in December at their strongest pace in five months -- an indication that holiday sales might have turned out better than expected. The Labor Department said December import prices climbed 1.1 percent in its largest increase since May.

The reports were another signal that the economy remains healthy, and could persuade central bankers to keep interest rates where they are. Stock and bond investors have been hoping the Fed might lower rates in the near future.

more...
http://biz.yahoo.com/ap/070112/wall_street.html?.v=39

[citizen snips]

38. Report: Sony Sold 490,700 PS3s in U.S.

LOS ANGELES (AP) -- Sony Corp., beset by supply issues, sold 490,700 PlayStation 3 game consoles in the United States in December, according to figures research firm NPD Group released Thursday.

Combined with NPD's earlier estimate of PS3 sales in November, that indicates Sony sold 687,700 PS3s from the Nov. 17 U.S. launch to the end of the year.

Sony has said it shipped 1 million PS3s to North America in 2006, but that figure includes Mexico and Canada, and some of the units may not have reached stores in time to be sold.

NPD said Microsoft Corp. sold 1.1 million of its competing Xbox 360 console in December, while Nintendo Co. sold 604,200 units of its new console, the Wii. Like Sony, Nintendo contended with supply shortages.

more...
http://biz.yahoo.com/ap/070112/video_game_sales.html?.v=4

[citizen snips]

39. S&P Leaders & Laggards: LSI, IPG, AMD

NEW YORK (AP) -- A third straight day of gains made LSI Logic Corp. the biggest gainer Friday on the S&P 500.

The index finished up 6.69, at 1430.51.

Semiconductor maker LSI was upgraded to "Above Average" by Caris & Co. Thursday. On Friday, shares picked up 55 cents, or 5.6 percent, to end the session at $10.39.

Shares of King Pharmaceuticals Inc. gained 83 cents, or 5.1 percent, to end at $17.12.

Citigroup analyst John Hill initiated coverage of Peabody Energy Corp. with a "Buy" rating and $48 price target. Peabody stock rose $1.77, or 4.6 percent, to end at $40.

more...
http://biz.yahoo.com/ap/070112/leaders_12.html?.v=1

[54anickel]

40. Zimbabwe: Reserve Bank Fails to Pay Gold Producers Forex

http://allafrica.com/stories/200701120729.html

THE Reserve Bank of Zimbabwe has since last October failed to remit foreign currency payments to gold producers in a development that saw gold production plummeting to record lows in the last quarter of the year.

The situation in the gold sector is so dire that some producers who closed for the Christmas break have indicated that they will not re-open their mines until they receive their payments from the central bank.


Mining sources said most gold mines were operating at below 40% of capacity owing to a myriad problems, chief among them an overvalued currency, unsupportive monetary policy system and power outages. The failure to pay the producers on time has added to their woes resulting in miners cutting back production further by at least 30% in the last quarter of last year.

The miners under the Zimbabwe Chamber of Mines, together with officials from the Mines ministry, have since September held meetings with the Reserve Bank to try and resolve the crisis but to no avail.

One such meeting was held last Thursday but there has not been any development yet.

more...

[54anickel]

42. Mopping up for the weekend

Dow 12,556.08 41.10 (0.33%)
Nasdaq 2,502.82 17.97 (0.72%)
S&P 500 1,430.73 6.91 (0.49%)
10-yr Bond 4.7710% 0.0340
30-yr Bond 4.8610% 0.0390
NYSE Volume 2,745,721,000
Nasdaq Volume 2,192,165,000

4:20 pm : More evidence that a soft landing for the U.S. economy remains on track helped extend Thursday's broad-based buying efforts. The Dow finished in record territory again while the Nasdaq hit a new six-year high.

December retail sales checking in with their biggest gain (+0.9%) since July - providing further evidence that the consumer is alive and kicking - was the biggest reason behind Friday's impressive follow-through effort. Retail sales (ex-autos) were also stronger than economists expected, rising 1.0% - the largest increase since January. Not only did the data alleviate concerns about the slowdown in housing curtailing consumption, but the absence of significant weakness increased the likelihood that Q4 GDP estimates will be revised higher.

Of the eight sectors closing in positive territory, Energy led the charge (+2.6%). The return of Energy's leadership, following four straight down days that had the sector down 3.5% for the week and off more than 8% already this year, more than acted as an offset to the 2.1% bounce in oil prices.

After plunging 13% so far this year and selling off over the last four days, a rebound of some sort in oil prices was not a big surprise. It is also worth noting that oil was still down nearly 6% for the week and is 33% below record levels reached last July.

Materials turned in the day's second best performance; but its 1.1% advance still didn't provide as much support as continued upward momentum in Technology. The more influential sector was in focus Friday after Advanced Micro Devices (AMD 18.27 -1.91) said Q4 revenue will miss expectations. AMD's warning prompted several analyst downgrades and initially renewed concerns about earnings prospects of other chip makers.

However, ongoing fears of missing out on an extended tech rally overshadowed AMD's expected revenue shortfall. Case in point, rival Intel (INTC 22.13 +0.21) was down as much as 1.4%, but the stock, which is also a recommended holding in the Briefing.com Active Portfolio, bounced back to close up nearly 1%. Fellow Dow component and tech bellwether Hewlett-Packard (HPQ 43.57 +0.93), which is a big beneficiary of the ongoing price wars between AMD and Intel, surged 2.2% to a multi-year high.

Building on Thursday's impressive 3.5% advance, Microsoft (MSFT 31.21 +0.51) hitting a new 4 1/2-year high also lent notable support for all three major averages for a second straight day. DJ30 +41.10 NASDAQ +17.97 SP500 +6.91 NASDAQ Dec/Adv/Vol 1147/1900/2.15 bln NYSE Dec/Adv/Vol 1113/2140/1.50 bln

3:30 pm : The bulls remain in control of the action with only a half hour left to go in this year's first full trading week. Helping to keep all three major averages on pace to record their best weekly finish in about two months has been another multi-year high on the very stock that carries a lot of weight on all three -- Microsoft (MSFT 31.32 +0.62). Nasdaq-listed Microsoft, a Dow component that also ranks as the fourth most influential constituent on the S&P 500, is tacking a 2.0% gain onto yesterday's impressive 3.5% advance. The Dow is on pace to close at a new all-time high for a second straight day and its 24th record close since October.DJ30 +41.57 NASDAQ +16.24 SP500 +6.87 NASDAQ Dec/Adv/Vol 1238/1791/1.80 bln NYSE Dec/Adv/Vol 1158/2066/1.20 bln

3:00 pm : Stocks are settling back into their relatively narrow afternoon trading ranges. The market's holding pattern has been further evidenced in the A/D line, as advancers on the NYSE still hold the same 20-to-11 edge over decliners they've enjoyed for the last three hours. Those on the Nasdaq maintain a smaller 16-to-13 advantage, but that ratio too has barely changed all afternoon. Diminishing volumes going into the close, as trading desks continue to empty early ahead of the long holiday weekend, also underscore the fairly sideways action seen in stocks throughout most of the afternoon. DJ30 +31.32 NASDAQ +11.46 SP500 +5.31 NASDAQ Dec/Adv/Vol 1350/1664/1.67 bln NYSE Dec/Adv/Vol 1196/2013/1.11 bln

2:30 pm : The major averages are pulling back from their best levels, but remain comfortably above the unchanged mark. A recent reversal in Consumer Staples removes some notable leadership. After hitting a new all-time high in each of the last four trading sessions. Altria Group (MO 88.69 -0.71) is succumbing to some modest profit taking. Oil prices retracing their highest levels of the day and eclipsing $53/bbl heading into the close of trading on NYMEX, without further upside momentum in energy stocks, is also taking some of the steam out of today's follow-through efforts. DJ30 +31.24 NASDAQ +10.64 SP500 +5.35 NASDAQ Dec/Adv/Vol 1303/1688/1.53 bln NYSE Dec/Adv/Vol 1138/2044/1.01 bln

2:00 pm : The market continues to hold its own in positive territory, showing little reaction to oil prices recently hitting session highs. Within the last 30 minutes, oil prices were up more than 2.0%. However, with the commodity still down more than 6% this week (down 33% from record levels last July), and with a rebound of some sort not a big surprise, subsequent leadership in the Energy sector (+2.1%) is acting as a notable offset to oil's recovery.DJ30 +38.25 NASDAQ +13.15 SP500 +6.79 XOI +2.8% NASDAQ Dec/Adv/Vol 1301/1695/1.45 bln NYSE Dec/Adv/Vol 1146/2004/946 mln

1:30 pm : Stocks continue to sport solid gains as Minehan refrains from commenting on the rate outlook, more or less echoing the speech she made last week. No ensuing direction from bonds, since the Treasury market closed early ahead of the long holiday weekend, also highlights why stocks have barely budged since the last update. As a reminder, both the U.S. equities and bond markets will be closed Monday in observance of Martin Luther King Jr. day.DJ30 +41.42 NASDAQ +14.38 SP500 +6.70 NASDAQ Dec/Adv/Vol 1188/1747/1.34 bln NYSE Dec/Adv/Vol 1102/2083/872 mln

1:00 pm : Buyers continue to show their resolve as the major averages make fresh session highs. Nine out of 10 economic sectors now trading higher further underscores what is finally shaping up to be a more convincing move to the upside. Upcoming testimony from Boston Fed President Cathy Minehan, who is a voting Fed official this year and is typically dovish, may also be acting as a source of market support.DJ30 +42.98 NASDAQ +15.98 SP500 +7.21 NASDAQ Dec/Adv/Vol 1228/1701/1.21 bln NYSE Dec/Adv/Vol 1138/2012/780 mln

12:30 pm : The indices enter the afternoon trading session extending their reach to the upside. As has been the case during the first two weeks of this year, the Nasdaq is pacing the way higher (+0.4%). It is worth noting, though, that tech is not necessarily the biggest reason behind its outperformance today. Much of the tech-heavy Composite's strength is actually coming from Biotech (e.g. AMGN +1.9%, BIIB +1.2%), Broadcasting & Cable (e.g. CMCSA +1.7%), Human Resources (e.g. MNST +2.1%), Transports (e.g. EXPD +1.8%) and Retail (e.g. SHLD +1.5%, ROST +2.6%).DJ30 +34.36 NASDAQ +10.83 SP500 +4.87 NASDAQ Dec/Adv/Vol 1265/1639/1.08 bln NYSE Dec/Adv/Vol 1158/2001/700 mln

12:00 pm : Stocks are trading near session highs midday, but there is not a whole lot of conviction on the part of buyers as investors juggle a strong retail sales report with another warning in the tech sector.

Before the bell, retail sales for December checked in with their biggest gain (+0.9%) since July. Sales (ex-autos) were also stronger than economists expected, rising 1.0% -- the largest increase since January. Not only have the data eased concerns about weakness in housing curtailing consumption but the absence of significant weakness may even lead to upward revisions to Q4 GDP estimates.

Be that as it may, the data also all but rule out a Fed rate cut anytime soon. Those concerns are weighing on Treasuries and preventing an even more persuasive follow-through effort in stocks on the heels of yesterday's broad-based rally. The 10-year note is down 8 ticks to yield 4.76%, an 11-week high.

Of the eight sectors trading to the upside, the fact that oil prices aren't selling off again is helping Energy turn in today's best performance (+1.5%). ConocoPhillips (COP 63.42 +1.60) is leading the sector's recovery effort after announcing plans to repurchase as much as $1.0 bln in stock. The return of Energy's leadership following four straight down days is being applauded, especially since Materials (+1.0%) and Telecom (+0.7%) -- the two least influential of the 10 S&P 500 sectors, are the only other areas sporting strong gains.

A recent turnaround in Technology is certainly noteworthy. Dow component Hewlett-Packard (HPQ 43.43 +0.79) surging nearly 2% to a new multi-year high is providing the bulk of recent sector support. Tech was under modest selling pressure most of the morning after Advanced Micro Devices (AMD 17.79 -2.38) said Q4 revenues will miss expectations. The chip maker's warning has prompted several analyst downgrades, is weighing on rival Intel (INTC 21.77 -0.15), and has renewed worries about earnings prospects throughout the influential sector.

If tech companies start lowering forecasts, it will pull the rug out from under what many expect to be a leading sector this year. Notable weakness in Apple (AAPL 94.87 -0.93), this week's biggest tech story (+12.6%) is another reason keeping intraday gains on this year's best performing S&P 500 sector at a minimum. BTK +0.8% DJ30 +23.52 DJTA +0.8% DJUA -0.5% DOT +0.2% NASDAQ +7.62 NQ100 +0.3% R2K +0.3% SOX -0.5% SP400 +0.4% SP500 +3.99 XOI +2.1% NASDAQ Dec/Adv/Vol 1257/1610/930 mln NYSE Dec/Adv/Vol 1179/1889/602 mln