STOCK MARKET WATCH, Friday January 26

[54anickel]

Friday January 26, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 724 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2222 DAYS
WHERE'S OSAMA BIN-LADEN? 1927 DAYS
DAYS SINCE ENRON COLLAPSE = 1888
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 August 22, 2006

Dow 12,573.22 48.55 (0.38%)
Nasdaq 2,449.76 16.52 (0.67%)
S&P 500 1,432.27 7.86 (0.55%)
10-yr Bond 4.86% 0.05
30-yr Bond 4.95% 0.04






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

[54anickel]

1. Today's Market WrapUp - Martin Goldberg

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

HUI and the Homebuilders

Both the Gold Bugs ($HUI) and the Dow Jones Home Construction ($DJUSHB) indices are now in critical stages of their technical chart patterns. The technical chart patterns of homebuilders, which are in a long term bear market, suggest a bear market rally nearing completion if it is not already done. The $HUI is in a long term bull market, but the intermediate term action suggests continuation of a corrective pattern.

Looking at the $HUI first, below is the long term picture showing the proposed Elliott Wave pattern in blue roman numerals referenced many times before. Wave I was completed in 5 red sub-waves occurring from late 2000 to late 2003. The $HUI then went into a long term corrective pattern (Wave II) lasting from late 2003 to the summer of 2005. Wave III began in the summer of 2005 whereby Wave 1 within Wave III began in the summer of 2005 and ended in early 2006. Wave 2 of Wave III so far has been a wild and difficult correction to trade, as the $HUI has zigzagged between a wide range between 275 and 400. Although proposed Wave 3 of Wave III promises to be a rapidly profitable phase of the bull market, deciding when it gets underway has been, and is likely to be a significant technical challenge.

snip>

Today’s Market

Today was marked by a distribution day throughout the entire stock market. As suggested by Marc Faber in the Newshour interview (a must read or hear),

“If the emerging markets start to perform badly after their strong outperformance it’s kind of the canary in the coal mine. In other words, that would be the first signal that liquidity is somewhat tightening.”

Of course, one day does not a market make, but it is notable that while the major US indices were down sharply by today’s standards, the emerging markets ETF was down over three percent.

The DJ Home Construction Index was down by 3.25 percent and in spite of the rip-roaring Goldman Sachs upgrade, most of these stocks sit upon their weekly lows. We now are approaching Superbowl Sunday, the completion of which marks the beginning of the residential selling season in the temperate parts of the US. Clearly the Goldman Sachs upgrade was designed to get investors to look past ’07 – quite a task for a market that appears to discount only the next day’s press release.

more...

[54anickel]

2. Good morning Marketeers.

Hopefully everything is OK with Ozy and he's just had connection problems this morning. I've not heard anything from him. I will keep him in my thoughts today and send good vibes his way. I'll try to fill in best I can, sorry so late. :hangover: Gotta go get my coffee.....

[silverlib]

5. Good morning and thanks 54anickel!

I, too, hope Ozy is okay. It's strange to not wake up to Ozy with my cup of coffee. Thanks for filling in. (I even kicked yesterday's thread this morning for purely selfish reasons.

[54anickel]

8. Heh-heh, I saw your kick. It didn't register at first. I thought to my self -

"52 posts already? Am I that late?!" Then I caught the date and went searching for today's thread. Thank you for kicking yesterday's or it might have been a while before I realized there wasn't one for today. :hi:

[Systematic Chaos]

7. Another K&R for Ozymandius from a religious lurker in this thread.

I hope he's okay too. This thread is one of my mainstays on DU during the weekdays, and the funny thing is I haven't a freaking penny to invest other than the possibility of picking up ounces of silver here and there (which I think I should start doing from the looks of it). :)

[54anickel]

14. Thank you Gentle Giant. I'm sure Ozy will appreciate all the

well-wishes and/or prayers.

Silver was on sale last month. My B-I-L was going to sell a bunch of old silver half-dollars for his mother. When he was at the shop there were guys there buying on the dip, so he hesitiated. He called me and asked what I thought. I didn't really know what to tell him - no crystal ball here - but I did offer to take some off his hands for a wee-bit more than the shop offered him. :evilgrin: He decided to hold out for a while - looks like that might have been a good bet. It's not so much that I'm a PM bug, I'm just still hedging against the buck....it's a shame in a way, since a bet against the buck is really a bet against my own best interest. It's also a bet against a pretty damned powerful group. Roll them dice!!!


Gold, silver stocks, ETFs can bolster portfolios
http://www.thestar.com/Business/article/175061

Gold bugs invest in gold for what they perceive as financial security in the event of a currency devaluation. They remember the great German hyperinflation of 1923, when workers were paid twice a day and given half-hour breaks to rush to the shops with their satchels, suitcases or wheelbarrow to buy something, anything, before their paper money halved in value yet again.

Gold bugs view gold as a safe investment that will protect them from currency fluctuations or downturns in the financial markets.

Today, gold bugs also view gold as a safe alternative to a falling U.S. dollar. That's because gold is priced in U.S. dollars and gold tends to move in the opposite direction to the dollar's rise and fall.

Gold got off to a shaky start this year as the U.S. dollar rallied through December and into the first seven trading days of January, in spite of worsening U.S. trade and budget deficits.

Most reasonable people know that over the long term every currency will decline – mostly due to economic growth and the inflation that accompanies growth. The central banks tend to fear disinflation more than inflation, and so monetary policy is directed to controlling rising prices and avoiding falling prices.

snip>

The gold component is a distinct asset class that tends to operate in a counter-cyclical price movement to the other assets in the portfolio.

As such, it is a hedge in case some capital event triggers selling across the broader equity markets.

snip>

A final observation: don't overlook the silver complex. This group could provide greater upside if we get another gold rush, but make sure you can handle the volatility.

more...

[nitpicker]

3. Interest rate worries.

Stocks fall after home sales report
Fri Jan 26, 2007 10:27am ET

NEW YORK (Reuters) - U.S. stocks fell on Friday after data showing stronger-than-expected new home sales last month raised concern about the outlook for interest rates.

A rise in crude oil prices added to the negative tone.

The Dow Jones industrial average <.DJI> was down 39.57 points, or 0.32 percent, at 12,462.99. The Standard & Poor's 500 Index <.SPX> was down 5.25 points, or 0.37 percent, at 1,418.65. The Nasdaq Composite Index <.IXIC> was down 13.30 points, or 0.55 percent, at 2,420.94.
(snip)

[54anickel]

4. Today's reports

Jan 26 8:30 AM Durable Orders Dec
Jan 26 10:00 AM New Home Sales Dec

http://biz.yahoo.com/c/ec/200704.html

[54anickel]

6. Durable orders up 3.1% on broad-based gains

Orders excluding transportation up 2.3%, best since March

http://www.marketwatch.com/news/story/durable-orders-up-31-broad-based/story.aspx?guid=%7BD58F8182-0069-46C7-9F2F-A80B8096FAF2%7D

WASHINGTON (MarketWatch) -- Orders for durable goods jumped by 3.1% in December, led by stronger demand for airplanes and capital equipment, the Commerce Department reported Friday.

Orders for new durable manufactured goods increased in most sectors, from autos to machinery, last month. The report confirms other data showing the nation's manufacturing sector regained some momentum as the year ended after encountering a soft patch earlier in the fall.

The report "was surprisingly strong and was a welcome turnaround," wrote Marisa DiNatale, an economist for Moody's Economy.com. She warned, however, that improvement could be choppy in 2007. "Manufacturers will need to work off excess inventories, which are still a problem in a several industries."

"The trend is one of weakening growth," said Josh Shapiro, chief economist for MFR Inc.
The December increase was largely in line with economists' expectations of a 3.5% gain after taking into account a small upward revision made in November's orders, to 2.2%. See Economic Calendar.

Treasurys sold after the release, lifting yields as traders continue to adjust to stronger economic data.

snip>

Orders for core capital equipment -- the kind of goods producers invest in to build their productive capacity -- rose 2.4% in December, also the biggest gain since March and the first increase since September. For 2006, core capital equipment orders rose 9%.

But one economist wasn't impressed by the gains, saying the 2.4% jump in core orders only reversed half of the losses in earlier months.

"The monthly data are hugely noisy," wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics, in an email. "The trends here are not good." Core capital equipment orders fell at a 6.2% annualized pace in the quarter, he said.

more...

[nitpicker]

9. More market commentary.

http://hosting.briefing.com/Reuters/MarketAnalysis/StockMarketUpdate.htm

Stock Market Update
1 min ago
As evidenced by the Nasdaq recently (albeit briefly) inching into positive territory and a narrower spread between decliners and advancers, sentiment has improved since the last update. Aside from strength in Systems Software (+1.0%), as Microsoft's (MSFT 30.80 +0.35) upbeat Q2 report renews optimism about tech's growth prospects, a sense that other areas in tech are oversold is also giving the influential sector a boost. Semiconductor Equipment, one of this year's worst performing S&P industry groups (-3.9%) as of yesterday's close, ranks as today's second best performer (+1.8%). ..SOX +1.8%.
31 min ago
Just as the market was anticipating, a stronger than expected housing report has taken an added toll on the market. All three indices have extended their reach to the downside after the Commerce Dept. showed new home sales rose a healthy 4.8% in December to 1.12 mln, the highest level since April, leaving some investors fearing the worst -- that the Fed's next move may actually be to tighten.

However, further analysis of the report, which also showed a decline in monthly inventories, a drop in median home prices and an upward revision to November's numbers, also serves as a reminder that the worst may be over for housing, which has been reflected in a modest bounce from morning lows. The housing report is a net positive for stocks, it just depends on whether investors will decide to return their focus to "good" news instead of questionably "bad" news.

1 hr 1 min ago
Early recovery efforts are short lived as added nervousness sets in ahead of another update on housing, especially in the wake of yesterday's existing home sales report. As a reminder, existing homes sales may account for the majority of (about 85%) the U.S. housing market, but new home sales, which will be out momentarily, are recorded when a contract is actually signed and are considered a timelier gauge of the housing market. More evidence of stabilization in housing is an overall positive for the economy and further sidelines the worst of recession fears; but too strong a number will also further diminish hopes of a Fed rate cut anytime soon and likely weaken an already clearly shaky sentiment about owning equities at current levels.
1 hr 21 min ago
Not surprising, the on-again, off-again trading pattern that has driven the stock market of late has stocks bouncing back following yesterday's sell-off. Providing a boost to all three major averages is Microsoft (MSFT 31.20 +0.75), which is up 2.5% after topping Wall Street expectations on strong sales last night. Fellow Dow component Caterpillar (CAT 61.02 +1.39) is surging 2.3% after issuing upside sales guidance for 2007 and following data that showed manufacturing activity gained some steam heading into the end of 2006.

Earlier, the Commerce Dept. showed that durable goods orders jumped 3.1% in December. Excluding transportation, orders rose 2.3% -- the first rise since September and the best increase since March, while non-defense orders (ex-trans) rose 2.4% after a few months of decline. The rebound reflects a solid underlying trend in orders that will add to the steady growth in consumer spending to help the economy get back on track.

[54anickel]

11. New-home sales strong in December, but post 17.3% drop for 2006

http://www.usatoday.com/money/economy/housing/2007-01-26-new-homes_x.htm?POE=NEWISVA

WASHINGTON (Reuters) — Sales of new homes rose 4.8% in December and prices climbed 1.2% as the number of homes on the market decreased, but for the year, the Commerce Department said 1.061 million new homes were sold, down 17.3% from 2005.

While Friday's report showed some firming in the weakened housing sector in December. The year's drop was the biggest in 16 years and the first annual decline after a five-year rally.

In December, sales of new single-family homes rose to a 1.120 million unit annual rate after climbing sharply the previous month. The department revised November 's sales pace up to a 1.069 million pace from an originally reported 1.047 million unit rate.

While those increases were better than expected, analysts cautioned that they were influenced by unusually warm weather in those two months.

The number of new homes on the market at the end of December fell to 537,000 from 542,000 a month earlier. At the current sales pace, that represented 5.9 months' supply.

The median home price — half sold for more, half for less — rose to $235,000 in December from a downwardly revised $232,200 in November, the Commerce Department said.

more...

[54anickel]

10. 11:05 and time to check the numbers - awww, and here the futures were

looking so bright and shiny.

Dow 12,465.79 36.77 (0.29%)
Nasdaq 2,431.69 2.55 (0.10%)
S&P 500 1,420.36 3.54 (0.25%)
10-yr Bond 4.8750% 0.0080
30-yr Bond 4.9710% 0.0090
NYSE Volume 804,452,000
Nasdaq Volume 738,616,000

11:00 am : As evidenced by the Nasdaq recently (albeit briefly) inching into positive territory and a narrower spread between decliners and advancers, sentiment has improved since the last update. Aside from strength in Systems Software (+1.0%), as Microsoft's (MSFT 30.80 +0.35) upbeat Q2 report renews optimism about tech's growth prospects, a sense that other areas in tech are oversold is also giving the influential sector a boost. Semiconductor Equipment, one of this year's worst performing S&P industry groups (-3.9%) as of yesterday's close, ranks as today's second best performer (+1.8%). DJ30 -30.77 NASDAQ -1.07 SOX +1.8% SP500 -2.60 NASDAQ Dec/Adv/Vol 1505/1202/624 mln NYSE Dec/Adv/Vol 1664/1315/360 mln

10:30 am : Just as the market was anticipating, a stronger than expected housing report has taken an added toll on the market. All three indices have extended their reach to the downside after the Commerce Dept. showed new home sales rose a healthy 4.8% in December to 1.12 mln, the highest level since April, leaving some investors fearing the worst -- that the Fed's next move may actually be to tighten.

However, further analysis of the report, which also showed a decline in monthly inventories, a drop in median home prices and an upward revision to November's numbers, also serves as a reminder that the worst may be over for housing, which has been reflected in a modest bounce from morning lows. The housing report is a net positive for stocks, it just depends on whether investors will decide to return their focus to "good" news instead of questionably "bad" news. DJ30 -28.84 NASDAQ -6.38 SP500 -2.90 NASDAQ Dec/Adv/Vol 1749/922/456 mln NYSE Dec/Adv/Vol 1807/1116/252 mln

10:00 am : Early recovery efforts are short lived as added nervousness sets in ahead of another update on housing, especially in the wake of yesterday's existing home sales report. As a reminder, existing homes sales may account for the majority of (about 85%) the U.S. housing market, but new home sales, which will be out momentarily, are recorded when a contract is actually signed and are considered a timelier gauge of the housing market. More evidence of stabilization in housing is an overall positive for the economy and further sidelines the worst of recession fears; but too strong a number will also further diminish hopes of a Fed rate cut anytime soon and likely weaken an already clearly shaky sentiment about owning equities at current levels.DJ30 -8.09 NASDAQ -9.91 SP500 -1.56 NASDAQ Dec/Adv/Vol 1232/1209/168 mln NYSE Dec/Adv/Vol 1118/1497/72 mln

09:40 am : Not surprising, the on-again, off-again trading pattern that has driven the stock market of late has stocks bouncing back following yesterday's sell-off. Providing a boost to all three major averages is Microsoft (MSFT 31.20 +0.75), which is up 2.5% after topping Wall Street expectations on strong sales last night. Fellow Dow component Caterpillar (CAT 61.02 +1.39) is surging 2.3% after issuing upside sales guidance for 2007 and following data that showed manufacturing activity gained some steam heading into the end of 2006.

Earlier, the Commerce Dept. showed that durable goods orders jumped 3.1% in December. Excluding transportation, orders rose 2.3% -- the first rise since September and the best increase since March, while non-defense orders (ex-trans) rose 2.4% after a few months of decline. The rebound reflects a solid underlying trend in orders that will add to the steady growth in consumer spending to help the economy get back on track.DJ30 +15.78 NASDAQ +5.61 SP500 +2.28 NASDAQ Vol 92 mln NYSE Vol 48 mln

09:15 am : S&P futures vs fair value: +3.0. Nasdaq futures vs fair value: +6.0.

09:00 am : S&P futures vs fair value: +3.4. Nasdaq futures vs fair value: +6.0. Still shaping up to be an upbeat start to end the week as futures trade continues to improve heading into the opening bell. Recent evidence that underlying business investment trends are picking up after a few soft months is providing some reassurance. A sense that yesterday's broad-based sell-off may have been an overreaction, especially on the heels of Microsoft's solid quarter and further analysis of Caterpillar's Q4 report which also offered upside FY07 sales guidance, are also contributing to an improved underlying tone.

08:33 am : S&P futures vs fair value: +1.8. Nasdaq futures vs fair value: +4.5. Durable Orders rose 3.1% in December (consensus 3.5%), given a large jump in aircraft orders. Non-defense capital goods orders excluding transportation, which provide a clearer read on underlying business capital investment, also rose a healthy 2.4%. Futures trade has strengthened following the data and now point to a modestly higher start for the cash market. Bonds, though, have weakened, pushing the yield on the 10-yr note (-7/32) to 4.90%.

08:00 am : S&P futures vs fair value: +0.1. Nasdaq futures vs fair value: -0.8. Early indications are pointing to a relatively flat start for stocks. Meanwhile, Microsoft (MSFT) topped Wall Street expectations last night, but the stock's 2.0% advance in pre-market trading is being offset by an analyst downgrade on Cisco Systems (CSCO) and an earnings shortfall from Amgen (AMGN); Nasdaq 100 futures are slightly below fair value.

Caterpillar (CAT) missing forecasts and fellow Dow component Honeywell (HON) merely matching expectations also underpin a cautionary stance as equity traders again find themselves looking for "incoming" economic data and ensuing actin in Treasuries to set a more definitive tone to today's action. Dec. Durable Orders will be up first (8:30 ET) to provide an update on the health of business investment while New Home Sales will be closely monitored (10:00 ET), especially after yesterday's Existing Home Sales, for further evidence of stabilization in the housing market.

[silverlib]

12. Halliburton 4th QTR down 40%

Time for Iran.

Link to kpete OP

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x45073

[54anickel]

15. WHAT?!?!? This has to be related to the spin-off of KBR or something.

That went through didn't it? I've gotta go do some digging......

[54anickel]

16. Halliburton Profit Falls After Year-Earlier Tax Gain (Update4)

http://www.bloomberg.com/apps/news?pid=20601103&sid=a.oYt9YjJJOU&refer=news

Jan. 26 (Bloomberg) -- Halliburton Co., the world's second- largest energy-services provider, said fourth-quarter net income fell as the absence of a year-earlier tax gain undermined a jump in profit from its oilfield businesses.

Net income fell 40 percent to $658 million, or 64 cents a share, from $1.1 billion, or $1.04, a year earlier, the Houston- based company said today in a statement. Revenue rose 8 percent to $6.02 billion. The year-earlier $540 million tax benefit was related to a 2004 asbestos settlement.

Demand for oilfield services will stay strong in 2007, Halliburton Chief Executive Officer David Lesar predicted on an investor conference call. Profit from the company's services, which help producers get more oil and gas from their deposits, climbed 41 percent in the quarter as the number of rigs in use rose. Lesar said the he is ``still getting'' price increases.

``U.S. drilling activity stayed strong, and international drilling activity stayed strong,'' said Jeff Tillery, an analyst at Pickering Energy Partners in Houston who rates Halliburton shares ``buy.'' While oil and gas prices fell in the quarter, ``it wasn't low enough, long enough for producers to really change behavior,'' he said.

snip>

Record Oilfield Revenue

Halliburton's KBR Inc. unit, reporting its own quarterly results for the first time after an initial public offering of 19 percent of its shares in November, said net income fell 23 percent to $43 million, or 28 cents a share. Halliburton said today it should finish disposing of its remaining stake in the next three months.

Halliburton's oilfield-services business posted record revenue of $3.5 billion in the quarter, the company said. Profit was $959 million, up from $678 million. North America accounted for $525 million, or 55 percent, of the quarterly profit.

snip>

Oilfield work accounted for almost 90 percent of Halliburton profits in 2005. It contributed less than half of the company's revenue, with the rest coming from engineering and government- services unit KBR.

The unit earned Halliburton $120 million, up 11 percent, while revenue fell 8 percent as business declined on U.S. military contracts.

Logistics and construction work supporting the U.S. and other governments in both military and non-military roles earned it $61 million, up 13 percent. Work in Iraq, Kuwait and Afghanistan made KBR the sixth-largest U.S. military contractor.

more...

[54anickel]

17. Halliburton, KBR Beat

http://www.thestreet.com/_googlen/newsanalysis/energy/10335022.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

Halliburton (HAL - Cramer's Take - Stockpickr) and its newly minted KBR (KBR - Cramer's Take - Stockpickr) unit each beat fourth-quarter earnings expectations Friday.

Halliburton, the Houston-based oil service company that owns 81% of construction and engineering services giant KBR, said it made $667 million, or 65 cents a share, from continuing operations for the quarter ended Dec. 31, down from the year-ago $1.09 billion, or $1.03 a share. Revenue rose to $6.02 billion from $5.57 billion a year earlier.
Analysts were looking for a 61-cent profit on sales of $5.9 billion.

KBR said it made $43 million, or 28 cents a share, down from the year-ago $48 million, or 35 cents a share. Revenue dropped 8% from a year ago to $2.5 billion, as the U.S. military continued to scale back the construction and procurement activities related to military sites in Iraq.

Analysts were looking for a 19-cent profit.

"I am pleased to begin a new era for KBR as we expect to complete the separation from Halliburton in the next few months," said KBR chief Bill Utt. "I look forward to heading the transition of KBR to a public company and am focused on execution of our strategies to enable KBR to build on its leadership position in the engineering and construction business."

KBR raised $508 million late last year in selling a 19% stake to the public.



more...

[silverlib]

19. What do you think about this?

I'm rather confused by the tax write off for the asbestos settlement.

What is you take on the 40% down?

[54anickel]

22. Well, the 40% down isn't really a "down" since last year's profit was

exagerated by the tax write off they took on the Dresser settlement. My take is that Hellaburnin is doing just fine, as evidenced in their earnings. It's sort of a shell game, you have this huge parent company with lots of different divisions and you play with the numbers of those divisions until you come up with the best possible outcome for all - divisions and parent company. Way, way back when I did accounting we usually tried to get the numbers of the parent company to basically be a wash - a gain from one division would be off-set by a loss in another. They did a split to put KBR under bankruptcy protection in 2002. I don't know what's all up with Hellaburnin, their accountants creativity would put my old boss's to shame.



It's all a game of numbers. I don't know if I'd make the leap to their lower profits being the driving force behind the "surge" or a widening of the war to Iran.

What I do find interesting is their distancing from KBR - is it an attempt to also put some distance between KBR and Cheney? The one article I posted talks about investigations swinging from Hellaburnin to KBR. :freak: Gotta make you wonder, though I don't think it will work. The investigation needs to stay focused on the initial 2001 award of the 10 year contract.



Here's an old article looking at the Cheney-Halliburton connection:
http://www.freepress.org/columns/display/1/2002/264

AUSTIN, Texas -- The Securities and Exchange Commission is now investigating Halliburton -- the company formerly run by Vice President Dick Cheney -- for accounting irregularities. What took so long?

Dick Cheney's record at Halliburton is one of the most under-covered stories of the past three years. When you consider all the time and ink spent on Whitewater, the neglect of the Cheney-Halliburton story is unfathomable.

The proximate cause of the SEC investigation is an "aggressive accounting practice" at Halliburton approved by the accounting firm Arthur Andersen -- a little matter of counting revenue that had not yet been received, $100 million worth. The New York Times reports two former executives of Dresser Industries, which merged with Halliburton in 1998, say Halliburton used the accounting sham to cover up its losses. Dresser may have thought it got a bad deal in that merger because of that $100 million "anticipation" on the credit line, but the deal turned out to be much more sour for Halliburton.

Cheney bought himself a former Dresser subsidiary facing 292,000 claims for asbestos-caused health problems. He said at the time the merger was "one of the most exciting things I've ever been involved in" and predicted it would benefit Halliburton's customers, employees and shareholders. The first thing that happened was Halliburton eliminated 10,000 jobs. (It was always amusing to hear Cheney on the campaign trail in 2000 claiming he had been out in the private sector "creating jobs.")

According to executives at Halliburton, Cheney knew about the asbestos liability before the merger and considered the risk. Because of the liability, Halliburton's stock has fallen from over $60 to under $20. In January, the company had to deny rumors it was going into bankruptcy. In other words, Cheney pretty well ruined the business. Of course, what the company wants to do now is have Congress pass a new law limiting asbestos liability.

Even more interesting is Halliburton's governmental record under Cheney. In an August 2000 report, the Center for Public Integrity noted that Cheney had said publicly the United States should lift restrictions on American corporations in countries listed by the government as sponsoring terrorism. Hey, that was then, this is now.

more...

And a look at that 10 year contract:
http://www.publicintegrity.org/wow/bio.aspx?act=pro&ddlC=31

snip>

KBR does everything from conducting or managing large construction projects, such as power plants and pipelines, to providing maintenance for existing facilities or government operations. Halliburton was founded in 1919 by Erle Halliburton, who innovated a way to fortify oil wells with cement. The company acquired offshore-platform constructors Brown & Root in 1962 and expanded worldwide through the 1990s. In 1998, Halliburton acquired oil field equipment manufacturer Dresser Industries for $7.7 billion, which had acquired the oil services company M.W. Kellogg ten years earlier. Dresser Industries became embroiled in a series of asbestos lawsuits in 2001, causing Halliburton to reorganize. In 2002, the company split its operations into two distinct entities in order to protect its assets from the asbestos litigation: Halliburton Energy Services Group, which provides equipment and services such as well drilling for the oil and gas industry, and KBR. Halliburton placed KBR under bankruptcy protection.

snip>

Still, KBR beat out DynCorp and defense giant Raytheon for the third LOGCAP contract in December 2001, which is renewable for 10 years. Though LOGCAP's total value is undefined since services are provided in response to changing military needs, as of Sept. 21, 2003, KBR had been awarded 67 task orders totaling $2.2 billion—more than $2 billion for Iraq alone. LOGCAP does not comprise all of the company's military contracts. For example, it was awarded another LOGCAP-type contract with the U.S. Navy in April 2001, spanning five years and potentially worth $300 million. That contract, too, was awarded over the protests of the General Accounting Office, which questioned the criteria used to evaluate bidders.

Iraq contracts
In the competition for the current LOGCAP contract, the Army Corps of Engineers asked competitors to develop a contingency plan for extinguishing oil well fires in Iraq. The Army chose KBR's plan in November 2001, though it remains classified.

On March 24, 2003, the Army announced publicly that KBR had been awarded five task orders in Iraq potentially worth $7 billion to implement the plan. One of the task orders, obtained by the Center for Public Integrity, required KBR to "procure, import and deliver" fuels to Iraq. In fact, the contract was awarded more than two weeks earlier, without submission for public bids or congressional notification. In their response to Congressional inquiries, Army officials said they determined that extinguishing oil fires fell under the range of services provided under LOGCAP, meaning that KBR could deploy quickly and without additional security clearances. They also said that the contract's classified status prevented open bidding.

The Army's actions came under fire by Congressman Henry Waxman, D-Calif. who, along with Rep. John Dingell, D-Mich., asked the General Accounting Office—the investigative arm of Congress—to investigate whether the U.S. Agency for International Development and the Pentagon were circumventing government contracting procedures and favoring companies with ties to the Bush administration. They also accused KBR of inflating prices for importing gasoline into Iraq. In June 2003, the Army announced that it would replace KBR's oil-infrastructure contract with two public-bid contracts worth a maximum total of $1 billion to be awarded in October. However, the Army announced in October it would expand the contract ceiling to $2 billion and the solicitation period to December. As of Oct. 16, KBR had performed nearly $1.6 billion worth of work. In the meantime, KBR has subcontracted with two companies to work on the project: Boots & Coots, an oil field emergency-response firm that Halliburton works in partnership with (CEO Jerry L. Winchester was a former Halliburton manager) and Wild Well Control, both of Texas.

more "dated" dirt....

[silverlib]

30. Thanks so much for your take on this. ..

You make a lot of sense, (as usual). My gut feeling was that the accounting seemed strange. The drop in the stock price didn't seem to be setting off alarms for a $40M loss, although I guess if I held this stock, it would seem significant. But the distancing from Cheney and the "balancing" of divisions certainly seems likely, as well as putting forth an argument that the company has not profited greatly from war.

Really bizarre stuff going on in the market. It sure appears that the market is just as much a puppet as the pResident.

Your response really helped. Thanks again.

[Lucky Luciano]

13. Continental Airlines Downgraded By Goldie

Goldman Sachs has downgraded (CAL), this coming shortly after JPMorgan also downgraded (CAL). Look out below!
Other stocks to watch for this are:
AMR - Parent company to American Airlines.
JBLU - Jet Blue
UAUA - Unite Airlines


Airlines usually trade very well corrleated to each other though a downgrade in one could upset that balance a bit. Naturally, airlines are also negatively correlated to oil in the short term.

[54anickel]

18. Oil rises on cold U.S. weather, holds above $54

http://biz.yahoo.com/rb/070126/markets_oil.html?.v=6

LONDON (Reuters) - Oil edged higher on Friday, holding above $54 a barrel on expectations cold weather in top consumer the United States would trigger a long-awaited rise in heating oil demand.

snip>

"Yesterday's drop was not a big one. $50 is overdone (to the downside) and we could go back to $60 next week with the winter coming," Keith Sano of Tokyo-based Sumitomo Corp said.

Unseasonably mild weather and a shift in fund flows have pushed oil down about 10 percent since the start of 2007, blunting the impact of OPEC supply cuts agreed last year.

Temperatures in the U.S. Northeast, the world's biggest heating oil market, were expected to stay below normal for at least the next week, the AccuWeather website showed.

But the cold snap could have come too late to have a major impact on inventories and demand, analysts said.

After the market's failure last week to break significantly below $50 a barrel, analysts said the technical picture was short-term bullish, although the rally from the low of $49.90 for U.S. crude was stalling.

The Organization of the Petroleum Exporting Countries has said it would wait to assess the impact of existing cuts of 1.7 million barrels per day before calling for further reductions.

more...

[54anickel]

31. Oil Prices Rise Above $55

Oil Prices Break Above $55 a Barrel on OPEC Production Cut Concerns, Cold Weather

http://biz.yahoo.com/ap/070126/oil_prices.html?.v=13

snip>

Tank tracker Lloyds Marine Intelligence Unit said Friday that oil exports from the Organization of Petroleum Exporting Countries fell to less than 23 million barrels a day in December from just under 24 million barrels a day in November, according to a Dow Jones newswire report.

Saudi Arabia, the world's largest crude oil producer and exporter, was the quickest to implement OPEC's production cuts; its exports in December were 1.1 million barrels a day lower than before the OPEC's October call for production cuts.

"The market has been concerned about the rate of OPEC compliance. Yesterday, it was worried compliance was bad. Today, it's worried that it's good," said Tim Evans, an energy analyst at Citigroup Global Markets. "Overall, the larger story is that OPEC production is declining."

OPEC said it would begin cutting production by 1.2 million barrels a day in November, but some traders speculated that cartel members were not complying. The cartel said late last year it planned to cut production an additional 500,000 barrels a day starting Feb. 1.

On Thursday, tanker tracker Oil Movements said it expects exports from OPEC to rise in mid-February. The news sent oil prices down to settle at $54.23 Thursday, after rising as high as $55.90 during earlier trading.

"The market has overcome that tracker report," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "The market is thinking that OPEC compliance will be better as we go forward. Oil is looking very strong."

Victor Shum, energy analyst with Purvin & Gertz in Singapore, also pointed out that prices are being propped up by cold weather in the U.S. and the announcement Tuesday that the U.S. government plans to double the size of its Strategic Petroleum Reserve.

more...


I thought the Saudis increased production?

Saudi 'oil war' against Iran
http://www.turkishdailynews.com.tr/article.php?enewsid=64683

As international oil prices hover around $55 a barrel, signing a dramatic decrease of 17 percent over the last few months, eyes are turned into the political rivalry between Iran and Saudi Arabia, two giant petroleum exporters.

Robert Windrem from NBC News claimed in his latest report that Saudis are letting the price of oil and thus, “waging an oil-price war” on Iran.

The Saudi oil minister has steadfastly refused calls for a special meeting of Organization of Petroleum Exporting Countries (OPEC) and announced that the nation is going to increase its production, which will send the price down even further, noted Windrem on his report, published on Tuesday on the MSNBC Web site. Oil Minister Ibrahim al-Naimi, during a recent trip to India, had said that oil prices are headed in the “right direction.”

Punishment policy:

According to the story, oil traders believe the Saudis are not alone in this “punishment for Iran” policy. On the contrary, they are collaborating with other Sunni-dominated oil producers and the United States. Their belief is that this policy “will hurt majority-Shiite Iran economically and create a domestic crisis for Iranian President Mahmoud Ahmadinejad, whose popularity at home is on the wane,” reported MSNBC.

An oil trader, who spoke on condition of anonymity, told the Web site that under normal circumstances, Saudi Arabia “would have already called for a special OPEC meeting” to overturn the decrease. “It's got to be something else and that something else has to be Iran,” he continued.

more...

[PATRICK]

20. Real value of the market

and the trends. Those dark posts in darker market times spoke of values nearly half of the numbers(dollar devalued?) that are inching up still today. The other topic was the recession and series of recessions
making up some type of new collapse. We hear about smaller issues like the housing market and widespread dangers of worldwide this and that. Can Bush who sees only that the Iraq War seemed to reboost the economy(stock markets) power through another war and leave the impression that any final withering was not under his watch?

He seems to be sneaking out of the economic issues on domestic tiptoes while the horns of war distract.
I can imagine them saying about the Bush "glory years" that market once the terrorist effect(not HIS fault) was countered kept going up until the Democrats ruined it. I can more than imagine Bush and Cheney thinking this now as part of their legacy escape package.

Is this a bubble and will it burst differently than before?

I have no will or stomach to invest in any speculative venture while these nuts are in charge no matter what the market diagnosis. It seems all like blood money.

[54anickel]

21. Dollar Watch

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

Last trade 85.24 Change +0.13 (+0.15%)

Settle Time 15:01 Open 85.15

Previous Close 85.11 High 85.43

Low 85.10 2007-01-26 11:21:10, 30 min delay

52wk High 91.16 52wk High Date 2006-03-10

52wk Low 82.24 52wk Low Date 2006-12-05


The U.S. dollar was initially stronger this morning following the better-than-expected Durable Goods orders
http://www.fxstreet.com/fundamental/market-view/daily-us-forex-summary/2007-01-26.v02.html

The U.S. dollar was initially stronger this morning following the better-than-expected 3.1% rise in Durable Goods orders for December. As the currency failed to break through key resistance levels on the euro it paired its earlier gains. Data showed U.S. new home sales in December were higher than expected; further providing evidence the U.S. economy is on solid ground. Dollar trading will remain range bound as traders await the U.S. central bank's first policy meeting of the year, which gets under way next Tuesday and Wednesday. The Fed is widely expected to keep interest rates on hold at 5.25%. After a string of surprisingly robust economic data in recent weeks some analysts have backed down on forecasts that the Fed will cut rates in the first half of 2007.

The euro remains range bound this morning, driven largely by USD volatility. The single currency is under continued pressure from yesterday's weaker-than-expected reading from the German Ifo business sentiment survey. Expectations, however, still remain for more rate hikes from the European Central Bank.

The Japanese yen erased earlier gains to fall back to recent 4-year lows versus the dollar on Friday after soft Japanese inflation figures cast doubt on whether the Bank of Japan will raise rates next month. Japanese core consumer prices rose just 0.1% in December from a year earlier, suggesting Japan is struggling to shake off a decade of deflation. Japan's top government spokesman said today that currency movements could be one factor for the Bank of Japan to consider when conducting monetary policy but it is not the sole determinant. "Of course, it is natural to take currencies into consideration but it is not true that they will decide policy on that factor alone," Chief Cabinet Secretary Yasuhisa Shiozaki told a news conference. The market will await next month's G7 meeting where Europe may seek a more forceful message on the yen's weakness.

The British pound weakened slightly against the U.S. dollar due to ambiguity over Britain's monetary policy outlook. Minutes from the Bank of England's last policy meeting yesterday showed only five out of the nine committee members voted for this month's surprise interest rate hike to 5.25 percent. Look for the pound to remain range bound as traders consolidate their positions ahead of the weekend.

The Canadian dollar climbed higher this morning, leaving recent 14-month lows behind, as higher oil prices dictated direction for the commodity-linked currency in the absence of domestic economic data to sway sentiment. With a cold snap on the East Coast, a rise in demand for heating oil is expected and is underpinning the CAD. Canada today USD/CAD will remain in a tight range with resistance coming in at 1.1800. The Canadian data calendar remains bare until next week when the industrial product price index and raw materials price index for December are released on Tuesday, while November gross domestic product figures will follow on Wednesday. Generally strong economic data so far this year has prompted analysts to scale back their previous expectations for Canadian interest rate cuts later in the year.

more...


Borrowing in yuan and investing in bucks
http://asiasentinel.com/index.php?option=com_content&task=view&id=354&Itemid=32

The carry trade hot money discovers the Chinese currency
It is no wonder that so many of the so-called economists employed by investment banks and hedge funds keep up constant pressure on central banks, especially Asian ones, to keep rates low. Without that there would be no fuel for the carry trade, which has enriched so many ill-deserving bulge-bracket gamblers and could potentially result in the near-collapse of the global financial system. Although hitherto this game has mainly been played in Japanese yen, the latest currency to join the carry-trade bonanza is the Chinese yuan.

The game is played by borrowing billions of dollars worth of yen with their negligible interest rates to invest in high-yielding currencies such as the New Zealand and Australian dollars, pounds sterling and the US dollar itself. It is a self-reinforcing game in it that it enables potentially weak currencies to remain relatively strong. It is of course no coincidence that four afore-mentioned currencies are all those of countries with huge and entrenched current account deficits – from 3% to 7% of GDP. Japan’s surplus meanwhile has risen despite increased competition from Korea, Taiwan and – to a lesser extent -China.

The latest throw of the dice proffered as an “investment idea” is to take advantage of the low cost of borrowing in yuan in the offshore market. The implied cost of 12-month money is just 0.7 percent, which makes it about as cheap a funding currency as the yen. Meanwhile the rate of appreciation of the yuan is – according to the argument – slow and predictable, with the People’s Bank of China reluctant to allow the currency to float up and jeopardize both its gargantuan trade balance and its mountain of US dollar reserves.

Meanwhile there are huge gains to had from higher interest rates in Asian currencies such as the won, baht and ringgit, not to mention the perennial Aussie and Kiwi currencies. Much the same argument can be made for the borrowing Taiwan dollars where interest rates have been almost as low as in yen and where the currency has been held down to keep within sight of the yen.

There is no doubt that huge of amounts of money have been made from the carry trade by investment banks, thus far mainly at the (indirect) expense of Japanese savers. But the tempo has picked up as investment bank balance sheets have ballooned and additional Asian currencies have entered the carry-trade play.

snip>

At some point of course it will hit home that countries with excess consumption and feeble savings are weak, not strong. But for now the bankers and fund managers can play their high risk games. Once upon a time, when these players were as yet unborn, bankers learned in the nursery that currency mismatches were one of the more dangerous games in town.

more...

[54anickel]

23. Today's Pfenning

http://www.kitcocasey.com/displayArticle.php?id=1190

So... On Tuesday of this week, just three days ago, we were staring straight down the barrel of pound sterling hitting "2"... And now? Well, let's just say we're not staring straight down that barrel any longer. What's happened in three days to change all that? Well... I told you on Wednesday that Bank of England (BOE) Gov. King mentioned that he believed inflation would fall quickly in the second half of this year, and that led the markets to think the rate hike environment was over in the U.K.

Upon further review, though... I looked over the whole King report, and by all means, he did not say those words to telegraph anything to the markets... In fact, his speech was quite hawkish! And the comment about inflation falling was really taken out of context... Unfortunately, that's not how the markets saw it or heard it... So, here we are... But wait, is this a crying opportunity? No... In my opinion, this is a buying opportunity!

The euro has come under some pressure too this week... I find this to be just another dolt mentality move by those selling euros and buying dollars... Can't they see the writing on the wall? Or, do they get some kind of sick pleasure out of taking future losses? The European Central Bank (ECB) is on the rate hike warpath... The rate hike drums are beating, and there's a ring of smoke rising from the ECB headquarters... And you know me... Where there's smoke... There's fire! And that's exactly what we have with the ECB and their desire to get rates to 4% in the first half of this year... That's an additional 50 BPS, and they get back on the rate hike tracks at their meeting in March... Either March 8th or 22nd...

snip>

I looked at the trading screens late yesterday afternoon, and was taken aback by the move in Treasuries... 10-year yields have crept up to levels not seen since the Fed started raising rates 2 years ago... And I had a V-8 moment! This is what has the dollar bulls all lathered up! Rising Treasury yields! Uh-oh... Rising Treasury yields might be good on the outside for the dollar, but imagine the mess it will cause in housing... And to the economy, which then brings the Fed into the scene, and seeing what's happening to the economy, they cut rates... So... Here's a memo to the dollar bulls basking in the sun right now because of higher Treasury yields... Enjoy it while you can! Because the storm clouds are forming on the horizon...

This just came across the screens... Eurozone Money Supply accelerated in December to the fastest pace in 17 years! M3 Money Supply for the Eurozone rose 9.7% from a year earlier... This should have been good news for the euro... Yes, I know, money supply growth like that is not good for a currency... But what I'm talking about is simply the fact that the ECB uses Money Supply Growth and Inflation as their tools to determine interest rate direction. This report is the final piece of the interest rate hike puzzle the ECB has been working on... Get those rates higher, squash that money supply, and all will be right on the night!

There's been a lot of talk swirling around that the G-7 ministers will discuss the yen's weakness at their next meeting Feb 9-10... I was telling Ashish the other day that about 3 or 4 years ago (not sure, as time sure does pass by very quickly) G-7 first used the term "flexible currencies" to describe their wish that the Asian currencies get in the game. The game that was going on was simply the European and South Pacific currencies taking liberties with the dollar, without the Asian currencies participating.

Anyway... What happened after that statement was interesting... Japanese yen rallied strongly... Very strongly... For almost two years, all the way down to 101.68... Longtime readers might recall how I chronicled the trillions of yen the Bank of Japan was spending every day to intervene in their attempt to bring the yen weaker... Well... Finally the markets quit fighting the Bank of Japan, and we all know what happened since then, eh?

snip>

I told you yesterday that the Japanese yen had mounted a rally, but I wasn't going to get lathered up about it... And for good reason! And... Yen didn't disappoint me, either! It gave back all its overnight gains throughout the day... UGH!

Today in the U.S., we'll see December reports on New Home Sales and Durable Goods Orders. Both should give additional strength to the dollar if the forecasts are correct. So, the currencies will end the week on a sour note... Not much I can do about that... UGH!

more...

[54anickel]

25. Will the U.S.$ peg continue in the Middle East?

http://www.kitco.com/ind/AuthenticMoney/jan232007.html

Oil is priced in the U.S. $, which makes it one of the vital interests of the U.S. Without this backing to the $ we have no doubt the path of the $ to the global reserve currency would have been impaired and be undergoing a major attack by now. The thought of oil being priced in currencies other than the $ poses a threat to the credibility of the U.S.$ of major proportions. Any talk of a switch to pricing in other currencies poses a threat to the U.S. $ in its reserve currency role. This threat is now a real one and poses a considerable danger to the $ in time. But it is unlikely to come from the up-coming Gulf Cooperation Council meeting shortly to take place.

It appears the Gulf Arab oil producers are to review the currency pegs to the U.S.$ of their currencies and may change their pricing of oil to other currencies. This could happen as early as March according to the United Arab Emirates central bank. The Governors of the six Gulf central banks will meet in March in Saudi Arabia and may agree to switch to another currency or currency basket, Governor Sultan Nasser al-Suweidi said. But then again, they may decide leave the pegs as they are with any new changes requiring the approval of the Gulf Arab rulers.

The six members of the Gulf Cooperation Council (GCC) -- UAE, Saudi Arabia, Kuwait, Qatar, Oman and Bahrain, are working toward monetary union . Oman placed these discussions in jeopardy last month, saying it would not join in 2010. Suweidi said the governors could opt for more flexible exchange rates, instead of the fixed pegs now maintained by all states except Kuwait, which revalued its currency last year. They may decide to peg to another currency or basket of currencies, he said, declining to comment on what currencies were being considered.

Because Saudi Arabia accounts for about half the G.C.C.' gross domestic product and 58% of oil production their input on this subject is the most important, so we will not accept this possibility until we hear from Saudi Arabia itself on the matter. It is doubtful that any change of currency in pricing Middle East oil will happen, for the Saudi’s are, in reality, completely dependent on the U.S. for their continued security. So such an offense to the U.S., which is the way it would be perceived, is most unlikely.

more...

[54anickel]

32. U.S. Treasuries' Decline Stalls as Higher Yields Attract Buyers

http://www.bloomberg.com/apps/news?pid=20601009&sid=a2wzeW3Y8kJQ&refer=bond

Jan. 26 (Bloomberg) -- U.S. Treasuries were little changed as investors said the highest yields since August offered adequate compensation for the risk that signs of economic strength will be sustained.

Government debt prices advanced, paring the benchmark 10- year note's sixth weekly decline in the past two months, even after government on durable goods orders and new home sales were stronger than economists expected.

``When you look at where rates are now, they're looking pretty good,'' said Andrew Harding, who helps manage $16 billion as chief investment officer for fixed income at Allegiant Asset Management in Cleveland. ``That's what the market is recognizing.''

snip>

``The market doesn't seem that expensive any more to me,'' said Thomas Tierney, head of Treasury trading at Citigroup Global Markets Inc. in New York, one of the 22 primary U.S. government securities dealers that trade with the Federal Reserve. ``Barring some real inflation problems, I think people will look at any kind of rates above 5 percent as pretty good.''

Relative Strength Index

The price decline pushed a measure of the security's momentum to a level that in the past has signaled a change in direction is imminent. The so-called relative strength index for the 10-year note futures contract's price over a nine-day period, on a scale of 0 to 100, dropped to 24.3 today.

more...

[54anickel]

33. Higher interest rates mean trouble ahead

http://www.kitco.com/ind/Schiff/jan262007.html

When I last commented on the bond market (December 5th's What’s really going on with bon) bond prices were inexplicably rallying, sending yields on ten year Treasury bonds to 4.4%. At the time, Wall Street was offering a variety of half-baked explanations as to why the market had moved beyond the cause and effect stimuli that had ruled for generations. My advice to investors was simply to sell into the rally and ask questions later. Since then, bonds have reversed course, with ten year treasury yields hitting 4.9% (a five-month high). Just as Wall Street’s explanation for falling rates was way off base then, so too is their explanation for rising rates now.

The consensus asserts that yields have turned around because new "evidence" of a bottom in the housing markets will keep the economy from tipping into recession, which in turn will diminish the likelihood of a Fed rate cut. The problem with this explanation is that there is no evidence of a bottom in the housing market. Despite the self-serving rhetoric of biased real estate industry spokesmen, a bottom is nowhere in sight, both in terms of price and time.

Although 2006 saw existing home sales decline by 8.4% (the biggest drop in 17 years) and new homes sales fall by a stunning 17.3% (the largest in 16 years), Wall Street Pollyannas stressed that opinion and sentiment trumped data. For example, based solely on a 7.9% decline in existing home inventory, perennial real estate shill David Lereah (chief “economist” for the National Association of Realtors) claimed “It appears that we have established a bottom.” (Mr. Lereah has seen more bottoms than a diaper attendant in a hospital nursery.)

snip>

New home sales figures are even more misleading. Although the headlines trumpet that inventories dropped in December, the figures ignore cancellations which are running at record highs. So while cancelled contracts are excluded from the “official” inventories, they are definitely part of the real inventory that will ultimately exert additional downward pressure on prices. Also, while new home prices “officially” fell by a modest 1.8% in 2006, the real decline is likely far more substantial. That is because the sales incentives now typically offered by developers, such as paying closing costs, free upgraded floors and countertops, free appliances, free swimming pools, free plasma TVs, free landscaping, decorating allowances, health club memberships, vacations, etc., are not reflected at all in sale prices. However, they are reflected in recent home builders’ earnings reports, which have been universally dismal.

The elephant in the living room is that the recent jump in bond rates suggests that things are about to get much worse for the housing market. Since January 5th, interest rates have risen by over 30 basis points and gold has risen by over $40 per ounce. When rates and gold prices rise together the most likely explanation is escalating inflation fears. Indeed, my guess is that rather then sensing a bottom in the housing market, bond investors around the world are beginning to appreciate the inflationary implications of a real estate crisis.

more...

[54anickel]

24. Gold Brushes Off Oil (Willie)

http://www.kitco.com/ind/Willie/jan262007.html

snip>

Throughout the entire crush of the energy complex price structure, gold has held up very well, seemingly unaffected by the blood letting. Silver has behaved with even more resilience. Let’s review the facts on this commodity downturn over the last several months. Crude topped at $78 at the time of the war in Lebanon last July, pushed below $60 rather suddenly last autumn in an unvarnished election grab attempt, held steady for two months at the important $57 support line, fell as part of a USDollar recovery program in early January, saw a few repulsed prints under $50, and finally has benefited from short covering and bargain hunters after a “49” handle seemed out of whack. A global energy war, chronic oil depletion, and a rash of socialists (see Chavez in Venezuela and Morales in Bolivia) and autocrats (see Putin in Russia) playing hard ball with national energy treasures seem wholly incompatible with a sustained energy market decline, global economic slowdown or not.

Late last summer a coordinated energy initiative seemed to be triggered after Goldman Sachs reduced by 6% the gasoline component to its managed commodity index. Over $100 billion in fund positions had to adapt, thus sell. Other agenda items seemed in place, which assisted the initiative to bring down energy prices for the benefit of the USEconomy. See the CFTC pressures on hedge funds, and maybe even US Military oil and diesel sales after conflict subsided in Lebanon. The rub comes with pain to some big Wall Street firms who serve as both creditors and partners to hedge funds. The financial markets are discounting an ABSENCE of war when war seems to be a fixture, not to go away. Throughout the entire crush of the energy complex price structure, gold and silver brushed off the onslaught and quietly have resumed their bull market march.

Natural gas has also been pushed to the $6 mark, but has since rebounded with the recent arrival of winter (however brief that might be). The chatter from Wall Street includes stories of $30 oil and $40 oil, which seems entirely unreasonable short of a severe global recession. Such a worldwide downturn would do great harm to the USDollar, probably more so than other major currencys, since the USEconomy is more dependent upon asset bubbles for sustenance, for household spending, and for bond speculation. Thus, a global recession would punish the USDollar and inversely lift the crude oil price. With all the focus upon the warm winter weather, one would think the energy trading pits had acted upon a repeal of winter itself. And then there is copper. It has careened from the $3 mark down toward the mid-$2 range. Bear in mind that the move in copper from $3.20 to $2.50 might represent a nice clean 62% Fibonacci retracement toward the $2.20 support line showing itself.

USFED STILL ASLEEP AT THE WHEEL

The infection from the highly publicized selloff in oil and copper has not extended to precious metals, whose advocates are expressing needless pain, depression, and somber tones for no reason. The only casualty for golden interests is the expected US Federal Reserve interest rate cut, which now looks like it might come in the 2H2007 time frame. The milder weather and lower energy costs have conspired to buffet the economic statistics, enough to puff up housing statistics in November, enough to offer households a small rebate, all sufficient to ward off panicky USFed rate cuts. Today, Beazer Homes stuck a hot poker in the heart of the dimwitted optimists who believe the housing market has stabilized. Their spokesman said “We have yet to see any meaningful evidence of a sustained recovery in the housing market.” To back that statement up, they reported new orders were down 55% from a year ago, and their cancellations are running at a horrendous 43% rate. People might sign contracts based on hearing the media news, and cancel those same contracts on a contrast with reality checks. The December existing housing sales came in at minus 0.8%, the largest decline in 24 years dating back to 1982. The official data contained a contradiction which went overlooked by the shallow voices on CNBC. The data claims that inventory levels fell by 7.9% at the same time that sales fell in a big way. Well, perhaps the inventory levels do not factor in the cancellations. Bear in mind that three large home builders in recent weeks announced a collective $1.2 billion in land option losses. The pain has nowhere nearly ended for housing.

more...

[54anickel]

26. Nasdaq says it won't raise offer for LSE

http://www.businessweek.com/ap/financialnews/D8MT48T80.htm

The Nasdaq Stock Market Inc. dug in its heels Friday and refused to raise its hostile takeover bid for the London Stock Exchange after the British bourse declined to discuss a tie-up.

Nasdaq is widely expected to extend its current offer, which closed earlier Friday, until Feb. 10 -- giving LSE shareholders another two weeks to decide whether to accept the 2.7 billion pound (US$5.3 billion; euro4 billion) offer.

Analysts said the move, which caught some by surprise, was a risky one aimed at flushing out investors that had been sitting on the sidelines waiting for a higher bid.

The LSE's shares dropped immediately after Nasdaq's announcement but rebounded to close 0.7 percent higher at 1,292 pence (US$25.33; euro19.63), which analysts said indicated that investors either do not believe another bidder will emerge or are happy for the LSE to remain independent.

"Given the current circumstances, it doesn't look good," said Cubillas Ding, a senior analyst at financial and consulting firm Celent. "The LSE will continue to build shareholder support, emphasizing its strong business and bright future independently."

more...

[54anickel]

27. Political muscle raises hopes of saving Doha

http://business.guardian.co.uk/story/0,,1999665,00.html

Hopes of a final breakthrough in the long-running global trade talks rose today as President Lula of Brazil joined Tony Blair and Gordon Brown in calling for a speedy end to the stalled negotiations.

Ahead of a meeting of 30 trade ministers in Davos tomorrow, the head of the World Trade Organisation, Pascal Lamy, said the involvement of political leaders and finance ministers had changed the atmosphere of the talks.

snip>

The prime minister arrived in Davos this afternoon to urge trade ministers to show enough flexibility over the coming days to allow Mr Lamy to restart the negotiations in Geneva early next month. Earlier Mr Lula had called on the US and the European Union to make concessions in order to get the talks moving.

"We are fighting ... to make rich countries aware that if there is no deal on the Doha round, there will be no point in blaming things on Iraq, or thinking that they can resolve wars by giving out financial help every now and again," he said.

"It's the possibility of growth, creating jobs and distributing wealth that will create a peaceful world," the former trade union leader said in Davos.

more...

[54anickel]

28. Davos 07: why should a socialist mayor come?

I remember reading this yesterday, but can't remember if I posted it (and I'm too lazy to look back). Sorry of it's a dupe.

http://commentisfree.guardian.co.uk/georgina_henry/2007/01/davos_07_why_should_a_socialis.html

snip>

The "mayor" bit is easy. London is currently the world's big city success story. McKinsey has declared this week London has edged ahead of New York as an international financial centre. London won the Olympics. The most multinational city on earth has seen racist and religious attacks fall almost 40% in six years. London chairs the C40 group of the world's leading cities on climate change. London's success seems agenda setting for both right and left.

This is the first reason to be in Davos. London's success is strategic. It has embraced internationalisation like no other city - understanding it is not only as an economic but a social and cultural process. From London's financial regulatory regime, through to the fact that over 60 per cent of Londoners are born outside the city, to its determinedly multicultural character, London has pushed ahead on internationalisation while other cities have hesitated.

London has reaped success accordingly. If it is logical that the 2008 Olympic Games are in Beijing, capital of the world's most rapidly growing major economy, it is equally logical the 2012 Games should be in London - the world's most international city. My job as mayor is to win London every advantage from the path that has brought it such success. Hence the trip to the world's most international economic gathering.

For me the "socialist" bit is just the flip side of the coin. I have not changed my views. I still believe one day that the idea that the main means of production are owned by private individuals or that one person who owns capital can decide to sack 100,000 who contribute their work, will be considered as anti-democratic as the idea serfs could be tied to the land. But I will not be alive when that day comes. Meanwhile many urgent problems - climate change, AIDS, malaria, wars, gender and racial discrimination - have to be tackled and solved before we get to where I would like to go.

This divides the world into two groups. The first says there are no problems - climate change does not exist or AIDS and other diseases will be cured automatically by preserving intellectual property rights of drug companies or women choose to be low paid, or Iraq is bringing the world stability. I have nothing to discuss with those holding such views.

The second group recognises there are problems: climate change exists, disease is rampant, racism blights our societies, unstoppable internationalisation of production left to itself is producing not only economic growth but deep social inequality. The majority of those at Davos have their own solutions - in some cases pure market-based ones. In many cases I don't believe they will work. But as long as there is a recognition there is a problem there is something to discuss. And Davos provides a world platform for discussing it. This is the second reason I, and a number of others, came.

more...

[54anickel]

29. Tremors at the Door

http://www.nytimes.com/2007/01/26/business/26mortgage.html?_r=2&adxnnl=1&oref=slogin&ref=business&adxnnlx=1169838735-TKB9kO1AqoNDi1i6Zgb3sA

Wall Street’s big bet on risky mortgages may be souring a lot faster than had been previously thought.

The once booming market for home loans to people with weak credit — known as subprime mortgages and made largely to minorities, the poor and first-time buyers stretching to afford a home — is coming under greater pressure. The evidence can be seen in rising default rates, increasingly strained finances at mortgage lenders and growing doubts among investors.

Now, Wall Street firms, which had helped fuel the growth in the market by bankrolling and investing in subprime mortgage lenders, have begun to pinch off the money spigot.

Several mortgage lenders have recently collapsed. While the failures so far are small in number, some industry officials are concerned that they could be the first in a wave. The subprime sector, which produced loans worth more than $500 billion in the first nine months of last year, could shrink significantly.

A sharp contraction in subprime mortgages would have ripple effects, reducing consumers’ access to credit and affecting investors like foreign central banks, pensions and mutual funds that have been big buyers of mortgage-backed securities.

The recent bankruptcy of Ownit Mortgage Solutions, a lender based in Agoura Hills, Calif., provides a cautionary tale. Even as its revenue grew by more than a third in the first nine months of 2006, to $8.3 billion, the company was losing money. It shut down after its financial backers, which included Merrill Lynch & Company and JPMorgan Chase, could not come up with a deal to save it.

more...

[54anickel]

34. Union membership drops to 12 percent, the lowest yet (WOW!)

http://www.signonsandiego.com/news/business/20070125-1242-organizedlabor.html

WASHINGTON – Union membership dropped to 12 percent of U.S. workers last year, extending a steady decline from the 1950s when more than a third belonged to unions.

After membership had held steady at 12.5 percent in 2005, it declined anew last year, a decrease of more than 325,000 workers, the Bureau of Labor Statistics said Thursday.

Membership had been 20.1 percent in 1983, when the bureau first provided comparable numbers. About 35 percent of American workers were union members in the mid-1950s.

snip>

The union membership rate for government workers, 36.2 percent, was substantially higher than for private industry workers, 7.4 percent.

The latest membership statistics have to be “incredibly discouraging for labor,” said Gary Chaison, a labor specialist at Clark University in Worcester, Mass.

“Before they can grow, they have to stand still,” he said. “The unions are losing so many members each year because their jobs are being outsourced and they are organized in shrinking sectors of the economy, like autos, steel and textiles.”

snip>

The continuing erosion of union membership is “just another sign of the collapse of the middle class,” said David Gregory, a professor of labor law at St. John's University Law School.

more...

[54anickel]

35. Hog farmers brace for high feed costs

http://www.philly.com/mld/philly/business/16551094.htm

DES MOINES, Iowa - A soaring demand for corn used to produce ethanol has hog farmers bracing for higher feed prices that threaten to put some producers out of business.

The price of corn is expected to climb to $4 a bushel, a level not seen in the last decade. The soaring price was the subject of a seminar Thursday at the Iowa Pork Congress, a two-day annual gathering for Midwest hog farmers.

Neil Dierks, chief executive officer of National Pork Producers Council in Des Moines, said the situation is so dire that some producers will opt to quit the business.

"Right now most hog farmers are in the break-even range," he said.

Jerry Shurson, a professor who studies swine nutrition and management at the University of Minnesota, said the situation could ease as farmers rely more on an ethanol-production byproduct called distillers grains as animal feed.

Most farmers already feed their hogs between 10 percent to 20 percent of distillers grains along with conventional corn, Shurson said.

He said distillers' energy value is equal to corn, but there may be concerns about them being high in fat and having lower amounts of protein.

more...

[54anickel]

36. 2:42 check in

Dow 12,460.10 42.46 (0.34%)
Nasdaq 2,434.30 0.06 (0.00%)
S&P 500 1,420.12 3.78 (0.27%)
10-yr Bond 4.8770% 0.0100
30-yr Bond 4.9780% 0.0160
NYSE Volume 1,851,152,000
Nasdaq Volume 1,543,813,000

2:30 pm : All three major averages are now at their best levels of the afternoon, spearheaded by a spike higher in Technology. With the sector trading relatively unchanged just 30 minutes ago, its intraday advance of 0.5% merely recoups half of its 1.0% decline yesterday; but as evidenced by the latest turnaround on the Nasdaq, tech's resurgence is having a noticeable impact. Aside from Microsoft's (MSFT 30.90 +0.45) influential 1.5% advance, a 0.8% gain on Cisco Systems (CSCO 26.43 +0.21), especially after being down as much 1.8% earlier, is also providing some notable leadership. DJ30 -24.99 NASDAQ +2.62 SP500 -2.11 NASDAQ Dec/Adv/Vol 1613/1304/1.45 bln NYSE Dec/Adv/Vol 1817/1385/966 mln

2:00 pm : So much for what was shaping up to be a modest recovery in Treasuries providing much relief for equity traders. Within the last 30 minutes, bonds have turned negative across the yield curve as traders, still questioning which way (and when) policy makers will fine-tune monetary policy, get back to unwinding expectations of a Fed rate cut anytime soon. Throw in a nearly 2.0% gain in oil prices and equity traders are finding it difficult to justify valuations from the rally during the second half of 2006. DJ30 -54.80 NASDAQ -2.43 SP500 -4.87 NASDAQ Dec/Adv/Vol 1619/1276/1.36 bln NYSE Dec/Adv/Vol 1776/1420/894 mln

1:30 pm : Equities are still on the defensive as the bulk of industry leadership remains negative. Telecom has pared its midday losses but further deterioration in Biotech (-3.0%), now the second biggest laggard, leaves the more influential Health Care sector as today's worst performing sector (-0.9%). Technology seeing more than half of its modest intraday gain halved since the last update, led by declines in Hardware (HWI -1.5%), is also contributing to the recent pullback.DJ30 -66.08 NASDAQ -6.14 SP500 -6.09 NASDAQ Dec/Adv/Vol 1708/1168/1.26 bln NYSE Dec/Adv/Vol 1778/1399/812 mln

1:00 pm : The Nasdaq's latest stint into the green didn't last long, but current market internals don't exactly suggest a whole lot of conviction on the part of sellers responsible for pushing it back into the red. As reflected on the A/D line, decliners on the tech-heavy Composite only hold 15-to-13 edge over advancers. Market breadth is similar on the NYSE, with only an 8-to-7 advantage going to declining issues, suggesting the blue-chip indices' struggles today can be attributed to weakness in several large-cap names (e.g. BA -1.3%, DD -1.3%, DIS -1.2%, HON -1.2%, JPM -1.2%, and T -1.4%).DJ30 -50.07 NASDAQ -1.75 SP500 -4.41 NASDAQ Dec/Adv/Vol 1531/1320/1.14 bln NYSE Dec/Adv/Vol 1658/1478/730 mln

12:30 pm : Stocks kick off the afternoon session paring their losses, leaving the major averages now trading in split fashion. The Nasdaq is back in the green as Microsoft (MSFT 31.10 +0.65) retraces its best levels of the day (+2.2%) and bargain hunters continue to jump back into beaten-down tech names, especially chip stocks. The PHLX Semiconductor Sector Index, which was down 2.5% year to date, is now up 1.6% on the day. Seventeen out of 18 components on the SOX are trading higher, led by a 3.6% surge in KLA-Tencor (KLAC 48.78 +1.68).

While oil prices hitting fresh session highs might typically act as an offsetting factor, crude futures now up 2%, have renewed enthusiasm across the Energy sector, which is also providing some notable leadership for the broader market. DJ30 -35.33 NASDAQ +2.64 SOX +1.6% SP500 -2.46 XOI +1.0% NASDAQ Dec/Adv/Vol 1588/1246/1.06 bln NYSE Dec/Adv/Vol 1769/1357/660 mln

12:00 pm : Stocks are extending Thursday's losses midday as another round of economic data perhaps diminishing the likelihood of a Fed rate cut anytime soon overshadow a batch of decent earnings news.

Before the bell, evidence that underlying business investment trends are picking up after a few soft months provided some reassurance. Durable goods orders jumped 3.1% in December, orders (ex trans) posted their first increase since September and non-defense orders (ex-trans) rebounded after a few months of decline.

A sense that yesterday's broad-based sell-off may have been an overreaction, especially on the heels of Microsoft's (MSFT 31.02 +0.57) solid quarter last night and Caterpillar (CAT 60.91 +1.28) issuing upside 2007 sales guidance, was also contributing to an improved underlying tone.

Be that as it may, another update on housing providing further proof that the market is stabilizing has left investors fearing the worst -- that the Fed's next move, not necessarily at next week's FOMC meeting, may actually be to tighten. New home sales rose a healthy 4.8% in December to 1.12 mln, the highest level since April. The report also showed a decline in monthly inventories, a drop in median home prices and an upward revision to November's numbers.

Strangely, bond traders don't appear to be buying into that argument this morning. Nonetheless, the fact Treasuries are only slightly higher across the yield curve, which is more indicative of a short covering sympathy rally than anything else, does little to dispel growing concerns the Fed won't ease before June.

Of the eight sectors trading lower, Telecom is today's worst performer as AT&T (T 36.06 -0.73) hitting a five-year high yesterday offers an excuse to consolidation gains. Having more of a negative impact on the broader market, though, is Health Care. The influential sector ranks second among today's laggards as the Biotech group gets hit following Amgen's (AMGN 71.07 -3.78) Q4 earnings shortfall amid troubling sales results from its blockbuster Aranesp drug. BTK -0.7% DJ30 -60.78 DJTA -1.4% NASDAQ -5.58 NQ100 -0.3% R2K -0.3% SOX +0.7% SP400 -0.2% SP500 -5.32 XOI +0.6% NASDAQ Dec/Adv/Vol 1643/1146/930 mln NYSE Dec/Adv/Vol 1786/1284/570 mln

[citizen snips]

37. Stocks Fall on Interest Rate Concerns

NEW YORK (AP) -- Wall Street turned lower Friday after a pair of reports indicated the economy is growing at a faster-than-anticipated pace, raising the likelihood that the Federal Reserve won't cut interest rates anytime soon.

The slide extends a triple-digit decline in the Dow Jones industrials from the previous session, when stocks had their worst performance so far this year. The decline was triggered in part by a sell-off in the bond market; in the current session long bonds showed little movement, while short-term Treasuries remained under pressure.

The Commerce Department said new home sales rose 4.8 in December, well above economist projections and a sign that the slumping housing market might have bottomed out. The department said orders to U.S. factories for big-ticket manufactured goods rose in December by the largest amount in three months, led by demand for commercial aircraft.

Investors had been holding on to hopes that central bankers might cut rates in the first half of the year. However, a steady stream of positive economic data is making that unlikely and instead raising the possibility the Fed might have to resume its campaign of rate hikes that ended in August.

more...
http://biz.yahoo.com/ap/070126/wall_street.html?.v=29

[54anickel]

38. Trade Unions Attack 'corporate Greed' of Private Equity Firms

'Buy it, strip it, flip it' acquisitions denounced by global union.

http://www.buzzle.com/articles/125086.html

The growing influence of private equity companies was strongly attacked by global coalitions of trade unionists yesterday as they used the gathering of executives from some of the world's biggest companies to condemn "corporate greed".

Phillip Jennings, general secretary of the UNI global union - which has 15 million members in 150 countries - said organised labour had come to Davos with the intention of forcing the activities of private companies into the spotlight.

"They are like a global vacuum cleaner hoovering up assets any place, anywhere, any time and we want to bring them out of the shadows," Mr Jennings told a press conference. "They should no longer consider themselves untouchable."

He said unions intended to press the European Union and the G8 to force private companies to abide by established rules of corporate governance, adding that there would also be union pressure on pension funds financing the purchases of public companies by private concerns.

"Unions need to be aware that the money they are paying into pension funds is feeding the beast that may devour them," Mr Jennings said.

snip>

The unions launched their attack on private equity at Davos in response to what they considered to be a downgrading of labour issues at this year's World Economic Forum. They feared a backlash by the corporations who finance the annual get-together following several years in which unions had successfully pushed their issues up the agenda.

John Evans, general secretary of the trade union body at the Organisation for Economic Cooperation and Development, said that in the US the ratio of chief executives' pay to that of the average production worker had risen from 30 to 1 in 1970 to 500 to 1.

"The share of corporate profits taken as personal compensation by the top five executives in the 1,500 largest US public companies has doubled - from 5% to more than 10% of total corporate profits over the past decade - to a total of more than $40bn a year. That leaves a lot less for reinvestment, for wage increases for ordinary workers, for shareholders, or to fund pension plan liabilities."

more...

[54anickel]

45. From Davos, NYSE Chief Says Tide Will Turn on Private Equity

http://dealbook.blogs.nytimes.com/2007/01/26/from-davos-nyse-chief-says-tide-will-turn-on-private-equity/

John Thain, chief executive of the NYSE Group, offered up some sobering words Friday about the explosive rise of private equity, which has swept many publicly traded companies off of the world’s major exchanges. He said, in effect: They’ll come back to us.

Half of last year’s initial public offerings on the New York Stock Exchange, which the NYSE operates, represented private equity firms exiting their investments, Mr. Thain said, making buyout shops “our biggest customers.”

Speaking at the World Economic Forum in Davos, Switzerland, Mr. Thain also emphasized the role of debt — debt, debt and more debt — that private equity funds take on to finance their big deals. As interest rates continue to rise, he said, low-cost leverage will evaporate, and buyouts of listed companies will look less attractive.

“The cycle will change eventually,” Mr. Thain told journalists Friday as a fresh layer of snow fell on this ski resort town.

Private equity firms dispute the idea that interest rates pose a threat, claiming that they can raise money for buyouts even if rates double. And higher rates tend to compress the valuations of publicly traded companies, they say, making buyouts more possible, not less.

more...


NYSE's John Thain: Private Equity Is a Good Thing
http://www.bloggingstocks.com/2007/01/26/nyse-s-john-thain-private-equity-is-a-good-thing/

snip>

And, speaking of private equity, Thain believes that this is a good trend for the NYSE. How?

True, NYSE listed companies are going private. However, private equity firms need to get a return on their investment. And this usually means eventually having an IPO.

According to Thain, about half of the IPOs on the NYSE in 2006 came from companies backed by private equity.

more...

[54anickel]

47. DAVOS-UPDATE 4-NYSE CEO sees Tokyo link announcement next week

&cap=Visitors%20walk%20beneath%20a%20circular%20monitor%20displaying%20share%20prices%20at%20the%20Tokyo%20Stock%20Exchange%20in%20Tokyo,%20April%2020,%202006.%20REUTERS/Yuriko%20Nakao&from=business

DAVOS, Switzerland, Jan 26 (Reuters) - New York Stock Exchange (NYX.N: Quote, Profile, Research) Chief Executive John Thain said on Friday that plans to link up with the Tokyo Stock Exchange would be released next week, but that a Euronext-style merger was not on the cards.

"Over time it makes sense to have linkages with the Tokyo Stock Exchange ... We are working at it," he told reporters on the fringes of the World Economic Forum in Davos. "I don't think it is very likely that anything with Tokyo is the same type of merger that we'll have with Euronext."

Thain later told Reuters that details of the link-up with Tokyo would be made public next week.

The NYSE CEO also said that full integration of the NYSE and pan-European exchange Euronext (ENXT.PA: Quote, Profile, Research) would take a year, and the combined exchange was open to include other European bourses. "In terms of Western Europe, there will be opportunities to include other marketplaces," he said.

Thain said the NYSE had been open to including Borsa Italiana, with which Euronext held talks, and said it was likely that there would be some European additions to NYSE/Euronext.

Euronext's head, Jean-Francois Theodore, said on Thursday he expects the tender offer to complete its merger with NYSE to start around the middle of February.

more...

Why do I feel this is a bad thing? :shrug:

[54anickel]

50. Thain Seeks Bond Comeback for New York Stock Exchange (Update3)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aMTLqiKD6tcs&refer=home

Jan. 26 (Bloomberg) -- John Thain plans to bring the world's biggest stock exchange back into the market for corporate bonds.

NYSE Group Inc., the owner of the New York Stock Exchange, next month will begin trading the first of about 6,000 debt securities sold by companies ranging from AT&T Inc. to Yum! Brands Inc. The venture, NYSE Bonds, aims to capture within a year 25 percent of the $500 million private investors trade on average each day by driving fees down as much as 80 percent.

``There has been an increasing desire on the part of the members of the exchange to trade not just stocks, but everything in one place, to provide one marketplace for trading the entire balance sheet of any of our listed companies,'' Thain, the chief executive officer of NYSE Group, said in a conversation with news organizations at the World Economic Forum's annual meeting in Davos, Switzerland. ``There will be increasingly a truly liquid market, which will bring a lot more transparency.''

snip>

Thain has been expanding the world's biggest stock exchange since he joined in 2004 after 23 years at Goldman Sachs Group Inc. The NYSE went public last year through the $2.2 billion acquisition of Archipelago Holdings Inc., a purchase that allowed the NYSE to add options trading to the roughly 3,600 common and preferred shares listed on the Big Board. NYSE shares have risen 23 percent since March to $99.22.

NYSE Group will move into European equities and trading futures contracts on commodities and interest rates this year with its purchase of Euronext NV, which owns the stock markets in Lisbon, Paris, Amsterdam and Brussels.

Emerging Markets

Thain is also pushing into Asia and emerging markets. NYSE Group will unveil an alliance with the Tokyo Stock Exchange next week, Thain said today in the interview, declining to disclose the details of the agreement. NYSE Group earlier this month acquired a 5 percent stake in National Stock Exchange of India Ltd., the maximum permitted.

``The other place we really want to have a position in is China,'' said Thain. ``The Chinese government, like you have seen them do with the big commercial banks, will likely open up the market allow some minority interest in their exchanges.''

more...

[54anickel]

56. Complex finance and the brave new world economy (Davos)

http://www.ft.com/cms/s/7e2e6dc6-ac18-11db-a0ed-0000779e2340.html

Much of the discussion at the World Economic Forum in Davos has two themes. First, the continued robustness of the global economy as defined by sustained high growth and low inflation. Second, the steady rise in economic and financial risks.

The tendency is to treat these themes as competing and engage in aninteresting but inconclusive debate about their relative merits. A better approach is to recognise that these themes are consistent with structural changes in the world and seek torecalibrate the perspective used for defining the way forward.

In the past few years there has been an acceleration in the realignment of the global economy. Two developments have been particularly important. First, the productivity shock resulting from the absorption into the global labour force of massive numbers of workers in emerging economies; and second, the increase in commodity prices that has transferred wealth to raw material exporters mainly in the emerging world.

As a result a new set of countries now exercises a greater (and different) influence on four key global variables: growth, trade, price formation and capital flow. For some of these countries, the transition is nothing short of a regime shift. The most visible is, of course, the move from international debtor status to international creditor status, with the concurrent provision of cheap funding back to countries such as the US.

The systemic impact of this global realignment would have been less dramatic were it not for a technical factor: the bout of financial innovation triggered by the proliferation of derivative based instruments. This has reduced the barriers to entry to almost all markets and encouraged the migration of capital towards more illiquid and leveraged asset classes.

The interaction of these economic and technical changes has altered market valuations, volatility, velocity and liquidity. No wonder various markets seem to be sending conflicting signals. No wonder market participants are having trouble predicting central bank policies, which are becoming more tentative. No wonder economists cannot resolve debates on the outlook forglobal payments imbalances.

No wonder there is a sense that greater international co-ordination is needed even though the global economy is in the midst of an unprecedented phase of high growth, low inflation and greater economic and financial convergence.

more...

[citizen snips]

39. Amgen Shares Fall

NEW YORK (AP) -- Shares of biotechnology company Amgen Inc. dropped Friday following flat fourth-quarter earnings and disappointing data for its cancer drug Vectibix.

The stock lost $3.65, or 4.9 percent, to $71.34 on the Nasdaq in afternoon trading. It has traded between $63.52 and $80.03 over the last 52 weeks.

The company reported a 1 percent rise in fourth-quarter profit late Thursday, missing Wall Street expectations. Also, Amgen released an interim analysis of a study comparing Vectibix with a combination of Vectibix and Genentech Inc.'s Avastin to treat colon cancer. Results showed Vectibix did not enhance the effects of the other drug.

Late Thursday, Morgan Stanley analyst Steven Harr said the negative news on Vectibix and on anemia drug Aranesp as well will likely combine to move shares lower. But, he said, fourth-quarter sales figures were largely in line with estimates.

more...
http://biz.yahoo.com/ap/070126/amgen_mover.html?.v=1

[citizen snips]

40. Technitrol Shares Tumble on 4Q Results

NEW YORK (AP) -- Shares of Technitrol Inc. took a hit Friday, after the electronics parts maker posted fourth-quarter results and an outlook that disappointed investors.

After the closing bell Thursday, Technitrol said it earned $14.8 million, or 36 cents per share, up 91 percent from $7.8 million, or 19 cents per share, during the same period in the prior year.

Adjusted earnings -- excluding items -- of 40 cents per share for the latest quarter were "well below expectations," wrote Longbow Research analyst Shawn M. Harrison in a note to clients. Analysts polled by Thomson Financial had expected, on average, adjusted earnings of 43 cents per share.

Revenue rose 28 percent to $236.1 million from $184.5 million.

more...
http://biz.yahoo.com/ap/070126/technitrol_mover.html?.v=1

[citizen snips]

41. Home Sales Fall; Show Faint Life-Signs

WASHINGTON (AP) -- New home sales fell in 2006 by the largest amount in 16 years, but they were up for a second straight month in December, raising hopes that the worst of the housing downturn is coming to an end.

The Commerce Department reported Friday that sales last month rose by 4.8 percent, following an even bigger 7.4 percent rise in November.

Those two increases, however, were not enough to salvage the entire year, with total sales of 1.06 million units, down 17.3 percent from 2005. That marked the biggest decline since a 17.8 percent plunge in the housing downturn of 1990.

The housing bust is occurring after a boom in which sales of both new and existing homes set records for five consecutive years. The lowest mortgage rates in four decades powered a surge in sales that was bolstered by investors making purchases in hopes of turning around and reselling the properties for quick profits.

more...
http://biz.yahoo.com/ap/070126/economy.html?.v=17

[citizen snips]

42. Caterpillar 4Q Earnings Climb 4 Percent

PEORIA, Ill. (AP) -- Caterpillar Inc., the world's largest maker of heavy construction equipment, said Friday its fourth-quarter profit rose 4 percent as higher operating costs partially offset strong sales.

Its shares rose more than 2 percent by midday as the company forecast strong 2007 results.

Net income grew to $882 million, or $1.32 per share, up from $846 million, or $1.20 per share, a year ago, but fell short of Wall Street's expectations. Analysts surveyed by Thomson Financial predicted earnings per share of $1.34.

The company said revenue for the quarter that ended Dec. 31 rose 14 percent to $11 billion, up from $9.66 billion a year ago.

more...
http://biz.yahoo.com/ap/070126/earns_caterpillar.html?.v=11

[citizen snips]

43. Nasdaq Won't Raise London Exchange Bid

LONDON (AP) -- The Nasdaq Stock Market Inc. fell short in its attempt to win a majority stake in the London Stock Exchange Friday, but refused to raise its hostile takeover bid for the LSE even as it continues its pursuit of the British bourse.

The New York-based electronic exchange said LSE shareholders pledged only 0.62 percent of ordinary, or common, shares by a Friday deadline to tender their shares. The amount was far from reaching the 21 percent needed to complete its hostile 2.7 billion pound ($5.3 billion) takeover, and forced the Nasdaq, which holds a nearly 30 percent stake in the LSE, to extend the deadline until Feb. 10.

"This very low level of acceptances is in line with the board's view that Nasdaq's offer substantially undervalues the exchange and fails to reflect its unique strategic position, outstanding financial performance and excellent prospects," the LSE said in a statement.

The Nasdaq's resistance to raising the bid this week led to an acrimonious exchange between the two companies about the LSE's future. Analysts said the Nasdaq's decision, which caught some by surprise, was a risky one aimed at flushing out investors who had been holding out for a higher bid.

more...
http://biz.yahoo.com/ap/070126/britain_nasdaq_lse.html?.v=9

[citizen snips]

44. Chips Snap: Rambus Rebounds

NEW YORK (AP) -- Semiconductor stocks advanced Friday, led by International Rectifier Corp. and MEMC Electronic Materials Inc., which were among the most dramatic gainers in the space.

Rambus Inc., a memory chip interface designer, was among the most heavily traded in the sector. The stock bounced back from Thursday's session, when shares closed down more than 4 percent. About 6.6 million shares of Rambus changed hands by Friday afternoon, versus average daily trading volume of 5.3 million.

Rambus shares rose $1.67, or 9.6 percent, to $19.08 on the Nasdaq.

MEMC Electronic Materials Inc., maker of silicon wafers, posted fourth-quarter profit that more than doubled from last year, sending shares up to a new 52-week high of $52.96 on the New York Stock Exchange, before slipping back to $52.80, up $9.18 or 21 percent.

more...
http://biz.yahoo.com/ap/070126/sector_snap_semiconductors.html?.v=1

[citizen snips]

46. VistaPrint Up to New High on Q2 Profit

NEW YORK (AP) -- VistaPrint Ltd. stock reached an all-time high Friday after its fiscal second quarter beat Wall Street expectations.

VistaPrint, which supplies online graphic design services and customized print products, said profit grew 52.1 percent, to $8.3 million, or 18 cents per share, for the quarter ending Dec. 31, 2006, from $5.5 million, or 13 cents per share, for the comparable 2005 period. Revenue increased to $64 million from $36.4 million from the same time last year, an increase of 76.2 percent.

The Bermuda-based company added 687,000 new customers, and repeat business increased 83 percent.

Stifel, Nicolaus & Co. analyst Scott Devitt raised his fiscal 2007 predictions to $256 million in revenue, from $229 million, and projected earnings per share of 78 cents, up from 74 cents.

more...
http://biz.yahoo.com/ap/070126/vistaprint_mover.html?.v=1

[citizen snips]

48. Friday's biggest stock gainers and decliners

Abaxis Inc. (NasdaqGS:ABAX - News) shares rose after the Union City, Calif.-based medical products company late Thursday reported fiscal third-quarter net earnings of $2.78 million, or 13 cents a share, compared with $1.85 million, or 9 cents a share, last year. Revenue rose to $22 million from $17.4 million. Analysts polled by Thomson First Call had forecast a per-share profit of 12 cents.

AirTran Holdings Inc. (NYSE:AAI - News) said it swung to a fourth-quarter loss as a profitable final two months of the year were unable to offset higher fuel prices and what was a weak October for the discount airline.

Carpenter Technology Corp. (NYSE:CRS - News) said its second- quarter net income rose to $48.1 million, or $1.82 a share, from $42.9 million, or $1.65 a share, impacted by a $53 million expense. A Thomson Financial survey of analysts, on average, expected earnings of $2.00 a share for the quarter. Analysts' estimates usually exclude items. The Wyomissing, Pa., metal and alloy company said revenue for the quarter ended Dec. 31 grew to $441.3 million from $345.7 million a year earlier.

Caterpillar (NYSE:CAT - News) said its fourth-quarter profit rose 4% as construction and mining machinery sales increased in the face of a weaker housing market and a decline in demand for truck engines..

more...
http://biz.yahoo.com/cbsm/070126/e88efa37c1324760b6c0dfd14a73ece9.html?.v=3

[citizen snips]

49. Oil Prices Rise Above $55

NEW YORK (AP) -- Oil prices rose above $55 a barrel Friday on concerns that producers were complying with OPEC's production cuts and on expectations of continued blustery weather in the northeastern United States.

Light, sweet crude for March delivery on the New York Mercantile Exchange rose $1.25 to $55.48 a barrel in morning trading in New York. Brent crude rose $1.24 to $55.36 a barrel on the ICE Futures exchange in London.

Tank tracker Lloyds Marine Intelligence Unit said Friday that oil exports from the Organization of Petroleum Exporting Countries fell to less than 23 million barrels a day in December from just under 24 million barrels a day in November, according to a Dow Jones newswire report.

Saudi Arabia, the world's largest crude oil producer and exporter, was the quickest to implement OPEC's production cuts; its exports in December were 1.1 million barrels a day lower than before the OPEC's October call for production cuts.

more...
http://biz.yahoo.com/ap/070126/oil_prices.html?.v=14

[citizen snips]

51. Sector Snap: Regional Banks

NEW YORK (AP) -- Many regional and community banks reported borrowers' ability to repay debt withered in the fourth quarter. While investors never like to see deterioration in credit quality, some analysts say credit performance had been so pristine it just had to fall back to Earth.

One of the key measures for bank profits is borrowers' creditworthiness. When borrowers default on loans, the uncollected money comes straight out of a bank's profit.

For years, borrowers of all kinds have paid their bills with unprecedented reliability. Job growth boosted retail customers' credit while an expanding economy supported commercial borrowers. But in the fourth quarter, many banks reported worse credit performance by most measures.

They said a higher percentage of their loan portfolios were nonperforming, meaning 90 days past due. For example, TCF Financial Corp., a Wayzata, Minn.-based bank with 453 branches and $14.7 billion in assets, said in the fourth quarter the percentage of nonperforming loans in its portfolio rose to 0.45 percent from 0.35 percent in the fourth quarter of 2005.

more...
http://biz.yahoo.com/ap/070126/regional_banks_sector_snap.html?.v=2

[citizen snips]

52. Halliburton 4Q Profit Declines 40 Pct

HOUSTON (AP) -- Oil industry services provider Halliburton Co. was upbeat Friday despite a 40 percent decline in fourth-quarter profit, citing heavy demand for its oilfield equipment and personnel and predicting more of the same for 2007.

Earnings fell to $658 million, or 64 cents per share, compared with $1.1 billion, or $1.04 per share, during the same period a year ago. But the prior-year results included $540 million of income, or 51 cents per share, that came from a tax benefit.

Analysts surveyed by Thomson Financial were looking for earnings of 61 cents per share.

In a conference call with analysts, Halliburton Chairman and Chief Executive Dave Lesar offered a positive outlook for this year, saying customers have indicated strong demand for oil-field services despite sliding natural gas prices.

more...
http://biz.yahoo.com/ap/070126/earns_halliburton.html?.v=15

[citizen snips]

53. European Markets Finish Lower

LONDON (AP) -- European markets finished lower Friday, with mining firms such as Xstrata and Antofagasta leading decliners amid weaker metals prices and offsetting gains from cosmetics giant L'Oreal.

The German DAX Xetra 30 index closed down 0.4 percent at 6,690.34, the French CAC-40 index slipped 0.5 percent to 5,582.30 and the U.K. FTSE 100 index lost 0.7 percent to 6,228.00.

U.S. shares were lower.

Industrials, including defense company EADS, also lost ground. EADS shares dipped 1.6 percent amid reports that the U.K. government could review contracts if the company doesn't go ahead with a planned 100 million pound (US$196 million; euro151 million) investment

more...
http://biz.yahoo.com/ap/070126/european_stock_roundup.html?.v=1

[54anickel]

54. GM Expects Record Revenue After Delay, Restatements (Update4)

http://www.bloomberg.com/apps/news?pid=20601103&sid=a235kxrKtCcg&refer=us

Jan. 26 (Bloomberg) -- General Motors Corp., the world's largest automaker, said it will announce record fourth-quarter revenue and a profit, after a restatement to correct five years of reporting errors.

GM yesterday abandoned a planned Jan. 30 release of fourth- quarter results, without setting a new date. The automaker said it's working on restatements involving deferred tax liabilities, hedging and other items for 2002 through the third quarter of 2006 as well as results from its former finance unit.

Signs that Chief Executive Officer Rick Wagoner's plan to end losses at the automaker are working may allay investors concerns over accounting errors. The latest delay comes after the automaker restated results back to 2000 last year. Only one quarter in the past eight hasn't been restated or adjusted.

``We're actually very, very impressed with what we're seeing going on,'' William Smith, who manages $70 million in assets including GM shares, at New York-based Smith Asset Management, said in an interview today. ``You're going to have record revenues, first of all. This is coming from a company that only a year ago people were talking about bankruptcy.''

snip>

The delay doesn't immediately threaten GM's B rating, which is five steps below investment grade, Standard & Poor's Rating Services said in a report today. If the company doesn't make a March 1 deadline for filing its annual report, S&P may put GM back on CreditWatch, meaning a downgrade is more likely. S&P took GM off CreditWatch on Dec. 13 on improvements in available funds.

The delay ``raises new concerns about the integrity of the company's financial reporting and internal controls, but has no immediate effect on the ratings on GM'' or its former finance unit, S&P said.

more...

[54anickel]

55. Ford Has $5.8 Billion Quarterly Loss, Worst Year Ever (Update9)

http://www.bloomberg.com/apps/news?pid=20601103&sid=aggRP0unV8L8&refer=us

Jan. 25 (Bloomberg) -- Ford Motor Co.'s fourth-quarter loss widened to $5.76 billion on plunging sales of pickups and sport- utility vehicles, capping the worst year ever for the 103-year- old company.

The loss was $3.05 a share, compared with $74 million, or 4 cents, a year earlier, Ford said today. Excluding costs Ford considers one-time, the loss was $2.08 billion, or $1.10 a share, wider than analysts' estimates. Revenue dropped 13 percent.

Ford's first quarter under new Chief Executive Officer Alan Mulally was the worst fourth quarter in its history. The full- year loss of $12.7 billion topped the previous record of $7.39 billion in 1992. Falling sales of light trucks following spikes in gasoline prices put Ford at risk of being passed by Toyota Motor Corp. as No. 2 in U.S. sales this year.

``We're in the first or second inning of a turnaround plan,'' said Dan Poole, who helps manage $34 billion including Ford shares for National City Corp. in Cleveland. ``You aren't going to see the numbers turn for quite a while yet -- we think the second half of 2008 at best.''

Ford said today it expects losses will narrow this year without providing an estimate. The Dearborn, Michigan-based automaker had net income of $1.44 billion in 2005 and hasn't been profitable since the second quarter of that year.

more...

[citizen snips]

57. Grains, Soybeans Fall

CHICAGO (AP) -- Grain and soybean futures ended lower Friday on the Chicago Board of Trade.

Wheat for March delivery fell 5 1/4 cents to $4.63 1/2 a bushel; March corn fell 1 1/2 cent to $4.05 1/2 a bushel; March oats fell 3 1/2 cents to $2.62 1/4 a bushel; March soybeans fell 2 3/4 cents to $7.10 1/2 a bushel.

Beef futures finished mixed while pork increased on the Chicago Mercantile Exchange.

February live cattle rose .10 cent to 90.22 cents a pound; March feeder cattle fell .20 cent to 94.10 cents a pound; February lean hogs rose .52 cent to 63.87 cents a pound; February pork bellies rose 2.10 cents to $1.0020 a pound.


http://biz.yahoo.com/ap/070126/board_of_trade.html?.v=4

[citizen snips]

58. Sector Snap: Homebuilders Decline

NEW YORK (AP) -- Shares of homebuilders declined on Friday after the Commerce Department reported that sales of new homes dropped in 2006 by the largest amount in 16 years. Disappointing quarterly results also weighed on shares in afternoon trading.

The Commerce Department reported 17.3 percent lower sales of new single-family homes, totaling 1.06 million units for 2006, versus an all-time high for sales of 1.28 million units set a year earlier.

Housing shares have fallen sharply this year, as the building industry contends with slumping sales and home prices. After setting sales records for five straight years, sales of both new and existing homes suffered sharp declines last year, which has caused ripple effects throughout the whole economy.

KB Home declined $1.22, or 2 percent, to $50.90, Hovnanian Enterprises Inc. lost 89 cents, or 3 percent, to $30.92 and Meritage Homes Corp. shed $1.42, or 3 percent, to $42.76.

more...
http://biz.yahoo.com/ap/070126/homebuilders_sector_snap.html?.v=1

[54anickel]

59. Anchor’s Ties to Citigroup Attract Scrutiny (CNBC's Bartiromo)

http://www.nytimes.com/2007/01/26/business/media/26maria.html?ref=business

Late last year, an executive from Citigroup phoned an official connected with CNBC, the cable business news channel. According to people with knowledge of the call, the Citigroup executive made it clear that Maria Bartiromo, the popular CNBC anchor, would not be permitted to fly on Citigroup’s corporate jet again.

Shortly before that, Todd S. Thomson, the head of Citigroup’s global wealth management group, arranged for Ms. Bartiromo to speak to some Citigroup clients in Hong Kong and Shanghai. Ms. Bartiromo had flown home with Mr. Thomson on the corporate jet, bumping several company bankers from the plane.

Executives at CNBC deny receiving a phone call telling them that Ms. Bartiromo would be barred from further flights.

Mr. Thomson was let go by Citigroup this week amid concerns over his judgment, his expenses and the way he handled some of his interactions with the CNBC anchor, including his decision to have Citigroup put $5 million into a multiyear sponsorship of a program on the Sundance Channel cable television network that would have Ms. Bartiromo as a co-host.

Ms. Bartiromo, by contrast, has the strong support of her employer. CNBC, which had said that her flight was pre-approved and that Citigroup was compensated, issued a statement yesterday that said she had not violated any of the channel’s ethical standards. It called her “one of the most prolific and well-respected financial journalists in the industry.”

Despite CNBC’s blessing, it is unusual for a financial journalist to make a public appearance on behalf of a major advertiser. That incident and other associations with Mr. Thomson have raised questions about Ms. Bartiromo’s judgment in getting too close to the people and organizations that she covers.

more...

[54anickel]

60. BRICs Deserve Bigger Say in Global Economic Wall

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=aCux0AQE5Gww

Jan. 26 (Bloomberg) -- The Group of Seven handicapping is already under way.

Will the great economic powers discuss the yen's weakness when they meet in Germany next month? Might the U.S. be in for a rebuke for its huge deficits? Could Europe be on the hot seat for not doing more to lower unemployment?

Yet here's the real question to ask about the G-7's meeting on Feb. 9-10: Should anyone care?

For years now, the G-7 has been like a relic of a simpler and more manageable time. Ten years ago, policy makers from Canada, France, Germany, Italy, Japan, the U.K. and the U.S. still had some sway over investors. Traders would interrupt their Saturday evening to see what the G-7 said about markets.

Nowadays, the group's meetings are often little more than an afterthought. If G-7 members are curious about the cause of their growing irrelevance, they need look no further than the so-called BRIC economies -- Brazil, Russia, India and China.

The influence of these four nations -- and developing ones in general -- was perhaps the biggest business story of 2006. Since 2000, more than a third of the world's growth has originated in the BRICs, according to Jim O'Neill, London-based head of global economic research at Goldman Sachs Group Inc.

more...

[citizen snips]

61. Dollar Rises on Factory Orders Report

NEW YORK (AP) -- The dollar rose against most major currencies on Friday after Washington reported positive economic news on factory orders.

In afternoon New York trading, the euro bought $1.2910, down from $1.2928 late Thursday in New York. The British pound also slipped to $1.9588 from $1.9641.

The dollar strengthened against the Japanese currency, rising to 121.58 yen from 121.11 yen.

The Commerce Department reported Friday that orders to factories for big-ticket manufactured goods rose in December by the largest amount in three months, led by a huge jump in demand for commercial aircraft and the biggest increase in orders for cars and trucks in more than two years.

more...
http://biz.yahoo.com/ap/070126/dollar.html?.v=2

[citizen snips]

62. Sector Wrap: Coal Producers

NEW YORK (AP) -- Shares of some of the nation's largest coal producers traded higher on Friday, as investors ignored analyst criticism of fourth quarter earnings reports and fears of pricing erosion.

Shares of Massey Energy Co. rose $1.46, or 6.5 percent, to close at $24. Shares of Consol Energy Inc. added 48 cents to finish at $34.15, while shares of Peabody Energy Corp. rose 68 cents to close the session at $40.35. All three stocks trade on the New York Stock Exchange.

The upward activity came after two days of earnings reports that failed to impress Wall Street. On Friday, Massey Energy reported profit of $10.7 million, or 13 cents per share, compared with a loss of $211.8 million, or $2.76 per share, in the year-ago period. But Wayne Andrews, an analyst at Raymond James, said absent a tax benefit of $7.4 million, the company's earnings would have missed Wall Street estimates.

"There is no surprise that MEE missed estimates yet again," Andrews said in a note to clients. "The tax benefit was the major factor in boosting EPS this quarter."

more...
http://biz.yahoo.com/ap/070126/coal_producers_sector_wrap.html?.v=1

[54anickel]

63. So where'd we end up for the close?

Dow 12,487.02 15.54 (0.12%)
Nasdaq 2,435.49 1.25 (0.05%)
S&P 500 1,422.18 1.72 (0.12%)
10-yr Bond 4.8790% 0.0120
30-yr Bond 4.9800% 0.0180
NYSE Volume 2,626,622,000
Nasdaq Volume 2,082,335,000

4:20 pm : The indices finished in split fashion and were relatively flat Friday as investors juggled mixed corporate news, surging oil prices and the growing likelihood the Fed might not cut rates at all this year.

Before the market opened, the belief that Thursday's sell-off may have been an overreaction, especially on the heels of Microsoft's (MSFT 30.60 +0.15) solid quarter and fellow Dow component Caterpillar (CAT 61.04 +1.41) issuing upside 2007 sales guidance, helped to improve the underlying tone.

Microsoft's solid quarter helped renew confidence in Technology's growth prospects, as bargain hunters jumped back into beaten-down chip stocks. Nonetheless, tech only recovering a fraction of the 1.0% it endured a day earlier was only enough to help the Nasdaq limp into the close with a paltry gain.

Aside from the inability to take a more convincing tech recovery into the weekend, growing uncertainty as to which way (and when) policy makers will fine-tune monetary policy also weighed on investors' minds.

At 8:30 ET, the market digested a report that showed underlying business investment trends are picking up after a few soft months. Durable goods orders jumped 3.1% in December, ex-transportation orders posted their first increase since September and non-defense orders (ex-trans) rebounded after a few months of decline.

Just a day removed from getting more evidence of stabilization in the economy's weakest sector - housing - the Commerce Dept. showed that new home sales rose a healthy 4.8% in December to a 1.12 mln annual rate, the highest level since April. The report also showed a decline in monthly inventories, a drop in median home prices and an upward revision to November's numbers. However, such strong data also left some investors fearing the worst - that the Fed's next move may actually be to tighten.

The funds futures market continues to reduce the favored odds for a Fed policy ease over 2007 as the current pricing holds off a rate cut until December.

At the end of the day, though, the market simply looked tired following a week of choppy trading. In fact, had reports of a possible alliance between Countrywide Financial (CFC 42.94 +2.65) and Bank of America (BAC 52.05 -0.35) not surfaced late in the day to turnaround the influential Financials sector, the Dow and S&P 500 would have lost even more ground.

On a positive note, the market remained fairly resilient in the face of a 2.2% surge in oil prices.BTK -0.2% DJ30 -15.54 DJTA -0.9% DJUA +0.2% DOT +0.2% NASDAQ +1.25 NQ100 -0.3% R2K +0.5% SOX 1.6% SP400 +0.3% SP500 -1.71 XOI +0.5% NASDAQ Dec/Adv/Vol 1239/1763/1.94 bln NYSE Dec/Adv/Vol 1361/1896/1.37 bln

3:30 pm : Going into the close of trading for the week, there still isn't a strong sense of conviction on either the bullish or bearish side of the aisle. However, a recent turnaround in the influential Financials sector, sparked by some encouraging news in the mortgage-lending space, is helping the blue-chip indices inch closer to the unchanged mark.

Thrifts & Mortgage (+1.5%) is now among today's best performers following recent reports that Countrywide Financial (CFC 44.66 +4.37) is holding discussions about an alliance with Bank of America (BAC 52.00 -0.40). Countrywide is surging nearly 11% to a new all-time high, but since B of A is losing ground on the news and is a much more heavily-weighted constituent on the S&P 500, the broader market is struggling to turn positive. DJ30 -7.33 NASDAQ +4.84 SP500 -0.10 NASDAQ Dec/Adv/Vol 1404/1560/1.67 bln NYSE Dec/Adv/Vol 1645/1599/1.15 bln

3:00 pm : The indices remain mixed even as oil prices finish near session highs. Crude for March delivery recently closed up 2.2% near $55.40/bbl, in sympathy with a nearly 4% surge in natural gas futures, as the Northeast experiencing its coldest day of the year is likely to boost demand for heating oil. What is most noteworthy, though, is the market's resilience in the face of oil's surge, especially since the Energy sector (+0.2%) failing to take full advantage does not position its leadership as the offset it can be when energy prices climb.DJ30 -34.70 NASDAQ +1.02 SP500 -2.54 NASDAQ Dec/Adv/Vol 1488/1449/1.57 bln NYSE Dec/Adv/Vol 1681/1528/1.06 bln

2:30 pm : All three major averages are now at their best levels of the afternoon, spearheaded by a spike higher in Technology. With the sector trading relatively unchanged an hour ago, its intraday advance of 0.5% merely recoups half of its 1.0% decline yesterday. However, as evidenced by the latest turnaround on the Nasdaq, tech's resurgence is having a noticeable impact.

Aside from Microsoft's (MSFT 30.90 +0.45) influential 1.5% advance, a 0.8% gain on Cisco Systems (CSCO 26.43 +0.21), especially after being down as much 1.8% earlier, is also providing some notable leadership.DJ30 -24.99 NASDAQ +2.62 SP500 -2.11 NASDAQ Dec/Adv/Vol 1613/1304/1.45 bln NYSE Dec/Adv/Vol 1817/1385/966 mln

2:00 pm : So much for what was shaping up to be a modest recovery in Treasuries providing much relief for equity traders. Within the last 30 minutes, bonds have turned negative across the yield curve as traders, still questioning which way (and when) policy makers will fine-tune monetary policy, get back to unwinding expectations of a Fed rate cut anytime soon. Throw in a nearly 2.0% gain in oil prices and equity traders are finding it difficult to justify valuations from the rally during the second half of 2006. DJ30 -54.80 NASDAQ -2.43 SP500 -4.87 NASDAQ Dec/Adv/Vol 1619/1276/1.36 bln NYSE Dec/Adv/Vol 1776/1420/894 mln


Good night everyone, have a great weekend :hi:

Ozy, if you're out there let us know how you're doing :grouphug:

[54anickel]

64. Wall Street Mixed After Economic Reports

http://biz.yahoo.com/ap/070126/wall_street.html?.v=43

NEW YORK (AP) -- Wall Street closed out a volatile week with a mixed performance Friday after a pair of economic reports dashed hopes for an interest rate cut anytime soon. The major indexes were down for the week.

Stocks found some late-day strength as investors sought bargains after a two-day pullback that erased most of its 2007 gains. The market had its worst performance so far this year, despite optimism about earnings earlier in the week that lifted the Dow Jones industrials to its fourth record high of the year.

snip>

Investors had been holding on to hopes that central bankers might cut rates in the first half of the year. However, a steady stream of positive economic data like Friday's is making that unlikely and instead raising the possibility the Federal Reserve might resume its campaign of rate hikes that ended in August. The Fed's Open Market Committee meets next week.

"The biggest driver is concern the Fed might see more reasons to raise rates than to lower," said Arthur Hogan, chief market analyst at Jefferies & Co.

snip>

Long-term bonds were little changed, with the yield on the benchmark 10-year Treasury note flat at 4.88 percent, compared with late Thursday. Shorter-term bond yields rose during the session. The market on Thursday was hit by a lackluster report on sales of existing homes, which sent long-term interest rates sharply higher and raised concern about the housing market.

The dollar was mixed against other major currencies, while gold prices fell.

more...