STOCK MARKET WATCH, Monday 2 May

[ozymandius]

Monday May 2, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 264 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 140 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 197 DAYS
DAYS SINCE ENRON COLLAPSE = 1254
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




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

AT THE CLOSING BELL ON April 29, 2005

Dow... 10,192.51 +122.14 (+1.21%)
Nasdaq... 1,921.65 +17.47 (+0.92%)
S&P 500... 1,156.85 +13.63 (+1.19%)
10-Yr Bond... 4.20% +0.03 (+0.67%)
Gold future... 436.10 +3.70 (+0.85%)

GOLD, EURO, YEN, Dollars and Loonie




PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Tim W. Wood

THE DOW REPORT
A Look at the Transports and Relative Strength Charts

Today I want to focus on the Transportation sector. In the first chart below we have the Dow Jones Transportation Average. It is this index that we use in conjunction with the Industrials under Dow theory. As I have stated in recent wrap ups, both the Industrials and the Transports are now “in gear” to the downside. But, in today’s wrap up I wanted to look specifically at a couple of the other transportation averages to see if they too are confirming the Dow Jones Transportation Average as well as the recent Dow theory confirmation.

The upper chart below is of the Dow Jones Transportation Average and I have marked in red the break below the January secondary reaction low point. The lower chart is of the Dow Jones Railroad Index. It may be just a bit difficult to see, but this index marginally violated its January low as well. According to Dow theory, any penetration of a previous high or low point on a closing basis counts as a valid break. Therefore, the Railroad Index is currently “in gear” with the Transportation Average.



It is important to remember that according to Dow theory the averages act as a barometer. In other words, they look ahead and discount the future economic environment. The fact that the Industrials and the Transports are in gear to the down side, they are looking ahead and forecasting a future economic slowdown. The fact that the Rails and the Trucking Index are further confirming the Transports just serves as further evidence of the coming economic slow down. If we see the Marine Index join the rest of the Transportation averages, then we will have all four indexes in agreement and that will be very hard to dismiss.

But, in addition to the Transports and the Industrials, we continue to see weakness in the Retail sector. This is telling us that the consumers have been pulling back, which has caused the contraction in the Industrials and the Transports.

more...

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

[radfringe]

2. packaging

another sector that acts as a barometer are companies who manufacture packaging materials (cardboard boxes, bubble wrap etc)

while these items are available to the general public -- the largest consumers are other manufacturing businesses. The more product they produce the more packaging materials they will need. If a manufacturer is slowing down, he has less need to stock up on packaging materials.

same goes for transportation -- the less goods that are produced the less need for transporting them to stores/outlets etc.

[Tandalayo_Scheisskopf]

3. Classic Head & Shoulders.

And there are some who would like us to ignore that fact.

I'll have my lotuses with a warm raspberry/walnut vinigarette, please.

[UpInArms]

18. good morning Ozy!

Great 'toon, today - and excellent wrapup.

:hi:

[AnneD]

35. Morning Marketeers

:donut: Thanks for the wrap ups and this thread. I always feel well informed after I read this thread. I always appreciate your work.
Happy hunting, and watch out for the bears.....

[UpInArms]

4. daily dollar watch

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

Last trade 84.49 Change +0.06 (+0.07%)

Dollar Shifts Focus To Tuesday Fed Meeting

http://www.dailyfx.com/index.php?option=com_content&task=view&id=908&Itemid=39

US Dollar

Moving on to the Fed! The first half of next week will be dominated by the FOMC rate decision on May 3rd. This time last week, we had hoped for the upcoming week's data to give us clearer insight on what changes, if any, that the Fed be making to their statement. Unfortunately, this week's data has only made forecasting the changes even more difficult, which means that the dollar is still at risk next week as the market remains divided on whether the Fed will be saying goodbye to the phrase "measured." A few of the things that we do know is that GDP growth slowed in the first quarter, durable goods orders tumbled and consumer confidence declined. However, inflation indicators came in higher than expected, home sales were exceptionally strong while the energy-induced slowdown in consumer spending has been much tamer than most analysts expected. From today's data alone, we see that personal spending once again outpaced personal income. Even worse though was the report that the US household savings rate fell to the lowest level since October 2001. Even for this sole reason, the Fed will need to increase interest rates to spur savings. Last month, the Fed did everything but remove the measured phrase, and even up till today, most banks have been quiet about whether the phrase will disappear next week. Our friends at IFR are one of the first to postulate that it may be time to say goodbye to the measured phrase given the recent acceleration in inflation. Once again, expect the market to hang onto Greenspan's every word.

<snip>

Japanese Yen

The biggest mover in the currency markets today was undoubtedly the Japanese yen. As we signaled in yesterday's FXCM SSI report, there was definitely more room for the yen to move lower following the flip in positioning from net shorts to net longs and the sharp rise in long positioning in general. The catalyst for today's sell-off was what we have been warning would be catalyst for a USDJPY's demise for some time, and that is Chinese revaluation. This time, it was the Chinese themselves that spurred the speculation. According to a front-page article in a Chinese state run paper, recent reforms have made conditions "ripe" for changes to the Yuan's exchange rate. Admittedly, the People's Bank of China did announce shortly thereafter that this does not represent the central bank's view and is "just analysis by some financial experts." What we do want to emphasize is that this article was published in a state run paper, not an independent one. This sort of "yes-no" mixed message that the Chinese government is sending out only tells us one thing, which is that at bare minimum, the Chinese government is indeed closer than we may think to revaluing their currency and may be trying to get speculators thinking about the inevitable move. We have repeatedly said that the yen would be the primary currency to use to play intervention because of the two countries' close trade ties. If talk of pegging to a currency basket surfaces rather than just a shift or widening of the trading band, then the euro would be next in line to react. Meanwhile, next week is the Golden Week holiday in Japan, which means that for the most part, the Japanese markets will be closed for most of the week.

...more...

The yuan—the big known unknown

http://www.financialexpress.com/fe_full_story.php?content_id=89691

excerpt:

It is nearly 20 years since September 22, 1985, when the Plaza Accord was signed, whereby the US dollar was devalued vis-a-vis the Japanese yen and German deutsch mark. The Plaza Accord itself was an outcome of the Bonn summit of the then G-5, held some months previously. In the February 2005 London summit, the G-8 official website informs us that the finance ministers and central bank governors of the G-7 countries met informally with China’s finance minister and central bank governor to continue the productive dialogue initiated in Washington in October 2004 “(and)...enjoyed (sic) an open and helpful exchange of views on a wide range of economic issues of mutual interest in a candid way...(including)...the Asian economic outlook, and exchange rate flexibility.” In case the enjoyment was not entirely mutual, or the discussion not candid enough, there is legislation afoot in the US that would impose huge countervailing duties on imports from China, if the yuan is not substantially revalued by the end of July 2005.

History has an odd way of repeating itself. In 1985, the US economy had a current account deficit logging 3.5% of GDP, which was viewed as truly alarming. Following from the Plaza Accord, the Japanese yen gained 33% vis-a-vis the US dollar over the subsequent year. The deutsch mark rose by 28%. By September 1987, both the yen and deutsch mark were 37% stronger than they had been vis-a-vis the US dollar just prior to the Plaza Accord. So what will the Middle Kingdom do? It has been let out that the authorities in China will adopt a more flexible exchange rate, starting from May 1, Labour Day. Which, so ironically, is an American event, the principal export the US made to international socialism. That is, aside from publishing Karl Marx in The New York Times.

To recap, at the start of 1994, China had devalued the yuan vis-a-vis the US dollar by a whopping 50%, from 5.82 to 8.72. It then drifted down, ever so gently, to 8.28 in October 1998 and has been stuck there since. The betting on the street is that China will revalue the yuan by between 5% and 7%, which would take it to between 7.7 and 7.9. The lessons of history, however, indicate otherwise. For starters, the US current account deficit is nearly double of what it was in 1985. There are no Germans around to share the pain. Most other Asian economies have already seen their currencies appreciate and the only thing holding them back from allowing further appreciation has been the obdurate peg on the yuan.

...more...

Asia finance chiefs meet at ADB as yuan talk swirls

http://www.reuters.com/newsArticle.jhtml?storyID=8358555&type=businessNews

LONDON (Reuters) - Finance officials from Asia, which has two-thirds of the world's foreign exchange reserves, meet next week as speculation reaches fever pitch about a Chinese currency revaluation that could rock global markets.

Asian finance ministers and central bank officials will attend the annual Asian Development Bank meeting in Istanbul to discuss the economic outlook, the risks they face and ways to prevent a repetition of the 1997/98 Asian financial crisis.

Asian central banks have more than $2.5 trillion of reserve assets, an arsenal that has grown rapidly in recent years as they intervened in markets to curb the export-damaging rise of their currencies against the falling dollar.

Participants include Japanese Finance Minister Sadakazu Tanigaki, Bank of Japan governor Toshihiko Fukui, Chinese finance chief Jin Renqing and his Indian counterpart Palaniappan Chidambaram. From Europe, Dutch Finance Minister Gerrit Zalm and his Belgian counterpart Didier Reynders join the meeting.

...more...

[UpInArms]

5. AIG - Giant Insurer Finds $1 Billion More in Flaws

http://www.nytimes.com/2005/05/02/business/02aig.html

The American International Group, the embattled insurance giant, said last night that an in-depth examination of its operations had turned up additional accounting improprieties going back to 2000 that would reduce its net worth by $2.7 billion, or $1 billion more than it had previously estimated.

The company also said that the improper transactions or accounting entries, which appeared to have been designed to achieve results "that would enhance measures important to the financial community," in certain cases involved misrepresentations to A.I.G.'s regulators and independent auditors as well as some of its own management.

In addition, A.I.G. said that its internal controls were deficient and that, as a result, its auditor, PricewaterhouseCoopers, would issue an adverse opinion on its internal controls over financial reporting.

<snip>

Half a dozen problem areas turned up as a result of A.I.G.'s review, the company said. One major area involved insufficient risk transfer in certain insurance transactions. For a company to realize the accounting benefits of insurance, risk must be transferred between an insurer and reinsurer, a company with which it is sharing its potential for losses. But A.I.G. acknowledged that this standard was not met in some transactions, and that the premiums that were previously recorded in the deals will now be accounted for as loans. This change will reduce A.I.G.'s net worth by $1.2 billion.

A.I.G. also said that it had failed to value some assets properly. For instance, its allowance for doubtful accounts in its domestic brokerage group was incorrect; correcting it will result in a $300 million drop in net worth.

...more...

[punpirate]

26. This is beginning to have all the earmarks of...

... the classic Nixon "limited hang-out." Offer little tidbits to distract from the really nasty stuff in the closet....

[UpInArms]

29. peeking into the closet

is likely to lead to a bunch of skeletons.

Greenberg Knew It All At AIG

http://www.forbes.com/home/business/2005/05/02/cx_da_0502aig.html

NEW YORK - More than a decade ago, during a brief interregnum in my career as a journalist, I was summoned to the office of Maurice "Hank" Greenberg at American International Group to talk about the company's annual report. The communications firm where I worked at the time believed that providing some help in the preparation of this somewhat turgid document might be a wedge into more work for the nation's fastest-growing financial conglomerate.

"Do you think you can improve on our annual report?" Greenberg growled at me. "Well, here's last year's. See if you can make it better."

Several weeks and many sleepless nights later, we turned in the document. The director of communications for AIG (nyse: AIG - news - people ) received it and smiled thinly. "You know, of course, who wrote every word of the original you were improving on?" he asked. "Hank Greenberg."

To suggest today that Greenberg had no real knowledge or understanding of any insurance product on his watch at this company that he ran with an iron fist for 35 years seems, at least to someone who has witnessed how he works closeup, a trifle naive. Indeed, if the numbers of various prosecutors circling AIG and the Fifth Amendment pleadings by its top executives are any indication, perhaps criminally naive. We'll see.

But it seems doubtful that the annual report was the only item Greenberg micromanaged. At AIG, he had a hand in virtually every new and innovative insurance product that launched from the moment he took control of the small property-casualty operation with its roots in Shanghai. There were even taxi vouchers for his executives that he scrutinized to the finest detail.

<snip>

The operations--involving increasingly complex financial vehicles that we are just beginning to understand--may mirror those of Enron at the peak of its success. Among those close to the auditors who are at this moment tearing apart the company's financial vitals, the talk is about "offshore entities" and the movement of huge sums in and out of hedge funds. Sound familiar?

...more...

[UpInArms]

47. Moody's cuts AIG long-term debt ratings to 'Aa2'

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38474.5472355903-834949847&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Moody's on Monday downgrded the long-term senior debt ratings on American International Group Inc. (AIG) to "Aa2" from "Aa1." The move comes after AIG further delayed the filing of its 2004 Form 10-K and said that the extensive financial review, which is not yet complete, has yielded further evidence of financial misstatements. The ratings remain on review for a possible further downgrade, Moody's said. Moody's also lowered the debt and insurance financial strength ratings of several supported entities, including the group's supported life insurance and mortgage insurance subsidiaries, and of members of AIG's Domestic Brokerage Group, to "Aa2" from "Aa1." They also remain on review for a further possible downgrade.

Wont' this change how much money they have to have in reserves?

[UpInArms]

6. U.S. automakers say Japan's forex intervention as export subsidies

http://www.japantoday.com/e/?content=news&cat=3&id=335962

WASHINGTON — U.S. automakers Ford Motor Co, DaimlerChrysler Corp and General Motors Corp have compiled a joint document criticizing Japan's currency exchange interventions as unfair "export subsidies" and urging the government and Congress to take action.

"Japan's massive interventions in currency markets to keep the value of the yen artificially weak have provided Japanese automakers with an unfair competitive advantage amounting to unfairly subsidizing their exports to the United States," the report states. The Big Three estimate that the yen manipulated to 105 yen against the dollar from 100 yen equals export subsidies of about $3,000 per unit for luxury sedans, over $1,000 for sport utility vehicles and close to $1,000 for midsize sedans. (Kyodo News)

...very short newsblurb...

[UpInArms]

7. Soft patch or slowdown?

http://www.marketwatch.com/news/story.asp?guid=%7B8C0A2426%2D6FA6%2D4E5F%2D9281%2D1F0753958B1F%7D&siteid=mktw

NEW YORK (MarketWatch) -- If Federal Reserve Chairman Alan Greenspan thought the bond market was a "conundrum" two months ago, he must be really mystified now.

If the Fed does what is nearly unanimously expected after its policy setting meeting on May 3 -- which is raise the overnight interest rate that banks charge each other by 0.25 percentage points to 3% -- the fed funds rate will have tripled since last summer.

Meanwhile, the yield on the benchmark 10-year Treasury note ($TNX: news, chart, profile) , which influences consumer mortgage and corporate borrowing rates, has eased half a percentage point, from 4.695% at the end of June 29, 2004 (the day before the first rate hike) to 4.201% at Friday's close.

On Feb. 16, the day Greenspan made his "conundrum" speech, the yield closed at 4.158%.

Perhaps more importantly, however, as an indicator of the expected health of the U.S. economy, the difference between the 10-year yield and the yield on the 2-year Treasury is less than one-third what it was before the rate hikes began.

<snip>

Meanwhile, the more confusing the bond market's behavior becomes, the clearer its message -- the financial markets, including equities, have begun positioning for the so-called soft patch to morph into a slowdown.

...more...

[UpInArms]

8. Seeking shelter in a difficult market

http://www.marketwatch.com/news/story.asp?guid=%7B931A6453%2D56EC%2D4873%2DB9B2%2DFF378AA6C11E%7D&siteid=mktw

CINCINNATI (MarketWatch) -- After touching three-year highs in early March, the markets have undertaken a steep seven-week dive that accelerated in April.

From the March 7 top to the April lows, each index experienced the following seven-week loss:

-- The Dow Industrials lost as much as 984 points, or 8.9%.

-- The Nasdaq dropped 196 points, or 9.3%.

-- The S&P 500 lost 93 points, or 7.6%.

With those losses in place, the most obvious question is, are they bullish or bearish? That is, are the markets now on sale, at 8 to 9% off? Or are they still vulnerable to further discounts?

Only time will tell, but from a technical standpoint, until proven otherwise the downtrend established in January is still in play.

...more...

[RawMaterials]

14. What does this mean for May?

For the time being, the markets are still reaching for a bottom.

And for better or worse, carving out a bottom is more a process than an event.

If the markets are in that process, they likely started on April 20, with the Dow's intraday low precisely on the 10,000 level. If they aren't, incremental downside on the order of 10% is well within the realm of possibility.



http://www.marketwatch.com/news/story.asp?guid=%7B931A6453%2D56EC%2D4873%2DB9B2%2DFF378AA6C11E%7D&siteid=mktw

[UpInArms]

9. The Economy: Why It's Not Déjà Vu

http://www.businessweek.com/magazine/content/05_19/b3932048_mz011.htm

Suddenly a lot seems to be turning sour for the economy. Oil prices have soared: Despite a $3-per- barrel fall on Apr. 27, they've climbed nearly 20% in the past four months alone. Due to sharply higher prices at the gas pump, consumer confidence is cratering, falling to its lowest level in five months in April. Corporate execs also are turning more cautious as signs of weakness in the economy have many companies cutting back on their outlays. The Commerce Dept. reported on Apr. 27 that capital-goods orders, excluding aircraft and defense products, fell 4.7% in March, the biggest decline since September, 2002.

At the same time that the economy is cooling, inflation looks to be heating up. Led by higher energy prices, consumer prices jumped 0.6% in April, the biggest increase since October. Even after stripping out volatile energy and food costs, core consumer prices still rose 0.4%, their largest single-month gain in more than 2 1/2 years. Companies from heavy-duty machinery maker Caterpillar Inc. to hotelier Marriott International Inc. are able to jack up prices after years of being forced to hold the line.

To many on Wall Street, it looks a lot like a return to the stagflationary days of the mid-to-late 1970s. Those were hard times indeed, as the nation suffered a malady that economists of the time thought could never happen: stagnant growth coupled with roaring inflation. Then, as now, fast-rising oil prices sent shock waves throughout the economy. It was a bad period for stocks, too, as investors endured a multiyear bear market. No wonder Wall Street and others are furiously working the worry beads. "This is a treacherous kind of situation," says Allen Sinai, president of consultants Decision Economics Inc.

<snip>

But the most important difference between then and now is productivity growth. Today's strong productivity helps protect the economy from the ravages of stagflation because it allows companies to make more with less. That boosts corporate profits, which gives businesses the power to spend and hire. And that, in turn, means the Federal Reserve can fight inflation by raising interest rates without snuffing out economic growth.

...more...

[54anickel]

15. HA! The Productivity Miracle again?

Sheesh, maybe it's because all the "production" has been exported?


http://www.gold-eagle.com/editorials_04/benson032704.html
The Productivity Miracle and Other Myths and Fairy Tales

snip>

Sadly, the real causes of the productivity miracle are "purposely hidden in plain sight" while the Chairman of the Federal Reserve tells us to look the other way, and believe in fairy tales.

We noticed the first indication of something going horribly wrong when Greenspan went to Capitol Hill for his annual testimony. On the first day, he went to the Senate and praised productivity growth. On the next day, he immediately went back to tell the House that retired workers on social security should not only not share in this productivity miracle, but they should work longer and harder and receive less benefits! Surely, we should have expected that he would be urging Congress to increase, not decrease, the benefits to those receiving a pension!

In looking at the world as it really is (and not what our government and Fed officials would like us to believe it is), at least two-thirds of productivity growth comes from the convenient ways that productivity is actually measured.

snip>

Productivity is measured by the product that leaves the factory in the United States, divided by the number of workers. No common sense adjustment is made for the sad fact that now the United States only produces 45% of the manufactured goods it consumes. Also, a startling percentage of workers, classified as manufacturing workers, are not engaged in manufacturing at all but in the design, marketing, back-office, shipping and logistics of these companies. All too often, the manufactured product (or almost all of the component parts), arrive from Asia. All that is left for the American to do at this point is to assemble, put it in a box, ship, and bill. Take one look at our trade deficit with China and the rest of Asia and you'll realize the real manufacturing work is being done over there. No wonder Americans look productive. It doesn't take too many people to put the finished goods in a box and ship them out!

To fully understand the "Productivity Fraud", take a moment to notice that worker productivity is measured as Output vs. Unit Labor Cost. Sending jobs to Asia is a great way to cut Unit Labor Cost by 80 to 90 percent! Another way to cut Unit Labor Cost is to cut health care benefits for retired workers. Even better is forcing labor agreements that allow new workers to get paid one-half of what established workers receive.

more...


http://hussmanfunds.com/wmc/wmc031110.htm

The U.S. Productivity Miracle (Made in China)

Two questions are worth asking. How much of a boom has U.S. measured productivity actually enjoyed? and, 2) How much of that measured productivity growth is real?

The first question is fairly simple to answer. Since 1947, productivity measured by output per worker has grown at a healthy rate of 2.0% annually. This overall growth rate masks a certain amount of variation. From 1950 to 1980, U.S. productivity grew by 2.1% annually. During the 1980's productivity growth slowed considerably, to a growth rate of just 1.3% annually. From 1990 through the third quarter of 2003, U.S. productivity has grown at a 2.2% annual rate, a full two-tenths of one percent over its long-term average.

Wait. Didn't productivity grow by 8.1% last quarter alone? Well, yes and no. That 8.1% is quarterly growth at an annualized rate. The actual increase of just over 2% was significant, of course, but was the combined result of an enormous program of tax rebates, a blowoff in mortgage refinancings prompted by a brief plunge in long-term interest rates on deflation fears, and a contraction in the U.S. labor market. Since the economy enjoyed higher output with fewer workers, the quarterly productivity figure was extremely strong. Even occasionally large quarterly variations do very little to change the long-term average of about 2% annually.

To an economist, even changes of a fraction of 1% in productivity growth have enormous welfare implications over the long-term. A change from 2% U.S. productivity growth to 2.5% over the long-term would be tremendously welcome, but almost unthinkably optimistic. Unfortunately, the way that productivity growth is often discussed, investors appear to believe that long-term productivity growth in the U.S. has accelerated by several percent, with similar implications for long-term earnings growth. That simply isn't the case.

So even though the implications of the recent “productivity miracle” for long-term earnings growth are marginal at best, 2.2% growth since 1990 is not bad from the standpoint of long-term economic health and social welfare. That is, assuming that this acceleration in measured productivity is both real and sustainable.

Is the increase in productivity growth real?

more...

[UpInArms]

10. Today's Reports:

May 2	10:00 AM	Construction Spending	Mar	-	0.6%	0.3%	0.4%	-	
May 2	10:00 AM	ISM Index		Apr	-	55.5	55.0	55.2	-

[UpInArms]

22. U.S. March construction spending stronger than expected

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38474.4168708102-834943962&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- Outlays on U.S. construction projects increased by a stronger-than-anticipated 0.5% in March, the Commerce Department said Monday. Economists surveyed by MarketWatch were expecting construction spending to rise by 0.2%. Spending on private construction rose 0.5%, while spending on public construction rose 0.3%. Residential, non-residential private construction, educational and highway construction all rose in March, the department said.

10:00am 05/02/05 U.S. MARCH CONSTRUCTION SPENDING STRONGER THAN EXPECTED

10:00am 05/02/05 U.S. MARCH CONSTRUCTION SPENDING UP 0.5%

[UpInArms]

23. ISM Down to 53.3%

10:05am 05/02/05 U.S. APRIL ISM FACTORY INDEX LOWEST SINCE JULY 2003

10:02am 05/02/05 U.S. APRIL ISM MANUFACTURING INDEX 53.3% VS 55.2% MARCH

10:03am 05/02/05 U.S. APRIL ISM MANUFACTURING INDEX BELOW 54.6% EXPECTED

10:03am 05/02/05 U.S. APRIL ISM JOB INDEX 52.3% VS 55.2% IN MARCH

(adding add'l info on edit)

[UpInArms]

27. U.S. April ISM manufacturing index falls to 53.3%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38474.4232569676-834944390&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) -- Factory activity in the United States decelerated for the fifth straight month in April, the Institute for Supply Management reported Monday. The ISM index fell to 53.3% in April from 55.2% in March. This is the lowest level since July 2003 The decline was slightly larger than expected. The consensus forecast of estimates collected by Marketwatch was for the index to slip to 54.6%. Readings above 50 indicate expansion. New orders fell to 53.7% in April from 57.1% in March. The employment index fell to 52.3% from 53.3%.

[UpInArms]

32. U.S. March pending home sales down 0.3%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38474.4357515625-834944958&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- U.S. pending home sales fell 0.3% in March, the National Association of Realtors said Monday. Pending sales were up 1.7% year-over-year. "Considering we've set records for home sales in each of the last four years, the level of contract activity is exceptionally strong," said David Lereah, chief economist for the real estate group.

10:24am 05/02/05 U.S. MARCH PENDING HOME SALES FALL 0.3%

(added link on edit)

[UpInArms]

11. Treasurys up ahead of U.S. borrowing announcement

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38474.3729832639-834941463&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) - Treasury prices rose, pushing down yields, early Monday, ahead of the U.S. Treasury's second-quarter borrowing requirements announcement. Earlier in the year the Treasury estimated it would need to borrow $12 billion in the current quarter, but unexpectedly strong tax receipts in recent days could diminish the institution's borrowing needs, an analyst said. Later in the session investors will focus on construction spending data for March and the latest Institute for Supply Management survey. In recent trades the yield on the 10-year stood at 4.19%, down from 4.20% late Friday.

[UpInArms]

12. Neiman Marcus agrees to $5.1B sale

http://www.marketwatch.com/news/story.asp?guid=%7BCB54A1CE%2DC8F5%2D4BA5%2DB312%2D0FEA46DC47BC%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) - Neiman Marcus Group agreed Monday to be acquired by private equity firms Texas Pacific Group and Warbrug Pincus for about $5.1 billion.

The deal values shares of the Dallas-based department store operator (NMG.A: news, chart, profile) at $100 a share in cash. Neiman's stock price has risen by half since it announced a potential sale in March. The stock closed Friday at $98.32, up 12 cents, but it fell 4.6% to $93.80 in pre-market action on Instinet.

Texas Pacific and Warbrug Pincus will each own equal stakes in Neiman upon completion of the transaction. The parties expect the deal to close by Nov. 1.

"We are very pleased with the results of our strategic review," said Richard Smith, Chairman of The Neiman Marcus Group. "This transaction provides outstanding shareholder value and represents an endorsement of the excellent performance of our entire team."

According to The Wall Street Journal, which reported the deal was imminent in its Monday editions, Warburg and Texas Pacific were considered dark-horse candidates in the weeks-long auction for the chain, which includes 35 Neiman Marcus stores and two Bergdorf Goodman stores in New York.

...more...

[fedsron2us]

13. IBM to cut 15,000 jobs in Europe

International Business Machines Corp is to cut 15,000 jobs throughout Europe next month as part of a company wide reorganisation, The Financial Mail on Sunday reported, citing IBM insiders.

The newspaper said the job losses, most of which will hit Britain, are in response to mounting shareholder pressure over rising costs and a sharply falling share price.

IBM's global services division will be the most severely affected unit. It runs implementation projects and consulting services.

According to insiders, the company is also to dismantle its European, Middle East and Africa corporate structure, a move that will take its toll on hundreds of IBM regional managers, the article added.

http://www.forbes.com/home/feeds/afx/2005/05/01/afx1988547.html
http://www.eveningtimes.co.uk/hi/news/5038329.html

European growth is already very anemic. Job cuts on this scale will just send it into reverse. Unemployment is currently running at between 10-12% in France and Germany. It is now also starting to accelerate in the UK. The big question is when is this finally going to spill over into political unrest. The Euro constitution already seems doomed, unless Diebold gets the contract for counting the votes in the French and Dutch referenda. Its rejection may just be the start of wider turmoil. Could we be in for one of those European 'year of revolutions' soon ?

edit for links

[UpInArms]

16. Prepare now for life after layoff

http://www.detnews.com/2005/money/0505/02/C01-168349.htm

Self-help gurus like to remind us, "Today is the first day of the rest of your life." It's meant to be a good thing, but what if today were the first day of your life without a job for the next two years?

That's a very real possibility, one for which many of our friends and neighbors -- or even you -- need to prepare.

But it's not losing a job that hurts your wallet the most -- it's not being able to get a new one right away.

"A lot of times the best way to approach it is to look at the worst-case scenario," cautions Charles Huff, a budget and credit counselor with DFCU Financial in Dearborn.

His advice: Anyone who might be on the receiving end of a pink slip should plan on two years without a job.

That means slashing your monthly expenses, revamping your lifestyle and using credit very carefully. In addition, the suddenly jobless should do anything to bring in new income and seriously consider moving to a new field or even a new location.

...more...

[RawMaterials]

24. Get Ready Detroit better start saving now...

Cancel your cell phone or your home phone, whichever costs more. Borrow DVDs at the library rather than renting at Blockbuster. Skip the Heineken and drink Blue Ribbon. Just tell yourself that tinny aftertaste means you're doing the right thing.

Granted, much or all of this sounds radical, but it's better to shift into survival mode as soon as a layoff comes -- if not before

Good morning marketers :hi:

[UpInArms]

28. if consumers start following that pattern

there won't be a "soft patch", it will turn quickly into black ice.

:hi: back to you RawMaterials!

[UpInArms]

17. pre-opening blather

briefing.com

9:00AM: S&P futures vs fair value: +2.6. Nasdaq futures vs fair value: +4.5. Futures market holding fairly steady this morning in positive territory, which is setting the stage for a higher open for the cash market... Note that the early favorable bias also comes on the first trading day of the month, typically a strong day for stocks as new inflows hit the market, and ahead of tomorrow's FOMC meeting, when the Federal Reserve is expected to hike rates another 25 basis points

8:30AM: S&P futures vs fair value: +2.9. Nasdaq futures vs fair value: +6.5. Still shaping up to be a higher open for the indices, as futures indications trade above fair value... Better than expected earnings from a handful of blue chips have also helped underpin a positive tone to pre-market trading... Humana (HUM) has beaten analysts' Q1 expectations by $0.05 and raised its FY05 earnings outlook while both Sysco Corp. (SYY) and Avon Products (AVP) have beaten forecasts by a penny, with the latter also raising FY05 guidance

8:00AM: S&P futures vs fair value: +3.1. Nasdaq futures vs fair value: +7.0. Futures market suggesting a higher open for the cash market amid falling oil prices and M&A activity... Crude oil prices ($49.18/bbl -$0.54) have fallen to a two-month low amid speculation that slowing economic growth and larger than expected oil inventories will restrain demand... Also contributing to the upside bias has been Verizon's (VZ) revised, more "superior," $8.4 bln for MCI Inc. (MCIP) and a potential $5.0 bln deal for Neiman Marcus Group (NMG.A)

ino.com

The June NASDAQ 100 was higher overnight due to short covering as it extends last Friday's upside reversal and is breaking out above the 10- day moving average crossing at 1428.80. Stochastics and the RSI are diverging and are turning bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 1449.67 are needed to confirm that a short-term low has been posted. If June resumes last month's decline, weekly support crossing at 1387.77 is the next downside target. The June NASDAQ 100 was up 6.00 pts. at 1431.50 as of 5:54 AM ET. Overnight action sets the stage for a steady to higher opening by the NASDAQ composite index later this morning.

The June S&P 500 index was higher overnight as it extends last Friday's key reversal up, which led to a breakout above the 10-day moving average crossing at 1155.14. Stochastics and the RSI diverging and are turning neutral hinting that sideways prices are possible near-term. Closes above the 20-day moving average crossing at 1165.28 are needed to confirm that a short-term low has been posted. If June renews last month's decline, the 62% retracement level of the August-March rally crossing at 1130.03 is the next downside target. The June S&P 500 Index was up 2.30 pts. at 1160.80 as of 5:56 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

[UpInArms]

19. 9:38 EST markets are open

Dow 10,230.72 +38.21 (+0.37%)
Nasdaq 1,928.86 +7.21 (+0.38%)
S&P 500 1,159.70 +2.85 (+0.25%)
10-Yr Bond 4.198 -0.03 (-0.07%)

NYSE Volume 76,021,000
Nasdaq Volume 90,873,000

Hurrah for the first of the month inflows!

[UpInArms]

20. Avon overcomes U.S. weakness to top estimates

http://www.marketwatch.com/news/story.asp?guid=%7BE22613D9%2D8D09%2D41E1%2DBB24%2D23C303F59436%7D&siteid=mktw

NEW YORK (MarketWatch) -- Avon Products Inc.'s first-quarter profit rose 16% as strong international results more than offset declines in the U.S., the word's largest direct selling company said Monday.

For the period ended March 31, the New York beauty products maker (AVP: news, chart, profile) said net income increased to $172 million, or 36 cents a share, from $148.1 million, or 31 cents a share, in last year's first quarter.

U.S. operating profit and revenue declined as expected, Avon said, falling 15% and 6%, respectively. That was more than offset by operating profit and revenue gains in Europe, Latin America and the Asia-Pacific region, the company said.

Revenue advanced 7% to $1.88 billion from $1.76 billion a year ago.

...more...

[UpInArms]

21. Vanguard Group forms political action committee

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38474.4039109143-834943314&siteID=mktw&scid=0&doctype=806&

BOSTON (MarketWatch) - Vanguard Group, the second-biggest U.S. mutual fund company, has formed a political action committee, spokesman John Woerth said Monday. The PAC, called the Vanguard Group Committee for Responsible Government, will be directed by a group of Vanguard officers who will authorize contributions to federal political candidates. Vanguard, which marked its 30th anniversary on Sunday, tapped long-time spokesman Brian Mattes to oversee its government affairs efforts.

[UpInArms]

25. 10:08 EST numbers and blather

Dow 10,243.74 +51.23 (+0.50%)
Nasdaq 1,929.58 +7.93 (+0.41%)
S&P 500 1,160.99 +4.14 (+0.36%)
10-Yr Bond 4.194 -0.07 (-0.17%)

NYSE Volume 286,130,000
Nasdaq Volume 267,237,000

10:00AM: Major indices extend early gains, as the bulk of sector leadership remains positive... Transportation has surged on the heels Yellow Roadway's (YELL 50.70 +1.70) revised 65% cash offer for USF Corp. (USFC 44.98 +2.35) while Telecom Services has been the best-performing economic sector amid Verizon's revised deal for MCI Inc... Interest rate-sensitive areas like Utility, Homebuilding and Financial have also traded higher, but some analyst downgrades on brokerage firms (i.e. GS, LEH) and an endorsement of Morgan Stanley's (MWD 49.95 -2.67) CEO Philip Purcell has minimized gains on the latter...

Technology has been strong across the board, led by a 1.3% surge in Hardware, while strength in Retail has provided a boost to Consumer Discretionary... Energy, however, has been under pressure as oil prices continue to slide... NYSE Adv/Dec 1534/785, Nasdaq Adv/Dec 1385/991

9:40AM: Decent follow through seen in stocks, as the market opens modestly higher... An extension of last week's 10% sell-off in crude oil futures ($49.39/bbl -$0.33), spurred by larger than expected oil inventories, has eased inflationary pressures... Meanwhile, merger news has also helped underpin a positive tone to trading...

Verizon Communications (VZ 36.12 +0.32) has sweetened its bid for MCI Inc. (MCIP 26.48 -0.05) to $8.4 bln - a deal that MCI's board has deemed "superior" to Qwest's (Q 3.50 +0.08) most recent (Apr. 21) $9.74 bln offer, while Warburg Pincus and Texas Pacific Group have announced plans to acquire Neiman Marcus Group (NMG.A 98.36 +0.04) for about $5.1 bln... Separately, investors will get the latest readings on manufacturing outlook - April ISM Index (consensus 55.0) - and Mar. construction spending (+0.3%) at 10:00 ET...

[UpInArms]

30. Fed: Asia can't harm U.S. interest rates

http://pacific.bizjournals.com/pacific/stories/2005/05/02/daily2.html

Are foreign countries keeping U.S. interest rates low? Can they harm the U.S. economy by changing their behavior? A new Fed report says they aren't and they can't.

Hawaii's housing boom continues in part because mortgage rates, which economists confidently predicted would surpass 6 percent months ago, remain a5 5.5 percent or less.

There is a connection between mortgage rates and the interest rates paid on 10-year Treasury notes. This is it:

The Treasury, which always has a specific amount of cash it wants to raise by selling notes, pays lower return when demand is great, and more when it needs to. This is driven by what investors believe will happen in the economy between now and the time the notes mature. If they think there will be a lot of inflation, for example, they will hold out for a higher rate of return. If they think the economy will be uncertain, safe Treasury notes look attractive.

Banks collect mortgage notes in packages and resell them to investors, who think of them as similar to 10-year Treasuries. Whatever 10-year Treasuries are paying back, they would like mortgage note packages to pay back a little more. So mortgage rates offered to consumers tend to go up and down in lockstep with 10-year Treasuries.

Foreign nations, led by those in East Asia, hold well over $1 trillion in U.S. Treasury securities. What if they stop buying these notes? The Federal Reserve Bank of San Francisco, whose jurisidiction includes Hawaii, commissioned economist Tao Wu to examine a widely-held idea that such purchases are keeping interest rates low, which in turn suggests that if those governments ever stop buying Treasury notes it will drive interest rate up and harm the U.S. economy.

...more...

[54anickel]

38. Bwahaha, Fed attempting to soothe the restless natives? Talk about

wishful thinking!

..."Foreign central banks are not the only players on the field," Wu writes. "Foreign individual investors are at least as active...the vacuum could well be filled by foreign individual investors."

Wu notes that even though U.S. investors' relative holdings have been declining, they are still the biggest holders of U.S. Treasuries, and would also be likely to step in if foreign central banks retreat.


Yeah, sure - maybe in a "flight to quality". which doesn't sound very promising for the overall economy to me either.

[UpInArms]

31. Gradual Yuan Appreciation Would Be a Success, Kuroda Says

http://www.bloomberg.com/apps/news?pid=10000080&sid=aKBp7ddhYZ14&refer=asia

May 2 (Bloomberg) -- The Chinese government should be able to oversee a gradual appreciation of the yuan with ``limited'' effect on other Asian currencies, including the Japanese yen, Asian Development Bank President Haruhiko Kuroda said.

China's regulations that limit the inflow and outflow of domestic and foreign currencies would need to be kept in place to ensure the success of a gradual appreciation of the yuan, Kuroda, 60, said today in an interview in Istanbul, Turkey.

``As long as the adjustment is gradual it will have little impact on other Asian currencies,'' Kuroda said before the start of the annual meeting of the Asian Development Bank. ``The yuan should be made more flexible and the decision if made earlier rather than later would be good.''

The U.S. has been pressuring China to relax its currency's peg to the U.S. dollar, which has been maintained at about 8.3 for a decade. Japan, Singapore and other Asian finance ministers will probably encourage China to adjust its currency this week as they seek to bolter exports, analysts said.

Chinese central bank Governor Zhou Xiaochuan said on April 23 that pressure from outside the country may force the government to speed up currency reforms.

...more...

[54anickel]

44. This is only a test

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

snip>

Although the yuan broke free for only 20 minutes, people who pay attention to this sort of thing think the furlough was a meaningful one. They consider China’s decision to allow the currency to inch higher as some sort of test – like taking away Michael Jackson’s umbrella to see if he spontaneously combusts or just tears up a little. And with a successful test behind them, some in the currency crowd think the Chinese will finally let the yuan grow up, at least a little.

snip>

...Many more people, however, will be affected by another form of top-down responsibility seeping into American behavior, that being the Double Minimum — a phrase that sounds like something on the Jeopardy board, but is really something that could put more people in it—jeopardy, that is.

According to this new law, credit card companies must jack up the minimum payment required on outstanding balances. The idea is to make sure that consumers are paring down principal instead of merely forking over only interest month after month. After month.

This sort of legislated responsibility is not as good as the bankruptcy law for the credit card companies because of the following equation: Interest rate x Balance x Infinity Payments = Infinity Profits. So if fewer people are spinning their wheels and more people are actually paying down principal, that means profits will be less than infinite, which would be quite a change for the credit card crowd.

Besides, the new law is the third blow to the punch drunk credit card holder. Apparently the average credit card debt per family comes to about $8,000, and depending on whom you ask, between a quarter and one-sixth of consumers pay only the minimum on their credit cards. Ergo, lots of folks are soon to be shot full of legislated good sense. Hiking the mandatory minimum from 2% to 4% would be a $160 monthly increase in responsibility. That’s real money, particularly on top of an upwardly adjusting ARM, higher property taxes, soaring pump prices, scary utility bills, and the potential for higher priced plastic goods from Wal-Mart down the road.

more...

[UpInArms]

33. Warren Buffett loses $310 million

http://us.rediff.com/money/2005/may/02buffet.htm

The world's best-known investment guru Warren Buffett has lost close to $310 million in the first quarter of the current financial year from his bets against the US dollar, The Times reported on Monday.

However, Buffet -- the world's second-richest man and the Chairman of Berkshire Hathaway -- is hardly perturbed and continues to hold his stand on the dollar.

Addressing the 19,000-odd shareholders at Berkshire Hathaway's annual general meeting in Omaha, Nebraska, Buffett reiterated his worry over the diminishing enthusiasm for dollars and the ever-rising budget and trade deficits of America.

Even the 'Sage of Omaha' -- as Buffet has been nicknamed -- spoke to shareholders, global ratings agency Fitch Ratings revised the rating on Berkshire Hathaway from 'stable' to 'negative.'

Berkshire will most likely announce in the next few weeks an insurance acquisition worth less than $1 billion, barely 2 per cent of the company's $44 billion cash till.

...more...

[UpInArms]

34. Retirement dream sadly may be real

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/05/02/BAGO2CIGM91.DTL

When people ask me about my retirement plans, I always give a stock wise-guy answer: I tell 'em I plan to buy a double-wide trailer, move it to Las Cruces, N.M., and regard any varmints strolling about the premises as a potential fricasseed lunch.

<snip>

"Every time he (Bush) speaks I get worried because I think all the rules are going to change."

And that's it in a nutshell for Baby Boomers.

<snip>

Of all the institutions in the federal government to show signs of weakness, the Social Security Administration is one of the few that reaches into every home in this country, and one of the few whose failure could set off a national revolt.

<snip>

By all accounts, Bush's plan to reduce Social Security benefits or privatize the system, much to the applause of his friend in the financial industry, has support from few quarters on Capitol Hill and virtually none outside the beltway. There's no question that Bush waited until his second term to unveil his own version of voodoo economics to the rest of the nation.

...more...

[AnneD]

42. Don't ya just luv...

the part where those making over 20K will have reduced benefits. I am 50 so by their plan I would be screwed to begin with. I have cotributed to 403B for some time, and I try to keep it balanced, but geez Luise, I have yet to see that 9%, let alone 12% that is continually touted as the historical return, and I have been in since 1991-yes, I got in during the bull market, but all I made has been wiped out. I am so opposed to personal accounts. Your retirement is TOO important to trust to Wall Street. The reason I felt ok to invest in the market is that I knew SS would be there if I lost all. BUT, if they take that away from me, I will no longer invest as much if at all due to insecure and volitle nature of the market.
Forgot to add...my crisis retirement plan...a spot on an ice floe, a fishing pole, and cans of tuna and sterno. I might have to switch to sardines or mackeral, but considering global warming...I think it is a more feasible plan than Shrubs plans for me.

[WhiteTara]

64. gosh, I better get cracking or I'm gonna lose

my dream trailer in the midwest!

[UpInArms]

66. I found you a fixer-upper that comes with some "help"

[AnneD]

70. Gosh,

Why didn't I think about that. Talk about easy maintaince. Need roof repair- just sweep the floor, add water and plaster it. I wouldn't even worry about mowing the roof.

[WhiteTara]

78. Well, I just figured out why you

chose that one! It has tobacco bales holding up the house!:loveya:

[UpInArms]

79. well, yeah!

I do love my vices :D

:smoke::smoke::smoke:

[WhiteTara]

82. yummm

[RawMaterials]

36. Selloffs Suggest a Credit Crunch

The credit boom is still on schedule to collapse in early 2006, taking the economy and the stock market down with it. What's more, the stock market is starting to see that scenario as increasingly likely.

Many expected 2005 to be the year when the economy turned in a robust performance, finally putting the destabilizing factors of the past five years -- overpriced assets, erratic demand, whipsawing consumer confidence and a gaping trade deficit -- in the rearview mirror.

But for the economy to escape those things, it has to ditch its addiction to easy money in the very near future. And there is no sign of that happening as we approach the middle of this pivotal year. In fact, just the opposite has occurred. As hard as it may be to believe, nearly every key indicator shows that the dependence on credit has gotten markedly worse.

And the stock market is obtaining an increasing distaste for the credit bubble, even though it has helped shore it up since 2001. The lackluster performance of market indices -- the S&P 500 is down 4% so far -- needs to be explained.

snip..

Given how sensitive the credit market is to changes in rates, there doesn't have to be a big catalyst to floor the U.S. economy. The Fed will of course try to forestall the inevitable by pushing the theory that the economy can grow its way out of its overleveraged state. But the only way the Fed thinks the economy can sustain its growth is by keeping rates low. What that does, however, is blow more air into the credit bubble, making the ultimate crunch much worse.

When the history books get written, the corporate crooks of the '90s will have a certain lasting notoriety -- and deservedly so. But the villain of our era will most certainly be the man who created and then sustained the biggest bubble the U.S. economy has ever had to deal with -- Detox's old friend, Fed Chairman Alan Greenspan.

more...

http://www.thestreet.com/comment/detox/10220902.html

[Renew Deal]

37. What does credit boom callapse really mean?

Does it mean that people will not be able to keep up with their credit burden or does it mean that the economy will be so bad that people will be laid off, and then cannot pay their bills?

[punpirate]

41. I think what it means is there won't be the money...

... available to keep extending easy credit. As the money supply draws down due to decreased foreign investment, less money to loan, the credit bubble shrinks, the economic bubble shrinks, and then the really bad things start to bubble up to the surface... sort of the short course in bubbles.... :)

[UpInArms]

39. 12:24 EST numbers and blather

Dow 10,236.64 +44.13 (+0.43%)
Nasdaq 1,925.82 +4.17 (+0.22%)
S&P 500 1,159.21 +2.36 (+0.20%)
10-Yr Bond 4.192 -0.09 (-0.21%)

NYSE Volume 897,042,000
Nasdaq Volume 746,107,00

12:00PM: Market maintains modest gains midday as another decline in oil and upbeat corporate news offset mixed economic data... Falling crude oil futures ($49.65/bbl -$0.07), under pressure amid reports of waning economic growth and rising crude supplies, have eased concerns that higher energy costs may eat into profit growth and consumer demand...

Meanwhile, Verizon's (VZ 35.64 -0.16) revised, more "superior," $8.4 bln for MCI Inc. (MCIP 26.34 -0.19) and a potential $5.1 bln deal for Neiman Marcus Group (NMG.A 92.70 -5.62) have reminded investors that many companies remain flush with cash while better than expected earnings (i.e. HUM, SYY, AVP, TSN) have further validated that operating earnings for the S&P 500 in aggregate will now be up roughly 14%, roughly twice the 7% initially anticipated... Oversold market conditions and anticipation of new fund inflows have perhaps also provided an extra boost to early buying efforts that have kept eight out of ten economic sectors in positive territory and overshadowed a mixed batch of economic data ahead of tomorrow's FOMC meeting...

April ISM index checked in at 53.3 (consensus 55.0), marking its fifth consecutive decline, but since any reading above 50 reflects growth in manufacturing and the survey does not represent hard data, only Treasurys have moved on the data... The benchmark 10-year note is off 3 ticks to yield 4.21%... Separately, Mar. construction spending rose 0.5% (consensus +0.3%), as the prior month's read was revised upward to 0.5%... Meanwhile, Transportation continues to pace the way higher, surging on the heels Yellow Roadway's (YELL 50.01 +1.01) revised 65% cash offer for USF Corp. (USFC 44.75 +2.12)...

11:30AM : Market backs off its best levels, but buyers remain in control of the action... Oversold market conditions, as the major indices lost an average of 2.9% during what has historically been the best month (April) for blue chips, have arguably provided a floor of buying support in the early going... Perhaps also contributing to strong follow through from Friday's rally have been expectations that new inflows could filter in during the first couple days of trading...NYSE Adv/Dec 1888/1130, Nasdaq Adv/Dec 1541/1299

11:00AM : More of the same as stocks continue to trade in a narrow range near intra-day highs... Also helping to underpin an improved underlying sentiment has been another round of better than expected earnings reports (i.e. HUM, SYY, TSN)... Since Q1 earnings overall remain excellent, it now appears that operating earnings for the S&P 500 in aggregate will be up 14% - roughly double the 7% growth analysts expected at the beginning of the quarter... NYSE Adv/Dec 1862/1076, Nasdaq Adv/Dec 1569/1191

10:30AM : Little changed since the last update, as the ISM Index dips but still reflects growth... The April ISM manufacturing index has recently checked in at 53.3, slightly below forecasts of 55.0 and a March reading of 55.2, marking its fifth consecutive decline... But since any reading above 50 reflects growth in the manufacturing sector and the survey does not represent hard data, market participants have not read too much into the report...

Treasurys, however, have turned slightly negative since the number was lower than expected, as the prices paid component fell to 71.0 (consensus 71.2) from 73.0 and employment dropped to 52.3 (from 53.3), marking its third consecutive decline... The 10-year note is off 2 ticks to yield 4.20%... NYSE Adv/Dec 1956/883, Nasdaq Adv/Dec 1649/1009

[UpInArms]

40. American Stock Exchange Pres Quick steps down

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38474.5135441898-834948427&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- The American Stock Exchange said Monday that Peter Quick has stepped down as president. Quick held the position for 5 years, the exchange said. It did not name a successor.

[wishlist]

43. Treasury just announced new 3.5% fixed rate for EE Savings Bonds

For anyone who is not aware of the new major change to a fixed rate for new Savings Bonds or wondered what the new fixed rate would be, Treasury announced it this morning:

New Rate Structure For Series EE Bonds

"On April 4, Treasury announced that EE bonds issued May 2005 and later earn fixed interest rates. The fixed rate for bonds purchased May 2005 through October 2005 is 3.50%. EE bonds earn interest for 30 years; the fixed rate applies during the first 20 years"

Link:
http://ussavingsbonds.gov/indiv/research/articles/news_newratestructure_0405.htm

Several experts who wrote articles about the change had expected the fixed rate to be at least 4%. Definitely not a good deal in a rising interest rate environment since the bonds can't be cashed in at all for one year and can only be cashed in earlier than 5 years with a penalty.

[54anickel]

45. Digging a Little Deeper into “Financial Sphere” Analysis:

Last entry on the page...

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

snip>

Admittedly, the concept of “Financial Sphere” and “Economic Sphere” is more than somewhat nebulous analysis. On a macro scale, we can think of the Financial Sphere in terms of Credit and financial systems, certainly including the markets, where myriad institutions, players and individuals borrow, lend, invest and speculate in securities, debt instruments, currencies and, more generally, speculative assets including homes, businesses and collectables. It has a great deal to do with confidence, perceptions and faith in the Fed and global central bankers. The Economic Sphere comprises scores of businesses, entrepreneurs, investors, governments, employees, and consumers involved in all aspects of production, distribution and consumption of real economic output – goods, services, commodities, structures and fixed investment. The Economic Sphere never appreciates how its behavior and fortunes are dictated by the Financial Sphere.

snip>

It used to be that The Spheres were Kindred Spirits. Financing profitable investment in the Economic Sphere was the commanding source of expansion for the Financial Sphere. Economic profits and prudent lending were, in conjunction, self-adjusting mechanisms, not repealing the business cycle but at least suppressing boom and bust dynamics. Moreover, tight control over Financial Sphere expansion (implemented post ‘30’s financial collapse) for some time nurtured both financial and economic stability. The Spheres shared common interests and growth dynamics. Sound economic investment was the key to financial stability; sound finance the lifeblood of balanced, sustainable economic growth.

But memories faded, historical revisionism prevailed and, over time, the Financial Sphere was set free and left to its own powerful devices. Once unleashed, it was an historic case of a progressive multi-decade bias to asset-based lending and securities speculation. Computerization, financial innovation and the evolution of “financial engineering” played a seminal supporting role. To be sure, the seeking of Financial Sphere “profits” became the commanding mechanism driving both lending and “investing” decisions, with real economic profits relegated to a fading and rather distorted second fiddle.

In contrast to the self-adjusting nature of economic profits (over and mal-investment fostering eventual profit disappointment and retrenchment), unfettered Financial Sphere expansion is seductively self-reinforcing over protracted periods (decades). By its very nature, financial sector expansion generates unending “profits” as long as the inflation (creation of additional financial claims) is sustained. The ballooning Financial Sphere has for some time suppressed the downside of business cycles. However, an unrestrained Credit Cycle nurtures speculation, surreptitious boom and bust dynamics, and financial and economic vulnerability to any ebbing of Credit and financial excess. Inflationary Bubbles in the Financial Sphere – such as those that culminated with the “Roaring Twenties” or 1980’s Japan – are manifestly more dangerous than inflation in the Economic Sphere.

There are myriad issues related to this momentous financial and economic development, most I have surely repeated several times too many. But I am never one to let repetition dissuade my attempts at pertinent insight. Today, the Financial Sphere is massively inflated with respect to the Economic Sphere. This excess finance – Monetary Disorder – has inflated financial returns, while destabilizing pricing mechanisms within the asset markets and real economy. The massive pool of finance is today faced with paltry opportunities for true economic returns, as well as a natural proclivity for over-investing at every opportunity. Speculative excess has gone to unprecedented extremes and there are, of late, initial indications that Bubbles are strained and possibly beginning to burst. Recent market turbulence is associated with newfound crosscurrents of heightened risk aversion, on the one hand, and the necessity for massive and continuous Financial Sphere expansion on the other. It is an especially volatile, unpredictable mix.

more...

[UpInArms]

46. Enterasys to lay off 30 percent of its staff (300 jobs)

http://www.masshightech.com/displayarticledetail.asp?Art_ID=68515

Secure network router and switch maker Enterasys Networks Inc. of Andover plans to trim 300 people or 30 percent of its global workforce, the company announced with its first quarter results.

The company, a spin-off of former New Hampshire Gov. Craig Benson’s Cabletron Systems Inc., said the layoffs would reduce quarterly expenses by between $10 million to $13 million.

The company experienced an unexpected slowdown in purchases in the North American and European markets, said Mark Aslett, the company’s chief executive officer. He said the company would begin its cost-reduction plan in the coming weeks.

<snip>

Reductions would come from all areas of the company, with a majority of savings coming in research and development as well as sales, general and administrative areas, Aslett said.

...more...

[54anickel]

48. Oh dear, one of my best friends is in sales there. Her "hubby" worked

for the same company as I did. He got laid-off about 1 year before I did - he never did find another IT position and moved into an entirely different field (at much less pay).

Bummer, I'll have to remember to give her a call tonight. :-(

[54anickel]

49. 1:47 and financial sector's not looking so good

Dow 10,213.13 +20.62 (+0.20%)
Nasdaq 1,922.23 +0.58 (+0.03%)
S&P 500 1,157.27 +0.42 (+0.04%)
10-Yr Bond 41.92 -0.09 (-0.21%)
NYSE Volume 1,181,024,000
Nasdaq Volume 959,945,000

1:30PM: Stocks still mired in relatively tight trading ranges, as buyers pick and choose from stocks... Meanwhile, Financial has recently inched into the red amid broad-based selling throughout the brokerage group... Morgan Stanley (MWD 48.98 -3.64) has been the largest laggard, after expanding its board of directors over the weekend but giving an endorsement of CEO Philip Purcell...
UBS downgrading its outlook on the brokerage sector to Neutral from Overweight, citing a looming slowdown in stock and bond underwriting, and subsequently cutting its ratings on Goldman Sachs (GS 103.77 -3.02), Lehman (LEH 87.63 -4.09) and Merrill Lynch (MER 52.51 -1.42) to Neutral from Buy, have also weighed on the group... Eleven of the 12 components in the AMEX Securities Broker/Dealer Index (XBD -2.5%), which is down roughly 12% in 2005, have been under pressure... NYSE Adv/Dec 1842/1322, Nasdaq Adv/Dec 1462/1528

1:00PM: More of the same, as the major averages continue to drift sideways, but buying remains widespread across most areas... Pacing the way to the upside has been Multi-Line Insurance (+4.8%) while Consumer Materials (+3.3%), Food Distribution (+1.9%), Railroads (+1.7%) and Semi Cap Equipment (+1.5%) have also been some of the best performing S&P groups... Showing relative weakness, however, have been Investment Banks & Brokerage (-3.9%), Wireless Services (-1.9%), Gold (-1.4%) and Hotels (-1.3%)...NYSE Adv/Dec 1821/1309, Nasdaq Adv/Dec 1482/1491

[UpInArms]

50. Pimp my ride -not my retirement

http://thepost.baker.ohiou.edu/E.php?article=E2&date=050205

utterly convoluted. So, let's apply the simple analogy of a car in need of repairs. Your dependable vehicle (Social Security) has been running efficiently for 70,000 miles now (70 years) with only minor repairs. However, your mechanic (President Bush) insists that the car will break down entirely in another 36,000 miles (in 2041). The problem, he claims, will be a build-up in residue that can clog the engine (projected Social Security shortfall). His solution -rims. That's right -he proposes to add a personalization feature, rims (private accounts), that would do nothing to extend the life of your vehicle.

Your mechanic's motives are quite clear. His friends (Wall Street), who helped to get him his job, just happen to specialize in "rims." Besides, he thinks they're cool. Over your protestations, he applies one argument after another to convince you of the need to add rims. When you argue that rims have nothing to do with the problem, he warns of impending disaster and admonishes you for not addressing the issue before it's too late. A second opinion shows that the real problem can be solved by using more expensive premium gasoline (increasing Social Security revenue) and/or by driving the vehicle less (cutting benefits).

While crude, the analogy provides an introduction to the public debate so far. If you add in to the story a media establishment that doesn't know a thing about automobile maintenance, it would be just about a complete account of the president's Social Security campaign -until now. At a press conference Thursday, President Bush recommended a program of benefit cuts to address the issue of Social Security's solvency, as reported by The Washington Post. The plan he supports is similar to that proposed by Robert Pozen, who served on the president's Commission to Strengthen Social Security.

According to the Center for Economic and Policy Research, the Pozen plan would maintain the current level of promised benefits for low-income workers earning less than $25,000. High-income workers earning more than $90,000 would have their future benefits linked to inflation, not wages, as the system operates today. Middle-income workers would have benefits that are some fraction of the difference between wages and inflation. The problem with this policy is simple -wages have historically risen faster than inflation. The result for our generation under Pozen's plan would be a 16 percent cut in guaranteed benefits for average earners making $36,507 per year and a 25 percent cut for workers making $58,411. Our children will fare even worse.

...more...

[UpInArms]

51. Toys 'R' Us insiders to collect $187 mln in buyout deal

http://www.marketwatch.com/news/story.asp?guid=%7BB0689496%2DE08B%2D4E27%2DA315%2D3F6DF2D0C6E5%7D

Toys "R" Us Chairman and Chief Executive John H. Eyler Jr. is due $65 million, making him the largest individual beneficiary of the expected payouts.

The windfall includes severance, bonuses and related tax obligations, as well as payouts for terminated compensation plans, restricted stock and stock options held by the Toys "R" Us executives, former executives and directors.

The tally was included in a preliminary proxy statement filed with the Securities and Exchange Commission. The document was filed in connection with Toys "R" Us' proposed $6.6 billion buyout by an investment group including private equity firms Kohlberg Kravis Roberts & Co. and Bain Capital Partners LLC, and real estate company Vornado Realty Trust (VNO).

In the proxy filing Monday, Toys "R" Us also disclosed that it has received regulatory clearance from the U.S. government for the buyout deal, and that two company investors have consolidated lawsuits seeking to halt the acquisition on grounds that the deal wasn't reached fairly.

Included in the $187 million total is a "success" bonus due to each Toys "R" Us executive, excluding CEO Eyler, if the officer stays with the company through the close of the buyout.

...more...

[UpInArms]

52. Crude-oil prices back over $50; AIG soars on restatement

http://www.marketwatch.com/news/story.asp?guid=%7B41FB129F%2DFA24%2D44FA%2DBB6E%2D48589BD56C7A%7D&siteid=mktw

NEW YORK (MarketWatch) - U.S. stocks traded higher but off their best levels Monday as the price oil climbed back over $50 a barrel, in a market bracing itself for the Federal Reserve's impending meeting on interest rates.

<snip>

"Nothing so far has changed from a perspective of an overall economic slowdown," said Paul Nolte, director of investments at Hinsdale Associates. "The market may be reacting to the fact that if this is the case, maybe the Fed is closer to stopping their rate increases than continuing on going forward."

<snip>

Crude-oil prices climbed back over $50 a barrel in afternoon trading.

Crude for June delivery was last up 48 cents at $50.15 in New York trading, after falling 10 % last week on two reports showing a much larger-than-expected build in weekly crude supplies. See full story.

...more...

[UpInArms]

53. 2:04 EST numbers and blather (What happened at 2:00?)

Dow 10,191.20 -1.31 (-0.01%)
Nasdaq 1,917.48 -4.17 (-0.22%)
S&P 500 1,155.50 -1.35 (-0.12%)
10-Yr Bond 4.194 -0.07 (-0.17%)

NYSE Volume 1,258,561,000
Nasdaq Volume 1,023,205,000

2:00PM: Sellers show some resolve, halving a day of gains, as oil prices hit session highs and turn positive... Renewed buying interest in crude oil futures ($50.65/bbl +$0.93), perhaps attributed to short-covering after the commodity plummeted 10% last week, has prompted profit taking across the board, as the indices now cling to modest gains... NYSE Adv/Dec 1708/1457, Nasdaq Adv/Dec 1402/1596

1:30PM: Stocks still mired in relatively tight trading ranges, as buyers pick and choose from stocks... Meanwhile, Financial has recently inched into the red amid broad-based selling throughout the brokerage group... Morgan Stanley (MWD 48.98 -3.64) has been the largest laggard, after expanding its board of directors over the weekend but giving an endorsement of CEO Philip Purcell...

UBS downgrading its outlook on the brokerage sector to Neutral from Overweight, citing a looming slowdown in stock and bond underwriting, and subsequently cutting its ratings on Goldman Sachs (GS 103.77 -3.02), Lehman (LEH 87.63 -4.09) and Merrill Lynch (MER 52.51 -1.42) to Neutral from Buy, have also weighed on the group... Eleven of the 12 components in the AMEX Securities Broker/Dealer Index (XBD -2.5%), which is down roughly 12% in 2005, have been under pressure... NYSE Adv/Dec 1842/1322, Nasdaq Adv/Dec 1462/1528

Straight line down at 2:00 :wtf:

[UpInArms]

54. Dow dips into the negative as oil turns higher

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7B6398C238-58B5-4DBF-8DD6-34C4FC3AB404%7D&

NEW YORK (MarketWatch) -- The Dow industrials ($INDU) has dipped briefly into negative territory as crude price erased earlier losses to rise by nearly $1. The Dow was last up 4 points at 10,197, but had been down as much as 4 points at its low of 10,188. Meawhile, June crude futures were up 98 cents at $50.65, after being down 69 cents at its intraday low of $49.03. The Nasdaq Composite ($COMPQ) was down 4 points at 1,918, erasing earlier gains of as much as 12 points.

[fedsron2us]

56. It is a Dance of Death

The moment stock markets turn bullish the oil price gets bid up on the expectation of increased demand. This negatively impacts the rest of the market and shares go down. Repeat cycle until all the money has been wrung out of the market. It is time investors got real. All the signs indicate that the world economy is slowing fast. There is overcapacity in many sectors that is only going to disappear in a recession. This is going to be bad for stock prices and commodities. It is also going to effect all parts of the world including the Asian boom economies. I fear there is going to be no place to hide.

[AnneD]

55. Unoh....

Faeries taking a late lunch...will they get back in time to pump stock? :toast: Hope they return sober, nothing uglier than a drunk faerie loose on Wall St. Hi UIA:hi:

[UpInArms]

58. 2:49 EST faeries back and sobering up

Dow 10,228.21 +35.70 (+0.35%)
Nasdaq 1,920.86 -0.79 (-0.04%)
S&P 500 1,158.99 +2.14 (+0.18%)
10-Yr Bond 4.192 -0.09 (-0.21%)

NYSE Volume 1,472,015,000
Nasdaq Volume 1,175,917,000

2:30PM: Indices bounce off session lows but now trade in split fashion... Aside from the 2.0% rebound in oil prices weighing on sentiment, news that Qwest (Q 3.47 +0.05) has ended its pursuit to acquire MCI Inc. (MCIP 25.50 -1.03) has done anything but renew investors' spirits... In fact, the Telecom Services sector (-1.6%) has extended modest losses after Qwest said, "Unfortunately, the latest in a string of decisions reconfirms what we have believed all along: that MCI never intended to negotiate in good faith with Qwest nor maximize shareowner value."...

Shares of Verizon Communications (VZ 34.72 -1.08) have plunged on the news while Qwest has turned positive...NYSE Adv/Dec 1639/1566, Nasdaq Adv/Dec 1308/1705

Looks like another interesting week at the tables.

:hi: AnneD!

Glad to have you joining in here with us :D

[UpInArms]

57. Going out on a limb

Lenders have fueled the housing market with no-money-down, low-monthly payment loans. At what cost?

http://money.cnn.com/2005/04/22/real_estate/financing/lendingrisk/index.htm

SALEM, Ore. (CNN/Money) – Economists have all kinds of reasonable explanations for the historic housing boom: Low interest rates, demographic trends and supply constraints are the usual buzzwords.

There's another reason, and it's increasingly cause for concern.

"Pretty much anyone can get a loan within reason," said Robert Moulton, president of mortgage brokerage Americana Mortgage Group in New York.

To be sure, many home buyers would not be trading up, buying a first home or investing in a vacation house if it weren't for lower down payment requirements, loans with ultra-low monthly payments and flexible lending standards.

According to Keith Gumbinger, vice president for HSH Associates, the shift in lending standards started after the dot-com stock bust in 2000. As big investors shifted out of stocks and into bonds – such as mortgage-backed securities – banks had more money to lend out.

...more...

[MARALE]

59. Snow storm coming

He talks again,

2:48pm 05/02/05 SEC SNOW: FUNDAMENTALS OF U.S. ECONOMY REMAIN STRONG
2:46pm 05/02/05 SEC SNOW: WE THINK CHINA READY TO MOVE ON YUAN
2:47pm 05/02/05 SEC SNOW: IMPORTANT THAT CURRENCY RATES BE FLEXIBLE
2:45pm 05/02/05 SEC SNOW: WE NEED HIGHER NATIONAL SAVINGS RATES

[UpInArms]

62. cold day in hell?

:hi: Marale

[UpInArms]

60. Incompetent Hack SnowJob spewing forth on issues beyond his grasp

Treasury Sec Snow: China is ready to move on yuan

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38474.6229999653-834952865&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Treasury Secretary John Snow on Monday said the United States believes that China is ready to revalue its currency, a move many currency watchers expect will take place this week while China's financial markets are closed for the "golden week" holiday. In terms of the U.S. economy, Snow said that it's slowing as result of higher energy prices, but that its fundamentals remain strong. Snow made his comments during an interview on CNBC.

2:48pm 05/02/05 SEC SNOW: FUNDAMENTALS OF U.S. ECONOMY REMAIN STRONG

2:46pm 05/02/05 SEC SNOW: WE THINK CHINA READY TO MOVE ON YUAN

2:47pm 05/02/05 SEC SNOW: IMPORTANT THAT CURRENCY RATES BE FLEXIBLE

2:45pm 05/02/05 SEC SNOW: WE NEED HIGHER NATIONAL SAVINGS RATES

Hang on to your hats, boy and girls. If this is true, it's gonna be a wild ride.

[MARALE]

61. George Schwartz on Catholic Values

Portfolio manager details fund's philosophy of investing in value-oriented companies that adhere to Catholic beliefs. Among his top picks: Harley Davidson.

I can just see all those Priests and Nuns riding Harleys!

http://www.marketwatch.com/news/default.asp?siteid=mktw&dist=&refresh=on
:rofl:

[UpInArms]

65. I guess they have to change their habits

:rofl:

[AnneD]

69. Stop it

your killing me:rofl: well, I never saw a Nun that didn't have a ruler in on her, so ...... maybe they are on vaction at a religious retreat.... 'show us your rosary'......ah to be a fly on the wall of the confessional.

[UpInArms]

63. Treasury expects to pay down $42 billion in Q2

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38474.6253599769-834952948&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) - The U.S. government plans to pay off some of its debt for the first time in four years. The U.S. government expects to pay down $42 billion in marketable debt in the second quarter, the Treasury Department announced Monday. Three months ago, the Treasury expected to have to borrow $12 billion. The improvement in the borrowing requirement is due to higher-than-expected tax receipts and a record issuance of federal debt to state and local governments. The Treasury will announce on Wednesday how much it will borrow in next week's quarterly refunding auctions.

Where will the Treasury come up with the $$$ since it's been running a deficit since 2001?

[jamesinca]

80. I think this explains it

"higher-than-expected tax receipts and a record issuance of federal debt to state and local governments".

So we actually paid more taxes than expected, I smell another tax cut and it seems as if the states are being asked to pick up more of the debt created by George. So the giver states are really being hammered this time around.

[UpInArms]

81. almost eveyone I know has been hit with

an increase in real estate taxes this year.

Makes sense.

Thanks James :hi:

[UpInArms]

67. June crude holds onto rally at close ($50.92 bbl) up 2.4%

http://www.marketwatch.com/help/default.asp?page=support/help/reprint.asp&dist=reprints&siteid=mktw

DALLAS (MarketWatch) -- The June crude contract added 2.4%, or $1.20, to close at $50.92 a barrel Monday on the New York Mercantile Exchange. John Kilduff, vice president of energy risk management at Fimat, said value buyers were on the scene. The head of the International Energy Agency said he doubted the recent decline in prices would stick.

[UpInArms]

68. 3:15 EST numbers and blather (all is well!)

Dow 10,233.61 +41.10 (+0.40%)
Nasdaq 1,922.32 +0.67 (+0.03%)
S&P 500 1,158.94 +2.09 (+0.18%)
10-Yr Bond 4.190 -0.11 (-0.26%)

NYSE Volume 1,596,097,000
Nasdaq Volume 1,262,651,000

3:00PM: Split industry leadership continues to dictate late-day action, as blue chips still outpace their Nasdaq counterparts... On the Dow, American International Group (AIG 53.41 +2.56) has surged after finally setting a definitive date (May 31) for the restatement of more than four years of financials... Home Depot (HD 36.13 +0.76) has also surged, getting a boost from a faster than expected 0.5% rise in March construction spending, while a possible migration of IBM customers now that Lenovo has completed its acquisition has arguably helped Hewlett-Packard (HPQ 20.92 +0.45)...

Of the 10 components losing ground, Verizon (VZ 34.93 -0.87) has paced the way lower while Citigroup (C 46.39 -0.57) and JP Morgan (JPM 35.39 -0.10) have lost ground in sympathy with the sell-off in Brokerage...NYSE Adv/Dec 1753/1475, Nasdaq Adv/Dec 1388/1654

[AnneD]

71. I have a question.....

If the market is trying to find a bottom...why is it trading in such a shallow range. Is this range the bottom. How low do you think it will go.

[UpInArms]

73. I have no clues for that question

AnneD - I dropped my crystal ball over the weekend and the Magic 8 Ball went on the fritz last night.

:D

[AnneD]

74. I use my...

Chihuahua prognosticator...the one Taco Bell gave out some time ago in the kids meal. It may not be accurate-but it is way cool. But seriously, if it fluxes this low for a while, could that be the bottom, or are the faeries setting the lower limits? Things I look at and just from keeping my eyes and ears open make me feel things will go lower but we just keep fluxing.

[UpInArms]

75. here are some numbers for you

The June NASDAQ 100 index closed slightly higher on Monday but remains below the 10-day moving average crossing at 1428.45. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are neutral signaling that sideways prices are possible near-term. Multiple closes above the 20-day moving average crossing near 1449.50 are needed to confirm that a short-term low has been posted. If June resumes this year's decline, fib support crossing at 1388.52 is the next downside target.

The June S&P 500 index closed higher on Monday confirming last Friday's key reversal up and closed above the 10-day moving average crossing at 1155.43. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning neutral signaling that sideways prices are possible near-term. Closes above the 20-day moving average crossing at 1165.41 are needed to confirm that a short-term low has been posted. If June renews this year's decline, the 62% retracement level of the August-March rally crossing at 1130.03 is the next downside target.

The Dow closed higher on Monday confirming last Friday's key reversal up and closed above the 10-day moving average crossing at 10,169. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are neutral signaling that sideways prices are possible near-term. Closes above the 20-day moving average crossing at 10,277 are needed to confirm that a short-term low has been posted. If the Dow renews the decline off March's high, last October's low crossing at 9,697 is the next downside target.

DOW target is 9697
Nasdaq target is 1888
S&P target is 1130

[54anickel]

77. Ahhh, but look how close they've come to signaling a turn around back

up. The "bulls" will be shooting for those confirmations of a short-term low.

They're within a whisker!

S&P 1165
Dow 10,277

[RawMaterials]

72. Closing Numbers and Blather

Dow 10251.70 +59.19 (+0.58%)
Nasdaq 1928.65 +7.00 (+0.36%)
S&P 500 1162.16 +5.31 (+0.46%)
10-Yr Bond 4.194% -0.07

NYSE Volume 1,956,201,000
Nasdaq Volume 1,546,589,000


Close: Market showed strong follow through from Friday, ahead of tomorrow's FOMC meeting, as arguably oversold conditions helped investors overcome a rebound in oil prices as well as mixed corporate and economic data... Earlier in the session, falling oil prices - under pressure amid reports of slowing economic growth and rising crude inventories - eased worries about higher energy costs eating into corporate profits and curbing consumer demand...

However, renewed buying interest in oil about an hour before the close of commodities trading, lifted the June contract above $50/bbl and spooked many investors into booking profits, as the commodity recouped more than half of the 4.0% lost on Friday before closing at $50.92/bbl (+$1.20)... But not even a 2.4% recovery in oil could keep buyers on the sidelines for very long, as an average 2.9% loss for the major indices last month - a month (April) historically among the best to own stocks, created buying opportunities across the board as nine out of ten economic sectors closed in positive territory...

Pacing the way higher was Energy (+1.8%), which turned the corner in lock-step with the rebound in oil, as even Financial (+0.3%) pared modest losses to close to the upside... Financial was in focus all day, as news that American International Group (AIG 53.41 +2.56) finally set a definitive date (May 31) restatement of more than four years of financials countered an endorsement of Morgan Stanley's (MWD 49.39 -3.23) CEO Philip Purcell that could prolong conflict at the firm and several analyst downgrades of brokerage firms... Technology also recovered lost ground, as strength in Hardware offset modest weakness in Semiconductor and Networking...

Hardware got a boost from Hewlett-Packard (HPQ 20.92 +0.45), which could see a possible migration of IBM customers now that Lenovo has completed its $1.75 bln acquisition of IBM's PC unit... Health Care (+0.4%) was also an influential leader to the upside, benefiting from strength in HMOs and Biotech while Consumer Staples (+0.8%) got a boost from Sysco Corp's (SYY 35.40 +0.80) strong Q1 report... Transportation was also a bright spot, surging on the heels of Yellow Roadway's (YELL 50.01 +1.01) revised 65% cash offer for USF Corp. (USFC 44.75 +2.12)...

Telecom Services, however, closed lower, extending midday weakness following the withdrawal of Qwest's (Q 3.50 +0.08) previously "superior" $9.7 bln offer... Verizon Communications' (VZ 34.87 -0.93) sweetened $8.4 bln for MCI Inc. (MCIP 25.58 -0.95) was initially welcomed by investors hungry for Monday merger news, but Qwest's withdrawal and accompanying statement - "MCI never intended to negotiate in good faith with Qwest nor maximize shareowner value" - overshadowed the fact that the ongoing back-and-forth battle finally appears to have found closure...

In economic news, April ISM index checked in at 53.3 (consensus 55.0), marking its fifth consecutive decline, but since any reading above 50 reflects growth in manufacturing and the survey did not represent any hard data, only Treasurys moved on the data... The benchmark 10-year note was off just 3 ticks to yield 4.21% following the data, but traders dug in their heals heading into tomorrow's FOMC meeting (2:15 ET), inching the benchmark 10-yr up 2 ticks into the close to yield 4.18%... Separately, Mar. construction spending rose 0.5% (consensus +0.3%), as the prior month's read was revised upward to 0.5%, but market participants paid little attention to the data...DJTA +1.7, DJUA +0.5, DOT +0.2, Nasdaq 100 +0.2, Russell 2000 +1.1, SOX -0.1, S&P Midcap 400 +0.8, XOI +1.4, NYSE Adv/Dec 2098/1168, Nasdaq Adv/Dec 1665/1403

[UpInArms]

76. GE subpoenaed by SEC in reinsurance probe

http://www.marketwatch.com/news/newsfinder/pulseone.asp?guid={F05920D1-8F90-41CA-9FEA-5C781455608A}&siteid=mktw

SAN FRANCISCO (MarketWatch) -- General Electric (GE) said after the closing bell Monday that it has received a subpoena from the Securities and Exchange Commission's New York office seeking documents relating to "certain loss mitigation insurance products." GE said that it will cooperate with the SEC.

Round up the usual suspects :eyes: