STOCK MARKET WATCH, Thursday 4 August

[ozymandius]

Thursday August 3, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 902 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2049 DAYS
WHERE'S OSAMA BIN-LADEN? 1749 DAYS
DAYS SINCE ENRON COLLAPSE = 1710
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 6
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 1, 2006

Dow... 11,199.93 +74.20 (+0.67%)
Nasdaq... 2,078.81 +16.82 (+0.82%)
S&P 500... 1,278.55 +7.63 (+0.60%)
Gold future... 664.10 +5.30 (+0.80%)
30-Year Bond 5.05% -0.02 (-0.36%)
10-Yr Bond... 4.96% -0.02 (-0.44%)






GOLD, EURO, YEN, Loonie and Silver


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Mike Hartman

CENTRAL BANKS STRUGGLE TO MANAGE FIAT MONEY

Stocks opened higher this morning following positive earnings results from Proctor and Gamble and good news from Time-Warner. Two hours into the session the broad indexes are holding decent gains with the Dow Industrials higher by 70 points and the NASDAQ Composite moving 18 points higher. Treasury notes and bonds are flat to slightly negative and the U.S. Dollar Index is fractionally lower at 84.80 after testing support at 84.75. Many analysts are suggesting the dollar is approaching oversold territory and poised for a bounce higher, but so far today it has been energy and metals prices that are stealing the limelight. As I write, gold is $8.70 higher at $655.00 per ounce and silver is 46 cents higher at $12.20. Energy prices are higher across the board with crude oil a dollar-fifty higher at $76.45 and natural gas roughly 10% higher with the heat wave and possible developments of a hurricane in the Gulf of Mexico.

There isn’t much in the way of economic news to report today, but we have the weekly report from the Mortgage Bankers Association, the Treasury auction announcement for next week’s sales, and a few comments from foreign central banks. We know the Fed is trying to orchestrate a “soft landing” for real estate prices here in the U.S., so let’s see what the MBA data said today. The mortgage applications index fell 1.2% with the purchase index lower by 3.3%, but the re-finance index rose by 2.3% to a four-week high. Year over year the number of purchase loans is down by 22% and re-financing is down by 39%. The average 30-year rate fell from 6.69% to 6.62%, and the average one-year ARM fell from 6.25% to 6.18%. Obviously, the Fed is keeping a close eye on the housing data (and employment data) as they consider their interest rate decision for next week.

Traders will be watching the labor report on Friday to look at job creation in July as a big clue to the Fed’s interest rate action to come on Tuesday. Everyone is waiting to see what the Fed has to say, but the other big event next week is the U.S. Treasury’s quarterly debt auctions.

-cut-

The Federal Reserve is trying to be as transparent as possible with their direction and outlook for interest rates, but they are trying to be as covert as possible in regard to the supply of money they are creating in the markets. Just five months ago the Fed said they will no longer disclose the M-3 money supply. They can print new money (create digitals on a computer) at will to monetize government debt. If the Fed doesn’t want to do it overtly, they may have Goldman Sachs, JPM, Citibank, etc. buy the paper on their behalf. Who knows, the Fed might even have a few of the BIG hedge funds set up to do some of their dealings in the market. If Enron had “shell companies” set up to move paper around, what is to stop the Fed from doing the same? The Fed and Treasury could even have phony hedge funds set-up in the Caribbean Islands and in the London financial markets just to make it look like foreign activities!

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

[54anickel]

45. Interesting wrap-up today. I'm going to sit down and read it again

more closely tonight when I have more of my wits about me. Can't help but think of that one article about how the Treasury and Fed were meeting with their eyes on something "new" that regular investors may not understand but the Street Suits would. They needed to work to calm investors concerns on this "new" direction.

[ozymandius]

2. Today's Reports

8:30 AM Initial Claims 07/29
Briefing Forecast 310K
Market Expects 308K
Prior 298K

10:00 AM Factory Orders Jun
Briefing Forecast 1.6%
Market Expects 1.7%
Prior 0.7%

10:00 AM ISM Services Jul
Briefing Forecast 58.0
Market Expects 56.5
Prior 57.0

[Ghost Dog]

32. Services, factory data below (& first-time claims above) expectations

http://today.reuters.com/investing/FinanceArticle.aspx?...

NEW YORK (Reuters) - Business activity in the U.S. services sector in July and new orders at U.S. factories in June were surprisingly weak, two reports showed on Thursday, signaling that economic growth was decelerating.

<snip>

The Institute for Supply Management's services index fell to 54.8 in July from 57.0 in June. The median forecast of Wall Street economists looked for an unchanged reading of 57.

It was the lowest reading for the ISM services survey since September 2005, directly after Hurricane Katrina.

<snip>

The ISM services prices-paid index rose to 74.8 in July from 73.9 in June, while the jobs component increased to 54.5 from 52.0, and new orders slipped to 55.6 from 56.6.

"Inflation has trended higher in most or all sectors of the economy, and the Fed will have to take notice," said Tim Mazanec, senior currency strategist at Investors Bank & Trust in Boston.

<snip>

Factory orders also showed signs of a moderating economy.

New orders at U.S. factories rose a smaller-than-expected 1.2 percent in June as orders outside transportation and defense were weak.

After stripping out transportation, factory orders rose a scant 0.1 percent, the weakest since a 2.5 percent drop in February.

In a sign of some manufacturing resilience ahead, unfilled orders for items meant to last more than three years rose 1.6 percent, the thirteenth gain in the last fourteen months. However, inventories of goods rose for the fifth time in the last six months.

<snip>

On the employment front, the number of workers seeking initial jobless aid rose 14,000 last week, but remained at levels still indicative of a stable labor market.

First-time claims for state unemployment benefits rose to 315,000 last week from an upwardly revised 301,000 for the prior week, the Labor Department said. Analysts had expected a reading of 308,000.

The key labor market data will be released on Friday, in the July employment report. The median estimate from a Reuters poll put payroll job gains at 142,000, modestly higher than the 121,000 increase in June.

/more...

[ozymandius]

3. Oil eases as Tropical Storm Chris weakens

LONDON (Reuters) - Oil prices eased on Thursday after a tropical storm weakened and was no longer expected to become the first hurricane of the U.S. season.

Fears hurricane force winds could crash into oil and gas production in the U.S. Gulf of Mexico had helped to drive up prices by around a dollar on Wednesday.

London ICE Brent crude was trading 22 cents lower at $76.67 by 0915 GMT on Thursday, while U.S. light crude fell 35 cents to $75.46.

Tropical Storm Chris' top sustained winds slowed to near 45 mph (75 kph) on Thursday, making it a minimal tropical storm and forecasters said it was expected to continue to weaken and even dissipate over the coming days.

more

[ozymandius]

4. Saudi Arabia rules out oil weapon in Mideast crisis

RIYADH (Reuters) - Saudi Arabia, the world's biggest crude exporter, believes oil should not be used as a weapon because it is the economic lifeline of Arab states, its foreign minister said.

Asked whether the oil weapon should be used if the conflict between Israel and Lebanon escalates, Prince Saud al-Faisal said: "The two issues should not be mixed because oil is among the economic capabilities that countries... need to meet their obligations toward their citizens.

"If we ignore this reality and start asking that the foundations of our life (be used) and enter into reckless adventures, the first to be hurt will be our citizens and no wise government can accept this," he told a news conference.

more

[ozymandius]

5. (natural) Gas prices climb amid heat wave in U.S.

NEW YORK - Natural gas prices rose Wednesday as scorching temperatures that baked states in the Northeast and the Midwest put pressure on the nation's electricity grids.

Crude oil and gasoline prices also rose sharply after a government report showed that U.S. crude and gasoline inventories fell last week, and as a tropical storm gained strength in the Caribbean.

Air conditioners in the United States have been stretching the capacity of national electricity grids and driving up the price of natural gas — the lifeblood of many power plants. By midafternoon on Wednesday, Washington hit 98 degrees, New York 101 degrees, Boston 98 degrees, and Chicago 95 degrees, according to the
National Weather Service.

When electricity use rises above normal levels, natural gas is the main fuel that utility companies use to run the extra turbines to meet demand.

more

[54anickel]

15. Senate Bill Lifts Hopes of Big Oil Offshore

http://www.nytimes.com/2006/08/03/business/03offshore.h...

Big oil has been pressing Congress for years to expand its rights to drill for domestic offshore oil and gas, with little to show for its efforts. But with tensions in the Middle East and gasoline prices at home rising, the industry’s fortunes on Capitol Hill may be changing.

Both houses of Congress have now passed legislation on new exploration, and though the bills differ, any final version is expected to liberalize offshore drilling for the oil companies.

There is a sense around the industry that a break may be coming from a quarter-century of federal policy that put a higher priority on environmental concerns than on opportunities to produce energy supplies offshore.

On Tuesday, the Senate voted to open for bidding 8.3 million acres of federal waters in the Gulf of Mexico, thought to hold 5.8 trillion cubic feet of natural gas and 1.3 billion barrels of crude oil. That would be enough gas to heat and cool six million homes for 15 years, and enough oil to satisfy two months’ demand in the United States.

The House passed a far more ambitious bill in June that would effectively end a federal moratorium since 1982 on offshore drilling on most of the outer continental shelf in the Atlantic and the Pacific.

more...

[54anickel]

16. Gas Costs Eat Into Restaurant Sales

http://www.latimes.com/business/la-fi-restaurants3aug03...

Consumers are dining out less as pump prices climb. Cheesecake Factory and Chili's are among the chains reporting declines.
By Jerry Hirsch, Times Staff Writer
August 3, 2006


Angela Pierce and husband Nicolas used to enjoy a dinner date once a week. Now the Culver City couple patronize restaurants just twice a month, thanks to gasoline prices that are more than 70 cents a gallon higher in Southern California than a year ago.

Unfortunately for the $175-billion U.S. sit-down restaurant business, the Pierces aren't the only ones staying away from their favorite eateries. In the last few months, restaurants such as Chili's, Cheesecake Factory and Applebee's — what analysts call the "casual dining" category that offers table service and alcoholic beverages — have recorded small but discouraging sales declines.

They are responding by offering discount burger specials and new menus featuring lower-priced items with smaller portions and by pushing the gift card business.

The culprit, restaurant chains say, is soaring gas prices. But rising interest rates and increases in the minimum payments that consumers must make on credit card debt have added to the problem.

"The Chili's and Applebee's of the world — some of their customers don't have all that much money," said Michael Smith, an analyst with Oppenheimer & Co. "They get startled when they fill up their SUVs, so they stop dining out or they trade down to fast food."

more...

[TAPat]

18. I just have to point out here that the wife of the CEO of Chili's

(and parent company, Brinker International http://www.brinker.com/company/default.asp ) was a "Pioneer" for the * Campaign...

[AnneD]

24. Morning Marketeers

and all you lurkers. I'm back, I'm bad, and I'm nationwide. Good to be back. Tried to post during my sojourn but getting my password proved problematic. But I read the post frequently....and a big thanks to those that keep it going
One of the things that I was going to mention that I noticed while off was that the restaurants are really hurting-even more so than I had previously posted. I have had numerous conversations with wait staff and the tips are skimpy too. Houston has always been a town that loves to eat out and loves variety. I can tell you how empty these places have been. The smaller places have laid off wait staff and the owners are doing table work now. And the store....hardly any staff or customers-even at WalMart. Weekends seem to be the only time you see people in the stores. At the malls you see more walkers than customers. It is really bad.
In RE, I see more for sale signs out. Developers are offering big discounts (20-30K)AND upgrade packages at no cost (OH, was that another pop I here).
I am so blessed I have a job AND got a raise-most folks here are hanging on by a fraying thread.

Happy hunting and watch out for the bears-they are feeding heavily in prep for the winter.

[Ghost Dog]

27. Hi there AnneD, glad you're back!

And not able to be around ere much myself, but drop in when I can.

Here in Barcelona the local down-to earth restaurant- cafe/bar scene seems to contine as usual. There are thousands of them and it is so common for many people to regularly eat out - breakfast, lunch, evenings - that prices in your average local eating-place are little higher than what preparing food at home would cost (and especially when taking shopping/preparation time and possible transport (while you're at work or otherwise out in the streets) costs are taken into account.

Of course I'm not referring to fast food - this is Catalan and other mediterranean-style, usually. Provides for plenty of reasonable-quality and often thoroughly professional employment, turnover, fresh-food markets, etc.

[54anickel]

31. Welcome back AnneD! We certainly missed you while you were out.

Hope you are getting settled into your new abode.

[AnneD]

37. I love the new place.....

Now that high gas prices are here to stay, we are even happier with the location of our apt and our decision to move. Everything is in a 5 mile radius. I use to use a tank of gas a week and I am now down to a tank of gas every week to week and a half. Once I get to riding the bike regularly, I expect it to drop more. We still have many boxes. There is a goo reason for that

Seems I severly injured the miniscus ligaments on my knee and had to deal with physical theraphy and chiropractic treatments. I was house bound and pretty much chair bound for the last 2 months. The good news is that I was able to avoid the knife and am well on the way to recovery. I was even able to do a full shift at the skilled unit pain free (no small feat with all of that lifting dead weight).

[54anickel]

39. Good for you! I remember you being injured, didn't realize it was such

a serious injury. Good to hear it's on the mend but be careful!

[AnneD]

43. I didn't think....

it was serious at the time. It kept getting reinjuried due to the move/work/second story apt/walking the dogs. My Chiropractor friend was really concerned when I finally hobbled into his office in tears (I have a high tolerance for pain so this was VERY unusual). I don't relish going under the knife for any ortho problems. I go to the Chiropractor first. It has served me well (as has weight training). Many of my nurse buds that I graduated with have sucumbed to career ending musculoskeletal injuries.

[stop the bleeding]

38. Bars and Resturants are where real $$$ gets spent

and if they are slow/crickets then that is a bad bad omen for the state of things. I know when Big Dog was in office and the economy was better waiters/waitresses made quite a good living.

Glad to have you back.

[ozymandius]

6. London lower as earnings disappoint

London equities moved lower on Thursday, with poorly received results from Unilever and ICI driving losses.

The FTSE 100 fell 0.7 per cent to 5,893.0, a decline of 39.1 points, and the mid-cap FTSE 250 lost 0.3 per cent, or 31.7 points, to 9,362.3.

Traders were expecting the Bank of England to hold interest rates at 4.5 per cent at its August meeting, the result of which will be announced at midday.

more

[ozymandius]

7. Stock futures fall as services ISM eyed

LONDON (Reuters) - U.S. stock futures slipped on Thursday, indicating opening losses on Wall Street, as investors worried that July's ISM non-manufacturing report later may raise expectations of further interest rate increases.

Sentiment was also hit by crude oil holding above $75 a barrel, although it slipped slightly as forecasters said Tropical Storm Chris had eased while hopes grew that a Middle East truce could be reached in the coming weeks.

By 0955 GMT, U.S. stock futures were down around 0.3 percent for the main indexes . European shares (^FTEU3 - news) fell 0.6 percent ahead of an expected rise in euro zone interest rates while Japan's Nikkei (^N225 - news) ended nearly flat.

Earnings will again dominate later and may boost the U.S. market if the standard of company reports matches the previous session's upbeat offering, which helped the Dow Jones industrial average (^DJI - news) add 0.67 percent or 74 points to 11,199.93.

more

[ozymandius]

8. I hope you have a wonderful day everyone.

Work calls.

Ozy

[Mnemosyne]

9. Have a good one Ozy. And stay cool!

[Roland99]

10. Having yet another Disney day! No choice but to have fun!

Off to Disney-MGM Studios in a bit then Fri. at Magic Kingdom then heading home on Sat.


Been a great week. Tell y'all all about when we get back.


TTFN!

[54anickel]

11. Great toon Ozy!!! Those future are lookin' bout as dim as the Dimson

this morning.

[54anickel]

12. Dollar Watch

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

Last trade 85.35 Change +0.03 (+0.04%)

Settle Time 15:01 Open 85.30

Previous Close 85.32 High 85.39

Low 85.09 2006-08-03 06:59:59, 30 min delay

52wk High 92.63 52wk High Date 2005-11-16

52wk Low 83.6 52wk Low Date 2006-05-15


The September Dollar closed slightly higher on Wednesday as it consolidates some of this week’s decline. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If September extends this week’s decline, the early- July low crossing at 84.42 is the next downside target. Closes above last Tuesday’s high crossing at 86.52 would confirm that a short-term low has been posted.

The September Euro closed lower on Wednesday as it consolidates some of Tuesday’s rally. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are becoming overbought but remain bullish signaling that sideways to higher prices are possible near-term. If September extends this month’s rally, the reaction high crossing at 129.20 is the next upside target. Closes below the 10-day moving average crossing at 127.502 would signal that a short-term top has been posted.

The September Japanese Yen closed slightly higher on Wednesday as it consolidates above the 20-day moving average crossing at .8718. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If September extends last week’s rally, July’s high crossing at .8877 is the next upside target. Closes below last Thursday’s gap crossing at .8675 would temper the near-term friendly outlook in the market.


Major currencies steady with focus firmly on BoE, ECB rate decisions
http://www.lse.co.uk/FinanceNews.asp?shareprice=&Articl...

LONDON (AFX) - Major currencies were confined to fairly tight trading ranges, as market attention centres firmly on today's interest rate decisions by the Bank of England and the European Central Bank.

The ECB is fully expected to raise interest rates by 25 basis points to 3.00 pct, while the BoE is set to leave rates on hold, but with a small risk of a hike.

Given that an ECB hike is already priced in, investors will be looking to ECB president Jean-Claude Trichet's accompanying speech for clues on whether rates could rise more aggressively in the coming months.

snip>

'The Fed and the ECB are clearly on different points in the cycle with regard to monetary policy, but over the next few days we will find out just how big the gap is following today's ECB council meeting and the 8 August FOMC meeting,' said Mitul Kotecha at CALYON. He added that this could set the tone for the trend in the euro/dollar rate for the next few weeks.

Meanwhile, the Bank of England is expected to leave interest rates on hold at 4.50 pct today, though the vote is expected to be close and the market is pricing in some risk of a surprise hike in the wake of recent strong UK data.

UBS currency analyst Mansoor Mohi-uddin noted that, although the risk is small, if the BoE did hike rates this would mean the BoE, Reserve Bank of Australia and the ECB all raising rates 'in a week when uncertainty over the Fed's intentions remains high'.

more...

[54anickel]

44. EAST ASIA’S DOLLARS (Long piece - somewhat interesting though)

http://www.newleftreview.net/?page=article&view=2625

Americans have long been warned that running large, continuous deficits courts disaster. ‘We are living on borrowed money and borrowed time’, was the way Walter Mondale put it to the 1984 Democratic Convention, when the us government’s cumulative deficit was some $7 trillion less than it is today. Three years later, a spate of cartoons and op-eds would depict the 1987 stock-market crash as a vicious hangover; the just deserts of a wastrel nation. The ever-accumulating deficits so frightened the first President Bush that he famously reneged on his ‘read my lips’ promise not to raise taxes. In 1992, Ross Perot launched the most successful third-party presidential candidacy since Eugene Debs by making the rivers of red ink his central campaign issue. Clinton’s great boast was that he managed temporarily to close the government deficit, although the trade deficit continued to grow during his administration.

It was not supposed to work that way; the government deficit had long been understood as a prime cause of the trade deficit. But before the puzzle resolved itself, George W. Bush arrived in Washington and, with his tax cuts, wars and lavish spending directed at his electoral base, ripped open the sutures that the Clinton administration had stitched between us government spending and tax revenues. Both the government and trade deficits soon reached levels that would have been regarded as inconceivable by most economists a few years before. Doomsayers extended far beyond the ranks of Democrats and old-school fiscal conservatives; at the beginning of 2005 Warren Buffett announced that he was so scared by the deficit trends that he was largely going to quit buying stocks or bonds denominated in dollars. <1> At the Davos Forum that year, C. Fred Bergsten of the Institute for International Economics warned of a dollar crisis ‘within weeks’. <2> In a widely reported speech at Stanford a month later, Paul Volcker, former chairman of the Federal Reserve, spoke of an economy ‘skating on thin ice’. <3> With beleaguered Republicans dependent on low taxes and government largesse to remain in power, and Democrats unelectable on an explicit programme of higher taxes and spending cuts, these men saw no plausible scenario other than a dollar crash for any reversal in the ever-growing-deficit trends. At some point, the foreigners who help finance the two deficits would surely refuse to throw more good money after bad. They would dump their dollar holdings, leading to a crash in the dollar that would finally force Americans to live within their means.

But none of this has happened. The markets reacted to the doom-saying with the insouciance of a dog shaking itself dry. By the end of 2005 the dollar stood 15 per cent higher against the euro, 13 per cent higher against the yen, than it had in January; and this during a year when both government and trade deficits continued to set new records practically every month. Hence the conundrum: the savviest observers pronounce the trend lines of the deficits to be unsustainable; no realistic scenario can be imagined under which those trends will be reversed through political action, leaving only a dollar crash to do the job; yet the dollar crash stubbornly refuses to occur. Keynes once compared the stock market to a beauty contest in which the winnings went to whoever could pick the contestant thought by the other judges to be the most beautiful. If this is true of stocks, it is emphatically the case for currency markets. The day is long gone when the ebb and flow of international trade determined the value of currencies. Daily volume on the world’s foreign-exchange markets runs in the trillions of dollars, with the us dollar bought or sold in roughly 85 per cent of all currency trades—most of them speculative. If enough people believe that enough others will hang on to the dollar come what may, then the dollar will not fall, whatever happens to the us deficits.

There is no secret about the identity of the biggest dollar holders. They are the central banks and other financial institutions of Japan, China, South Korea, Taiwan, Hong Kong, Saudi Arabia and the Gulf Emirates. If the dollar is going to crash, one or more of these places is going to have to change its stance towards the American currency. They display such a seemingly reflexive commitment to accumulating and retaining dollars that some commentators have described the current global financial order as ‘Bretton Woods ii’—a continuation by other means of the dollar-centred international order that prevailed in the postwar decades. The label does not itself explain why these states behave as they do. But it suggests that, for whatever reason, they have motives other than maximizing returns on their foreign-currency holdings; that they have a vested interest in the continuation of a us-led financial system.

more...

[54anickel]

13. What's the real federal deficit?

http://www.usatoday.com/money/2006-08-02-deficit-usat_x...

The federal government keeps two sets of books.
The set the government promotes to the public has a healthier bottom line: a $318 billion deficit in 2005.

The set the government doesn't talk about is the audited financial statement produced by the government's accountants following standard accounting rules. It reports a more ominous financial picture: a $760 billion deficit for 2005. If Social Security and Medicare were included — as the board that sets accounting rules is considering — the federal deficit would have been $3.5 trillion.

Congress has written its own accounting rules — which would be illegal for a corporation to use because they ignore important costs such as the growing expense of retirement benefits for civil servants and military personnel.

Last year, the audited statement produced by the accountants said the government ran a deficit equal to $6,700 for every American household. The number given to the public put the deficit at $2,800 per household.

A growing number of Congress members and accounting experts say it's time for Congress to start using the audited financial statement when it makes budget decisions. They say accurate accounting would force Congress to show more restraint before approving popular measures to boost spending or cut taxes.

"We're a bottom-line culture, and we've been hiding the bottom line from the American people," says Rep. Jim Cooper, D-Tenn., a former investment banker. "It's not fair to them, and it's delusional on our part."

more...

[54anickel]

14. 'Hourglass Economy' Divides Americans, Defines U.S. Politics

http://www.bloomberg.com/apps/news?pid=20601103&sid=a5F...

Aug. 3 (Bloomberg) -- Evelyn Dawson and Kevin Manning spent most of their working lives in the same town, living on their paychecks. They now find themselves on opposite sides of a widening wealth gap that increasingly defines American politics and the economy.

Dawson, 58, a former government worker, owns an expanding business in Roanoke Rapids, North Carolina. Manning, 36, supports a wife and three kids on a truck driver's wage, with nothing left for savings or to buy a house. ``I have pretty much always had to live paycheck to paycheck,'' he says.

Dawson was able to kick-start a second career because she had assets and specialized knowledge, two attributes driving a wedge between an upwardly mobile middle class and others trying to manage on meager income growth in less-skilled jobs. Household wealth grew six times faster than wages from 2001 to 2005, the biggest gap of any five-year period in half a century.

``It bothers me,'' former Federal Reserve Chairman Paul Volcker said in an interview. ``I tell you, I don't know why there hasn't been more discussion and more unhappiness about this because it's become quite distinct. For a long time now, if we believe the statistics, the average working guy does not have an increase in income.''

The divide is reviving protectionism in Congress, awakening a debate on the minimum wage, and making the Federal Reserve more sensitive to the risks of causing a collapse in financial and housing markets.

`Powerful Impact'

``Asset prices have never had such a powerful impact on the economy,'' Joseph Lavorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, said in an interview. ``Changes in wealth rather than income growth are a main reason why consumer spending and gross domestic product have both been so strong.''

more...

[54anickel]

17. Scandal widens in European car sector

http://www.iht.com/articles/2006/08/02/business/parts.p...

The chief executive of a leading French auto parts supplier stepped down Wednesday amid charges by prosecutors that he was aware of bribes allegedly paid to Germany's top automakers to win their business.

Directors at Faurecia, one of the biggest European makers of automotive interiors, met late Wednesday and announced the resignation of Pierre Lévi, saying that his departure was "in the best interests of the group."

Prosecutors in Frankfurt had said last week that they were investigating Lévi in connection with up to €800,000, or $1 million, worth of bribes that they suspected were paid to managers at Volkswagen, Audi and BMW. Other investigations are under way into suppliers in Germany as well as Lear, which is based in the United States.

Faurecia is majority-owned by PSA Peugeot Citroën, a leading French car manufacturer, and employs 60,000 people worldwide.

The fresh allegations come as competition is stiffening in Europe's blue- chip - but scandal-marred - automotive industry. Parts makers have consolidated and are increasingly seeking contracts with big car manufacturers outside their home markets.

more...

[alcibiades_mystery]

19. It's AUGUST 3

[54anickel]

20. Bank of England Unexpectedly Raises Benchmark Rate to 4.75%

http://www.bloomberg.com/apps/news?pid=20601087&sid=aNi...

Aug. 3 (Bloomberg) -- The Bank of England unexpectedly raised its main interest rate for the first time in two years to 4.75 percent to head off inflation as economic growth accelerated.

The bank said today after its seven policy makers met in London that it lifted the benchmark rate by a quarter-point, a move predicted by just eight of 46 economists surveyed by Bloomberg News. The other 38 economists had forecast no change. The bank will publish quarterly economic forecasts on Aug. 9 and minutes of this meeting on Aug. 16.

Growth in Europe's second-biggest economy reached the fastest pace in two years last quarter and record oil prices sent inflation in June above the bank's 2 percent target for a second month. The Bank of England, led by Governor Mervyn King, is following central bankers around the world in raising borrowing costs to prevent an inflationary spiral.

``Inflation is likely to remain above target for the next few years,'' said Kevin Daly, a London-based economist at Goldman Sachs Group Inc., which forecast today's increase. ``The Bank of England isn't going to ignore the fact that inflation is above target right now either.''

Investors were betting on at least one increase this year. The implied rate on the interest-rate futures contract maturing was 4.99 percent at 10:04 a.m. in London. The contract settles to the three-month London inter-bank offered rate for the pound, which has averaged about 15 basis points more than the central bank's target for the past decade.

more...


On edit - the buck ain't too happy about that

Last trade 85.16 Change -0.16 (-0.19%)

Settle Time 15:01 Open 85.30

Previous Close 85.32 High 85.39

Low 85.09 2006-08-03 08:19:00, 30 min delay

[Ghost Dog]

26. Eurozone interest rates lifted to 3 per cent

http://www.ft.com/cms/s/a87c2d74-2163-11db-b650-0000779...

The European Central Bank raised its main refinancing rate by a quarter of a point to 3 per cent on Thursday in a move widely anticipated by commentators.

<snip>

The ECB has been spooked by continuing strong inflation data. Headline inflation in the year to June came in at 2.5 per cent, comfortably above the bank’s self-imposed target rate of “close to, but below” 2 per cent.

Although much of the inflationary pressure is coming through higher energy costs, underlying inflation, which strips out fuel and food, ticked up from 1.3 to 1.4 per cent in June. Producer price inflation has risen simultaneously to 3 per cent.

The monetarists on the ECB’s governing council have also expressed concern over the growth of monetary aggregates. While M3 broad money supply growth eased to 8.5 per cent in the year to June, from 8.8 per cent in May, this was still well above the 4.5 per cent that the bank regards as consistent with price stability.

Survey evidence from both the services and manufacturing sectors has also continued to point to solid growth, with the latter’s purchasing manager’s index hovering close to a six-year high. Business confidence in the eurozone is currently running at a five-year high.

Even the unemployment rate, the Achilles’ heel of the eurozone economy, fell to 7.8 per cent in June, from 8.6 per cent in June 2005.

However, policymakers will be wary of raising rates at too fast a pace, given concerns over the possibility of a US-led slowdown in global growth and the danger that faster than expected rises in eurozone interest rates will push the euro higher, potentially damaging the bloc’s export sector.

/more...

[Ghost Dog]

28. Europe closes lower after ECB rate increase

http://mwprices.ft.com/custom/ft2-com/html-story.asp?da...

European stock markets extended their losses after the European Central Bank raised eurozone rates by a quarter point to 3 per cent as expected, but followed a similar decision by the Bank of England, which came as a surprise. The FTSE Eurofirst 300 was down 0.8 per cent to 1,330.25 in closing exchanges in London, while Frankfurt’s Xetra Dax shed 0.7 per cent to 5,640.03 and the CAC 40 in Paris fell 0.9 per cent to 4,983.68. London’s FTSE 100 outpaced other falling bourses, down 1.6 per cent to 5,838.4 after the Bank of England surprised markets with a quarter-point rate rise to 4.75 per cent.

[54anickel]

36. Dollar has been on a bit of a roller coaster today. Not sure what's

helping to support it today?

http://quotes.ino.com/chart/?s=NYBOT_DX&v=s
Last trade 85.10 Change -0.22 (-0.26%)

Settle Time 15:01 Open 85.30

Previous Close 85.32 High 85.39

Low 84.86 2006-08-03 13:41:12, 30 min delay



Forex - Euro eases off earlier highs as market looks ahead to US rate decision
http://www.forextv.com/FT/AFX/ShowStory.jsp?seq=140460

LONDON (AFX) - The euro eased off earlier highs against the dollar, reached after hawkish comments from European Central Bank president Jean-Claude Trichet, as uncertainty remained over next week's rate decision in the US.

After a surprise decision by the Bank of England to raise interest rates, plus a more hawkish-than-expected speech by Trichet indicating that further euro zone rate rises can be expected after today's hike, attention will centre on next week's rate decision in the US.

The market has gradually been moving to price in a pause by the Federal Reserve in raising interest rates on August 8, ending a period which saw 17 consecutive rate hikes, but there remains considerable uncertainty surrounding the decision.

Bear Stearns currency analyst Steve Barrow noted that today has seen a string of negative dollar news -- including a report that the Bank of Italy is cutting the proportion of dollars in its reserves in favour of sterling and weak US ISM services data as well as the two rate hikes -- but the dollar has still not fallen very much.

"The key really is what the Fed is doing and we are not really any closer to knowing that. Until the decision, the dollar will stay fairly steady," he said.

He added that quiet summer trade may be encouraging investors to stay on the sidelines for the time being.

"Either the dollar is finding some support from somewhere, or there isn't the usual interest at the moment," he said.

more...

[54anickel]

21. Ford's quarterly loss balloons to $254M

http://news.yahoo.com/s/ap/20060803/ap_on_bi_ge/ford_re... ;_ylt=AvxtaiMhLT064sa5ZYbBZrCyBhIF;_ylu=X3oDMTA2Z2szazkxBHNlYwN0bQ--

NEW YORK - Ford Motor Co.'s second-quarter loss more than doubled from what the No. 2 U.S. car maker previously reported because of higher-than-expected pension costs. In a second piece of weak news, the company said its luxury car division won't be profitable this year.

In a filing with the Securities and Exchange Commission Wednesday evening, Ford said it revised its loss to $254 million, or 14 cents per share, from the previously announced loss of $123 million, or 7 cents per share.

That contrasts with a profit of $946 million, or 47 cents per share, posted in the second quarter of last year.

Dearborn, Mich.-based Ford attributed the revision to an increase in full-year 2006 pension curtailment expenses to $1.2 billion, up from its previous projection of $1 billion. Full-year special items are expected to total $3.8 billion.

Ford had previously expected its Premier Auto Group, which includes its Jaguar, Volvo, Aston Martin and Land Rover brands, to post a 2006 pretax profit, but be close to breaking even, excluding special items.

more...

[54anickel]

35. Ford in engine fire fears recall

http://news.bbc.co.uk/1/hi/business/5243136.stm

US car firm Ford is to recall 1.2 million trucks, sport utility vehicles (SUVs) and vans over concerns about potential engine fires.
The recall, one of the largest ever, is over fears about the speed control deactivation switch system, which could corrode over time, overheat and ignite.

It followed "exhaustive investigations" by the US National Highway Traffic Safety Administration (NHTSA).

And it comes after Ford announced second quarter losses of $254m (£135m).

The group blamed the losses on an increase in pension curtailment costs related to job cuts.

more...

[54anickel]

22. Shaping up to be another interesting day. I've gotta run off to work

for most of the day. Have fun at the Casino.

[JNelson6563]

23. It looks like we may have to give back the free ponies!

Things aren't too sun-shiney out there right now. Clearly we need a better PR effort.



Julie

[JNelson6563]

25. 12:42 Update

Dow 11,219.06 +19.13 (0.17%)
Nasdaq 2,076.74 -2.07 (0.10%)
S&P 500 1,276.68 -1.87 (0.15%)
10-Yr Bond 4.965% + 0.004

Bit of a mixed bag right about now. Will try to check back later.

Julie

[54anickel]

29. Wow, they're doing fairly well. Much better than it was looking in the

pre-market.

1:29

Dow 11,245.47 +45.54 (+0.41%)
Nasdaq 2,089.74 +10.93 (+0.53%)
S&P 500 1,280.29 +1.74 (+0.14%)
10-yr Bond 4.955 -0.006 (-0.12%)
30-yr Bond 5.04 -0.011 (-0.22%)
NYSE Volume 1,576,884,000
Nasdaq Volume 1,027,527,000

1:00 pm : More of the same for the averages as the Dow and Nasdaq continue to trade in opposing directions. The Industrials sector is extending its reach to the upside as falling oil prices continue to help the Dow Jones Transportation Average chip away at some of the 11% lashing it endured in July. A 1.1% surge in United Technologies (UTX 62.99 +0.70) is also helping to offset downside Q4 guidance from Tyco International (TYC 26.01 -0.35). DJ30 +18.98 DJTA +0.7% NASDAQ -1.14 SP500 -1.78 NASDAQ Dec/Adv/Vol 1598/1240/898 mln NYSE Dec/Adv/Vol 1643/1434/872 mln

12:30 pm : Indices are back to trading in split fashion but there still isn't a strong sense of conviction on either the bullish or bearish side of the aisle. Technology, Materials and Industrials have all inched into positive territory, with a rebound in one of last month's worst performing industry groups -- Railroads, helping the latter. Nonetheless, gains in all three sectors are still too minimal to have much of an impact on the broader market. DJ30 +7.04 DJTA +0.6% NASDAQ -4.56 SP500 -2.77 NASDAQ Dec/Adv/Vol 1664/1146/816 mln NYSE Dec/Adv/Vol 1765/1288/800 mln

12:00 pm : Major averages are struggling to regain their footing midday as some disappointments on the earnings front and typical jitters ahead of tomorrow's influential jobs report sideline buyers.

In keeping with the on-again, off-again trading action we've seen for some time, earnings shortfalls from blue chips like Sprint Nextel (S 17.11 -3.02) and Prudential (PRU 73.77 -4.51), especially after buying interest was revived yesterday amid a batch of upbeat earnings news, has dampened early interest in equities. Medtronic (MDT 44.96 -5.97) saying that Q1 results will fall short of analysts' expectations, coupled with a Q2 warning from Ford (F 6.87 -0.09) and discouraging July same-store sales from Starbucks (SBUX 30.16 -3.14), are also weighing on the mind's of investors.

Lingering uncertainty tied to Friday's employment report and how it might impact Fed policy on Tuesday is also acting as an overhang. Even though a pair of economic reports earlier (e.g. ISM Services and Factory Orders) further suggested that economic growth was decelerating, a surprise rate hike by the Bank of England has cautiously reminded investors that interest rates are rising around the world. The unexpected move weighed on equity markets overseas, with the major European bourses shedding more than 1.0% on average, which collaterally contributed to some of the early apprehension seen in U.S. stocks.

Of the eight sectors trading lower, Telecom continues to get hit the hardest following Sprint Nextel's Q2 disappointment. Health Care is also notably weak as Medtronic's 12% drubbing to a 52-week low as well has been exacerbated by multiple analyst downgrades. Energy is under pressure following an earnings shortfall from Transocean (RIG 72.96 -5.72) and in sympathy with a pullback in oil prices. Crude oil is off 1.1% and below $75 a barrel following a smaller than expected build in weekly natural gas supplies and less of a threat on Gulf platforms as Tropical Storm Chris weakens.

One area benefiting from the decline in oil, though, has been retail as unusually warm weather helped clear out summer merchandise and result in better than expected July same-store sales. Even though the final sales tally has helped assuage early concerns about the pace of consumer spending, losses in Starbucks and Ford continue to overshadow gains throughout the retail space and are preventing the Consumer Discretionary sector from inching into the green. DJ30 -4.15 NASDAQ -7.79 SP500 -4.00 NASDAQ Dec/Adv/Vol 1754/1012/716 mln NYSE Dec/Adv/Vol 1777/1240/704 mln

11:30 am : Indices are still mixed but recent recovery efforts appear to have stalled. Technology, Industrials and Consumer Staples are struggling to hold onto small gains while volatile oil prices continue to play havoc with the Energy sector's inability to offer any support for the broader market. Consumer Discretionary, though, continues to pare its losses as the final same-store sales tally suggests that consumers in July were able to shake off record high gas prices above $3 a gallon and clear out summer merchandise amid unusually warm weather. Same-store sales rising 3.5% last month, above the 2.5% estimate compiled by The International Council of Shopping Centers-UBS, has helped assuage early concerns about the pace of consumer spending and renewed some enthusiasm throughout the struggling retail group (+1.2%). DJ30 +1.15 NASDAQ -6.92 SP500 -3.58 NASDAQ Dec/Adv/Vol 1669/1063/632 mln NYSE Dec/Adv/Vol 1653/1318/628 mln

11:00 am : Major averages now trade in split fashion as the Dow inches above the flat line. Notable blue chips turning positive since the last update include GE, HD, HPQ, IBM, MCD and PFE while this morning's biggest Dow laggards (e.g. GM, BA, and MMM) paring their losses has also helped the price-weighted index abandon its neutral stance. DJ30 +12.09 NASDAQ -1.32 SP500 -1.54 NASDAQ Dec/Adv/Vol 1730/946/510 mln NYSE Dec/Adv/Vol 1852/1081/502 mln

10:30 am : Indices continue to pare early losses, spearheaded by a turnaround in Technology. Apple Computer (AAPL 69.33 +1.17) turning positive and now up 1.7% at a fresh 2 1/2 month high amid reports of integrating its iPod into car audio systems is lending some early support. Oil prices hitting session lows (-1.3%) ahead of natural gas inventories data, without the Energy sector giving up too much in the way of leadership, has also improved sentiment while Treasuries regaining modest momentum ease some of the jitters ahead of Tuesday's FOMC meeting.DJ30 -3.68 NASDAQ -3.89 SP500 -2.96 NASDAQ Dec/Adv/Vol 1809/778/384 mln NYSE Dec/Adv/Vol 1922/905/374 mln

10:00 am : Indices are off their opening lows but still languish below the flat line as nine out of 10 sectors remain negative. Telecom, in the wake of Sprint Nextel's Q2 disappointment, is getting hit the hardest (-2.6%). Health Care (-0.8%) is also notably weak as Medtronic's 11% lashing to a 52-week low as well has been exacerbated by multiple analyst downgrades. Energy is under pressure in sympathy with a 1.0% pullback in oil prices while a reminder that interest rates are rising around the world, courtesy of a surprise rate hike by the Bank of England, does little to make the rate-sensitive Financials sector more attractive. Aside from its defensive characteristics in a down market helping Consumer Staples post today's only gain, CVS Corp (CVS 34.05 +0.86) raising its full-year earnings forecast is also lending some sector support. DJ30 -28.18 NASDAQ -12.39 SP500 -5.70 NASDAQ Dec/Adv/Vol 1837/533/198 mln NYSE Dec/Adv/Vol 1787/625/182 mln

09:40 am : As futures trade presaged, stocks have succumbed to selling pressure right out of the gate. Among the several factors sidelining buyers have been disappointments on the earnings front from blue chips like Sprint Nextel (S 17.51 -2.62) and Prudential (PRU 75.00 -3.28), especially following a session that was inspired by a plethora of upbeat earnings news. Further, Ford Motor (F 6.77 -0.19) now saying its Q2 loss was about twice as large as originally reported, coupled with a Q1 warning from Medtronic (MDT 45.20 -5.73) and discouraging July same-store sales from Starbucks (SBUX 29.07 -4.23), are also weighing on the mind's of investors still unsure about the outlook for Fed policy. DJ30 -40.75 NASDAQ -15.61 SP500 -7.13 NASDAQ Vol 94 mln NYSE Vol 72 mln

[JNelson6563]

30. Yeah, I was surprised

I guess I will never learn. If I get to the point where nothing surprises me, I will have finally learned.

[54anickel]

40. Stocks turn higher

http://biz.yahoo.com/cnnm/060803/080306_markets_newyork...

snip>

After a tough morning Thursday, stocks managed to return to positive territory, led by a turnaround in technology.

"The techs started breaking out, in particular the chips started moving higher, and that brought the whole market up," said Joseph Saluzzi, co-head of trading at Themis Partners.

Saluzzi said that after having slid on and off for nearly four months, the chip sector was perhaps due for a little rebound. He said that even amid the broad selloff earlier in the week, chips and the tech sector have been holding up better than the rest of the market.

Focusing on jobs, the Fed

Investors may have also been reassured by the morning's weaker-than-expected economic reports, in that weaker reports are seen as evidence to some investors that the Federal Reserve can pause in its interest-rate hiking campaign.

However, "that could all change tomorrow," Saluzzi said, referring to Friday's July employment report, the last big piece of economic news before next week's Federal Reserve meeting on interest rates.

more...

[54anickel]

33. AOL to Slash Payroll by 5,000 Employees

http://www.chron.com/disp/story.mpl/ap/fn/4092308.html

NEW YORK — AOL said Thursday it would drop as many as 5,000 employees, or a quarter of its global workforce, within six months as the company restructures its business to draw more online advertising dollars.

The announcement came a day after the Time Warner Inc. unit said it would no longer charge high-speed Internet customers for e-mail and other services.

[54anickel]

34. Ford, GM, Mazda Add iPod Support

http://www.betanews.com/article/Ford_GM_Mazda_Add_iPod_...

Apple said Thursday that it had struck agreements with Ford, General Motors and Mazda to offer seamless iPod integration in 2007 automobile models. In Ford and General Motors cars, a majority would provide the feature, while Mazda has decided to include the feature across its entire lineup.

"Now more than 70 percent of 2007-model US automobiles will offer iPod integration, with General Motors alone making it available on all 56 of its models, representing millions of cars and trucks," Apple marketing vice president Greg Joswiak said. The Cupertino company also said it had sold more the 58 million iPods since the product's launch.

[54anickel]

41. 2:37 and everything is rosy

Dow 11,254.68 +54.75 (+0.49%)
Nasdaq 2,095.27 +16.46 (+0.79%)
S&P 500 1,281.74 +3.19 (+0.25%)
10-yr Bond 4.947 -0.014 (-0.28%)
30-yr Bond 5.03 -0.021 (-0.42%)
NYSE Volume 1,980,962,000
Nasdaq Volume 1,313,994,000

2:30 pm : Market is off its best levels but the bulk of industry leadership remains positive. Homebuilding (+5.1%) is today's best performing S&P industry group, getting a lift from falling bond yields and a Freddie Mac report that showed mortgage rates fell for a second straight week. The PHLX Housing Sector Index is now up about 11% since hitting a 52-week high less than two weeks. Home Furnishings (+3.2%) and Specialty Stores (+2.9%), bolstered by strong monthly retail sales and falling oil prices, round out the top three and are also helping Consumer Discretionary provide some notable leadership. DJ30 +46.78 NASDAQ +14.15 SP500 +2.55 NASDAQ Dec/Adv/Vol 1201/1737/1.30 bln NYSE Dec/Adv/Vol 1228/1936/1.26 bln

2:00 pm : Indices extend their reach to the upside as buyers regain control of the action. As reflected in the A/D line, advancers on the NYSE now outpace decliners by a 17-to-13 margin while those on the Nasdaq hold a 15-to-13 edge. The ability by the Dow and Nasdaq to breach key resistance levels of 11240 and 2094, respectively, lends further support for the improved underlying tone that clearly became evident last week. DJ30 +61.15 NASDAQ +16.33 SP500 +3.62 NASDAQ Dec/Adv/Vol 1370/1523/1.13 bln NYSE Dec/Adv/Vol 1396/1726/1.12 bln

1:30 pm : A renewed wave of buying within the last 30 minutes, spurred in part by the U.S. State Department saying it hopes for a U.N. resolution on ending Mideast violence by Friday, now has all three major averages trading in positive territory. With tech's growth prospects still in question until there is more clarity on the interest rate outlook, falling bond yields as Treasuries turn the corner have also helped renew some enthusiasm for the beaten down Technology sector

[54anickel]

42. 3:41 heading into the close with healthy volumes. Looks like everyone

feels the Fed is done.

Dow 11,251.24 +51.31 (+0.46%)
Nasdaq 2,094.42 +15.61 (+0.75%)
S&P 500 1,281.38 +2.83 (+0.22%)
10-yr Bond 4.951 -0.01 (-0.20%)
30-yr Bond 5.035 -0.016 (-0.32%)
NYSE Volume 2,458,225,000
Nasdaq Volume 1,634,863,000

3:30 pm : Market continues to hold onto the bulk of its gains going into the close. Aside from better than expected same-store sales helping investors shrug off a handful of disappointments on the earnings front, oil prices closing lower for the first time in four days and bond yields finishing near session lows ahead of a heavily discussed jobs report tomorrow continue to underpin in a positive underlying tone. DJ30 +63.55 NASDAQ +19.17 SP500 +4.61 NASDAQ Dec/Adv/Vol 1190/1781/1.56 bln NYSE Dec/Adv/Vol 1229/1987/1.54 bln

3:00 pm : Buyers continue to show their resolve as early attempts to consolidate gains continue to be overshadowed by the temptation to pick up bargains in a number of underperforming areas. To wit, this year's worst performing sector -- Technology, is today's best performer (+1.1%) as Sprint Nextel's disappointment provides an opportunity to rotate money out of Telecom, this year's second best sector (+18%), and into struggling areas like semiconductors, networking and hardware.DJ30 +64.99 NASDAQ +20.57 SOX +1.9% SP500 +4.82 NASDAQ Dec/Adv/Vol 1197/1762/1.42 bln NYSE Dec/Adv/Vol 1228/1971/1.40 bln

2:30 pm : Market is off its best levels but the bulk of industry leadership remains positive. Homebuilding (+5.1%) is today's best performing S&P industry group, getting a lift from falling bond yields and a Freddie Mac report that showed mortgage rates fell for a second straight week. The PHLX Housing Sector Index is now up about 11% since hitting a 52-week high less than two weeks. Home Furnishings (+3.2%) and Specialty Stores (+2.9%), bolstered by strong monthly retail sales and falling oil prices, round out the top three and are also helping Consumer Discretionary provide some notable leadership. DJ30 +46.78 NASDAQ +14.15 SP500 +2.55 NASDAQ Dec/Adv/Vol 1201/1737/1.30 bln NYSE Dec/Adv/Vol 1228/1936/1.26 bln

2:00 pm : Indices extend their reach to the upside as buyers regain control of the action. As reflected in the A/D line, advancers on the NYSE now outpace decliners by a 17-to-13 margin while those on the Nasdaq hold a 15-to-13 edge. The ability by the Dow and Nasdaq to breach key resistance levels of 11240 and 2094, respectively, lends further support for the improved underlying tone that clearly became evident last week. DJ30 +61.15 NASDAQ +16.33 SP500 +3.62 NASDAQ Dec/Adv/Vol 1370/1523/1.13 bln NYSE Dec/Adv/Vol 1396/1726/1.12 bln

[54anickel]

46. Playing With Fire!

http://www.321gold.com/editorials/orlandini/orlandini08...

snip>

As tragic as the plight of Peru sounds, it is nothing compared to what is going on in the Middle East. For almost a year I have been attributing the rise in gold to the fact that the yellow metal senses some future event of really tragic proportions. I also said that I didn't have any idea as to what it could be related to. I am sorry to say that is no longer the case. Supply and demand factors aside, gold has focused its attention squarely on the Middle East conflict, an event orchestrated in large part by some insane policy implemented by the present US administration and supported by Israel. Some feel that it's really Israel that's calling the shots, but it doesn't matter1. What matters is the course they're on and the results they'll produce. At the present moment Israel is busy laying waste to Lebanon and it is doing so in such a fashion as to provoke and attack from one or more of its Arab neighbors, specifically Iran with help from Syria. An Iranian attack would be "just cause" for US military intervention, and since they lack the manpower for such an action, it would mean the US would probably play their nuclear card. Think about this for a minute. The US is the first country to develop a nuclear weapon, the first and only country to use such a weapon, and now sixty-one years later they seem to want to do it again. The justification is that Iran possesses, or is on the verge of possessing, weapons of mass destruction. Does that sound familiar? Remember Colin Powell showing the world all the indisputable proof that Iraq possessed such weapons? We never found any did we? I have news for you; you won't find any this time around either.

Just for a moment, I want to turn this argument around and suppose that Iran actually possesses nuclear weapons. Given their religious beliefs, culture, and history just how do you think they'll react? I'm not an expert on the Middle East, but I think I can figure it out by myself. If they've got it, they'll use it! Who do you think they'll direct their rage against? Why Israel of course! Do you have any idea what kind of mess this is going to create? There will be no winners here; only those who go down in flames. Both sides are going to risk everything, they are going to lose everything and what is worse, both sides are going to inflict tremendous suffering on the rest of the world.

Why would anyone want to go down such a dangerous road? Well, for the US a lot of it has to do with oil whereas for Israel it would be a chance to settle some old scores once and for all. I have no idea who threw the first stone in the Middle East some three thousand years ago, but if George Jr. is dumb enough to start dropping nuclear ordinance on the Arabs, and I think he is, you will be fighting the next war throwing stones from your respective caves2. Anyone who thinks China and Russia will sit quietly by while the US goes about the confiscation of +/- 50% of the world's oil is more than a few bricks shy of a full load. So far they have been content to let America kill innocent men, women, and children in Iraq and Afghanistan, all in the name of democracy, because they know full well it's a war we can't win. Russia can write volumes about going down to defeat in Afghanistan. The implementation of nuclear weapons changes all that, even low grade nuclear weapons, as the Arab nations would be powerless to fight back. At least over the sort run. Over the run long the United States would reap what it sows as the Al Qaeda would find some way to explode a nuclear weapon on American soil. It's worth remember that throughout the course of human history, whenever a bully has started throwing stones, someone eventually comes along with a bigger stone. The process of retribution often takes years, or even decades, but it inevitably happens. Mr. Bush will find that out the hard way.

For those of you who feel safe living in your log cabins nestled in the mountains of Montana, complete with solar power, a ten acre vegetable garden, your own well, and a satellite dish, I have one thing to say: think again! Don't be so naive as to believe you can simply explode a few nuclear bombs on the other side of the world and go on with your life as if nothing happened. More years ago than I care to admit, I took a biology course from a professor who was a bit of a rebel. In the middle of the semester, he dedicated a week's worth or lectures to a topic most people in today's world know nothing about, nuclear winter. It surprised me to learn that it was only necessary to explode half a dozen nuclear bombs on our globe to seriously alter for many decades the earth's weather patterns. In short, you would see snow at the Equator during the summer months and temperatures would hit freezing. I live just below the Equator in a city of ten million people where half the houses don't have roofs (it rains once every twenty years in Lima so most feel a roof is a luxury they can live without). Maybe 1% of the houses have a heating system. Nuclear winter would probably kill half the people in Lima within a week.

Having spent the first eighteen years of my life in the US, I find it difficult to relate what I see today with the values instilled in me by the late fifties/early sixties Midwestern culture I was exposed to as a child. The adult influences of my youth were hardened by the Depression and World War II. They knew what it meant to suffer and they were no strangers to hard work. They also had compassion, something that is lacking in today's generation....

more...

[54anickel]

47. Miller Time

Dow 11,242.59 +42.66 (+0.38%)
Nasdaq 2,092.34 +13.53 (+0.65%)
S&P 500 1,280.27 +1.72 (+0.13%)
10-yr Bond 4.951 -0.01 (-0.20%)
30-yr Bond 5.035 -0.016 (-0.32%)
NYSE Volume 2,728,553,000
Nasdaq Volume 1,857,596,000

4:20 pm : Stocks shrugged off early losses and closed higher for a second straight day as strong monthly retail sales, more signs of a potential pause at Tuesday's Fed meeting and lower oil prices helped offset some disappointments on the earnings front.

Thursday was shaping up to be reminiscent of the typical on-again, off-again trading pattern that has driven the stock market for some time now, as earnings shortfalls from blue chips like Sprint Nextel (S 17.75 -2.38) and Prudential (PRU 73.66 -4.62), especially following a session that was inspired by a batch of upbeat earnings news, dampened early interest in equities. Medtronic (MDT 44.32 -6.61) saying that Q1 results would fall short of analysts' forecasts, coupled with a Q2 warning from Ford Motor (F 6.86 -0.10) and a smaller than expected July same-store sales increase from Starbucks (SBUX 30.64 -2.66), also weighed on the mind's of investors still unsure about the outlook for Fed policy.

To wit, with the last piece of notable data before Tuesday's FOMC meeting out tomorrow morning -- the July Employment report, already acting as an overhang, a surprise rate hike by the Bank of England cautiously reminded investors that interest rates are rising around the world. Subsequent sell-offs in overseas markets, as evidenced by the major European bourses shedding more than 1.0% on average, also stalled early follow-through buying.

That is until investors, clinging to the improved underlying tone that clearly became evident last week, sifted through a typically uneventful pair of economic reports at 10:00 ET that lent further confidence that the Fed will achieve the soft landing they are seeking for the economy. The Institute of Supply Management said its services index fell a larger than expected 54.8% in July, a third consecutive monthly decline and the slowest pace since last September. Also, the Commerce Dept. showed that factory orders rose a smaller than expected 1.2% in June. Even though neither report usually gets a whole lot of attention, further validation that economic growth is decelerating provided more evidence that the Fed may take a breather on Tuesday after two years of rate hikes.

Then, as the final same-store sales tally checked better than expected, reassuring investors about the pace of consumer spending, a subsequent decline in crude prices and bond yields helped get buying efforts back on track.

Of the six economic sectors closing higher, Industrials paced the way to the upside as oil closing lower for the first time in four days helped the Dow Jones Transportation Average chip away at some of the 11% lashing it endured last month. Aside from strong monthly comps creating bargain hunting opportunities throughout the underperforming retail group, lower borrowing costs renewed enthusiasm for beaten down homebuilders. To wit, the PHLX Housing Sector Index is now up about 10% since hitting a 52-week high less than two weeks.

Lending further support for the desire to pick up bargains was renewed interest in Technology, this year's worst performing sector, as Sprint Nextel's disappointment provided an opportunity to rotate money out of Telecom, this year's second best sector (+18%), and into struggling areas like semiconductors, networking and hardware. DJ30 +42.66 DJTA +2.6% NASDAQ +13.53 SOX +1.5% SP500 +1.72 NASDAQ Dec/Adv/Vol 1265/1752/1.84 bln NYSE Dec/Adv/Vol 1304/1937/1.81 bln

Have a great evening!

[Lindacooks]

48. I love your posts and read them regularly, but Thursday is August 3.

Thanks!