STOCK MARKET WATCH, Friday December 15

[ozymandius]

Friday December 15, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 766 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2179 DAYS
WHERE'S OSAMA BIN-LADEN? 1885 DAYS
DAYS SINCE ENRON COLLAPSE = 1846
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 7
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON December 14, 2006

Dow... 12,416.76 +99.26 (+0.81%)
Nasdaq... 2,453.85 +21.44 (+0.88%)
S&P 500... 1,425.49 +12.28 (+0.87%)
Gold future... 630.90 -1.50 (-0.24%)
30-Year Bond 4.72% +0.03 (+0.55%)
10-Yr Bond... 4.60% +0.02 (+0.39%)






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 Martin Goldberg

PUT THIS NEWS SHORT ON GOOGLE IN A TIME CAPSULE
(And Look at Its Chart)

There was a paragraph posted on Yahoo Finance Wednesday morning that summarizes accurately the dominant mood moving today’s stock market. This short is relevant from many perspectives to stock market cynics. While William O’Neill accurately stated that he never met a successful cynic, it may be relevant to read this paragraph carefully, print it out, and place it in a time capsule. There will be a time to get it out and read it again when the eventual and inevitable reversion to the mean of stock market valuation occurs. The cast of characters, subject matter, and quotation are what makes this short a pure slice of today’s stock market sentiment. Here it is:

“Wednesday, December 13, 2006
Harold Maass] NEWS AT A GLANCE

Google plays the market

Google plans to help employees make the most of their stock options by selling them through an online auction. The system will make it clear how much financial institutions think the options are worth, which could be more than the current share price if Wall Street expects the stock to rise. (AP in Yahoo! Finance) "There's been a huge debate as to whether stock options have value," said Arthur Levitt, former Securities and Exchange Commission chairman and senior adviser at the Carlyle Group, "and this settles that debate for me, personally." (The Washington Post, free registration required)”

Aside from this news, the chart of Google is probably as good an indicator as to the intermediate term technical position of the overall market as any. At a current market capitalization of about $146 billion, Google now sports a market capitalization that is greater than that of IBM and more than that of Boeing and Disney combined. There are numerous fundamentally based rationales from Wall Street as to why Google should sport such a generous valuation; yet regardless of the rationale used, they all sound like late 1990’s bubble talk. All of these rationales are based upon unrealistic long term earnings growth rates. Generally speaking, they take the one-year projected earnings growth rate of more than 30% and project it out for an unrealistic time frame of 5 years or more. To put this growth rate in perspective, 30% growth per year compounded over 5 years results in total growth of about 370%. The point is, divorced from any reasonable basis, the market price of Google shares as it trades today is simply an indicator of current positive market sentiment. Watching the market action in Google is relevant because it gives the analyst a window as to how the market feels. There are some early, yet not definitive indicators (described below) that suggest this positive sentiment may be beginning to turn for the worse.

-cut-

In summary, Google, which is an important indicator of overall market sentiment, is at a key technical support level while it is showing negative momentum and bearish volume/price tendencies. A decisive break of support confirmed with volume would be bearish in the intermediate term for Google as well as the overall market.

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

[ozymandius]

2. Today's Reports

8:30 AM CPI Nov
Briefing Forecast 0.2%
Market Expects 0.2%
Prior -0.5%

8:30 AM Core CPI Nov
Briefing Forecast 0.2%
Market Expects 0.2%
Prior 0.1%

8:30 AM NY Empire State Index Dec
Briefing Forecast 12.0
Market Expects 18.0
Prior 26.7

9:00 AM Net Foreign Purchases Oct
Briefing Forecast NA
Market Expects $69.5B
Prior $65.1B

9:15 AM Capacity Utilization Nov
Briefing Forecast 82.1%
Market Expects 82.1%
Prior 82.2%

9:15 AM Industrial Production Nov
Briefing Forecast 0.1%
Market Expects 0.0%
Prior 0.2%

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

[Ghost Dog]

27. 08:30 Reports (CPI 0.0%, Empire State 23.1) Surprise!

Dec 15 8:30 AM CPI Nov Actual 0.0% Briefing 0.2% Expected 0.2% Prior -0.5%
Dec 15 8:30 AM Core CPI Nov Actual 0.0% Briefing 0.2% Expected 0.2% Prior 0.1%
Dec 15 8:30 AM NY Empire State Index Dec Actual 23.1 Expected 12.0 Briefing 18.0 Prior 26.7

...Surprise, surprise...

[Ghost Dog]

28. Consumer inflation unchanged in November

http://news.yahoo.com/s/ap/20061215/ap_on_bi_go_ec_fi/e...
By MARTIN CRUTSINGER, AP Economics Writer 5 minutes ago

WASHINGTON - Consumer inflation was a no-show in November as Americans enjoyed a third straight month of price relief led by big declines in energy costs.
ADVERTISEMENT

The Labor Department reported Friday that consumer prices were unchanged last month, even better than the small 0.2 percent analysts had been expecting. Prices had actually fallen by 0.5 percent in both September and October. The good news in all three months came from tumbling gasoline and other energy costs, which are retreating after a big run-up earlier in the year.

Core inflation, which excludes food and energy, was also unchanged in November, the best showing since June. That was likely to boost spirits at the
Federal Reserve, which is working to keep inflation in check.

With one month left in 2006, overall inflation is rising at an annual rate of 2.2 percent, down from last year's 3.4 percent increase. Core inflation, excluding energy and food, has been rising at an annual rate of 2.6 percent this year, an acceleration from the 2.2 percent gain turned in last year.

/...

[Ghost Dog]

29. Consumer prices flat in November

http://www.marketwatch.com/news/story/consumer-prices-f...
Core CPI also unchanged, easing pressures on Fed

WASHINGTON (MarketWatch) -- U.S. consumer prices were unchanged in November, as lower energy and car prices offset increases in costs for homeownership and medical care, the Labor Department reported Friday. Core prices - which exclude volatile food and energy prices - were also unchanged in November, the lowest core inflation since June 2005.

The consumer price index was much tamer than expected. Economists polled by MarketWatch expected 0.2% gains for both headline and core inflation.

...

With the separate CPI for urban workers down 0.1% in November and hourly wages up 0.2%, real (that is, inflation-adjusted) weekly earnings rose 0.2% in November and are up 2.6% in the past year.

Details

Inflation fell or rose at a slower rate for most categories of goods and services. Housing was the exception, with prices up 0.4% on hefty gains in hotel fares, rents, and owners' equivalent rent. The CPI excluding shelter fell 0.2%.

Energy prices fell 0.2% in November, the third decline in a row. Gasoline prices fell 1.6% in November. However, gasoline prices have ticked higher since the November survey. Natural gas prices rose 4.7% in November. Energy prices are down 3.8% in the past year.

Food prices fell 0.1%, as fruit and vegetable prices tumbled.

Medical care prices rose 0.2%, the smallest gain since July. Prescription drug prices fell 0.7%

Apparel costs fell 0.3%, the second decline in a row.

Shelter costs rose 0.4%, including a 0.4% rise in rents and a 0.3% gain in owners equivalent rent.

Transportation prices fell 0.9%. New car prices dropped 0.7%. Airfares fell 4.8%, the biggest drop in seven years.

/...

[Danascot]

35. Is there a vehicle to short consumer discretionary?

I think it would be a good play. Rydex which has several contrarian and bear funds in different flavors has a consumer discretionary sector fund but not its inverse. ... I know I could place puts on individual companies but I'd like a broader basket, plus I'm lazy.

Any ideas?

[Ghost Dog]

40. I don't know, Danascot. But you may find some leads eg. here?

http://etf.seekingalpha.com/article/592

[Ghost Dog]

53. November consumer prices jump up in Midwest

http://wichita.bizjournals.com/wichita/stories/2006/12/...
Wichita Business Journal - 1:40 PM CST Friday
by Shane T. Farley

Prices in the Midwest rose three-tenths of a percent for November, even though prices in all other regions of the country declined last month, according to consumer price index data released by the Bureau of Labor Statistics Friday.

Prices in the west, northeast, and south regions declined anywhere from two-tenths to four-tenths of a percent, the index indicated.

After lower energy prices, largely a result of lower gasoline prices, pushed the Midwest index downward in the previous two months, energy prices increased 2.1 percent in November and accounted for seventy-five percent of the change in the Midwest index over the month. November's increase in energy prices was led by higher prices for utility gas service.

/.

[Ghost Dog]

32. 09:00-09:15 Reports (further surprises):

Dec 15 9:00 AM Net Foreign Purchases Oct Actual $82.3B Briefing NA Expected $69.5B Prior $70.2B Revised from $65.1B
Dec 15 9:15 AM Capacity Utilization Nov Actual 81.8% Briefing 82.1% Expected 82.1% Prior 81.8% Revised from 82.2%
Dec 15 9:15 AM Industrial Production Nov Actual 0.2% Briefing 0.1% Expected 0.0% Prior 0.0% Revised from 0.2%

[Ghost Dog]

33. Modest Gain for Industrial Production:

http://www.briefing.com/Investor/Public/MarketAnalysis/...

November industrial production was up 0.2%. This modest gain was a bit higher than the expected 0.0%, but the October change was revised lower from an original 0.2% to 0.0%.

The manufacturing component of production was up 0.3%, while mining and utilities both posted modest declines. The year-over-year change in industrial production is now up 3.8% over the year-ago level (which was depressed post Hurricane Katrina).

It is clear that manufacturing growth has slowed down. Industrial production the past four months is net flat. It isn't falling, however, so the trend is still consistent with a soft landing rather than recession.

/.

[Ghost Dog]

36. US Oct net capital inflows rise to $62.2 billion

http://today.reuters.com/news/articleinvesting.aspx?typ...

NEW YORK, Dec 15 (Reuters) - Net overall capital inflows into the United States rose to $62.2 billion in October from September's $57.8 billion, more than enough to cover the U.S. trade deficit for that month, the Treasury said on Friday.

The U.S. trade deficit for October was $58.9 billion. Net long-term capital inflows rose to $82.3 billion from $70.2 billion in September.

"The report is dollar-bullish, generally does not impact bonds," said T.J. Marta, fixed income strategist at RBC capital Markets.

"The strength was derived from official -- as compared to private -- flows," he added.

Foreigners bought U.S. Treasuries amounting to $26.30 billion in October, compared to selling of $233 million the previous month.

Japan was the biggest holder of U.S. Treasuries for the month, with holdings amounting $641.1 billion, while China came in second with $344.9 billion.

/...

[ozymandius]

3. Oil extends rise above $62 a barrel

LONDON - Oil prices extended their rise above $62 a barrel Friday, a day after OPEC's decision to maintain current production levels for now but to cut output in February.

Light sweet crude for January delivery on the New York Mercantile Exchange rose 21 cents to $62.72 a barrel in electronic trading by midday in Europe. A day earlier, prices leaped $1.14 after OPEC's announcement.

At London's ICE Futures exchange, Brent crude for February, the new front month, changed hands at $63.30 a barrel, up 41 cents.

The delayed cuts by the Organization of Petroleum Exporting Countries, spurred by concerns of bulging worldwide inventories and anticipated non-OPEC supply growth in 2007, were seen as a warning to the world's major consuming nations.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

4. 3 hostages taken from Shell oil complex

YENAGOA, Nigeria - Armed men who seized control of a Royal Dutch Shell PLC oil complex overnight fled Friday, taking three Nigerian hostages, shooting a man and forcing the oil giant to halt production at the site.

The attackers kidnapped a soldier, an administrative officer and a chef who works at a base that houses staff and stores equipment in Oporoma in the southern state of Bayelsa, said Joshua Benemesia, a traditional chief who has mediated hostage negotiations in the oil-rich delta region.

At least one man was shot in the attack, Benemesia said. Neither his identity nor his condition were immediately known.

-cut-

Shell officials earlier confirmed the station was occupied. Spokesman Bisi Ojediran said it had been shut down as a precaution, cutting production by 12,000 barrels of oil per day. Attacks on pipelines and oil facilities have cut the West African country's usual daily output of 2.5 million barrels by about a quarter this year.

http://news.yahoo.com/s/ap/20061215/ap_on_bi_ge/nigeria...

[Roland99]

34. So much for that 0.0% rise in inflation last month

As if inflation was completely absent.

[ozymandius]

5. BAE Shares Rise After U.K. Drops Saudi Contract Probe (Update4)

Dec. 15 (Bloomberg) -- Shares of BAE Systems Plc, Europe's largest weapons maker, rose the most in 3 1/2 years after the U.K.'s Serious Fraud Office dropped a probe into defense contracts with Saudi Arabia.

The fraud office yesterday abruptly terminated a three-year investigation into allegations of corruption surrounding the sale of weapons to the Saudis under the Al Yamamah contract. The probe had threatened a new agreement by Saudi Arabia to buy 72 Eurofighter jets, made by BAE and partners, in a deal worth at least 10 billions pounds ($19.6 billion).

``The government appears to have leaned on the SFO to drop the case because it was jeopardizing commercial contracts for BAE,'' said Doug McVitie, managing director of Arran Aerospace, a Dinan, France-based consulting company.

Saudi Arabia, holder of the world's largest oil reserves, has been a key British ally in the Middle East. U.K. exports to Saudi Arabia were 1.6 billion pounds in 2005, the biggest market for British goods in the region after the United Arab Emirates, according to the Office for National Statistics. Imports from Saudi Arabia were 1.7 billion pounds.

http://www.bloomberg.com/apps/news?pid=20601102&sid=aSD...

[ozymandius]

7. FTSE boosted by BAE

London equities moved further toward five-year highs on Friday morning, as shares in BAE Systems rose on news of the demise of an inquiry into allegations of corruption within key Saudi arms contracts.

Tobacco stocks also lit up the leaderboard after Gallaher agreed to be acquired by Japanese Tobacco in a long-expected deal.

The FTSE 100 started the day 0.3 per cent higher at 6,246.5, a rise of 18 points taking it within touching distance of November's five year peak of 6,256.0. The mid-cap FTSE 250 was flat at 11,049.6, but still around its all-time high.

The prospect of volatile trading around 10.00am, at the simultaneous expiry of stock futures and options contracts - known as "double witching" - kept volume restrained.

http://news.yahoo.com/s/ft/20061215/bs_ft/fto1215200605...

[Ghost Dog]

13. European stock markets strike five-year highs

http://asia.news.yahoo.com/061215/afp/061215121314eco.h...

LONDON (AFP) - European stock markets have hit their highest levels for more than five years, after a record overnight performance on Wall Street, with London gains underscored by BAE Systems.

The British capital's FTSE 100 index of leading shares hit 6,258.80 points on Friday, which was last breached on February 13, 2001.

Meanwhile, the French CAC 40 index hit 5,540.03 points and Frankfurt's DAX 30 touched 6,587.27 points -- both also last seen more than five years ago.

"A record high close on the Dow yesterday amid good earnings results has helped to lift Asian and European markets as sentiment turned positive once again as we approach the festive season," said Sucden analyst Michael Davies.

/...

[Ghost Dog]

16. European car sales hit record high in November

http://yahoo.reuters.com/news/articlehybrid.aspx?storyI...

FRANKFURT, Dec 15 (Reuters) - New car sales in Europe last month rose 3.9 percent to a record level for November, helped by a surge in Germany before a VAT tax rate rise and with Fiat (FIA.MI: Quote, Profile , Research), Volkswagen (VOWG.DE: Quote, Profile , Research) and Toyota (7203.T: Quote, NEWS , Research) leading the charge, industry data showed on Friday.

It was the best November sales figure since Brussels-based carmakers group ACEA began compiling data in 1990.

Japan's Nissan (7201.T: Quote, NEWS , Research) posted a second consecutive month of solid sales, while sister company Renault (RENA.PA: Quote, Profile , Research) of France got clobbered again, losing more than a full percentage point of market share.

New car registrations in Europe rose for a second month in a row to 1.22 million vehicles, bringing market growth in the first 11 months to 0.8 percent.

/...

[Ghost Dog]

18. Euro zone inflation up more than expected

http://www.rte.ie/business/2006/1215/eurozone.html

Annual euro zone inflation accelerated last month more than initially estimated, data from the European Union statistics office showed today. Industrial production in October also missed market expectations.

Eurostat said consumer prices in the euro zone rose 1.9% year-on-year in November, revising upwards its earlier flash estimate of 1.8%, which was also the market consensus. The figure was up from 1.6% in October - a 32-month low. Month-on-month prices stayed unchanged, as expected.

...

Meanwhile, industrial production data for October showed a 0.1% monthly decline against market expectations of a 0.4% gain, mainly as a result of falls in the output of energy and capital goods.

On year-on-year terms, the production increase was also smaller than expected at 3.6%, rather than the consensus estimate of 4.4%. The annual inflation rise was fuelled by a 2.1% gain in energy, as a fall in energy prices in November 2005 lowered the base for the year-on-year comparison for last month. On a monthly basis energy prices fell 0.5% in November. Food, alcohol and tobacco prices rose 3% year-on-year.

Excluding the volatile energy and unprocessed food costs, a measure the ECB calls core inflation, prices were flat month-on-month and rose 1.6% year-on-year, as expected. This was unchanged from October - a sign that past energy price rises have not yet filtered through to other sectors of the economy in any major way. The ECB is keen to prevent such second-round effects with tighter monetary policy.

/..

[Ghost Dog]

43. Europe’s year-end rally retakes 5-year highs

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

European equities advanced to fresh 5½-year highs on Friday as inflationary pressure cooled on both sides of the Atlantic, helping equities markets rally.

Core Eurozone inflation was unchanged at 1.6 per cent with headline CPI revised up to 1.9 per cent, just below the ECB’s target of 2 per cent.

News of softer than expected US inflation added to the trend and brought further momentum with fresh all-time highs for the Dow Jones Industrial Average, up 0.4 per cent at 12,467.3 as European traders shut up shop.

The FTSE Eurofirst 300 was up 0.5 per cent at 1,488.4 in closing trade while the German Xetra Dax rose 0.6 per cent at 6,588.8. The CAC 40 in {Paris rose 0.6 per cent to 5,54.6.

/...

[Ghost Dog]

44. FTSE closes at 5 1/2 year high, BAE leads

http://investing.reuters.co.uk/news/articleinvesting.as...

LONDON, Dec 15 (Reuters) - Britain's top share index closed at a 5-1/2-year high on Friday, bolstered by M&A talk and led by defence firm BAE Systems (BA.L: Quote, Profile , Research) after Britain dropped an investigation into past defence deals with Saudi Arabia.

"BAE has helped the market today, but M&A remains supportive of shares, and investors can also focus on strong visible earnings," said Henk Potts, equity strategist at Barclays Wealth.

The FTSE 100 .FTSE index closed up 32 points, or 0.5 percent, at 6,260.0, its highest closing level since February 2001. The index performance was boosted by a rise of the Dow Jones Industrial Average <.DJI> on data showing U.S. consumer prices were unexpectedly flat in November, boosting optimism that economic growth is neither too fast nor too slow.

BAE led FTSE 100 gainers with a 6.9 percent rise after Britain's Serious Fraud Office dropped the investigation, which the company said had put at risk a BAE-led sale of Eurofighter Typhoon jets to Saudi Arabia. Analysts have estimated the deal is worth about 10 billion pounds ($19.7 billion).

Earlier its shares rose to their highest level since April at 429 pence, while Rolls Royce (RR.L: Quote, Profile , Research), which helps make engines for the Typhoon, rose 1.5 percent.

Sentiment was also buoyed after the world's third-biggest tobacco company, Japan Tobacco (2914.T: Quote, NEWS , Research), said it would buy British rival Gallaher (GLH.L: Quote, Profile , Research) for $14.7 billion in cash.

Corruption, of course, pays (the few).

[Ghost Dog]

51. (Pound Sterling): A BEAUTY CONTEST OF MISSHAPEN HALF-WITS

http://www.financialsense.com/fsu/editorials/tustain/20...
by Adrian Ash
Bullion Vault
December 15, 2006

"...Even Wall Street agrees the Pound Sterling must tumble. So why have central bankers been buying all they can get...?"

Everyone wants a piece of the UK today. Bill Bryson just got himself an honorary gong. Monty Python's 'Spamalot' musical will soon hit Las Vegas (it's a hoot, by the way). And half-a-million Polish citizens are now living in Britain to earn Sterling, not Zloty.

Should US investors hail a black cab to Britain? Hold the Pound up to the light before you hedge your Dollars this Christmas.

Check the watermark. Make sure the metallic strip is intact. Then read the "promise to pay" signed by Mervyn King, Governor of the Bank of England. It's just as empty as the promise on US Treasury notes. Nothing but more fiat promises back it up – which will work fine so long as everyone accepts Sterling in payment of debt.

But the Pound is set to fall hard, according to two big US investment banks. Goldman Sachs says the Pound is 13% over-valued on a trade-weighted basis. Lehman Brothers are gloomier still. "I'm not saying that things will be terrible, but they will feel much worse," warns their chief UK economist, Alan Castle. He sees Sterling falling to $1.82 next year, before sinking to $1.68 by Christmas 2008.

Wall Street's reasons are simple. They might give you déja vu, too. For Great Britain and the United States have much more in common than merely the mess in Iraq.

/read on...

[Ghost Dog]

20. 'National interest' halts arms corruption inquiry

http://www.guardian.co.uk/armstrade/story/0,,1972749,00...
David Leigh and Rob Evans
Friday December 15, 2006
The Guardian

A Eurofighter or typhoon jet fighter plane. Photograph: EPA

A major criminal investigation into alleged corruption by the arms company BAE Systems and its executives was stopped in its tracks yesterday when the prime minister claimed it would endanger Britain's security if the inquiry was allowed to continue.

The remarkable intervention was announced by the attorney general, Lord Goldsmith, who took the decision to end the Serious Fraud Office inquiry into alleged bribes paid by the company to Saudi officials, after consulting cabinet colleagues.

In recent weeks, BAE and the Saudi embassy had frantically lobbied the government for the long-running investigation to be discontinued, with the company insisting it was poised to lose another lucrative Saudi contract if it was allowed to go on. This came at a time when the SFO appeared to have made a significant breakthrough, with investigators on the brink of accessing key Swiss bank accounts.

However, Lord Goldsmith consulted the prime minister, the defence secretary, foreign secretary, and the intelligence services, and they decided that "the wider public interest" "outweighed the need to maintain the rule of law". Mr Blair said it would be bad for Britain's security if the SFO was allowed to go ahead, according to the statement made in the Lords by Lord Goldsmith. The statement did not elaborate on the nature of the threat.

/...

ed: Looks like a heavy (at least UK) news dump Friday...

[Ghost Dog]

30. Blair defends decision to drop BAE probe

http://news.yahoo.com/s/ap/20061215/ap_on_bi_ge/britain...

LONDON (AP) - Prime Minister Tony Blair defended a controversial decision by the government to halt an investigation into a multibillion dollar arms deal between BAE Systems PLC and "key ally" Saudi Arabia on Friday.

The Serious Fraud Office revealed on Thursday that it had dropped the long-running probe after advice from the government's legal counsel that it would damage security and relations between the two countries.

"Our relationship with Saudi Arabia is vitally important for our country, in terms of counterterrorism, in terms of the broader Middle East, in terms of helping in respect of Israel/Palestine, and that strategic interest comes first," Blair told reporters at a European Union summit in Brussels.

"Particularly in circumstances ... where, if this prosecution had gone forward, all that would have happened is that we have had months and years of ill feeling between us and a key ally, and probably to no purpose," he said.

The SFO was investigating allegations that BAE ran a 60 million pound ($110 million) "slush fund" offering sweeteners to officials from Saudi Arabia in return for lucrative contracts as part of the Al-Yamamah arms deal in the 1980s.

Opposition lawmakers said dropping the probe, which follows media reports earlier this month that the Saudi government had given Britain 10 days to halt the SFO inquiry or lose a 10 billion pound ($19.6 million) contract to buy fighter jets, undermines Britain's business reputation.

"Coming straight after a threat from the Saudis to withdraw from future business, this completely undermines the U.K.'s reputation on good governance," said Liberal Democrat lawmaker Norman Lamb. "How on earth can we lecture the developing world on good governance when we interfere with and block a criminal investigation in this way?"

/...

[Ghost Dog]

31. Blair questioned by police on day of 'burying bad news'

http://news.independent.co.uk/uk/politics/article207615...

Downing Street faced accusations of trying to "bury bad news" by using the release of the report on the death Diana, Princess of Wales, to overshadow a two-hour grilling of the Prime Minister by police as part of the "cash-for-honours" investigation.

Mr Blair became the first serving Prime Minister to be interviewed in a criminal investigation by the Metropolitan Police. But one hour after the unprecedented meeting in N0 10, Lord Stevens published the findings of his inquiry into the princess' death.

The Government also chose yesterday to announce that the Serious Fraud Office was dropping its long-running inquiry into a multi-billion-pound arms deal with Saudi Arabia and the closure of 2,500 post offices in the face of fierce opposition from rural areas.

The shadow Transport Secretary, Chris Grayling, said: "Five years after Labour launched the concept of burying bad news, Mr Blair's spin doctors are back to their old tricks."

/...

[ozymandius]

6. Ford shakes up top team, names product chief

DETROIT (Reuters) - Ford Motor Co. announced on Thursday a shake-up of its top management intended to streamline vehicle development efforts and bring Chief Executive Alan Mulally closer to key operations.

In his first major move since taking his position full time in October, Mulally created a post of global product development chief at the struggling No. 2 U.S. automaker and eliminated a layer of management in its international operations.

Derrick Kuzak, 55, who played a key role in the launch of Ford's small Focus sedan, will lead Ford's new global development group, reporting to Mulally.

-cut-

In a series of interviews since taking office, Mulally has criticized Ford's regional operating structure as an impediment that was keeping the company from competing effectively against rivals such as Toyota Motor Corp.

http://today.reuters.com/news/articlenews.aspx?type=bus...

[Ghost Dog]

8. Morning Ozy. No specific cartoons yet on "DSM-2"

ref: http://www.democraticunderground.com/discuss/duboard.ph...

[ozymandius]

12. Good morning Ghost Dog and everyone.

How can Blair not burn after this?

[Amonester]

17. Um... Because he's a sleazy war criminal.

Can't have that for a British PM.

Especially when they've re-elected him...

What have they become?

[Ghost Dog]

21. Yup. Nowhere to run now but Ever Onward! n/t

[Ghost Dog]

9. Japanese business sentiment hits two-year high (Tankan Survey)

http://asia.news.yahoo.com/061215/afp/061215084030busin...

TOKYO (AFP) - Japan's captains of industry are at their most upbeat in two years, the central bank has said, reinforcing expectations of another interest rate rise in early 2007 as the economy continues on the mend.

Confidence among Japan's big manufacturers rose to 25 in December from 24 in September, the Bank of Japan's (BoJ) closely watched Tankan survey showed -- the third quarter of improvement and matching market expectations.

The figure was the strongest since the 13-year high of 26 seen in September 2004. A positive reading means that confident firms outweigh pessimistic ones.

Sentiment among major non-manufacturers rose unexpectedly to 22 in December from 20 in September, defying market fears of a drop to 19 and hitting the highest level since November 1991.

"Economic sentiment is improving not only in large manufacturing firms but also in non-manufacturing firms and in small- and medium-(sized) firms. This is a very good result," said Takuji Aida, chief economist at Barclays Capital.

But Hiromichi Shirakawa, chief economist for Japan at Credit Suisse First Boston, was more cautious, noting that sentiment among retailers dipped, pointing to sluggish consumption.



"Even though capital expenditure plans are upgraded, the broader picture of the economy is unchanged: capex strong, consumption weak.

"If consumption is weak, inflation is not picking up and it's very difficult for the BoJ to hike interest rates," he added.

The Tankan survey of almost 10,000 firms showed that all companies now expect to boost capital expenditure by 10.5 percent on average in the year to March, up 2.1 percentage points from the September reading.

Large companies in all industries plan to raise capital spending 12.4 percent this fiscal year, up 0.8 percentage points from the previous survey.

Japanese share prices hit a fresh seven-month high as the Tankan calmed worries about the pace of the local economic slowdown, with the benchmark Nikkei-225 closing up 85.11 points or 0.51 percent at 16,914.31.

But the Japanese currency came under pressure with the dollar topping 118 yen for the first time in three weeks as players took the view that the central bank is unlikely to raise interest rates next week despite the strong Tankan.

Most analysts say the BoJ is more likely to hold off until early next year before hiking its key rate to 0.5 percent, to ensure Japan's recovery does not grind to a halt if the US economy slows sharply.

/..

[Ghost Dog]

11. Japanese Stocks Climb; Dollar Down

http://asia.news.yahoo.com/061215/ap/d8m184ug0.html

(AP) Japanese stocks rose moderately Friday after a key central bank survey showed an improvement in corporate sentiment.

The benchmark Nikkei 225 stock index added 85.11 points, or 0.51 percent, to end the week at 16,914.31 on the Tokyo Stock Exchange. Earlier it rose as high as 16,959.91 points _ the highest since May 11.

Markets got a boost after the Bank of Japan's quarterly "tankan" survey of business executives showed that the confidence index for major manufacturers rose to 25 from 24 from the September survey.

The modest improvement were not expected to affect the widespread view that the BOJ will hold off on raising interest rates at its meeting Monday and Tuesday. Central bank policy makers have said they are more concerned about the weakness of consumer spending, inflation and other data related to the household sector.

...

The broader Topix index, which includes all shares on the exchange's first section, was up 5.55 points, or 0.34 percent, at 1,657.40.

/...

[Ghost Dog]

14. Japan,India to strengthen ties, start economic talks

http://in.today.reuters.com/news/newsArticle.aspx?type=...

TOKYO (Reuters) - Japan Prime Minister Shinzo Abe and and his Indian counterpart Manmohan Singh agreed on Friday to launch talks towards an economic partnership pact to be concluded in two years.

India is the largest recipient of Japanese development aid, but trade and investment between the two economies have been unspectacular so far as Japanese companies have focused on markets such as China, Thailand and Vietnam.

Singh, in Japan on a four-day visit, said earlier that he was committed to providing an economic environment attractive for investment and urged companies in Japan, the world's second-largest economy, to boost their presence in India, the second most populous country. He met Abe on Friday, and the two leaders agreed to launch negotiations for an economic partnership agreement next year as well as tightening ties across a broad range of fields.

"Indeed, India and Japan are natural partners with a mutual interest in each other's progress," Singh told a joint news conference with Abe. "There is much that we can, and should, do together."

Abe noted that the two nations shared many values, which equipped them to work well together. "We confirmed that our bilateral relationship, based on shared activities and broad mutual benefits, is exceedingly full of possibilities," Abe said. The two sides did not give any details about the proposed economic pact.

Japan's trade with India in 2005 amounted to 740 billion yen ($6.3 billion), less than 4 percent of its trade with China. Japan's foreign direct investment in India was just 11 billion yen in the April-June quarter compared with 173 billion yen for China. Companies are becoming keen to step up investment, however, lured by the Indian economy's robust growth at an average of 8 percent for the last three fiscal years.

/...

[Ghost Dog]

15. India Market in bull grip, Sensex up by 127 pts

http://www.outlookindia.com/pti_news.asp?id=437495

MUMBAI, DEC 15 (PTI) The stock market today continued its upward journey for the third day in a row on strong global cues and heavy gains in Reliance Communications and Tata Steel, pushing the benchmark Sensex 127 points higher.

The Bombay Stock Exchange (BSE) 30-share sensitive index (Sensex) opened strong at 13,545.60 and rallied sharply to the intra-day high of 13,669.65.

It later ended the day at 13,614.52, a net rise of 127.36 points or 0.94 per cent over Thursday's close of 13,487.16.

Metal shares witnessed a robust rally on the back of a strong surge in metal prices on London Metal Exchange (LME).

Tata Steel shares gained 5.4 per cent on some market players speculating that it may abondon its bid to acquire Anglo-Dutch steelmaker Corus Group Plc, while RCL stock rose 4.3 per cent on reports that it was in the race to acquire India's third largest private mobile firm Hutch-Essar.

The broader S&P CNX Nifty of the National Stock Exchange (NSE) jumped by 45.60 points or 1.19 per cent to 3,888.65 from previous close of 3,843.05.

The market, which lost 977 points between December 8 and 12, has since recovered 619.50 points in the past three days.

Bull operators and retail investors continued to cover short positions while Foreign Institutional Investors (FIIs) stepped up purchases, absorbing sales made by domestic funds.

/...

[Ghost Dog]

19. India can be fastest growing economy in '07

http://ia.rediff.com/money/2006/dec/15gdp.htm

India is set to surpass China as the fastest-growing economy in Asia next year on the back of increasing consumer demand and public investment in infrastructure, global research firm Credit Suisse has said.

In its December forecast, the firm upgraded India's economic growth rate to 9.5 per cent in 2006 from 8.5 per cent projected in September this year. The economy would grow by 10 per cent in 2007 and 10.5 per cent rate in 2008, it added.

"Our most significant growth upgrade for 2007 is in India from 8.5 per cent to 10 per cent, surpassing China to become the top growth performer in the region," Credit Suisse research analyst Dong Tao said in the report.

Besides, external liquidity in India remained a concern and interest rates could go up. The report also singled out India on external liquidity concerns and said most countries in the region maintained robust current account surpluses.

The agency also increased the projected growth rate for China in 2007 to 9.9 per cent from 9.5 per cent forecast in September. Chinese economy is likely to grow at 10.4 per cent in 2006, it said.

/...

[Ghost Dog]

25. China to avert hard landing in 2007-govt economist

http://yahoo.reuters.com/news/articlehybrid.aspx?storyI...

BEIJING, Dec 15 (Reuters) - China should be able to steer clear of a hard landing as the economy slows next year, with further government caution needed over a potential rebound in investment, a government economist said on Friday.

Zhu Baoliang, an economist with the State Information Centre, a government think-tank under the National Development and Reform Commission, said China would continue to grow at a rapid clip but would be confronted with a slew of problems.

Investment growth, which has slowed compared to levels seen earlier in the year as a result of government steps to cool the economy, could rebound if recently appointed provincial officials initiated projects in the new year, he told reporters.

...

"I think investment growth of 20 percent would be appropriate," he said. "But it will be very difficult for China to bring investment growth down to 20 percent next year."

Other problems facing the economy included the nation's bulging trade surplus which Zhu said had fuelled excess liquidity and trade frictions with other countries.

...

One area likely to remain a bright spot in the economy was consumer price inflation which was likely to remain tame at around 1.5 percent for the whole of 2007, he said.

/...

[Ghost Dog]

26. China's economy -- What's in store for 2007? (People's Daily)

http://english.peopledaily.com.cn/200612/15/eng20061215...

Double-digit growth is a certainty for China this year, but the trade imbalance is more difficult to forecast.

Snowballing exports have combined with surging investment, but consumption has remained stagnant. A global economic downturn could hit China hard with its over reliance on trade.

Problems such as the widening urban-rural wealth gap, rising employment pressure, inadequate social security, the deteriorating environment and energy waste all relate to deep-rooted system flaws.

WTO membership gave the country's economy a shot of adrenalin. It also threw China into fiercer global competition and trade friction.

This month's Central Economic Work Conference involving the Chinese leadership drew up major strategies and policies to tackle these issues in 2007. Here is the analysis:

QUESTION 1: WHAT'S THE OBJECTIVE OF MACRO-ECONOMIC CONTROL?

CONFERENCE DOCUMENT: Realizing "good and rapid" growth, with stability as the priority to prevent drastic fluctuations, and making resolute efforts to ensure central government policies are fully implemented.

ANALYSIS: By putting "good" in front of "rapid" for the first time, the leadership underscores the quality of economic development.

/continues...

[Ghost Dog]

42. U.S./China: Few Results In Economic Talks

http://www.rferl.org/featuresarticle/2006/12/e5fcfade-0...
<-- Yes, it's THOSE (Radio Free Europe / Radio Liberty) people, still around (now definitively minus their Spanish/Catalan radio transmitter), still performing the usual function, one supposes...

By Breffni O'Rourke
U.S./China - US Treasury Secretary Henry Paulson (L) and Chinese Vice Premier Wu Yi gesture ahead of the opening of the Strategic Economic Dialogue in Beijing's Great Hall of the People China, 14Dec2006

U.S. Treasury Secretary Henry Paulson with Chinese Deputy Premier Wu Yi before their talks in Beijing on December 14 (epa)

Talks in Beijing between high-ranking U.S. and Chinese economic officials ended today with both sides claiming progress was made. But China's pledge to allow greater flexibility on the exchange rate of its currency -- a long-standing U.S. demand -- was made without any timetable.

PRAGUE, December 15, 2006 (RFE/RL) -- The two-days of talks in Beijing were seen by both sides as being key to a long-term bilateral economic relationship.

Treasury Secretary Henry Paulson, who led the U.S. side at the meetings, said he wanted the talks to lay the basis for relations which will have consequences for generations of Americans. Deputy Premier Wu Yi -- who led China's delegation -- called the meetings critically important.
"Rather than the Central Asian economies basing themselves on a dollar economy, they may be looking far more at or pegged economies, particularly in view of China's massive drive for business across the world."

Lots Of Pledges

And though at the conclusion of the talks the two sides pledged better cooperation in promoting trade, opening markets, and Beijing liberalizing its currency -- the yuan, which is also known as the renminbi or RMB -- there were few concrete results from the meeting.

/...

[ozymandius]

10. Stock futures point higher before CPI data

NEW YORK (Reuters) - U.S. stock index futures pointed higher on Friday, a day after the Dow industrials closed at a record high as investors awaited a report on U.S. consumer prices that could show tame inflation accompanying a moderate economic slowdown.

With major market indexes pointing to fresh highs, investors are awaiting November's
Consumer Price Index, due out at 8:30 a.m. (1330 GMT). The forecast for both headline and core inflation, which excludes food and energy, is for a 0.2 percent rise.

Other major economic indicators on tap include industrial production and capacity utilization, set for 9:15 a.m. (1415 GMT).

http://news.yahoo.com/s/nm/markets_stocks_dc

[Ghost Dog]

22. Dollar rises before CPI, tankan no help for yen

http://yahoo.reuters.com/news/articlehybrid.aspx?storyI...
Fri Dec 15, 2006 6:11am ET17
By Natsuko Waki

LONDON, Dec 15 (Reuters) - The dollar rose broadly on Friday ahead of U.S. inflation data which could help dampen expectations of an interest rate cut, and the yen slipped as an upbeat tankan survey failed to change the outlook for Japanese rates. The Bank of Japan's tankan quarterly headline index of sentiment at large manufacturers rose to a two-year high. But the data was not strong enough to reignite expectations for an interest rate hike to 0.5 percent next week.

An "Empire State" survey by the New York Federal Reserve on Thursday showed manufacturing activity slowed less than expected in December, adding to recent data which scaled back expectations of a near-term U.S. interest rate cut.

"We had a strong Empire State survey and data has been dollar supportive. If we get surprisingly strong CPI you might see the dollar extends this mini rally," said Daragh Maher, currency strategist at Calyon.

"On Japan, the market was already expecting a pretty good (tankan) number and it wasn't enough to put a December rate hike back on the agenda."

The euro was down a quarter percent on the day at $1.3112 <EUR=>, with the technical picture eroding expectations for the single currency to break the past record high above $1.36 anytime soon.

The dollar hit its highest level in more than three weeks at 118.26 yen <JPY=>, and was up 0.3 percent at 1.2184 Swiss francs <CHF=>, a three-week high.

/...

[Ghost Dog]

23. Nickel hits record high, copper steady

http://yahoo.reuters.com/news/articlehybrid.aspx?storyI...

LONDON, Dec 15 (Reuters) - Nickel futures touched a record high at the London Metal Exchange on Friday, building on a five-percent rise in the previous session, while copper futures steadied after a turbulent two days.

Nickel for delivery in three months <MNI3> on the LME hit a high of $34,950 per tonne, up from $34,800 on Thursday, before softening slightly to $34,450/34,650 by 1111 GMT.

There are sound reasons why fund managers are buying nickel futures, analysts said. Strong demand from stainless steel mills, the largest consumers of nickel, and tight supply mean prices should remain high for years to come.

"Partly because BHP Billiton thinks stainless steel output will rise 4.9 percent a year over the next five years...the company sees nickel staying in deficit for at least another year -- a shortfall Xstrata reckons could last 'until the end of the decade'," Sean Corrigan, chief investment strategist at Diapason Commodities Management said in a report.

Andrew Harrington, commodities analyst for ANZ in Sydney, said strikes, political unrest and production problems in major producers, made nickel a good bet.

/...

[Ghost Dog]

24. Copper Falls After Decline in Euro-Zone Industrial Production

http://www.bloomberg.com/apps/news?pid=20601012&sid=a62...

Dec. 15 (Bloomberg) -- Copper dropped in London, heading for a third straight weekly decline, after industrial output unexpectedly fell in the countries sharing the euro, signaling reduced demand for the metal used in homes and cars.

Industrial production in the euro zone fell 0.1 percent in October, Eurostat, the European Union's statistics office in Luxembourg, said today. A 0.4 percent gain was the median expectation of 32 economists surveyed by Bloomberg News.

``The figures were a disappointment for the copper market,'' said Michael Widmer, London-based director of metals research at Calyon, one of 11 companies that trade on the floor of the London Metal Exchange. ``The euro-zone growth was seen as supporting the market.''

Copper for delivery in three months fell $40, or 0.6 percent, to $6,730 a metric ton at 11:02 a.m. on the London Metal Exchange. Prices are down 2.2 percent this week.

Other metals on the LME dropped. Aluminum fell $22 to $2,842 a ton, nickel slipped $125 to $34,625 and zinc slipped $30 to $4,320. Lead was unchanged at $1,665 and tin was unchanged at $11,050.

/.

[Danascot]

37. There was a short story on local TV news last eve

saying the metal in pennies and nickels is now worth more than the face value of the coins and the US mint was warning of stiff fines and up to 5 years in prison for melting them down!

[AnneD]

46. Morning Marketeers.....

and lurkers. We have been having some serious problems in Houston with copper thefts. I remember Mom telling me how bad it was in Arizona, about 4 months prior to the thieves becoming active here. Thieves target construction sites and air conditioning units (esp churches-where it is used intermittently). It is getting so bad here that the city is targeting the scrap metal dealers for taking fenced goods. Hope it works 'cause it is down right criminal to take someones A/C in this part of the world. It's like carrying wire cutters in a range war.

I find so much of the news today. No inflation, flat sales....my my. What are you alls take on this.


Happy hunting and watch out for the bears.

[Ghost Dog]

49. My take? Predictably weird...

Hiya

[Ghost Dog]

38. Wall Street extends rally

http://news.yahoo.com/s/ap/20061215/ap_on_bi_st_ma_re/w...

NEW YORK - Wall Street extended its rally Friday after reports showed inflation remained tame in November and industrial production rose for the first time in two months amid increased output by automobile makers.

The economic data underscored a sense in the market that the economy is slowing at a reasonable pace and that inflation, a key concern of the
Federal Reserve, was in check. High inflationary readings would likely make the Fed hesitant to lower short-term interest rates.

In the first hour of trading, the Dow Jones industrial average was up 38.85, or 0.31 percent, at 12,455.61. The increase comes a day after the Dow rose nearly 100 points, closing above 12,400 for the first time.

Broader stock indicators were higher. The Standard & Poor's 500 index was up 4.26, or 0.30 percent, at 1,429.75, and the Nasdaq composite index was up 13.20, or 0.54 percent, at 2,467.05.

/...

[Ghost Dog]

39. 09:50 Exuberant euphoria:

Dow 12,462.58 Up 45.82 (0.37%)
Nasdaq 2,466.98 Up 13.13 (0.54%)
S&P 500 1,429.51 Up 4.02 (0.28%)
10-Yr Bond 4.5200% Down 0.0750
NYSE Volume 637,217,000
Nasdaq Volume 559,565,000

09:35 am : As expected, the major indices have started the day on a bullish course that was set by the better than expected CPI report. Initial buying efforts are fairly broad-based, but not quite as strong as had been projected. Energy (-0.22%), which was yesterday's big gainer, is the main laggard today and the only sector in negative territory. Similarly, Black & Decker (BDK 82.77, -4.15) and Illinois Tool Works (ITW 46.75, -1.17) aren't participating either, as both stocks are down following earnings warnings from the companies.DJ30 +42.54 NASDAQ +14.23 SP500 +4.27

--> As expected ... course set by ... better than expected CPI ... :huh?:

[Ghost Dog]

41. 11:15 Hesitating

Dow 12,471.88 Up 55.12 (0.44%)
Nasdaq 2,465.95 Up 12.10 (0.49%)
S&P 500 1,430.43 Up 4.94 (0.35%)
10-Yr Bond 4.5280% Down 0.0670
NYSE Volume 1,197,014,000
Nasdaq Volume 951,330,000

11:00 am : The market continues to show a good deal of resilience to selling efforts. That is understandable today given the broad-based leadership and the hopeful view that the November CPI report will encourage the FOMC to embrace the option of cutting interest rates sooner rather than later. Separately, the bullish bias is reflected in the fact that 8 Dow components hit new 52-week highs today. General Electric (GE 37.09, +0.88) highlights the list and is followed by Coca-Cola (KO 49.11, +0.11), AT&T (T 35.93, +0.27), DuPont (DD 48.63, +0.23), Citigroup (C 53.70, +0.59), Microsoft (MSFT 30.09, +0.02), Disney (DIS 34.71, -0.01) and McDonald's (MCD 43.60, -0.09). The latter two stocks are recommended holdings in Briefing.com's Active Portfolio.DJ30 +60.97 NASDAQ +11.95 SP500 +5.33 NASDAQ Dec/Adv/Vol 1061/1685/825 mln NYSE Dec/Adv/Vol 1116/1871/679 mln

10:25 am : There hasn't been much follow through after the initial burst of buying interest. The hesitation could be owed to a sense of angst that, coupled with yesterday's rally, today's gains could invite some profit taking ahead of the weekend. There is still a lot of time left in the session, though, and with both the technology (+0.41%) and financial (+0.31%) sectors still outperforming at this juncture, the market isn't likely to roll over without a fight. Volume is running higher than average on account of today's quarterly options expiration.DJ30 +46.47 NASDAQ +11.06 SP500 +3.79 NASDAQ Dec/Adv/Vol 983/1671/654 mln NYSE Dec/Adv/Vol 1046/1815/537 mln

10:00 am : The Dow has extended its reach into record territory as investors have responded favorably to the November CPI report's unchanged reading. The latter was better than the 0.2% increase that was expected and it has served as a source of encouragement that the Fed is succeeding in keeping inflation under wraps. The dip in the year-over-year rate for core-CPI to 2.6% from 2.7% has also contributed to that belief. The Treasury market certainly liked what it saw as gains have been registered across the yield curve. The benchmark 10-year note is up 23 ticks and its yield has dropped 9 basis poiints to 4.51%. That move has been a boon for the homebuilders, which are among today's leadership groups.DJ30 +49.99 NASDAQ +15.21 SP500 +4.69 NASDAQ Dec/Adv/Vol 837/1644/478 mln NYSE Dec/Adv/Vol 748/1783/399 mln

[Ghost Dog]

45. 13:20 Backpedalling:

Dow 12,460.58 Up 43.82 (0.35%)
Nasdaq 2,460.70 Up 6.85 (0.28%)
S&P 500 1,428.50 Up 3.01 (0.21%)
10-Yr Bond 4.5790% Down 0.0160
NYSE Volume 1,779,020,000
Nasdaq Volume 1,415,054,000

1:00 pm : What little selling interest there has been today hasn't been undertaken with much conviction outside of some specific situations, like Black & Decker (BDK 79.72, -7.20) which disappointed investors with an earnings warning that was linked to U.S. sales being significantly lower than anticipated. A look in at the Dow reveals that more than 2/3 of its 30 components are registering a gain, although only two - Honeywell (HON 43.84, +1.15) and General Electric (GE 37.33, +1.12) - have moved more than a point.DJ30 +46.87 NASDAQ +8.34 SP500 +3.26 NASDAQ Dec/Adv/Vol 1322/1616/1.32 bln NYSE Dec/Adv/Vol 1530/1633/1.06 bln

12:25 pm : The indices are doing some backpedaling as the lack of follow through has invited some profit taking predicated on the notion that the market is overbought on a short-term basis. We've heard that claim for some time, of course, but it's understandable that there would be an urge of some sort to take profits ahead of the weekend - and ahead of a week that should graudally see an exodus of participants before the Christmas holiday. Like the earlier gains, the pullback seems to be a factor affecting most groups, with technology bearing the brunt of profit taking efforts.DJ30 +32.85 NASDAQ +5.51 SP500 +1.40 NASDAQ Dec/Adv/Vol 1244/1673/1.19 bln NYSE Dec/Adv/Vol 1332/1818/965 mln

12:00 pm : The stock market's positive showing today boils down to three letters: C...P...I.

Before the open, the Bureau of Labor Statistics reported that November CPI was unchanged overall, and, excluding food and energy. Economists had been expecting a 0.2% increase in the total and core-CPI numbers, so the inflation update was an encouraging read for Fed watchers on a couple of levels. First, it validated the view that Fed policy has helped keep inflation under wraps, as the year-over-year rate in core-CPI slipped to 2.6% from 2.7%; and secondly, it offered a hopeful sign suggesting the FOMC could cut rates sooner rather than later.

The spin on the CPI report was quickly reflected in the capital markets, as the dollar weakened, Treasuries rallied across the yield curve, and stock futures shot higher. A subsequent report showing industrial production was up 0.2% in November didn't do anything to disrupt the bullish view as that report fit neatly with the Fed's soft landing scenario.

Continuing where they left off, then, stocks started the day on a positive note, albeit not quite as strong as had been projected. That point notwithstanding, they held comfortably above the unchanged mark through the morning session, underpinned by broad-based leadership that was spearheaded by the financial, technology, and industrial sectors.

The energy sector (-0.80%) has been the one laggard of note, but its pull has been easily offset by the recognition that stocks such as General Electric (GE 37.32, +1.11), Citigroup (C 53.81, +0.70), Coca-Cola (KO 49.05, +0.05), DuPont (DD 48.80, +0.40) and Disney (DIS 34.55, -0.17) all hit new 52-week highs.

The post-CPI enthusiasm has faded a bit in the Treasury market, which is off its best levels. Still, with the yield on the 10-year note down 6 basis points to 4.54%, stocks are finding an added source of support on this quarterly options expiration day.
DJ30 +48.07 NASDAQ +12.63 SP500 +4.54 NASDAQ Dec/Adv/Vol 1170/1697/1.07 bln NYSE Dec/Adv/Vol 1274/1852/889 mln

11:30 am : The indices remain noticeably above the unchanged mark, but like yesterday, have endured somewhat of a lull following an initial rush of buying interest. Crude futures are up $0.39 at $63.72 per barrel, but unlike yesterday, the energy sector hasn't gone along for the ride. In fact, the energy sector (-0.40%) is the day's biggest laggard as momentum money is finding its way into the industrial and financial sectors with the likes of GE and Citigroup hitting new 52-week highs. The utilities sector (-0.15%) is the only other economic sector in negative territory.DJ30 +50.39 NASDAQ +11.02 SP500 +4.43 NASDAQ Dec/Adv/Vol 1116/1697/957 mln NYSE Dec/Adv/Vol 1098/1949/797 mln

[Mojorabbit]

47. What's up with gold? It seems to be tanking. n/t

[OrangeCountyDemocrat]

48. Tanking?

Moving sideways is more like it. Been stuck in that $575-$625 range for awhile.

[Ghost Dog]

50. Almost convinced it's time to buy more, myself

(and especially silver...).

[Mojorabbit]

54. An 11 dollar drop in a day.

Just wondering what kind of news caused that.

[Ghost Dog]

52. Gold Dips on Tame CPI

http://www.thestreet.com/_googlen/markets/commodities/1...
By Simon Constable
TheStreet.com Staff Reporter

Benign inflation data gave early holiday gifts to stock traders but coal to gold dealers.

Contracts for February delivery of gold were losing $3.90 at $627 an ounce on the Comex division of the Nymex. The bullion exchange-traded funds streetTracks Gold Shares (GLD - commentary - Cramer's Take) and iShares Comex Gold Trust (IAU - commentary - Cramer's Take) were both falling, off 0.4% recently.

New Labor Department data revealed lower-than-expected growth in the consumer price index, spurring stocks higher with the Dow Jones Industrial Average recently up 0.5% at 12,477.25. The CPI figures showed zero growth during November vs. the consensus forecasts of 0.2%. The headline numbers were identical to those for the core rate, which excludes the volatile food and energy components.

"In terms of economic data, Santa delivered early," says Jason Schenker, an economist at Wachovia in Charlotte, N.C. "Ameliorating price pressure continues to pave the way for Fed rate cuts."

Schenker predicts the Federal Reserve will lower short-term interest rates by a quarter point twice during the first half of 2007, with the first coming in March and the other by the end of June at the latest. Such events should keep the dollar depreciating "on trend," he says.

/read on...

[ozymandius]

55. I'll put the fork in it.

Dow 12,445.52 Up 28.76 (0.23%)
Nasdaq 2,457.20 Up 3.35 (0.14%)
S&P 500 1,427.09 Up 1.60 (0.11%)
10-Yr Bond 4.597% Up 0.002
NYSE Volume 3,229,575,000
Nasdaq Volume 2,508,575,000

4:10 pm : Stock prices inflated at the open after it became known by way of the November CPI report that inflation is being contained. Specifically, both total and core-CPI, which excludes food and energy, were unchanged last month.

The market had been expecting 0.2% increases at both levels, so there was no mistaking that the unchanged readings were good news, particularly since the year-over-year rate in core-CPI slipped to 2.6% from 2.7% as a result. In recognition of the encouraging trend, both stock and bond prices rallied in the early-going on the idea that today's data enhanced the possibility of a rate cut from the Fed occurring sooner rather than later.

The industrial production report, which showed a 0.2% increase in the month of November, didn't do anything to alter that belief as the production trend of late has fit neatly with the Fed's soft landing scenario.

As one might expect, then, stocks started the day on an upbeat note drawing added support from a noticeable drop in market rates and healthy leadership from the financial, technology and industrial sectors.

Earnings warnings from Black & Decker (BDK 78.26, -8.66) and Illinois Tool Works (ITW 46.80, -1.12), a continued uptick in oil prices, a lack of participation by the energy sector, and a sense that the stock market is overbought on a short-term basis, were among the limiting factors that kept the early gains in check on this quadruple witching options expiration Friday.

Although the stock market maintained a position in positive territory throughout the session, it spent a good part of the day seeing the early gains get pared on profit taking efforts. However, the outperformance of influential blue chip components like General Electric (GE 37.36, +1.15), Honeywell (HON 43.62, +0.93), Procter & Gamble (PG 64.11, +0.76), Citigroup (C 54.07, +0.96) and Cisco (CSCO 27.56, +0.25) kept selling efforts in check and the indices above the unchanged mark.

At the end of the day there weren't a lot of big movers from a sector standpoint, with the exception of Energy (-1.24%) which happened to be the prior day's biggest gainer.

Decliners actually outpaced advancers at the NYSE and Nasdaq, but the buying interest in large cap issues proved to be the difference that kept the indices from sporting negative signs at the closing bell.

Volume was heavier than usual which was a function of the increased trading that took place with the expiration of stock options, index options, index futures and single stock futures.DJ30 +28.76 NASDAQ +3.35 SP500 +1.60 NASDAQ Dec/Adv/Vol 1616/1456/2.16 bln NYSE Dec/Adv/Vol 1756/1491/1.72 bln