STOCK MARKET WATCH, Monday 9 May

[ozymandius]

Monday May 9, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 257 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 147 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 204 DAYS
DAYS SINCE ENRON COLLAPSE = 1261
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




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

AT THE CLOSING BELL ON May 6, 2005

Dow... 10,345.40 +5.02 (+0.05%)
Nasdaq... 1,967.35 +5.55 (+0.28%)
S&P 500... 1,171.35 -1.28 (-0.11%)
10-Yr Bond... 4.27% +0.10 (+2.50%)
Gold future... 426.90 -3.80 (-0.89%)

GOLD, EURO, YEN, Dollars and Loonie




PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Tim W. Wood

THE DOW REPORT
The Dow Jones Utility Average

In recent wrap-ups I have talked about the breakdown that has occurred by the Industrials and the Transports. I have explained that they have both violated their recent Secondary reaction low points which puts them both “in gear” to the down side. I have also recently received a number of e-mails asking about the strength of the Utility average. Therefore, I want to address the Utilities today.

-cut-

Robert Rhea then followed in Mr. Hamilton’s footsteps. It is very clear in Mr. Rhea’s writings that he did not use the Utility average as he constantly made reference to “Both Averages” with charts and tables constructed only of the Industrials and the Transports. Here is what Robert Rhea had to say about the Utility average:

“The action of the utility average, started by Dow, Jones & Co. in January, 1929, is ignored in this study. Many students of the market thought that this average, at that time more active than Rails, might supercede that average as a companion to the Industrials in appraising the trend of the market. There was no logical basis for this assumption, and, after four years’ study of the daily fluctuations of the utility average, this writer has reached the conclusion that any attempt to use the utility average in connection with the industrial average as a forecasting device would be useless, as will be explained at greater length later on. Then, too, the interlocking ownership of utilities is such that some development might affect the utility average unfavorable even in a period of expanding earnings of the Industrial group. Throughout the years 1929 to 1933, while the Rails and Industrials were confirming each other, any attempt to use the utility average as a substitute for the Rails would have resulted in serious mistakes.”

-cut-

My observation is that when we stand back away from these averages, we see that they all tend to ebb and flow together with major turn points all occurring within close proximity to the turn points of the other averages. This can be seen in the first chart below, which is a quarterly chart of the Industrials, the Transports and in the lower window we have the Utilities. This chart runs from the inception of the Utilities through the mid-1980’s and it is clear to see that the general price movement was the same in all indexes. The varying factor was the extent of the moves by the individual averages and the turn points. This created divergences or non-confirmations between the three averages at these major turn points; nevertheless, the general market direction was pretty much the same for all averages. Please understand that because of the time span covered by these charts it is difficult to see the degree of the turns and that we are talking in a broader more general sense here.

more...

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

[UpInArms]

2. daily dollar watch

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

Last trade 84.64 Change +0.03 (+0.04%)

U.S. Treasury in final stages of currency report

http://www.washingtonpost.com/wp-dyn/content/article/2005/05/06/AR2005050601161.html

WASHINGTON (Reuters) - The U.S. Treasury Department is in the final stages of finishing a semiannual report on the currency practices of China and other trading partners, a top official said on Friday.

Randal Quarles, acting U.S. Undersecretary for International Affairs, cautioned in a Reuters interview against drawing any conclusions about the reports contents from the fact that it is late. The report was due April 15. :rofl:

<snip>

Delving further into often fraught Sino-U.S. trade relations, Quarles said the Bush administration was still evaluating whether a surge in clothing imports from China since the start of the year had reached "market-disrupting" levels.

Clothing imports from China have surged since the Jan. 1 end of an international quota system that had protected American textile producers for decades.

...more...

Soft Patch Dodged, Trade Data Looms For Dlr

http://sg.biz.yahoo.com/050508/15/3seph.html

NEW YORK (Dow Jones)--Last week, a major source of pressure on the dollar was relieved with strong payrolls data suggesting fears over a soft patch in U.S. growth were overblown. But with international trade data due this week, a second bullet might prove harder to dodge.

The dollar found a friend last week in the revelation that Federal Reserve policymakers remain worried over inflation, and that U.S. job creation surged in April. For the week, the euro ended down only 0.3% versus the dollar, but it was off 1.3% from the week's high point. Versus the yen, the dollar eked out a 0.1% advance.

With those gains, the dollar remains not far from the upper reaches of its 2005 range versus the euro, and is in the middle of its range against the yen.

Analysts said the dollar made stronger post-payrolls gains versus European currencies than versus Asian currencies because of the continued concerns about economic and political developments in the euro zone.

These include worries over the May 29 vote in France over the European Union constitution, as well as renewed signs of stagnation in the euro-zone economy. The yen and other Asian currencies, meanwhile, have been supported by ongoing speculation over a revaluation of the Chinese yuan.

<snip>

This week's trade and flow data "will make it clear that the U.S. cannot maintain its outperforming economic position without the risk of running into a severe funding crisis," said Hans Redeker, global head of foreign exchange at BNP Paribas in a research note Friday.

...more...

Majors Collapse Under Dollar’s Onslaught

http://www.dailyfx.com/index.php?option=com_content&task=view&id=999&Itemid=39

EUR/USD - Euro bulls retreated after the dollar longs staged a massive assault on the single currency positions and pushed the pair below the 1.2800 figure in the latest bout of the greenback bullishness. As euro continues to lose ground to the dollar, single currency longs will try to mount a defense at 1.2730, a minor support created by the 2005 low.

An intermediate support at 1.2657, a Nov 3 daily spike low, currently defends the major support at 1.2632, an Oct 28 daily spike low. In the unlikely event of the countermove by euro bulls, single currency longs will encounter a minor resistance at 1.2892, a 78.6 Fib of the Feb-Mar euro rally. An intermediate resistance can be seen at 1.2942, a 20-day SMA, with major resistance at 1.3019, a 61.8 Fib of the Feb-Mar euro bull swing continuing to defend dollar held territory against the advance by the single currency longs. Oscillators remain mixed, with Stochastic treading above the oversold line on the daily chart at 30.92 and extremely oversold at 5.78 on the dealer (4HR) chart. RSI is neutral on the daily chart at 37.38 and is approaching oversold line at 33.28 on the 4-hour chart. MACD remains below zero line on the daily chart and is getting ready for a bearish crossover above the zero line on the dealer (4HR) charts.

<snip>

USD/JPY - Yen bulls continued to lose ground to the advancing dollar bulls following the failure by the JPY longs to retake the 104.00 figure. As the greenback bulls continue to push the pair higher, vanguard dollar longs will encounter a minor resistance at 105.50, an Apr 28 daily spike low, which acts as the first line of defense for the yen longs. A further advance will encounter an intermediate resistance at 105.98, a Feb 18 daily spike low, with a breakout above testing the yen defenses at 106.13, a major resistance established by the 38.2 Fib of the 101-79-108.88 dollar rally. In an instance dollar assault fails and greenback longs pullback, they will rely on a minor support 104.79, a 5-day SMA, for the first line of defense. An intermediate support can be seen at 104.41, a 61.8 Fib of the Jan-Apr greenback bull swing, with major support at 104.16, a May 4 daily spike low, continuing to defend the 104.00 level from the yen bulls. Indicators are mixed, with Stochastic extremely oversold on the daily chart at 11.53 and extremely overbought at 92.72 on the dealer (4HR) chart. RSI is treading above the oversold level on the daily chart at 40.10 and is approaching an overbought line at 62.29 on the 4-hour chart. MACD is below the zero line on the daily chart and is slopping upwards toward the zero line on the dealer (4HR) chart.

...more...

Have a Great Day Marketeers!

[UpInArms]

32. US Treasury's SnowJob - China should move now on yuan

http://www.reuters.com/financeNewsArticle.jhtml?type=governmentFilingsNews&storyID=8427987§ion=investing

HARTFORD, Conn., May 9 (Reuters) - U.S. Treasury Secretary John Snow said on Monday that China has taken the necessary steps to ease the peg it maintains on its yuan currency (CNY=CFXS: Quote, Profile, Research) to the U.S. dollar and that it should act now.

"They've made great strides with their financial system, they've said want to do it, they've affirmed their commitment to doing it," Snow said in response to reporters' questions after addressing an insurance industry group.

"Now is the time," he added.

...very short newsblurb...

[UpInArms]

38. update - more info

http://www.reuters.com/financeNewsArticle.jhtml?type=governmentFilingsNews&storyID=8428676§ion=investing

excerpt:

A group of officials from the People's Bank of China was in Washington on Monday for discussions that include foreign exchange.

U.S. Treasury officials portray the talks as regular technical discussions on a range of economic and financial issues but they occur when speculation is high that China may be near a revaluation of the yuan.

The officials taking part in the meetings are at the deputy assistant secretary level or below, the U.S. official said. In the bureaucratic hierarchy at Treasury, deputy assistant secretaries fall beneath assistant secretaries, undersecretaries, a deputy secretary and the secretary.

[UpInArms]

37. Cable spins lower; Yen pressure on Korean tensions

http://www.forextv.com/FT/Text/ShowStory.jsp?id=3569

excerpt:

The yen moved lower vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥105.65 level, its highest level since 29 April. The pair was supported around the ¥105.05 level and added to Friday's strong gains that were inspired by strong U.S. non-farm payrolls data. Increasing speculation that North Korea is readying to conduct a nuclear test in Japan's backyard "or executing an elaborate deception" has also dented confidence in the yen. Ratings agency Fitch upgraded its outlook on Japan's long-term foreign currency and long-term domestic currency ratings from stable to negative. MoF's Hosokawa verbally intervened overnight saying the government "will take decisive steps to stop excess and disorderly currency moves." This is the first verbal intervention by a Japanese monetary official in quite some time and follows the dollar's decline last week to a seven-week low of ¥104.20. Japan has not officially intervened in the FX markets by selling yen since mid-March 2004. Minutes from Bank of Japan Policy Board's mid-March monetary policy meeting were released overnight and they evidenced a unanimous decision to maintain the central bank's ¥30 - 35 trillion liquidity target unchanged. BoJ has found it difficult to maintain the ¥30 - 35 trillion target because commercial banks are growing more reluctant to keep large excess reserves at BoJ to guard against a bank failure. This is a symptom of the banking system's achievements in reducing its massive non-performing loan portfolios. An adjustment in the target range will not signal an end to Japan's long-standing quantitative easing policy. Most BoJ-watchers do not believe the central bank will begin to unwind its quantitative easing policy before the end of the current fiscal year in March 2006. The Nikkei 225 stock index shed 0.19% to close at ¥ 11,171.32. Dollar bids are seen around the ¥104.15 level and dollar offers are seen around the ¥105.95 level. The euro gained ground vis-à-vis the yen as the single currency tested offers around the ¥135.50 level and was supported around the ¥134.65 level. Stops were hit above the ¥134.95 level during the move higher as traders reacted to increasing tensions on the Korean peninsula. In Chinese news, Japanese MoF official Hosokawa said "it is favourable for China to reform its currency regime. We expect China to take appropriate measures by itself." Chinese monetary officials will meet with their U.S. counterparts in Washington, D.C. later today.

...more...

[UpInArms]

3. Today's Report:

May 9	10:00 AM	Wholesale Inventories	Mar	-	1.0%	0.7%	0.6%	-

[UpInArms]

15. U.S. wholesale inventories rise 0.4%

March sales up 0.2% on big jump in petroleum

WASHINGTON (MarketWatch) - Sales at U.S. wholesalers grew by 0.2% in March, while inventories increased 0.4%, the Commerce Department estimated Monday.

The inventory-to-sales ratio remained at 1.19. The typical wholesaler had about 36 days of sales on hand. A year ago, the inventory-sales ratio was 1.15.

Sales were up 7.2% year-over-year, while inventories increased 10.8%. The figures are adjusted for seasonal factors, but not for inflation.

All of the increase in sales was accounted for by petroleum, which increased 9.2% as prices soared. It was the largest increase in petroleum sales in two years.

Inventories were boosted by petroleum, up 9.3%, which offset a 2.3% drop in automotive inventories. It was the largest decline in auto inventories in three years.

<snip>

The shortfall in inventories compared with expectations could lead to a slightly lower estimate of gross domestic product. GDP increased 3.1% in the first quarter in the first estimate.

...more...

[MARALE]

18. Weren't they expecting a larger inventory report?

Indicator Wholesale inventories

Period March
ReleaseDate 5/9 10am
Previous 0.6%
Kellner'sForecast 1.0%
Market-Watchsurvey 0.8%
The other surveys 0.7%
Actual 0.4%


So is this smaller number good news, bad news or just a don't really care very much?

[UpInArms]

19. I think if one delves into that report a bit deeper

that there was a sharp increase in inventories.

Inventories of nondurable goods increased 1% on the 9.3% rise in petroleum stocks and a 6.1% increase in farm products.

It appears that the cutbacks in production are keeping the numbers from rising too rapidly on the inventories side, yet the ratio of inventories to sales is where the issues will show up.

[MARALE]

28. Thanks, didn't see that

So this must not be seasonally adjusted number, because of the farm #s. I guess that they could not seasonally adjust this number, would mean nothing if they did that. These are the kind of reports that I need to learn more about.

[UpInArms]

30. what I have found when

looking at these numbers is that they are similar to cooked books in that the "reported number" rarely reflects the internals - so if you just take it on the face they come in close to the projections or expectations - only when you take the numbers apart and look at the rest of it does it reflect the economic climate.

(learned how to "meet targets" from some professional cooks :eyes: )

[UpInArms]

48. Weak U.S. wholesale stocks signal softer Q1 GDP

http://www.reuters.com/financeNewsArticle.jhtml?type=economicNews&storyID=8429457§ion=investing

WASHINGTON, May 9 (Reuters) - Inventories at U.S. wholesalers rose a smaller-than-expected 0.4 percent in March, Commerce Department data showed on Monday, prompting economists to cut forecasts for first-quarter growth.

Wall Street analysts predicted a 0.8 percent increase in stocks after a 0.6 percent gain in February. The weaker March number was due in part to a decline in the stockpile of cars and professional equipment like computers.

The Commerce Department said inventories of durable goods -- products meant to last three or more years -- edged up 0.1 percent in March. Inventories for non-durable items increased 1.0 percent as stocks of petroleum jumped 9.3 percent, the largest increase since July 2004.

"Based on this result, we now see Q1 GDP being revised down to plus 2.8 percent from plus 3.1 percent," said Morgan Stanley economist Ted Wieseman.

...more...

[UpInArms]

4. Countrywide loan fundings fall in April

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38481.3499242361-835161035&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Countrywide Financial (CFC) on Monday said April mortgage loan fundings fell 5% from March to $34 billion, down 4% from the year-ago period. Since there were two fewer working days, loan fundings on an average daily basis in April rose by 4% compared to March, the company said. The company said the month wrapped up with "solid" results. Shares of Countrywide rose 9 cents to $35.54 on Friday.

[UpInArms]

5. Asian Shares End Mixed; Tokyo Down 0.2%, HK Up 0.4%

http://sg.biz.yahoo.com/050509/15/3sf8e.html

SINGAPORE (AP)--Stock prices in Tokyo fell on profit-taking Monday while Hong Kong edged higher on hopes that China will loosen restrictions on its currency as Asian markets finished mixed.

Japan's Nikkei Stock Average of 225 selected issues dipped 20.85 points, or 0.2%, to 11,171.32. The index added 190.06 points, or 1.7% Friday.

Traders sold blue chips that gained recently. Car makers Honda Motor Co. and Toyota Motor Corp. dropped, as did technology stocks Advantest Corp., Elpida Memory Inc. and Kyocera Corp. Sony Corp. and Canon Inc. also slipped.

<snip>

In Hong Kong, the share market ended slightly higher as sharp losses in Chinese markets tempered gains on speculation that China will allow its currency to appreciate.

...more...

[UpInArms]

6. Oil up, OPEC says pumping near full tilt

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8425498

LONDON (Reuters) - Oil prices held above $51 a barrel on Monday and OPEC's president said the cartel will keep pumping near full tilt, ignoring its system of formal production quotas.

U.S. light crude (CLc1: Quote, Profile, Research) was up 14 cents to $51.10 a barrel, while London Brent crude (LCOc1: Quote, Profile, Research) gained 59 cents to $51.36.

Prices are barely $7 below record peaks struck last month, even though OPEC producers have ramped up output to build a cushion of oil stocks ahead of an expected fourth quarter demand surge.

"I think now we are dealing with the production without the quotas," said Kuwaiti oil minister Sheikh Ahmad al-Fahd al-Sabah, also OPEC President.

...more...

[UpInArms]

12. OPEC president says oil market oversupplied

http://www.forbes.com/markets/feeds/afx/2005/05/09/afx2009618.html

KUWAIT (AFX) - OPEC's president said the oil market is oversupplied and that any increase in output at the cartel's meeting next month must take into consideration prices and growth in demand.

'The OPEC-10 (excluding Iraq) real production now in the market based on our latest information from OPEC and other sources is 29.7 million barrels per day,' Sheikh Ahmed Fahd al-Sabah - who is also Kuwait's energy minister - told reporters.

'We believe there is two million bpd of overproduction in the market ... In the third quarter the required demand from OPEC-10 will be 28.5 million bpd.'

'For June, I can't say anything for now. But we have to study the market, the behaviour of prices and growth of demand,' he said in response to a question if OPEC might increase output at its June 15 meeting.

...more...

[AnneD]

7. Morning Marketeers

:donut: I am looking for an adapter for my lap top. Hopefully hubby can bring it to me before my battery runs out.
Seems the drop in consumer confidence numbers got the WH's attention but they said that 'consumer's weren't understanding the economic indicators-the economy is doing well'. :rofl:
I will try to find the exact quote as I heard it on the telle this am. Just cus you say it, doesn't make it so. Talik about total disconnect. Happy hunting and watch out for the bears.

[UpInArms]

8. Bonds extend declines, with 10-yr. yield at 2-wk. high

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38481.3717558681-835161910&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- The bond market continued to lose ground Monday, with the yield on the benchmark 10-year Treasury note ($TNX) rising 0.022 percentage points, or 2.2 basis points, to a 2-week high of 4.288%. The yield had surged 10.4 basis points on Friday after much stronger-than-expected April jobs data, in which nonfarm payrolls increased by 274,000 vs. expectations of a gain of about 180,000. The day before the jobs data, the yield had hit a 2 1/2-month low of 4.135%. The 30-year Treasury bond yield ($TYX) was last up 0.1 basis points at 4.635%. The data calendar is light, with wholesale trade data due out at 10:00 a.m. ET not expected to have much impact on the bond market. Participants will have little data to deal with until perhaps Wednesday's merchandise trade data, and Thursday's initial jobless claims and retail sales data.

[54anickel]

20. Long-term rates buck expectation, stay low

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/05/08/BUGP5CLK0I1.DTL

snip>

Since the Federal Reserve started raising the federal fund rates on June 30 last year, other short-term rates have gone straight up. Normally, when the Fed starts raising rates, long-term rates go up too, though not as fast as short-term rates.

This time around, long-term rates have gone down. The rates on 10- and 30- year Treasury bonds are lower today than they were on June 29 of last year, despite Friday's jump in response to the strong April employment report.

Federal Reserve Chairman Alan Greenspan has called the behavior of long- term rates a conundrum.

snip>

The yields on long-term bonds, those maturing in 10 to 30 years, are set by market forces and generally move in line with long-term inflation expectations. The yield on the benchmark 10-year bond was 4.27 percent on Friday, compared with 4.69 percent before the Fed started raising rates. The yield on the 30-year bond has fallen to 4.63 percent, from 5.37 percent during the same period.

Here are some factors that may be keeping long-term rates lower than expected:

more...

[UpInArms]

22. US Treasuries weighed down by $51 bln in new supply

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8426764

NEW YORK, May 9 (Reuters) - U.S. Treasuries started the week under pressure and traders suspected prices would have to cheapen further to attract demand at this week's auctions of $51 billion in new government debt.

Benchmark 10-year Treasury notes (US10YT=RR: Quote, Profile, Research) were trading 6/32 lower, while their yield edged up to 4.29 percent from 4.26 late Friday. Yields jumped 10 basis points on Friday after an unambiguously strong U.S. payrolls report suggested any economic soft patch would prove fleeting.

"The auctions will be a challenge to sell at current prices," said Christopher Rupkey, senior financial economist at BTM. He noted that refundings in November and May last year came after upbeat job reports and in both cases prices softened into the sales.

"The risk is that dealers back yields up as high as 4-3/8 percent, especially if investor demand pulls back if the retail sales number is above expectations on the morning of the 10-year note sale on Thursday," he said.

<snip>

Treasury sells $22 billion of three-year notes on Tuesday, $15 billion of five-year paper the day after and $14 billion of 10-year notes on Thursday.

...more...

isn't there a report due on Friday regarding capital inflows?

[54anickel]

23. US Treasuries bend beneath $51 bln paper pile

edit to eliminate dupe posting

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8427962

NEW YORK, May 9 (Reuters) - U.S. Treasuries were mostly softer on Monday as traders sought to cheapen prices to attract demand at this week's auctions of $51 billion in new government paper.

snip>

"The auctions will be a challenge to sell at current prices," said Christopher Rupkey, senior financial economist at BTM. He noted that refundings in November and May last year came after upbeat job reports and in both cases prices softened into the sales.

"The risk is that dealers back yields up as high as 4-3/8 percent, especially if investor demand pulls back if the retail sales number is above expectations on the morning of the 10-year note sale on Thursday," he said.

snip>

Wholesale inventories rose 0.4 percent, half the gain analysts expected, after a 0.6 percent increase in February. The rise was slightly smaller than that implied by the advance report on first quarter gross domestic product.

The Fed Bank of Kansas City releases its April manufacturing survey at 11 a.m. (1500 GMT). The March survey showed an index of 44.

more...

[UpInArms]

25. twins!

:toast:

[54anickel]

33. Hi UIA! I changed mine. So, what do you make of Snow's timing on

that "maybe we'll bring back the 30-year" announcement? Seems rather strange on the heels of the Fed accidently leaving out that "inflation is well contained" line.

I have a difficult time believing the Fed would screw up their statement - Greenspin is always so careful in choosing his mumbo-jumbo, and talk is cheap. I'm curious as to just how much 30-year paper Snow's blowing here.


Greenspan's Final Days
http://www.realclearpolitics.com/Commentary/com-5_9_05_RN.html

snip>

On the contrary, some members of the FOMC at their previous meeting on March 22 wanted to send a stronger anti-inflation message by dropping language saying that the Fed would continue to fight inflation at a "measured pace." If financiers had found the word "measured" missing, the impact on markets could have been devastating.

This omission of "measured" would actually have seemed a flagrant misjudgment in view of the economy's apparent weakening after the March 22 meeting. Federal Reserve Governor Ben Bernanke stepped in during the closed-door meeting to say this was a very bad idea. The language was not changed.

By the time the FOMC met on May 4, Bernanke was not present due to his appointment to the president's Council of Economic Advisers. No effort was made this time to remove "measured."

Where was Greenspan, the most masterful Fed chairman in history? He seemed disengaged March 22 in the debate over "measured," according to Fed sources. One especially adroit Fed-watcher described his performance that day as "coy."

Greenspan was not coy last Tuesday when, in an apparent accident, the Fed's public statement omitted a sentence saying that "longer-term inflation expectations remain well contained."

more... (Sorry for the source)

[UpInArms]

34. I found that the "omission" was

very orchestrated - the movements of the dollar after that "omission" was stuck in just prior to the market closing was an impressive show of "verbal intervention".

:argh:

There are no "accidents" with these people, they have very few bullets left in their guns - actually I think that all they have left in the holster are a few blanks.

[UpInArms]

43. Fed adds reserves via overnight system repurchases

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8427289§ion=investing

NEW YORK, May 9 (Reuters) - The Federal Reserve said on Monday it added temporary reserves to the banking system through overnight system repurchase agreements.

Fed funds last traded at 3.0 percent, in line with Fed's target for the rate on overnight loans between banks.

Further details of the operations are available at: http://www.ny.frb.org/markets/omo/dmm/temp.cfm

All this "liquidity" is starting to look like diarrhea :eyes:

[54anickel]

57. Treasury to re-issue 30 year bonds, any takers?

http://www.321gold.com/editorials/schiff/schiff050505.html

The prospect of the U.S. Treasury returning to a more fiscally responsible method of financing its debts has profound implications for the U.S. budget and current account deficits. While it makes perfect sense for the government to borrow for 30 years, I would question the intelligence of any one foolish enough to lend. While it is no secret that individual American debtors have temporally benefited though the use of low-cost, short-term financing, most notably through the proliferation of ARMs, many have neglected to notice that the Federal Government, the world's largest debtor, has employed the same tactics.

The reason that many individuals, and the Federal Government, have chosen to borrow on the short end of the yield curve, is that in so doing they temporarily reduce the cost of servicing their debts. However, in the long run, this strategy comes at the price of higher interest payments in the future. For the federal government, the future has just arrived. With short term rates now at 3%, and the yield on 30 year bonds at about 4.5%, the savings between borrowing short and borrowing long are not nearly as great as when short rates were only 1%. As a result, the Treasury apparently realizes that it no longer makes sense to keep the maturity of its debts so short.

However, the problem for the Federal government, and obviously American taxpayers, is that the process of refinancing trillions of dollars of short-term debt will inevitably push long-term rates much higher. So not only will the government no longer have the benefit of cheap short-term financing, it will also face much higher long-term rates than would have been the case had they acted responsibly these past several years by locking in low long-term rates while they had the chance.

With the national debt approaching 8 trillion, every 100 basis increase in the average rate at which that debt is refinanced adds 80 billion in additional interest expense which the federal government must pay annually. Since the government is already operating in a deficit, this increase will also have to be borrowed. My guess is that over the next several years, 100s of billions will be added to the annual budget deficit merely as a result of increased interest payments. Also, because a significant percentage of those payments will flow to foreign creditors, the current account deficit will grow significantly as a result. Further, as higher interest rates will likely push the highly leveraged U.S. economy into a severe recession, the structural deficit will swell as tax revenues decline and higher expenditures kick in.

bit more...

[UpInArms]

9. NY Times expands weekday, Saturday business sections

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7B0ACDE000-5DD2-400C-B568-2ECF8E21CB03%7D&

NEW YORK (MarketWatch) -- The New York Times Company (NYT) said Monday it plans to introduce a redesigned Business Day section on Monday 16 May. It also plans to expand its coverage of new media and online web journals known as blogs as well as widen its coverage of consumer technology, the legal profession, Wall Street, venture capital and financial products. For the business section, weekly coverage will focus on expanded editorial content, new graphics and new columnists. The Saturday business section will have added editorial coverage on personal finance and a new column from journalist Joseph Nocera, who recently joined the paper from Fortune magazine. On Friday, the stock fell 0.2% to $33.33.

[UpInArms]

10. AIG changed reserves, former employee says

http://www.iht.com/articles/2005/05/09/business/aig.php

Executives at American International Group, the giant insurer, regularly made changes to the company's reserves to help meet earnings goals through much of the 1990s, according to a former employee who was briefed on the adjustments.

Although they were not made in every quarter, the changes were nonetheless common at AIG, this person said last week.

Insurance reserves, the money set aside to pay future claims, are closely watched by investors. The types of reserves that were most commonly adjusted by the company to enhance its earnings were those connected to directors' and officers' liability insurance, the former employee said.

These policies, and the reserves assigned to them, are large enough that adjustments to them could make a substantial difference in the earnings of a company as big as American International. The company is one of the largest in the business of insuring corporate directors and officers against liabilities like shareholder lawsuits.

...more...

[UpInArms]

11. pre-opening blather

briefing.com

9:00AM: S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -2.0. Futures trade still stuck in neutral, suggesting the cash market may open near the unchanged mark... Blue chips making news include McDonald's (MCD), which has reported better than expected April comps of 2.8%... GM has denied reports of tech talks with Toyota while the FDA on Friday said that Pfizer (PFE) ran misleading ads for its drug Zoloft

8:30AM: S&P futures vs fair value: flat. Nasdaq futures vs fair value: -1.0. Still shaping up to be a relatively flat open for the indices, as the futures market continues to trade close to fair value... Contributing to the subdued action has been the absence of notable earnings reports, modest weakness in overseas markets and no economic data hitting the wires until 10:00 ET, when Mar. Wholesale Inventories (consensus +0.7%) are released

8:00AM: S&P futures vs fair value: -0.2. Nasdaq futures vs fair value: -2.0. Futures market versus fair value indicating a lackluster open for the cash market... Reports suggest that E*Trade (ET) has sent a letter to Ameritrade (AMTD) about a possible $12-14 bln acquisition while Duke Energy (DUK) has agreed to acquire Cinergy (CIN) for roughly $9 bln... However, potential profit taking in the wake of the best weekly advance for the major indices since early February, as well as higher oil prices, has so far kept buyers on the sidelines

ino.com

The June NASDAQ 100 was slightly higher overnight as it extends last week's rally and is poised to test this year's downtrend line crossing near 1475.85. Stochastics and the RSI are becoming overbought but remain bullish signaling that sideways to higher prices are possible near-term. The June NASDAQ 100 was up 2.00 pts. at 1460 as of 5:51 AM ET. Overnight action sets the stage for a steady to higher opening by the NASDAQ composite index later this morning.

The June S&P 500 index was slightly higher overnight and is working on a possible inside day as it consolidates above the 38% retracement level of the March-April decline crossing at 1173.41. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the 50% retracement level of the March-April decline crossing at 1185 is the next upside target. The June S&P 500 Index was up 2.40 pts. at 1173.60 as of 5:52 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

[UpInArms]

13. 9:35 EST markets are open

Dow 10,335.87 -9.53 (-0.09%)
Nasdaq 1,968.27 +0.92 (+0.05%)
S&P 500 1,170.53 -0.82 (-0.07%)
10-Yr Bond 4.286 +0.20 (+0.47%)

NYSE Volume 47,339,000
Nasdaq Volume 61,135,000

[UpInArms]

14. calculating the *Co SS piratization plan

http://www.nytimes.com/2005/05/09/opinion/09krugman.html?hp

excerpt:

In last fall's debates, Mr. Bush asserted that "most of the tax cuts went to low- and middle-income Americans." Since most of the cuts went to the top 10 percent of the population and more than a third went to people making more than $200,000 a year, Mr. Bush's definition of middle income apparently reaches pretty high.

But defenders of Mr. Bush's Social Security plan now portray benefit cuts for anyone making more than $20,000 a year, cuts that will have their biggest percentage impact on the retirement income of people making about $60,000 a year, as cuts for the wealthy.

These are people who denounced you as a class warrior if you wanted to tax Paris Hilton's inheritance. Now they say that they're brave populists, because they want to cut the income of retired office managers.

Let's consider the Bush tax cuts and the Bush benefit cuts as a package. Who gains? Who loses?

<snip>

Suppose, finally, that you're making $1 million a year. You received a tax cut worth about $50,000 per year. By 2045 the Bush plan would reduce benefits for people like you by about $9,400 per year. We have a winner!

...more...

[UpInArms]

16. 10:05 EST numbers and blather

Dow 10,338.46 -6.94 (-0.07%)
Nasdaq 1,964.69 -2.66 (-0.14%)
S&P 500 1,170.81 -0.54 (-0.05%)
10-Yr Bond 4.284 +0.18 (+0.42%)

NYSE Volume 217,561,000
Nasdaq Volume 220,125,000

10:00AM: Major indices still struggle to gain much traction, as sector leadership remains mixed... Energy has paced the way higher as oil prices hold above $51/bbl while solid gains in brokerage, amid a potential ET-AMTD merger, has given Financial an early boost... Utility, however, has paced the way lower amid uncertainty regarding the announced DUK-CIN deal... Technology has seen modest losses across the board while weakness in drug stocks has pressured Health Care... NYSE Adv/Dec 1140/1117, Nasdaq Adv/Dec 1285/1076

9:40AM: Market opens in lackluster fashion, in line with futures indications... While the overall sentiment remains quite positive following Friday's better than expected jobs report and some new M&A activity this morning, potential consolidation following the best weekly advance for the major averages since early February has prevented much follow through buying interest... E*Trade (ET 12.64 +0.71) has made an unsolicited bid to buy Ameritrade (AMTD 13.63 +2.32) for roughly $5.5 bln while Duke Energy (DUK 28.75 -0.61) has agreed to acquire Cinergy (CIN 42.27 +1.89) for roughly $9 bln...

[UpInArms]

17. 9 minutes later - are they reading the actual report?

Dow 10,320.80 -24.60 (-0.24%)
Nasdaq 1,960.60 -6.75 (-0.34%)
S&P 500 1,169.59 -1.76 (-0.15%)
10-Yr Bond 4.280 +0.14 (+0.33%)

NYSE Volume 273,347,000
Nasdaq Volume 267,539,000

also from the Inventory Report:

In March, sales of durable goods fell 0.5% after a 1% drop in February. Sales of lumber sank 4.1%, while metals sales fell 1.2%. Auto sales dropped 0.9%. Inventories of durable goods increased 0.1%. The inventory-to-sales ratio for durables rose to 1.50. A year ago, the inventory-sale ratio was 1.41.

Inventories of metals increased 1.5%, leaving the inventory-to-sales ratio at a record high 1.92.

The increase in durables inventories could lead to production cutbacks if sales continue to weaken. Wholesale durable goods sales have fallen three months in a row.

[RawMaterials]

21. Toyota Open to Sharing Hybrid Tech With GM

TOKYO (AP) -- Japan's Toyota Motor Corp. said Monday that it was willing to discuss sharing its hybrid vehicle technology with rivals, including U.S. automaker General Motors Corp. But the two automakers denied they were already in talks.

"If another company -- not just GM but other automakers too -- were to express an interest in the technology, we would not turn that down. We would be willing to open discussions," Toyota Chairman Hiroshi Okuda was quoted by Toyota spokesman Tomomi Imai as saying.

Okuda's comments follow GM's denial Sunday of an online news report, which said the two automakers were in talks about a possible technology-sharing pact that could result in a quicker, wider offering of hybrid vehicles.

Imai also denied that Toyota and GM were already in talks.

more..

http://biz.yahoo.com/ap/050509/toyota_gm.html?.v=2

[UpInArms]

24. GM denies talking about hybrid technology with Toyota

http://www.woodtv.com/Global/story.asp?S=3317088&nav=0RceZblL

(New York-AP, May 9, 2005, 7:27 a.m.) General Motors is denying a report that it and Toyota are in talks about hybrid vehicle technology-sharing.

The report ran on the Web site of the "Wall Street Journal."

It said GM chief executive Rick Wagoner is planning to head to Japan this month to meet with top Toyota officials.

GM spokesman Scott Fosgard says Wagoner is visiting Japan to see the 2005 World Expo, but isn't discussing technology with Toyota. Fosgard says no such talks are under way at any level.

...more...

Somehow you would think that GM would get a clue about how clueless they are :eyes:

[napi21]

26. Any decent engineers should have already figured it out!

For the amount of $$ they spend on R&D, they can just buy a new Toyota and tear it apart!

This sounds a bit suspicious to me.

[Neshanic]

27. "We need some of that..what is it? Hybrid stuff....quick!"

That's being ahead of the curve GM. Good long range planning.

(Sarcasm off)

Now they want to do it. Thank God at least they are doing it now, instead of waiting for 4 bucks a gallon gas.

[UpInArms]

29. NASD fines SunTrust Capital Markets $100,000

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38481.4534415162-835165474&siteID=mktw&scid=0&doctype=806&

BOSTON (MarketWatch) - The National Association of Securities Dealers Monday said it has fined SunTrust Capital Markets $100,000 for failing to register its 48 research analysts under new NASD rules that took effect last year. The action against SunTrust Capital Markets, an Atlanta, Ga.-based bank-affiliated broker-dealer and investment bank, marked the first NASD enforcement action involving the new registration requirements.

[UpInArms]

36. NASD probing A.G. Edwards fund sales

Regulator may take disciplinary action against broker

http://www.marketwatch.com/news/story.asp?guid=%7B53A7933B%2D7FE8%2D4873%2DBAF2%2DAB1027A00734%7D&siteid=mktw

BOSTON (MarketWatch) -- The National Association of Securities Dealers may take disciplinary action against A.G. Edwards Inc. over the sales of class B and C shares of mutual funds, the company said in a regulatory filing Monday morning.

The matter involves supervisory procedures and possible suitability violations, the company said.

<snip>

Edwards is the focus of previously-disclosed and ongoing investigations by state and federal regulators over compensation from fund families in exchange for pushing certain funds. The company is also being probed over alleged market-timing and late-trading infractions, which can harm long-term shareholders.

Edwards said the impact of the investigations will not be material to the consolidated financial condition of the company, but could affect operating results in one or more periods.

...more...

[UpInArms]

31. 11:09 EST numbers and blather

Dow 10,336.46 -8.94 (-0.09%)
Nasdaq 1,963.88 -3.47 (-0.18%)
S&P 500 1,172.01 +0.66 (+0.06%)
10-Yr Bond 4.276 +0.10 (+0.23%)

NYSE Volume 521,839,000
Nasdaq Volume 462,229,000

11:00AM: Little changed since the last update as the major averages continue to vacillate in roughly the same ranges... With earnings season winding down, the lack of notable reports has also contributed to the subdued action in the early going... However, of the only two S&P 500 constituents out with results this morning - Dynegy (DYN 4.13 +0.36) and King Pharmaceuticals (KG 9.18 +0.19) - both have surprised the Street... DYN has beaten analysts' Q1 forecasts by a penny, excluding multiple items, and guided a narrower than expected FY05 loss amid improvements in its core energy businesses...

KG has beaten expectations by $0.04 with Q1 earnings of $0.31... NYSE Adv/Dec 1490/1415, Nasdaq Adv/Dec 1316/1408

10:30AM: Stocks slip to session lows as oil prices spike to session highs, but volatile trading in the commodity has since sent oil back to the lower end of its early morning trading range... Meanwhile, the Commerce Dept. has recently shown that Mar wholesale inventories rose a smaller than expected 0.4% (consensus +0.7%) while the wholesale inventory/sales ratio held unchanged at 1.19 months, after bottoming out at 1.14 months in April of last year... But since the data say little about personal consumption, the report has gone relatively unnoticed by investors...NYSE Adv/Dec 1307/1475, Nasdaq Adv/Dec 1144/1446

[UpInArms]

35. Wall Street Awash With Money

http://www.forbes.com/business/2005/05/09/cx_lm_0509funds.html

excerpt:

Money is pouring into hedge funds and private equity firms as pension managers and other institutions chase higher-yielding investments. Investment banks, eager for a piece of the pie, are lining up with financing packages, vying to advise on deals, building businesses to better accommodate fund clients or even investing in the ventures for themselves.

This is hardly a secret. There has been "a movement of the power base on Wall Street," says Martin Mayer, a banking and financial historian. "There is a far larger base of people influencing the markets" than a decade ago.

The booming hedge fund industry has become an obsession among Wall Street firms. They're all scrambling to do more and more business with these lightly regulated, somewhat mysterious investment funds, often led by star traders who defected from Wall Street to the lush pastures of Fairfield County, Conn.

<snip>

Rapid trading by hedge funds contributes about one-third of equity commissions booked by the big Wall Street banks--roughly $7.5 billion is up for grabs this year alone. And unlike mutual funds which demand commission discounts, hedge funds are willing to pay for fast execution of more frequent trades.

"Hedge funds rescued institutional securities," says Philip Augar, the former head of Schroder Securities and now the author of books about Wall Street, including his most recent, The Greed Merchants.

...more...

[54anickel]

41. Now that's a disturbing article. Taking on higher and higher risks in

search of better yields. Seems rather short-sighted. Perhaps tunnel vision might be a better description. So focused on yields alone, they pay no attention to the risks surrounding those yields, much less the piss-poor economic outlook that has them seeking those higher yields in the first place. Did I miss something? When did the risk/yield concept get replaced with "investment guru"/yield?

So, will working class tax-payers end up baling them out down the road too? GSEs, PBGC, now hedge funds and derivatives. Then there are those little IOU pieces of paper (as BeelzeBush refers to Treasuries).

Today's markets make the LTCM crisis look like child's play.

Hedge funds get Greenspan warning on leverage

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8404669

BOSTON, May 5 (Reuters) - The hedge fund industry, which often relies on borrowed money, received a pointed warning from Federal Reserve Chairman Alan Greenspan on Thursday to play responsibly to help protect market liquidity.

For months, market analysts, economists and others have been concerned that a disaster might be brewing in the $1 trillion hedge fund industry as managers borrowed money when it was cheap and now are being squeezed as interest rates rise.

Greenspan said highly leveraged hedge funds could pose risks to market liquidity.

He urged banks to guard against providing hedge funds with easy credit, in a speech delivered via satellite to a conference hosted by the Federal Reserve Bank of Chicago.

"Greenspan's concern mirrors the concern of many in the bond market and clearly the bond market is uneasy with the fact that he's feeling uneasy," said James Swanson, chief investment strategist at MFS Investment Management, in Boston.

It's been less than seven years since a consortium of banks rescued Connecticut-based hedge fund Long Term Capital Management from bankruptcy to avoid sending major shock waves throughout the financial world.

Some worry it could happen again.

more...

[UpInArms]

44. some background on LTCM

(for those not familiar)

Greenspan defends hedge-fund bail-out

http://www.geocities.com/Eureka/Concourse/8751/jurus/hf100203.htm

The Chairman of the US Federal Reserve Bank, Alan Greenspan, has defended the publicly organised bail-out of Long-Term Capital Management (LTCM), a hedge fund specialising in large-scale speculation.

Speaking to the banking committee of the US House of Representatives, Mr Greenspan said a failure of LTCM's failure could have caused substantial damage to banks and investors and might have impaired the economies of many nations, including the United States.

LTCM lost hundreds of millions of dollars when its financial experts misjudged the extent of the crisis in Russia. Co-ordinated by the Federal Reserve, 14 large banks got together to bail out the fund to prevent its collapse.

Mr Greenspan insisted that for LTCM's bailout "no Federal Reserve funds were put at risk, no promises were made by the Federal Reserve, and no individual firms were pressured to participate."

The "fragile" condition of the markets had prompted the Federal Resevere to act quicker than usual, he said, promising that the bail-out would be a "rare occasion."

<snip>

Representative Bernard Sanders of Vermont, the House's lone independent, called it a "bailout for billionaires" that rewarded "the gambling practices of the Wall Street elites."

...more worth reading....

[loudsue]

45. Yep...sounds like 1929, doesn't it?

All they're doing with those hedge funds is gambling, it seems to me. Value, evidently, has nothing to do with the equation, and where are the underlying fundamentals?

The whole thing looks like a powder keg....or some twist of a pyramid-type scheme.

:kick:

[UpInArms]

47. those higher risks

However, after several years of success changed market conditions made it more and more difficult for LTCM tor repeat its good performance. According to the Fed's chairman, the fund then tried to get high returns by taking higher risks "just as financial market uncertainty ... began to rise rapidly around the world."

He said that this risk had produced "stunning losses" of about half the firm's capital base.

[54anickel]

50. The similarities in market conditions back then and what they are now

should be setting off alarms. Here I sit with feelings of deja vu. I believe Greenspin, in his effort to protect those precious flows of liquidity is setting us up for a repeat - though on a much grander scale.

Then again, perhaps it is by design. Is Greenspin really a tool for the elite "plutocracy"? :tinfoilhat: Keeping him on is another one of those things I will always hold against the Big Dawg.

[54anickel]

46. Hooked on “The Hand” (more Greenspin on hedge funds)

The last entry on the credit bubble bulletin page....

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

snip>

Question: “Can more (hedge fund) transparency be required – should it be required?”

Chairman Greenspan: “You have to remember, that the one extraordinary important issue relating to the hedge funds is they act to increase liquidity in markets. And you have to be very careful to make sure that, on the one hand, that the hedge funds are completely transparent to their investors and that the investors are acutely aware of the nature of the risks and the level of the risk they are taking. But you also have to be careful about imposing regulation on these funds to the extent that you inhibit their actions. Remember, collecting data on hedge funds may appear to give you a degree of transparency, but most of the data you get – at best – will tell you about their strategy of last night. This morning they have a new one. Consequently, the type of data which is supposedly to be collected to create a degree of transparency and knowledge about how these funds are behaving is actually history. And it’s usually quiet unusable, because it’s their very nature to be innovative, changing and never actually to anticipate necessarily what they are going to find next in the marketplace which will suggest to them some imbalance – some potential exceptionally large profit arbitrage which they haven’t even anticipated would exist 48 hours earlier. So I think the question here is to be very careful to be sure that the people we want to protect are the counterparties to the hedge funds – meaning they have to get all the information that they need. And that will protect the marketplace and all their investors.”

Question: “Are there any financial crises brewing at the moment?”

Chairman Greenspan: “Well, not really. I mean, the problem that I have is that crises that you can see are probably already behind us. You have to remember, that the vast majority of imbalances that occur in markets are addressed very quickly by prices and we never hear of them. So, it strikes me that what we have to recall is the terrific insight of Adam Smith that there is something equivalent to an ‘invisible hand’ which continuously is readdressing market imbalances towards equilibrium is indeed what we are seeing virtually everyday – in fact, every hour and every minute – in the markets in which we deal. And I would suspect that the international context – looking at the increasing degree of globalization that we see almost on a day-by-day basis – that there is something attuned an international invisible hand that seems to be at work. Markets are always by their nature driving towards equilibrium. It looks as though it’s chaos- indeed it’s that chaos which was disposed of by Adam Smith in the great insights of more than 200 years ago – which in some respects hold up with very little revision to this day. In a certain sense that so called ‘creative destruction’ in markets which is what Schumpeter defined the process as many, many years later obviously, is a continuous train which is always creating a sense of nervousness about something going wrong. In fact, it’s normal. And it strikes me that crises are very difficult to forecast. Or, let me put it another way: the numbers of forecasts of crises that one gets day-by-day, week-by-week, is far in excess of the number of crises that actually occur. This is the reason why I’ve argued previously that since we really cannot know that we are about to get a crisis until we are right up against it, economic policy-making should be heavily focused on the issue of creating and sustaining the flexibility of markets so that when we get pressures of one form or another, the markets respond in a balanced manner and essentially remove the disruptions that are causing the difficulties.”


It is inadvisable to have one man singularly reign over monetary policy-making for 18 years. It is potentially disastrous when this individual is an ardent ideologue. And one of the painful lessons that will be ascertained from this experience is that the greatest risk with regard to discretionary monetary policy is the propensity for policy errors to engender only greater errors – along with a lot of rationalizations.

more...

[KoKo]

64. That paragraph where Greenscum talks about "The Invisible Hand"

gave me chills... The way he so blithely tosses out "markets correcting themselves" in the same dialog mentioning "the Hand."

Also his comments about Hedge Funds not being able to be regulated because what they do can't be transparent nor should they be because of what they do. :crazy:

Remember, collecting data on hedge funds may appear to give you a degree of transparency, but most of the data you get – at best – will tell you about their strategy of last night.

Didn't some famous pundit say: "If you don't understand it, don't buy it." I think it was Peter Lynch, who said that.

Greenscum "knows all" he's "invincible" like Shrubby and the PNAC. The PNAC's "Invisible Hand" caused terrible destruction and killed thousands and put us into deficit. These folks just thrive on the "invisible and
secret" that will save their butts but probably run us all into ruin...God/Jesus/Markets/Hedgfunds. :grr:

[54anickel]

73. Heh-heh! That'll be their next marketing blitz -

What would Jesus invest in?

[UpInArms]

39. US consumer spending slowed in April, survey finds

http://www.reuters.com/financeNewsArticle.jhtml?type=economicNews&storyID=8428511§ion=investing

NEW YORK, May 9 (Reuters) - U.S. consumer spending slowed last month as falling real wages and a growing tax burden restrained Americans' shopping habits, a survey published on Monday showed.

Deloitte Research said its Leading Index of Consumer Spending eased to 3.96 percent in April from an upwardly revised 4.16 percent in March.

Rising gasoline prices, and to some extent soaring benefit costs, have caused real wages to decline for more than a year, despite strong productivity growth and a relatively low rate of unemployment.

Continued strength in consumer spending, which accounts for two-thirds of U.S. economic activity and has been the primary engine of the latest expansion, will depend a lot on the housing sector, Deloitte said.

<snip>

The weakness in spending was all the more worrisome because it took place even as the labor market appeared to be picking up. Data out last week showed a rebound in hiring during April and upward revisions to employment for the prior two months.

...more at link...

[UpInArms]

40. 12:14 EST numbers and blather

Dow 10,372.54 +27.14 (+0.26%)
Nasdaq 1,972.66 +5.31 (+0.27%)
S&P 500 1,176.48 +5.13 (+0.44%)
10-Yr Bond 4.280 +0.14 (+0.33%)

NYSE Volume 785,284,000
Nasdaq Volume 670,889,000

12:00PM: Market now trades near session highs midday, but gains are modest at best, as mixed M&A news and limited earnings reports provide investors with little in the way of market moving data to digest... Some uncertainty about economic growth and inflation following Friday's jobs report, as well as some reluctance on the part of buyers following three straight weeks of market gains, has also prevented stronger follow through...

With regards to merger activity, a potential $5.5 bln deal between E*Trade (ET 12.58 +0.65) and Ameritrade (AMTD 13.73 +2.42) has extended gains within the Brokerage space and subsequently provided a floor of buying support in the Financial sector... Utility has also traded higher, but only partly due to Duke Energy's (DUK 28.94 -0.42) $9.0 bln proposal for Cinergy (CIN 42.72 +2.34), as a 10% surge in Dynegy (DYN 4.17 +0.40), which beat analysts' Q1 forecasts by a penny and guided a narrower than expected FY05 loss, has also assisted in the sector's respectable performance... Energy has been strong, benefiting from higher oil prices, while Health Care has recently inched into positive territory...

Technology, however, continues to struggle somewhat as losses in Hardware and Software offset modest strength in Semiconductor and Networking... Materials has also traded lower amid weakness in Paper and Steel... Separately, wholesale inventories in March rose a smaller than expected 4.0% (consensus 0.7%), but since the data says nothing about personal consumption, the report has not moved stocks... Treasurys, however, have gotten a modest bounce on the data, but the 10-yr note is still off 4 ticks to yield 4.27%...

[UpInArms]

49. 1:11 EST numbers and blather

Dow 10,365.50 +20.10 (+0.19%)
Nasdaq 1,971.86 +4.51 (+0.23%)
S&P 500 1,175.95 +4.60 (+0.39%)
10-Yr Bond 4.278 +0.12 (+0.28%)

NYSE Volume 974,257,000
Nasdaq Volume 804,315,000

1:00PM: Indices continue to claw higher, as buying now remains widespread across most areas... Most notably has been Technology, which has recently turned positive due in large part to strength in the Networking space (+1.4%)... Pacing the way higher has been Lucent Technologies (LU 2.79 +0.21), soaring more than 8.0% following an upbeat article in Barron's over the weekend...

Strong follow through in shares of Corning (GLW 15.24 +0.48), which surged 6.4% on Friday, and strength in Cisco Systems (CSCO 18.18 +0.16), ahead of its earnings report tomorrow, have also contributed to the sector's upside momentum...NYSE Adv/Dec 1970/1163, Nasdaq Adv/Dec 1610/1288

12:30PM: Stocks continue to improve amid spirited leadership from a number of blue chips... Pacing the way higher on the Dow has been McDonald's (MCD 29.96 +0.58), after reporting better than expected April comps of 2.8%... General Motors (GM 31.14 +0.38) has also surged, benefiting from Tracinda Corp's official offer to buy nearly $870 mln of GM stock, while other notable gainers include C, JPM, PFE, UTX and WMT... Hewlett-Packard (HPQ 20.62 -0.36), however, has been under pressure after a Banc of America Securities analyst said HPQ could trim upcoming Q2 expectations by as much as 5-10%... NYSE Adv/Dec 1954/1150, Nasdaq Adv/Dec 1641/1242

[UpInArms]

42. Today's "Junk" pile

S&P cuts Calpine debt ratings deeper into junk

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8428972§ion=investing

NEW YORK, May 9 (Reuters) - Standard & Poor's on Monday cut Calpine Corp.'s (CPN.N: Quote, Profile, Research) debt ratings further into junk status, citing the company's need to sell assets and monetize supply contracts to meet obligations.

S&P cut Calpine's corporate credit rating to "B-minus", six steps below investment grade, from "B." The outlook on the new rating is negative.

The company has about $18 billion of debt outstanding, S&P said.

perhaps just a "downgrade"?

S&P may cut AEM's debt ratings

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8428850§ion=investing

NEW YORK, May 9 (Reuters) - Standard & Poor's on Monday said it may cut AEM SpA's (AEMI.MI: Quote, Profile, Research) debt ratings, citing AEM and Electricite de France's plans to buy a stake in Italy's Edison SpA (EDN.MI: Quote, Profile, Research) .

The deal is large, and if it were funded with a large amount of debt, AEM's ratings could be cut by several notches, S&P said.

AEM's long-term corporate credit rating is "A," the sixth highest rating.

[54anickel]

51. Destroying the American Dream

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=42815

Well he’s done it. I didn’t want to believe it, but it’s true. Greenspan of course has transmogrified attractive interest rates of recent years into outrageously negative real interests for so long that he has nursed into being a virtual Godzilla of real estate speculation the likes we have not seen since Og traded a club and mammoth skin for his friend’s cave. Welcome to LA’s housing nightmare.

snip>

When Alan and his merry band of counterfeiters pursued a policy of “making the world safe for speculators” at the expense of working, middle class, and yes, even upper middle class people (100k a year is not sufficient income for a first time homebuyer in LA) he destroyed the value of their savings and returns on their labor.

The new rules of the game are simply this; “He who speculates first wins.” And those who have assets to begin with are in the best position to speculate first when the conditions for speculation are risk free as opposed to those who are just getting started in life and are scrimping and saving for that 20% down payment, as in the old days.

So the rich get richer, and you can finish the sentence. When budding LA real estate tycoons in the making rapidly piece together, 3, 5, 10 residential houses at inflated prices, and then raise the rental rates, as what can happen in a difficult supply-demand situation in LA, not only does the entire cost structure of the rental market increase to the detriment of working people, but there are now fewer available homes for people who just need a place to raise their families. Result, rewarding speculators at the expense of everyone else. Great, just great.

Yes, life is unfair, but for Alan’s gang of monetary inflationists, it’s OK as long as it’s unfair in your favor. Of course he had lots of help from his friends. With unlimited amounts of credit, lax lending standards, and with the loan originators having no moral hazard to contend with as they dump their real estate paper onto the back of Alan’s credit inflation Godzilla monster, Fannie Mae, the rich do indeed get richer, as this credit machine moves into hyperspace. Question: was Fannie Mae created to help lower income households obtain credit? Just checking.

more...

[54anickel]

52. Economy's signs of life may spell doom for stocks

http://www.usatoday.com/money/markets/us/2005-05-08-mart-usat_x.htm

NEW YORK — A sharp spike up in new jobs in April is good news for the economy. But it could translate into bad news for stock market investors.

Faulty logic? Hardly. The reason 274,000 newly created jobs in one month could be deemed a negative is because signs of life in the economy temporarily put to rest talk of a "soft patch." That dashes hopes that the Federal Reserve will pause in its campaign to boost short-term interest rates to a "neutral" level.

snip>

In fact, in the eight instances since 1929, when the Fed raised short-term rates by 2 percentage points — as they have in the current cycle — the Standard & Poor's 500 index was lower 12 months later five times, says InvesTech Research. Similarly, the last two times the Fed raised rates eight consecutive times, in the 1970s, the S&P was down an average 1.4% a year later.

snip>

James Stack, president of InvesTech Research, says stocks may struggle even after the Fed is done raising rates. He notes that of the past 10 Fed interest-rate tightening cycles in the past 50 years, the Fed tightened too much and caused a recession eight times. "The Fed has orchestrated only two soft landings, and one ended in a bear market," he says.

With the bull market now more than 31 months old — one month longer than the median bull market dating to 1928 — the prospect of even higher rates does not bode well for stocks, Stack adds.

more...

[KoKo]

66. And so "one month report" has them all scrambling for strategy....

and gives some buzz for CNBC to rattle on about all day. Will they/Won't they increase rates...Pushme/Pullyou.

And who even thinks that the report was accurate? "They" can move markets by manipulating the news, just like everything else. As a matter of fact maybe our whole Government spends our tax $$$'s now is putting out distorted info to swing the Hedge Funds in just the right direction for their big investor buddies so that the rest of us are stuck with the paltry "leavings" in our 401-K's.

:tinfoilhat:

[54anickel]

53. Is the IMF an Endangered Species in Asia?

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_pesek&sid=aDypalC2I9SE

May 9 (Bloomberg) -- It's baaaaaaaaaaaaack!

The reference here is to the so-called ``Asian Monetary Fund.'' Such an animal was mulled during Asia's 1997-98 crisis and quickly died amid strong U.S. resistance to Asia creating a counterpoint to the International Monetary Fund.

Last week's meeting of the Asian Development Bank marked its resurrection. At least that was the scuttlebutt in the hallways and watering holes of Istanbul, where the ADB's annual confab was held this year.

Its creation could have major consequences for the global elites and the so-called ``Washington Consensus'' on how developing nations should go about raising living standards for their swelling and often poor populations.

The idea came up in September 1997, amid worsening crises in Thailand, Indonesia and South Korea. The IMF was holding its annual meeting in Hong Kong and Asia pushed the idea of an Asia- only bailout fund to provide assistance to economies with fewer strings attached than the IMF required. At the time, the IMF was demanding high interest rates and fiscal tightening, policies that worsened the crisis.

more...

[54anickel]

54. It is different this time (Willie)

http://www.321gold.com/editorials/willie/willie050905.html

The world functions upon a greatly different world chessboard compared to seven decades ago. Conditions inside the United States are as different nowadays versus the 1930 decade, as that Great Depression Era was compared to the Roman Empire. Well, not really. We are more similar today to the Romans, with our Wall Street aristocrats, our babbling US Senate, our military aggression, our sovereign coins debased of gold, our exclusive clubs as baths, our protection of the ultra-wealthy corrupt in collusion, our sexual bacchanalia parties (see Tyco), our growing tax burden of the middle class, our stock & bond markets as the financial Coliseum, our reality television shows as the household living room Coliseum, and the sports arenas as the outdoor Coliseum. Try to tell me that NFL football players, in full equipment garb, do not resemble the great Roman gladiators, rather than players equipped with those flimsy padded uniforms & leather helmets used several decades ago!!!

Many are the differences between now and the Great Depression era. So vast are the cited differences, that the present day has almost no resemblance. Versus that historic era,

snip the long and interesting list>

Nobody of sober mind can legitimately claim that the above differences fail to change the landscape over which secular deflation runs its course. Forces might exert themselves toward debt contraction, but the climate is profoundly different from 70 years ago. The reverberating event to end the core expansion and begin the long contraction process was the 2000 stock bust and tech/telecom bust. The US Economy has not recovered since that event in any healthy or sustained fashion. Interest rates have fallen periodically since then, a sign that all is not well. The 2000 stock bust left an indelible mark on the financial world and on many businesses, such as the numerous firms which over-committed themselves to purchase companies at elevated prices. Historical analysts (at least those who choose not to employ politically motivated revisionism) will point back to 2000 as the seminal point where the secular deflation tightened its grip. We are heading toward an uncertain climax. The economic system has "wanted" to contract and rid itself of the colossal debt. In counter action, the human response has been to provide an avalanche of liquidity, the euphemism of government money off the printing press, i.e. inflation. The prescribed flow changes everything, distorts everything, and resolves nothing. For the first time since World War II, housing prices did not falter after the stock market decline, another sign that worse still, something is awry and corrections are coming.

It really is different this time, the economic depression, that is. Many astute analysts foresee a tragic repeat of the Great Depression. That is not my vision of the near future. Whether the air comes out of the US Economy, and world economy for that matter, in a fast-moving convulsion, reminiscent of what occurred 70 years ago, that is doubtful. What is absolutely certain, however, is that the human wizards will use in sequence gradually more powerful and desperate weapons to fight what might be called the Revenge of Economic Mother Nature. The location where nature's wrath is seen is far from known.

DEPRESSION IN THE REAL ECONOMY (K-WINTER)

more...

[54anickel]

55. China Needs a New Anchor (Roach)

http://www.morganstanley.com/GEFdata/digests/20050506-fri.html#anchor0

In China, stability is everything. Despite the extraordinary progress the nation has made on the road to reform over the last 27 years, the Chinese leadership does not take these accomplishments for granted and will not do anything to jeopardize economic, social, or political stability. But while China has managed the tradeoff between reforms and stability with great success, an important adjustment is now needed: The Chinese economy must find a new stability anchor.

China’s fate is tied far too closely to that of the US. Its export-led growth is dependent on the American consumer; at least a third of all Chinese exports go to the US. Moreover, China’s currency, the renminbi, has been pegged to the US dollar for over a decade. This means the monetary policies of the People’s Bank of China and the Federal Reserve are joined at the hip.

There is now a problem with this snuggly relationship: China has linked itself to a US economy that is on the cusp of a major current account adjustment. The US current account deficit (in effect, its balance of trade in goods, services, and international income payments) probably exceeded 6.5% of GDP in the first quarter of 2005, yet another record for the US and an unprecedented financing burden for the rest of the world. Driven by an unparalleled shortfall of national savings — the result of a near-zero personal saving rate and outsized government budget deficits — the US economy is on an increasingly perilous and unsustainable course.

It is only a matter of time before America’s external deficit is rebalanced. When that happens, the US will need to reduce consumption — undermining the major driver of China’s externally led growth dynamic. At the same time, the US dollar will undoubtedly fall further, resulting in a depreciation of China’s pegged currency. For a super-competitive Chinese economy, that could fuel anti-China protectionist actions in the US and possibly in Europe as well. And US real interest rates will probably need to rise in order to compensate America’s foreign creditors for taking a currency risk. That could lead to heightened speculative capital inflows into China betting on an eventual currency revaluation — an infusion of external liquidity that might further destabilize its already precarious financial system.

China needs to prepare for the coming US current account adjustment. From the standpoint of stability, it is taking on unnecessary risk in tying itself to what could well be the most unstable major economy in the developed world. It is taking an equally serious risk linking its embryonic financial system to what could well be the most unstable currency in the world. The stability anchor that has served China so well for so long must now be hoisted out of the water and a new one found.

more...

[UpInArms]

56. Fed: banks ease lending terms for businesses in Q1

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38481.5833948727-835169779&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- Close to a quarter of banks surveyed by the Federal Reserve eased lending standards and terms for business loans in the first quarter of 2005, the Fed said Monday. No banks reported tightening terms. Banks that eased standards reported having done so due to increased competition from other sources of credit. At the same time, demand for commercial and industrial loans increased, the Fed said. The Fed queries the largest 32 banks in each of its districts for the survey.

huh?

[UpInArms]

58. 2:27 EST numbers and blather

Dow 10,358.42 +13.02 (+0.13%)
Nasdaq 1,972.65 +5.30 (+0.27%)
S&P 500 1,175.78 +4.43 (+0.38%)
10-Yr Bond 4.276 +0.10 (+0.23%)

NYSE Volume 1,247,292,000
Nasdaq Volume 1,012,697,000

2:00 PM: Buyers remain in control of the action as the bulk of sector leadership remains positive... While gains of 1.5% and 2.4% on the Dow and Nasdaq, respectively, edged out a solid 1.3% performance on the S&P last week, the broader market has led today's action... Financial, which accounts for roughly 20% of the S&P, has had the largest impact, while gains of at least 0.5% from Health Care, Industrials and Consumer Discretionary - each of which accounts for about 12% of the S&P - have also provided a floor of buying interest... ..NYSE Adv/Dec 2026/1158. ..NASDAQ Adv/Dec 1718/1236.

1:30PM: Range-bound trading persists as the averages still trade near intra-day highs... Arguably assisting in an improved sentiment from earlier this morning, especially in the absence of any notable economic data until Mar. trade deficit data (5/11) and Apr. retail-sales results (5/12), has been the fact that Q1 earnings from S&P companies continue to impress Wall Street...

With nearly 90% of the S&P 500 having already reported results, more than two-thirds have beaten analysts' expectations compared to disappointments from just 20%, as Q1 earnings growth closes in on 18-20% for the quarter - more than double earlier estimates of around 8.0%... NYSE Adv/Dec 1982/1186, Nasdaq Adv/Dec 1628/1310

[54anickel]

59. 274K Jobs in a Soft Patch?

http://www.forexnews.com/AI/default.asp

snip>

Services Growth Strong and broad-based


Employment payrolls in services industries added 229K jobs in April, nearly a 100% increase over the March figure. The recovery was broad-based, stemming from a 36K rise in professional & business services, a 35K rise in education & health jobs and a 24.4K rise in retail industries. There was also a strong 58K increase in leisure and hospitality, 60% of which was in food services and drinking establishments. The 5K loss of jobs in air transportation was well offset by other transportation jobs and retail trade.

Manufacturing still in the red

Manufacturing industries shed 6K jobs in April, showing a contraction in 8 out of the last 12 months. Interestingly, manufacturing jobs have generally continued to fall regardless of the monthly showing in services. Whether the stabilization in layoffs could signify an increase in subsequent months partially depend on the interaction of higher interest rates and rising fuel costs constraining manufacturers. Accumulation of cash balances have been widely documented to be allocated for debt repayment and mergers, with stark evidence used for hiring.

274K jobs in a soft patch?

The interesting aspect about the April employment report is that it is inconsistent with the rest of the economic data for the month, the majority of which showed a decline or a slowdown, with the exception of the existing and new home sales, which were March figures. Construction spending has also hit a record high in March. But If the March and some of the April data represented a soft patch, then the remainder of April figures (durables, factory orders, construction spending, home sales, and industrial output) will be required before drawing a conclusion about the durability of the soft patch. The chart below shows an increasing possibility of a cyclical peak in job creation, despite a spike in the 3-month average. With 21% of the April payroll creation stemming from leisure and hospitality jobs, we wonder about the durability of these sectors.

Solely by looking at the chart, one could easily conclude that interest rates have considerable upside remaining, especially that rates are less than half way from their 2000 peak. But the realities of higher oil prices, increased household and corporate leverage as well as lower stock valuations could suggest that the “neutral” level of short-term rates may be under historical levels—as was indicated by Fed Board Governor Ben Bernanke in February.

more...

[naderzenithnow]

60. I made this point Friday and learned later that even these were Bogus.

'With 21% of the April payroll creation stemming from leisure and hospitality jobs, we wonder about the durability of these sectors."

A very important point. More workers are being displaced into "at risk" jobs. But, even these numbers were simply invented by the BLS from their mysterious birth/death model. I think the "unimpressed" reaction from the market tells it all.

[54anickel]

62. They have "cooked" the numbers for so long, (especially with that

birth/death model and it's flawed assumptions) they have reduced the BLS BS to nothing more than meaningless dribble. Lies, damned lies and statistics that keep the public complacent and willing to continue borrowing against their the future to consume cheap Wal-Mart crap today. Blowin' sunshine up the a$$ of Americans.

[UpInArms]

61. that number was made to order

for the rescue of the dollar - every currency was hitting highs against the dollar and the dollar had one hope - the NFP for April.

[54anickel]

63. They certainly have taken their verbal interventions to extremes lately.

[54anickel]

65. (Heh-heh!) Economic 'soft patch' seems short-lived

Bounce-back in hiring eases concerns about near-term slowdown

http://www.msnbc.msn.com/id/7761959/

Friday’s strong employment report puts to rest most concerns about an oil-induced “soft patch” and makes it more likely the Federal Reserve will continue raising interest rates for the rest of the year, economists said.

“The U.S. economy is in the process of a gradual deceleration, a function of higher interest rates and higher oil prices,” said Nariman Behravesh, chief economist for Global Insight, a forecasting firm. “But the doom and gloom that was triggered by some of the numbers in March was overdone.”

The economy added 274,000 jobs in April, far more than expected, and job growth was revised upward for February and March by the Labor Department. So far this year job creation is slightly behind last year’s pace, but since the beginning of 2004, the economy has added more than 3 million jobs, or nearly 200,000 a month.

“Relatively speaking it’s not that bad, although compared to the past 25 years it’s not that great,” said Joel Naroff of Naroff Economic Advisors, who was almost exactly right with his employment forecast. Employers “are hiring, and they are hiring at a modest pace.”

more...

[KoKo]

67. For this one needs a "tearing my hair out by roots" emoticom...

:argh: :crazy: That's the best I can do...

[UpInArms]

68. June Crude at $52.05 bbl

3:03pm 05/09/05 JUNE CRUDE AT $52.05, UP $1.09

[UpInArms]

69. 3:16 EST numbers and blather

Dow 10,348.80 +3.40 (+0.03%)
Nasdaq 1,970.61 +3.26 (+0.17%)
S&P 500 1,174.84 +3.49 (+0.30%)
10-Yr Bond 4.278 +0.12 (+0.28%)

NYSE Volume 1,452,730,000
Nasdaq Volume 1,175,668,000

3:00PM: Indices show resilience at current levels, as stocks sport fractional gains heading into the final hour of trading... One group showing strong follow through - for the eighth consecutive session no less - has been Biotech... After selling off along with virtually everything else following a weaker than expected read on Q1 GDP (April 28), the AMEX Biotech Index has since more than recouped the 2.1% lost that day and has surged another 1.0% this afternoon...

Contributing to some of the buying interest has been a Buy reiteration and price target increase (to $110 from $95) from Smith Barney on Genentech (DNA 73.41 +0.29)...NYSE Adv/Dec 2042/1205, Nasdaq Adv/Dec 1664/1324

2:30PM: Sellers show some resolve, as oil hits session highs, but the indices continue to trade in positive territory... As has been the case so often lately, a late-day surge in crude oil futures ($52.20/bbl +$1.24) heading into the close of commodities trading has taken some of the steam out of the market's recovery efforts... While OPEC's President believes the oil market is currently oversupplied by 1.2 mln barrels, further mention in OPEC's report that there is no need to cut June production has renewed buying interest in the commodity...NYSE Adv/Dec 2073/1145, Nasdaq Adv/Dec 1712/1260

[UpInArms]

70. Disney, Directors Sued For Fraud By Roy Disney, Stanley Gold

3:22pm 05/09/05 Roy Disney, Gold allege statements made re: CEO search - MarketWatch.com

3:22pm 05/09/05 Roy Disney, Gold allege company made false statements - MarketWatch.com

3:21pm 05/09/05 Roy Disney, Stanley Gold file suit against Disney - MarketWatch.com

[RawMaterials]

71. Closing Numbers and Blather

Dow 10384.34 +38.94 (+0.38%)
Nasdaq 1979.67 +12.32 (+0.63%)
S&P 500 1178.84 +7.49 (+0.64%)
10-Yr Bond 4.278% +0.12

NYSE Volume 1,802,317,000
Nasdaq Volume 1,437,812,000



Close: In a day of relatively quiet trading, with little in the way of market moving news, Monday merger activity provided just enough of a spark to extend last week's gains... Earlier in the session, some uncertainty about economic growth and inflation following Friday's jobs report, as well as some reluctance on the part of buyers following three straight weeks of market gains weighed on sentiment... But the indices showed resilience, even shrugging off a late-day surge in oil prices, to close virtually every sector in positive territory...

With regards to M&A news, reports of E*Trade's (ET 12.67 +0.74) interest to acquire rival Ameritrade (AMTD 13.48 +2.17) took center stage... Taking into account cost-cutting initiatives and growth opportunities, some analysts said such a deal could be valued by investors at $12-14 bln... Another multi-billion dollar deal involved Duke Energy (DUK 28.77 -0.59), which agreed to buy Cinergy (CIN 42.23 +1.85) for roughly $9.0 bln... Meanwhile, nine out of ten economic sectors closed higher...

Energy (+1.2%) paced the way to the upside following a 2.1% surge in crude oil futures ($52.03/bbl +$1.07) amid news that, even though the oil market is currently oversupplied by 1.2 mln barrels, there is no need at this time to cut June production... Financial (+0.8%) was also an influential leader to the upside, taking a bullish cue from further consolidation in the online brokerage industry (i.e. ET-AMTD deal)... Utility also climbed, due to the proposed DUK-CIN merger as well as a 13% surge in Dynegy (DYN 4.29 +0.52)... Dynegy beat analysts' Q1 forecasts by a penny, guided a narrower than expected FY05 loss and said it may sell its network of natural-gas processing plants...

Defensive areas like Health Care and Consumer Staples also attracted buyers while Consumer Discretionary got a boost after McDonald's (MCD 30.10 +0.72) posted better than expected April comps of 2.8% and U.S. comps of 4.7%... With regards to Technology, Networking paced the way higher amid a 1.0% surge in Cisco Systems (CSCO 18.22 +0.20) and an upbeat article in Barron's about Lucent Technologies (LU 2.93 +0.35) while even Hardware eked out a modest gain despite weakness in Hewlett-Packard (HPQ 20.72 -0.26), which was under pressure after Banc of America Securities said it may not meet estimates next week...

Materials, however, closed slightly lower amid weakness in Paper and Steel as well as dollar strength against the yen... The greenback extended gains against the yen (105.63) after China restrained from letting its yuan move more freely against the dollar during last week's national holiday... Separately, Mar wholesale inventories rose a smaller than expected 0.4% (consensus +0.7%), however, since the data say almost nothing about personal consumption, the largely ignored report had almost no influence on overall market activity...

Treasurys, however, briefly rebounded on the data, but the recovery effort stalled amid the dearth of more notable economic data and modest gains in equities, as the 10-yr note finished down 4 ticks to yield 4.27%... DJTA +0.7, DJUA +0.8, DOT -0.1, Nasdaq 100 +0.5, Russell 2000 +1.0, SOX +0.4, S&P Midcap 400 +0.5, XOI +1.2, NYSE Adv/Dec 2211/1076, Nasdaq Adv/Dec 1935/1127

[54anickel]

72. HA! Something sure got them excited before the bell. Nice little gains

despite the rise in oil.

[UpInArms]

74. maybe this

4:19pm 05/09/05 U.S. RETAIL GAS PRICES LOWEST IN 6 WEEKS

4:18pm 05/09/05 U.S. RETAIL GASOLINE PRICES FALL 4.6C TO $2.231: DOE

:sarcasm:

:wow: gas is only $2.23 a gallon! Yippee! uh...right... :argh: