STOCK MARKET WATCH, Tuesday November 14

[ozymandius]

Tuesday November 14, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 797 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2148 DAYS
WHERE'S OSAMA BIN-LADEN? 1854 DAYS
DAYS SINCE ENRON COLLAPSE = 1815
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 6
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54


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




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

AT THE CLOSING BELL ON November 13, 2006

Dow... 12,131.88 +23.45 (+0.19%)
Nasdaq... 2,406.38 +16.66 (+0.70%)
S&P 500... 1,384.42 +3.52 (+0.25%)
Gold future... 625.80 -4.30 (-0.69%)
30-Year Bond 4.70% +0.01 (+0.26%)
10-Yr Bond... 4.61% +0.02 (+0.41%)






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 [email protected]

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Rob Kirby

ACTIONS, REACTIONS AND DISTRACTIONS

Much has happened in the past 7 days. In the U.S.A., Democrats have retaken both the House and Senate for the first time since 1994. On a macro/geo-economic level – this move is almost universally viewed as being a shift toward advocacy of “fair trade” as opposed to unbridled “free trade.” In econo-speak this is referred to as a move toward protectionism.

While the extent to which the U.S. actually does or does not follow through with legislation in this regard – there has already been fallout, or perhaps more accurately stated – “a shot over the bow” – from America’s biggest beneficiary of free trade. Take special note of the timing – November 9, two days after the American mid-term elections – of People’s Bank of China head, Zhou Xiaochuan,

"All central banks are trying to diversify," People's Bank of China Governor Zhou Xiaochuan said at a conference in Frankfurt. "We have had a very clear diversification plan for several years."

The reaction to these words (the political message) in international markets was swift; the U.S. Dollar Index initially cratered, then recovered.

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

[ozymandius]

2. Today's Reports-a-plenty

8:30 AM Business Inventories Sep
Briefing Forecast NA
Market Expects NA
Prior 0.6%

8:30 AM Core PPI Oct
Briefing Forecast NA
Market Expects NA
Prior 0.6%

8:30 AM PPI Oct
Briefing Forecast NA
Market Expects NA
Prior -1.3%

8:30 AM Retail Sales Oct
Briefing Forecast -0.2%
Market Expects -0.4%
Prior -0.4%

8:30 AM Retail Sales ex-auto Oct
Briefing Forecast NA
Market Expects NA
Prior -0.5%

8:30 AM Retail Sales ex-auto Oct
Briefing Forecast 0.1%
Market Expects -0.3%
Prior -0.5%

8:30 AM PPI Oct
Briefing Forecast -0.7%
Market Expects -0.5%
Prior -1.3%

8:30 AM Core PPI Oct
Briefing Forecast 0.1%
Market Expects 0.1%
Prior 0.6%

10:00 AM Business Inventories Sep
Briefing Forecast 0.6%
Market Expects 0.5%
Prior 0.6%

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

[UpInArms]

12. Another Up Day on Optimism About Coming Reports

it will be interesting to see how surprised the eCONomists are today :eyes:

http://www.nytimes.com/2006/11/14/business/14stox.html?ex=1321160400&en=7350e8e33c0444f8&ei=5088&partner=rssnyt&emc=rss

(free registration or try www.bugmenot.com)

Wall Street extended its November rally into a new week yesterday, betting that a coming series of economic reports will show strength in the overall economy with inflation contained.

Comments from Richard W. Fisher, the president of the Federal Reserve Bank of Dallas, put investors at ease about coming economic and retail sales reports. He said the economy continued to grow strongly, and he did not indicate that inflation was presenting a problem.

Stocks have risen six out of the last seven weeks as oil prices continue to tumble, helping lift sectors that typically are large energy consumers. Lower energy prices are also viewed as a lift for consumers, especially heading into the holiday shopping period.

“There is a tremendous amount of momentum built into the market,” said Steven Goldman, chief market strategist for Weeden & Company. “We’ve had a good run, we’ve consolidated, and we need this acceleration going into the holidays.”

...more...

[UpInArms]

13. Reports pour in:

U.S. core finished PPI up 0.6% in past year (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. core intermediate PPI up 5.9% in past year (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. intermediate goods PPI fall 1.1%(8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. retail sales up 4.5% in past year (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. crude goods PPI fall 10.5% (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. PPI energy prices fall 5.0% (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. core PPI biggest drop since August 1993 (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. gasoline sales fall 6% after 11.1% drop in Sept. (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. core PPI down 0.9% vs. rise 0.1% expected (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. PPI biggest drop since October 2001 (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Sept. retail sales revised to -0.8% vs. -0.4 (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. PPI down 1.6% vs. fall 0.5% expected (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. general merchandise sales fall 0.3%, 11-month low (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. auto sales up 0.6% (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. retail sales ex-autos, ex-gas rise 0.4% (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. retail sales ex-autos down 0.4% vs. -0.2% expected (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

U.S. Oct. retail sales down 0.2% vs. -0.4% expected (8:30 AM ET, Nov 14, 2006 - 1 minute ago)

[AnneD]

14. Morning Marketeers....

:donut: and lurkers. This is a tweek and a fly by post today. Have to head into court for a friend today. Will give the details tomorrow. Interesting case about real estate.

Happy Hunting and watch out for the bears.

[54anickel]

17. Treasurys rally on tame inflation report

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BA5169450%2D5A42%2D4B8D%2D8C5C%2D75F2FACF1924%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

NEW YORK (MarketWatch) - Treasurys rallied on Tuesday following the release of data showing tamer-than-expected October producer prices and a decline in retail sales, dampening the case for further interest-rate hikes.

snip>

"The bond market had already been bracing for weak data and got more than they bargained for on that count," wrote the Action Economics team in a note.

The producer price index fell a sharp 1.6%, which matches a record low set in October 2001, the Labor Department reported Tuesday. The core PPI, which excludes food and energy costs, fell 0.9%, the biggest drop since August 1993.

The weak numbers surprised economists. Ian Shepherdson, chief U.S. economist at High Frequency Economics, called the core rate "literally unbelievable." :eyes:

more...

[ozymandius]

3. Oil prices up amid concerns over winter

LONDON - Crude-oil futures rose Tuesday as markets remained concerned about supplies heading deeper into the Northern Hemisphere winter.

With the seasonal rise in oil demand still ahead, and another month before the Organization of Petroleum Exporting Countries meets again, prices were holding near $59-$60 a barrel.

Light sweet crude for December delivery was up 31 cents to $58.89 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. December Brent at London's ICE Futures exchange rose 40 cents to $59.45.

Heating oil futures rose nearly 2 cents to $1.6784 a gallon on the Nymex, while unleaded gasoline futures increased half a cent to $1.5425 a gallon. Natural gas futures slid 1 cent to $7.884 per 1,000 cubic feet.

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

[ozymandius]

4. Gasoline prices rise 3 cents to $2.23

WASHINGTON - The price of gasoline climbed three cents last week to an average of $2.23 nationwide.

The federal Energy Information Administration said Monday that U.S. motorists paid $2.23 a gallon on average for regular grade last week, an increase of 3.2 cents from the previous week.

Pump prices are now six cents lower than a year ago and 80 cents a gallon lower since the start of August.

Gasoline prices were most expensive last week on the West Coast, averaging $2.44 per gallon, and cheapest in the Gulf Coast region, averaging $2.11 per gallon, according to the EIA.

http://news.yahoo.com/s/ap/20061113/ap_on_bi_ge/gasoline_prices_1

[ozymandius]

5. InterOil says finds big gas reserves in PNG

SYDNEY (Reuters) - Canadian oil firm InterOil Corp. (Toronto:IOL.TO - news) said on Tuesday a gas and condensate discovery in Papua New Guinea could hold at least 4 trillion cubic feet of gas, potentially the biggest discovery in the Pacific nation.

Chief Executive Phil Mulacek told Reuters the Elk-1 field, would be developed for a US$3 billion liquefied natural gas (LNG) joint venture between InterOil, Merrill Lynch Commodities (Europe) Ltd. and private equity group Clarion Finanz AG.

"Third parties have said that the flow of the Elk-1 well is bigger than anything they have seen in North West Shelf," Mulacek said in a phone interview.

http://news.yahoo.com/s/nm/20061114/bs_nm/energy_australia_interoil_dc_1

[UpInArms]

6. daily dollar watch

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

Last trade 85.24 Change -0.13 (-0.15%)

Tomorrow's Economic Releases: German GDP, US Retail Sales Take Point

http://www.dailyfx.com/story/calendar/key_events/Tomorrow_s_Economic_Releases__German_GDP__1163461157711.html

US Produce Price Index (OCT) (13:30 GMT; 08:30 EDT)
(MoM) (YoY)
Consensus: -0.5% -0.5%
Previous: -1.3% 0.9%

Outlook: Producer prices look to continue their recent downtrend, as analysts predict headline PPI will shrink by 0.5 percent through the month of October. The negative headline figure will likely reflect the swift drop in energy prices, but the core PPI figure looks to move modestly higher within the same period. Markets will likely pay closer attention to these core figures, as prominent central bankers have continued to cite their importance over headline price growth. The market-moving impact may be limited, however, as expectations of little change will do little to shift outlook on the central bank’s overnight lending rate. It will likely take significant surprises in either direction to elicit a jump in price volatility for USD-denominated currency pairs.

Previous: Producer prices dropped by the most in over three years, as an improvement in energy prices limited overall price inflation. Excluding volatile food and energy prices, however, prices rose by the largest percentage since April 2005 on quickly gaining automobile prices. Indeed, markets had predicted a 0.2 percent rise, but the number unexpectedly rose by 0.6 percent through the observation period. Markets reacted by sending bond yields lower and cut expectations of US Federal Reserve interest rate increases through the medium term. Since the release, traders have only continued to scale back initial predictions of a further 25 basis point rate hike by year end. It will be important to monitor upcoming inflation and retail sales data to gauge whether bond yields will continue their recent trend lower.

US Advanced Retail Sales (OCT) (13:30 GMT; 08:30 EDT)
(Sales) (ex Autos)
Consensus: -0.4% -0.2%
Previous: -0.4% -0.5%

Outlook: Retail sales are expected to contract 0.4 percent for a second month in October, suggesting rising confidence and cheaper energy prices will not translate into more liberal spending habits. For the month of October, sentiment surveys were mixed. The University of Michigan’s final read of optimism grew to its highest level since July of 2005 on the combination of cheaper gas prices and continued job growth. On the other hand, the Conference Board’s report of the same thing actually contracted slightly to 105.4 over the same period, blamed on the fret over the continued housing slump. For October, a related indicator may have helped to guide predictions for the retail report. Total auto sales for the period slipped from 16.6 million on an annual pace to 16.2 million. With this in mind however, the market will discount the headline figure and pay greater attention to the ex autos report to gauge the health of consumer spending in an environment where so many issues are in flux.

Previous: Retail sales in the world’s largest economy unexpectedly dropped 0.4 percent as a large drop in gas receipts offset gains in other areas. In September, filling station sales plunged 9.3 percent, the single largest monthly decline on record. Such large slide follows the drop in the broad energy product group and specifically easing in gasoline prices to an 8-month low $2.25 per gallon. On the other hand, when the drop at the pump was excluded from the price reports, the monthly statistics were very different. When service station sales were left out, retail sales actually grew 0.6 percent. Further whittling down on the volatile components, when autos and building materials were also cut, the indicator actually grew 0.8 percent, the biggest increase for this focused group since January.

...more...

FX Volatilities Perk Up After Hitting Record Lows

http://www.dailyfx.com/story/strategy_pieces/weekly_option_strategy/FX_Volatilities_Perk_Up_After_1163437797827.html

The trading week starts out with volatilities higher across the board as the volatilities have bounced off some very lows levels. Some sharp movements in the foreign exchange markets and some pivotal news events last week have resulted in short and longer term implied volatilities being bid higher. There was added uncertainty in the market last week as control of congress shifted from the republicans to the democrats. Last week the Bank of England and the Reserve Bank of Australia both raised rates by 0.25% which continues the trend of higher interest rates around the world. The Federal Reserve seems to be holding steady, but the market will find out more once the FOMC minutes are released on Wednesday. This week is very busy in terms of economic news. Tuesday has PPI and retail sales numbers. Wednesday has NY Empire Index and the FOMC minutes. Thursday will have Initial claims, CPI, Capacity Utilization and Philadelphia Fed. Friday will have Housing starts, Building permits, and the Michigan Sentiment Index.



The risk reversals have changed from last week. The risk reversals in EUR/USD have moved in favor of EUR calls. The 1 month 25 delta risk reversal has the EUR calls trading at a volatility premium of 0.3%/0.6% over the EUR puts. The USD/JPY favors of USD puts versus USD calls. The volatility premium now stands at 0.6%/0.80% for USD puts over USD calls.

...more with lots of charts...

[54anickel]

16. Iran cuts dollar-based transactions to 'minimum'

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=0943ab6a-146b-444c-9d14-03cc3b3c793a

TEHRAN (AFX) - Iran said it is reducing its dollar-based transactions to a "minimum level" in response to US restrictions on Iranian banks.

"We will carry out our foreign currency transactions with currencies other than the dollar, and our use of the dollar will reach a minimum level," Economy Minister Davoud Danesh Jafari was quoted as saying by student news agency ISNA.

"Some US banks have been disrupting our dollar-transactions for a long time and Iran, in return, has been decreasing its dependence on dollar," he added, without elaborating.

The move comes after the US Treasury Department said in September it had barred Iran's state-run Bank Saderat from having any links with US-owned banks because of its "support for terrorism."

[54anickel]

18. Dollar falls on soft inflation, retail sales

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB1D094F4%2DFA70%2D496D%2D9B0A%2DE09826E28480%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

NEW YORK (MarketWatch) -- The dollar fell against major currencies Tuesday after government reports showed weaker-than-expected wholesale inflation in October and a sharp downward revision to retail sales in September, boosting expectations the Federal Reserve will lower interest rates soon.

U.S. prices of raw materials and other producers' inputs fell 1.6% in October, the Labor Department said. Excluding food and energy costs, the core PPI fell 0.9%. Economists were expecting the PPI to fall 0.5% and the core rate to rise 0.1%. See full story.

"Core prices dropped by the biggest amount since 1993 and headline prices fell by the biggest amount in at least 50 years," said Kathy Lien, chief strategist at FXCM. "It will be hard for consumer prices to rise after such a weak release."

snip>

The government will report consumer prices for October, an indicator closely watched by the Federal Reserve, on Thursday at 8:30 a.m. Eastern. Economists polled by MarketWatch expect a 0.3% drop in the consumer price index. Excluding food and energy, the CPI probably rose 0.2% in October.

Retail sales fall
The Commerce Department said U.S. retail sales fell 0.2% in October after sinking a downwardly revised 0.8% in September. Excluding autos, retail sales dropped 0.4% after a 1.2% decline in September. Economists expected a 0.4% decline in October sales and a 0.2% drop in sales excluding autos. See full story.

Lien described the data as "extremely weak," indicating "the U.S. consumer is buckling, which could push the over the cliff, especially with exceptionally weak inflation numbers."

"With U.S. consumer spending and inflation being two of the Fed's most closely followed indicators, we are certainly seeing higher odds for an early 2007 rate cut," she said. "Expect this week to be a major dollar negative week."

more...

[54anickel]

19. Meanwhile, the buck gets pumped after dropping to 84.95

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

Last trade 85.31 Change -0.06 (-0.07%)

Settle Time 15:00 Open 85.37

Previous Close 85.37 High 85.44

Low 84.95 2006-11-14 12:43:52, 30 min delay

[54anickel]

20. A Lower Trade Deficit Unlikely to Save the Dollar

http://www.merkfund.com/merk-perspective/insights/2006-11-14.html

America’s massive trade deficit exerts pressure on the US dollar as currency is shoveled abroad in return for goods and services. As the economy is slowing down and possibly sliding into recession, the rate at which the trade deficit grows may be slowing down; in September, this deficit was “only” $64.3 billion – still near record territory, but not as bad as economists had predicted.

Does this mean the worst for the dollar is over? After all, it now costs over 50% more to pay for a €100 euro hotel room than six years ago, assuming the hotel has not raised its price. Can it get worse? Since you probably cannot afford to go to Europe on vacation anymore, it may not matter to you. But even if you do not travel abroad, it does matter to you as your purchasing power erodes; amongst others, the cost of imports and commodities, including the price you pay at the gas pump, is likely to go up.

The trade deficit is a component of the broader current account deficit, which also includes investment income. The current account deficit is the shortfall that needs to be covered by foreign investors for the dollar not to fall. Last year, foreigners needed to purchase $805 billion in US dollar denominated assets, just to keep the dollar from falling, that’s more than $2 billion every single day.

As the US economy is slowing down, what matters is whether other factors propping up the dollar slow down even faster. The most apparent one is whether foreigners will be as inclined to invest in a slowing economy. Another is trade policy: a new Congress may take a tougher look at ‘protecting’ local jobs. If such policy is not engineered very carefully, the risk is high that it will hurt all those who have been able to adjust by taking on jobs working in an industry dependent on imports; the trade deficit makes the dollar vulnerable should our trading partners not agree with new rules or restrictions on trade.

Note, too, that we are talking about slowing growth in the deficit, not about reversing the trend, nor about eliminating an enormous cumulative deficit that has been built over time. We only need to have a negative change at the margin of any parameter that supports the dollar, for the dollar to weaken further.

more...

[ozymandius]

7. UPDATE 1-Google closes YouTube deal; denies new Web bubble

SAN FRANCISCO, Nov 14 (Reuters) - Web search leader Google Inc. (GOOG.O: Quote, Profile, Research) said on Tuesday that it closed its $1.65 billion acquisition of top online video-sharing site YouTube, setting a new record in the valuation for user-generated media sites.

In a statement, Mountain View, California-based Google said it had issued 3,217,560 shares to pay for YouTube. It also paid restricted stock units, options and a warrant that can be converted into 442,210 shares of Google's common stock.

The $1.65 billion stock deal included around $15 million in funding which Google provided to YouTube between signing the deal in early October and closing the deal this month.

One-eighth of the equity, or roughly $200 million, will be held in escrow as security on certain unspecified indemnification obligations, the Google statement said.

http://today.reuters.com/news/articleinvesting.aspx?type=mergersNews&storyID=2006-11-14T091551Z_01_N14236487_RTRIDST_0_TECH-GOOGLE-UPDATE-1.XML

[ozymandius]

8. Wal-Mart Third-Quarter Profit Increases as Retailer Cuts Prices

Nov. 14 (Bloomberg) -- Wal-Mart Stores Inc., the world's largest retailer, said third-quarter profit rose 11 percent as the company reduced prices on toys and generic drugs to lure customers to its U.S. stores.

Net income rose to $2.65 billion, or 63 cents a share, from $2.37 billion, or 57 cents, a year earlier, the Bentonville, Arkansas-based retailer said today in a regulatory filing. Revenue in the quarter ended Oct. 31 rose to $83.5 billion from $74.6 billion.

Third-quarter sales at stores open at least a year rose 1.5 percent, the slowest in seven quarters, as renovations at Wal- Mart stores and weak clothing sales hurt results. Chief Executive Officer H. Lee Scott has cut prices on electronics and appliances after falling gasoline prices failed to spur increased customer visits at stores.

http://www.bloomberg.com/apps/news?pid=20601103&sid=arpUFEaw68Ts&refer=us

[ozymandius]

9. Eddie Bauer agrees to takeover bid

Eddie Bauer Holdings Inc., a clothing and accessories retailer, says it has accepted a $286 million (U.S.) cash takeover bid from two private-equity firms, becoming the latest in a long line of retailers choosing to go private.

A company owned by affiliates of Sun Capital Partners Inc. and Golden Gate Capital will pay shareholders $9.25 per share, a 4.5 per cent premium over Friday's closing Nasdaq price, and assume about $328 million in debt.

The stock, which traded as high as $23.50 in December, was up 14 cents, or 1.6 per cent, to $8.99 at the close yesterday.

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1163458214091&call_pageid=968350072197&col=969048863851

[UpInArms]

10. US chain store sales fell 0.8 pct in latest week

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-11-14T124530Z_01_NAT002294_RTRIDST_0_ECONOMY-RETAIL-ICSC-URGENT.XML

NEW YORK, Nov 14 (Reuters) - U.S. chain store retail sales slipped in the latest week with a mixed performance regionally, a retail report said on Tuesday.

Sales declined 0.8 percent in the week ended Nov. 11, compared with a 1.0 percent rise the previous week, the International Council of Shopping Centers and UBS Securities said in a joint report.

<snip>

Consumer demand was strong in the West, but soft in the Northeast as retailers started their advertising campaigns for the holiday season, the report said.

...more at link...

[UpInArms]

11. D.R. Horton (home builder) earnings down 51 pct on weak housing

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-11-14T124646Z_01_N14259380_RTRIDST_0_CONSTRUCTION-DRHORTON-EARNS-UPDATE-1.XML

NEW YORK, Nov 14 (Reuters) - D.R. Horton Inc. (DHI.N: Quote, Profile, Research), the largest U.S. home builder, on Tuesday said quarterly profit fell 51 percent as orders declined, but results topped forecasts.

The company joined Toll Brothers Inc. (TOL.N: Quote, Profile, Research), Hovnanian Enterprises Inc. (HOV.N: Quote, Profile, Research) and other rivals in reporting weaker earnings as deteriorating consumer confidence and falling home prices cast a pall over the once-thriving homebuilding sector.

<snip>

Last week, Toll, a luxury homebuilder, projected a 10 percent drop in quarterly homebuilding revenue, and warned of softness in once-booming Northern California and Florida markets.

Smaller luxury builder Hovnanian projected a fourth-quarter net loss, hurt by order cancellations, while Beazer Homes USA Inc. (BZH.N: Quote, Profile, Research), which builds many homes for first-time buyers, said quarterly profit fell 44 percent, and said fiscal 2007 earnings will fall short of analysts' expectations.

...more...

[54anickel]

15. Worst to First: Refco, Delphi, Charter Bondholders Beat Market

http://www.bloomberg.com/apps/news?pid=20601103&sid=aSMCDXN0qvdc&refer=us

Nov. 14 (Bloomberg) -- The worst are now first in the U.S. corporate bond market.

Securities with the lowest credit ratings gained 33 percent this year after losing 16 percent in 2005, according to an index compiled by Merrill Lynch & Co. Refco Inc. and Delphi Corp., which stopped paying interest when bankruptcy proceedings began 12 months ago, appreciated more than $900 million this year while below-investment-grade bonds on average gained 8.6 percent.

Hedge funds, fortified by $110 billion of new money from institutional investors, are snapping up the highest-yielding, highest-risk junk bonds, encouraged by an economy strong enough to reduce defaults without accelerating inflation, according to Chicago-based hedge fund Research Inc. So-called distressed debt funds attracted $2.7 billion during the third quarter, the biggest three-month inflow since at least 2003, the group said.

``I'm as surprised as anyone that we're having a rally in dreck,'' said Marilyn Cohen, who manages $225 million of bonds as president of Envision Capital Management in Los Angeles.

``Hedge funds are increasing institutional demand for yield,'' said Tom Connolly, co-head of leveraged finance and one of two Goldman Sachs Group executives overseeing origination and distribution of high-yield, high-risk bonds and loans. ``The leveraged debt market has seen explosive growth.''

more...

[54anickel]

21. 1:17 numbers and yada

Dow 12,120.43 11.45 (0.09%)
Nasdaq 2,406.85 0.47 (0.02%)
S&P 500 1,383.43 0.99 (0.07%)
10-yr Bond 4.5620% 0.0430
30-yr Bond 4.6620% 0.0420
NYSE Volume 1,646,242,000
Nasdaq Volume 1,007,590,000

1:00 pm : Buyers return from the sidelines within the last 15 minutes as the indices are back to trading in split fashion. Current recovery efforts can best be attributed to turnarounds in some influential sectors, in particular, Technology. To wit, the Nasdaq has inched back above the flat line as momentum continues to improve in semiconductors (SOX +0.5%) and hardware (HWI +0.9%). Another sector turning positive has been Consumer Discretionary, as retailers (RLX +1.1%) get some assistance from a turnaround in Home Depot (HD 36.70 +0.30) while homebuilders (HGX +2.0%) get a boost after DR Horton (DHI 24.11 +1.73) handily topped expectations on both the top and bottom lines. Health Care has also turned the corner, getting a lift after Express Scripts (ESRX 68.05 +2.09) issued upside FY07 EPS guidance.DJ30 -13.61 NASDAQ +0.65 SP500 -1.26 NASDAQ Dec/Adv/Vol 1727/1228/922 mln NYSE Dec/Adv/Vol 1525/1615/782 mln

12:30 pm : Not much has changed since the last update as the market's modest weakness carries over into the afternoon session. While the market continues to trade in a relatively narrow range, it is also worth noting that all three indices declining in synch with each other and logging roughly the same percentage losses (-0.3%) suggest that program trading is behind today's broad-based consolidation efforts.DJ30 -36.10 NASDAQ -6.09 SP500 -3.47 NASDAQ Dec/Adv/Vol 1706/1216/826 mln NYSE Dec/Adv/Vol 1557/1557/694 mln

12:00 pm : Stocks are still struggling to revisit early market gains buoyed by more evidence that the economy is on track for a soft landing.

With policy makers focused on inflation risks, a surprising drop in the October core-PPI showed that inflationary pressures at the wholesale level remain contained, renewing hopes of the Fed cutting interest rates early next year. To wit, bond traders are back to pricing in such a scenario, pushing the yield on the 10-year note (+12/32) to a seven-month low (4.56%). Core-PPI unexpectedly fell 0.9%, the biggest decline since August 1993, while total PPI plunged 1.6%, matching the steepest decline on record.

Also out before the bell was an update on the health of the consumer. Retail sales fell a less than expected 0.2% in October while retail sales, excluding a drop in gasoline sales, which is good for the economy, rose 0.4%. That is consistent with a moderate upward trend in consumer spending.

Be that as it may, given the market's preoccupation with the pace of economic growth, concerns that today's data also suggest the U.S. economy is slowing faster than anticipated have taken the mat out from under early buying efforts.

Also leaving buyers a bit hesitant to extend recent gains have been a batch of mixed earnings reports in the retail space. Wal-Mart (WMT 47.25) beat by a penny while Target (TGT 58.08 +0.32), BJ's Wholesale (BJ 30.00 +1.39), Saks (SKS 20.24 +0.35) and Dillard's (DDS 34.06 +4.85) also topped expectations. Home Depot (HD 36.14 -0.26), however, missed expectations and cut its full-year outlook, adding to worries about growth due to its status as a Dow component.

Of the 10 sectors now trading lower, though, Telecom (-0.9%) is pacing the way to the downside following an analyst downgrade on Sprint Nextel (S 20.07 -0.43) based on valuation. In fact, today's negative disposition is also being driven by a burgeoning sense that the market is overbought on a short-term basis, leaving the valuations of stocks across several sectors in question. As a reminder, the Dow, S&P 500 and Nasdaq are up 3.6%, 3.4%, and 6.3%, respectively, just six weeks into Q4, already surpassing the impressive gains witnessed in Q3. BTK -1.1% DJ30 -36.12 DJTA -1.1% DJUA -0.3% DOT -0.2% NASDAQ -5.92 NQ100 -0.3% R2K -0.1% SOX +0.1% SP400 -0.2% SP500 -3.63 XOI -0.2% NASDAQ Dec/Adv/Vol 1737/1139/742 mln NYSE Dec/Adv/Vol 1492/1585/620 mln

11:30 am : The market continues to pare its losses but selling remains widespread across most areas. Even with oil prices briefly turning negative, transportation stocks are still among today's biggest laggards. To wit, Railroads (-1.9%) ranks as today's third worst performing S&P industry group after Norfolk Southern (NSC 50.66 -2.02) said it sees "challenges" in its Q4 intermodal business and foresees "mixed business conditions" in 2006 and 2007. This morning's biggest disappointment, though, is Electronic Equipment Manufacturing (-4.6%). Agilent Technologies (A 32.60 -2.40) missing analysts' Q4 expectations has prompted investors to consolidate nearly one third of the 22% advance the stock has made since the company reported Q3 results in August.DJ30 -30.18 DJTA -1.0% NASDAQ -5.71 SP500 -2.54 NASDAQ Dec/Adv/Vol 1766/1070/620 mln NYSE Dec/Adv/Vol 1552/1479/512 mln

http://finance.yahoo.com/marketupdate/update

[54anickel]

22. Uncle Sam no longer big in Asia

http://www.guardian.co.uk/worldbriefing/story/0,,1947692,00.html

As a young man he was less than keen to go to Vietnam, but after his mid-term "thumping" George Bush may welcome the chance to hole up in Hanoi at this Friday's 21-nation Asia-Pacific Economic Cooperation (Apec) summit. Vietnam is a one-party state. After last week, the US no longer is.

Escape from the States or not, Mr Bush's attendance in Hanoi is necessitated by ongoing efforts to maintain US influence in a region increasingly dominated by China. Critics say Apec is being outstripped by rival organisations. Next month the Philippines will host the latest East Asia summit, a new Beijing-backed group that excludes Washington.

Apec is supposed to promote free trade and investment. Its communique is expected to urge a "last chance" rescue of the World Trade Organisation's (WTO) stalled Doha round of liberalisation measures. It will also raise the prospect of an Apec-wide free trade zone. Together the 21 member states account for nearly half of world trade.

But Mr Bush's hopes of furthering his free trade agenda by normalising trade ties with Vietnam's communist-capitalist bosses were dashed by Congress this week. Although the measure could be resurrected, the defeat was a sign of things to come. Many Democrats in the new congressional intake have adopted protectionist positions in response to voter concerns about "unfair" foreign competition. And Mr Bush's fast-track authority for approving a global trade deal will expire next July.

more...

[Ghost Dog]

26. US and China call for more trade, not protectionism

http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=117447&version=1&template_id=48&parent_id=28

BEIJING: China’s huge trade surplus with the US should be addressed through increased US exports to China and not protectionist moves by Washington, commerce chiefs from the two sides agreed here yesterday.
US Commerce Secretary Carlos Gutierrez and his counterpart Bo Xilai offered an upbeat assessment of bilateral trade ties after meeting yesterday, despite continued growth in the political sensitive trade imbalance.
Both noted growing American imports to China and the need for more. “Our exports to China are up 34% in 2006 on a year-to-date basis. We now export about $50bn of services and merchandise to China. The future should be focused on exporting to China,” Gutierrez said.
Gutierrez arrived on Sunday for a five-day visit aimed at pushing for greater access to China’s markets for US goods and halting the pirating of American copyrights.
The meeting comes amid speculation over whether the new Democrat-led US Congress could get tougher on China over its trade surplus with the US.
The surplus hit a record $201bn in 2005, according to US government statistics, and is on pace to expand even further this year as Americans continue to snap up cheap Chinese-made goods.
Gutierrez, who is travelling with a delegation of 25 top American business leaders, said he was confident the relationship could stay on track.
“The initial signals and comments that we’ve heard from Congress have been very positive from the standpoint of supporting trade and trade agreements.”
But he added: “We all have to be very aware of any steps that we take that would signal protectionism.”

/...

[54anickel]

23. Halliburton's KBR Says U.K. Ministry Seeks IPO Delay (Update1)

http://www.bloomberg.com/apps/news?pid=20601102&sid=aDcSseLvTT1M&refer=uk

Nov. 14 (Bloomberg) -- Halliburton Co.'s KBR subsidiary, which plans an initial offering of shares later today, said a contract to manage a naval shipyard in the U.K. may be threatened if it doesn't agree to postpone the IPO.

The U.K. Defense Ministry told KBR officials yesterday that it wants more time to evaluate how the offering will impact the Houston-based company's financial ability to manage the Devonport Royal Dockyards, KBR said in a filing with the U.S. Securities and Exchange Commission. Halliburton operates the yard through a majority-owned venture, Devonport Management Ltd.

``This offering may adversely affect or result in the loss of our DML joint venture's interest in the operation,'' KBR said in today's amended prospectus.

The ministry's options include making the venture's interest in the dockyard non-voting, removing its directors or buying out its interest, KBR said.

more...

[Ghost Dog]

24. Japan's economy grows at 2.0 percent annual pace in July-Sept quarter

http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=564840155912209525

TOKYO (AP) - Japan's economy grew at a stronger-than-expected 2.0 percent annual pace in the July-September quarter, the government said Tuesday, thanks to surprisingly robust corporate investment in factories and equipment.

Gross domestic product grew for the seventh straight quarter, expanding 0.5 percent from the previous quarter, according to the Cabinet Office. Economists had forecast a 0.3 percent gain, or 1.1 percent at an annual pace.

After a decade-long slump, Japan's economy has quietly mustered one of its longest periods of overall growth since World War II. Using a variety of economic data, including GDP, the government says the economy has expanded for 57 months now. That matches a similar period of growth in the 1960s, although the rate is far more moderate than that era of rapid growth.

...

Stocks jumped on the news, with the benchmark Nikkei 225 index rising 1.67 percent.

Although private consumption, which accounts for more than half of Japan's economy, shrank 0.7 percent on quarter in the three months ended Sept. 30, capital investment grew a stunning 2.9 percent, according to Cabinet Office data.

/...

[Ghost Dog]

25. Yen Strengthens as Japan's Economic Growth Exceeds Forecasts

http://www.bloomberg.com/apps/news?pid=20601083&sid=ahCdj9KLWF0k&refer=currency

Nov. 14 (Bloomberg) -- The yen gained the most in a week against the dollar after Japan's economy grew twice as fast as economists expected in the third quarter, fueling speculation the central bank will raise interest rates again this year.

The Japanese currency also gained the most in two weeks versus the euro as the world's second-largest economy expanded at an annual 2 percent pace, double the 1 percent median forecast by economists. Bank of Japan policy makers meet tomorrow to decide rates, with Governor Toshihiko Fukui saying last week they need to act ``in advance, moderately.''

``The GDP number was better than the market expected, and increases speculation of another rate hike in Japan,'' said Ian Stannard, a currency strategist in London at BNP Paribas SA. ``An earlier-than-expected rate hike would provide the yen with support in the near term.''

The yen rose to 117.76 against the dollar at 9:32 a.m. in London, from 118.16 late yesterday in New York. It reached 151.17 per euro, from 151.32 yesterday and a record low of 151.48 on Nov. 9. The dollar traded at $1.2838 against the 12-nation currency, from $1.2806.

The two-day BOJ policy meeting ends Nov. 16, when policy makers will leave the benchmark overnight lending rate at 0.25 percent, according to a survey of economists. Two of 16 see higher rates by year-end and eight predicted a first-quarter move. Fukui on Nov. 10 told lawmakers ``gradual rate adjustments would help nurture long-lasting economic growth.''

/...

[Ghost Dog]

27. Euro-area economy grows 0.5 pct. in 3Q

http://news.yahoo.com/s/ap/20061114/ap_on_bi_ge/eu_economy

BRUSSELS, Belgium - The economies of the 12 nations that use the euro grew by 0.5 percent in the third quarter, slowing from the second quarter, the EU statistics agency Eurostat said Tuesday.

Quarter-on-quarter growth for the entire 25-country
European Union was 0.6 percent, it said.

Compared with the third quarter of 2005, the euro area grew 2.6 percent and the EU grew 2.8 percent, it said.

...

In comparison, U.S. gross domestic product growth was 0.4 percent in the third quarter and 0.6 percent in the second. In year-on-year growth, the U.S. expanded by 2.9 percent in the third quarter.

/..

[Ghost Dog]

28. Villepin: Europe needs 'monetary shield'

http://www.businessweek.com/ap/financialnews/D8LD0PHO0.htm

NOV. 14 1:36 P.M. ET French Prime Minister Dominique de Villepin on Tuesday called for euro-zone countries to devise a foreign exchange policy to promote growth and jobs and protect industry.

"Europe needs a monetary shield," Villepin said.

Citing the difficulties at European commercial jet maker Airbus as one example of the consequences of a strong euro, Villepin said "the euro permitted the creation of a stable environment between all European partners, but its current level penalizes some of our exports."

European aerospace companies are hurting because their costs are in euros, while they get paid in dollars for the products they make and the services they provide.

"All the great trading powers have a foreign exchange policy, sometimes even an aggressive one," Villepin said. "We must not let the euro be used as an adjustable variable for global monetary equilibrium."

"Let's create a real foreign exchange strategy that integrates the targets of growth, protection of our industry and, of course, employment," Villepin said. "It's a major subject that we must address at the European level."

In a wide-ranging speech on the need to foster innovation in industry and thereby contribute to job creation, Villepin said the United States is dominating innovation because of "massive" financing from public and private sources, as well as a lowering of the barriers among researchers, entrepreneurs and financiers.

/...

[ozymandius]

29. sweeping the floor and turning out the lights

Dow 12,218.01 Up 86.13 (0.71%)
Nasdaq 2,430.66 Up 24.28 (1.01%)
S&P 500 1,393.22 Up 8.80 (0.64%)
10-Yr Bond 4.568% Down 0.037
NYSE Volume 3,027,477,000
Nasdaq Volume 2,022,542,000

4:20 pm : After middling around the flat line throughout most of the session, a technical bounce late in the day vaulted stocks to their best levels of the session.

What was shaping up to be a rather lackluster session amid a tug-o-war about whether or not today's economic data suggested a soft or hard landing for the economy turned out favorably for the bulls when the S&P 500 broke through its six-year high of 1389 around 2:45 ET. Eclipsing that technical barrier, on no specific news, prompted a surge in buy orders for the S&P 500 futures contract, which in turn lit a fire under stocks across the board. In fact, all three of the major indices initially surging higher and logging roughly the same percentage gains lent further evidence that program trading was behind the late-day rally.

Of the nine sectors trading higher, Consumer Discretionary and Technology turned in the best performances, each surging 1.1%. As the second most influential sector, Tech's advance provided the bulk of leadership, as evidenced by the Nasdaq outpacing its blue chip counterparts to the upside. Intel Corp (INTC 21.86 +0.86) more than doubled yesterday's impressive 2.0% advance amid more upbeat analyst commentary and the early rollout of its new quad-core processors. Intel is a suggested holding in the Briefing.com Active Portfolio.

Also helping the Dow close at a new all-time high was discretionary component Home Depot (HD 37.26 +0.86). The stock was down as much as 1.7% after it missed expectations and cut its full-year outlook, renewing concerns about the impact a weak housing market is having on the overall economy. That was eventually put to rest as it became apparent that much of the bad news may have already been priced into the stock. Also mitigating some of the housing worries was DR Horton (DHI 24.11 +1.73), which soared 9.3% after handily topping Wall Street expectations on both the top and bottom lines. Homebuilding was today's best performing S&P industry group.

The discretionary sector was actually in focus before the market even opened as investors waited to get an update about the health of the consumer and inflation. The Commerce Dept. showed that retail sales fell a less than expected 0.2% in October. More notably, retail sales, excluding a drop in gasoline sales - which is good for the economy - rose 0.4%.

That was consistent with a moderate upward trend in consumer spending that was also evidenced by a batch of better than expected earnings reports from a plethora of retailers. Wal-Mart (WMT 47.66 +1.34) beat by a penny while Target (TGT 59.16 +1.40), BJ's Wholesale (BJ 29.69 +1.08), Saks (SKS 20.40 +0.51) and Dillard's (DDS 35.59 +6.38) also topped expectations.

With policy makers focused on inflation risks, a surprising drop in the October core-PPI that showed inflationary pressures at the wholesale level remain contained provided additional support. To wit, bond traders began pricing in a possible Fed easing, pushing the yield on the 10-year note (+12/32) to a seven-month low (4.56%). Core-PPI unexpectedly fell 0.9%, the biggest decline since August 1993, while total PPI plunged 1.6%, matching the steepest decline on record. DJ30 +86.13 NASDAQ +24.29 SP500 +8.80 NASDAQ Dec/Adv/Vol 1017/2039/1.97 bln NYSE Dec/Adv/Vol 883/2388/1.71 bln

[54anickel]

30. Da-what!?!?!? Where did that pump suddenly come from? And no, I am

not buying the blatherers BS explanation this time around either.