STOCK MARKET WATCH, Wednesday May 14

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday May 14, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 252
DAYS SINCE DEMOCRACY DIED (12/12/00) 2670 DAYS
WHERE'S OSAMA BIN-LADEN? 2395 DAYS
DAYS SINCE ENRON COLLAPSE = 2686
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
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 May 13, 2008

Dow... 12,832.18 -44.13 (-0.34%)
Nasdaq... 2,495.12 +6.63 (+0.27%)
S&P 500... 1,403.04 -0.54 (-0.04%)
Gold future... 870.20 -14.70 (-1.66%)
30-Year Bond 4.62% +0.10 (+2.15%)
10-Yr Bond... 3.91% +0.13 (+3.55%)






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

---

Read more: du

[ozymandius]

1. Market WrapUp: S&P 500 Analysis

BY MARTIN GOLDBERG, CMT

The S&P 500 index is now at 1403.04 which has proven to be an important support level in 2007, and an important resistance level in 2008, thus far. It has yet to decisively break the 1400 level to the upside and both momentum and volume are diminishing. So at the present time, there are three important characteristics of the S&P index that traders should note:

1. The long term trend of the index is down, as indicated by the downward sloping 200-day moving index and the lower highs and lower lows.
2. The intermediate term and short term trend of the index is up as indicated by the trendline.
3. As stated above, 1400 is an important former support, and current resistance level and this is shown by the blue horizontal line.

-see chart-

As shown in the chart above, the momentum indicators are indicating a loss of momentum in the short term. However, trend lines trump momentum. So this momentum loss should only be considered as an alert or warning at this time.

A high volume surge of the S&P 500 to 30 or 40 points beyond the previous high of 1422 would confirm the intermediate and short term trend as UP and bring the long term downtrend of the index into question.

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

[ozymandius]

2. Today's Reports

08:30 Core CPI Apr
Briefing.com 0.2%
Consensus 0.2%
Prior 0.2%

08:30 CPI Apr
Briefing.com 0.4%
Consensus 0.3%
Prior 0.3%

10:30 Crude Inventories 05/10
Briefing.com NA
Consensus NA
Prior 5654K

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[UpInArms]

18. U.S. April CPI food prices up 0.9%. largest since 1990

01. U.S. April CPI food prices up 0.9%. largest since 1990
8:30 AM ET, May 14, 2008

02. U.S. April CPI energy prices flat vs 1.9% gain in March
8:30 AM ET, May 14, 2008

03. U.S. CPI core up 2.3% in past 12 months
8:30 AM ET, May 14, 2008

04. U.S. CPI up 3.9% in past 12 months
8:30 AM ET, May 14, 2008

05. U.S. April core CPI up 0.1% vs. 0.2% expected
8:30 AM ET, May 14, 2008

06. U.S. April CPI up 0.2% as expected
8:30 AM ET, May 14, 2008

[ozymandius]

3. Oil prices fall back in Asia after record near $127

BANGKOK, Thailand - Oil prices fell back Wednesday in Asia after hitting a record near $127 a barrel in the previous session on concerns Iran may consider cutting oil production.

Iranian officials denied in later news reports that production cuts were imminent but acknowledged a reduction has been discussed.

Light, sweet crude for June delivery dropped 35 cents to $125.45 a barrel in electronic trade on the New York Mercantile Exchange by midafternoon in Singapore. Oil prices hit a trading record of $126.98 a barrel Tuesday before settling at $125.80.

Analysts said traders reacted quickly overnight to the news that Iran's government was considering cutting crude oil production.

But James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com, said he doubts Iran will actually cut production.

.....

Meanwhile, the International Energy Agency, an adviser to mostly western, industrialized nations, said high prices are cutting demand for oil and petroleum products in the U.S. and Europe. The IEA cut its global oil demand growth forecast for this year to 1.2 percent from 1.5 percent. In the U.S., the IEA said demand for oil may contract by as much as 2.1 percent this year, while demand for gasoline will drop by about 1 percent.

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

[ozymandius]

4. New records for oil, gas

NEW YORK (AP) -- Oil prices shot to a new record near $127 a barrel Tuesday on concerns that Iran may consider cutting crude oil production. Gas prices, meanwhile, rose to a new record over $3.73 a gallon Tuesday, and their advance shows little sign of slowing with Memorial Day weekend, the traditional start of the summer driving season, just 10 days away.

Oil prices: Light, sweet crude for June delivery rose as high as a record $126.98 a barrel in midday trading on the New York Mercantile Exchange Tuesday before retreating to settle up $1.57 at $125.80.

.....

Prices at the pump: At the pump, meanwhile, the national average price of a gallon of regular gas rose 1.4 cents overnight to a record $3.732, according to a survey of stations by AAA and the Oil Price Information Service. Prices have now risen to the level at which the Energy Department forecasts they'll peak in June, on a monthly average basis; that means prices may still go higher, but their average will peak at around $3.73.

Many analysts have predicted prices will surge much higher, and may breach the psychologically important $4 level on a national basis within the next couple of months. Prices are already that high in many parts of the country.

http://money.cnn.com/2008/05/13/markets/oil.ap/index.htm?postversion=2008051312

[Roland99]

17. $3.95/gal across the city here now. yippee!!

[DemReadingDU]

31. $3.95 SW Ohio too

:(

[ozymandius]

33. Between home and work: a range of 3.77 to 3.89/gal for regular. nt

[ozymandius]

5. Where Are Oil Prices Taking Stocks?

American consumers and companies have howled in agony at oil's 27% price surge in the last six weeks. But apparently—at least so far—stock investors could not care less.

As oil makes its record-breaking run, stocks have rallied, too. The broad Standard & Poor's 500-stock index is up more than 5% since the beginning of April.

If oil keeps hitting new highs, eventually stocks will feel the pain, market observers say. But at what point?

.....

Despite all the trouble from high fuel costs, the stock market seems unruffled. In the past month, consumer discretionary stocks are up 3.25%, better than the broader market despite their sensitivity to the consumer's mood. Meanwhile, health care and consumer staples—sectors relatively unaffected by fuel cost concerns—are down about 1% each. What's going on?

http://www.businessweek.com/investor/content/may2008/pi20080512_543483.htm?chan=top+news_top+news+index_news+%2B+analysis

---

While this article brings statistics and percentage points to compare the rise in fuel and stock valuations - it omits significant deliberations of data such as transports. FedEx's fuel cost increases are in there. This point, however, does not seem to gauge measurably in answering the question posed in the headline.

[54anickel]

19. Possibly an attempt to refuel market complacency? Don't worry, be happy -

(and stupid with your money). The S&P is rising "against all odds"

I wish i could just make you turn around,
Turn around and see me rise
There's so much i need to sell to you,
So many shares to buy
You're the only one who really knew me at all

So take a look at me now, well there's just an empty space
And there's nothing left here to remind me, just the memory of your face
Now take a look at me now, cos there's just an empty space

But to wait for you, is all i can do and that's what i've got to face
Take a good look at me now, cos i'll still be standing here
And you coming back to me is against all odds
It's the chance i've gotta take

Take a look at me now

[TalkingDog]

21. And in terms of transport, not accounting for the military's needs

I'm sorry I can't recall the story, site or link, but about 2 weeks ago I read that the military is stockpiling fuel. Like everybody else they saw what was coming and have the facilities to keep large amounts of fuel on hand.

The entities that can stockpile are doing so.

(my meager 2 cents for today)

[UpInArms]

13. High oil prices rekindle oil production in Mo.

http://news.yahoo.com/s/ap/20080514/ap_on_bi_ge/new_oil_production

DEERFIELD, Mo. - Pumpjacks, the oil rigs that resemble those thirsty bird toys, are going up in Missouri for the first time in two decades, the latest region to revive a long-faded industry as crude nears $130 a barrel.

The sky-high price of oil has turned extraction methods recently considered cost-prohibitive into cash cows.

Bright blue pumpjacks stand over a 10-acre site near the Missouri-Kansas border where MegaWest Energy Corp., a Canadian company, is attempting to draw heavy oil — as thick as molasses, and requiring better technology and extra effort to pull from the ground.

<snip>

CEO George Stapleton says MegaWest can turn a profit as long as oil prices stay above $40 to $45 a barrel.

"Roughly half of every dollar above that we are able to capture as part of our net profit. At $100 a barrel, our profit is about $30 a barrel. That's attractive and that's why we're doing it," he said.

...more...

[UpInArms]

15. Senate Passes Halt On Oil Stockpiling To Curb Gas Prices

http://news.yahoo.com/s/ibd/20080513/bs_ibd_ibd/20080513feature

A veto-proof majority in the Senate voted Tuesday to stop filling the Strategic Petroleum Reserve to try to curtail soaring gasoline prices.

The vote dealt a setback to President Bush's policy of boosting oil stockpiles in the event of a major supply disruption. But it had a limited immediate market impact.

Crude oil spiked to $126.98 a barrel on fuel oil demand and Iran's talk of cutting exports. Oil shed some gains on the SPR vote, but still closed up $1.57 at $125.80.

The Senate voted 97 to 1 to halt crude deliveries now averaging 70,000 barrels a day until the price of oil drops below $75. That's less than 0.1% of global demand of 87 million barrels. A House vote was scheduled later in the day.

The Energy Information Administration estimates stockpiling 100,000 barrels a day adds $2 a barrel to the price of oil and 4-5 cents a gallon to gasoline.

House Speaker Nancy Pelosi's office says an SPR halt could save drivers 5-24 cents a gallon.

Influential oil economist Philip Verleger told Congress in December that filling the strategic reserve "may have added as much as 10% to the light sweet crude price."

...more...

[ozymandius]

50. Gas above $3.75 a gallon; oil falls on mixed supply report

NEW YORK (AP) -- Gas prices roared above $3.75 a gallon Wednesday, while oil prices fell as an Energy Department report gave a mixed picture of the nation's petroleum reserves.

At the pump, the average national price of a gallon of regular gas rose 2.6 cents overnight to a record $3.758 a gallon, according to AAA and the Oil Price Information Service. Gas prices are 67 cents higher than a year ago, and are expected to continue rising at least until the Memorial Day weekend.

The Energy Department recently forecast that prices will peak next month at a monthly average of $3.73 a gallon. But that means prices may rise well above that level at times; many analysts expect prices to reach $4 a gallon on a national basis in coming weeks.

Gas prices typically peak around Memorial Day, then decline through the summer. But some analysts are beginning to question whether that will happen this summer, noting that oil prices have doubled over the past year and show little sign of slowing their advance.

High fuel prices have cut demand for gasoline and oil, but that has had little impact on prices. In its weekly inventory report, the Energy Department's Energy Information Administration said gasoline demand fell slightly last week.

http://biz.yahoo.com/ap/080514/oil_prices.html?.v=23

[ozymandius]

6. US foreclosure filings surge 65 percent in April

LOS ANGELES - More U.S. homeowners fell behind on mortgage payments last month, driving the number of homes facing foreclosure up 65 percent versus the same month last year and contributing to a deepening slide in home values, a research company said Tuesday.

Nationwide, 243,353 homes received at least one foreclosure-related filing in April, up 65 percent from 147,708 in the same month last year and up 4 percent since March, RealtyTrac Inc. said.

Nevada, Arizona, California and Florida were among the hardest hit states, with metropolitan areas in California and Florida accounting for nine of the top 10 areas with the highest rate of foreclosure, the company said.

.....

One in every 519 U.S. households received a foreclosure filing in April. Foreclosure filings increased from a year earlier in all but eight states.

The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with fewer options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't get refinanced into an affordable loan.

http://news.yahoo.com/s/ap/20080514/ap_on_bi_ge/foreclosure_rates

[ozymandius]

7. Stock futures flat ahead of CPI, Freddie Mac, Macy's

LONDON (Reuters) - Stocks looked set to open steady on Wednesday with investors focusing on key inflation data and corporate earnings from the housing and retail sectors.

The Consumer Price Index (CPI) for April is due for release at 8:30 a.m. EDT (1230 GMT), before the U.S. market opening, and may offer some evidence of how much scope the Federal Reserve has to cut U.S. interest rates.

Earnings, meanwhile, were due from Freddie Mac (FRE.N), the second largest U.S. home funding company, and department store chain Macy's (M.N), both of which report before the Wall Street opening bell.

.....

The figures, however, are being released following renewed concerns from U.S. Federal Reserve officials about growing U.S. inflationary pressure.

Cleveland Fed President Sandra Pianalto said on Tuesday that core inflation measures were rising faster than she liked and called inflation "a key risk." Dallas Fed President Richard Fisher said it was unclear whether a slowing U.S. economy would be enough to alleviate cost pressures.

Both comments suggested the Fed is unlikely to cut interest rates again next month.

http://news.yahoo.com/s/nm/20080514/bs_nm/markets_stocks_dc

[ozymandius]

8. My apologies to DU for this apparent waste of bandwidth. (Greenscam quote)

U.S. could face mild recession, Greenspan quoted

SINGAPORE (Reuters) - U.S. economic data suggests the world's biggest economy could face a mild recession, former Federal Reserve chairman Alan Greenspan was quoted as telling Asian investors on Wednesday.

"He said that the data coming out of the U.S. so far suggests a mild recession. The risk is really on the housing side," a participant quoted Greenspan as telling a closed-door Deutsche Bank investor meeting in Singapore via videolink from Washington.

Greenspan, who was quoted as saying earlier this month that the U.S. has fallen into an "awfully pale recession," also told the investor meeting that the credit crisis would end when home prices in the United States begin to stabilize.

http://news.yahoo.com/s/nm/20080514/bs_nm/greenspan_us_dc

---

To me, this prognosis is akin to putting one's head on the train tracks, listening for vibrations of an approaching locomotive, when the train is ten feet away.

I wonder how much swag he was offered for uttering this drivel.

[54anickel]

20. You gotta love his choice of words though...almost poetic, maybe prophetic, they could

have so many double twisted meanings...
awfully
pale
recession

[TalkingDog]

22. as in: Bleeding out, Exsanguinated, Drained, Total Hypovolemia n/t

[54anickel]

23. Did you run his words through the Dilbert Jargonator? n/t

[TalkingDog]

40. No. Got a link?

I'm a word lover...in terms of the way they sound and the rhythm and cadence, the "mouth-feel".

The South has always had a strong oral tradition and many of our best and brightest were wordsmiths. There is an attitude here: Between telling a bland truth and a beautiful lie, the greater sin lies in the one lacking grace.

Which should in no way imply we can't comprehend the difference.

And without attaching the meaning, I've always liked "Exsanguinated"

[54anickel]

54. No link, that was so long ago. Used to have a download game at work, my

supervisor used it all the time...seriously. He had a great sense of humor.

[AnneD]

24. Morning Marketeers....

:donut: and lurkers. He's been sputtering that spittle about 'pale recession' since a meeting (I think it was in Switzerland) last week. I hate to break the news to him but we are already sliding into a 'light depression' :eyes:

And speaking of 'light depressions'-I think I will be having a depression soon, per the old joke. I mentioned earlier that my beloved principal was retiring. Instead of our decision making committee having a say-this will be a top down decision. Principals can and frequently do eventually bring their staff with them-so I am not the only one concerned. I am the building union steward too-which can give me the added nuisance of having an adversarial relationship with the new principal. Our parents are quite versed in the law and are well to do. The parents from the area they are bringing this new principal from-the parent are poor, ill informed and tend not to fuss too much. This coming year will be very interesting.

I will be prepare for what ever comes. I have very good connections and will probably return to MD Anderson long enough to retire at a higher pension. I sure will miss being a school Nurse though. And who knows-the principal might turn out to be a great person. My experiences with this sort of thing are 50-50. I at least have some time to prepare. It's funny, even though our town is doing relatively well, folks are cutting anyway, preparing for the worst I guess.

Happy hunting and watch out for the bears.

[ozymandius]

9. Tax rebate won't stem U.S. recession: Merrill

SINGAPORE (Reuters) - The U.S. economy is in a recession and stimulus from a government tax rebate later this quarter will only temporarily stem a fall in consumer spending, a Merrill Lynch economist said on Wednesday.

U.S. households will get tax rebates next month as part of a $152 billion stimulus package passed earlier this year, aimed at propping up an economy hit by the subprime mortgage crisis, losses at top banks and a credit crunch.

.....

He said the world's largest economy was already in recession as consumer spending and confidence had fallen and jobs losses were rising, with the number of hours worked having fallen sharply.

http://news.yahoo.com/s/nm/20080514/us_nm/usa_economy_merrill_dc

[ozymandius]

10. ING's Net Income Falls 19% as Investments Decline (Update2)

May 14 (Bloomberg) -- ING Groep NV, the biggest Dutch financial-services company, said first-quarter profit dropped 19 percent as declining investments hurt the insurance units.

Net income fell to 1.54 billion euros ($2.4 billion) in the first three months of the year from 1.89 billion euros a year earlier, the Amsterdam-based company said today in a statement. That was in line with the 1.56 billion-euro median estimate of 11 analysts surveyed by Bloomberg.

ING, which traces its roots to 1743 and operates in more than 50 countries, said impairments, trading losses and writedowns reduced pretax profit by 80 million euros in the first quarter. Lower valuations on real estate and private equity and smaller realized stock gains cut 436 million euros from earnings after tax. While the declines cut first quarter profit by 31 percent in the insurance units, new life sales rose 23 percent.

.....

Wholesale, Online Declines

ING profit fell 14 percent in the wholesale unit and 6.1 percent in online banking. The company got 11 percent of banking profit last year from its online-banking unit, ING Direct, 48 percent from its wholesale banking business, and 55 percent from insurance.

http://www.bloomberg.com/apps/news?pid=20601085&sid=aTimEW99d.U8&refer=europe

[DemReadingDU]

32. Uh oh, I just opened an online account with ING

This was last month. I checked several places, and all had good info about ING, as compared to some local banking institutions.


edit, from the Bloomberg article...

The Dutch lender agreed earlier this month to buy U.S. benefit-plan-services company CitiStreet LLC from Citigroup Inc. and State Street Corp. for 578 million euros. The CitiStreet venture offers administrative services and record keeping for 12 million participants and 16,000.


another Uh oh.

[Robbien]

45. Isn't it just a crap shoot these days

on which one to pick for banking needs?

With all of them lying about the amount of their off the books level 3 investments, who knows which ones will be around after the dust settles.

Right now by default I am with JPMorgan Chase. Now with its ownership of the Federal Reserve, JPMorgan will be around but who knows where their banking business will end up.

[DemReadingDU]

51. That's why I have several banks

I don't know which one will go belly-up, so I have checking at one bank, savings at another, CDs at 2 more banks. It's a monthly chore sorting thru all the paperwork, but I feel safer having my nesteggs in different baskets.

:P

[ozymandius]

11. BOE Sees Inflation Accelerating, Limiting Scope for Rate Cuts

May 14 (Bloomberg) -- The Bank of England said inflation will accelerate, breaching the government's 3 percent limit for ``several quarters,'' making it harder for policy makers to cut interest rates as economic growth slows.

The bank said inflation will overshoot its central 2 percent target in two years if it cuts the benchmark rate to 4.5 percent in 2009 as investor predict. The Bank of England this month left the rate at 5 percent.

Policy makers, led by Governor Mervyn King, are trying to shore up an economy threatened by the worst housing slump in more than a decade and surging food and oil prices. Inflation accelerated to 3 percent in April, the most in more than a year, and any deterioration will require King to write a letter to the government explaining how he plans to bring prices under control.

http://www.bloomberg.com/apps/news?pid=20601085&refer=europe&sid=aRTobrBueI.I

[UpInArms]

12. dollar watch

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

Last trade 73.488 Change +0.191 (+0.26%)

Dollar Saved by Retail Sales

http://www.dailyfx.com/story/bio1/Dollar_Saved_by_Retail_Sales_1210715984316.html

US retail sales decreased 0.2 percent in the month of April, but the US dollar skyrocketed as there was strength beneath the headline number. Excluding autos, sales actually increased 0.5 percent and despite the rise in gasoline prices, gas station receipts actually fell. This suggests that Americans are driving less and buying fewer cars. This weekend, the NY Times reported that gas prices are sending a surge of riders to mass transit and the details of the retail sales report confirm that. Consumers increased their spending on building materials, electronics and clothing. As indicated in yesterday’s Daily Fundamentals, earnings for many discount retailers including Wal-Mart t have surprised to the upside and there were many reasons to believe that retail sales was not exceptionally weak in April. According to Ken Perkins of Retail Metrics Inc, April was the best month for retailers since November. What we have seen today is weak job growth does not always translate into weak consumer spending. In October 2001, when non-farm payrolls dropped 325k, retail sales actually jumped 6.6 percent. It is important to remember that the index can be very volatile on a month to month basis. The number gives traders more reason to be dollar bullish in the near term, but don’t lose sight of the fact that there are still many risks to consumer spending. Meanwhile import prices rose 1.8 percent to an all time high of 15.4 percent, reflecting the global increase in inflationary pressures. US consumer prices are due for release tomorrow and we believe that consumer prices will follow import and producer prices higher. In today’s Wall Street Journal, there is an article about rising shoe prices. The combination of higher production costs in China, which makes about 85 percent of the shoes sold in the US and higher fuel prices, is forcing many footwear makers to raise prices. This trend is evidence of inflation hitting core consumer prices and despite the article in the WSJ; the shoe industry is not the only ones to have increased prices.

...more...

Euro Retraces, Looks For Downtrend to Resume

http://www.dailyfx.com/story/topheadline/Euro_Retraces__Looks_For_Downtrend_1210657103192.html

Having given back some of its recent rally, the US Dollar looks poised to regain momentum again the Euro, Swiss Franc and the Yen. The Canadian dollar too looks weakly positioned against the greenback above support of the long-held range. While the Australian continues to show very few chinks in the armor despite clear deterioration in fundamentals as the yield advantage guide price action, the New Zealand dollar collapse has accelerated.



EUR/USD


Strategy: Bearish below 1.5560, Targeting 1.5170

Over the past several weeks, we’ve experimented with the establishing our Fibonacci retracement setup for the EURUSD to capture either the entire bullish run from 1.4437 to 1.6019 or just the first leg that took the pair to 1.59. Following the initial run, EURUSD made a triple top at 1.59 before a final push towards 1.60. The historic high was touched but unsurpassed, and EURUSD subsequently fell. The slope of the first run differs from that of the second leg, and we were tempted to treat these as separate moves (especially given the feeble 1.60 test). Price action seems to have a similar idea, as the decline in EURUSD stopped just at the 38.2% Fibonacci retracement of the 02/07-03/17 advance to 1.59, while resistance is neatly capped by the 23.6% Fib of the same move. Our bias remains bearish. We see EURUSD descending lower from here, targeting a break of current support to hit the 50% Fib at 1.5170.



...more...

I find all of this quite amusing - nothing in this economy has changed in a positive manner and yet the dollar is "rescued" and the euro is "collapsing". You can't just make this shit up!

[UpInArms]

14. Bernanke says crisis not over; prices worry others

http://news.yahoo.com/s/nm/20080514/bs_nm/usa_fed_bernanke_dc

MIDLAND, Texas (Reuters) - Federal Reserve Chairman Ben Bernanke said on Tuesday the credit crisis was not over, even as his colleagues revealed growing concerns about inflation that could signal a pause in interest rate cuts.

"Conditions in financial markets are still far from normal," Bernanke said. "Ultimately, market participants themselves must address the fundamental sources of financial strains. This process is likely to take some time."

A string of other Fed officials in separate speeches seemed increasingly worried that rising energy costs would put upward pressure on inflation, potentially dampening their fervor to cut rates further.

The comments highlighted the Fed's ongoing predicament: It must prevent economic growth from slumping too deeply even as it grapples with price pressures that are largely out of its control.

<snip>

"Generally the view that emanated from the 'Fed speak' ... was that the Fed was neutral, but pondering when it would shift its focus from the downside risks to the economy to the risk of spurring inflation," said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ in New York.

Like Bernanke, Fisher noted some improvements in market conditions but said the financial sector was "not out of the woods yet."

...more...

I smell a rate cut in the air :eyes:

[AnneD]

25. What the hell...

is Bernanke doing in Midland, Texas. It just says community event. Time to check the Midland papers.

[UpInArms]

26. I noticed that dateline, too, AnneD - and it bothered the hell out of me

I am so very sick of this mal-administration and its minions.

[Hugin]

28. Had to stop by and fuel up his Helo...

coming back from the wedding.

[AnneD]

41. It's not in the local papers....

or any events calander I can find. Wonder how this tulip got planted?

[ozymandius]

49. Any Republican campaign fundraisers in your area?

Did Ben have green ink stains on his fingertips?

[AnneD]

52. Houston is far removed from Midland....

but there is lots of oil as you know as well as ADM. Nothing at all as far as I can tell. I can't find anything!!!!!

The RNC is sweating bullets right about now-donors are drying up and the areas they are trying to shore up are going blue.

Edited to add that Dallas is the main site of the Reserve-although we have the shredding facility here. They came by my daughters school to give a talk. They had a question and answer session and they were giving out tubes of shredded money when you got the correct answer. She won 10 tubes. She said she doesn't know she did it (and they were weird questions too). She said she must have been listening subconsciously while I was bitching about the economy.

[UpInArms]

16. JPMorgan may cut 4,000 jobs on Bear deal and markets

http://news.yahoo.com/s/nm/20080513/bs_nm/jpmorgan_jobs_dc

NEW YORK (Reuters) - JPMorgan Chase & Co (JPM.N) could cut as many as 4,000 of its own employees worldwide as the bank prepares to take on staff from Bear Stearns Cos (BSC.N) at the same time it deals with turmoil in financial markets, people familiar with the situation said on Tuesday.

In addition to roughly 2,000 JPMorgan employees who will be replaced by counterparts acquired through its takeover of Bear Stearns, the sources said that an additional 1,000 to 2,000 JPMorgan employees may lose their jobs because of the slowdown in investment banking activity and credit market crisis.

Final decisions dealing with specific employees have not been made, though JPMorgan is expected to decide on market-related cuts by early June, the sources said.

JPMorgan, which expects to complete its takeover of Bear Stearns around June 1, told investors on Monday the bank had made decisions on about 10,000 of Bear's nearly 14,000 employees.

Morgan Chief Executive Jamie Dimon told investors the bank had extended job offers to about 6,000 Bear staffers, leaving decisions still to be made on the remaining 3,500 Bear staffers. Most of these employees work in technology and operations, a person familiar with the matter said.

...more...

[Hugin]

27. ~09:40 EST: And they're off!!!

Index Last Change % change
• DJIA 12898.05 +65.87 +0.51%
• NASDAQ 2506.41 +11.29 +0.45%
• S&P 500 1411.29 +8.25 +0.59%]


Did the NYMEX Oil Futures Chart go all screwy for anybody else?

[theDash]

29. CPI Shows inflation grew at a slower than expected pace

Breaking on cnnfn

This is nuts, you know these reports are total BS.

Saw this article on there that explains how the numbers don't truly reflect inflation:

http://money.cnn.com/2008/05/13/news/economy/misery/index.htm

[54anickel]

34. "No inflation if you don't eat or drive"....

Or take medications, or go to the doctor, or heat, cool or illuminate your home or participate in any life sustaining activities or life in general.

No inflation if you're a rock.

If you buy into that no inflation BS you're in the right place....

[ozymandius]

35. Did I mention recently that I hate these people?

Truly. Hate.

For all the reasons that you mention here: core data only serves the agenda of the executive power. It enfuriates me even more that little sunshine faeries who compile this information get paid for it.

And somehow, this information is considered a critical gauge on the health of our economy.

[DemReadingDU]

39. Hate to the power of n

These people are despicable

:mad:

[DemReadingDU]

55. Martin Weiss: The Prelude to Double-Digit Inflation

5/12/08 Martin Weiss: The Prelude to Double-Digit Inflation

Nearly all the pieces are now in place for inflation to strike with increasing speed and fury, catching Wall Street by surprise, throwing government policy into turmoil and, at the same time, opening up broad opportunities for investors.

It Would Be the Epitome of Complacency to Assume Double-Digit Inflation Is Not in the Cards

Indeed, by many of the measures I've just cited — producer prices, import prices and commodity prices — we already have double-digit inflation in the U.S. today.

So isn't it suspicious that the only measure that does not yet reflect surging inflation — the Consumer Price Index — also happens to be the yardstick with the most immediate political implications?

Isn't it a bit worrisome when all measures of inflation are flying higher except the one that means the most for millions of Americans?

Until now, the discrepancy between actual inflation and the government's Consumer Price Index (CPI) was largely an academic debate few people paid much attention to.

Now, however, with real-world consumer prices jumping right before our eyes ... while the government's distorted CPI still lingers near the 4% area, the gap between the two is about to burst onto the scene as a scandalous cover-up.

lots more...
http://www.moneyandmarkets.com/Issues.aspx?The-Prelude-to-Double-Digit-Inflation-1774

[Tansy_Gold]

57. Excellent article, but . . . . . .

Where's the advice for the people who don't have money to invest in gold or silver or energy stocks as a hedge against this double-digit inflation?

I remember those Carter and early Reagan days when mortgage rates were 17%, if you could even get one.

But many non-wealthy consumers are already paying these rates, as "real" inflation -- rising prices, falling incomes, new expenses (health care that used to be covered, etc., etc., etc.) -- goes way above any mathematical formula and 25% interest on credit cards may be the ONLY way to survive.

I dunno. I'm no economist, no mathematician, but I have a feeling there's a hidden double-digit inflation already at work (pun intended) in a lot of micro-mini-economies, and when when some of the macro numbers hit as Weiss predicts, we're going to have a mess the likes of which not even The Great Depression can match.

But I'm in one of my pessimistic moods today, because I'm


Tansy Gold

[DemReadingDU]

58. totally agree

I posted that portion because there are others who also are very suspicious that the CPI isn't surging like everything else.

Even if I had extra cash, gold is too expensive to buy. And there is no guarantee that gold will stay high in value.

Even if I had lots of gold, I can't conveniently take it to pay for groceries and gas. America runs on cash, credit cards to some people.

I remember those 70's too. We had 1 car, 2 babies, spouse unemployed and I was going back to college.

I fear those days of double-digit inflation again, are just around the corner.

The bright side is that the CD I now am getting 3% interest, might perhaps also jump to double-digits interest. :)

[Hugin]

61. ...

There are some who think the unemployment #'s are double digit too.

[ozymandius]

60. You see? We need more heretics with academic letters by their names

to pronounce the freak show absurdities of the government inflation numbers.

Still I wonder why these minds, long with historical knowledge and encyclopedic in their understanding, like Dr. Weiss, are left mostly to observe and comment. Why can't we have people like him as monetary stewards?

[ozymandius]

30. So the markes love that prices have risen father than the rate of economic growth.

9:50
Dow 12,913.28 81.10 (0.63%)
Nasdaq 2,513.67 18.55 (0.74%)
S&P 500 1,412.17 9.13 (0.65%)
10-Yr Bond 3.86% 0.049
NYSE Volume 356,879,062.5
Nasdaq Volume 175,108,765.625

[54anickel]

36. Congress And The Credit Crisis

http://www.forbes.com/business/2008/05/13/congress-credit-fed-biz-beltway-cx_jz_0514credit.html

Washington, D.C. - A congressional panel meets Tuesday morning looking to answer two big questions about the economy: Is the credit crisis over? And can anything be done to prevent another crisis in the future?

To both questions, the answer is "No. And proceed with great caution."

snip>

Now for the second question: How to prevent risk in the future. That's what makes Tuesday morning's hearing significant. The early advice Congress receives could shape regulation of banks and the financial market for years or even decades. And, as Treasury Secretary Henry Paulson noted in proposing a series of regulatory reforms in March, "few, if any, will defend our current balkanized system as optimal."

snip>

"In the wake of a bust, there is always a predictable series of political activities," says Alex Pollock, former president of the Federal Home Loan Bank of Chicago, who will testify before the committee. "First, the search for the guilty; second, the fall of previously esteemed heroes; and third, legislation and increased regulation to ensure that 'this will never happen again.' But, with time, it always does happen again."

The guilty have been identified as the twin bogeymen of the subprime underworld: "speculators" and "unscrupulous lenders," enabled by banks unable to price risk and an irrational belief that home prices would always rise. The esteemed heroes have fallen: the collapse of Bear Stearns, disappointing results from Wall Street's banks. Even Alan Greenspan has lost some of his luster.

The third act at the boom and bust theater is well under way. This week the Senate is ironing out its companion legislation to the House's Foreclosure Prevention Act, which passed last week with a 266-154 margin. The president has indicated he would veto the bill's current incarnation but could support a toned-down version. All that remains is the predictable regulatory overhaul and then a long wait for the inevitable cycle to begin in the future.

more...

[DemReadingDU]

37. Did Bernanke lie in Congress?

5/14/08 From The Automatic Earth

Bloomberg obtained Bernanke’s March schedule under a Freedom of Information Act request. It was "sanitized", mind you, before they received it.

Yesterday, they published -some of- what they found. It provides some interesting background, in particular about a March 11 lunch meeting with all Wall Street powerboys, with the very notable exception of Bear Stearns’ representatives.

First, I’ll post a comment below on the article Bloomberg published about it today, after that the article itself, and finally, a second comment. Bit of an upside down, but I think it reads best that way.

The issue I see here, to get to the point, is what everybody, including the commenters below, apparently dare not speak by name. From what I digest, reading these three pieces, there’s only one possible conclusion: It is very likely that Ben Bernanke has lied to Congress. And if that is true, so has Tim Geithner, the president of the New York Fed.

Which leads me to an issue that we’ve had some earlier conversations about here, and that I talked about with Karl Denninger and others. When the Chairman of the Federal Reserve testifies, makes statements and answers questions in Congress, is he under oath? I don’t think he’s sworn in.

Now, it has been suggested that all testimony before Congress is subject to perjury. But if that were true and/or enforced, there’d be no need ever for people to be sworn in before testifying. And some people really are sworn in. Government officials are stuck, they swear an oath when they start on their jobs. Chairman of the Federal Reserve is not a government job.

Ergo: perhaps Bernanke is free to lie in Congress.


Here’s a timeline of the Bear events:

* Friday March 7 2008: ”..one bank (which has not been identified) refuses to make a short term loan of $2 billion to Bear.”

* Monday March 10: Bear Stearns publicly denies rumors about its alleged liquidity troubles.

* Tuesday March 11: In chronological order:

1. Bernanke announces plans to lend $200 billion of Treasuries in exchange for debt including mortgage-backed securities.

2. Big Wig lunch, Bear Stearns absent. See articles below.

3. “Hours after the meeting every bank on Wall Street reportedly began refusing to issue credit protection on the debt of Bear.”


* Thursday March 13: The day Bernanke said he first heard of Bear’s problems, according to his statement before Congress. Or, alternatively, one might give the interpretation that he testified that Bear first notified the Fed of its problems om this day.

This may be seen as two different things, but I don’t think it’s really important. If Bernanke knew about Bear’s predicament before the company contacted him about it, he should have said so in Congress. Certainly in view of the meeting he organized two days earlier. The meeting, and Bear's absence, very strongly suggests he did know.

* Friday March 14: Bernanke and Geithner set up a $13 billion emergency loan to Bear Stearns.

* Sunday March 16: Fed agrees to take on $30 billion of mortgage-backed securities and other assets from Bear Stearns, facilitating a take-over by JPMorgan and Chase.



It’s of course not even possible to exclude the biggest rumor of the day from the conversation in a meeting like this. Neither is it possible to set up such a meeting in anything less than 12 hours. There were quite a few people present, and they all have to be tracked down and many flown in.

And that means Bernanke must have known about Bear’s problems around lunch time, Tuesday March 11. At the very latest. Because the meeting had to be organized, though, Monday, March 10, looks far more believable as a “latest” time for him to have known.

You decide.

Three articles included to read...

http://theautomaticearth.blogspot.com/2008/05/did-bernanke-lie-in-congress.html

[ozymandius]

38. 11:04

Dow 12,932.90 100.72 (0.78%)
Nasdaq 2,518.25 23.13 (0.93%)
S&P 500 1,413.73 10.69 (0.76%)
10-Yr Bond 3.909% 0.00
NYSE Volume 1,209,424,875
Nasdaq Volume 615,166,875

11:00 am : The stock market extends its gains and then pulls back a bit. The financial sector (+0.6%) is underperforming the broader market, but is getting a lift from the thrifts & mortgages group (+3.7%). Freddie Mac (FRE 27.52, +2.56) reported $151 million first quarter loss, but that was good enough to top analysts' dour expectations. Freddie also plans to raised $5.5 billion in capital in the "near future."

All ten economic sectors are now in positive territory, as the energy sector has recovered its earlier losses. Crude has traded choppy manner since the crude inventory data levels, and is currently trading down 0.5% to $125.10 per barrel.DJ30 +109.35 NASDAQ +21.95 SP500 +10.91 NASDAQ Dec/Adv/Vol 983/1628/583 mln NYSE Dec/Adv/Vol 877/2012/330 mln

[AnneD]

42. Eleven kidnapped from Nigerian oil services boat

PORT HARCOURT, Nigeria — Unidentified gunmen in Nigeria's restive south have hijacked an oil-services vessel carrying 11 crew members, the military said today.

The hijackers are demanding about $250,000 for the release of the boat and the crew, including one Portuguese and one Ukrainian, said military spokesman Maj. Sagir Musa.

The boat, used for maintaining oil infrastructure in Africa's biggest petroleum producer, was taken on Tuesday in the southern Niger Delta, Musa said. The situation remained unresolved today, he said, giving no further details.

Numerous armed militant and criminal groups roam the delta, a vast region of creeks, swamps and rivers but few roads. Militants frequently blow up oil infrastructure or attack security forces to press demands for more oil-industry revenues for their impoverished region.

more.....

http://www.chron.com/disp/story.mpl/business/5778434.html

[AnneD]

43. How to Curb CEO Pay

John Cassidy has got me thinking on executive pay. Cassidy is angry at the sums paid to CEOs, and he's urging us all to "go ahead and get mad" in an attempt to curb the worst excesses. It's not the biggest issue facing corporate America right now, but that's no reason not to address it.

Cassidy zeroes in on CEOs' contracts as a large part of the problem: they basically make it impossible for CEOs to be fired, which means that when they're replaced they generally leave with an extremely generous departure package.

Cassidy uses Stan O'Neal as his Exhibit A: he was allowed to leave with $130 million in unvested options, because the board couldn't fire him for cause. I find this example not entirely compelling, because those options were essentially past pay. The board might have had reason to want to unpay him some of that money, but clawing back previously-awarded compensation is a pretty drastic thing to do.

Here's my bright idea: rather than awarding options, boards should extend enormous low-interest or even interest-free loans to their CEOs, on the condition that all the money be used to buy the company's stock. The fiction of options, of course, is that they have no value if they're awarded with a strike price where the market price for the stock is - that's how companies find it so easy to award so many of them. My idea also costs the company very little, but it does give the CEO much more downside exposure than any options grant does.

If Stan O'Neal had received an interest-free loan to buy Merrill stock on an annual basis, people wouldn't worry so much about how much he got paid each year or how difficult his contract made it to fire him. When he left, he'd have to repay the loan, and the value of that stock wouldn't come close to covering the amount of money he needed to do that.

more....

http://www.portfolio.com/views/blogs/market-movers/2008/05/13/how-to-curb-ceo-pay?rss=true

Frankly, I think they should work on comission or their salaries voted on by stock holders with employee input. I want value for my dollar.

[AnneD]

44. Our Great Economic U-Turn

Twenty years ago, when I started out as a writer, the problems of mass prosperity were the ones that intrigued me most. America was then, as I thought it would always remain, the great middle-class nation. And in the permanent affluent society, questions of taste and waste and marketing and alienation were what really mattered, now and forever. When moved to consider workplace issues in those days, I instinctively placed them in the category of brutal-things-settled-long-ago: Without even thinking about it, I connected the word "labor" to the word "history."

It's not a mistake anyone can make any longer, whether they are pondering the voting patterns of working-class Hoosiers or the driest statistics in the record book. Median "nonelderly" household income, we find, fell consistently through the first half of this decade, despite the solid economic growth enjoyed by the country as a whole.


Silly worker: Paychecks are for bosses.
Some nonmedian folks did just fine, of course: The top 20% of households earned more, after taxes, than the rest of the country combined in 2005, while the topmost 1% of the population took home more than the bottom 40%. The top-earning hedge fund manager of 2007, in fact, made about as much last year in nominal dollars ($3.7 billion) as J. Paul Getty, one of the richest men in the world, was worth in the mid-1970s.

Real hourly wages for most workers, on the other hand, have risen only 1% since 1979, even as those workers' productivity has increased by 60%. What's more, American workers now clock more hours per year than their counterparts in virtually every other advanced economy, even Japan. And unless you haven't read a newspaper for 15 years, you already know what's happened to workers' health insurance and pension plans.

more......

http://online.wsj.com/article/SB121072656227790335.html?mod=fpa_editors_picks

OK, not new to us but nice to see in print.

[ozymandius]

46. The latest on the Wall Street love-in.

1:18
Dow 12,975.40 143.22 (1.12%)
Nasdaq 2,523.71 28.59 (1.15%)
S&P 500 1,418.41 15.37 (1.10%)
10-Yr Bond 3.907% 0.002
NYSE Volume 2,104,884,500
Nasdaq Volume 1,085,994,750


1:05 pm : The stock market took a step back from its recent session high, but is now making a push higher. The S&P 500 is currently up more than 13 points, or almost 1.0%.

All ten of the major economic sectors are trading higher. Telecom (+1.9%) is the session leader, though trading off its session high. The sector had been up almost 2.5% this morning. Industry giant and Dow Jones component AT&T (T 39.85, +0.59) is lending the most influence to the sector. DJ30 +122.62 NASDAQ +23.80 SP500 +12.76 NASDAQ Dec/Adv/Vol 1068/1726/1.03 bln NYSE Dec/Adv/Vol 931/2084/561.07 mln

12:30 pm : Market breadth is positive, with advancers outpacing decliners by 7-to-3 and by 5-to-3 on the Nasdaq. This is reflected within the S&P 500's broad-based strength -- of the 137 industry groups, only 17 are posting a loss.

The bullish bias has persisted throughout the session, with the S&P not touching negative ground once. The stock market is now up nearly 13% from its March 17 multi-year low, cutting its year-to-date loss to 3.6%. The Nasdaq has posted a more substantial rebound, gaining 17% since March.DJ30 +120.26 NASDAQ +25.11 SP500 +12.69 NASDAQ Dec/Adv/Vol 1017/1747/930 mln NYSE Dec/Adv/Vol 893/2105/509 mln

[ozymandius]

47. Inflation pressures ease despite food price jump (Are you going to eat your tee-vee?)

WASHINGTON (AP) -- Inflation pressures eased a bit in April despite the biggest jump in food prices in 18 years.

The Labor Department reported Wednesday that consumer prices edged up 0.2 percent last month, compared to a 0.3 percent rise in March.

The lower inflation reflected a flat reading for energy, which helped offset a 0.9 percent jump in food costs as prices climbed for many basic items, from bread and milk to coffee and fresh fruits.

The unchanged reading for energy reflected a big 4.8 percent jump in natural gas prices, offset by a 2 percent decline in gasoline costs.

The reported drop in gasoline prices reflected the government's accounting process, which discounts expected seasonal price changes.

http://biz.yahoo.com/ap/080514/economy.html?.v=19

See? If you just ignore it - it doesn't exist.

[Robbien]

53. Fitch has reported that global banks have reported 80% of all loan losses

http://www.cnbc.com/id/24611595

Which means further admissions of fuck ups will be a relative drop in the bucket, right? Yeah, right.

No wonder the speculators are partying today. Koolaid drinkers each and every one of them.

[ozymandius]

48. EU to rein in bonuses for executives (everyone gets a cut)

BRUSSELS, Belgium (AP) -- European Union governments agreed Wednesday to go after executive bonuses deemed to be excessive by threatening to levy taxes against firms that dole out the large sums.

Faced with an economic slowdown, EU governments also called on trade unions to temper demands for pay rises.

EU finance ministers emerged from two days of talks agreeing the 27-nation bloc was not in a recession but that economic belt-tightening was in order because of slow growth and fast-rising inflation spurred by higher fuel and food costs.

They agreed to keep an eye on wage increases to ensure they do not aggravate inflation.

For the first time, the finance ministers pledged to consider steps to rein in bonuses for executives that are deemed "excessive."

http://biz.yahoo.com/ap/080514/eu_executive_bonuses.html?.v=1

[Ghost Dog]

56. The crisis rotates from America to Europe, and Asia

Posted by Ambrose Evans-Pritchard on 13 May 2008 at 19:49
Tags: China, America, Economy, Goldman Sachs, Depression, Bear Stearns, Fed

After taking sedatives, wiping away the foam, and breathing deeply for an hour on the floor, I am calmer now, and ready to answer a great clutch of posts on my Monday's View, which was perhaps a bit - well - bearish.

Like others, I have been waiting and watching since the Fed went nuclear with emergency rate cuts in January, and even more nuclear in March by invoking Article 13 (3) for the first time since the 1930s to save Bear Stearns - and by extension to save the derivatives system.

I briefly shared a degree of "market infantilism" about a recovery. After all, the Fed has never acted quite so dramatically before. But it has since become evident, at least to me, even if it was already evident to Nouriel Roubini, Michael Panzer, and other stern bears, that rates of 2 per cent cannot stop an ugly debt purge, and nor should they do so.

This is not to dismiss the latest Fed actions as a "failure". The Bernanke rescue has averted a downward spiral that risked ending in depression. There will be no depression now, but nor will there be an easy recovery.

By using the term Global Slump, I do not mean a global depression along the lines of the 1930s. I mean a global downturn that persists long enough to do serious damage and change the lives of a lot of people.

The IMF defines a `global recession' as fall in world growth below 3 per cent - a very rare event. It says there is a 25 per cent chance of this happening. Will the sky fall if that happens? That depends on who you are, and where you live. It did not fall for most people even in the 1930s.

One can glimpse a flicker of light already at the end of the American tunnel. The economic woes are still spreading as the delayed effects of the credit crunch hit home, but the shape of the downturn is becoming clearer - it looks like a W, with deeper dip on the second V. America's bad news is mostly in the market.

What is not fully priced into the market is the second half of the story: that Europe, Japan, and arguably China are also coming unglued. This is not US contagion as such - though for Japan it surely is - but rather because these regions face their own internal boom-bust cycles.

Europe's Latin bloc, the Baltics, Ukraine and Kazakhstan, all risk a crunch after letting rip with credit - indeed, Italy is now brushing recession and Spain is crumbling by the day.

Britain has become a disaster area, of course. Today's RICS (Chartered Surveyors) report on housing was the worst since records began in 1978.

Commercial property has fallen by almost a third in the London region. The budget deficit reached 3 per cent at the top of cycle, leaving no fiscal ammo to fight the downturn. Household debt is 103 per cent of GDP. I weep for Britain as much as I weep for America.

I confess that I do not speak with authority on China, and may be wrong to doubt the miracle -- so much like the Japan hype of the late 1980s to my jaded eye.

I look to clever people who know what is going on, such as Dr Kwan Chi Hung from the Nomura Institute -- an esteemed figure in the Far East, and himself Chinese - who believes that China's long-term prospects are "horrible".

China's workforce will peak in seven years (the delayed fruit of the one-child policy) and then go into the steepest downward spiral ever seen by a large nation in peacetime. It will, and do so long before it is rich. This demographic implosion cannot be reversed quickly.

Dr Kwan says China enjoys a dreadful return on capital because credit is still allocated by a Communist banking system pursuing political aims.

This is how disasters on a truly huge scale are incubated. Competitiveness is in any case slipping. It is already cheaper to produce cars in Japan than China, he says.

/continues... http://blogs.telegraph.co.uk/business/ambrosevanspritchard/may2008/crisisrotatesfromustoeurope.htm

[ozymandius]

59. I wonder who was suckered today? (close)

Dow 12,898.38 Up 66.20 (0.52%)
Nasdaq 2,496.70 Up 1.58 (0.06%)
S&P 500 1,408.66 Up 5.62 (0.40%)
10-Yr Bond 3.938% Up 0.029
NYSE Volume 3,946,609,750
Nasdaq Volume 2,129,500,000

Modest Gain After Late Pullback
Dow +66.20 at 12898.38, Nasdaq +1.58 at 2496.70, S&P +5.62 at 1408.66

The stock market spiked on Wednesday in response to a tamer-than-expected inflation reading, but after testing highs reached earlier in the month, stocks gave up the majority of their gains on technical-based selling interest.

In the end, the S&P 500 posted a modest advance, with nine of the ten economic sectors in positive territory. The Nasdaq saw a steeper retreat from its session high -- after being up 1.3%, it ended the session with a paltry 0.1% gain.

On the economic front, the April Consumer Price Index (CPI) rose 0.2%, while core CPI, which excludes food and energy, rose 0.1%. Economists expected a higher increase in prices, pegging a 0.3% increase in CPI and a 0.2% increase in core CPI. Compared to last year, total CPI is up 3.9% and core CPI up 2.3%. This matches the Fed's view that inflation should moderate, and is a positive report for the stock market.

The better-than-expected CPI data garnered the majority of the market's attention on Wednesday, but several corporate items also attracted some interest.

Department store operator Macy's (M 24.93, +0.87) reported an unexpected first quarter profit and reaffirmed its full year guidance. As a result, its stock rose 3.6% and spurred buying interest within the S&P 500 Retailing Index (+1.6%).

Shares of Freddie Mac (FRE 27.25, +2.29) spiked 9.2% after the company reported a first quarter loss of $151 million, or $0.66 per share, which was better than the expected loss of $0.93. The company also announced plans to raise $5.5 billion in capital. The financial sector advanced 0.9% on the day, outperforming the broader market.

Hewlett-Packard (HPQ 45.64, +1.37) was the best-performing S&P 500 component after its stock rebounded 3.1% from its recent 10% decline. Traders felt the sell-off in HP's stock over the buyout of Electronic Data Systems (EDS 24.34 unch) was overdone. Enthusiasm regarding HP's stock did not translate to other large-cap tech names, with the Nasdaq 100 ending the day down 0.2%.

Meanwhile, Deere (DE 81.25, -8.94), Electronic Arts (ERTS 52.78, -1.78) and Whole Foods (WFMI 28.96, -4.68) all saw their stocks get clipped after market participants responded negatively to their respective earnings reports.

Separately, the government's weekly energy report showed a smaller-than-expected increase in crude stockpiles. However, crude oil prices were unable to find support on the report, falling 1.3% to $124.11 per barrel. The dip in prices weighed on the energy sector (-0.9%), which was the sole sector to post a loss.
..Nasdaq 100 -0.2%. ..S&P Midcap 400 +0.4%. ..Russell 2000 -0.1%.