STOCK MARKET WATCH, Tuesday 22 March

[ozymandius]

Tuesday March 22, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 304 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 99 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 155 DAYS
DAYS SINCE ENRON COLLAPSE = 1213
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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

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AT THE CLOSING BELL ON March 21, 2005

Dow... 10,565.39 -64.28 (-0.60%)
Nasdaq... 2,007.51 -0.28 (-0.01%)
S&P 500... 1,183.78 -5.87 (-0.49%)
10-Yr Bond... 4.53% +0.01 (+0.31%)
Gold future... 431.40 -8.30 (-1.92%)





GOLD, EURO, YEN, Dollars and Loonie

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PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

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[UpInArms]

1. daily dollar watch

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

Last trade 82.75 Change -0.13 (-0.16%)

http://www.dailyfx.com/index.php?option=com_content&task=view&id=409&Itemid=39

Dollar Pauses After a Massive Countermove against the Majors

EUR/USD - As we noted in our March 18th report titled "A Calm Before the Storm", the euro was consolidating, but the failure by the anti-dollar bulls to retake 1.3482, a top of the euro's last major move, resulted in a major breakdown and as a result the pair tumbled over 160 pips.

With dollar bulls currently pausing their progress, euro bulls have a chance to consolidate above the minor support at 1.3140, a daily range low. Any further advances by the greenback will be met with an intermediate support at 1.3105, a key 50.0 Fib of the 1.2730-1.3482 euro rally. In case of a breakthrough, euro bulls may rely on major support at 1.3090, a top of Jan-Feb consolidation range, to mount a strong defense. In case of the anti-dollar counter move, euro will meet a minor resistance at 1.3194, a 38.2 Fib of the Feb-Mar euro rally. A failure by the greenback to hold the minor support may see the pair retest the intermediate resistance at 1.3279, a 20-day SMA. A sustained breach by the single currency will be met by major resistance at 1.3305, a 23.6 Fib of the 1.2730-1.3482 euro rally and Mar 8-21 consolidation low. Oscillators still remain supportive of the further dollar move on the daily charts and are setting the stage by a short-term countermove by euro. Stochastic is slopping downward on the daily at 66.3 and is oversold on the 4-hour chart at 12.21. RSI is neutral on daily at 44.78 and is oversold on dealer chart at 24.78. MACD confirmed a bearish crossover above the zero line on the daily chart and is below the zero line on the 4-hour chart.

<snipping charts>

USD/JPY - Yen bulls finally gave way under the dollar onslaught and the pair broke the channel, leaving 104.88, a 38.2 Fib of the 101.68-106.87 dollar rally as a minor support for the greenback bulls. In case of a counter move by the yen, greenback can rely on the intermediate support at 104.67, a combination of the 5-day and 20- day SMA's. If the yen supporters manage to push deeper into the dollar territory, greenback bulls will mount defense at the major support at 104.47 a 10-day SMA. Currently a shift in the short term trend is taking place, confirmed by the crossing of the 5-day SMA though both 10-day and 20 day SMA's, As dollar bulls continue to advance against the yen, greenback will have to punch its was though a minor resistance at 105.50, an Mar 21st spike high. A further move by the dollar will meet an intermediate resistance at 105.63, a 23.6 Fib of the Jan-Feb dollar rally. Yen bulls may mount a defense at a major resistance at 106.35, Feb 18-21 consolidation high. Indicators are neutral with Stochastic sloping upward on the daily chart at 44.64 and dipping below the overbought level on 59.11 on the dealer chart. RSI is supportive of either dollar or yen on the daily at 56.69 and is moving below the overbought level on the 4-hour chart at 61.17. MACD is neutral at the zero line on the daily chart and is getting ready for a bearish crossover on the dealer chart.

...more...

http://www.dailyfx.com/index.php?option=com_content&task=view&id=402&Itemid=39

Dollar Action Hinges Upon Fed’s “Measured” Statement

The dollar has strengthened ahead of tomorrow's FOMC rate decision. With Japan closed for trading overnight, liquidity has been comparably thin and as a result, a larger more exaggerated move ahead of this week's most pivotal event is not surprising. Loose budget rules listed in the EU's new Stability and Growth Pact gave dollar bulls another good reason to dump the single currency. The former breakdown of the Stability and Growth Pact was a primary result of too many countries escaping penalties despite repeatedly breaching the Pact's budget deficit limitations. The revised Pact now contains an escape clause for those countries that are going to breach the deficit, which should make no difference because all it does is make it within the law to break the rules and possibly even endorse irresponsible fiscal policy. For a governing authority to be respected, they must not be afraid to uphold harsh rules and not accede to the individually motivated pressures of the parties under its rule. The failure of the ECB to do so will only hurt the confidence that have been built up in the euro over the past 6 years. Meanwhile the markets easily overlooked the comments by ECB officials in light of bigger developments. In an interview with Reuters yesterday, Mersch said that the ECB "is only considering to keep rates stable or raise them. It doesn't plan a rate cut." ECB Noyer on the other hand, confirmed that euro reserve "diversification is (already) underway."

<snip>

The dollar has gained strength against the Japanese yen for the third consecutive trading day. With the markets closed for the Vernal Equinox Holiday, USDJPY has been led higher solely by dollar optimism ahead of tomorrow's rate decision. Much like Friday, the primary focus today is China and we do not want to lose sight of possible budding developments. On Friday, we wrote about how the government is developing an "internal" inter-bank system to get their local banks educated on making markets in some of the more liquid currencies. Today, the market is circulating rumors that an article in the Beijing Daily Newspaper indicates that China has decided to "drop its U.S. dollar peg and change to being pegged to a basket of eight foreign currencies." It also reported that the PBoC "will gradually exit from daily forex transactions and that "the band within which the Renminbi exchange rate floats may be expanded to 0.6% or 1.0% from the current 0.3%." Some are saying that this could happen as early as May. If this is truly the case and these rumors prove to be true, then a more official revaluation announcement may be right around the corner.

...more...

I think I heard that particular broadcast, Ozy :D - great 'toon!

Have a Great Day Marketeers!

[UpInArms]

7. Dollar weaker vs euro and yen after PPI data

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7BEDF9392A-5DB0-4F9B-B9C4-2EE4DB8817BC%7D&

NEW YORK (MarketWatch) - The dollar traded lower against the euro and yen Tuesday after news of a larger-than-predicted increase in U.S. producer prices, due to surging energy prices, last month. The producer price index rose 0.4 percent in February, contrasting with a projection of a 0.3 percent increase from economists polled by MarketWatch. Excluding food and energy prices, the core PPI increased 0.1 percent, in line with expectations. Later in the day the market will receive a new Federal Open Market Committee decision on interest rates. The euro traded at $1.3182, up 0.2 percent on the session, while the dollar stood at 105.06 yen, down 0.2 percent.

[UpInArms]

58. Dollar benefits from U.S. rate increase

http://cbs.marketwatch.com/news/story.asp?guid=%7B3DEF4E0C%2DF459%2D4ADE%2D8ABD%2D136E0F6E8A2D%7D&siteid=mktw

NEW YORK (MarketWatch) - The dollar moved higher Tuesday, after the Federal Open Market Committee ordered a widely anticipated rate increase and issued a policy statement some viewed as unexpectedly hawkish.

The euro in late afternoon was at $1.3055, down 0.8 percent on the session, as the dollar rose 0.4 percent to 105.66 yen. Before the FOMC announcement the dollar was lower against both currencies.

The FOMC lifted the fed funds target rate by a quarter point to 2.75 percent, as widely expected.

In its latest policy statement, the committee indicated that inflation pressures are mounting. Some observers interpreted the statement about inflation as a signal the central bank could embark on a more aggressive course of rate increases.

"Though longer-term inflationary expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident," the FOMC said.

...more...

[UpInArms]

2. Today's Reports

Mar 22 8:30 AM
Core PPI Feb
report -
briefing.com 0.0%
market 0.1%
last report 0.8%
revised -

Mar 22 8:30 AM
PPI Feb
report -
briefing.com 0.2%
market 0.3%
last report 0.3%
revised -

Mar 22 2:15 PM
FOMC policy announcement

[UpInArms]

3. U.S. Feb. PPI up 0.4%; core PPI up 0.1%

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38433.3542301968-833446057&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) - A surge in energy prices pushed the U.S. producer price index for finished goods up 0.4 percent in February, the Labor Department reported Tuesday. Excluding big increases in food and energy prices, the core PPI increased 0.1 percent. Economists were forecasting a 0.3 percent gain in the PPI and 0.1 percent in the core. In the past year, the PPI is up 4.7 percent and the core PPI is up 2.8 percent, the fastest gain in more than nine years. Prices of intermediate goods destined for further processing increased 0.7 percent in February, while crude goods prices fell 1.6 percent.

[salin]

4. er - shouldn't food and energy prices

be included? Or shouldn't they at least show the numbers with them included as well as excluded. I thought the point to glean a true picture thus to be able to make "rational" market decisions (i know, this is the bush era and the point no longer matters as muchas the image)?

Funny how economic models that are popular today (econometrics) presume "rational man" (eg acting in rational self-interest) - while the numbers now presented both by the govt and by companies are so opaque that there is no way to make "rational" decisions.

[Tace]

5. Yeah, The Numbers Are Such Bullshit -- It's Offensive...

to the rational man. : )

[UpInArms]

6. the PPI is the "producer price index"

and is basically the cost of goods made or manufactured.

The way I am reading this is that it is costing more to produce but those increases are not currently be passed to the consumer - kind of a deflation for the producer - consumer won't pay more (can't afford to because of higher food and fuel prices at the consumer level) but the rest of the products made are costing more for the producers and they are getting less money for them at the end of the chain.

I could be totally wrong about my interpretation, but that's how it reads to me.

[salin]

8. since when are higher costs not passed on

let's see... since maybe 1979 or so?

So energy and food producers would raise prices due to their higher prices but everyone else would take a nip in their profits? I would have to see evidence that this assumption is true, before accepting it as an acceptable assumption for the calculations.

[RawMaterials]

11. The price increase will get passed on to

the consumer, it just takes time. Maybe a couple of quarters. The companies try to hold off as long as possible, because of competition. what really hurts is that wages don't keep up with the increase cost, and that prolongs the downturn.

[salin]

14. Yes, but I think less for fear of competition

and more because it has to work its way across the distribution chain (where others increase costs since their costs are increased as well.)

We seem to be in an era in many industries where competition is less of a concern - where we can market "value" to get people to pay what we charge - the game seems more to try to extend to the maximum point on the utility curve (the max that folks will pay) rather than competing with others. For example, I don't know that Walmart is really that much less expensive of a place to shop than Target - however the image is that it is... they go as high as they can to keep that perception - the savings they squeeze out in production costs (by forcing suppliers to go cheaper and cheaper) goes much more to maximizing profits than it does to "lowering prices" to compete.

Many long standing economic principles seem to have been a bit upended in recent years.

Or at least that is how it seems.

[UpInArms]

16. many manufacturers are citing "competition" as the reason

for the cessation of production in the USoA and moving those manufacturing jobs to lower production cost countries - have you seen where the prices for any of those goods (at the consumer level) have actually fallen?

recent personal anecdotal example: Levis discontinued all US operations - bought a pair of 501s for hubby that were made in Africa - price was more than I paid one year ago for same product manufactured in the US - I guess the cost of fuel to ship took up the slack :shrug:

and I definitely agree with this statement:

Many long standing economic principles seem to have been a bit upended in recent years.

[salin]

20. Another example

GE removes the production lines of an energy saving refrig locally to go to mexico - for "competition" reasons. Those same models, sold locally, don't see a cent in lower prices since the move and "lower labor costs." The competition today, it seems, is not competition vs other companies - but the competition for higher profits (and thus a competition on the stock market). This seems to go opposite of old models where competition at the retail level (for market share) drove most decisions. Now - there seems to be a whole lot less competition at the retail level... prices very close together - so more a "features" / "marketing" competition than a price one... coupled with the foremention stock market competition.

Consumers and those without money to risk in the market are the losers. And those in the market - have a lot to lose as well, given the inflated ratios on many stocks.

[UpInArms]

25. this article appears to have the same "flavor"

McCormick hit by margin squeeze

http://cbs.marketwatch.com/news/story.asp?guid=%7B61533360%2D75C8%2D445A%2D8CD2%2D4CB6683B4AE1%7D&siteid=mktw

CHICAGO (MarketWatch) -A falling margin brought on by an unsuccessful vanilla hedge, along with higher interest and tax rates -- and sales that were little better than flat -- brought down McCormick & Co.'s fiscal first quarter profit to below both last year's level and Wall Street's hopes.

Before the bell, McCormick said that it earned $36 million, or 26 cents per share, on the period, down from $38.1 million, or 27 cents, in the year ago period. Excluding a penny-per-share special charge, the spice company would have earned 27 cents - still shy of the 29-cent average estimate of analysts polled by Thomson First Call.

Total sales rose 5 percent to $604 million. However, the company said that 2 percent came from an acquisition and another 2 percent form currency benefits.

McCormick (MKC: news, chart, profile) said that its gross profit margin was hurt by a big purchase of vanilla in 2003 and a subsequent price drop in the cost of the bean - a situation it expects to continue through the first half of 2005.

...more...

[salin]

27. that brings up another huge, unchecked problem

going on since the late eighties... increasing debt by buying businesses that don't necessarily pay for themselves in terms of profits - so more of the revenues go to paying off debt. In the past these might not have seem liked healthy mergers (eg likely to boost bottom line) - but bigger being better being the motto started in the leveraged buy-out era...left even that economic/business principle in the dust. So here there are sizeable profits... but they miss the mark on the market due to debt from acquisition - and an acquisition that wasn't a good one (shouldn't they have projected what would happen per value if bean price stayed stable, dropped or increased, and figured that into their bid/offer for the company? If the scenario in case of drop made such a decrease in value - then shouldn't a lower price been offered to offset that scenario - and if the vanilla co refused - then walk away from the deal?)

Business plans, sound ones it seems, these days are only important for small businesses and nonprofits.

[UpInArms]

32. Why M&As Can Fail

http://www.investopedia.com/university/mergers/mergers5.asp

It's no secret that plenty of mergers don't work. Those who advocate mergers will argue that the merger will cut costs or boost revenues by more than enough to justify the price premium. It can sound so simple: just combine computer systems, merge a few departments, use sheer size to force down the price of supplies, and the merged giant should be more profitable than its parts. In theory, 1+1 = 3 sounds great, but in practice, things can go awry.

Historical trends show that roughly two thirds of big mergers will disappoint on their own terms, which means they will lose value on the stock market. Motivations behind mergers can be flawed and efficiencies from economies of scale may prove elusive. And the problems associated with trying to make merged companies work are all too concrete.

Flawed Intentions

For starters, a booming stock market encourages mergers, which can spell trouble. Deals done with highly rated stock as currency are easy and cheap, but the strategic thinking behind them may be easy and cheap too. Also, mergers are often attempts to imitate: somebody else has done a big merger, which prompts top executives to follow suit.

A merger may often have more to do with glory-seeking than business strategy. The executive ego, which is boosted by buying the competition, is a major force in M&A, especially when combined with the influences from the bankers, lawyers and other assorted advisers who can earn big fees from clients engaged in mergers. Most CEOs get to where they are because they want to be the biggest and the best, and many top executives get a big bonus for merger deals, no matter what happens to the share price later.

...more...

[ozymandius]

22. We saw this last month.

The PPI rose but prices were stable. One inference says that market prices cannot -or will not- go higher for now.

This must have Greenscam and his fellow shills breaking a sweat because this is a simple recipe for deflation. It could also demand that the Fed figure more than core CPI when stating its report.

[UpInArms]

23. here's a speech from Bernanke on deflation from July 2003

http://www.federalreserve.gov/boarddocs/speeches/2003/20030723/default.htm

excerpt:

Since the inflation crisis of the 1970s, the Federal Reserve has consistently pursued the goal of price stability in the United States. And not too long ago, something remarkable happened--the goal was achieved! Core inflation measures (that is, measures of inflation that exclude the prices of the relatively volatile food and energy components) now lie in the general range of 1 to 2 percent per year, which (taking into account factors such as measurement biases in inflation indexes) is probably the de facto equivalent of price stability.

Attaining price stability is an important accomplishment, one of which my predecessors on the Federal Open Market Committee (FOMC) can justifiably be proud. But this development has also forced the Federal Reserve--as well as the public--to reorient its thinking about inflation in a fundamental way. After a long period in which the desired direction for inflation was always downward, we are now in a situation in which risks to the inflation rate can be either upward, toward excessive inflation, or downward, toward too-low inflation or deflation. As many of you are aware, the Federal Reserve officially recognized this new situation in its balance-of-risks statement issued at the close of the FOMC meeting this past May 6. That statement was the first to assess the risks to economic activity and inflation separately, recognizing explicitly that upside and downside risks to inflation could exist under varying conditions of the real economy. Previous FOMC statements had characterized the balance of risks one-dimensionally, as being either in the direction of economic weakness or in the direction of excessive inflation.

The May 6 statement was more than a procedural innovation; it also broke new ground as the first occasion in which the FOMC expressed the concern that inflation might actually fall too low. Let me repeat the critical portion of the statement for you:

"Although the timing and extent of improvement remain uncertain, the Committee perceives that over the next few quarters the upside and downside risks to the attainment of sustainable growth are roughly equal. In contrast, over the same period, the probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its already low level. The Committee believes that, taken together, the balance of risks to achieving its goals is weighted toward weakness over the foreseeable future."
Though terse, the FOMC's statement--and the subsequent statement after the June meeting, which contained similar language--evoked powerful reactions in the media and in the financial markets. Notably, since the May 6 statement, the concept of deflation has commanded wide public attention for the first time in many decades. Moreover, long-term government bond yields have fluctuated sharply, falling to unusually low levels immediately after May 6 but rising more recently as bond market participants have reacted both to Fed pronouncements and to incoming economic data.

...more...

[UpInArms]

28. more details

http://www.moroccotimes.com/news/article.asp?id=4979

While the advance in the overall PPI was a touch ahead of the 0.3 % rise expected on Wall Street, the core rate matched forecasts and should help soothe inflation fears as Federal Reserve officials gather to discuss interest rates.

Energy prices shot up 1.4 % in February, led by a 5.2 % increase in the cost of gasoline. In addition, home heating oil rose 3.8 % and the price of liquefied petroleum gas increased 3.2 %. Food prices climbed 0.8 %.

Analysts had said the big gain in producer prices in January and some signs of a pickup in core consumer inflation could lead Fed officials to vigorously debate the merits of continuing to say they expect to raise rates at a "measured" pace when they meet on Tuesday to set interest rates.

...more...

isn't it a shame that this is in the Moroccan news and not in the MSM :shakesheadsadly:

[UpInArms]

9. AIG fires top execs - CFO and VP took the Fifth, report says

CFO and VP took the Fifth, report says

NEW YORK (MarketWatch) -- American International Group fired two top executives who said they'd invoke their Fifth Amendment rights against possible self-incrimination, the Wall Street Journal reported Tuesday.

AIG (AIG: news, chart, profile) fired Howard I. Smith, who had been its chief financial officer until he abruptly took leave last week, and Christian M. Milton, a vice president who may have helped to execute one of the main transactions under scrutiny, the report said.

...a bit more...

[UpInArms]

10. Alcoa to cut 2,000 jobs; sell stake in Norway's Elkem ASA

http://www.kansascity.com/mld/kansascity/business/11200560.htm

PITTSBURGH - Alcoa will cut 2,000 jobs over the next 12 months as the company streamlines its operations as part of its new global business structure, the company announced Tuesday.

The cuts in some of Alcoa's North American, European and South American operations will result in after-tax restructuring charges of $20 million to $25 million, but should eventually save the company $45 million a year. Alcoa currently has about 131,000 workers in 43 countries.

"The elimination of jobs is always a difficult decision and one that is not taken lightly," said Alain Belda, chairman and chief executive officer. "But in order to put our company in the best competitive position and properly serve our global customers, they are necessary."

The company also announced that it has agreed to sell its 46.5 percent stake in Elkem ASA, a Norwegian metals and energy group, to another Norwegian firm, Orkla ASA, for about US$870 million, the Pittsburgh-based aluminum maker said Tuesday.

...more...

[UpInArms]

12. pre-opening blather

briefing.com

9:15AM: S&P futures vs fair value: +0.2. Nasdaq futures vs fair value: -0.3.

9:00AM: S&P futures vs fair value: +0.2. Nasdaq futures vs fair value: +0.2. Expectations for a relatively flat start for the cash market remain intact as investors weigh upbeat guidance with FOMC uncertainty... Homebuilding should be in focus following solid Q1 earnings and raised FY05 guidance from LEN and KBH while Transports could get a lift after UNP raised Q1 guidance... Separately, reports suggest that MCI has halted merger discussions with Qwest

8:36AM: S&P futures vs fair value: +0.9. Nasdaq futures vs fair value: -0.8. Futures trade holds relatively steady following PPI data that basically matched economists' forecasts, still indicating a lackluster open for the indices, as the data temper current inflation concerns ahead of today's FOMC meeting... Treasury market, however, has ticked a bit higher as the 10-yr note is now up 7 ticks to yield 4.49%...

8:00AM: S&P futures vs fair value: -0.7. Nasdaq futures vs fair value: -3.8. Futures market suggesting a lower open for the cash market as investors await economic data... Key inflation data in the form of Feb PPI (consensus +0.3%) and core PPI (consensus +0.1%) will be out at 8:30 ET while at 2:15 ET the Fed will release its latest decision on monetary tightening, which is widely expected to be a 1/4% interest rate hike to 2.75%... The market will also be keeping an eye on whether or not the Fed will retain its language of raising rates at a "measured" pace

ino.com

The June NASDAQ 100 was slightly higher overnight due to short covering as it consolidates below January's low crossing at 1496.50. Stochastics and the RSI are oversold and have turned neutral hinting that a short-term low might be in or is near. However, last week's breakout below January's low crossing at 1496.50 has opened the door for a possible test of weekly support crossing at 1473.54. Closes above the 10-day moving average crossing at 1508.70 would signal that a short- term low has likely been posted. The June NASDAQ 100 was up 0.50 pt. at 1488.50 as of 5:48 AM ET. Overnight action sets the stage for a steady to higher opening by the NASDAQ composite index later this morning.

The June S&P 500 index was lower overnight as it extends Monday's breakout below the February 22nd reaction low crossing at 1189. Stochastics and the RSI are bearish but oversold hinting that a short- term low might be in or is near. Monday's close below the reaction low crossing at 1189 has opened the door for a possible test of gap support crossing at 1179 later this month. Closes above the 10-day moving crossing at 1199.44 would signal that a short-term low has been posted. The June S&P 500 Index was down 0.60 pts. at 1185.70 as of 5:50 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

[UpInArms]

13. FOMC meeting has begun

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38433.3894938657-833448847&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- The Federal Open Market Committee has begun on Tuesday morning, according to a Fed spokeswoman. Almost everyone expects the FOMC to hike its target federal funds rate by a quarter percentage point to 2.75 percent. Economists are watching closely to see whether the FOMC chances the post-meeting policy statement, which is expected to be released about 2:15 PM Washington time.

[UpInArms]

42. Fed raises rates, worries about inflation

Fed says inflation pressures picking up

http://cbs.marketwatch.com/news/story.asp?guid=%7B3A1EB68C%2D4956%2D4845%2D81B8%2D7771B48EE14C%7D&siteid=mktw

WASHINGTON (MarketWatch) - The Federal Reserve raised interest rates as expected Tuesday and said it is getting more worried about inflation.

For the seventh straight meeting, the Federal Open Market Committee increased its target for overnight interest rates by a quarter-percentage point, this time to 2.75 percent.

But the big news was in the language of the statement. Read the statement. http://www.federalreserve.gov/boarddocs/press/monetary/2005/20050322/

The FOMC said that, "though longer-term inflationary expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident."

"The rise in energy prices, however, has not notably fed through to consumer prices," the statement continued.

...more...

2:17pm 03/22/05 FOMC SAYS ENERGY PRICE RISE NOT RAISING CONSUMER PRICES

2:17pm 03/22/05 FOMC SAYS PRICING POWER MORE EVIDENT

2:17pm 03/22/05 FOMC SAYS INFLATION PRESSURES UP IN RECENT MONTHS

2:17pm 03/22/05 FOMC: RATE HIKES NEEDED FOR GROWTH, INFLATION BALANCE

2:17pm 03/22/05 FOMC SAYS RATES STILL 'ACCOMMODATIVE'

2:17pm 03/22/05 FOMC SOUNDS MORE WORRIED ABOUT INFLATION IN STATEMENT

2:17pm 03/22/05 FOMC: RATES CAN STILL BE RAISED AT 'MEASURED' PACE

2:17pm 03/22/05 FOMC HIKES RATES BY QUARTER POINT TO 2.75%

[Spazito]

15. The rise in the Canadian dollar against the greenback today...

strikes me as odd given the certainty interest rates in the US will be raised by a quarter percent today. Under 'normal' circumstances that would ensure a drop in our dollar against the greenback, at least that is what I have understood to be the case, yet it has risen almost a full cent from late yesterday.

Possibly it will drop after the actual announcement, I guess I will have to wait and see.

Here is an article from the Canadian perspective on the priorities of our Bank of Canada's decision-making re raising the rates, just in case anyone might be interested:

Cost of living remains key to Bank of Canada rate decisions: Dodge

http://www.canada.com/news/business/story.html?id=003668c5-e18a-447d-8302-d66d9dc09f9b

[Tace]

24. ...Buy The Rumor, Sell The Fact?

[Spazito]

26. Could be, up seems to be down not only in politics but also

in the market as well lately.

[UpInArms]

17. 9:36 EST markets are open (everybody's happy)

Dow 10,568.05 +2.66 (+0.03%)
Nasdaq 2,011.68 +4.17 (+0.21%)
S&P 500 1,185.81 +2.03 (+0.17%)
10-Yr Bond 4.502 -0.23 (-0.51%)

NYSE Volume 63,667,000
Nasdaq Volume 85,228,000

[ozymandius]

19. and happier still

9:41
DJIA 10,585.49 +20.10 +0.19%
Nasdaq 2,013.53 +6.02 +0.30%
S&P 500 1,186.98 +3.20 +0.27%
Gold future 432.00 +0.60 +0.14%
10-Year Bond 4.48% -0.04 -0.97%

[UpInArms]

21. blather

9:40AM: Stocks open with little fanfare, as the market remains focused on this afternoon's Fed meeting, but cling to modest gains in the early going... While the Fed is widely expected to raise interest rates by 25 basis points for the seventh time in as many meetings (2:15 ET), investors today will be more focused with the precise wording of the accompanying policy statement regarding the pace of future Fed tightening...

Meanwhile, Feb PPI was up 0.4% and the core rate checked in at 0.1% - both relatively in line with expectations - but the data have failed to convincingly show whether or not an uptrend in underlying inflation is developing ahead of tomorrow's more influential CPI data...

[ozymandius]

18. WrapUp by Jim Puplava - "Reisgo País"

Reisgo País

Traders on bond desks have a special name for risk. Market pros use the term “country risk” to describe and quantify the added cost or yield a foreign country has to pay over risk-free Treasuries. In Spanish, it is called riesgo país. Essentially we’re talking about bond spreads or the premium offered on riskier bonds. In times of crisis, it becomes front page news. During the Argentine debt crisis of 2001 riesgo país became a regularly reported statistic in the nightly news. Everyone followed it from the politicians to the man on the street. The lower the number, the better off the country. A high number was indicative of a crisis.

As a result of record low interest rates in the U.S., the “carry trade’, and the global search for yields, riesgo país has fallen dramatically over the last two years. Investor appetite for riskier assets drove up prices and shrunk yields globally. Towards the end of last year spreads on all types of debt—corporate, sovereign, investment grade and high-yield—narrowed and closed below their historical lows. Junk bonds and emerging market debt has been one of the best performing asset classes the past two years. Last year junk bonds and emerging market debt beat the returns earned on equities in the U.S. As shown in the two graphs below, investors in junk bond funds and emerging market debt earned double-digit returns as opposed to single-digit returns in equities.

-cut-

A drop in historical long-term interest rates occurring at a time the Fed was raising short-term interest ratest gave way to what Fed Chairman Greenspan called a “conundrum.” Instead of rising long-term rates, interest rates remained range bound. By the end of February 10-year U.S. Treasury yields remained close to 30 basis points below where they were when the Fed began raising interest rates. What was perplexing for bond investors last year is that long rates headed down instead of up as the markets had been anticipating. In its recent quarterly review the Bank of International Settlements attributed the decline to three factors—a reduction in the inflation premium, risk premium, and a drop in forward rates. The decline in forward rates is where the real conundrum lies. It could be due to lower inflation and risk expectations or more likely it represents a temporary imbalance in the supply and demand for government securities. Strong demand from pension and insurance companies—large buyers of long-dated bonds—have put pressure on prices because of demand.

-cut-

It is becoming apparent to the financial markets that pipeline inflation is on the rise. Price pressures are starting to show up in the rate investors are seeking as protection against higher inflation. The markets are waking up to the fact that the credit markets are becoming less benign. The riesgo país is rising rather than falling, which signals trouble lies ahead for the bond markets. Yields across the board are rising once again from Poland to Pakistan, from Turkey and Russia to Argentina and Brazil. Emerging market spreads are up 6 basis points to 369. That’s up from year-end when they stood at 335. Bond investors and politicians in Latin America are watching the U.S. bond markets closely and paying attention to every nuance emanating from the Fed. Rising interest rates in the U.S. means rising rates for most of Latin America. Interest rates are up in Argentina, Brazil, Uruguay, Peru, and Mexico. Junk bond yields are also rising especially after last week’s bombshell by GM.

more...

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

[Tace]

29. Somebody said "May You Live In Interesting Times"

This is about as interesting as being a passenger in a jet crash. : )

[UpInArms]

30. from whence that came:

http://www.noblenet.org/reference/inter.htm

In a speech in Cape Town, South Africa, on June 7, 1966, Robert F. Kennedy said, "There is a Chinese curse which says, "May he live in interesting times." Like it or not, we live in interesting times..." Journalists picked up the phrase and it has become a commonplace.

However, the popularity of this "Chinese curse" puzzles Chinese scholars, who have only heard it from Americans. If it is of Chinese origin, it has somehow escaped the literature, although it may be a paraphrase of a liberal translation from a Chinese source, and therefore unrecognizable when translated back to Chinese. It might be related to the Chinese proverb, "It's better to be a dog in a peaceful time that be a man in a chaotic period."

Stephen DeLong, who has been researching this quotation for several years and details his quest on his own website, has traced the quotation back to a 1950 science fiction story: "U-Turn" by Duncan H. Munro, a pseudonym for Eric Frank Russell.

[Tace]

34. Thanks For The Info

You too, ret5hd. Chrs

[ret5hd]

31. i believe that was meant as a curse masked as a blessing.

[yebrent]

38. yes, an ancient Chinese curse.

[RawMaterials]

33. Deleted

Dupe

[loudsue]

35. Kickin' for an update!

:hi: Hi Marketeers! Thanks for keeping us informed! :hi:

Another day at the casino, and I still don't understand why so many people are buying into this market! Isn't the Iranian Bourse market for oil supposed to open this week? Whassup w/ that? Has anybody heard?

:kick::kick::kick:

[ozymandius]

39. I found this.

Regardless of the potential U.S. response to an Iranian petroeuro system, the emergence of an oil exchange market in the Middle East is not entirely surprising given the domestic peaking and decline of oil exports in the U.S. and U.K, in comparison to the remaining oil reserves in Iran, Iraq and Saudi Arabia. According to Mohammad Javad Asemipour, an advisor to Iran’s oil ministry and the individual responsible for this project, this new oil exchange is scheduled to begin oil trading in March 2005.

"Asemipour said the platform should be trading crude, natural gas and petrochemicals by the start of the new Iranian year, which falls on March 21, 2005.

He said other members of the Organization of Petroleum Exporting Countries - Iran is the producer group's second-largest producer behind Saudi Arabia - as well as oil producers from the Caspian region would eventually participate in the exchange." <7>

(Note: the most recent Iranian news report from October 5, 2004 stated: "Iran's oil bourse will start trading by early 2006" which suggests a delay from the original March 21, 2005 target date). <8> Additionally, according to the following report, Saudi investors may be interested in participating in the Iranian oil exchange market, further illustrating why petrodollar hegemony is becoming unsustainable.

http://www.thehandstand.org/archive/march2005/articles/iraneuro.htm

[MARALE]

36. Electronic Arts warns on FY results

http://www.marketwatch.com/news/story.asp?guid=%7BEF54C199%2DE063%2D4B96%2D8E47%2DF1CA2096D4CB%7D&siteid=mktw&dist=

Redwood City, Calif.-based Electronic Arts (ERTS: news, chart, profile) said it now expects full-year sales in a range between $3.1 billion and $3.125 billion, compared with the previous range of $3.275 billion to $3.325 billion.

The company, which publishes best-selling games such as "Madden NFL" and "The Sims," said it expects profit between $1.62 a share and $1.64 a share, well below the previous range of $1.82 to $1.87.

...

During the call, EA said it plans to release 15 titles for the PSP in the coming year. See full story.

Jensen said that none of EA's senior staff will be receiving bonuses this year, though the company said it plans to reward its employee base "accordingly."

My 16 year old says that EA games now "suck", I don't know what has happened to the company in the last few year to make a difference. I think they don't keep up with the new technologies that the kids like and they keep releasing the same old thing, just revamped a little.

[ozymandius]

37. lunchtime watching paint dry

12:20
DJIA 10,587.34 +21.95 +0.21%
Nasdaq 2,010.65 +3.14 +0.16%
S&P 500 1,187.42 +3.64 +0.31%
Gold future 432.00 +0.60 +0.14%
10-Year Bond 4.49% -0.03 -0.69%

12:00PM: The market continues to trade near session highs midday amid tempered inflation concerns and a relatively upbeat batch of corporate news ahead of today's FOMC meeting... While Feb PPI inched slightly higher, checking in at +0.4% (consensus +0.3%), a core PPI reading of +0.1%, which excludes volatile food and energy costs, matched expectations and mitigated concerns that the Fed will employ a more aggressive pace of interest rate hikes...

That said, Treasurys have been resilient ahead of this afternoon's FOMC meeting (2:15 ET), which is widely expected to result in another 1/4% increase and lift the Fed Funds rate to 2.75%... Yields on the 10-year note (+9/32) have held below 4.50% and, in addition to modest weakness in oil prices ($57.25/bbl -$0.21), have helped underpin a relatively bullish sentiment for equities as virtually every sector has traded in positive territory... Pacing the way to the upside has been Transportation, lifted by strength in Airline and Railroad, with the latter gaining ground amid upside Q1 guidance from Union Pacific (UNP 68.51 +2.44)...

Homebuilding (+1.7%) has also been strong following better than expected Q1 earnings and upside FY05 guidance from Lennar (LEN 57.11 +2.24) and KB Home (KBH 119.91 +3.21)... Energy, Health Care, Materials, Utility, Consumer Staples and Consumer Discretionary have also been influential leaders trading higher... Meanwhile, gains in Semiconductor, fueled by upgrades on Cypress Semi (CY13.46 +0.44) and National Semi (NSM 20.53 +0.39), have offset weakness in Software (-1.3%), which has faltered after Electronic Arts (ERTS 57.94 -8.41) lowered its FY05 EPS outlook...

[UpInArms]

40. 1:15 EST numbers and blather (paint still drying)

Dow 10,588.52 +23.13 (+0.22%)
Nasdaq 2,011.03 +3.52 (+0.18%)
S&P 500 1,187.65 +3.87 (+0.33%)
10-Yr Bond 4.491 -0.34 (-0.75%)

NYSE Volume 1,003,560,000
Nasdaq Volume 896,259,000

1:00PM: Stocks show little vigor, having moved little in the past hour, but a modestly bullish bias remains intact... Advancers on the NYSE hold a 3 to 2 edge over decliners while advancing issues on the Nasdaq hold a 16 to 13 margin over declining issues... The ratio of up to down volumes also suggests a relatively positive sentiment at both the Big Board and the Composite... Meanwhile, the Dow, S&P and Nasdaq continue to trade above initial support levels but modest buying interest has not been enough to push the major averages through resistance levels of 10600, 1189 and 2015, respectively...NYSE Adv/Dec 1865/1292, Nasdaq Adv/Dec 1606/1310

12:30PM: More of the same as buying remains widespread across most areas... With nine of ten economic sectors gaining ground today, one sector in particular making headlines has been Consumer Staples (+0.2%), led by gains in Tobacco (+1.8%)... Shares of Altria Group (MO 64.40 +1.12) have led the charge after reports suggested that lawyers have commenced talks with cigarette makers to try to settle the government's fraud and racketeering case against the tobacco industry... Other notable movers have been UST Inc. (UST 53.73 +0.43) and Reynolds American (RAI 79.12 +1.10)... NYSE Adv/Dec 1842/1275, Nasdaq Adv/Dec 1613/1278

[UpInArms]

41. 2:08 EST numbers and blather

running upward before FOMC?

Dow 10,606.99 +41.60 (+0.39%)
Nasdaq 2,015.86 +8.35 (+0.42%)
S&P 500 1,189.10 +5.32 (+0.45%)
10-Yr Bond 4.479 -0.46 (-1.02%)

NYSE Volume 1,184,310,000
Nasdaq Volume 1,058,558,000

2:00PM: Stocks edge to new intraday highs as oil prices spike to fresh session lows ahead of the Fed's upcoming decision regarding monetary policy... The fed funds futures contract continues to factor in a 100% probability that the Fed will raise rates by 25 basis points to 2.75% for the seventh time since June 2004... The FOMC's policy statement, which will be released in roughly 15 minutes, really remains the only unknown with regards to the Fed's action today; but Briefing.com expects the wording to be quite similar to that issued in February...

Treasurys have also climbed to their best levels of the day as the 10-year note is up 12 ticks to yield 4.47%... NYSE Adv/Dec 1942/1276, Nasdaq Adv/Dec 1685/1288

[UpInArms]

43. 2:22 EST numbers and after FOMC blather (going red)

Dow 10,563.17 -2.22 (-0.02%)
Nasdaq 2,010.69 +3.18 (+0.16%)
S&P 500 1,187.38 +3.60 (+0.30%)
10-Yr Bond 4.479 -0.46 (-1.02%)

NYSE Volume 1,253,653,000
Nasdaq Volume 1,133,515,000

2:18PM: As expected, the FOMC has raised the fed funds rate by 25 basis points to 2.75% and maintains balanced risk assessment, with declaration that it believes policy accommodation can be removed at a pace that is likely to be measured... NYSE Adv/Dec 2005/1226, Nasdaq Adv/Dec 1745/1238

[UpInArms]

44. 2:39 EST numbers and blather (all red now)

Dow 10,545.07 -20.32 (-0.19%)
Nasdaq 2,006.90 -0.61 (-0.03%)
S&P 500 1,183.66 -0.12 (-0.01%)
10-Yr Bond 4.522 -0.03 (-0.07%)

NYSE Volume 1,361,331,000
Nasdaq Volume 1,229,720,000

2 minutes later:

Dow 10,532.36 -33.03 (-0.31%)
Nasdaq 2,004.35 -3.16 (-0.16%)
S&P 500 1,182.08 -1.70 (-0.14%)
10-Yr Bond 4.543 +0.18 (+0.40%)

NYSE Volume 1,379,688,000
Nasdaq Volume 1,245,858,000

2:30PM: Market plummets to its worst levels of the session, in sympathy with a sell off in Treasurys, but finds some buying support just above the flat line... While the policy statement was basically left unchanged, the mention that "pressures on inflation have picked up in recent months" has rattled the bond market, as the 10-year note, which was up 11 ticks yielding 4.47% ahead of the report, has now fallen more than 14 ticks and now yields 4.57%...

The actual text of the statement reads: "The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Output evidently continues to grow at a solid pace despite the rise in energy prices, and labor market conditions continue to improve gradually. Though longer-term inflation expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident. The rise in energy prices, however, has not notably fed through to core consumer prices. The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability."NYSE Adv/Dec 2010/1234, Nasdaq Adv/Dec...

[MARALE]

45. Holy Cow!!!

I just checked in, I did not expect the Fed to have this big of an impact.
:scared: :scared: :scared: :scared: :scared:

[UpInArms]

46. Stocks hit by Fed's hawkish inflation tone

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38433.6104106366-833462481&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- U.S. stock investors were unsettled by the more hawkish tone on inflation adopted by the Federal Reserve in its statement accompanying its latest decision to raise interest rates by 25 basis points, said Jeffrey Kleintop, chief investment strategist at PNC Advisors. "People were wondering if they would deviate from words like "measured" and "accommodative" so it's really the inclusion of that line on pricing power and a pick up in inflation that has hit the market," he said. "It hasn't really affected the Fed funds futures contract, though, which is still pricing in four more moves at the remaining meetings in 2005." Kleintop said the market is probably less concerned about a change in the pace of interest rate changes and more concerned about where inflation will be at year end. The Dow Jones Industrial Average was last up 5 points at 10,571, compared with 10,608 before the decision was announced.

[nolabels]

47. What the hell !!! "robust underlying growth in productivity"

Are they delusional or are they just talking about the robust underlying growth in productivityin the business of exporting jobs out of the country?

:crazy: Don't tell me I'm crazy, I am working in financial, and we can't be bothered with details

[UpInArms]

50. interesting question, nolabels

off I went to find that terminology and this is what came up first:

http://business.timesonline.co.uk/article/0,,8209-1536322,00.html

this article is regarding the economy in the UK

Kate Barker, an independent member of the MPC, said that the Bank would have to examine “over the coming quarters” whether Britain was enjoying an acceleration in productivity growth that has lifted capacity more than generally realised.

If higher productivity is expanding potential output, supply constraints will be looser and interest rates may not have to be raised. Ms Barker said that recent increases in overtime working could also mean that the labour market was less constrained.

so as I read what this article is saying - productivity growth means they don't have to raise interest rates :shrug:

using "robust productivity growth" on the US economy sounds completely tangled to me :shrug:

[ozymandius]

48. blather update - panic!

3:00PM: Selling intensifies in equities as Treasurys continue to deteriorate... Yields on the 10-year note have now surged to levels (4.60%) not seen since last July, amid concerns that the Fed may now raise rates at a more aggressive pace to stave off inflation, increasing borrowing costs and weighing heavily on overall sentiment... Meanwhile, the Dow has fallen to a new 7-week low while the S&P and Nasdaq have fallen to levels not seen since mid February and late January, respectively... NYSE Adv/Dec 1550/1707, Nasdaq Adv/Dec 1359/1645

[ozymandius]

49. 3:08

DJIA 10,526.81 -38.58 -0.37%
Nasdaq 1,999.46 -8.05 -0.40%
S&P 500 1,179.29 -4.49 -0.38%
Gold future 431.60 +0.20 +0.05%
10-Year Bond 4.61% +0.09 +1.88%

[UpInArms]

51. Benchmark Treasury yield back at highest since July

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38433.6241744907-833463275&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- The yield on the benchmark 10-year Treasury note nosed above 4.6 percent, or back at its highest since last July, after the Federal Reserve's policy statement indicated the U.S. central bank was growing more worried about inflation risks. The note was last down 20/32 at 95 7/32. Its yield rose to 4.61 percent from 4.53 percent at Monday's close. The yield last closed at 4.62 percent on July 28, according to Fed statistics. The yield closed at 4.67 percent in late May 2004.

[UpInArms]

52. wonder what that will translate to for less than "prime" borrowers?

3:11pm 03/22/05 WELLS FARGO BANK UPS PRIME RATE TO 5.75%

[ozymandius]

54. answer

[UpInArms]

66. and all of the big banks are running to copy that move

3:42pm 03/22/05 NATIONAL CITY CORP RAISES PRIME RATE TO 5.75%

3:40pm 03/22/05 WACHOVIA CORP. RAISES PRIME RATE TO 5.75%

3:27pm 03/22/05 U.S. BANCORP RAISES PRIME RATE TO 5.75%

[UpInArms]

69. a couple more jump on the bandwagon

4:22pm 03/22/05 BANK OF AMERICA, FLEET NAT'L UP PRIME RATE TO 5.75%

[UpInArms]

53. 3:18 DOW under 10,500 - Nasdaq under 2000

Dow 10,499.71 -65.68 (-0.62%)
Nasdaq 1,991.61 -15.90 (-0.79%)
S&P 500 1,176.15 -7.63 (-0.64%)
10-Yr Bond 4.607 +0.82 (+1.81%)

NYSE Volume 1,644,352,000
Nasdaq Volume 1,476,174,000

[ozymandius]

55. 3:25 - bond market getting hammered

DJIA 10,508.04 -57.35 -0.54%
Nasdaq 1,994.27 -13.24 -0.66%
S&P 500 1,176.57 -7.21 -0.61%
Gold future 431.60 +0.20 +0.05%
10-Year Bond 4.61% +0.09 +1.88%

[RawMaterials]

56. Whats that one song? Let the Body hit the floor n/m

[UpInArms]

57. Futures market sees 4% fed funds rate at year end

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38433.6362961574-833464117&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) -- Traders in the federal funds futures market expect the Federal Open Market Committee to boost rates by a quarter percentage point at least five more times this year, putting the Fed's target rate at 4 percent, up from 2.75 percent currently. Following the FOMC's rate hike Tuesday and its warning that increased pricing power is threatening an inflationary spike, the futures market now sees an increased chance of a half-point hike at the May or June meetings. For the first time, the market sees a small possibility that the fed funds rate could hit 4.25 percent by the end of the year.

[ckramer]

60. Just wonder what will that do to the housing market?

Crash in sight?

[UpInArms]

63. numbers to watch will be in 60 days ........ eom

[RawMaterials]

64. I think this sums it up,

I'm just waiting for the splatter.

[ozymandius]

59. 3:36 numbers and blather

DJIA 10,503.85 -61.54 -0.58%
Nasdaq 1,994.52 -12.99 -0.65%
S&P 500 1,175.81 -7.97 -0.67%
10-Year Bond 4.61% +0.09 +1.88%

3:30PM: Indices continue to languish near their lows of the session as buying interest continues to diminish heading into the close... Showing resilience, however, has been Homebuilding (+0.7%), following upbeat FY05 EPS guidance from LEN (+2.0%) and KBH (+1.9%) and ahead of economic data tomorrow... At 10:00 ET, investors will get the latest read on housing demand when Feb existing home sales (consensus 6.70 mln) are released... Last week, building permits and housing starts - supply-side indicators - checked in stronger than expected...

But the key piece of economic data scheduled for tomorrow - Feb CPI (consensus +0.3%) and core CPI (consensus +0.2%) - will be released at 8:30 ET, providing investors with the latest read on inflation... NYSE Adv/Dec 1276/1994, Nasdaq Adv/Dec 1340/1705

[RawMaterials]

61. 3:39 under 10500

Dow 10493.04 -72.35 (-0.68%)
Nasdaq 1992.27 -15.24 (-0.76%)
S&P 500 1175.57 -8.21 (-0.69%)
10-Yr Bond 4.610% +0.85
NYSE Volume 1,815,045,000
Nasdaq Volume 1,598,803,000

[UpInArms]

62. 3:39 EST (3 minutes later DOW now down 72+)

Dow 10,493.04 -72.35 (-0.68%)
Nasdaq 1,992.27 -15.24 (-0.76%)
S&P 500 1,175.26 -8.52 (-0.72%)
10-Yr Bond 4.610 +0.85 (+1.88%)

NYSE Volume 1,815,045,000
Nasdaq Volume 1,598,803,000

[UpInArms]

65. 3:46 EST and still running for the exits

Dow 10,474.79 -90.60 (-0.86%)
Nasdaq 1,989.57 -17.94 (-0.89%)
S&P 500 1,172.15 -11.63 (-0.98%)
10-Yr Bond 4.610 +0.85 (+1.88%)

NYSE Volume 1,873,751,000
Nasdaq Volume 1,646,258,000

[RawMaterials]

67. Closing Numbers and Blather

Dow 10470.58 -94.81 (-0.90%)
Nasdaq 1989.34 -18.17 (-0.91%)
S&P 500 1171.71 -12.07 (-1.02%)
10-Yr Bond 4.610% +0.85

NYSE Volume 2,086,242,000
Nasdaq Volume 1,800,089,000



Close Dow: Just a few Fed words was all it took to erase a day of modest gains, as the major averages closed near session lows... While this morning's PPI data initially provided investors with a tinge of optimism, as Feb core PPI of 0.1% (consensus 0.1%) - which excludes high energy costs - eased inflation fears, the language of the FOMC's policy statement declared a slightly different message...

As widely expected, the Fed raised the fed funds rate by 25 basis points to 2.75% for the seventh consecutive time and maintained a balanced risk assessment saying "policy accommodation can be removed at a pace that is likely to be measured"... However, additions to the policy statement that cited "pressures on inflation have picked up in recent months and pricing power is more evident" underpinned worries that producers are now more apt to raise prices to offset higher costs... The news unnerved the bond market and renewed fears of more aggressive Fed tightening, pounding Tresurys enough to lift yields on the benchmark 10-year note (-22/32) to 4.61% - levels not seen since last July - subsequently pummeling stocks, reversing a bullish bias and closing virtually every sector in the red...

Software (-2.4%) paced the list of laggards, following downside FY05 EPS and revenue guidance from Electronic Arts (ERTS 55.20 -11.15) and concerns ahead of Oracle Corp's (ORCL 12.50 -0.15) Q3 earnings report, as Technology was weak across the board... Interest-rate sensitive issues like Financial (-1.9%), Utility (-1.9%) and REITs (-2.2%) also got hammered after bond yields surged while Telecom Services (-1.2%), Consumer Discretionary (-0.8%), Industrials (-0.6%) and Health Care (-0.1%) also finished to the downside...

Energy ended the day lower as crude oil prices closed down 2.5% at $56.03/bbl (-$1.43) - a drubbing in the commodity that had temporarily lifted the indices to session highs ahead of the FOMC's report... Materials (-0.4%) traded higher throughout most of the session, lifted by strength in Steel and a weak greenback, but lost ground into the close as the dollar recovered lost ground... The dollar rallied against both the euro (1.3081) and the yen (105.56) as bonds became less attractive...

Homebuilding (+0.2%) however, amid better than expected Q1 earnings and upside FY05 guidance from Lennar (LEN 55.80 +0.93) and KB Home (KBH 118.25 +1.55), held onto modest gains despite higher bond yields... Transportation also posted modest gains, led by resilience in Airline (+1.0%) and upside Q1 guidance from railroad operator Union Pacific (UNP 69.43 +3.36)... Separately, reports that lawyers have begun talks to settle the government's fraud and racketeering case against cigarette makers minimized losses in Consumer Staples (-0.5%)...DJTA +0.1, DJUA -2.0, DOT -1.2, Nasdaq 100 -1.3, Russell 2000 -0.5, SOX -0.8, S&P Midcap 400 -0.5, XOI -1.8, NYSE Adv/Dec 964/2363, Nasdaq Adv/Dec 1183/1902

[UpInArms]

68. self delete

RM has it covered :D

:hi: