STOCK MARKET WATCH, Wednesday 6 April

[ozymandius]

Wednesday April 6, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 289 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 114 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 170 DAYS
DAYS SINCE ENRON COLLAPSE = 1228
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




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

AT THE CLOSING BELL ON April 5, 2005

Dow... 10,458.46 +37.32 (+0.36%)
Nasdaq... 1,999.32 +8.25 (+0.41%)
S&P 500... 1,181.39 +5.27 (+0.45%)
10-Yr Bond... 4.47% +0.01 (+0.31%)
Gold future... 426.60 +0.60 (+0.14%)

GOLD, EURO, YEN, Dollars and Loonie




PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Ike Iossif - WEEKLY CHARTS

DJIA: The pattern remains bullish for as long as interim support at 10350 continues to hold and the upside target is channel resistance at 10975. If interim support at 10350 doesn't hold, then it can go all the way down to test support at 9625-9650.

-cut-

SP500: The pattern remains bullish for as long as the 1180-1160 zone contains the decline and the upside target is channel resistance at 1235-1240. If interim support at the 1180-1160 zone doesn't hold, then it can go all the way down to test support at 1100.

-cut-

NASDAQ: If support in the 2000-1980 zone doesn't hold, we can expect a decline to the 1900-1850 area and perhaps to 1750.

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

Check out the 10-day buy/sell charts if you want to see some drama. Careful, though, all those pointy lines might put an eye out.

Ozy :hi:

[punpirate]

2. Why do these little blurbs...

... remind me of the pronouncements of some pasha's court astrologer, and why do they make my head hurt? :)

[trogdor]

3. This is what they're talking about.

http://money.excite.com/servlet/GifServlet?index=5|60|11671|

Anyone can look at the 1 year Dow 30 chart and see a definite pattern. It pretty much supports the assertions made in the parent post.

[UpInArms]

4. daily dollar watch

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

Last trade 84.65 Change -0.01 (-0.01%)

http://www.dailyfx.com/index.php?option=com_content&task=view&id=609&Itemid=39

Dollar’s Advance Stalls

EUR/USD - Euro bulls held their ground against the greenback and managed to push the pair higher as the price action is becoming reminiscent of a showing match. Euro longs maintained their defensive positions with a minor support at 1.2797, an Apr 5 daily low, followed by an intermediate support at 1.2757, Nov 5 spike low, which combine to protect the major support at 1.2729, a 2005 low and the gatekeeper to the 1.2490 level, a 61.8 Fib of the 1.1760-1.3667 euro rally.

A break down of the 1.2490 may see the pair retest the 1.2000 figure, which marks the 2004 summer range lows. Dollar bulls fortified their defenses in the wake of the euro's countermove with the minor resistance at 1.2890, a 78.6 Fib of the 1.2730-1.3482 euro rally, which is further reinforced by a 5-day SMA at 1.2897. An intermediate resistance at 1.2918, a 10-day SMA currently defends the major resistance at 1.2971,a Mar 25-31 consolidation range high. Oscillators are mixed, with Stochastic continuing to be extremely oversold at 8.98 on the daily chart and is traveling toward the overbought line at 57.8 on the dealer (4HR) chart. RSI at 30.83 continues to skim the oversold level on the daily and is neutral at 48.44 on the 4-hour chart. MACD remains below the zero line on the daily chart and followed through with a bullish crossover below the zero line on the dealer (4HR) chart.

<snip>

USD/JPY - Yen bounced of the channel's upper boundary and is currently pushing the dollar longs toward the lower channel's boundary in the latest countermove against the greenback. As yen longs continue to advance against the greenback they will encounter a minor support established by the dollar bulls at 107.73, a 5-day SMA. An intermediate support is seen at 107.50, channels lower boundary, which defends the major support at 107.25, a 10-day SMA. If dollar longs manage to stage a countermove, they will encounter a minor resistance at 108.85, channel's upper boundary, which protects an intermediate resistance at 109.14 an Oct 11 daily low. A breakout above the lesser resistance levels will encounter the major resistance at 109.92, a 61.8 Fib of the May-Jan yen rally. The 109.92 remains a tempting target for the dollar longs as it defends the 111.48, a start of the Nov-Dec yen rally. Indicators are mixed. Stochastic remains extremely overbought on daily chart at 93.42 and is neutral at 48.80 on the dealer (4HR) chart. RSI remains above the overbought line on the daily at 76.53 and is dipping below the overbought line at 55.87 on the 4-hour chart. MACD continues to travel above the zero line on daily chart and made a bearish crossover above the zero line on the dealer (4HR) chart.

...more...

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8100486&src=rss/businessNews

Dollar Below Peaks on Profit-Taking

LONDON (Reuters) - The dollar fell more than a cent from the previous session's two-month high against the euro on Wednesday as traders locked in profits.

With little news hitting the screens, investors booked trading gains amid concerns the rally might have gone too far.

Federal Reserve Chairman Alan Greenspan stoked such concerns on Tuesday when he failed to mention the threat of inflation while he talked about soaring oil prices.

"Greenspan did not sound the inflation warning alarms on account of oil so maybe some profit-taking evolved from there," said Peter Fontaine, currency strategist at KBC in Brussels.

"Some people in the market are looking at what has been done and thinking that a bit of profit-taking wouldn't hurt," he said.

...more...

Great 'toon again, Ozy!

Oil inventories will be out today.

Have a Great Day Marketeers!

[UpInArms]

12. Dollar higher ahead of new Greenspan remarks

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38448.3620984028-833911735&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) - The dollar picked up a bit of strength Wednesday as the market awaited the second of three public appearances by Federal Reserve chief Alan Greenspan this week. The Fed chief will address the Senate Banking Committee on regulatory reform of government-sponsored enterprises. There are no U.S. economic reports until Thursday. The euro was down 0.05% at $1.2846, while the dollar traded at 108.73 yen, up 0.4%.

more intervention through verbal mumblings?

[UpInArms]

20. Meanspin spewing

9:30am 04/06/05 GREENSPAN: FANNIE, FREDDIE LIMITS WON'T HURT HOUSING

9:30am 04/06/05 GREENSPAN BACKS LIMITS ON FANNIE, FREDDIE MTG. HOLDINGS

9:30am 04/06/05 GREENSPAN BACKS NEW FANNIE MAE, FREDDIE MAC REGULATOR

Greenspan backs limits on Fannie, Freddie mtg. holdings

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38448.4000514815-833913823&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- Federal Reserve chief Alan Greenspan gave his strong endorsement Wednesday to Congressional efforts to strengthen federal oversight of Fannie Mae (FNM) and Freddie Mac (FRE) . In testimony prepared for the Senate Banking committee, Greenspan said the two government sponsored entities need a regulator "with authority on par with banking regulations." He said Congress must also limit Fannie and Freddie's retained mortgage portfolios, "perhaps as a share of single-family home mortgages outstanding or some other variation of such a ratio." He dismissed suggestions that limiting the amount of mortgages that the two firms hold would hurt home buyers.

(added link on edit)

[UpInArms]

25. Dollar rises vs. yen on Greenspan text

http://cbs.marketwatch.com/news/story.asp?guid=%7B7216C99C%2D0D28%2D4E0A%2DBB06%2D08EE63435C9A%7D&siteid=mktw

NEW YORK (MarketWatch) -- The dollar rose against the yen after prepared remarks from Federal Reserve chief Alan Greenspan indicated he believes legislators will have to limit the size of the Fannie Mae and Freddie Mac portfolios - as well as tighten oversight of the agencies - to reduce risk to the financial system.

The Fed chief's remarks were interpreted by some players in the currency markets as a sign that the Federal Reserve could also have to embark on a program of bolder interest rate increases to contain the risk from the massive mortgage portfolios, according to Kathy Lien, chief fundamental analyst at Forex Capital Markets.

The dollar stood at 108.60 yen, up 0.3%, erasing gains scored by the yen overnight after the Bank of Japan held rates steady. The euro was up 0.05% at $1.2855.

Greenspan is making his second of three public appearances this week before the Senate Banking Committee to discuss reform of government sponsored agencies. A text of his remarks was carried on the Dow Jones Newswires late Tuesday.

"World class regulation, by itself, may not be sufficient and, indeed, might even worsen the potential for systemic risk," if the public concludes that heavier oversight will increase the likelihood of a government bailout, the report said.

...more...

Ah, the power of the mumble :puke:

[54anickel]

29. Silly question UIA,

Depending on how tightly they regulate the GSEs, wouldn't this have somewhat the same effect on limiting credit as raising the interest rates?

With consumers driving 2/3 of the economy and personal mortgage/refinancing making up the largest percentage of the liquidity bubble, this seems like an attempt by the Fed to regain control. Lord knows their rate increases haven't been trickling through the markets quite the way they planned.

The bond markets and mortgage rates haven't been following Greenspin's lead as well as hoped for, partly because the Fed has lost control to the derivative/hedge-fund markets to such a great extent.

This jaw-boning, if the markets fall for it, could allow the Fed to stick with their "measured" pace. It might just give them the breathing room they need between that rock and hard place they've gotten themselves into. :shrug:

[UpInArms]

31. I can't really see that they will go for

tight regulation, as that does not conform with "market forces" and conflicts with the dogma that they have been preaching for 30 years.

I think that Falcon stepping down is merely a "nod to the gods" and nothing will actually change.

It's more of the same "caught with their hand in the cookie jar" and now they're "sorry" but nothing will change except the names of the players.

Meanspin continues to mumble his inscrutable words and the dealers all have to act like they understand what he is saying so that they can keep the illusion of their worldliness :shakeshead:

The "measured pace" bullshit will keep the bond markets happy until the bottom falls out.

caveat: this is merely mho :)

[54anickel]

36. I should clarify - its not the actual implementation of regulations, but

rather all the yammering about it that the Fed may be betting on to move the markets to un-wind a bit. We all know how quickly Congress actually moves on anything with so many special interests involved. (Glacial movements come to mind)

It would allow the "measured pace" BS game to continue a bit longer, no?

[UpInArms]

37. agreed - it would definitely allow

the verbal intervention game to work until at least the next Fed meeting.

[UpInArms]

35. here's some more spew for you

Greenspan urges Fannie, Freddie portfolio limits

http://cbs.marketwatch.com/news/story.asp?guid=%7B07E374FE%2D733E%2D46FD%2DB080%2D0DFA3E25DF7A%7D&siteid=mktw

WASHINGTON (MarketWatch) - Federal Reserve board chairman Alan Greenspan told Congress that limiting the mortgage holdings of Fannie Mae and Freddie Mac is the cornerstone for any new federal regulation over the mortgage giants.

If Congress does not limit the portfolios, "we run the risk of solidifying investors' perceptions that the government-sponsored enterprises are instruments of the government and that their debt is equivalent to government debt," Greenspan told the Senate Banking Committee on Tuesday.

Fannie and Freddie keep some mortgages on their books, known as retained portfolios. The companies hold about $1.5 trillion under these accounts.

Greenspan admitted that determining a suitable amount of capital for Fannie (FNM: news, chart, profile) and Freddie (FRE: news, chart, profile) "is a difficult and technical process."

Limiting Fannie and Freddie's holdings is expected to be a tough political fight. Opponents argue that limiting the size of their portfolios would hurt home buyers. But Greenspan dismissed these suggestions.

"Limitations on portfolio holdings could be imposed gradually over several years and then adjusted upward or downward depending on the growth of the single-family mortgage market," he said.

...more...

adjusted upward or downward means constantly shifting the target so no one will ever know who's on first :eyes:

[54anickel]

48. South African Rand Surges as Gold Prices Advance: World's Biggest Mover

http://www.bloomberg.com/news/markets/currencies_europe.html

April 6 (Bloomberg) -- South Africa's rand surged against the dollar, the biggest fluctuation of any currency today, as the price of gold and platinum, the country's largest exports, rose.

Gold gained after the dollar's rally against major currencies stalled, boosting the appeal of the precious metal as an alternative to the U.S. currency. The rand typically gains against the dollar when the price of gold rises, according to data compiled by Bloomberg.

``The firm gold price, mild dollar aversion and corporate flows are aiding the rand,'' said Goolam Ballim, chief economist at Standard Bank Ltd., Africa's largest lender. ``Gold has reemerged as a store of value and this has a direct impact on South Africa in terms of exports and the current account.'' The rand may reach 6 per dollar before the week ends, Ballim said.

Against the dollar, the rand was at 6.14 as of 4:15 p.m in Johannesburg, from 6.23 late yesterday. The currency rose as much 1.3 percent to 6.09 versus the dollar, the biggest gain among 61 currencies tracked by Bloomberg.

snip>

The rand also gained on speculation the country's exporters sold dollars to take advantage of the higher value of their foreign earnings in local currency after a fall to a three-day low of 6.29 yesterday.

more...

[UpInArms]

5. Mortgage Applications Fall in Latest Week

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8100896&src=rss/businessNews

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8100896&src=rss/businessNews

NEW YORK (Reuters) - Applications for U.S. home mortgages eased last week along with weaker refinancings despite a dip in 30-year mortgage rates, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity decreased 4.4 percent to 644.5 in the week ended April 1, more than offsetting a increase of 2.4 the week previous.

The MBA's seasonally adjusted index of refinancing applications fell 3.1 percent to 1798.8, after falling 2.0 percent the prior week and their share of mortgage activity increased to 38.3 percent of total applications from 37.8 percent the previous week.

Adjustable-rate mortgage share of activity, however, decreased to 35.2 percent of total applications from 36.6 percent the previous week, the MBA said.

Applications for ARMs have recently made up an increasing portion of overall applications. The percentage of ARMs within overall applications reached its highest level in the week ended March 25 since the MBA began compiling the data in 1990.

...more...

[UpInArms]

6. Trouble on the Farm?

http://www.fool.com/News/mft/2005/mft05040528.htm

(subscription site)

Has it not seemed almost surreal that rising oil and gasoline prices have not caused a flood of profit shortfalls? Well, out on the farm, the warning sounds are starting to be heard.

Among other things, Corn Products (NYSE: CPO) makes high fructose corn syrup, which is used in everything from your Coca-Cola (NYSE: KO) to your Del Monte (NYSE: DLM) canned apricot halves.

Today the company is reporting that it is having a difficult first quarter. It's so difficult that it expects a 35% to 40% decline in first-quarter profits. The news has sent the stock down as much as 22.2% today, and the stock is the biggest percentage loser on the NYSE.

The company cites three factors for the profit squeeze. First, corn costs were significantly higher, driven by lower co-product (byproduct) values and the timing of corn purchases for contracted business. Look at this CBOT chart for corn, and you can see the sharp drop in corn prices caused by last summer's bumper crop. So companies that contracted early to ensure their corn supply, as Corn Products did, bought at higher prices than today.

Problem No. 2 is higher energy and freight costs. You have to look no further than Burlington Northern Santa Fe's (NYSE: BNI) recently announced mileage-based fuel surcharge (replacing an assessed percentage of a customer's freight bill) to see transportation companies trying to recover fuel costs more quickly. Oil costs are higher, and they manifest in the form of higher distribution costs. For companies such as Corn Products, which has many supply contracts, the pricing flexibility is not currently available.

...more...

[UpInArms]

7. As China sews, few US mills left

http://www.csmonitor.com/2005/0406/p01s02-usec.html

ERWIN, N.C. – The town of Erwin once proudly proclaimed itself the "Denim Capital of the World."

<snip>

But as that process moves forward, the case of Erwin is a reminder of the nearly inexorable nature of the challenge. The last mill here closed five years ago, long before China's competitive potential was unleashed on world apparel markets. The threat from Shanghai and Souzhou now adds to worries that many of America's remaining 677,000 textile and apparel jobs - down from 1.6 million in 1994 - could face a similar fate.

"Ten years ago when NAFTA and GATT were implemented, there was a feeling of, 'We're going to fight it,' " says Mike Walden, an economist at North Carolina State University in Raleigh. "Now there's a changed view, a mixture of resignation and reality. Young people know they don't have a future going into the textile mills, and the big question is what will those towns morph into and what will those people be doing 10 years from now?"

<snip>

"There are misconceptions in Washington and nationally that these are yesterday's jobs, that better jobs are on the way," says Cass Johnson, president of the National Council of Textile Organizations in Washington. "But there's been a realization in the last five years that if someone loses one of these jobs, they get a worse job, lower wages, and less-satisfying work. It's no longer a good bargain."

...more...

[UpInArms]

8. US CREDIT- GM edges closer to junk status

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8095648

NEW YORK, April 5 (Reuters) - General Motors Corp.'s credit weakened on Tuesday as the world's largest automaker took a step closer to junk status, and traders are split as to where spreads head from here.

Moody's Investors Service on Tuesday cut GM's (GM.N: Quote, Profile, Research) debt rating to a step above junk status, with a negative outlook, citing factors including the company's high fixed costs and declining market share.

GM said last month it would post its weakest first-quarter earnings since 1992, and profits this year could fall as much as 80 percent below its previous forecast. GM has said it is grappling with soaring employee health-care costs and falling market share.

Since then, the cost of protecting General Motors Acceptance Corp.'s debt against default for five years has jumped by 200 basis points to close at 485 basis points on Tuesday, or $485,000 a year for every $10 million of debt protected in the credit derivatives market.

...more...

[UpInArms]

30. GM leads advance in auto stocks

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38448.4338487384-833916376&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

SAN FRANCISCO (MarketWatch) -- General Motors' shares (GM) jumped 1.8% to $29.57 Wednesday, leading a mild advance in the automotive sector. The gains came a day after Moody's downgraded GM's $200 billion in debt to one-step above "junk" status. Moody's also said it was reviewing Ford Motor (F) for a possible downgrade. Shares of the No. 2 U.S. automaker gained 1% to $11.21 in recent trading. Elsewhere, DaimlerChrysler (DCX) moved slightly south while the top three Japanese manufacturers logged minimal gains.

[54anickel]

39. The General Motors Questions S&P Needs to Answer (Heh-heh)

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_gilbert&sid=ai3v3FwJVkNQ


snip>

Here are what I reckon are the most frequently asked questions about S&P and its General Motors rating. For potential answers, I've turned to comments S&P has made in its research reports about the company. A spokeswoman for S&P in London declined to comment for this column.

1) Why haven't you cut General Motors to junk?

``The rating outlook is revised to negative from stable, reflecting heightened concerns regarding the profit potential of GM's core North American automotive business in the wake of the company's dramatically revised earnings and cash flow guidance. Consolidated debt outstanding totaled $301 billion at Dec. 31, 2004.''

2) Maybe I wasn't clear enough. Why haven't you cut General Motors to junk?

``We now view the rating as tenuous. The rating can tolerate several quarters of weak profitability and cash flow, but only under the assumption that financial performance will improve to more satisfactory levels thereafter. The rating could be lowered at any point if we came to doubt that GM was on a trajectory to realizing such improvement. In keeping with our policies, the rating would not necessarily be placed on CreditWatch prior to a downgrade.''

3) Which bit of ``Why haven't you cut General Motors to junk?'' don't you understand?

more...

[UpInArms]

9. Siebel drops qtrly outlook, raises wider concerns

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8095227

SAN FRANCISCO, April 5 (Reuters) - Business software maker Siebel Systems Inc. (SEBL.O: Quote, Profile, Research) on Tuesday said delayed customer deals will cause it to miss its current first-quarter sales and profit forecast, raising analyst concerns about the health of the software sector amid other profit warnings this week.

Siebel's stock fell about 8 percent in after-hours trade following the company's forecast for total first-quarter revenue of $297 million to $300 million -- well below its Jan. 27 outlook for sales of $325 million to $345 million.

"You have (nine) companies warning in the past two days and so many diverse reasons as to what went wrong .... It's a pretty major thing," said Friedman Billings Ramsey & Co. analyst Nitsan Hargil, after Siebel's warning.

"We were expecting slow and steady growth for the software sector ... but the events of the last two days bring down our expectations for the remainder of the year," he added.

...more...

Siebel woes company specific: analysts
But warning of loss could pressure SAP shares

http://cbs.marketwatch.com/news/story.asp?guid=%7B75EBD004%2DCF0A%2D421C%2DA424%2D317862D654AD%7D&siteid=mktw

LONDON (MarketWatch) - The troubles that have prompted Siebel Systems to warn of a first-quarter loss are company specific, analysts said Wednesday.

Siebel Systems warned of the loss late Tuesday, blaming acquisition-related charges and disappointing application license revenue.

Siebel (SEBL: news, chart, profile) shares remained under pressure in speculative pre-open trading, last down 8.5% at $8.37. The stock closed regular trading off 1.2% at $9.15.

"We would not extrapolate significantly from Siebel's disappointing performance to SAP, as we believe it reflects some company-specific execution issues and some share gain by SAP," Goldman Sachs analysts told clients. Siebel makes software to manage customer relationships.

Yet Goldman said the warning may spark investor concern about the ability of other software companies to meet first-quarter expectations, and so may pressure SAP (SAP: news, chart, profile) (DE:716460: news, chart, profile) shares. SAP shares were flat in midday Frankfurt trading.

...more...

[UpInArms]

14. Wendy's sees Q1 earns below year-ago performance (Hardee's too)

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38448.3702334259-833912025&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Wendy's International (WEN) said Wednesday that same-store sales at its namesake U.S. company restaurants fell 5.1% in March. At franchised Wendy's restaurants, same-store sales fell 3.9% to 4.2% for the month. At the company's Tim Horton's locations, same-store sales increased 3.2% to 3.4% in Canada and 5.5% in the U.S. in March. The Dublin, Ohio, hamburger purveyor added that it now expects earnings for the first quarter to come in below its year-ago equivalent restated profit of 42 cents per share. The current average estimate of analysts polled by Thomson First Call is for a profit of 43 cents per share in the March period. Wendy's said results in the first quarter were affected by the shift of Easter, higher beef prices, and the expensing of restricted stock. The company forecast beef prices of $1.52 per pound for the second quarter, higher than its prior expectations, but also affirmed its outlook for earnings of $2.17 to $2.23 per share in 2005.

CKE's Hardee's March same-store sales off 0.3%

http://cbs.marketwatch.com/news/newsfinder/marketPulse.asp?doctype=-1&siteid=mktw&mp=1

NEW YORK (MarketWatch) -- CKE Restaurants Inc. (CKR: news, chart, profile) said Wednesday same-store sales for its Carl's Jr. locations rose 4.2 percent in March, while comparable sales at its Hardee's locations fell 0.3 percent on the month. The stock closed Tuesday at $15.97, up 2.6 percent.

[UpInArms]

15. Kodak loweres 2004 earnings after accounting review

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38448.3805633218-833912624&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- Eastman Kodak Co. on Wednesday lowered its 2004 operating earnings per share to $2.30 from the $2.62 reported on Jan. 26, after an accounting review. The new figure reflects 22 cents per share for tax accounting issues; 5 cents per share related to pension and other post-retirement accounting issues; and 5 cents per share for miscellaneous items. CFO Robert H. Brust blamed "inadvertent accounting errors, in part associated with the complex restructurings necessitated by our digital transformation." Shares of Kodak rose 43 cents to $32.04 on Tuesday.

[UpInArms]

24. Imagistics lowers 2205 earnings outlook on charges

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38448.4032561921-833914470&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

SAN FRANCISCO (MarketWatch) -- Imagistics International (IGI) said Wednesday that it is lowering its 2005 earnings outlook to account for restructuring and severance-related charges. The Trumball, Conn.-based company said it now expects to report 2005 earnings of $1.61 to $1.66 a share, lower than its previously announced forecast of $1.85 to $1.90 a share. Imagistics said that it expects to take a first-quarter restructuring charge of $1.8 million, or 6 cents a share, from the closing of its National Remanufacturing Center and expects first-quarter severance charges of $1.8 million, or 6 cents a share, from anticipated staff cuts this year. The company also said that the expensing of employee stock options is estimated to reduce earnings by 2 cents a share in the first quarter and by 8 cents to 10 cents a share for 2005. The company also said that it expects revenue from its copier/MFP products to grow below earlier estimates in 2005 and sees a decline in facsimile revenue for the first quarter.

[UpInArms]

10. Goldman Sachs discloses Enron settlement

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38448.3496630787-833911240&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Goldman Sachs <: gs> on Wednesday said a settlement had been reached over proceedings brought by Enron North America Corp. relating to termination of an agreement for the trading of over-the-counter derivatives and by Enron Corp. seeking to avoid related guarantees. Also in Wednesday's quarterly filing, Goldman Sachs said a federal district court denied the company's motion to dismiss federal commodities claims in a suit stemming from 30-year Treasury bond trading. Shares of Goldman Sachs fell 58 cents to $61.15 on Tuesday.

hmmm... wasn't it Goldman Sachs that just said not to pay attention to the Siebel warning? :eyes:

[UpInArms]

11. MBIA probe expands: report (more insurance malfeasance)

http://cbs.marketwatch.com/news/story.asp?guid=%7BF5318C4B%2DDEEC%2D414C%2D8E6B%2D833952030DAA%7D&siteid=mktw

NEW YORM (MarketWatch) - Regulators investigating bond insurer MBIA have expanded their probe to see if the company had a second secret agreement with reinsurers in addition to an already disclosed one, a published report said Wednesday.

The Wall Street Journal, See Journal story citing a person familiar with the matter, said regulators are trying to determine if MBIA had an agreement with reinsurer Channel Re to protect the Bermuda firm from any losses resulting from claims it transferred to it.

MBIA (MBI: news, chart, profile) says it had no such agreement, the Journal report also said.

In March, MBIA said it would restate its financial statements for 1998 and subsequent years to correct the accounting treatment for two reinsurance agreements that MBIA entered into in 1998 with Converium Re (previously known as Zurich Reinsurance North America).

The company also said last month that that it received additional requests from the New York Attorney General's Office and the Securities and Exchange Commission that supplement the subpoenas it received in 2004.

...more...

[UpInArms]

13. Bubbling crude...

http://cbs.marketwatch.com/news/story.asp?guid=%7B30E31FFE%2DB1DB%2D49C6%2DA483%2D7DFAAAD906F5%7D&siteid=mktw

ANNANDALE, Va. (MarketWatch) -- Is the oil market forming a bubble?

<snip>

The problem with this vernacular understanding of bubbles is that it is too broad. By its definition, virtually any overvalued security can be described as a bubble. But by saying something is in a bubble, surely we are communicating something above and beyond the idea that it is overvalued.

But what is that "something"? And is it fair to say that this "something" exists in the oil market?

<snip>

After reviewing the academic literature on bubbles, Montier concluded that there actually are four different types of investment bubbles:

Near Rational. In this type of bubble, investors in effect adhere to the so-called "Greater Fool Theory." That is, they are willing to keep paying higher and higher prices, so long as they believe they can find someone else who down the road will pay even higher prices. Investors recognize and concede that they are in a bubble, but are supremely confident they will be able to get out before the bubble pops.

Intrinsic. Unlike how they behave in a "Near Rational" bubble, investors in this case do focus on fundamentals. The error they make is extrapolating the high rates of return of the recent past into the future, naively believing they will continue into the indefinite future.

Fads. In this type of bubble, investors are being motivated by social and psychological factors. "People come under intense pressure to confirm the majority's view," as Montier puts it. This clearly played a large role during the buildup of the Internet bubble, for example, when analysts were written off as old-fashioned fuddy-duddies if they didn't subscribe to the "new era" thinking.

Informational. In this type of bubble, prices deviate from fundamentals because investors mistakenly assume that those prices reflect hidden information about those fundamentals. So if prices go up, then traders must know something that the rest of the market doesn't; investors react by bidding prices up even more. Montier points out that the momentum aspects of "Informational Bubbles" lead them into being very fragile because a "small trigger" can "engender a major change" in investor behavior.

...more...

[UpInArms]

16. BofA lifts oil price estimates

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38448.3803005787-833912611&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- Banc of America Securities raised its 2005 estimate for West Texas Intermediate spot oil prices to $47 a barrel from $45 and its 2006 forecast to $40 a barrel from $38 on the belief that global demand for crude will outpace supply. For natural gas, the broker lifted its 2005 estimate to $6.26 million British thermal units from $6, and its 2006 projection to $6.50/MMBtu from $6.26. Analyst Bob Morris added that if the oil exploration and production stock sector were to reflect its long-term oil price estimates, there would be 15% upside to stock prices.

[UpInArms]

17. Chinese economy to land softly in 2005-2006: ADB

http://news.xinhuanet.com/english/2005-04/06/content_2794988.htm

BEIJING, April 6 (Xinhuanet) -- The Asian Development Bank (ADB) said Wednesday the Chinese economy is expected to land softly in 2005-2006 even as it continues to expand rapidly from 2005 to 2007, with growth rates expected to reach 8.5 percent, 8.7 percent, and 8.9 percent, in successive years.

According to the bank's Asian Development Outlook 2005, a forecast report of economic trends, the fast growing Chinese economy is being reined in for a soft landing under the government's balanced development strategy and continued macroeconomic control policy.

Despite a series of macroeconomic control measures taken in 2004 to dampen sectors considered to be overheated, economic growth last year accelerated to 9.5 percent, the highest level since 1997, the bank said.

<snip>

The report said China continued to be a favored destination for foreign investment, which rose by 13.3 percent to 60.6 billion US dollars in 2004.

"Investors come partly for unskilled labor, which is about 4 percent of the cost in the US and one third of the cost in, for example, Malaysia," said the report.

...more...

[UpInArms]

18. military spending

L-3 scores contract worth potential $110.7M from Army

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38448.3909019329-833913027&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- L-3 Communications Holdings Inc. (LLL) said Wednesday it has received a contract worth roughly $110.7 million from the U.S. Army National Guard. The deal breaks down to a one-year award worth $6.6 million and nine one-year option periods. It calls for L-3 to provide supply chain management services for the National Guard's C-23 Sherpa aircraft fleet. The stock closed Tuesday at $71.61, up 48 cents.

[UpInArms]

61. Tetra Tech gets $125M environmental contract from Navy

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38448.6306804861-833923331&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

SAN FRANCISCO (MarketWatch) -- Tetra Tech Inc. (TTEK) said Wednesday that it was re-awarded a contract with a value of up to $125 million to provide program management and technical environmental services to a unit of the U.S Navy. The Comprehensive Long-Term Environmental Action Navy contract has a one-year base period with four one-year options, Pasadena, Calif.-based Tetra Tech said in a statement.

[UpInArms]

19. pre-opening blather

briefing.com

9:15AM: S&P futures vs fair value: +3.5. Nasdaq futures vs fair value: +3.0.

9:00AM: S&P futures vs fair value: +3.1. Nasdaq futures vs fair value: +2.5. Expectations remain set for the cash market to open higher, as futures indications still trade above fair value... Modest buying interest in Treasurys has also contributed to an upbeat sentiment, as yields on the 10-year note have fallen to 4.44%... While there are no notable economic reports scheduled for today, Fed Chairman Greenspan will testify before the Senate Banking Committee (9:30 ET) about regulating GSEs, which should keep Fannie Mae (FNM) and Freddie Mac (FRE) in focus

8:30AM: S&P futures vs fair value: +4.6. Nasdaq futures vs fair value: +5.5. Futures market ticks a bit higher, indicating an even stronger start for equities... Software should be in focus again amid mixed earnings outlooks - a warning from Seibel Systems (SEBL) and upside guidance from AutoDesk (ADSK), while Semiconductor should attract buyers following multiple Merrill Lynch upgrades on chip stocks... Some other notable ratings changes include upgrades on PFE, GPS, JCP and BHI while AIG, ADM, BUD and SEBL have been downgraded

8:00AM: S&P futures vs fair value: +4.1. Nasdaq futures vs fair value: +3.0. Futures market suggesting a higher open for the cash market amid falling oil prices and new M&A activity... A decline in crude oil to $55.55/bbl (-$0.49), ahead of an EIA report that could show the eighth straight build in crude oil inventories, has again underpinned a positive bias...

ino.com

The June NASDAQ 100 was slightly higher overnight due to short covering and is challenging the 20-day moving average crossing at 1496.60. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes above last Friday's high crossing at 1508 are needed to confirm that a short-term low has been posted. If June resumes the decline off March's high, weekly support crossing at 1433.06 is a potential downside target. The June NASDAQ 100 was up 4.50 pts. at 1495 as of 5:31 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 higher overnight as it extends this week's short covering rebound and is challenging the 20-day moving average crossing at 1189. Stochastics and the RSI are bullish again signaling that sideways to higher prices are possible near-term. Closes above last Friday's high crossing at 1195.55 are needed to confirm that a short-term low has been posted. Closes below January's low crossing at 1170 would open the door for a possible test of weekly support crossing at 1163.50. The June S&P 500 Index was up 2.40 pts. at 1187.70 as of 5:34 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

[54anickel]

21. Return-Hungry Investors Snap Up Riskier Loans

http://www.nytimes.com/2005/04/06/business/06place.html?adxnnl=1&adxnnlx=1112794325-AUKRcs/Sgjhwg02K+jcDcg

Krispy Kreme Doughnuts is a troubled company. Its accounting is under investigation by regulators, and it has not filed any financial statements since August. Bankers froze access to its credit lines.

And yet, with relative ease, Krispy Kreme obtained $225 million in new loans this week. The company was able to raise the money because it is paying high rates to attract hedge funds and other investors, who are increasingly willing to elbow aside banks when it comes to lending to riskier companies.

Hedge funds are particularly active buyers of a type of loan known as a second lien, which accounted for much of the money raised by Krispy Kreme. In the event of a bankruptcy, buyers of these loans get their money back only after other creditors - the first-lien lenders - are paid.

"Hedge fund managers are willing to do these deals because they are focused on what assets are worth and a company's ability to repay its debts," said Donald E. Pollard, co-manager of the leveraged lending group at Credit Suisse First Boston. "They are not focused solely on short-term credit ratings."

Corporate loans were once tightly held by banks. But over the last decade or so, the riskiest form of the business, known as leveraged lending, has been transformed to an actively traded market. Besides hedge funds, other large buyers of these loans now include managers of pools of loans known as collateralized loan obligations, which are sold to insurance companies and the like.

But there are concerns that these lenders, in their zeal for high returns, will end up losing much of their money, particularly as rates rise and companies have a harder time paying their debts. If the value of a company declines sharply, there may not be enough assets to cover the value of the second liens. In a report in October, Standard & Poor's estimated that investors in second liens could recover less than 25 percent of their principal in the event of a bankruptcy.

more...

[54anickel]

22. Top-selling funds of 2000 deep in red

http://www.usatoday.com/money/perfi/funds/2005-04-05-bear-usat_x.htm

Never have so few lost so much for so many.
The average stock fund has eked out a 1% gain the past five years. But investors who poured money into the 50 hottest-selling funds five years ago are down an average 42% since March 2000, according to Lipper, the mutual fund trackers.

These aren't just a bunch of tiny Internet funds. Consider Fidelity Aggressive Growth, which had $23 billion in assets in March 2000. Investors poured $15.1 billion into the fund the 12 months before the S&P 500 peaked that month. A $10,000 investment then would be worth $2,697 now — a 73% loss.

Other big top-sellers that have fared badly: Janus Worldwide, then a $13 billion fund, has fallen 45% the past five years; Nasdaq 100 Trust, then a $10 billion fund, has fallen 67%; Janus Global Technology, a $10 billion fund in March 2000, has plunged 73%.

All told, investors put $228 billion into the 50 best-selling stock funds in the 12 months before the market peaked. Only two of them have shown a gain the past five years: American Funds New Perspectives, up 2.3%, and Vanguard Capital Opportunity, up 1.5%.

more...

[54anickel]

23. Mexico, Indonesia Spurn Oil Companies as Global Oil Prices Soar

http://www.bloomberg.com/apps/news?pid=10000086&sid=auPNZEIfrhp8&refer=latin_america

April 6 (Bloomberg) -- Mexico and Indonesia face declining oil production as government policies discourage investment by companies such as Exxon Mobil Corp. and ChevronTexaco Corp., limiting global supply and pushing prices to records.

Output from Mexico's Cantarell field, one of the world's largest, may start to fall this year because of restrictions keeping out needed technology and funding, said Luis Ramirez, chief executive of state-owned Petroleos Mexicanos. Indonesia, where Exxon Mobil has delayed drilling as the government insists on a bigger stake for state-owned PT Pertamina, may import more than it exports this year after a two-decade production slide.

Policies that discourage foreign investment, whether in Iran, Bolivia, Mexico or Indonesia, force companies to tap more expensive sources, such as oil sands in Canada. Rising costs, and surging demand, were cited by Goldman, Sachs & Co. analysts last week among reasons oil could reach $105 a barrel. Crude oil touched a record $58.28 a barrel in New York this week.

``There's not a shortage of oil globally,'' said Adam Sieminski, a global oil strategist with Deutsche Bank AG in London. ``There are access issues, some of which are a result of the political feelings in the countries that have those resources.''

Exxon Mobil, the world's largest publicly traded oil company, assumes there will be improvement in the environment for investment in countries with ample resources, said Scott Nauman, who oversees the company's forecasting. The changes will make it possible for oil production worldwide to rise by almost 50 percent to 120 million barrels per day by 2030.

more...

[54anickel]

34. The Teetering Empire

http://www.antiwar.com/orig/horton.php?articleid=5455

snip>

Short of outright occupation, there are still many ways of controlling foreign powers, and economic pressure of one kind <.pdf> or another usually paves the way for a new kind of colonialism that calls itself anything but what it is. For those in denial about America's status as world empire, Chalmers Johnson reports in Sorrows of Empire that there are currently 725 American military bases in 153 countries. Most of these, while tangible expressions of forward-deployed military power, are permitted by the governments of these countries, often even by their citizens. These are "friendly" occupations that breed dependence on the U.S. for the locals' defense and economy, which in turn ratchets up pressure on cooperative states to relinquish their most valuable domestic resources through agreements private interests would have to pay much more to secure. Many of these occupations create "blowback," including resentment against us for policies most Americans don't know about or understand. Blowback is what killed 3,000 on 9/11.

snip>

If we believe in the free markets we claim to be exporting, let's show the world by example, and offer to buy their oil. How much oil could the average American have bought at the local Quick-E-Mart with money the government has wasted occupying the Middle East and Central Asia? A lot. It is much more costly to steal oil than to buy it. American elites apply their mistaken belief in the domestic power of government to international relations as well: if America needs oil, they must use military force to "secure" it. They apparently think that if they don't send in the Marine Corps, the people of the Middle East will just leave the oil in the ground and make no money. If they were to do so, it would only be as short-term revenge for recent meddling by the U.S. government. The more aggressive our government is, the more reluctant to trade with us freely others will be. If the U.S. treats the people of the Middle East with respect, of course they'll sell the oil. Regardless, it happens to be under the ground in their countries; it's up to them to sell or not.

Those waging war while preaching freedom and property rights ought to understand this. Perhaps they just don't care.

The new domino theory (with America as the Reds) holds that once we erect "democracies" in the Middle East, the remaining "non-democracies" will fall in line. This is laughable. Our $2.57 trillion government foments coups, hires mercenaries to train the "national guard" for amirs and sultans, encourages revolutions, installs airbases on holy land, and so forth, all of which ultimately brings our rivals together. The instability spread by having Americans in camouflage all over Asia will only make it harder in the end for us to get the oil we need. Even if ends justified means, the rhetorical gloss of freedom and democracy ought to be fading fast for even the most devout statists.

snip>

According to Chalmers Johnson, what was, in more rational times, America's biggest fear, a Paris-Berlin-Moscow axis, is now being realized. The aggressive position of the U.S. made it happen. We might as well add China to the list, too. The old Sino-Soviet split is healing quite nicely, as the Chinese-Russian "friendship treaty" of 2001 and their upcoming joint military exercises would seem to indicate. The Europeans are also warming to China. They will begin selling them weapons again next year. It's good that everyone wants to be friends, but these new friendships are motivated by an increasingly common view of America as their greatest potential threat.

more...

[UpInArms]

26. 10:00 EST numbers and blather

Dow 10,488.25 +29.79 (+0.28%)
Nasdaq 2,007.31 +7.99 (+0.40%)
S&P 500 1,184.55 +3.16 (+0.27%)
10-Yr Bond 4.436 -0.34 (-0.76%)

NYSE Volume 205,695,000
Nasdaq Volume 259,061,000

9:40AM: Market opens to the upside as falling oil prices provide a floor of support for stocks... Crude oil futures ($55.60/bbl -$0.44) have declined for the third consecutive session after hitting an all-time high above $58/bbl on Monday... Oil prices, now off more than 3.0% for the week, have fallen on expectations of an eighth straight build in crude oil inventories, which are already at their highest levels since July 2002... At 10:30 ET, the Energy Dept. will report weekly crude oil inventories (consensus +2.5 mln), gasoline supplies (consensus -2.0 mln) and distillates (consensus -1.4 mln)...

Meanwhile, Saudi Arabia's oil minister hinting at increased production to 15 mln barrels a day (currently at 11 mln), following Greenspan's comments about rising inventories easing the "current price frenzy" in oil, has also contributed to profit taking in the commodity...

[54anickel]

27. It all started with a big bang (Gross)

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2005/IO+April+2005.htm

snip>

Remember Dow 5000? I sure do and if I should ever forget, there is always someone nearby to remind me of that “singularity” when I temporarily lost my mind. It only lasted for a split second, although my current investment universe is still in the process of cooling, condensing, and spewing forth lots of additional hot gas. I dare bring this topic back up because like a true scientist, I have examined the evidence and have come up with a theory that explains Dow 5000 in the negative—why we haven’t gone there. My mistake, I am convinced, lies in underestimating the depths to which real interest rates would fall. Back in 2002, although the Fed was in the process of dropping short rates like a rock, there was nary a hint from Greenspan or the PIMCO war room that nominal short rates would sink to one percent, and that real yields would go subzero, resembling the depths of outer space. They did, and they have barely climbed back up to zero percent real. The real yield decline, of course, expanded profit margins especially for finance-based companies, and led to equally unimagined levels of cash flow which increased corporate “margins of safety” rendering Dow 5000 not only unnecessary as a level of “value,” but out of date in what would prove to be an entirely new world of lower real interest rates. Stocks had found their wormhole and managed to survive the great freeze.

There are two parts to the above “mea culpa,” however, and the future for stocks and other asset categories depends more heavily on one of them than the other. Granted, lower yields exploded profits and cash flow like the first seconds of existence nearly fourteen billion years ago. But, if my mistake had simply been in underestimating forward earnings, it would have little bearing on the future since, if they can go up, they can go down, and no one is gonna be perfect in the timing or magnitude of future earnings waves. The real key to avoiding Dow 5000, however, and in fact the reason we now reside above Dow 10,000, is that real interest rates came down and are expected to stay down.

Our own Paul McCulley, even before he rejoined PIMCO in 1999, made the amazingly simplistic but powerful distinction between disinflation’s journey and its destination. The journey, he suggested, had phenomenal strength much like that of the universe’s “electromagnetic” force. As inflation sunk to near zero (and real interest rates with it) the price investors would be willing to pay for future income should expand, since it would be “discounted” at lower and lower real rates. “Stock P/Es and bond prices, therefore, should go up,” he said and, of course, they did. Once they reached their destination, however, the power would weaken as the multiple expansion based on the journey would reach its finale. Once disinflation or its real interest rate companion reached its “destination,” much like a spaceship approaching the speed of light, the investment world would begin to change. No longer would the stock market’s form take the shape of this sleek, lengthy cone-shaped vehicle able to generate double digit returns. But instead, its “mass” and future returns would compress into something resembling current real interest rates and expected future inflation, a number that today is close to five percent. Elegant. Like Einstein and other scientists have known for centuries, the simplest equation explaining a phenomena is often the best.

snip>

The same discounting mechanism that helped to avoid Dow 5000 and led to Dow 10,000+ has been the primary thrust behind today’s double-digit gains in home prices. The layman would not disagree. If you are able to borrow money at essentially no cost, ex-inflation, then home prices should go higher. “How high?” is the question and this is where the “journey” and the “destination” rubber meets the valuation road for not just housing, but for stocks, bonds, and other asset categories such as commodities and collectibles which are all dependent on the same real interest rate standard and its ultimate level.

The fact is that this real interest rate journey to its current destination has pumped up all asset prices because they are all being discounted by an extremely low real interest rate. The current level has produced double-digit annual rates of appreciation for different asset classes at varying cycles—stocks and bonds first—commodities, collectibles and housing with a lag. The important point and critical element in a future forecast, however, is to recognize that real yields, whether they be short-term or further out the curve, bottomed in 2003 and have been moving higher ever since. Not only has the downward journey ended, but a mini up-cycle appears to be underway which ultimately reduces bond prices, stock P/Es and casts a negative pall on other asset classes.

Now I am not about to forecast another black hole for stocks or any other asset class. No masochist here! But, my point is that since the lower and lower real interest rate spiral is basically over, the multiple expansions in stocks, housing, commodities, collectibles and bonds are over as well. Housing prices may go up in the future, but only to the extent that they mirror inflationary and perhaps mild demographic pressures. Stock prices may go up in the future, but only to the extent of real earnings growth (1-2 percent) and inflationary pass-throughs, assuming today’s market valuations are correct. Commodities, art, jewelry, stamps—ditto, ditto, ditto, and ditto. And when exuberant holders of these assets finally realize that all of their “investments” have a common denominator of value that has experienced its big bang, but will in future years cool and condense in a new investment return atmosphere, well then, we shall see how this world ends. Since the PIMCO forecast is for real yields to stay low, absent a policy mistake by the Fed, we may well whimper along rather slowly as all asset classes compress to provide 2-3 percent real and 5+ percent nominal returns over long periods of time. We remain mindful, however, of not only potential central bank errors of judgment, but of oil, currency and geopolitical sparks that could produce a calamitous Big Bang in a highly levered, finance-based economy. High quality bonds, and especially those with inflationary protection, remain the bond market’s best bet absent a wormhole to a warmer and more inviting universe.

more...

[UpInArms]

28. U.S. regulator expects more problems at Fannie Mae

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38448.4200168403-833915903&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) - More problems with Fannie Mae's accounting will likely arise as the company continues its earnings restatement, the director of Fannie's federal regulator said Wednesday in prepared Congressional testimony. But, Armando Falcon, of the Office of Federal Housing Enterprise Oversight told lawmakers he expected the mortgage giant to emerge as a "healthy, well managed enterprise." Falcon is appearing Wednesday before a House Financial Services subcommittee. Fannie Mae shares fell 0.4% in early Wednesday trading.



Fannie, Freddie rise in early trade

http://cbs.marketwatch.com/news/story.asp?guid=%7BA4AFE42B%2DB5C6%2D4FFC%2D82DB%2DCD88D107B3E9%7D&siteid=mktw

NEW YORK (MarketWatch) -- Shares of Fannie Mae and Freddie Mac topped gainers among financial stocks in the S&P 500 Wednesday as Federal Reserve Chairman Alan Greenspan backed limits on the firms' mortgage holdings.

<snip>

Federal Reserve chief Alan Greenspan gave his strong endorsement Wednesday to Congressional efforts to strengthen federal oversight of Fannie Mae and Freddie Mac. In testimony prepared for the Senate Banking committee, Greenspan said the two government sponsored entities need a regulator "with authority on par with banking regulations."

He said Congress must also limit Fannie and Freddie's retained mortgage portfolios, "perhaps as a share of single-family home mortgages outstanding or some other variation of such a ratio."

He dismissed suggestions that limiting the amount of mortgages that the two firms hold would hurt home buyers.

...more...

[UpInArms]

32. Petroleum Inventories: DOE

10:31am 04/06/05 US DISTILLATE SUPPLIES UP 0.7M BBLS IN LATEST WEEK: DOE

10:31am 04/06/05 US GASOLINE SUPPLIES DOWN 2.1M BBLS IN LATEST WK: DOE

10:30am 04/06/05 CRUDE SUPPLIES UP 2.4M BARRELS IN LATEST WK: DOE

will post the PSI numbers when they come in -

crude up again - gasoline down again - distillate (heating) up, but that would be expected as warmer weather is here.

[UpInArms]

42. API petroleum inventory report

11:44am 04/06/05 DISTILLATES DOWN 0.2M BARRELS IN LATEST WEEK - API

11:43am 04/06/05 GASOLINE SUPPLIES UP 0.3M BARRELS IN LATEST WEEK - API

11:42am 04/06/05 CRUDE SUPPLIES UP 4M BARRELS IN LATEST WEEK - API

[UpInArms]

53. Traders mull conflicting reports on weekly supplies - Crude rises

http://cbs.marketwatch.com/news/story.asp?guid=%7BE6848DCD%2D39AC%2D4BC0%2D9FDB%2DB902FA0C759C%7D&siteid=mktw

NEW YORK (MarketWatch) -- Crude-oil futures reversed early losses to trade higher Wednesday as traders digested conflicting reports on supplies.

Crude for May delivery was last trading at $56.55 a barrel, up 51 cents, or 0.9%, after touching a low of $55.30.

The Department of Energy reported that crude supplies rose 2.4 million barrels in the latest week, to stand at 317.1 million barrels, near the top of the average range for this time of year.

Gasoline inventories fell 2.1 million barrels to 212.3 million barrels, although they remain above the average range, the DoE said.

Distillates rose 700,000 barrels to 104.1 million barrels, but remain in the lower half of the average range for the time of year, it said.

<snip>

"Clearly, the fear of high summer demand and insufficient refinery capacity are the main compulsions forcing prices higher off the late March low."

...more...

I hate one sentence paragraphs! :rant:

[UpInArms]

33. 10:36 EST numbers and blather

Dow 10,484.99 +26.53 (+0.25%)
Nasdaq 2,006.34 +7.02 (+0.35%)
S&P 500 1,183.73 +2.34 (+0.20%)
10-Yr Bond 4.437 -0.33 (-0.74%)

NYSE Volume 392,267,000
Nasdaq Volume 459,485,000

10:30AM: Equities still on the offensive as the bulk of sector leadership remains positive... Pacing the way to the upside has been Semiconductor, following multiple upgrades from Merrill Lynch, while strength in Disk Drive and Networking have helped the Nasdaq pace its blue chip counterparts... Financial (+0.5%) and Health Care (+0.6%) have again been influential leaders to the upside while strong follow through in Airline (+1.2%) has helped Transportation... Even Energy (+0.3%), despite falling oil prices, has also traded modestly higher...

Telecom Services (-0.4%), however, has been under pressure following MCI's rejection of Qwest's most recent takeover bid, while Homebuilding (-1.0%) has continued to fall after Standard Pacific (SPF 70.15 -4.50) reported a year-over-year decline in Q1 orders... DJTA +0.4, SOX +1.4, NYSE Adv/Dec 1935/856, Nasdaq Adv/Dec 1783/854

10:00AM: Little changed since the last update as falling bond yields also contribute to an upbeat sentiment... Treasurys have climbed amid Greenspan's stern opening testimony on government-sponsored enterprises (GSE's), as yields on the 10-year note (+10/32) have fallen to 4.42% - their lowest levels since early March... The Fed Chairman has told lawmakers that Congress must clarify GSE insolvency rules and reiterated the need for a new GSE regulator authority to set minimum capital standards... Meanwhile, GSEs like Fannie Mae (FNM 53.42 +1.14) and Freddie Mac (FRE 62.36 +0.60) have traded higher... NYSE Adv/Dec 1787/751, Nasdaq Adv/Dec 1579/859

[54anickel]

38. Some days, it's not even worth chewing through the restraints (Mogambo)

http://www.321gold.com/editorials/daughty/daughty040605.html

snip>

With a $2.2 trillion budget and a deficit of $1 billion deficit, then it seems to me, remembering my old school days where the teacher would ask me a question and I would reply that I did not know the answer, if you divide one of these numbers by the other one, you will show that the deficit is 46% of the budget! And, if the damn Treasury keeps borrowing money at this rate, the budget deficit as a percentage of GDP will then exceed 8% of GDP! Hell, Japan, far and away the world's biggest idiots as concerns monetary policy, is only running a budget deficit of 6.5% of GDP, and we American bozos are still "officially" at a budget deficit of "only" 4.4% of GDP, which is bad enough to cause old timers (which is defined in the Big Mogambo Dictionary (BMD) as "anybody who disagrees with the monstrous economic idiocy of constantly stimulating the economy and thus fueling inflation and don't start talking about inflation because that really sets The Mogambo off and he is liable to have a heart attack ('urk!') and plotz right here on the floor."

Bill Buckler, who writes the Privateer newsletter, and who is, coincidentally, addressing this very topic, says "If the US credit expansion does no more than stay on its fourth quarter of 2004 trajectory, it will generate new credit to the tune of $US 3.425 TRILLION over the current year. By the end of 2005, the total will be close to 29.25% of the US GDP. That is a TOTALLY out of control situation. At the present level of expansion, total US credit markets will stand at around $US 40 TRILLION in less than nine months. That total will then be around 350% of the TOTAL US economy. Historically, this is a debt load which breaks ANY civil economy."

The result is that "If the US federal government even slows down their rate of deficit spending, the US economy dives into an economic recession. If the Federal Reserve slows down its credit expansion, the US economy dives into a steep economic recession. Both institutions are fully aware of this, so they will NOT slow down. This being the case, it is simply a matter of time before the world slows down or even stops its funding of US external deficits. The result will be a US economic recession and a plunging $US."


snip>

All this cheap money is pumping up the prices of assets, which, in turn makes Ben Bernanke of the Federal Reserve start wetting his pants when he thinks that the prices of these ludicrously-overpriced assets might fall in price ("deflation'). His answer? More money! More inflation! Inflation-targeting! The Mogambo falls to one knee, weeping piteously, his mighty shoulders heaving with each sob, when he thinks of the inevitable pain that is surely ours if we continue to listen to such idiocy.

Well, creating more and more money is always the solution to every problem, asposited by the horrid Ben Bernanke, who has, thankfully, been appointed to the toothless, powerless and ignored intellectual wasteland known as the President's Council of Economic Advisors, and thus he is no longer in danger of doing damaging, stupid things as a Governor at the Federal Reserve, because if ever there was a lunatic halfwit, this Bernanke character is it, although he does not wear a cape and a propeller beanie like the Mogambo, who is ALSO a lunatic halfwit, and (for those of you who are new to the ways of the Mogambo (WOTM)) you can always tell the difference between only one of us has such a classy sartorial style.

Plus, Bernanke will be perfect for the job as economic advisor to President Bush, as Bush is intent on spending us into the poorhouse. And creating more money and credit and spending it like there is no tomorrow is Bernanke's prescription for everything, which is all they teach in the universities anymore, and which also that proves, beyond a doubt, that we Americans are the biggest bunch of idiots that ever walked on the face of the earth, because it takes a huge group of real morons to not only think that the problems caused by too much creation of money and credit, and the amassing of un-payable levels of debt, is MORE money and credit and debt, but they actually teach this preposterous idiocy in our universities! And to mix it all with a fiat currency, a central bank overseeing a fractional banking leverage of historical proportions, and a huge government that combines the worst elements of communism, socialism and fascism that, as I have argued before the Intergalactic Council back when Zorgg the Tyrant was crowned as Omnipotent Overlord of the Galaxy, proves that Earthlings are dumber than the Zylonian Glog-people in the Rigelian star cluster, which always gets a big laugh.

more...

[bain_sidhe]

64. another point from Mogambo...

Noticed this as I devoured the latest Mogambo rant:

The job numbers surprised Bob Wood of Kaizen Managed Assets, too, and he stopped demanding that I pay back the money I owe him to take a look at the employment numbers and says to me, "The BLS confirms 110,000 new jobs, albeit with 179,000 of those jobs the result of the birth/death model! And Kudlow is glowing at how strong the economy and job market are!" So, after adjustment, the March Jobs Data is actually lower by 69,000? Hahahaha! 69,000 jobs were actually lost! Hahahaha!

[MARALE]

40. MCI rejects Qwest's $8.9B buyout offer

http://businessweek.com/ap/financialnews/D899UUCO0.htm?campaign_id=apn_home_up

the board of MCI Inc. has rejected an $8.9 billion buyout proposal from Qwest Communications, opting instead to go with a lesser offer from Verizon Communications Inc.

In a statement early Wednesday, the MCI board said the firm was "not willing to jeopardize the certainty of its Verizon agreement for the uncertainties surrounding the Qwest proposal."

MORE

I am not surprised. Did you see where Bush is inviting the Prince of Saudi to his ranch? He needs his poll numbers to go up I quess, maybe if he would stop messing with Social Security they would. Messing with the gas prices won't help that much.

[UpInArms]

41. World Bank: U.S. deficits may hurt others

http://www.businessweek.com/ap/financialnews/D899TL100.htm?campaign_id=apn_home_down

APR. 6 8:48 A.M. ET Continued high U.S. budget and trade deficits could sharply cut economic growth in developing countries by driving up interest rates and weakening the dollar, the World Bank said Wednesday.

Even without the impact of U.S. deficits, average economic growth in China, Russia, India and other developing economies is expected to decline from a three-decade high of 6.6 percent in 2004 to 5.2 percent next year, the bank said in a report on the global economic outlook.

But it said that fall could be sharper if financial markets respond to continued heavy U.S. borrowing by pushing up interest rates.

<snip>

A weaker dollar due to rising debt "will hurt trade volumes," Timmer said.

The U.S. deficit in trade and investment income with the rest of the world hit an all-time high of US$665.9 billion (euro512 billion) last year, while the budget deficit soared to a record US$412 billion (euro317 billion).

"The advice that we would give to the U.S. authorities ... is that it's important to move" on deficit reduction, said Uri Dadush, director of the bank's Development Prospects Group.

...more...

[54anickel]

43. Good grief, maybe it's all going according to some master scheme

after all. :tinfoilhat:

[UpInArms]

45. I can hardly wait to see what the reports

will say when Wolfowitz takes over the World Bank :eyes:

[54anickel]

47. I keep praying for some "devine intervention" before that happens..n/t

[MARALE]

52. They Just could not say it

The U.S. deficit in trade and investment income with the rest of the world hit an all-time high of US$665.9 billion
That should be $666 billion, right??? Let me borrow that tin hat

:tinfoilhat:

[54anickel]

54. GACK!!! "New World Order" and all, spooky times...eom

[UpInArms]

44. Ford details exec payouts for 2004 (WHEE!)

http://cbs.marketwatch.com/news/story.asp?guid=%7BE2F0F851%2D5A21%2D4526%2D86FF%2D22F297803ECC%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) - Ford Motor, in a filing with federal regulators on Wednesday, detailed its 2004 executive compensation, which includes a multimillion-dollar bonus for freshly tapped President Jim Padilla.

Padilla, who took over for a retired Nick Scheele on February 1, was paid a salary of $966,667 and a bonus of about $2 million. He also received a combination of stock and options valued at more than $3.7 million.

Former president and COO Nick Scheele was paid a salary of $1 million along with a cash and stock bonus of $1.5 million. He was also given 81,168 in stock options.

<snip>

Instead of a $1.5 million salary, Chairman and CEO Bill Ford received 103,882 shares of restricted stock. He was also paid a bonus of 841,008 shares valued at about $10.5 million.

...more...

[54anickel]

46. Greenspan On Oil: Long-Term Bear

http://www.forbes.com/home/energy/2005/04/06/cx_da_0406topnews.html

snip>

Unlike in the 1970s and early 1980s, most of the money spent for oil is sent overseas. Thus, higher oil prices act as a tax on U.S. consumers, Greenspan has said.

"The longer-term outlook for oil and gas is, if anything, more conjectural," Greenspan said. But he noted several possibilities for conservation. "he more than 200 million light vehicles on U.S. highways, which consume 11% of total world oil production, become more fuel efficient as vehicle buyers choose the lower fuel costs of lighter or hybrid vehicles," the chairman allowed.

In recent years, world oil reserves have increased, even beyond the amount consumed, Greenspan said. That's the good news. The bad news is that "investment to convert reserves to productive capacity has fallen short of the levels required to match unexpected recent gains in demand, especially gains in China." Also, "The status of world refining capacity has become worrisome as well."

The recent energy price increases have been reflected in the stock market, but only partially. Oil and gas stocks like Exxon Mobil (nyse: XOM - news - people ), ConocoPhillips (nyse: COP - news - people ) and recent takeover target Unocal (nyse: UCL - news - people ) are up between 40% and 60% in the past year. But energy exploration companies, like Transocean (nyse: RIG - news - people ), Diamond Offshore Drilling (nyse: DO - news - people ) and Noble (nyse: NE - news - people ) have seen their shares rise by 66% on average, though those averages have been supercharged by small companies whose shares have tripled or quadrupled in some cases.

Over the very long term, Greenspan was more less certain what would happen, but more certain that whatever happened would work well. The economy of the U.S. and the world could change its fuel mix, using more of what will be discovered later. "The experience of the past fifty years--and indeed much longer than that--affirms that market forces play the key role in conserving scarce energy resources, directing those resources to their most highly valued uses," Greenspan concluded

more...

[UpInArms]

50. Analysts see lofty gas prices lasting into summer

http://cbs.marketwatch.com/news/story.asp?guid=%7B6498747A%2DA6CD%2D4F6D%2DA24A%2DAB3415A18EAD%7D&siteid=mktw

Summer break on gasoline unlikely
EIA report seen highlighting tight supplies, high prices

SAN FRACNISCO (MarketWatch) -- As they gear up for the summer driving season, U.S. motorists shouldn't expect any breaks at the gas pump.

Soaring global prices for crude oil, continued strong fuel demand, and a refining industry already running flat out are seen keeping gasoline prices near or even above current record highs.

That's the message energy analysts expect the Energy Information Administration to deliver Thursday when it lays out its annual report on the state of the nation's gasoline market.

Analysts said they the EIA, part of the Energy Department, will likely predict a 1.5% to 2% rise in gasoline demand this summer, pretty much in line with their 2% estimate last year. That would put the nation's gasoline consumption at about 9.5 million barrels per day, up from 9.32 million a year ago. (One barrel equals 42 gallons.)

But relentlessly high prices could take a toll on driving, which makes the EIA's task of predicting demand this summer especially tricky.

...more...

(edited for html)

[UpInArms]

49. 12:13 EST numbers and blather

Dow 10,516.69 +58.23 (+0.56%)
Nasdaq 2,013.36 +14.04 (+0.70%)
S&P 500 1,188.23 +6.84 (+0.58%)
10-Yr Bond 4.439 -0.31 (-0.69%)

NYSE Volume 813,893,000
Nasdaq Volume 864,574,000

12:00PM: Market trades near session highs midday as falling oil prices and lower bond yields underpin a positive tone for trading... A more than 3.0% decline in crude oil prices ($56.00/bbl -$0.04) over the last three days has eased inflationary pressures and provided a floor of support for both stocks and bonds in the early going... Profit taking has continued to pressure the commodity as builds in inventories continue to drive down prices...

Crude oil inventories rose 2.4 mln barrels, (consensus +2.5 mln) and distillates rose 672K barrels (consensus -1.4 mln), but gasoline inventories fell 2.1 mln barrels, slightly more than the expected 2.0 mln barrel decline... Meanwhile, falling bond yields have also lent support to equities, as Treasurys have gotten a boost following Greenspan's comments yesterday about a weakening "price frenzy" in oil and today's testimony about the oversight of GSEs Fannie Mae (FNM 53.77 +1.49) and Freddie Mac (FRE 63.27 +1.51)... The benchmark 10-year note is up 8 ticks yielding 4.43%...

Taking full advantage of strength in Treasurys have been interest-rate sensitive sectors like Financial (+0.9%) and Utility (+0.2%) while strength in Health Care (+0.6%) has been assisted by a Morgan Stanley upgrade on Pfizer (PFE 27.05 +0.15) as well as solid gains in Biotech (+2.2%)... Technology has been strong across the board, with Semiconductor leading the charge after several chip stocks were upgraded at from Merrill Lynch... Other influential sectors trading higher have included Materials (+0.9%), despite strength in the dollar and weakness in Steel (-0.8%), and Energy (+1.3%), gaining ground amid volatility in oil prices...

A lovely day in the neighborhood /quoting Mr. Rogers

[54anickel]

51. KEEPING UP WITH THE JONESES

http://www.kitco.com/ind/grandich/apr052005.html

snip>

Americans have bought into the Wall Street and Madison Avenue pitch that more happiness can only be achieved by greater wealth and status. Simply put, a bus driver can never be as happy as the bus company owner. If your neighbors the Jones get a new car, so must you. If your kids tell you all their friends are wearing $200 sneakers and so must they in order to "fit in," you must buy them. If you must use public storage in order to keep all your "stuff," so be it. Unfortunately, every psychological study I've seen suggests Americans as a whole are more unhappy now than any previous generation, despite all the stuff our parents and grandparents never had (or needed).

MAMMOTH DEBT CRISIS

A mammoth debt crisis is looming. America has gone from seeing total debt (consumer, corporate and government) equaling 140 percent of GDP in the 1960s and 1970s, to more than 300 percent today. Excessive spending and borrowing has been sustained thanks to record-low interest rates and an unsustainable rate of rise in real estate prices. We also have grown dependent on foreign capital inflows to finance our daily deficits.

I believe that what has happened to General Motors corporately is a harbinger of things to come on the consumer side. GM used to make the vast majority of its profits from building and selling automobiles. However, thanks to intense competition from foreign car makers and the increasing need to offer bigger rebates in order to sell cars, GM discovered the world of credit and concluded that the profit from providing credit far outweighed the profit from selling cars. But like many Americans, GM became too entrench in the debt world and has now seen its corporate bonds reduced to junk status. What status do you think would be given to the typical American based on its debt level, the ability to service that debt and future movement of interest rates and real estate prices?

snip>

Thankfully, I'm not alone in my perception of the future. In fact, I was pleasantly surprised to learn that one of America's most prestigious independent financial institutions, Standard & Poor's, has issued a dire warning for the United States, France, Germany and the United Kingdom. Here's a copy of a March 21, 2005, article that appeared in The Financial Times.

US, Germany, France and UK face junk debt status within 30 years, warns S&P

Rapidly rising pension and healthcare spending will reduce the debt status of the world's richest industrialized countries to junk within 30 years unless their governments move quickly to balance budgets and reducing outgoings, a report warns today.

more...

[UpInArms]

55. Greenspan-GSE overhaul needs receivership provision

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8104195

WASHINGTON, April 6 (Reuters) - Federal Reserve Chairman Alan Greenspan said on Wednesday any legislation to control mortgage lenders Fannie Mae and Freddie Mac should have a trigger mechanism to put them into receivership if necessary.

Greenspan was responding to a question from Senate Banking Committee Chairman Richard Shelby near the end of a two-hour hearing about whether a receivership provision was needed.

"I agree and stipulate in addition there must be some form of mandatory trigger which requires the regulator to essentially invoke the receivership statute," Greenspan said.

...more..

Kudos to Shelby for the question - must have put the Liar on the spot - last time I checked "receivership" implied "bankdruptcy" :evilgrin:

[ozymandius]

56. 1:08 numbers et al

Dow
10,518.10
+59.64
(+0.57%)

Nasdaq
2,010.96
+11.64
(+0.58%)

S&P 500
1,188.15
+6.76
(+0.57%)

10-Yr Bond
4.44%
-0.03

NYSE Volume
993,289,000

Nasdaq Volume
1,015,431,000

That mysterious Mr Greenscam pillow talks his way into the hearts of our traders.

[UpInArms]

57. 1:58 EST numbers (changing direction?)

Dow 10,493.85 +35.39 (+0.34%)
Nasdaq 2,001.99 +2.67 (+0.13%)
S&P 500 1,184.34 +2.95 (+0.25%)
10-Yr Bond 4.430 -0.40 (-0.89%)

NYSE Volume 1,152,291,000
Nasdaq Volume 1,158,117,000

1:30PM: Major averages continue to drift sideways, as investors digest a recent SEC ruling... The SEC has just voted 3-2 to extend the trade-through rule to Nasdaq-listed shares - a rule that guarantees investors will get the best price on all electronic trades... The controversial market reform, which has been opposed by some over concerns such as filling large block trades, will be applied roughly one year from now (April 10, 2006); with full compliance occurring on June 12, 2006... NYSE Adv/Dec 2217/918, Nasdaq Adv/Dec 1856/1131

[UpInArms]

58. blather

2:00PM: Sellers show some resolve as the indices retreat from their highs within the last fifteen minutes... A tendency to sell into strength could arguably be attributed to the pullback, as the indices have enjoyed their third straight session in higher territory, assisted in part by early-month inflows... But with oil prices still more than 3% off their highs of the week and yields on the 10-year note still around 4.43%, the sustainability of recent selling pressure remains in question as the indices have shown resilience at current levels...NYSE Adv/Dec 2128/1025, Nasdaq Adv/Dec 1781/1233

any question as to why *Co wants your SS money?

[UpInArms]

59. Waste Management former chairman received $8.9 mln retirement pay in 2004

http://cbs.marketwatch.com/news/story.asp?guid=%7B07B735E4%2D994E%2D402F%2D8516%2DFB0AC19CAB4F%7D

WASHINGTON (MarketWatch) -- Waste Management Inc. (WMI) said Wednesday that former Chairman A. Maurice Myers received a lump-sum retirement payment of $8.9 million in 2004, according to a proxy filed with the Securities and Exchange Commission.

<snip>

However, in 2002, Waste Management agreed to pay the retirement benefit in a lump sum on or after Nov. 10, 2004, at the time of Myers' retirement from the company, the filing said.

Including the retirement payout, Myers received total compensation of about $10.9 million in 2004, which includes salary, bonus as well as other compensation. Myers also received 112,000 stock options with an exercise price of $29.24 a share, according to the filing.

...more...

:wow: he had only served since 1999!

[UpInArms]

60. 3:04 EST numbers and blather

Dow 10,493.34 +34.88 (+0.33%)
Nasdaq 2,002.88 +3.56 (+0.18%)
S&P 500 1,185.14 +3.75 (+0.32%)
10-Yr Bond 4.436 -0.34 (-0.76%)

NYSE Volume 1,388,059,000
Nasdaq Volume 1,365,876,000

3:00PM: Indices are still off their highs, but a positive tone remains fully intact heading into the final hour of trading... Failing to take full advantage of today's bullish bias and widespread gains in technology, however, has been Software (-0.2%)... While Siebel Systems (SEBL 8.22 -0.93) has been the most actively traded issue on the Nasdaq, the stock has lost more than 10% of its value after SEBL guided Q1 EPS and revenues below analysts' forecasts amid lost sales to competitors in the final few days of Q1...

Minimizing some of the losses in the group, however, has been a 5% surge in shares of Autodesk (ADSK 32.43 +1.54), which, in contrast, raised its FY06 EPS and revenue outlook, citing increased global demand across all of its industries... NYSE Adv/Dec 2174/1052, Nasdaq Adv/Dec 1756/1292

[UpInArms]

62. McDonald's Pays $7.18M in CEO Bonuses

http://www.forbes.com/home/feeds/ap/2005/04/06/ap1928828.html

In a year when McDonald's Corp. had three chief executive officers, the fast-food chain paid a total of $7.18 million in bonuses to executives holding the post.

McDonald's said in a definitive proxy filed Wednesday with the Securities and Exchange Commission that it paid Vice Chairman and Chief Executive James A. Skinner a $2.2 million bonus for 2004. Skinner was elected chief executive on Nov. 22.

The Oak Brook, Ill.-based company said it awarded about $3.19 million to the estate of former President and Chief Executive Charles H. Bell. Bell stepped down from his posts on Nov. 22 for health reasons and died in January from cancer.

Also, McDonald's said it awarded a $1.8 million discretionary bonus to the estate of former Chairman and Chief Executive James R. Cantalupo. Cantalupo died in April 2004 and was immediately replaced by Bell. The estate also received a long-term incentive plan payout of $791,200.

McDonald's said Skinner received total pay of $3.29 million for 2004, excluding the grant of stock options and restricted stock award.

...more...

[RawMaterials]

63. Closing numbers and Blather

Dow 10486.02 +27.56 (+0.26%)
Nasdaq 1999.14 -0.18 (-0.01%)
S&P 500 1184.07 +2.68 (+0.23%)
10-Yr Bond 4.436% -0.34

NYSE Volume 1,784,656,000
Nasdaq Volume 1,706,354,000




Close: Blue chip indices showed resilience into the close, hanging onto modest gains earlier spurred by falling oil prices and lower bond yields... But the Nasdaq, albeit closing off just 0.01%, finished lower... A tendency to sell into strength, as all three major indices had recorded two straight days of gains, arguably contributed to the late-day pullback, as nervousness also set in ahead of Dell's analyst meeting and Alcoa's earnings report...

While crude oil futures ($55.85/bbl -$0.19) were only down a modest 0.3% for the day, the sell off closed the commodity to the downside for the third day in a row, mitigating speculation that higher energy prices will contribute to inflationary pressures... Earlier, profit taking pushed the commodity much lower, as builds in inventories continued to drive down prices, providing a floor of support for both stocks and bonds... Crude oil inventories rose 2.4 mln barrels, (consensus +2.5 mln) and distillates rose 672K barrels (consensus -1.4 mln), but gasoline inventories fell 2.1 mln barrels, slightly more than the expected 2.0 mln barrel decline...

With gasoline inventories having arguably moved into the spotlight ahead of the busy summer driving season, declining inventories should remain a concern as high gas prices pressure discretionary spending... Meanwhile, falling bond yields also lent support to equities, as Treasurys got a lift following Greenspan's comments, as the benchmark 10-year note closed up 8 ticks to yield 4.43%... Yesterday, the Fed Chairman mentioned that oil was in a "price frenzy" while today, he testified about the oversight of government-sponsored enterprises (GSEs) Fannie Mae (FNM 53.77 +1.49) and Freddie Mac (FRE 63.27 +1.51)...

One sector that benefited from lower bond yields and large gains in both FNM and FRE was Financial (+0.7%), in contrast to Utility and Homebuilding (-1.1%%), with the latter under pressure after Standard Pacific (SPF 69.51 -5.14) reported a year-over-year decline in Q1 orders... Energy (+1.7%), strangely, found the most strength amongst the 10 largest economic sectors, the more influential Health Care (+0.2%) and Industrials (+0.1%) also found buying interest...

Biotech paced the way higher, taking a bullish cue from a rally in shares of Human Genome Sciences (HGSI 9.96 +0.70), which reported positive results in Phase II trials of its rheumatoid arthritis drug LymphoStat... Technology, however, was mixed, as modest gains in Semiconductor, following multiple chip stock upgrades at Merrill Lynch, struggled to offset weakness in Software (-0.3%), under pressure amid mixed guidance... Siebel Systems (SEBL 8.22 -0.93) - the most actively traded issue on the Nasdaq - issued a warning for Q1 while Autodesk (ADSK 32.43 +1.54) issued upside FY06 guidance...

Better competitive positioning at Altera (ALTR 19.95 +0.41) and a concluding inventory correction at Broadcom (BRCM 30.44 +0.68) prompted Merrill to upgrade both chip makers to Buy while PMC Sierra (PMCS 8.58 +0.55) was upgraded to Neutral based on a recovery in order rates... Software, however, was weak as a Q1 warning from Siebel Systems (SEBL 8.22 -0.93) - the most actively traded issue on the Nasdaq - offset upside FY06 guidance from Autodesk (ADSK 32.43 +1.54)...

The Consumer Staples sector (-0.2%) also posted modest losses after Anheuser-Busch (BUD 45.62 -1.82) lowered Q1 EPS guidance while Consumer Discretionary (-0.5%) finished lower amid weakness in Retail (-0.8%), ahead of March same-store sales and Bed Bath & Beyond's (BBBY 36.65 -0.65) Q4 earnings report, which was expected after the bell... Telecom Services (-0.5%) was also weak after MCI (MCIP 25.25 +0.24) again rejected Qwest's (Q 3.80 -0.06) sweetened $8.9 takeover bid in favor of Verizon Communications' (VZ) lower $7.6 bln bid... Separately, the SEC voted 3-2 to extend the trade-through rule to Nasdaq-listed shares - a rule that guarantees investors will get the best price on all electronic trades... NYSE Adv/Dec 1985/1265, Nasdaq Adv/Dec 1614/1471