STOCK MARKET WATCH, Tuesday October 17

[ozymandius]

Tuesday October 17, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 825 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2120 DAYS
WHERE'S OSAMA BIN-LADEN? 1826 DAYS
DAYS SINCE ENRON COLLAPSE = 1787
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 6
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54


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




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

AT THE CLOSING BELL ON October 16, 2006

Dow... 11,980.60 +20.09 (+0.17%)
Nasdaq... 2,363.84 +6.55 (+0.28%)
S&P 500... 1,369.05 +3.43 (+0.25%)
Gold future... 598.50 +5.80 (+0.97%)
30-Year Bond 4.92% -0.02 (-0.38%)
10-Yr Bond... 4.79% -0.02 (-0.37%)






GOLD, EURO, YEN, Loonie and Silver


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Rob Kirby

There has been much speculation recently in the financial press regarding the health of the Commodities Bull Market that began earlier this decade. Recent setbacks in the price of gold, crude oil, natural gas and gasoline have led many market pundits to speculate that the commodities bull has run its course and we’re on the threshold of an economic contraction.

Accompanying the cat calls for an impending recession is the familiar deflationist pleas for the Federal Reserve to begin lowering rates to avert a possible deflationary collapse.

-cut-

While so much of what we read in the financial press might seem “conflicted” – is the Fed tightening enough, are they done, is the commodities bull market finished, has the stock market topped – these are all questions whose answers lie in correctly interpreting the machinations of mostly unseen and seldom discussed macro shifts of “ice berg sized” chunks of cash.

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

[ozymandius]

2. Today's reports-a-plenty

8:30 AM Core PPI Sep
Briefing Forecast NA
Market Expects 0.2%
Prior -0.4%

8:30 AM PPI Sep
Briefing Forecast -0.8%
Market Expects -0.7%
Prior 0.1%

8:30 AM Core PPI Sep
Briefing Forecast 0.3%
Market Expects 0.2%
Prior -0.4%

9:00 AM Net Foreign Purchases Aug
Briefing Forecast NA
Market Expects $53.0B
Prior $32.9B

9:15 AM Capacity Utilization Sep
Briefing Forecast NA
Market Expects 82.3%
Prior 82.4%

9:15 AM Industrial Production Sep
Briefing Forecast -0.2%
Market Expects -0.1%
Prior -0.1%

9:15 AM Capacity Utilization Sep
Briefing Forecast 82.2%
Market Expects 82.2%
Prior 82.4%

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

[UpInArms]

15. PPI falls 1.3% in Sept. on record drop in gasoline prices

8:30 AM ET 10/17/06 U.S. SEPT. PPI LIGHT TRUCK PRICES UP 3.5%

8:30 AM ET 10/17/06 U.S. SEPT. PPI GASOLINE PRICES FALL RECORD 22.2%

8:30 AM ET 10/17/06 U.S. SEPT. CORE INTERMEDIATE PPI UP 0.1%

8:30 AM ET 10/17/06 U.S. CORE PPI UP 1.2% YEAR-OVER-YEAR

8:30 AM ET 10/17/06 U.S. SEPT. PPI ENERGY PRICES FALL 8.4%, MOST IN 20 YEARS

8:30 AM ET 10/17/06 U.S. SEPT. CORE PPI RISES 0.6% VS. 0.2% EXPECTED

8:30 AM ET 10/17/06 U.S. SEPT. PPI FALLS 1.3% VS. -0.7 EXPECTED

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B49C5D9B9%2DC0DF%2D4216%2DBA79%2D228AA9A64166%7D&symbol=

WASHINGTON (MarketWatch) - Wholesale prices plunged 1.3% in September as the price of energy goods tumbled at the fastest rate in 20 years the government said Tuesday. It was the biggest decline in the seasonally adjusted producer price index in three years, the Labor Department reported. Meanwhile, the core producer price index, which excludes food and energy costs, rose a surprising 0.6%, the most since January 2005, as the prices of motor vehicles jumped at the fastest rate in more than 15 years. Economists were taken by surprise. They expected a smaller 0.7% decline in the headline PPI, and also expected a smaller 0.2% gain in the core PPI. The mixed inflation reports shows the dramatic impact of falling crude oil prices, but also shows persistent inflation at the producer level that won't let the Federal Reserve breath easy. Producer prices are up 0.9% in the past year, while core prices are up 1.2%.

[ozymandius]

30. more data

9:00 AM Net Foreign Purchases Aug
Actual $116.8B
Market Expects $53.0B
Prior $32.9B

Industrial Production Sep
Actual -0.6%
Briefing Forecast -0.2%
Market Expects -0.1%
Prior -0.1%

Capacity Utilization Sep
Actual 81.9%
Market Expects 82.3%
Prior 82.4%

[Egnever]

32. Wow thats a shocking miscalculation!

9:00 AM Net Foreign Purchases Aug
Actual $116.8B
Market Expects $53.0B
Prior $32.9B


Newb that I am to all of this I am not sure what this reflects exactly but the fact that that number came in double what the market expected has to mean something. Not to mention that it is three times the prior!

Gonna have to google this one.

[Egnever]

35. hmm....

Apparently this refers to foreign investment in us treasuries.

This appears to be a huge jump in foreign investment. What I don't understand is what prompted this surge. I guess it helps explain to me some of the dollars recent performance though.....

[Ghost Dog]

37. Mostly 'private' investors...

Some funds 'repatriating' from selected overseas (eg. Asian) markets?

http://www.bloomberg.com/apps/news?pid=20601068&sid=aJ_6Yk3AbydA&refer=economy

Demand for U.S. assets jumped in August as the Federal Reserve ended two years of interest-rate increases and reports showed a combination of easing inflation and greater consumer spending. The surge in investment helps explain the resilience of the dollar even as the trade deficit widens to a record.

<snip>

International purchases of U.S. securities previously peaked at $102.6 billion in October 2005 and averaged $71.6 billion over the 12 months through July. The average over the previous five years was $57.8 billion.

The dollar strengthened in the minutes following the report's release, and later retreated to be little changed after separate government figures showed industrial production fell. The dollar traded at $1.2562 per euro at 11:54 a.m. in New York from $1.2533 late yesterday. Against the yen, the dollar traded at 118.68 from 119.04.

<snip>

The Treasury report captures international purchases of U.S. government notes and bonds; stocks; corporate debt and debt issued by U.S. agencies such as mortgage-lenders Fannie Mae and Freddie Mac. The figures don't include direct investment in the U.S. or bank deposits.

Private Investors

In August, private investors bought a net $89.4 billion, compared with a net $31.8 billion in July. Official purchases, mostly by central banks, increased to $30.1 billion, up from $22.7 billion. Americans bought $2.7 billion worth of securities abroad in August.

Purchases of Treasury securities rose a net $46.3 billion, up from $6.6 billion in July. Demand for agency debt rose $31.3 billion from $18.5 billion.

Foreign purchases of U.S. stocks rose $4.4 billion in August, compared with $10.4 billion in July. Corporate bond buying climbed to $37.5 billion from $19 billion.

/...

[Ghost Dog]

38. Furthermore:

China, Japan, the U.K. and major oil exporters increased their holdings of U.S. government debt. Caribbean investors scaled back their purchases.

Japan, the largest holder of U.S. Treasury securities, raised its holdings by $7.6 billion to $644.2 billion. China, the second-largest holder, raised holdings by $8.7 billion to $339 billion.

Oil Exporters

Major oil exporters -- a group that includes the 11 members of the Organization of Petroleum Exporting Countries, Ecuador, Bahrain, Oman and Gabon -- purchased a net $1.7 billion of U.S. securities. The U.K., which, through London, acts as a transit point for international investors, especially those in the Middle East, added a net $11.1 billion.

Brazilian-based investors added Treasuries at the fastest pace in August, buying a net $11.5 billion. That increased Brazilian holdings to $43.2 billion, making the country the 11th largest holder of U.S. debit.

Caribbean banking centers, which analysts link to hedge funds, sold a net $800 million.

Total international holdings of Treasuries increased 2.4 percent to $2.15 trillion in August from the previous month. That's about 44 percent of the U.S.'s $4.9 trillion ($4,884,685) outstanding public debt in August.

/..

[ozymandius]

3. Oil prices rise ahead of OPEC meeting

VIENNA, Austria - Oil prices rose above $60 a barrel Tuesday as traders awaited an
OPEC meeting later in the week where production cuts were to be discussed. Cold weather forecasts in the U.S. also prompted traders to bid up the cost of home-heating fuels.

-cut-

Light, sweet crude for November delivery on the New York Mercantile Exchange rose 52 cents to $60.46 a barrel in electronic trading by midday in Europe. The contract jumped $1.37 to settle at $59.94 a barrel on Monday.

-cut-

The Organization of Petroleum Exporting Countries said this weekend that it would hold a meeting Thursday in Qatar to discuss production quotas. Some members have suggested a cut of 1 million barrels per day was possible.

"The market is waiting for the OPEC meeting for the members to confirm what I believe has already been priced into the market. Participants already expect an output cut after the meeting," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

more

[ozymandius]

4. Gas prices fall to lowest level in '06

WASHINGTON - The price of gasoline has fallen to its lowest level of the year. The federal Energy Information Administration said Monday that U.S. motorists paid $2.226 a gallon on average for regular grade last week, a decrease of 3.5 cents from the previous week.

Pump prices are now 50 cents lower than a year ago and have plummeted by more than 80 cents a gallon since the start of August. The previous 2006 low for gasoline was set in the first week of January, when pump prices averaged $2.238

Gasoline can be found for less than $2 a gallon in many parts of the country. Tom Kloza, an analyst at the Oil Price Information Service in Wall, N.J., said Missouri is on course to become the first state with average prices below that psychological level.

more

[ozymandius]

6. Oil prices rise above US$60 a barrel on OPEC plan, cold U.S. weather

VIENNA, Austria Oil prices rose above US$60 a barrel Tuesday as traders awaited an OPEC meeting later in the week. Cold weather forecasts in the U.S. also prompted traders to bid up the cost of home-heating fuels.

Still, with stock levels healthy both in the United States and Europe and the Organization of Petroleum Exporting Countries predicting less demand for its crude, any increases were expected to be held in check.

-cut-

U.S. weather forecasts for a cold blast to hit the Rockies and below-normal temperatures in much of the eastern two-thirds of the country later this week were also supporting prices on concerns that demand for heating fuels will jump.

-cut-

Analysts surveyed by Dow Jones Newswires expected weekly petroleum inventories data to be released Wednesday to show a decline in distillate stocks, which include heating oil, by 900,000 barrels.

http://www.iht.com/articles/ap/2006/10/17/business/EU_FIN_MKT_Oil_Prices.php

[ozymandius]

5. UnitedHealth in Shake-Up Over Options

Grants were 'likely backdated.' The CEO, a director and the firm's top lawyer are leaving.

he chief executive of one of the nation's largest health insurance companies retired under pressure Sunday, the latest executive to fall in an options-based pay scandal that is unfolding at scores of companies nationwide.

UnitedHealth Group Inc. announced that William McGuire, 59, was leaving — along with a director who oversaw executive compensation and the firm's top lawyer.

The announcement came in the wake of a board-commissioned investigation that found that stock option grants were "likely backdated" to allow insiders to maximize financial gains.

-cut-

McGuire's departure was announced only days after the leaders of two technology companies stepped down, all signs of the growing scope of a scandal over once-hidden stock option practices designed to pad insiders' compensation packages.

http://www.latimes.com/business/la-fi-unitedhealth16oct16,1,4573936.story?coll=la-headlines-business

[cosmicdot]

45. Donna Shalala and Tom Kean are on UnitedHealth's Board

fwiw

Board of Directors

Oct. 16, 2006

William C. Ballard, Jr.
Of Counsel
Greenebaum Doll & McDonald PLLC
Director since 1993.

Richard T. Burke
Non-executive Chairman
UnitedHealth Group and
Director of Meritage Homes
Corporation and
First Cash Financial Services, Inc.
Director since 1977.

Stephen J. Hemsley
President and
Chief Operating Officer
UnitedHealth Group
Director since 2000.

James A. Johnson
Vice Chairman
Perseus, LLC
Director since 1993.

Thomas H. Kean
Former President of
Drew University
Former Governor of New Jersey
Director since 1993.

Douglas W. Leatherdale
Former Chairman and
Chief Executive Officer
The St. Paul Companies, Inc.
Director since 1983.

Mary O. Mundinger, DrPH, RN
Dean, School of Nursing, and
Centennial Professor in Health
Policy and Associate Dean,
Faculty of Medicine
Columbia University
Director since 1997.

Robert L. Ryan
Former Senior Vice President and
Chief Financial Officer
Medtronic, Inc.
Director since 1996.

Donna E. Shalala, PhD <----she wasted no time after leaving Dept of HHS, home of Medicare and Medicare Rx

President of
University of Miami
Director since 2001.

Gail R. Wilensky, PhD
Senior Fellow
Project HOPE
Director since 1993.

Audit Committee*
William C. Ballard, Jr.
Douglas W. Leatherdale
James A. Johnson

Compensation and Human
Resources Committee
James A. Johnson
Donna E. Shalala
Gail R. Wilensky

Public Responsibility Committee
Thomas H. Kean
Richard T. Burke
Robert L. Ryan

Nominating Committee
Donna E. Shalala
James A. Johnson
Mary O. Mundinger

Executive Committee
William C. Ballard, Jr.
James A. Johnson
Thomas H. Kean
Donna E. Shalala

Independent Committee
James A. Johnson
Richard T. Burke
Douglas W. Leatherdale

*All Audit Committee members are deemed to be “financial experts.”

http://www.unitedhealthgroup.com/about/BoardofDirectors.pdf

[bronxiteforever]

7. I gotta vote for the cartoon-its a hoot!!!

Good job!

[ozymandius]

9. Ben Sargent is a national treasure.

And thanks for chiming in.

Ozy :hi:

[ozymandius]

8. Sony Recalls 90,000 Batteries in Its Vaio Computers (Update1)

Oct. 17 (Bloomberg) -- Sony Corp., the world's second- largest consumer-electronics maker, is recalling 90,000 batteries used in its Vaio computers, the first time in a two-month global recall that it's replacing power packs in its own laptops.

About 60,000 of the power packs will be replaced in Japan, and the rest in China, company spokesman Daichi Yamafuji said over the telephone today. Tokyo-based Sony said earlier today it may cut its 130 billion yen ($1.1 billion) profit forecast as it recalls more than 8 million batteries worldwide.

-cut-

``We are currently in the process of deciding whether a revision of full-year earnings is necessary,'' Tokyo-based Sony said in an e-mailed statement. The company didn't provide a reason for an earnings revision in the statement.

-cut-

PlayStation 3 Shipments

Sony, the world's biggest maker of video-game players, may also cut its earnings forecast because it lowered the price of its PlayStation 3 by about 10,000 yen to compete with less expensive machines from Microsoft Corp. and Nintendo Co., the newspaper said.

http://www.bloomberg.com/apps/news?pid=20601101&sid=a5WW5idiFKak&refer=japan

[ozymandius]

10. Intel May Report Profit Drop on Rising Competition, Price Cuts

Oct. 17 (Bloomberg) -- Intel Corp., the world's largest semiconductor maker, may say today that third-quarter profit fell as price reductions and competition from Advanced Micro Devices Inc. caused the biggest revenue drop in five years.

Net income probably fell 46 percent to $1.07 billion, or 18 cents a share, from $2 billion, or 32 cents, a year earlier, according to Prudential Equity Group computer-chip analyst Mark Lipacis, who has StarMine Inc.'s top rating for accuracy in predicting earnings. Sales may have slid 13 percent to $8.7 billion, he said.

Intel Chief Executive Officer Paul Otellini sold older chips at a discount to make room for the Santa Clara, California-based company's Core 2 Duo models, designed to win back market share from Advanced Micro. Intel increased shipments, and the newer products are now making their way into personal computers being bought by consumers and companies.

``The concern is high levels of inventory,'' said Michael Shinnick, who manages $2.6 billion, including Intel shares, for First Source Bank in South Bend, Indiana. ``That's the big question mark. I don't think they worked through that in the quarter.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=aCRwOKc313cg&refer=home

[ozymandius]

11. back later

:donut:
I must take my son to school.

Ozy :hi:

[ozymandius]

12. Gotta post this and scoot. Listen to Bonddad

The Federal Government's Approaching Fiscal Meltdown

Robert Rubin was one of the architects of Clinton's economic program - an economic program that worked for the vast majority of Americans. The economy created 23 million jobs. Real incomes - incomes adjusted for inflation - increased as documented by the Census Bureau, Federal Reserve and Bureau of Labor Statistics. Total US Treasury debt issuance slowed dramatically - especially when compared to the "you can have your cake and eat it to" supply - side economic crowd. In other words, when Rubin talks, you just might want to listen.

A few days ago, the New York Times published an editorial by Robert Rubin titled Attention: Deficit Disorder. The editorial is behind the NY Times firewall. The salient points are below.

First, a brief bit of history. Despite claims to the contrary, the deficit is nowhere near under control. According to the Bureau of Public Debt, the US Treasury has issued over $550 billion in net new debt each year for the last 4 years. This indicates the Bush's public numbers are at best manufactured - primarily by using the Unified Budget. And despite Kudlow's claims to the contrary, there has not been "an explosion of tax revenue." According to the Bureau of Economic Analysis, tax receipts from individuals were $1.047.4 trillion in the first quarter of 2001 and $1.067.4 trillion in the second quarter of 2006. Over the same period, discretionary spending increased from $649 billion to 947 billion. In other words, Bush has done just about everything possible to destroy the US' national finances.

This is the situation the Democrats will inherit if we win in the upcoming elections - something very close to the worst situation imaginable.

http://www.dailykos.com/storyonly/2006/10/17/74346/760

[AnneD]

39. Afternoon Marketeers....

:toast: and lurkers. Kinda makes me wish the GOP got to clean up their own mess this time. If they did, then just like the Great Depression, we could count on DEM leadership for years to come. We we finally get the 'REAL' numbers, our DEM leaders need to have a frank talk with the nation. Cuts are going to have to come from the top this time because everyone below say 80k is being squeezed to death at the moment.

Happy hunting and watch out for the bears.

[UpInArms]

13. daily dollar watch

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

Last trade 86.88 Change -0.07 (-0.08%)

Dollar Rally Hits Ceiling, Strong US Data Will be Needed to Power On

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/Dollar_Rally_Hits_Ceiling__Strong_1161033810858.html

US Dollar

Despite the strength embedded in last Friday’s retail sales report and the non-farm payrolls number the week prior, the dollar has struggled to break its key resistance levels. In fact, a quick survey of the charts will reveal that many of the pairs are in the process of “rolling.” USD/JPY appears to be rolling downwards while the EUR/USD and GBP/USD appear to be rolling upwards. Whether this becomes a true reversal rather than just consolidation will be determined by this week’s reports. We are expecting a great deal of inflation data along with other key numbers. Tomorrow, producer prices, net foreign purchases of US securities, industrial production and the NAHB housing market index are due for release. It is extremely unlikely that the US will be able to escape the softer inflationary pressures that we have already seen in other countries. Producer prices should reverse some of its earlier growth while core price growth should remain relatively limited. The drop in manufacturing payrolls suggests that industrial production could also be weak, but don’t bank too much on that report impacting the dollar because today’s jump in the Empire State manufacturing index should offset any bearish sentiment by leaving the outlook for the manufacturing sector cloudy. What could drive major movements in the dollar besides the PPI number is the net foreign purchases report, which is also known as the TIC (Treasury International Capital flow) report. Last month’s release for the month of July reflected the smallest gain since May of 2005. For the month of August, foreigners are expected to have snapped up $56 billion worth of US investments. The Dow began to really take off in the month of August and we expect the TIC report to reflect active and growing foreign participation. There were a number of Fed speeches today. FOMC member Poole was slightly hawkish on inflation citing more positive inflation data, however Yellen pointed to the slowdown in the economy and reiterated her support for keeping interest rates unchanged. Bernanke has learned from his mistakes and kept to the topic on regulation. Fed Presidents Bies and Stern will be speaking tomorrow, neither of them are expected to touch on the economy or monetary policy.

...more...

Tomorrow's Economic Releases: Second US Inflation Gauge Should Generate Interest

http://www.dailyfx.com/story/calendar/key_events/Tomorrow_s_Economic_Releases__Second_US_1161039308429.html

US Producer Price Index (SEP) (12:30 GMT; 08:30 EST)
(MoM) (YoY)
Consensus: -0.7% 1.4%
Previous: 0.1% 3.7%

Outlook: The US Producer Price Index looks to edge lower for the first time since February, as swift declines in energy prices limit the upside in headline input costs growth. Indeed, with oil as much as 23 percent off of August’s highs through the month, underlying fundamentals suggest that Producer Prices will move lower in the medium term. Though the market has largely discounted a drop in the headline result, inflation watchers will likely pay more attention to developments in the Core prices figure. Excluding food and energy costs, Producer Prices are expected to gain 0.2 percent in September. As a result, watch for surprise developments in this key inflation measure. Any substantive prints above or below median estimates could spark volatile moves in the USD on renewed Fed interest rate change speculation.

Previous: Producers prices continued steadily higher through August, as the headline index gained 3.7 percent on the previous year’s number. Of more important note, however, core price growth came in well-below expectations with PPI excluding Food and Energy dropping the most since April, 2003. This solidified the case for a sustained pause in any overnight lending changes by the US Federal Reserve. Moving forward, however, Fed-watchers will scrutinize future reports to gauge the likelihood of rate changes in the final quarter of the year. Synthetic forward rates show that traders have priced in an approximately 50 percent chance of a further 25 basis point hike through December, but any large surprises in upcoming inflation data could quickly move interest rates above or below current levels.


US Net Foreign Security Purchases (TICS) (AUG) (12:30 GMT; 08:30 EST)

Consensus: $56.0B
Previous: $32.9B

Outlook: Foreign interest in American securities is expected to rebound in August as debt and equity gauges advanced over the period. Net Foreign Security Purchases (commonly referred to as TICS) are expected to post a $56 billion deficit to make up for July’s slightest positive gap in over a year. From the three primary asset groups, purchasing activity is expected to pick up in all of them. Corporate and government debt over the month of August will have likely drawn in more foreign interest on interest rate differentials. While the benchmark lending rate in the US passed unchanged through August, expected slowing in other nations monetary policy will hold the strong carry intact. Furthermore, as the globe economies start to print weakening growth numbers in the wake of expensive energy prices, the world’s biggest is expected to weather the burden and make a soft landing. Perhaps the biggest change however will come on the part of equities. From July’s swing low, the SP 500 Index rose nearly 85 points by the end of August to close in on highs set earlier in the year. Aside from the components aspect tomorrow though, the real interest in the TICS data will come through in its comparison to the same month’s good and services trade balance. The trade deficit hit a record deficit in August, though the subsequent reaction was muted by expectations of a contraction in the months ahead. If the TICS number is able to capitalize on these forecasts and report a strong rebound, worries over the trade accounts could ease and the dollar strengthen.

Previous: Foreign investors bought a net $32.9 billion in US assets in July, the least since May of last year. Interest in US assets shrank through the month as treasury assets suffered under a yet to be capped 17 consecutive rate hikes and range trading near recent lows in major stock indices. Over the month, net inflows in equities grew to $10.4 billion. Further interest in stocks was curtailed by a rebound in emerging markets. Finally ending a two-month slide, emerging market stocks were an attractive investment for traders looking for more assets known to be volatile and lucrative. Elsewhere, treasury purchases amounted to $6.6 billion over the period, the least since April, and agency debt cooled to $18.5 billion. These debt instruments continued to suffer under steadily rising interest rate hikes, but the attraction to higher yield on these instruments was also in jeopardy grew increasingly closer to ending its rate regime.

...more...

[OrangeCountyDemocrat]

17. If You Think Fed Will Even Consider Raising Rates This Year...

I've got a bridge to sell ya. I guarantee you one thing, it will ABSOLUTELY, POSITIVELY, NOT HAPPEN until AFTER the election.

[UpInArms]

14. U.S. adds bribery allegation against ex-Comverse CEO

http://news.yahoo.com/s/nm/20061016/bs_nm/crime_alexander_bribe_dc

NEW YORK (Reuters) - Jacob "Kobi" Alexander, former chief executive of Comverse Technology Inc. (Nasdaq:CMVT - news), offered an unidentified person $5 million to falsely take sole blame for a fraud involving the manipulation of stock options, according to new charges filed in U.S. District Court in Brooklyn last week.

Alexander, who is living in Namibia in southwestern Africa and is wanted in the United States on criminal fraud charges, first offered the person $2 million, then raised the offer to $5 million, according to an indictment filed on October 11.

Alexander then told the person to "name your price," an offer that he repeated several days later, according to the court document.

The bribery allegation, obstruction-of-justice charges and witness-tampering charges were added to others filed against Alexander in August. The other charges included conspiracy, money laundering and securities fraud.

Alexander and two other former Comverse executives are accused of engaging in an options scheme that allowed them to reap millions of dollars in profit by altering the grant dates of stock option awards.

...more...

[texpatriot2004]

16. K & R nm

[RedEarth]

18. Citadel, Hedge Funds Bet $3 Billion on Gas

Oct. 16 (Bloomberg) -- Citadel Investment Group LLC, the $12 billion hedge fund manager, T. Boone Pickens and the Merchant Commodity fund expect natural gas to rebound from a historic losing streak.

Hedge funds amassed a $3 billion wager on rising prices in New York futures markets as gas plunged 74 percent in the past 10 months, the biggest drop of any commodity. Chicago-based Citadel added to its bet in September by taking over trades from Amaranth Advisers LLC, the hedge fund that's closing after losing $6.5 billion in the gas market.

Demand for gas, used for furnaces and power plants, will outstrip supply as production from U.S. wells declines in 2007, say the chief executive officers of energy producers Devon Energy Corp. and EOG Resources Inc. Natural gas will average $9 per million British thermal units over the next 12 months, says EOG's chief, Mark Papa, up from less than $6 last week.

``If you told me I had to go long or short today, I would go long,'' betting on higher prices, said Pickens, whose Dallas hedge fund is up 120 percent this year. Gas may reach $10 this winter if cold weather depletes inventories, he said on Oct. 11 in New York. He declined to predict when his fund might get back into the gas market after exiting earlier this year.

Natural gas may rise as high as $12 per million Btu by March, said Michael Coleman, founder of Singapore-based Aisling Analytics Pte Ltd., which runs the $386 million Merchant Commodity hedge fund.

Falling Supply

http://www.bloomberg.com/apps/news?pid=20601103&sid=aJNu32QG4gYI&refer=news#

[Ghost Dog]

19. Tokyo stocks decline on profit-taking

http://www.ft.com/cms/s/09d007c0-5d9c-11db-82d4-0000779e2340.html

Japan’s Nikkei 225 stock average fell on profit-taking on Tuesday after reaching a five-month closing high on Monday.

The benchmark average closed 0.5 per cent lower at 16,611.59. The broader Topix was also down 0.5 per cent to 1,637.95.

The Mothers market of smaller growth stocks fell too, after staging a strong recovery in the past few trading days following earlier sharp falls. The index declined 0.3 per cent to 1,178.26.

/...

[Ghost Dog]

22. JGB 10-yr yield hits 2-month high, curve flattens

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061017:MTFH86560_2006-10-17_07-08-28_T2944&type=comktNews&rpc=44

TOKYO, Oct 17 (Reuters) - The yield on the benchmark 10-year Japanese government bond rose to a two-month high on Monday after moderate demand at a 30-year auction prompted dealers to sell long maturities in favour of super-long bonds.

An offer of 600 billion yen ($5 billion) of 30-year JGBs at 2.515 percent by the Ministry of Finance attracted moderate demand, drawing bids nearly three times the amount offered.

"The results at the 30-year auction were fairly good, which prompted dealers to sell 10- and 20-year bonds to pick up the new issue," said Naomi Hasegawa, a senior fixed income strategist at Mitsubishi UFJ Securities.

A recent flattening in the yield curve made super-long bonds a more attractive buy than shorter maturities, analysts said.

The 10-year yield <JP10YTN=JBTC> rose a basis point to 1.8 percent, its highest level since late August, after inching down to 1.790 percent.

/...

[Ghost Dog]

23. HK blue chips at new 6-½ yr high, H shares gain

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061017:MTFH87969_2006-10-17_08-21-12_HFB077741&type=comktNews&rpc=44

HONG KONG, Oct 17 (Reuters) - Hong Kong blue chips added just under five points on Tuesday, a day after closing at their highest in 6-½ years, while China plays gained as resource shares rallied amid an improved outlook for the sector.

The benchmark Hang Seng index <.HSI> ended at 18,014.84, erasing losses in the morning session.

The China Enterprises index of H-shares <.HSCE>, or Hong Kong-listed shares in mainland companies, gained 0.5 percent to 7,402.15.

/...

[Ghost Dog]

24. Institutional investors subscribe to 18 billion yuan in China bank IPO

http://www.afp.com/english/news/stories/061017052959.cpprh526.html

SHANGHAI (AFP) - Institutional investors in Shanghai have subscribed to 18 billion yuan (2.25 billion US) worth of shares on offer by the Industrial and Commercial Bank of China (ICBC).

The Shanghai Securities News reported 23 domestic institutional investors had subscribed to A-shares priced at 2.60-3.12 yuan (33-39 US cents) once the mainland tranche of ICBC's initial public offer (IPO) went to market on Monday.

The IPO, potentially the world's largest ever, will result in a dual listing for ICBC in Shanghai and Hong Kong, where separate offers to the public and international institutions have been made.

"Up until 3:00 pm, subscription funds of 18 billion yuan from institutional investors have been received," the paper quoted a source close to the deal as saying.

"This implies that ICBC's A share offer is 45 percent complete," the paper said, presuming a final IPO price would be fixed at the upper limit of 3.12 yuan.

Nine key institutional investors, including China Life Insurance and Ping An Insurance, subscribed to 9.3 billion yuan worth of shares, the paper said.

"From the speedy subscription from the institutional investors, they seem confident in the share sales and the subsequent performance of the shares," the paper quoted the unnamed source as saying.

The bank Monday attracted orders worth more than 42 billion Hong Kong dollars (5.38 billion dollars) from retail investors on the first day of the Hong Kong public offering, according to 10 local brokerages.

This amount represents an oversubscription of about seven times ICBC's retail tranche.

/...

[Ghost Dog]

25. Asian equities show classical top and momentum divergence

http://www.indiadaily.com/editorial/13756.asp

For quite some time the Asian equities are showing signs for classical top formation. The super growth in China and India has reached a level where the inflation genie is becoming uncontrollable. China has taken some very specific anti-inflation measures. India is in the process. Reserve Bank of India is worried although finance ministry shows ecstasy at the raging bull.

The South Korean and Japanese market actually show the momentum divergences. The reason may very well be the security concern on North Korean nuke test. But stochastic and other analytic models are showing extreme signs of overbought characteristics.

The Japanese markets dependence on US consumer confidence index is noteworthy. The markets at the top typically lose its own momentum and start looking at external indicators.

An analytic index that measures smart money in-flow show severe draw down from Asian equity markets.

/...

[Ghost Dog]

20. (Europe) Higher commodity prices dent stocks, ZEW ignored

http://today.reuters.co.uk/news/articleinvesting.aspx?type=economicIndicatorsNews&storyID=2006-10-17T094149Z_01_L17761674_RTRIDST_0_MARKETS-GLOBAL-WRAPUP-3.XML

(Reuters) - A jump in oil and metal prices supported mining and energy stocks on Tuesday but other sectors suffered on worries that higher input prices will dent profits while keeping pressure on inflation and interest rates.

Data showing German investor confidence fell to its lowest level in more than 13 years last month supported government bonds but did little to dissuade markets that the European Central Bank will continue to raise interest rates.

"The ZEW continued its trend of the last nine months. I do not set great store by it though," said Holger Schmieding, an economist at Bank of America.

"The current situation is so good that there are as a result fewer and fewer people who say that it will get better."

The ZEWeconomic institute said its economic expectations indicator for Germany, based on a survey of analysts and institutional investors, fell to -27.4 from -22.2 in September.

/...

[Ghost Dog]

26. Bourses lose further ground mid-session as banking rally fades

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39007.3246180556-883182266&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

European shares fell on Wednesday as profit-taking emerged after a nine-session winning streak that has taken the bourses to five-year highs. By midday, the FTSE Eurofirst 300 was down 0.6 per cent to 1435.64, Frankfurt’s Xetra Dax shed 0.8 per cent to 6,138.60, the CAC 40 in Paris lost 0.6 per cent to 5,328.23 and London’s FTSE 100 slipped 0.4 per cent to 6,150.0. Banks gave way after adding much weight to the recent rally on merger speculation.

/...

[Ghost Dog]

33. London closes sharply lower

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39007.4902430556-883197450&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

London markets extended losses on Tuesday afternoon following Wall Street lower as US stocks reacted to mixed economic data.

<snip>

Traders said it was not surprising investors were looking to “lock in” profits, particuarly with domestic interest rates likely to rise before the end of the year. According to traders, Tuesday’s UK inflation data makes an increase in November all but certain.

In the wider market, leading shares closed lower for the first time in seven sessions as heavyweight investors decided to book profits. The FTSE 100 closed 63.8 points, or 1 per cent, lower at 6,108.6 with the heavyweight banking sector doing most of the damage. Elsewhere, the FTSE 250 lost 158.5 points, or 1.5 per cent, to 10,219.7.

[Ghost Dog]

34. Bourses end nine-session winning streak

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39007.4872685185-883197259&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

European shares fell on Wednesday as profit-taking emerged after a nine-session winning streak that has taken the bourses to five-year highs. The markets also took a cue from Wall Street as US stocks traded weaker following mixed economic data.

<snip>

The wider energy sector was higher after crude prices extended past $60 a barrel as Opec prepared to meet in Qatar on Thursday to discuss how to implement production cuts. Total of France gained 0.5 per cent to €53, while in the UK BP added 0.3 per cent to 602p. By the close, the FTSE Eurofirst 300 was down 1.1 per cent to 1,428.03, Frankfurt’s Xetra Dax shed 1.2 per cent to 6,115.10, the CAC 40 in Paris lost 1.1 per cent to 5,302.99 and London’s FTSE 100 slipped 1 per cent to 6,108.6.

[Ghost Dog]

21. 10:07 - Oversold & sliding, bouncing down

Dow 11,932.89 Down 47.71 (0.40%)
Nasdaq 2,338.70 Down 25.14 (1.06%)
S&P 500 1,361.56 Down 7.49 (0.55%)
10-Yr Bond 4.7380% Down 0.0500
NYSE Volume 421,167,000
Nasdaq Volume 358,080,000

10:00 am : Sellers remain in complete control as the indices extend their reach into negative territory. Aside from an unsurprising temptation to take some money off the table following such tremendous market gains, a disappointing report on inflation at the wholesale level has also underpinned a sense of nervousness. Total PPI fell 1.3%, the biggest drop in three years, which was caused by an 8.4% plunge in energy prices; gas prices fell a record 22.2%. However, the more closely watched core PPI rose a surprising 0.6% (consensus 0.2%), reflecting an increase in auto and truck prices that may prove temporary but nonetheless have ruffled the inflation hawks' feathers. Even though the larger than expected rise in the core rate is not indicative of any underlying firming trend and PPI data are much more volatile than tomorrow's more influential CPI report, today's data have raised some concern on the inflation front, especially with policy makers scheduled to kick off day one of its next FOMC meeting a week from today. DJ30 -49.31 NASDAQ -25.97 SP500 -8.11 NASDAQ Dec/Adv/Vol 1906/581/252 mln NYSE Dec/Adv/Vol 2009/696 /94 mln

09:40 am : As futures trade presaged, the belief that stocks are overbought on a short-term basis has sparked some broad-based consolidation right out of the gate. After all, the bulk of earnings reports this morning are undeniably bullish; but since another quarter of double-digit profit growth has been priced into the market heading into the Q3 earnings season, a sell-the-news response has left the indices struggling to extend Monday's gains. To wit, valuation concerns prompted Goldman Sachs to downgrade Dow component Intel (INTC 21.19 -0.42), which reports tonight. As of yesterday's close, the Dow, S&P 500 and Nasdaq were up 2.6%, 2.5% and 4.7% just two weeks into October; the Russell 2000 is up an even more impressive 6.0% for the month.DJ30 -44.03 NASDAQ -22.46 SOX -1.0% SP500 -7.18 NASDAQ Vol 102 mln NYSE Vol 72 mln

[Ghost Dog]

27. China urges Japan not to develop nuclear weapons

http://asia.news.yahoo.com/061017/kyodo/d8kq9tvg3.html

Spokesman Liu Jianchao said, "We hope Japan...is able to strictly carry out its treaty obligations and appropriately defend the three-point nuclear principle." To safeguard regional peace and stability Japan should "adopt a responsible attitude," he added.

Liu made the comments at a regular ministry press briefing after a suggestion that Japan could develop its own nuclear weapons in order to counter the increased threat from North Korea, which claimed to have carried out a nuclear test last week.

Shoichi Nakagawa, chairman of Japan's ruling Liberal Democratic Party's Policy Research Council, said Sunday that discussing whether to possess such weapons is a possibility.

However, Japanese Prime Minister Shinzo Abe said Monday his government will not discuss the possibility of possessing nuclear weapons due to the three-point principle of not possessing nuclear arms, not making them and not allowing them on its territory.

The prime minister also denied the possibility of the government allowing the United States to bring in nuclear weapons to Japan as part of efforts to maintain deterrence power against North Korean threats.

/...

[ozymandius]

28. Bush signs US terror trial bill, shits behind couch

Either on the world stage or in a cornerless room, dignity is gone

President George W Bush has signed into law a bill that sets standards for the interrogation and prosecution of terror suspects held by the US.

This follows a Supreme Court ruling in June that military tribunals set up to prosecute detainees at Guantanamo Bay violated US and international law.

The new law protects defendants from blatant abuse but still restricts their right to challenge their detention.

A US spokesman said preparations would now begin to try Guantanamo suspects.

-cut-

The bill forbids treatment of detainees that would constitute war crimes - such as torture, rape and biological experiments - but gives the president the authority to decide which other techniques interrogators can use.

http://news.bbc.co.uk/2/hi/americas/6058970.stm

[AnneD]

41. I'm embarassed....

and ashamed to be an American today. When we invaded Iraq-I took the photos of me in my military uniform down from the wall. I still had the DOI and the Constitution on the wall. Guess they may be coming down.
I have tickets to see the Benjamin Franklin exibit at the Museum of Science. I am taking my daughter and one of her high school friends. Maybe it will cheer me up. America really was a good idea-maybe we can find our way back.

[ozymandius]

29. bruising 10:57 numbers

Dow 11,919.92 Down 60.68 (0.51%)
Nasdaq 2,334.42 Down 29.42 (1.24%)
S&P 500 1,360.43 Down 8.62 (0.63%)
10-Yr Bond 4.7340% Down 0.0540
NYSE Volume 770,532,000
Nasdaq Volume 658,532,000

10:30 am : More of the same for stocks as negative industry leadership across the board continues to take a toll on the market. Of the eight sectors trading lower, Technology (-1.5%) is getting hit the hardest as Intel (INTC 20.84 -0.77) gives up three days of gains. In addition to weakness in semiconductors, hardware stocks are also under pressure after EMC Corp (EMC 12.35 -0.48) posted a 33% decline in Q3 profits. The Financials sector has also been in focus, albeit following better than expected earnings from Merrill Lynch (MER 83.69 -0.42), Wells Fargo (WFC 35.98 -0.22), and State Street (STT 63.16 -1.18) to name just a few. However, Chicago Mercantile Exchange's (CME 515.00 +11.75) $8 bln bid for CBOT Holdings (BOT 153.26 +18.75) is among the only story in the space exciting investors as the absence of leadership from the most influential S&P 500 sector also weighs heavily on the proceedings. DJ30 -57.79 NASDAQ -27.84 SOX -2.5% SP500 -8.44 NASDAQ Dec/Adv/Vol 2094/578/476 mln NYSE Dec/Adv/Vol 2077/798/246 mln

[ozymandius]

31. no parachute

11:21
Dow 11,891.51 Down 89.09 (0.74%)
Nasdaq 2,330.70 Down 33.14 (1.40%)
S&P 500 1,358.06 Down 10.99 (0.80%)
10-Yr Bond 4.7360% Down 0.0520
NYSE Volume 917,597,000
Nasdaq Volume 786,460,000

11:00 am : Indices continue to languish near session lows amid a lack of spirited leadership from a number of blue chips. Even though Johnson & Johnson (JNJ 66.03 +1.10) is doing its part to get the Dow closer to its next milestone (12,000), surging 1.7% to a historic high beating Wall Street's forecasts, losses in 25 of the Dow's 30 components leave the price-weighted index in jeopardy of closing at its 8th record high in 11 sessions. United Technologies (UTX 65.92 -0.87) also topped forecasts and went a step further by raising its FY06 EPS outlook, but after opening very close to an all-time high a feeling of vertigo has set in and prompted shareholders to consolidate recent gains. DJ30 -66.28 NASDAQ -30.01 SP500 -9.04 NASDAQ Dec/Adv/Vol 2119/620/650 mln NYSE Dec/Adv/Vol 2171/828/380 mln

[Ghost Dog]

36. Midday slight bounce

Dow 11,933.05 Down 47.55 (0.40%)
Nasdaq 2,340.55 Down 23.29 (0.99%)
S&P 500 1,361.32 Down 7.73 (0.56%)
10-Yr Bond 4.7560% Down 0.0320
NYSE Volume 1,558,692,000
Nasdaq Volume 1,373,150,000


1:30 pm : Little has changed since the last update as the major averages settle into a relatively narrow trading range. Selling remains widespread across most areas but it is worth noting that Health Care has recently inched into the green. Aside from a historic high on Johnson & Johnson (JNJ 66.27 +1.34), strength in the biotech space fueled by Eli Lilly's (LLY 57.50 -0.16) $2.1 bln bid for ICOS Corp (ICOS 31.59 +4.47) is also lending enough support to keep the sector clinging to a small gain. BTK +2.1% DJ30 -60.60 NASDAQ -25.24 SP500 -8.38 NASDAQ Dec/Adv/Vol 2043/862/1.32 bln NYSE Dec/Adv/Vol 2164/1050/840 mln

1:00 pm : The market continues to trade at improved levels as oil prices slip below $59/bbl, but a bearish bias remains firmly intact. As reflected in the A/D line, decliners outpace advancers on both the NYSE and the Nasdaq by at least at 2-to-1 margin. A 3-to-1 ratio of down to up volume paints an even more dismal picture for the bulls, even though New Highs are outnumbering New Lows, but above average volume on the Nasdaq is providing even more conviction behind the broad-based drubbing in Technology. ..HWI -1.1%. ..GSO -0.9%. DJ30 -60.04 DOT -0.9% NASDAQ -24.83 SOX -2.7% SP500 -8.33 NASDAQ Dec/Adv/Vol 2127/780/1.20 bln NYSE Dec/Adv/Vol 2226/975/758 mln

12:30 pm : Stocks bounce off their morning lows as the afternoon session gets underway, but the indices continue to chalk up losses. Crude oil prices plunging to fresh session lows near $59/bbl are contributing to the recovery effort. However, the subsequent lack of leadership from the Energy sector (-1.2%) is preventing a more aggressive attempt to pare market losses. Energy earnings are expected to grow at nearly half the 44% rate enjoyed in Q2 due to a 15% decline in oil prices during the third quarter.DJ30 -68.44 NASDAQ -27.41 SP500 -8.95 NASDAQ Dec/Adv/Vol 2149/720/1.07 bln NYSE Dec/Adv/Vol 2284/880/680 mln

12:00 pm : Stocks continue to sell off midday as mixed economic data and a sense that the market has gotten ahead of itself overshadow a plethora of better than expected earnings, M&A activity and a reversal in oil prices. As a reminder, the Dow (which has hit a record high in 7 of the last 10 sessions), S&P 500 and Nasdaq were up 2.6%, 2.5% and 4.7%, respectively, just two weeks into October as of yesterday's close. Such impressive gains on a short-term basis have tempted investors pricing in another widely expected quarter of double-digit profit growth to take some money off the table.

Exacerbating what was initially shaping up to be a modest pullback has been a disappointing read on core inflation at the wholesale level. Total PPI fell 1.3%, the biggest drop in three years due to a record 22.2% drop in gas prices. However, the more closely watched core PPI rose a surprising 0.6% (consensus 0.2%), reflecting an increase in auto and truck prices that may prove temporary but nonetheless has cast a cloud of uncertainty as to how tomorrow's more influential CPI report will fare. As a reminder, policy makers kick off day one of their next FOMC meeting a week from today.

On the earnings front, the bulk of reports this morning were undeniably bullish. Dow component Johnson & Johnson (JNJ 66.10 +1.17) was the biggest name and is doing its part to get the Dow closer to its next milestone (12,000) as it remains at historic highs. However, a sell-the-news response to United Technologies' (UTX 65.25 -1.54) better than expected Q3 report, due in part to a larger than expected decline in September Industrial Production, and an analyst downgrade on tech giant Intel (INTC 20.86 -0.75) ahead of its report tonight are among the few reasons stocks are struggling to extend recent gains.

Throw in the absence of leadership from Financials, despite falling bond yields, a blowout quarter from Merrill Lynch (MER 83.99 -0.12) and Chicago Mercantile Exchange's (CME 515.30 +12.05) $8 bln bid for CBOT Holdings (BOT 152.10 +17.59), and the market remains poised to snap a three-day winning streak. BTK +1.8% DJ30 -90.21 DJTA -2.5% DJUA +0.4% DOT -1.0% NASDAQ -33.54 NQ100 -1.6% R2K -1.4% SOX -2.9% SP400 -1.3% SP500 -11.81 XOI -0.9% NASDAQ Dec/Adv/Vol 2171/687/964 mln NYSE Dec/Adv/Vol 2288/841/606 mln

[specimenfred1984]

40. Straight Up for 24 Minutes, Culminating in the usual 20K Pump

ahhhhhhhh the completely rigged S&P.

Torture is legal now, it must be time to celebrate here in what used to be a free country.

[Ghost Dog]

42. 15:15 - "Recovery efforts"

Dow 11,958.58 Down 22.02 (0.18%)
Nasdaq 2,347.16 Down 16.68 (0.71%)
S&P 500 1,364.36 Down 4.69 (0.34%)
10-Yr Bond 4.7800% Down 0.0080
NYSE Volume 1,987,740,000
Nasdaq Volume 1,749,290,000

2:30 pm : Recent recovery efforts have stalled as a lack of catalysts leaves the indices retracing prior lows. Among the majors, the Nasdaq continues to outpace its blue chip counterparts to the downside. Concerns that tech companies won't come through with decent enough profit growth to justify current valuations continues to act as an overhang. Similar concerns are also taking a toll on the Industrials sector, as a Q3 earnings miss from Werner Enterprises (WERN 18.98 -1.13) during what is typically the industry's busiest season weighs on Trucking, the day's worst performing S&P industry group (-3.6%).DJ30 -55.07 NASDAQ -23.28 SP500 -8.24 NASDAQ Dec/Adv/Vol 1995/964/1.53 bln NYSE Dec/Adv/Vol 2125/1111/992 mln

2:00 pm : Stocks get back to clawing their way out of what was shaping up to be an even worse performance for the indices earlier. At their lowest levels of the day, the Dow, S&P 500 and Nasdaq were down 0.8%, 0.9% and 1.4%, respectively. Meanwhile, investors are sifting through prepared remarks from Fed Governor Bies. Even though Bies has made no mention about the economy or monetary policy, her comments suggesting some stabilization in the housing market, after the NAHB/Wells Fargo housing market index rose for the first time in nine months, may be offering some relief. DJ30 -40.35 NASDAQ -20.09 SP500 -6.26 NASDAQ Dec/Adv/Vol 2062/877/1.42 bln NYSE Dec/Adv/Vol 2194/1039/912 mln

[Ghost Dog]

43. 16:30 - "last-ditch effort" could/should have been worse...

Dow 11,950.02 Down 30.58 (0.26%)
Nasdaq 2,344.95 Down 18.89 (0.80%)
S&P 500 1,364.05 Down 5.00 (0.37%)
10-Yr Bond 4.7780% Down 0.0100
NYSE Volume 2,443,486,000
Nasdaq Volume 2,189,036,000

3:30 pm : The indices remain in negative territory but are putting together a solid recovery effort going into the close. Evidently the underlying bullish tone that has lifted the three major indices 3.3% on average just two weeks into the fourth quarter is silencing some of the intraday inquiries about the sustainability of a three-month rally in stocks. A turnaround in Yahoo (YHOO 24.28 +0.10), which was down as much as 2.1% after being downgraded ahead of its Q3 report tonight, has helped Technology pare some of its losses. An improvement in Financials, though, is providing the bulk of support as evidenced by the Dow inching ever so closely to breakeven on the day.DJ30 -7.87 NASDAQ -13.13 SP500 -3.13 NASDAQ Dec/Adv/Vol 1844/1135/1.81 bln NYSE Dec/Adv/Vol 1960/1283/1.18 bln

3:00 pm : With crude futures closing near session lows and below $59/bbl, the bulls are making a last-ditch effort to show that valuations remain reasonable at current levels. After all, with energy prices declining, the pressure on core inflation rates may ease even further, which bodes well for overall earnings growth and puts much of the focus tomorrow on the influential CPI report. Economists are expecting a 0.2% increase, which would calm the markets following today's disappointing read on core PPI. DJ30 -29.46 NASDAQ -17.33 SP500 -5.59 NASDAQ Dec/Adv/Vol 1982/999/1.67 bln NYSE Dec/Adv/Vol 2159/1090/1.08 bln

[Ghost Dog]

44. Final half-hearted blah

4:20 pm : After getting within three points of Dow 12,000 a day earlier, an added sense that stocks are overbought on a short-term basis and ripe for some profit taking left sellers in control Tuesday, snapping a three-day winning streak. As a reminder, the Dow had hit a record high in seven of the last 10 sessions; all three major indices are up 3.3% on average just two weeks into October.

Given the more optimistic view on inflation that has been priced into stocks of late, investors also erred to the side of caution after a disappointing read on inflation at the producer level cast a cloud of uncertainty over tomorrow's more influential CPI report. Total PPI fell 1.3%, the biggest drop in three years due to a record 22.2% drop in gas prices. However, the more closely watched core PPI rose a surprising 0.6% (consensus 0.2%), ruffling the inflation hawks' feathers even though the PPI data are much more volatile than CPI and the increase in auto and truck prices responsible for the jump in core PPI may prove temporary.

The biggest thorn in the market's side was a 3.0% sell-off in Intel (INTC 20.96 -0.65). The Dow component, which is also the sixth most heavily weighted component on the Nasdaq, tumbled after Goldman Sachs downgraded the stock on valuation concerns and noted that expectations heading into its Q3 report after the bell are too aggressive. Worries that tech companies won't come through with decent enough profit growth to justify current valuations overshadowed a plethora of better than expected earnings reports, some M&A activity and a 1.7% sell-off in oil prices.

Dow component Johnson & Johnson (JNJ 66.07 +1.14) was the biggest blue chip out with strong quarterly results, but its 1.7% surge struggled to offset declines in 18 of the Dow's 30 components. To wit, United Technologies (UTX 65.92 -0.87), the Dow's second worst performer today (-2.4%), also topped forecasts and went a step further by raising its FY06 EPS outlook. However, after opening very close to an all-time high, shareholders opted to consolidate recent gains, which removed some leadership from the influential Industrials sector.

Merrill Lynch (MER 84.60 +0.49) was another notable name exceeding Wall Street's expectations. The investment bank more than doubled Q3 net income, providing further evidence the S&P 500 will enjoy a 13th straight quarter of double-digit profit growth and playing into our Overweight rating on Financials. Nonetheless, the rate-sensitive financial sector still ended lower on the day in spite falling bond yields and Chicago Mercantile Exchange's (CME 516.01 +12.76) $8 bln bid for CBOT Holdings (BOT 152.10 +17.59). DJ30 -30.58 NASDAQ -18.89 SP500 -5.00 NASDAQ Dec/Adv/Vol 1926/1089/2.07 bln NYSE Dec/Adv/Vol 2069/1212/1.36 bln