STOCK MARKET WATCH, Friday May 4

[ozymandius]

Source: DU

Friday May 4, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 626 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2315 DAYS
WHERE'S OSAMA BIN-LADEN? 2025 DAYS
DAYS SINCE ENRON COLLAPSE = 1985
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 9
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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

---

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

AT THE CLOSING BELL ON May 3, 2007

Dow... 13,241.38 +29.50 (+0.22%)
Nasdaq... 2,565.46 +7.62 (+0.30%)
S&P 500... 1,502.39 +6.47 (+0.43%)
Gold future... 684.40 +9.30 (+1.36%)
30-Year Bond 4.84% +0.02 (+0.37%)
10-Yr Bond... 4.67% +0.03 (+0.60%)






GOLD, EURO, YEN, Loonie and Silver

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PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

more Radical Fringe here


Read more: DU

[ozymandius]

1. Today's Market WrapUp

The Nasdaq 100 - Wall Street's Dirty Little Secret
BY MARTIN GOLDBERG, CMT

The stock market looks at valuations, but sometimes it doesn’t see them. This is one of those times. Valuations of the Dow and S&P 500 are often discussed since they can now compare somewhat favorably with other times in recent history. What the market may not be seeing is the fact that the stocks within the major indices have just completed a multi-year run of double digit earnings growth and this cannot continue indefinitely. Still the bull case sees this double digit earnings growth resuming after the most recent quarter’s growth decelerated into high single digit percentages. And to be fair, may be this earnings growth is something that I’m not seeing. The most recent quarter’s single digit percentage earnings growth beat analysts’ “expectations” and this was the apparent reason for a sharp and erect multi-month market rally. The bear case has earnings growth decelerating in the near term future while P/E’s compress as a result and the bear market resumes. For the major indices, one can defend either the bull or bear case, but for today, the market has decided – bulls win! For tomorrow, it’s anyone’s guess.

While the valuation case can be argued either way for the Dow and S&P 500, similar arguments cannot be brought forth with a straight face for the Nasdaq 100. It amazes me that there are precious few references where one could evaluate the price/earnings (P/E) ratio of this almost $2 trillion index. You can find the P/E of the Dow Industrials, S&P 500, Dow Utilities, or Transports by simply looking them up in the Wall Street Journal, Barron’s, or Investor’s Business Daily (IBD). But no such “look ups” seem to be available for the Nasdaq 100. Is there something to hide? Fortunately with the ability to download spreadsheet data from Yahoo Finance, one can easily evaluate the index as a whole as I did. What was found is staggering. The index is overpriced by any reasonable measure except for those involving technical chart analyses.

If one were to ignore the components of the Nasdaq 100 with triple-digit P/E’s and those with no trailing earnings at all, the arithmetic average trailing P/E of the remainder of the companies in the Nasdaq 100 is 34.3 and the forward P/E is 22.1. Including all components of the Nasdaq 100, the forward P/E is a whopping 34.9. Earnings growth based on Wall Street analyst expectations is projected to be over 35% over the next year. There seems to be something in the collective business models of these companies that make payment of dividends to shareholders passé. While the current dividend yield of the S&P 500 is 1.91% (way low by historic standards), the dividend yield of the Nasdaq 100 is a mere 0.36% (0.5% capitalization weighted) by comparison. Given that Nasdaq 100 companies are among those most implicated for options back-dating and shareholder dilution, a reasonable person would expect that shareholders would now demand dividends and corporate managements would oblige. Forget it; beyond momentum, there is no reason on Wall Street.

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

[ozymandius]

2. Today's Reports

8:30 AM Nonfarm Payrolls Apr
Briefing Forecast 115K
Market Expects 100K
Prior 180k

8:30 AM Unemployment Rate Apr
Briefing Forecast 4.5%
Market Expects 4.5%
Prior 4.4%

8:30 AM Hourly Earnings Apr
Briefing Forecast 0.4%
Market Expects 0.3%
Prior 0.3%

8:30 AM Average Workweek Apr
Briefing Forecast 33.8
Market Expects 33.8
Prior 33.9

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

[UpInArms]

14. 8:30 reports: 88,000 NPFs - dollar falls

08. U.S. April average workweek 33.8 hours vs 33.9 March
8:30 AM ET, May 04, 2007 - 3 minutes ago

09. U.S. April household job decline largest since Nov '02
8:30 AM ET, May 04, 2007 - 3 minutes ago

10. U.S. April factory jobs down 19,000; services up 116,000
8:30 AM ET, May 04, 2007 - 3 minutes ago

11. U.S. April construction jobs down 11,000
8:30 AM ET, May 04, 2007 - 3 minutes ago

12. U.S. April average hourly earnings up 0.2%, up 3.7yr-on-yr
8:30 AM ET, May 04, 2007 - 3 minutes ago

13. U.S. April nonfarm payroll smallest rise since Nov. '04
8:30 AM ET, May 04, 2007 - 3 minutes ago

14. U.S. April unemployment rate 4.5% vs 4.4% in March
8:30 AM ET, May 04, 2007 - 3 minutes ago

15. U.S. April nonfarm payrolls up 88,000 vs 100,000 expected
8:30 AM ET, May 04, 2007 - 3 minutes ago

[Roland99]

23. wow. barely half of what we need each month in new jobs.

[mojavekid]

26. Forbes: Gold rises as dollar falls back on weaker-than-expected US jobs data

http://www.forbes.com/markets/feeds/afx/2007/05/04/afx3686229.html

LONDON (Thomson Financial) - Gold rose in early afternoon trade as the dollar dipped against the euro on weaker-than-expected US non-farms payroll data.

The US economy added just 88,000 jobs in April, sharply below the 115,000 jobs economists had expected from the survey of employer payrolls.

The unemployment rate, taken from a separate survey of households, rose slightly to 4.5 pct from 4.4 pct in March, while average hourly wages rose 0.2 pct in April to 17.25 usd.

'The consensus was for 100,000 or higher, so the data is a little disappointing,' said James Steel, an analyst at HSBC (nyse: HBC - news - people ) in New York. 'The dip in hourly wage gains was also disappointing, and the two have combined to put pressure on the dollar, which is supporting gold right now.'

The euro rose to 1.3587 usd in the immediate aftermath of the news from 1.3564 previously.

more...

[ozymandius]

3. Oil prices steady around $63 a barrel

SINGAPORE - Oil prices were steady around $63 a barrel in Asian trading Friday despite a spate of oil worker kidnappings and attacks in Nigeria's oil-rich delta region.

Light, sweet crude for June delivery rose 5 cents to $63.24 a barrel in electronic trading on the New York Mercantile Exchange mid-afternoon in Singapore.

Brent crude contract for June delivery gained 27 cents to $66.32 a barrel on the ICE Futures exchange in London.

Gunmen in Nigeria, Africa's leading oil exporter, kidnapped at least 21 people in three attacks that left a Nigerian soldier dead, officials and witnesses said Thursday. Nine captives were later reported freed, of whom eight were foreigners.

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

[mojavekid]

29. Doug Casey: African Madness... Coming Soon to a Gas Pump Near You

http://www.safehaven.com/article-7482.htm

snip...to skip the annoying preamble

Last year marked the first time ever that U.S. imports of African crude oil surpassed shipments of oil from the Middle East. The trend is continuing in 2007; so far, three African countries (Nigeria, Angola, Algeria) account for 26% of crude oil imports, while three Middle Eastern countries (Saudi Arabia, Iraq, Kuwait) account for just 23%.

Our drift toward dependence on African oil goes hand in hand with dwindling production in Mexico, the U.S.' number-two foreign source... and with the continuing ugly business in Iraq, where oil production is still off about 27% from its pre-war high.

snip...

Unfortunately, while the prospects for law and order in Nigeria are dim, the prospects for just plain order aren't much brighter. So it's no wonder that oil prices jumped on the news of the election outcome; a bookie's odds, if you will, on the likelihood of a coup or widespread unrest in the foreseeable future -- either of which would bring work stoppages and sabotage. And, because as goes the fate of Nigeria, at 2.1 million barrels a day Africa's largest oil-producing nation, so goes the cost of your daily commute.

more..

- and here in So. Cal. our gas prices have already hit $3.50 gal, Supreme is $3.75

[ozymandius]

4. Imports erode U.S. wheat gluten industry

WICHITA, Kan. - Even as fears grow over contaminated imported wheat gluten in recalled pet food, U.S. production has been so eroded by low-cost imports that it can no longer supply domestic demand, domestic makers say.

Only four domestic gluten manufacturers, including two in Kansas, have survived the flood of foreign wheat gluten bought here in the last decade at prices cheaper than U.S. producers can make it.

When the United States removed quotas on gluten imports in 2000, prices plummeted by about half, said John Neufeld, chief operating officer for Dallas-based White Energy, which purchased a bankrupt wheat gluten facility in Russell, Kan.

The U.S. imports roughly 80 percent of its wheat gluten from Australia, the European Union and China, where the contaminated wheat gluten behind the recent pet food recall is believed to have originated, according to figures from the National Association of Wheat Growers. It is used primarily as an ingredient in the baking industry, in cereal and in pet food.

-cut-

The food supply chain in the U.S. is highly regulated, but those safeguards are not always in place overseas. Other countries can make low cost food products because they have lower labor costs, less expensive land and less government regulation.

http://news.yahoo.com/s/ap/20070504/ap_on_bi_ge/farm_scene

[Demeter]

5. I'm Sure They Can Gear Back Up

American ingenuity being what it is, now that the industry is protected from predatory marketing of adulterated products! This is what Congress and the Executive Branch are supposed to be doing--protecting American interests--not giving the country away to the mafias of the world!

[ozymandius]

7. Sure they can step up production -- from the article

...MGP Ingredients Inc., is based in Atchison, Kan., with another plant in Pekin, Ill. The company has the capacity to produce 120 million pounds of gluten in a year but the plants are running at only 20 percent of that capacity...

The U.S. consumes about 530 million pounds of wheat gluten annually.

[UpInArms]

11. China Food Mislabeled, U.S. Says

http://www.nytimes.com/2007/05/03/business/worldbusiness/03food.html?ex=1335844800&en=9073740753e4ae30&ei=5088&partner=rssnyt&emc=rss

SHANGHAI, May 2 — A Chinese company accused of selling contaminated wheat gluten to American pet food suppliers avoided inspections partly because it did not correctly disclose its shipping contents to Chinese export authorities, according to American regulators.

The Xuzhou Anying Biologic Technology Development Company, one of two Chinese companies at the center of the huge recall of pet food that has killed or sickened thousands of animals, shipped more than 700 tons of wheat gluten labeled as nonfood products this year through a third-party Chinese textile company.

By listing the goods as nonfood items, the company’s shipments were not subject to mandatory inspection by the Chinese government. Though a possible violation of export policies, such mislabeling is thought to be widespread in China.

The details of the case, some of them disclosed on Friday in a circular released by the Food and Drug Administration, are just the latest clues that Chinese feed suppliers may have been intentionally disguising the contents of their goods.

F.D.A. officials are now visiting China to seek more information about how and why an industrial chemical used in plastics and fertilizer got mixed into pet food ingredients.

...more...

[lovuian]

24. China Imports are Poisoning Americans and destroying

our agriculture and manufacturing

[AnneD]

30. Morning Marketeers....

:donut: and lurkers.

Do any of you remember the story of the man that got a free donkey. Seems this farmer was giving donkeys away. A man came buy, saw that they were free, scooped one up and took it home. By the time he bought the feed, de wormed it, fed it, built a shed, bought a bit and bridle for it, he was thousands of dollars poorer, and the farmer that gave the donkey away but sold the supplies was thousands of dollars richer.

In our haste to get the free donkey, we are not looking at the entire cost of the free donkey.


And speaking of free donkeys, the Texas legislature has put the brakes on Gov. Goodhair attempt to put our tollways up for sale at a deep discount to some of his buddies. The also are saying that if any are sold-they are to have a buy back provision. And here I thought those guys lacked an ability to add and subtract. I have the feeling that this will be a L-O-N-G term for Perry.

Happy sink the mayo day and as always......


Happy hunting and watch out for the bears.

[Ghost Dog]

44. Damn. & I was thinking about maybe investing in one of those Spanish toll-road donkey-companies!

Mierda. Guess I'll have to make do with the privatized water-supply (and purification) business, after all.

Stay cool y'all and say hello to the bears for me. :hi:

(Edit: keyboard, I say).

[AnneD]

46. I have a donkey I can give ya...

If you give me a no bid contract as your supplier.
Have fun. We will try to stay cool. We will have our first days over 90 degrees.

[ozymandius]

6. Yahoo Jumps on Report About Interest From Microsoft (Update1)

May 4 (Bloomberg) -- Shares of Yahoo! Inc., owner of the second most-used Internet search engine, jumped 19 percent after the New York Post reported Microsoft Corp. asked to start talks about a possible takeover.

Yahoo shares surged $6.52 to $34.70 in early Nasdaq Stock Market trading. Shares of Redmond, Washington-based Microsoft, the world's biggest software maker, slipped 44 cents to $30.53.

Microsoft is working with Goldman Sachs Group Inc. on a possible deal, the newspaper said, citing unidentified bankers. An agreement would almost triple the software maker's share of the U.S. search market to 38.4 percent, rivaling Google Inc.'s 48.3 percent share, according to March figures from ComScore Inc.

``Their only other real choice to catapult into a really competitive position is either to buy five to 10 smaller companies or buy something like Yahoo,'' said Peter Misek, an analyst with Canaccord Capital Inc. in Toronto who rates Microsoft ``buy.'' He said it may take a decade and tens of billions of dollars to catch Google with internal development.

http://www.bloomberg.com/apps/news?pid=20601087&sid=an1f_.XA1slU&refer=home

[ozymandius]

8. Judge Approves $1.53 Billion Verdict Against Microsoft

A federal judge has approved a jury's decision to award Alcatel-Lucent SA $1.53 billion in damages after finding that software company Microsoft violated its patents.

Judge Rudi Brewster, of U.S. District Court in San Diego, signed off on the award Monday.

In February, a jury found that Microsoft's Windows Media Player software violated digital speech patents owned by Lucent Technologies, which was acquired last year by Paris-based Alcatel.

Microsoft said it plans to challenge the ruling by Brewster, who in March dismissed a related claim by Alcatel-Lucent against Microsoft.

A U.S. Supreme Court decision earlier this week could bolster the software maker's chances for a successful appeal.

http://www.informationweek.com/news/showArticle.jhtml?articleID=199203549

[UpInArms]

9. dollar watch

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

Last trade 81.921 Change -0.045 (-0.05%)

Non-Farm Payrolls for April: How Bad Can It Be?

http://www.dailyfx.com/story/topheadline/April_Non_Farm_Payrolls__How_Bad_1178202389807.html

This Friday, we are expecting April Non-farm payrolls and now more than ever, with the EUR/USD trading near its record highs, the amount of jobs created last month will be critical in determining where the dollar is headed next.

For the past few months, the stability of the labor market has pacified the market’s concern about the housing market because as long as people have jobs, they will continue to pay their mortgages. However the problems in the housing market are worsening with sharp drops seen in existing, new and pending home sales for the month of March. If the labor market buckles as well, then the US economy could be in serious trouble. The two week consolidation that we have seen in the EUR/USD indicates that traders are waiting for the non-farm payrolls release before deciding whether to take the EUR/USD above 1.37 or back below 1.35. With a skyrocketing stock market and strong corporate earnings, the downside surprises that we have seen in some of the leading indicators for NFP has traders and analysts completely befuddled. Even though the current consensus estimate for payrolls is 100k, according to the Bloomberg survey, the range of estimates is between 40k and 160k. This divergence suggests that payrolls can be anyone’s game, so as usual anticipate a volatile trading session tomorrow.

What does this mean for the US Dollar?

When examining payrolls, it is important to look at both the headline number and the revisions. In many of the prior months, revisions have negated downside surprises and payrolls and exacerbated the upside ones. With a 180k print in March, there is a decent chance for significant revisions to the prior month’s data. If both the headline and revision number turns out to be dollar negative, then market watchers will pounce on the idea of sharply slower growth in the second quarter. The labor market is the backbone of the US economy. Weak job growth poses a big threat to consumer spending. Even though the Federal Reserve is mostly concerned about inflation, with the housing market turning down, payrolls less than 100k will force them to slam the door on future rate hikes and look to cut interest rates this year. On the other hand, if the payrolls figure catches the market by surprise and increases by more than 100k, with no revisions to offset the dollar bullish number, the Federal Reserve will have the flexibility to leave interest rates unchanged at 5.25 percent. This would send the dollar skyrocketing and exacerbate the weakness that we are already beginning to see in the EUR/USD and GBP/USD in the process.

...more...

US Dollar: Stronger Going into Payrolls

http://www.dailyfx.com/story/bio1/US_Dollar__Stronger_Going_into_1178225958980.html

The rally in the US dollar today suggests that the optimism about Friday’s non-farm payrolls release could be stronger than most economists and derivative traders may anticipate.

• US Dollar: Stronger Going into Payrolls
• Yen Based Carry Trades Continue to Move in Lockstep with the Dow
• USD/CAD Nears 7 Month Lows after BoC Dodge Downplays Intervention Risk

US Dollar: Stronger Going into Payrolls

The rally in the US dollar today suggests that the optimism about Friday’s non-farm payrolls release could be stronger than most economists and derivative traders may anticipate. The dollar strengthened for the fourth straight day against the Euro and the third day against the British pound and Japanese Yen. The current consensus estimate for payrolls is 100k while the latest payrolls derivative auction settled at 88.8k. Derivative traders are more pessimistic than economists, but the price action in the dollar suggests that currency traders may actually be looking for stronger job growth in the month of April. Given the dollar’s rally going into the number, we will probably need to see something in excess of 125k to see further dollar strength. Today’s jump in the service sector ISM index and mild increase in the Monster.com’s online job ads has triggered renewed optimism ahead of such a critical number. With the employment components of both the service sector and manufacturing sector ISM reports signaling an increase in hiring, there is a decent chance that non-farm payrolls could beat expectations especially since the 100k forecast is very low. However, traders should be particularly careful when trading non-farm payrolls because this is a report that can cause a great deal of volatility. The revisions are just as important as the headline. There are also plenty of reasons why payrolls could still come out weak, including the sharp drop in the ADP Employment index, the increase in layoffs according to Challenger Gray and Christmas and mounting jobless claims. Our Non-Farm Payrolls Preview contains more information on what is expected and how to trade this release. We anticipate a sharper reaction to a weak number than a stronger one since traders are buying up dollars ahead of the number.

...more...

[ozymandius]

10. Reuters stock soars on takeover bid

LONDON (Reuters) -- Financial news and information provider Reuters said on Friday it had received a preliminary takeover approach from an unidentified suitor, sending its shares up nearly 25 percent.

Earlier, traders had reported market speculation of a 600-pence-a-share bid from Canada's Thomson (Charts) or Rupert Murdoch's News Corp. (Charts)

Reuters (Charts) declined further comment. Thomson Corp declined to comment. News Corp could not immediately be reached.

Reuters shares rose 24.3 percent to 611-1/2 pence, valuing the business at $15.3 billion (£7.7 billion). Shares earlier touched a 5-year high of 617-3/4 pence.

"The board of Reuters confirms it has received a preliminary approach from a third party which may or may not lead to an offer being made for Reuters," Reuters said in its statement.

http://money.cnn.com/2007/05/04/news/companies/reuters.reut/index.htm?postversion=2007050405

[UpInArms]

12. UBS Closing Hedge Fund; $124 Million in Losses Cited on Mortgages

http://www.nytimes.com/2007/05/04/business/04ubs.html?ex=1335931200&en=3c1c00950506fb5e&ei=5088&partner=rssnyt&emc=rss

LONDON, May 3 — After turning UBS’s investment bank into one of the elite on Wall Street, John P. Costas gave up the chief executive’s post to run a hedge fund for the company, sensing the opportunity to build another world-class business.

On Thursday, the foundation collapsed.

UBS, the big Swiss bank, said that it would close its hedge fund arm, Dillon Read Capital Management, after less than two years because of losses in the United States mortgage market. The losses contributed to a 7 percent drop in first-quarter profit, the third consecutive quarterly decline.

The decision to close Dillon Read is a big blow to Mr. Costas, who propelled a foreign bank into the upper echelons of Wall Street. He was then given control of Dillon Read to prevent his leaving to set up his own hedge fund. Instead, he took a small group of UBS bond and other fixed-income traders to the new venture, which combined proprietary trading on the bank’s own account with managing money for outside investors.

The potential did not pay off. Ultimately, Dillon Read became “too complex and expensive,” John Fraser, the chief executive of UBS’s asset management division, said in a statement on Thursday. It lost 150 million Swiss francs ($124 million) in the first quarter, largely because of losses in trading in United States mortgage securities.

...more...

[ozymandius]

13. Jobs, mergers could extend rally

Futures higher as Wall Street awaits jobs reading and mulls latest reports of bids for Yahoo, Reuters, EMI and Dow Jones.

NEW YORK (CNNMoney.com) -- A busy morning for media-merger reports have U.S. stocks looking higher ahead of the much-anticipated April jobs report due an hour before the market open.

Stock futures were up in early trading, although they are likely to be affected by the 8:30 a.m. ET report.

Economists surveyed by Briefing.com forecast that employers added 100,000 jobs in the month, down from the 180,000 gain in March, while the unemployment rate is forecast to creep back up to 4.5 percent from 4.4. Hourly wages are again forecast to post a 0.3 percent rise, the same gain seen in March.

John Silvia, chief economist with Wachovia, said if the report comes in near forecasts, it could help stocks continue their rally. But he said there's a lot of risk that the markets will sell off on the report, especially if traders are looking for an excuse to sell and lock in some recent stock gains.

http://money.cnn.com/2007/05/04/markets/stockswatch/index.htm?postversion=2007050407

[UpInArms]

17. US STOCKS-Futures add slight gains after jobs data

http://www.reuters.com/article/bondsNews/idUSN0429019620070504

NEW YORK, May 4 (Reuters) - U.S. stock futures added slight gains after weaker-than-expected April jobs data on Friday.

S&P 500 futures (SPc1: Quote, Profile, Research were up 7.5 points, above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures (DJc1: Quote, Profile, Research were up 57 points, and Nasdaq 100 (NDc1: Quote, Profile, Research futures were up 12.5 points.

[burf]

22. It is encouraging to see

the job market adding 116,000 of those good paying service sector jobs and eliminating those dead end manufacturing positions. :sarcasm:

[AnneD]

43. You don't want

those wages driving up inflation.:sarcasm:

[UpInArms]

15. New Century (Sub-prime Lender) to cut 2,000 jobs as unit fails to sell

http://www.reuters.com/articlePrint?articleId=USN0348653620070504

LOS ANGELES, May 3 (Reuters) - Bankrupt subprime mortgage lender New Century Financial Corp. (NEWC.PK: Quote, Profile, Research will lay off 2,000 workers on Friday as it shuts down its lending unit after failing to find a buyer for it, a spokeswoman said.

Separately, KPMG quit as auditor of the company, New Century said in a Thursday filing.

No bids were made at an auction ending on Wednesday for the lending unit, whose main assets are technology and a national network that quit taking loan applications on March 8, spokeswoman Laura Oberhelman said.

Chief Executive Brad Morrice told employees on a conference call on Thursday that the unit would be closed.

New Century helped spark the subprime lending mortgage frenzy and is the largest to go bankrupt in the devastated sector focused on high-interest-rate mortgages to relatively risky borrowers.

The new staff cuts take the company, which had about 7,000 employees at the beginning of the year, to about 750, who are mostly in its division servicing loans. That unit also is for sale, although Carrington Capital Management has already made a bid.

...more...

[UpInArms]

16. Hovnanian (luxury home builder) sees loss bigger than previously thought

http://www.reuters.com/article/bondsNews/idUSN0426931520070504

(Reuters) - Hovnanian Enterprises Inc. (HOV.N: Quote, Profile, Research said on Friday its second-quarter loss would be bigger than it had previously expected, as the subprime mortgage crisis exacerbated weakness in the moribund home-building sector.

The luxury home builder said it expected to post a loss of about 30 cents per share before certain land-related charges. It had earlier forecast the loss at 5 cents to 20 cents.

After the charges, the company expects to report a loss of 45 cents to 50 cents per share.

The company expects to incur about $15 million to $20 million of pretax charges for land impairment and write-offs of predevelopment costs and land deposits in the second quarter.

<snip>

"The adverse publicity surrounding the subprime market has further damaged home buyers' psychology, resulting in decreased demand and leading to continued use of sales incentives," Hovnanian said in a statement.

The company said net contracts for the quarter fell 21 percent, and home deliveries sank 30 percent.

...more...

[Demeter]

19. How Many Fools In This Fiasco?

1) the builder of luxury homes, when what America needs is solar passive, low maintenance, high intrinsic value, highly efficient shelter--not gimcracky, slapped together monstrosities stuck way out in the boonies.

2) the buyer who buys what he doesn't need at rates he can't afford with money he hasn't got

3) the lenders, who give money they don't have to people who can't afford the "luxuries" they want, in spite of all indications that the loans will fail, but hey! they can securitize these bogus mortgages and pass them on to a greater fool!

The level of self-deception and deception of others in this new millenium must be a record.

[burf]

21. UIA, you certainly

highlighted the key there. It's because of all the adverse publicity. Not because we were building McMansions for folks who had no hope of ever paying the things off. Whose credit was maxed out twice over but still thought they could live way beyond their means.

When all else fails, blame the messenger.

[texpatriot2004]

18. K & R nm

[citizen snips]

20. Kodak 1Q Loss Narrows

ROCHESTER, N.Y. (AP) -- Eastman Kodak Co. reported a narrower loss for its first quarter on Friday, its ninth deficit in the last 10 quarters as it applies some final touches to a drastic digital makeover.

The photography company lost $151 million, or 53 cents a share, in the January-March period versus a loss of $298 million, or $1.04 a share, a year ago when it took hefty charges linked to its massive overhaul.

Sales fell 8 percent to $2.12 billion from $2.89 billion a year ago.

Its overall digital sales in the latest quarter fell 3 percent to $1.2 billion, while revenues from film, paper and other traditional, chemical-based businesses dipped 13 percent to $896 million.

more...
http://biz.yahoo.com/ap/070504/earns_kodak.html?.v=6

[mojavekid]

25. Daily Pfennig 54/07: U.S. Data Baffling...

http://www.kitcocasey.com/displayArticle.php?id=1364

Good day... The dollar continued its ascent yesterday on productivity and service industry growth, which again exceeded forecasts. Productivity, a measure of how much an employee produces for an hour of work, rose at an annual rate of 1.7 percent last quarter. The ISM followed up yesterday's strong manufacturing data with their non-manufacturing index, which climbed to 56 in April from 52.4 in March. The data continued to confound economists and would indicate the U.S. economy may be strengthening after the slowest pace of growth in four years.

But I don't buy it, and after scanning several publications, I find I'm not alone in my skepticism. Yesterday's headline in the Financial Times Market section put it best: "Strong U.S. manufacturing figures are 'baffling'". According to the FT, "The rise in the ISM index is impossible to square with either the regional surveys released over the past few weeks or our medium-term, yield-driven model. We think it is quite likely that in their next iterations the ISM will drop sharply."

Overshadowed by the strong ISM numbers were the weekly Initial Jobless Claims which did tick down, but remained above 300k. Continuing claims also dropped slightly. The market's focus is on today's release of the monthly jobs data as it will be the last major economic data release prior to the FOMC's meeting next week. The bar has been set pretty low as the consensus among economists is for the monthly figures to show an increase of 100k. With all of the positive data released this week, and that wonderful "birth death model," I think we will see the numbers come in just above the consensus at 107k. But even if the numbers come in as expected, the unemployment rate will tick up as 100k jobs won't be enough to keep the rate at the current 4.4%. I continue to believe the FOMC has no choice but to leave rates right where they are and continue their "wait and see" attitude. I don't care what the data shows, the U.S. economy isn't anywhere near the bottom, which we will likely see later this year or early 2008.

more...

[mojavekid]

27. Fleckenstein: Bad news: This bubble is worldwide

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/BadNewsThisBubbleIsWorldwide.aspx

Rather than go through the blizzard of earnings reports Wednesday night, I thought I might take a stab at discussing the recent market action and attempt to put it into perspective. Besides, delving into the earnings details doesn't seem to matter these days, as stocks explode on good news, lukewarm news and bad news.

Behold the bull
The stock market has been on an epic run from the July lows, with hardly a breather other than the nasty but short-lived break we saw in February. Since that event, the rally has become even more relentless and maniacal, with the Dow up 20 out of the past 22 days, as of Friday.

There is no decent explanation to account for this. The bulls talk about it being 1995 all over again. And while last summer I assumed they'd make that case -- which is why I'd gotten out of my shorts, before re-entering them, way prematurely -- I thought last fall that that scenario and the end of Federal Reserve rate increases had been well discounted. I certainly never dreamed the bulls would be able to make their case so forcefully in the stock market.

more...

[mojavekid]

28. Peter Schiff: "Growth" is in the Eye of the Beholder

http://www.safehaven.com/article-7487.htm

It may come as a shock to many of you, but I too believe that we are experiencing a "Goldilocks" economy. However, unlike most on Wall Street I do not define this as economic growth that is neither too hot nor too cold. I believe the analogy is apt simply because U.S. economic growth is a fairy tale! When such gains are measured against the gains in the price of just about anything people buy, or in just about any foreign currency, it's a whole different story. For example; measured in euros, U.S. GDP has declined from 11.5 trillion in January of 2000 to 10 trillion today. From a European perspective, the U.S. economy has been in a seven-year recession, with GDP declining by close to 2% per annum.

Also ignored in the rhapsodizing over U.S. GDP growth is the extent to which consumption has been paid for with borrowed money. Since these debts must be repaid with interest, GDP will likely decline even more significantly in the future. Had we borrowed primarily to finance capital investment this would not be the case, as the loans could have been repaid out of increased income. However, as the vast majority of borrowing is simply used to purchase consumer goods, the income needed to repay the debts will have to come at the expense of reduced future consumption.

This week we received new data that illustrates how big of a financial hole U.S. consumers are digging. Despite disappointing sales from major retailers such as Target and Circuit City, first-quarter profits at MasterCard surged 70% to a record $214.9 million following a 19% jump in transactions. I see two possible explanations for this apparent paradox. The first is that despite buying fewer items, consumers were forced to borrow to pay for things that until recently they could afford to pay for in cash. A second possibility is that due to disappearing home equity and tighter lending standards, fewer home owners were able to tap into home equity and were thus forced to use credit cards instead. Since credit card debt carries higher interest rates and is non-tax deductible, it is far more expensive to finance then mortgage debt. Under either possibility, future consumption will suffer as an even greater share of personal income is devoted to making interest and principal payments on items consumed in the past.

more...

[ozymandius]

31. 12:56 snapshot

Dow 13,250.97 Up 9.59 (0.07%)
Nasdaq 2,568.68 Up 3.22 (0.13%)
S&P 500 1,504.62 Up 2.23 (0.15%)
10-Yr Bond 4.64% Down 0.034
NYSE Volume 1,496,893,000
Nasdaq Volume 1,258,343,000

12:30 pm : The market has encountered a bout of selling interest that has robbed the Dow and Nasdaq of their earlier gains. Altogether the market is mixed and basically flat for the session.

There wasn't a specific news catalyst for the recent pullback, as it is simply a case of profit taking. Entering today's session the Dow was up 0.9% for the week after gaining 5.7% in April.

the pullback, like the earlier advance, has been orderly and broad-based.DJ30 -6.34 NASDAQ -1.95 SP500 +0.38 NASDAQ Dec/Adv/Vol 1356/1519/1.11 bln NYSE Dec/Adv/Vol 1226/1825/647 mln

Just a drive-by posting. I'm about to spend the entire day in meetings and on the phone.

Ozy :hi:

[citizen snips]

32. Celgene Shares Hit All-Time High

NEW YORK (AP) -- Shares of Celgene Corp. rebounded to an all-time high Friday, as Wall Street worked through weaker-than-expected sales figures for one of the biotech drug maker's key drugs and focused on how sales of the drug improved margins.

Celgene shares rose $1.50, or 2.4 percent, to $63.11 in afternoon trading. Shares reached an all-time high of $63.90 in earlier trading, and have appreciated more than 53 percent over the last 52 weeks.

On Thursday, the company reported adjusted earnings per share of 20 cents on revenue of $293.4 million. Analysts polled by Thomson Financial expected 20 cents per share on revenue of $294.3 million. On the earnings release, shares opened at $59.61, or 5.1 percent lower than their prior close, and struggled over the day to close at $61.61.

While sales of the company's cancer drug Revlimid more than tripled to $146 million, they fell below Wall Street expectations of $150 million.

more...
http://biz.yahoo.com/ap/070504/celgene_mover.html?.v=1

[citizen snips]

33. Electronic Data Shares Tumble

NEW YORK (AP) -- Shares of Electronic Data Systems Corp. tumbled nearly 7 percent Friday amid concerns over lower bookings.

The information technology services company posted a sharp jump in its first-quarter profit on Thursday, as some contract payments came in ahead of schedule.

But Cowen and Co. analyst Moshe Katri noted the company reported weak bookings and free cash flow. He said in a client note that the quarter's earnings of 31 cents per share benefited from "numerous" one-time items, including a large prepayment from Verizon Communications Inc.

The analyst reiterated a "Neutral" rating on EDS.

more...
http://biz.yahoo.com/ap/070504/electronic_data_mover.html?.v=1

[citizen snips]

34. Grains Mixed, Soybeans Fall

CHICAGO (AP) -- Soybean futures declined and grains were mixed Friday on the Chicago Board of Trade.

Wheat for July delivery rose 1/4 cent to $4.94 3/4 a bushel; July corn rose 1 1/2 cent to $3.90 3/4 a bushel; July oats fell 3 1/2 cents to $2.68 a bushel; July soybeans fell 1/4 cent to $7.47 1/2 a bushel.

Beef futures ended mixed while pork futures increased on the Chicago Mercantile Exchange.

June live cattle rose .45 cent to 92.17 cents a pound; August feeder cattle fell .38 cent to $1.0927 a pound; June lean hogs rose 1.30 cent to 74.82 cents a pound; July pork bellies rose 2.47 cents to $1.0272 a pound.

http://biz.yahoo.com/ap/070504/board_of_trade.html?.v=4

[citizen snips]

35. Starbucks Shares Slip

NEW YORK (AP) -- Starbucks Corp. shares slipped Friday after the coffee chain reported disappointing fiscal second-quarter sales, though some analysts remained upbeat about the future.

While Starbucks' profit jumped 18 percent in the quarter ended April 1, U.S. sales at stores open at least a year -- a key metric -- rose by just 3 percent, the slowest growth rate for so-called same-store sales since 20001.

Analysts were expecting same store sales in the U.S. to increase by 4 percent to 5 percent; a year earlier, quarterly same-store sales jumped 10 percent.

Same-store sales are important because they measure a retailer's performance at existing stores rather than at newly-opened ones.

more...
http://biz.yahoo.com/ap/070504/starbucks_mover.html?.v=1

[citizen snips]

36. Reports: Microsoft Pursuing Yahoo

NEW YORK (AP) -- Speculation about a possible Microsoft-Yahoo tie-up met with skepticism Friday from analysts who believe services from the two companies have too much in common.

Yahoo shares surged nearly 10 percent following published reports Friday that Microsoft Corp. is resuming its pursuit of Yahoo Inc. in an attempt to better compete with Web search and advertising leader Google Inc.

The New York Post reported that Microsoft has asked Yahoo to enter formal negotiations for an acquisition that could be worth $50 billion. Yahoo's market capitalization was about $38 billion on Thursday.

Both companies declined comment on the reports, each of which cited unidentified people familiar with the situation.

more...
http://biz.yahoo.com/ap/070504/microsoft_yahoo.html?.v=25

[citizen snips]

37. Sector Wrap: Big Pharma Rises

NEW YORK (AP) -- Shares of major drug makers remained near 5-year highs Friday, resisting the post-earnings tug that has followed the last two reporting periods.

The American Stock Exchange's Pharmaceuticals Index, which tracks 15 major drug makers, rose 3.16 points, or nearly 1 percent, to end at 370.95. The index peaked at a 5-year high of 372.06 in the last week of April as major drug makers finished reporting quarterly earnings. In the two previous earnings seasons, the index fell 5 percent between reporting periods.

Leading the pack Friday was Schering-Plough Corp., whose stock hit a 5-year high of $33.37 in earlier trading. Shares of Schering-Plough rose 85 cents, or 2.7 percent, to close at $32.96 on above-average volume.

Prudential analyst Tim Anderson upgraded Schering-Plough to "Overweight" from "Neutral Weight," and raised his price target to $37 from $32, on optimism about the company's $14.4 billion purchase of Organon Biosciences from Akzo Nobel NV, and a pipeline heart disease treatment.

more...
http://biz.yahoo.com/ap/070504/big_pharma_sector_wrap.html?.v=1

[citizen snips]

38. Sector Glance: Telecom

NEW YORK (AP) -- Telecom stocks were mixed Friday as the broader market inched higher, with AT&T Inc. up slightly but Verizon Communications Inc. erasing some of Thursday's gains.

Verizon's shares had hit a 52-week high Thursday, the day of the telecom carrier's annual shareholder meeting, where investors were split on a proposal that would give them an advisory vote on executive pay.

Cowen & Co. analyst Thomas Watts had attributed the stock price jump to "technical factors," noting the company had a very good quarter.

On Friday, Verizon's stock inched lower, though Buckingham Research analyst Qaisar Hasan boosted his target price by $1 to $41.

more...
http://biz.yahoo.com/ap/070504/sector_glance_telecom.html?.v=1

[citizen snips]

39. Sector Glance: News Providers

NEW YORK (AP) -- Shares of news companies traded mostly higher Friday after British news and financial information provider Reuters Group PLC said it received a preliminary takeover approach.

Media reports identified the bidder as Canada's Thomson Corp., which competes with Reuters and Bloomberg LP in delivering real-time financial data and news to customers such as investment banks that are willing to pay a premium for the information.

The Financial Times, Dow Jones and the Globe and Mail newspaper of Canada all named Thomson as the bidder, citing people close to both companies.

News of the proposal came just three days after Rupert Murdoch's News Corp. offered to buy Dow Jones & Co. for $5 billion.

more...
http://biz.yahoo.com/ap/070504/sector_glance_news.html?.v=1

[citizen snips]

40. Gold Boosted by Weaker Dollar

NEW YORK (AP) -- A softer U.S. dollar following a disappointing jobs report Friday provided the fuel for gold to continue its rally.

June gold settled up $5.30 at $689.70 a troy ounce on the New York Mercantile Exchange. July silver settled up 2 cents at $13.53.

"This is very much a dollar story," said Bart Melek, global commodities strategist with BMO Capital Markets.

Currency analysts have blamed the dollar's weaker tone on news that U.S. employment last month grew at the slowest pace since November 2004. Non-farm payrolls rose 88,000 during April, when expectations had been for an increase of 110,000. The unemployment rate rose to 4.5 percent from 4.4 percent, as most economists had expected.

more...
http://biz.yahoo.com/ap/070504/commodities_review.html?.v=3

[citizen snips]

41. Sector Glance: Apparel Retailers

NEW YORK (AP) -- Shares of apparel retailers were mixed on Friday, as Sears Holding Corp. and Bebe Stores Inc. offered a bleak outlook.

Sears late Thursday issued a first-quarter outlook below analyst expectations, while apparel retailer Bebe said it expects fourth-quarter profit between 17 cents and 21 cents per share, shy of Wall Street's 25-cent consensus estimate.

Sears shares fell $8.56, or 4.6 percent, to close at $179.76, while Bebe shares fell 36 cents, or 2.1 percent, to $16.99.

Here is how some other apparel retailers fared Friday:

Hot Topic Inc., up 13 cents to $10.95

more...
http://biz.yahoo.com/ap/070504/sector_glance_apparel_retailers.html?.v=1

[citizen snips]

42. Market Spotlight: Online Education

NEW YORK (AP) -- As more working adults enroll in online degree programs, universities are swooping in to lure students at the expense of the for-profit education companies that have offered degrees over the Internet for years.

Traditional bricks-and-mortar schools are seeing a burgeoning opportunity in online education as students keep looking for ways to complete degrees while juggling work and school.

Online degree programs have already started at well-known schools nationwide, such as the University of Maryland, the University of Florida and Penn State, especially as consumer interest remains strong and online degrees gain acceptance among prospective employers.

"Employer concerns tend to melt away, especially as the alma maters of many employers are offering these online degrees," says Richard Garrett, a senior analyst at Eduventures, a Boston-based consulting and research firm for the education market.

more...
http://biz.yahoo.com/ap/070504/education_market_spotlight.html?.v=1

[UpInArms]

45. Closing with ponies for everyone!

Dow 13,264.62 23.24 (0.18%)
Nasdaq 2,572.15 6.69 (0.26%)
S&P 500 1,505.62 3.23 (0.21%)
10-Yr Bond 4.64% 0.034

NYSE Volume 2,761,932,000
Nasdaq Volume 2,307,702,000

4:10 pm : The market strung together another winning session, aided by some tantalizing merger speculation, a 2.0% drop in oil prices and an April employment report that didn’t contain any bearish surprises.

In fact, the jobs report, which showed an 88K increase in nonfarm payrolls, the slowest gain in more than two years, was very much in line with expectations. The one positive surprise was the 0.2% increase in hourly earnings. That calmed inflation fears as that took the year-over-year rate down to 3.7% from 4.0%.

For the most part, though, the jobs data seemed to take a backseat to speculative reports that Microsoft (MSFT 30.56, -0.41) may be trying to work a deal to acquire Yahoo! (YHOO 30.98, +2.80). Both companies said they don’t comment on rumors, yet that news, and confirmation from Reuters (RTRSY 74.76, +15.84) that it received a takeover approach from a third party, helped keep the market’s bullish momentum intact.

The drop in oil prices, which was attributed to a belief that supplies will be adequate to meet demand, also offered a measure of support. That pullback, however, undercut an early rally in the energy sector (-0.10%) which was one of only two economic sectors to end the day with a loss.

Sector moves were limited in scope on both the upside and downside. That point is borne out in the tight range between the worst-performing sector (energy; -0.10%) and the best-performing sector (+0.60%), which was materials.

In today’s session, outsized moves were restricted to individual stocks like Yahoo! and CROCS (CROX 68.85, +11.44) which were driven by company-specific news. In the case of CROCS, it delivered a blowout report that was replete with upside guidance and a 2-for-1 stock split announcement.

The Dow, once again, finished at a new all-time closing high.DJ30 +23.24 NASDAQ +6.69 SP500 +3.23 NASDAQ Dec/Adv/Vol 1445/1600/2.16 bln NYSE Dec/Adv/Vol 1401/1800/1.36 bln

3:30 pm : Still no signs of buckling as the indices are inching their way higher into the close.

The energy sector (+0.1%), which was the strongest performer earlier in the day, has ceded that position in the wake of a 2.0% decline in oil prices.

The latter has been a welcome site for the airlines, which comprise one of today's best-performing industry groups.DJ30 +28.20 NASDAQ +430 SP500 +3.53 NASDAQ Dec/Adv/Vol 1437/1572/1.89 bln NYSE Dec/Adv/Vol 1435/1740/1.17 bln

3:00 pm : The market is entering the final hour of what has been another impressive week of trading. Today's gains are negligible, but they are noteworthy nonetheless since they reflect a market that seems impervious to selling activity.

Just about all factors have worked in its favor today, from M&A news to earnings results to a drop in oil prices. It wouldn't surprise us if there were some final hour profit taking, but the way things have gone for the better part of the past five weeks, we wouldn't bet on it.DJ30 +12.10 NASDAQ +1.54 SP500 +1.82 NASDAQ Dec/Adv/Vol 1474/1527/1.74 bln NYSE Dec/Adv/Vol 1411/1745/1.01 bln

2:25 pm : The indices remain confined to tight trading ranges as the conviction on the part of buyers and sellers has been lacking.

The FOMC meeting is next week's key event, but there will also be some important economic data out in the form of the PPI and Retail Sales reports. Both will be released next Friday.

Next week also brings another full slate of earnings with noteowrthy companis such as Disney (DIS), Cisco (CSCO), AIG (AIG) and CVS/Caremark (CVS) on the docket.DJ30 +6.74 NASDAQ +2.06 SP500 +1.73 NASDAQ Dec/Adv/Vol 1508/1459/1.61 bln NYSE Dec/Adv/Vol 1439/1705/987 mln

See! We don't need no stinkin' jobs! :bounce:

:sarcasm: