STOCK MARKET WATCH, Tuesday February 6

[ozymandius]

Tuesday, February 6, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 713 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2234 DAYS
WHERE'S OSAMA BIN-LADEN? 1938 DAYS
DAYS SINCE ENRON COLLAPSE = 1898
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 7
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 February 5, 2007

Dow... 12,661.74 +8.25 (+0.07%)
Nasdaq... 2,470.60 -5.28 (-0.21%)
S&P 500... 1,446.99 -1.40 (-0.10%)
Gold future... 656.10 +4.60 (+0.70%)
30-Year Bond 4.91% -0.02 (-0.32%)
10-Yr Bond... 4.81% -0.02 (-0.39%)






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. Today's Market WrapUp

Markets Are Quiet Ahead of Quarterly Refunding
BY MIKE HARTMAN

So far this morning, the financial markets are exhibiting very low volatility in the absence of significant market-moving news or events. Stock prices are flat with the Dow higher by six points and bonds are slightly higher from Friday’s close. The dollar is stronger versus the pound, euro and Swiss franc, but weaker when priced in Canadian dollars, Australian dollars and yen. Overall, the U.S. dollar index is higher by 0.24% at 84.99…still battling with the resistance at 85 from last week. As the dollar tries to grind its way higher, gold and silver are grinding higher right along with the dollar. Oil touched a high of $59.95, but has since pulled-back to $59.05. I’ll come back later to check the closing prices. Overall for the week I expect to see much of the same low volatility as the Treasury prepares to conduct their quarterly debt refunding as they bring $38 billion of new supply to the Treasury market tomorrow, Wednesday and Thursday.

The most significant economic data to hit the markets today came from the Institute for Supply Management with the release of their Services Index posting a gain to 59. Expectations called for a reading of 57. The better-than-expected number did very little to move the markets. The bond market didn’t even flinch (by moving lower) with the stronger-than-expected services report. Bond prices have tumbled seven out of the last nine weeks and finally stabilized last week. It looked like bonds wanted to shoot higher on Friday, but were held in check as we await the debt sales over the next three days. Bonds are in oversold territory, which is just right to create a buying atmosphere for the auctions. I believe bonds are set to rally over the coming weeks once the Treasury auctions are complete.

-cut-

Consumer Spending Translates to CONSUMPTION

We have growth from emerging nations tracking in the vicinity of 7% to 10% annually and here in the U.S. consumer spending and consumption have continued to move higher. In my mind this all translates to continuing demand for commodities of all kinds. Emerging nations are building-out infrastructure as their economies expand and the commodity demand from China still appears to be insatiable. On Friday, Mineweb.com ran a piece that started with, “Rio Tinto posts a 43% increase in net profits for 2006 for a record $7.44 billion.” The article went on to say:

“Rio Tinto is also very bullish on the future of its iron ore. Rio Tinto Chairman Paul Skinner told U.S. metals analysts that the iron ore demand from Chinese steel mills ‘is very, very strong.’ Despite the growth of domestic iron ore mining in China, Skinner insisted that the Chinese steel producers’ ‘appetite for our iron ore is considerable.’”

-cut-

We all know that China, India and many other emerging nations are building roads, bridges, hospitals, homes, production plants, water treatment, and all other kinds of infrastructure projects…don’t forget China is still building venues to host the Olympics next year. I have also done some cursory research to learn that China is very actively working to build their military capabilities. The U.S. military most certainly possesses some proprietary technologies for waging war, but the biggest thing that differentiates our military from all other military forces is our “blue-water navy.”

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

[ozymandius]

2. Oil climbs toward $60 on cold weather in U.S.

LONDON (Reuters) - Oil surged $1, toward $60, on Tuesday on expectations the coldest weather of the U.S. winter would cut heating oil stocks in the world's top energy consumer.

The onset of cold weather in the U.S. Northeast, the world's biggest heating oil market, and a shift in investment flows has lifted oil from a 20-month low of $49.90 on January 18 and brought it into the danger zone for consumer nations' economies.

U.S. crude oil was up $1.10 at $59.84 a barrel by 1155 GMT. London Brent crude gained $1.08 to $59.19.

Last time oil reached these levels -- it peaked at $78.40 in July 2006 -- consumer nations led by the United States called on the Organization of the Petroleum Exporting Countries to increase oil supplies to protect economic growth.

more

[ozymandius]

3. European equities hit 6-year highs

European equity markets rose to fresh six-year highs on Tuesday, with Italy's Capitalia leading banks higher after Spain's Santander was reported to be poised to raise its stake to around 5 per cent.

By midday, the FTSE Eurofirst 300 was up 0.5 per cent to 1,546.22, Frankfurt's Xetra Dax added 0.3 per cent to 6,894.18, the CAC 40 in Paris edged 0.2 per cent higher to 5,694.6 and London's FTSE 100 climbed 0.5 per cent to 6,348.1.

Capitalia gained 1.7 per cent to EU7.18 after reports the bank was in talks with Banco Santander Central Hispano (NYSE:STD - news)of Spain, which currently hold less than 2 per cent of its Italian rival, about raising its stake to help Capitalia defend itself against takeover by Dutch bank ABN Amro.

http://news.yahoo.com/s/ft/20070206/bs_ft/fto020620070719013588

[ozymandius]

4. Toyota Reports Record Quarterly Profit

Toyota reported record sales and net profit for the October-December quarter Tuesday as the Japanese company moves closer to surpassing General Motors as the world's biggest automaker.

Hot sales of the Camry sedan and the remodeled RAV 4 sport utility vehicle in North America helped Toyota Motor Corp. (nyse: TM - news - people )'s group net profit to rise 7.3 percent to 426.8 billion yen (US$3.6 billion; euro2.8 billion) in the fiscal third quarter, up from 397.6 billion yen the same period the previous year.

Quarterly sales climbed a solid 15.2 percent to 6.15 trillion yen (US$51.2 billion; euro39.6 billion).

http://www.forbes.com/feeds/ap/2007/02/06/ap3398238.html

[54anickel]

24. GM's Wagoner: Government should support alternative fuels

http://www.suntimes.com/classifieds/autos/autonews/241982,wagoner05.article

DEARBORN, Mich. -- With oil prices at a 19-month low, you'd think General Motors Corp. Chief Executive Rick Wagoner would be giddy.
After all, it's high gasoline prices during the past two years that led to hard times for his company and the rest of the traditional domestic automakers.

Yes, he's happy that the price of oil has dropped below $52 a barrel, a 19-month low. But he also doesn't think it will last.

At an auto industry conference in the Detroit suburb of Dearborn, Wagoner called on the U.S. government to support diversifying America's energy supply by using tax credits or fuel subsidies to promote development of ethanol, hydrogen fuel cells and advanced battery technology.

"We run the risk of reverting back to our traditional energy policy," he told the Automotive News World Congress last month. "That is, relying on the lowest-cost energy available on world markets without providing adequate support for developing alternative sources."

Wagoner said automakers need to lead the way, but government and other industries such as oil, electric utilities, battery companies and research laboratories also must play a role.

He said marketplace reality is going to require the government to step in and promote U.S. energy security and diversity "regardless of what happens to the price of oil in the short term."

more...

[54anickel]

30. Granholm will push alternative energy (MI Gov.)

http://www.freep.com/apps/pbcs.dll/article?AID=/20070206/BUSINESS06/702060316/1002/BUSINESS

Gov. Jennifer Granholm is expected to announce plans during her State of the State address today to invest at least $100 million over three years to pay for research, development and commercialization of alternative energy in Michigan.

The plan calls for:

• Investing about $50 million over three years in public and private sector money to pay for the research and pilot programs of alternative energy companies in Michigan.

• A loan fund of about $12 million that would help the state's alternative energy entrepreneurs reduce their debt and lower costs of capital access for renewable resources.

• Spending about $7 million to install about 1,000 biodiesel and ethanol pumps across the state by the end of 2008.

• Targeting $20 million of state money and at least $11 million from private resources toward the Venture Michigan Fund to help the commercialization of alternative energy companies across the state.

It is "the investment we're choosing to make and the tools the governor is bringing to bear that will create the comprehensive economic plan for alternative energy the state will need to diversify," said Dana Debel, Granholm's policy director.

more...

[54anickel]

31. 3 in 10 Michiganders expect they'll have to leave state, poll says

http://www.freep.com/apps/pbcs.dll/article?AID=/20070206/BUSINESS06/702060386/1002/BUSINESS

Nearly half of young Michiganders predict they'll have to leave the state to pursue a career and almost two-thirds of those won't mind leaving, the latest indicator of a Michigan economy in crisis.

In all, three in 10 state residents think they might have to leave Michigan, according to The Detroit Free Press-Local 4 Michigan Poll.

snip>

The state's unemployment rate -- at 7.1% in December, the second highest in the nation -- was cited by 39% of respondents as their chief economic concern. Another 31% cited the rising cost of health care.

The Free Press-Local 4 Michigan Poll is based on telephone interviews with 803 Michiganders 18 years and older conducted Jan. 28 to Jan. 31. The margin of error is plus or minus 3.5 percentage points.

Don Boozer, 51, of Rochester Hills said last week that he plans to move to West Virginia in three years once he retires. One of the Madison Heights firefighter's two adult children already s left the state; the other is seriously considering it.

"My son's got an engineering degree, and for him to stay in Michigan, there's no sense in getting tied in to companies that are laying people off every quarter," Boozer said.

more...

[54anickel]

25. Imports about to overtake Big Three

Domestic models from GM, Ford and Chrysler took barely half the U.S. market in January, and their share is getting smaller.

http://money.cnn.com/2007/02/06/news/companies/import_nation/index.htm?postversion=2007020606

NEW YORK (CNNMoney.com) -- Baseball, hot dogs, apple pie and ... imported cars?

That old Chevrolet jingle, which was written to position the General Motors (Charts) brand as the all-American make of car and truck, could be due for an update, according to the latest sales figures in the auto industry.

That's because imported auto brands reached a record high of 49.4 percent of U.S. sales in January, according to the latest industry figures.

Experts in the field say imports should cross the 50 percent mark in the world's most important auto market sometime this year, perhaps as soon as March.

"There's going to be at least several months this year when, we think, the import brands will top 50 percent," said Jesse Toprak, senior analyst with automotive Web site Edmunds.com.

snip>

The Detroit automakers say they're not focused on whether the American car buyer is turning to Detroit or overseas brands for a majority of their car and truck purchases.

Instead they're trying to cut costs and return to profitability. Part of that requires cutting production and dropping money-losing products. That means reduced market share.

"The 50 percent is not a benchmark. It's an interesting statistical point," said GM spokesman John McDonald. "It's like global sales leadership, it's nice, and we've had it for 76 years. But if you're not making money, it's not really relevant. We can't be chasing market share for the point of chasing market share. We can't afford to lose money."

more...

[54anickel]

34. Dusting Off The Taurus

http://www.forbes.com/business/2007/02/06/ford-taurus-returns-biz-cz_jm_0206ford.html

DETROIT - Ford Motor is about to dust off the once-proud Taurus nameplate and put it on the slow-selling Five Hundred sedan, proving that a change at the top doesn’t necessarily lead to clearer thinking.

Ford has suffered plenty of self-inflicted wounds in recent years. And Alan Mulally, Ford's new chief executive, has made it clear he thinks killing off the Taurus last year was one of the doozies. But Mulally's first major product-related decision since taking over in October is exactly the kind of shortsighted thinking that got Ford in trouble in the first place.

Mulally's right about one thing: It's a crime that Ford allowed what was once America's best-selling car to wither on the vine. The company should have been reinvesting to keep the Taurus ahead of the Toyota (nyse: TM - news - people ) Camry and Honda (nyse: HMC - news - people ) Accord. Even so, the Taurus managed to retain a loyal following, even after it was relegated to rental car status in recent years.

But putting the Taurus badge on a nondescript car like the Five Hundred will only compound Ford's earlier mistake. It won't magically restore the Taurus luster. And it may well further damage Ford's already shaky credibility.

There's some logic to the name change. In today's hypercompetitive market, the explosion of new models makes it difficult to build awareness for new nameplates. Ford sold 6 million copies of the Taurus during its 21-year run, and 3 million of them are still on the road today. Consumer awareness of the Taurus nameplate is almost 90%--twice the level of the Five Hundred. That makes marketing easier, and less expensive.

more...

Hmmm, sort of hard to call a vehicle at nearly twice the price a Taurus, ain't it?

[ozymandius]

5. Kodak enters inkjet-printer market with low-cost cartridges

ROCHESTER, N.Y. (AP) -- Eastman Kodak Co. (EK) elbowed its way into the crowded inkjet-printer market Tuesday, unveiling a trio of home printers that produce documents and photos using ink cartridges that cost roughly half as much as the competition's.

"For far too long, people have felt restrained from printing due to the high cost of ink," said Antonio Perez, Kodak's chief executive. "Our new system gives consumers the freedom to print documents and photos frequently, easily and affordably with exceptional quality that lasts a lifetime."

Replacement cartridges will run $9.99 for black ink and $14.99 for color, Kodak said.

The photography company's long-awaited leap into the rough-and-tumble arena where printers are typically sold at cost or bundled with computers to propel lucrative ink sales could trigger a price war that cheers millions of photo enthusiasts but leaves some manufacturers in the dust.

http://www.marketwatch.com/news/story/kodak-enters-inkjet-printer-market-low-cost/story.aspx?guid=%7BD2D60EAB-9C79-447F-AE94-9C14A7356B04%7D

[JNelson6563]

8. Good idea, glad to see this

I've wondered when Kodak would jump on this wagon, they're well suited for it. Without such moves they'd just continue along the path of the buggy whip companies.

Julie

[ozymandius]

6. Not to steal UpInArm's thunder...

There's some good stuff here that extrapolates dollar policy to various conclusions.

Another nail in the US dollar's coffin
By Jephraim P Gundzik

Growing political instability in the US will weigh heavily on the dollar during 2007. This weight, combined with growing political pressure for dollar devaluation and a slew of negative economic factors, is likely to prompt significant dollar depreciation against most other currencies. The dollar's decline will help send asset values in the US sharply lower and precious metals prices soaring.

Smells like impeachment

The aftermath of President George W Bush's State of the Union address last month provided a clear picture of the now-gaping divide between the policies of the US president and the opinions of Congress, the American people and most of the world. The president pleaded for the support of Americans for his plan for "stabilizing" Iraq and the Middle East by escalating the US military presence in the region. Rather than stabilization, this policy could fuel civil wars in Iraq, Lebanon and the Palestinian territories. It could also lead to military conflict between the United States and Iran.

-cut-

No legs left to stand on

In addition to rapidly increasing political instability, growing pressure in the US Congress for the devaluation of the dollar will also undermine support for the greenback. Democrats, who now control Congress, have long lobbied for the revaluation of the yuan and yen against the dollar. Revaluation of the Chinese and Japanese currencies means devaluation of the dollar.

The political pressure for dollar devaluation ratcheted higher late last month after the announcement by US auto maker Ford that it lost US$13 billion in 2006. This record loss surpassed the record loss posted by General Motors in 2005 of $11 billion. While some of these enormous losses can be pinned on very high health-care and retirement costs burdening US auto makers, much of the blame for these losses is landing squarely in Tokyo for its weak-yen policy.

http://www.atimes.com/atimes/Global_Economy/IB07Dj01.html

[54anickel]

10. Dollar Watch - in a bit of a funk overnight

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

Last trade 84.96 Change -0.12 (-0.14%)

Settle Time 15:00 Open 85.08

Previous Close 85.08 High 85.17

Low 84.87 2007-02-06 10:25:11, 30 min delay

52wk High 91.16 52wk High Date 2006-03-10

52wk Low 82.24 52wk Low Date 2006-12-05

[54anickel]

12. Today's Pfenning

http://www.kitcocasey.com/displayArticle.php?id=1209

Good day... Not much went on in the currency markets yesterday... Basically, a big fat dud! With the empty data cupboard in the U.S. this week, I think the markets' participants are waiting for something earth shattering from the G-7 meeting this week... Me? I think the markets' participants will be waiting a long time... It's been a long, long time coming... It's going to be a long time gone...

The Fed Heads, Moskow, Yellen and Bernanke will all be out on the road giving us their latest thoughts in speeches today. I find this to be interesting, in that given the void in data this week, and the focus on G-7, and the ECB/BOE rate decision meetings... It gives them a chance to speak about inflation fears, and the whole lot of "hawkish toned" words, to offset the positives that could come from overseas....

But I'm sure it's all on the up and up with the Fed, don't you?

Last week, last month, last year and the year before that, and so on, I've been telling you about the Global Imbalances, and how they will all come crashing down like a house of cards at some time in the future... Well... Yesterday in the Wall Street Journal, there was a good article about the Global Imbalances... So, instead of having me ramble on and on and on about this again, let's see what the WSJ says about Global Imbalances!

snip>

The other story centered around the rising vacancies of homes in the U.S. I know, this report normally flies under the radar screens... But wait till you see why I find it to be important to talk about now....

"Amid brightening hopes that the U.S. housing market is stabilizing, some economists are zeroing in on a piece of data that could augur badly for the consensus view: the homeowner vacancy rate. That figure, an often-overlooked measure of how many homes for sale in the country are empty, has climbed to its highest level since the Census Bureau began tracking it four decades ago. Last week, the bureau said that in the final three months of 2006 there were about 2.1 million vacant homes for sale.

"That brought the national homeowner vacancy rate to 2.7%, up from 2.0% a year earlier. Before 2006, the number had never risen above 2.0%. Like the housing economy more broadly, the measure varies by region: The South had a homeowner vacancy rate of 3.0%, the Midwest had a rate of 2.9%, the West had a 2.4% rate and the Northeast had a rate of 2.0%."

more...

[54anickel]

13. Enormous Pressure on the U.S. Dollar

http://www.kitco.com/ind/Rubino/feb052007.html

Cash -- Not as Safe as It Seems

Holders of cash and its equivalents (CDs, T-bills, and the like) may not earn much in the way of interest, but they are at least certain to get all of their principal back. For this reason, many people assume that holding all cash is the safest and most conservative possible investment stance.

But there is a hidden threat to cash holders: while they are assured of getting all their money back, the money they get may be worth less than it was when they first deposited it. This is what's known as "purchasing power risk."

We believe purchasing power risk to be a serious issue for today's cautious investors. Our concern is owed to a strongly-held belief that the value of the US dollar is likely to decline substantially in the not-too-distant future. This is a topic that we will revisit in far greater detail down the road, but for now we offer this brief synopsis of our reasoning:

snip>

These macroeconomic forces will exert enormous pressure on the US dollar in the years ahead. As a result, the interest earned by holders of cash-equivalents is unlikely to compensate them for the eventual loss of the dollar's purchasing power.

So what's a conservative saver to do? (That's the million dollar question - isn't it?)

more...

[AnneD]

28. Morning Marketeers......

:donut: and lurkers. I watch WSJ on Saturday. Maria had this guy on that I had never heard about-Jim Rogers. Of course he was hawking his book and is big into commodities. Seemed like a good, funny guy. He was talking about how the gov stats are phony bologna and how Chopper Ben is cranking up the printing presses. Then if that wasn't enough, he started talking about how the market was overvalued-just look at some of these brokers and managers getting millions to basically shove paper around. Laughed so hard from my sick bed, esp when Maria said that WS didn't like him much. I hadn't heard that much truth on a business show since I can't remember. It was one of the better interviews. I looked Roger up in passing. What a piece of work....Do any of you have any opinions on this guy? I hope raw materials will weigh in. How long will it take for folks to wise up about our currency. He like the Loonie because they could back up their dollar (actually, so do I-for the same reasons).


Happy hunting and watch out for the bears.

[54anickel]

33. He used to show up over on Financial Sense quite a bit. Haven't

followed him lately though. He partnered with Soros a long time ago. Rather surprised he was on WSJ though. Here's a link to a discussion on his latest adventure....

http://208.149.108.65/media/jrog.htm

[AnneD]

37. Thanks....

He really had me laughing. Maria was talking to him about how his views weren't that popular around WS (did I mention that he thought that it was crazy for a 29 yo to get a million dollar year end bonus for pushing paper around) :rofl: . After what HE had to say-small wonder. I am sure he was there to hawk the book, but he was very refreshing.

[54anickel]

35. Yen Near Three-Week High as G-7 May Focus on Japan's Low Rate

http://www.bloomberg.com/apps/news?pid=20601101&sid=aDN__2hBDacA&refer=japan

Feb. 6 (Bloomberg) -- The yen traded near a three-week high on speculation European officials will say Japan's currency is too weak and its interest rate too low at a meeting of the Group of Seven nations this week.

German Finance Minister Peer Steinbrueck, who speaks in Berlin tomorrow, may echo remarks by officials in France that Bank of Japan rates and the yen should reflect the strength of the economy. A report today showed Japan's broadest index of future economic activity signaled for a second month that growth may slow, damping expectations for interest-rate increases.

``European officials are likely to question why Japan isn't raising rates from extremely low levels, given the economy is expanding,'' said Tony Morriss, currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney. ``That should see these short yen positions unwound a bit more.'' A short position is a bet on an asset price's decline.

The yen traded at 155.54 per euro at 7:32 a.m. in New York, from 155.59 late yesterday. It was also at 120.12 against the dollar, from 120.34. The euro traded at $1.2947, from $1.2929 yesterday.

Japan's currency has added 1.1 percent in the past five days. Against the pound, the yen traded at 236.50, from 235.92. It stood at 93.20 versus the Australian dollar, from 93.31, and was at 81.95 per New Zealand dollar from 82.34.

more...

[texpatriot2004]

7. K & R nm

[54anickel]

9. 10:24 numbers and stuff

Dow 12,671.12 9.38 (0.07%)
Nasdaq 2,471.52 0.92 (0.04%)
S&P 500 1,448.88 1.89 (0.13%)
10-yr Bond 4.8120% 0.0040
30-yr Bond 4.92% 0.01
NYSE Volume 485,566,000
Nasdaq Volume 386,412,000

10:00 am : The indices are holding onto modest gains as the bulk of industry leadership remains positive. Of the eight sectors trading higher, Materials (+0.6%) paces the way as greenback weakness makes dollar-denominated commodities stocks more attractive. Providing a more influential floor of support for stocks, though, is Financials (+0.4%). An analyst upgrade on State Street (STT 68.19 +1.11) is giving Asset Managers a boost while investors are applauding MGIC Investment (MTG 69.30 +6.37) and Radian Group (RDN 67.00 +6.16) merging in a $4.9 bln stock swap. DJ30 +10.94 NASDAQ +4.50 SP500 +2.05 NASDAQ Dec/Adv/Vol 921/1567/170 mln NYSE Dec/Adv/Vol 853/1901/92 mln

09:40 am : As expected, the indices open modestly higher. With virtually every sector expected to show slower growth in coming quarters, and earnings forecasts in the Tech sector coming down noticeably of late, investors are placing some early bets that bellwether Cisco Systems (CSCO 27.76 +0.25) will be an exception. The stock is up nearly 1%.

Oil prices are up 1.3% near $59.50/bbl; but the market's resilience of late to higher energy prices and subsequent leadership in the Energy sector are providing some notable support as stocks try to regain some momentum on the heels of yesterday's breather. DJ30 +10.37 NASDAQ +5.40 SP500 +2.17 NASDAQ Vol 98 mln NYSE Vol 54 mln

09:15 am : S&P futures vs fair value: +2.6. Nasdaq futures vs fair value: +3.5.

09:00 am : S&P futures vs fair value: +2.7. Nasdaq futures vs fair value: +2.5. The S&P 500 and Nasdaq 100 futures are off their best levels but still trade above fair value to signal a decent start for the major averages. Oil prices pushing $60/bbl again (+1.9%) are keeping bullish enthusiasm in check while a Q3 revenue warning from National Semiconductor (NSM) last night may leave investors questioning growth prospects throughout the influential semiconductor space.

08:30 am : S&P futures vs fair value: +3.2. Nasdaq futures vs fair value: +4.0. Still shaping up to be a modestly higher open for the indices as futures indications continue to trade above fair value. The absence of potentially troubling economic data is clearing the way for the bulls to build on recent market gains. However, Treasury Secretary Paulson discussing President Bush's budget proposal at 10:00 ET will garner some attention while Fed Chairman Bernanke speaking at 1:30 ET on the level and distribution of economic well-being will be eyed for any clues about monetary policy.

08:00 am : S&P futures vs fair value: +3.2. Nasdaq futures vs fair value: +4.5. Early indications suggest stocks will get back in buying mode after taking a breather yesterday. A batch of better than expected earnings results this morning, and anticipation of a solid report from tech bellwether Cisco Systems (CSCO) tonight, are contributing to the positive disposition.

The market's resilience Monday to the bears' attempts to consolidate some of last week's hefty gains, as well as more M&A activity, are also providing some reassurance that valuations still remain attractive at current levels. MGIC Investment (MTG) is acquiring Radian Group (RDN) in a $4.9 bln stock swap while Blackstone has raised its bid for Equity Office Properties (EOP) to $39 bln.

06:29 am : S&P futures vs fair value: +2.6. Nasdaq futures vs fair value: +5.0.

06:29 am : FTSE...6345.00...+27.10...+0.4%. DAX...6895.91...+21.85...+0.3%.

06:29 am : Nikkei...17406.86...+62.06...+0.4%. Hang Seng...20655.20...+199.58...+1.0%.

[54anickel]

11. Treasurys off lows; Paulson says growth is slowing (Fed jawboning watch)

http://www.marketwatch.com/news/story/us-treasury-bonds-drop-ahead/story.aspx?guid=%7B780FE64B%2DBF81%2D4DC9%2D8020%2DC362FC54580F%7D&siteid=yhoo&dist=yhoo

NEW YORK (MarketWatch) - Treasury price losses lightened Tuesday morning, after Treasury Secretary Henry Paulson told the House Ways and Means Committee that the economy is slowing to a more sustainable rate of growth.

The fixed-income market generally cheers signs of slower growth because it takes pressure off the Federal Reserve to keep rates high and stirs demand for low-risk assets. But Tuesday's minor losses also were the result of position adjustments ahead of an auction.

There are still speeches ahead by Federal Reserve Chairman Ben Bernanke and two other Fed speakers.

snip>

"Our economy appears to be transitioning from a period of above-trend growth to a more sustainable level of about 3% growth," Paulson said. The secretary highlighted real wage growth of 1.7% over the last 12 months, saying that workers are beginning to reap bigger paychecks as a result of low inflation.

Paulson will discuss the budget with a panel of Senators this afternoon.

With no economic reports due Tuesday, investors are focusing on the remarks by Paulson and upcoming speeches by Bernanke as well as those by Michael Moskow, president of the Federal Reserve Bank of Chicago, and San Francisco Fed chief Janet Yellen.

Bernanke will discuss economic well-being in Omaha in the early afternoon. Moskow will speak at 1 p.m. Eastern and Yellen will review the Asian financial crisis of the late 1990s at 3.30 p.m. Eastern.

more...

Keep yer boots on - it could get deep around here!

[54anickel]

39. Bernanke-focus on skills to widen opportunity

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-02-06T183154Z_01_WAT006922_RTRIDST_0_USA-FED-BERNANKE-URGENT.XML

WASHINGTON, Feb 6 (Reuters) - Policy makers should seek to expand worker skills but should refrain from restricting trade or labor flows in efforts to narrow income disparity, U.S. Federal Reserve Chairman Ben Bernanke said on Tuesday.

"The challenge for policy is not to eliminate inequality per se but rather to spread economic opportunity as widely as possible," Bernanke said in remarks prepared for delivery to the Greater Omaha Chamber of Commerce in Omaha, Nebraska. A copy of his remarks was distributed in Washington.

Bernanke did not discuss the outlook for interest rates or the economy in his prepared text released in advance to media. He was not scheduled to take questions after the speech.



edit to add a more detailed link...they're starting to come out now

http://www.iht.com/articles/ap/2007/02/06/business/NA-FIN-ECO-US-Bernanke.php

Fed chief Bernanke: Education — not protectionism — would help deal with income inequality

WASHINGTON: Bolstering education and training — rather than erecting trade barriers — would help narrow the economic gap between low- and high-income workers, Federal Reserve Chairman Ben Bernanke said Tuesday.

In his most extensive remarks to date on economic inequality, Bernanke also issued a fresh warning for the United States to steer away from policies that seek to erect protectionist barriers to trade and investment opportunities or to stifle the economy's flexibility. Doing so, he cautioned, "would do far more harm than good."

His remarks come as Democrats, who have sought to portray the Bush administration's economic and tax policies as mainly benefiting the wealthy, have made it a priority to take steps to alleviate widening economic inequality in the United States. President George W. Bush, in recent speeches, has tried to calm angst among those who worry about their job and economic security in a constantly changing economy.

Bernanke, in prepared remarks delivered to the Omaha Chamber of Commerce, said disparities in education and training is "likely the single greatest source of the long-term increase in inequality."

Thus, "policies that boost our national investment in education and training can help reduce inequality while expanding economic opportunity," he said.

[54anickel]

40. Sallie Mae blasts Bush budget cuts

http://milwaukee.bizjournals.com/washington/stories/2007/02/05/daily11.html

Stock in SLM Corp. posted its biggest one-day decline in more than six years Monday after President Bush's 2008 budget proposal was released.

The president's budget for fiscal 2008, which begins in October, would reduce loan reimbursement rates and other subsidies to student-loan lenders such as Reston-based Sallie Mae.

"The cuts proposed today by the president to the private-sector student lending program, which currently serves 80 percent of all student borrowers, would have far-reaching consequences for students and taxpayers," Sallie Mae said in a statement. "These harmful cuts would result in substantially fewer lenders participating in the program, reduced competition and move us closer to a government-run student loan monopoly in the Direct Lending program, supported by an enormous federal government bureaucracy."

more...

Sallie Mae chairman sells 400,000 shares
http://washington.bizjournals.com/washington/stories/2007/02/05/daily17.html?jst=b_ln_hl

The chairman of SLM Corp. has sold 400,000 shares of company common stock on the open market.

Albert Lord, chairman of SLM, the Reston-based student-loan lender known as Sallie Mae, sold the shares, which represent less than 5 percent of his holdings, to provide cash for commitments to various business projects, the company says in a statement.


Lord sold the shares at a range of $45.75 to $46.03 per share, according to a filing with the Securities and Exchange Commission.

Sallie Mae's stock (NYSE: SLM) opened Tuesday at $42.45 per share.

Lord now owns about 1 million shares of Sallie Mae stock and holds options to purchase nearly 7.3 million additional shares, the company says.

more...

[54anickel]

14. CDO Surge Squeezes Deutsche Bank, Vanguard Bond Funds (Update3)

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

Feb. 6 (Bloomberg) -- Credit derivatives, the fastest- growing business on Wall Street, are squeezing returns for bondholders to an all-time low.

Contracts that protect investors against defaults are being sold in record numbers and then bundled into securities known as collateralized debt obligations. CDOs are driving down the cost to protect against non-payment so much that even the government of Argentina, which reneged on $95 billion of debt five years ago, is paying less than ever to borrow.

``CDOs are changing the economics of investing in corporate bonds,'' said Lorenzo Isla, head of structured credit research at Barclays Capital in London. ``By expanding the investor base for corporate credit risk, they compress the spreads available to corporate bond investors.''

Bondholders have halved the amount they charge high-risk companies in the past four years to a record-low 2.6 percentage points on average over U.S. Treasury notes, according to data compiled by Merrill Lynch & Co. Investment-grade securities produced the worst returns since 2001 for fund managers from Deutsche Bank AG to Vanguard Group, Bloomberg data show.

CDOs that invest in derivatives of investment-grade bonds return as much as 12 percent a year, three times more than the yields on the underlying notes, according to data compiled by Barclays Capital.

snip>

Regulators worry that derivatives are distorting the assessment of risks in the debt market. The Basel Switzerland- based Bank for International Settlements, which has monitored markets for central banks since the 1930s, says credit derivatives are too new to have been tested in a crisis.

``People can't know what risks they've taken on,'' Bank of England Deputy Governor John Gieve told U.K. lawmakers last week. Financial markets need to return to ``adequate risk pricing,'' Bundesbank chief Axel Weber, who is also a European Central Bank council member, said in an interview in Davos, Switzerland.

more...

[54anickel]

15. Danger of equities being infected by risk mispricing

http://www.ft.com/cms/s/bf71d5a8-b586-11db-a5a5-0000779e2340.html

The past few weeks have brought a drumbeat of warnings from central banks and regulators about the dangers of a credit crunch - or a "reappraisal of risk", as one of them more delicately put it. The odds of such an event or its timing are unknowable. But what would it do to other asset classes, equities in particular?

Before we get to that, notice that those august bodies have something of an agenda. Central banks cannot individually control the tide of global liquidity that is so deforming the credit markets. And neither they nor the regulators know where the risk is sitting in the financial system, so they cannot control that either. Their subtext, therefore, is: if things go pear-shaped, don't blame us. We did warn you.

That said, back to equities. The conventional view is that they are, if not exactly cheap, at least not as wildly expensive as other things. They are certainly at the low end of their rating relative to bonds. And whereas some instruments such as junk loans and credit derivatives are arguably in glut, the supply of equities in the US and UK has been shrinking.

snip>

An unexpected downturn in the US economy, for whatever reason, would at least be familiar territory. The switching into defensive sectors would also be fairly predictable. The more complex question is how the market would react to a purely financial upset - the collapse of a string of hedge funds, say.

That would certainly hit riskier and less-liquid equities such as emerging market and small cap stocks. It would also knock banks and financials generally - which, given that they provide almost a third of the earnings on the broad Standard & Poor's index, is thought-provoking in itself.

Some other stocks, though, could even benefit. Take big pharma, which is presently out of favour. Investors want instant gratification in the form of high cash payouts, and press companies to borrow for the purpose. The pharma companies, committed as they are to long-term growth and investment, cannot easily oblige.

If risk was abruptly repriced, of course, all that would change. In fact, I would suggest a basic rule of thumb for stocks that would do well in those conditions. Simply run a screen for companies that have been under fire from analysts and commentators for having "inefficient" balance sheets.

snip>

At this point, I picture young investment bankers rolling their eyes. Price-earnings ratios - so old-fashioned. Indeed they are. But in a world of re-priced risk, they could be back in fashion.

more...

[54anickel]

16. S.E.C. Is Looking at Stock Trading

http://www.nytimes.com/2007/02/06/business/06wall.html?_r=2&adxnnl=1&oref=slogin&ref=business&adxnnlx=1170778542-VrAgD3VBSI4OC+/YHJ8tmg

The Securities and Exchange Commission has begun a broad examination into whether Wall Street bank employees are leaking information about big trades to favored clients, like hedge funds, in an effort to curry favor with those clients, executives at Wall Street banks said.

The inquiry, these people said, seems aimed at determining how pervasive insider trading, or the illegal use of market-moving nonpublic information, may be on Wall Street. Knowledge about a large trade, like the sale of a big block of stock by the mutual fund giant Fidelity, would tell a trader which way the stock would move.

Trading ahead of client orders, or front-running, has long been an issue on Wall Street. Large mutual fund companies have often complained in the past that Wall Street brokerage firms were front-running their trades, using information about the funds’ plans to buy or sell to make a risk-free bet on a stock’s direction.

But the latest S.E.C. investigation appears to have a new twist: Rather than examine whether a bank is trading ahead of its own client by using knowledge of the customer’s trade, the scope of the investigation will allow regulators to see if banks tip their valued customers who then go trade at another bank, making the paper trail harder to detect.

The commission sent out letters in mid-January to the major Wall Street banks, including Merrill Lynch, Morgan Stanley, UBS and Deutsche Bank. The commission, according to one Wall Street employee, is requesting a wide swath of information: all stock and option trading data, for themselves and their customers, for the last two weeks of September. Those weeks are the close of the third quarter and investigators may be looking to see any pickup in trading activity as money mangers sought to dress up their returns.

Representatives for the Wall Street banks declined to comment on the investigation.

“Mutual fund traders have long complained that their big trades may be being front-run by market participants with inside information about their trades, and they believe the price on those trades suffers as a result,” said Lori Richards, the director of the Office of Compliance Inspections and Examinations at the S.E.C. “We are looking into these allegations in a systemic way. It is fact-finding and too early for any conclusions.”

more...

[54anickel]

17. Bush Puts SEC Budget on a Diet

The administration is asking Congress for a cost-of-living increase for the Securities and Exchange Commission, and no more.

http://www.cfo.com/article.cfm/8657849/c_8656814?f=home_todayinfinance

President Bush is asking Congress for a 3 percent budget increase for the Securities and Exchange Commission as part of his $2.9 trillion government funding plan for fiscal year 2008. The increase brings the SEC budget request to $905 million, slightly higher than the 2007 continuing resolution level of $877 million under which the SEC is currently operating. Congress is expected to vote to make the FY 2007 budget permanent later this month.

Compared to the 2005 SEC budget request, the 2008 funding looks frugal. Three years ago, the President requested $913 million for FY 2005, a 12.5 percent increase above the 2004 budget of $893 million. That request was first crafted by then SEC Chairman William Donaldson, and gave the SEC the funding to hire 106 new employees. Congress eventually approved only $888 million as the final FY 2005 budget number. The budget request trimming came the next year when the President asked for a tiny $177,000 increase for FY 2006.

snip>

Ruiz noted in a conference call on Monday that the regulator will not be adding any new programs to its agenda in 2008. However, SEC staffers expect that next year, they will be taking on extra duties, particularly reviewing new applications for companies applying to be credit rating agencies and dealing with appeals from audit firms that disagree with the government's assessment of their operations.

In September, President Bush signed the Credit Rating Agency Reform Act of 2006, which gave the SEC authority to regulate competition within the credit-ratings industry, as well as keep an eye on conflicts of interest. Part of that process will be accepting and review applications to become a ratings agency, or what the SEC calls a Nationally Recognized Statistical Rating Organization (NRSRO). Because the regulator does not know how many companies will apply to be an NRSRO, the staff would not comment on whether additional manpower and funds would have to be rerouted to support the registration effort.

more...

[54anickel]

18. Investment-bank bonuses soar in 2006: survey

Top structured-finance traders likely earned $10 million to $15 million

http://www.marketwatch.com/news/story/want-make-15-million-try/story.aspx?guid=%7BD7543D25%2D4933%2D421A%2D92A9%2D2AA538C516D1%7D

SAN FRANCISCO (MarketWatch) -- Top traders earned as much as $15 million in 2006 as investment banks tried to keep talent from joining hedge funds, according to a survey by Trader Monthly magazine and Options Group, an executive-search firm.

Structured-finance and structured-credit trading, equity sales and commodities trading were among the most lucrative positions last year, the survey said.

The global heads of structured-finance trading -- who oversee trading in derivatives such as asset-backed securities and commercial mortgage-backed securities -- made $10 million to $15 million in 2006, Trader Monthly and Options Group found.

Global heads of equity sales at leading investment banks made $12 million to $15 million last year, while the heads of structured-credit trading made $10 million. Top commodity traders made $7 million to $9 million, according to the survey.

"Credit derivatives and structured-credit traders are the hottest markets for trading positions right now," Michael Karp, chief executive of Options Group, told Trader Monthly magazine.

Wall Street paid a record $23.9 billion in bonuses in 2006, up 17% from 2005, the office of the New York state comptroller estimated in December.

more...

[54anickel]

19. Schwab Wants to Make China Squirm Over Subsidy

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_mukherjee&sid=aaTOWLtATBbk

Feb. 6 (Bloomberg) -- Susan Schwab, the U.S. trade representative, has decided to make China squirm.

Sixty percent of Chinese-made goods sold in the U.S. are eligible for ``market-distorting'' export subsidies from the government, Schwab alleged last week in what is to date the biggest complaint against China at the World Trade Organization.

This is not an isolated attack on Chinese shrimp, furniture or brassieres. Between $122 billion and $158 billion of China's exports to the U.S. may be at stake, depending on which of the two trading partners' recordkeeping you want to believe.

The Commerce Ministry in Beijing called the U.S. complaint ``regrettable.''

This is the third time the U.S. has asked the global trade body to settle a dispute with China.

snip>

The latest U.S. case against China is also its most ambitious. The scope of the allegation covers the gamut of Chinese business practices with one notable exception: China's currency policy. It is a case that is meant to create pressure.

It's not a complaint that can be easily proven.

Export subsidies, which are banned under WTO rules, are getting increasingly hard to pin down. Most nations have learned how to structure the freebies in order to keep them safe from legal challenge.

more...

[54anickel]

20. China's booming economy to lead retail spending in Asia in H1 - report

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=2b824a46-b955-40eb-96ee-8060f676e779

SINGAPORE (XFN-ASIA) - Retail sales in 12 key Asia Pacific economies are expected to increase in the first half of 2007, with China set to lead the way with the highest rise in percentage terms, a twice yearly index of retail forecast by credit card firm MasterCard said.

Shoppers in China are expected to spend 527 bln usd, up 12 pct over the same period last year, on rising disposable income, the report said.

In Australia, consumption growth is tipped to remain steady with retail sales to rise 4.9 pct to 72.4 bln usd, while in New Zealand, the figure is expected to total 12.14 bln usd, up 3.8 pct year-on-year.

snip>

In East Asia, retail sales in Japan are expected to rise 1.25 pct to 469.04 bln usd, in South Korea 3.4 pct to 77.62 bln usd, in Hong Kong 3.2 pct to 13.9 bln usd and in Taiwan 2.3 pct to 48.44 bln usd.

more...

[54anickel]

21. U.K. Retail Sales Gain on Foods, Industry Group Says (Update2)

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

Feb. 6 (Bloomberg) -- U.K. retail sales increased in January at the fastest pace in six months as concerns about obesity led shoppers to buy more fruit, vegetables and organic foods, the British Retail Consortium said.

Revenue at stores open at least 12 months rose an annual 3.1 percent after gaining 2.5 percent in December, the group, which represents 80 percent of Britain's retailers, said today in London. The report covered the four weeks through Jan. 27.

Shares of J Sainsbury Plc and Tesco Plc, two of Britain's biggest grocers, have risen this year after they raised sales of food in December. Inflation reached the fastest pace in a decade that month, suggesting Bank of England policy makers, who begin a two-day meeting tomorrow, may need to extend a series of interest- rate increases to cool Europe's biggest economy after Germany.

``This figure suggests strong retail activity over the festive period spilled over into January,'' said Hann-Ju Ho, an economist at Lloyds TSB Group Plc in London. ``It will maintain market nervousness ahead of the Bank of England decision. Our central view is for a rate rise this week to 5.5 percent.''

Food sales rose the most since a heatwave in July, as New Year resolutions and healthy-eating promotions encouraged shoppers to buy more fresh fruit, vegetables, salads and organic goods. The annual gain also reflects a ``weak'' result in January 2006, the group said.

more...

[54anickel]

22. German December Orders Decline, Led by Consumer Goods (Update2)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYaG.tUGmfBs&refer=worldwide

Feb. 6 (Bloomberg) -- German manufacturing orders unexpectedly fell in December after demand from abroad for consumer goods such as refrigerators and television sets dropped.

Orders, adjusted for seasonal swings and inflation, declined 0.2 percent from November, when they gained 0.8 percent, the Economy and Technology Ministry said in a faxed statement today. Economists expected a gain of 0.5 percent, the median of 43 estimates in a Bloomberg News survey showed. Foreign orders for consumer-related products plunged 9.4 percent.

Today's report is the latest to indicate economic growth in Germany and the rest of the 13-nation euro region will cool in 2007 from the fastest pace in six years. German business confidence fell from a record in January and European manufacturing growth slowed for a third month.

``Momentum in the economy has peaked,'' said Rainer Guntermann, an economist at Dresdner Kleinwort in Frankfurt. ``However, this month's decline isn't dramatic. These numbers are very volatile.''

On a two-month comparison, which smoothes out monthly fluctuations, orders rose 0.4 percent in November and December.

Orders from outside Germany declined 0.4 percent in December from a month earlier, the ministry said today. Demand from domestic companies gained 0.2 percent in December. Overall consumer goods orders dropped 4.9 percent.

Growth to Accelerate

For now, economists expect German growth to gather pace through the year as consumers recover from Chancellor Angela Merkel's sales-tax increase in January.

more...

[54anickel]

23. India's billion-dollar buyouts

India's steel giant Tata bought out Britain's Corus Steel for $12 billion. Now other Indian companies are following suit, says Fortune's John Elliot.

http://money.cnn.com/magazines/fortune/fortune_archive/2007/02/19/8400168/index.htm?postversion=2007020605

(Fortune Magazine) -- Watch out for more big takeover bids from India's increasingly confident companies after Tata Steel's $12.1 billion victory in its battle with CSN of Brazil for control of Corus (Charts), the British steel company.

The merger will create the world's fifth-largest steel company and make the diversified Tata Group the largest in India, far outstripping its rival, Reliance Industries.

Two bids with pricetags in excess of $5 billion are already in the offing, though it is too early to know whether the Indian firms involved will prevail. Pharmaceuticals company Ranbaxy has confirmed that it is interested in buying the generics arm of Merck (Charts) in the U.S., and the Aditya Birla Group is said to be eyeing Novelis (Charts), a Canadian aluminum company that has reported it is in talks about a possible sale.

Those sums mark a gigantic step forward from past takeover deals, all of which were for less than $1 billion. The Tata Group has been in the vanguard of outbound investment in recent years, spending $677 million for a 30 percent stake in Energy Brands, a U.S. bottled-water company, and $890 million for two steel companies in Thailand and Singapore.

snip>

"The surge of foreign investments is already underway," says Chanda Kochhar, deputy managing director in charge of international and corporate banking at ICICI, a leading Indian bank. ICICI estimates that India's foreign takeovers last year totaled $8.5 billion, double the 2005 figure.

That trend will likely be boosted by a Standard & Poor's decision in late January to restore India to full investment-grade status after a 15-year lapse, making it easier for Indian companies to raise funds abroad.

more...


Linked article from January 11:

India is awash in private equity
The PE boom isn't just for American corporations -India's economy is on a roll and foreign private-equity investments have exploded over the past two years, says Fortune's Yassir Pitalwalla.
http://money.cnn.com/magazines/fortune/fortune_archive/2007/01/22/8398211/index.htm

(Fortune Magazine) -- India has never rolled out the welcome mat for foreign companies. Red tape, restrictions on ownership and other barriers have made it difficult for banks, retail giants and media companies to gain a foothold in one of the world's fastest-growing economies. But when it comes to foreign private equity, that's another story.

Indeed, the door is wide open: Foreign private-equity investments in Indian companies doubled to $2.2 billion in 2005 from the previous year, then increased in the first nine months of 2006 to $5.4 billion, according to industry newsletter Venture Intelligence.

And unlike South Korea and Japan, where foreign private-equity groups have been castigated as "vultures," they have been embraced in India - even after scoring big profits, as TPG Newbridge did last year when it netted $260 million selling its stake in Matrix Laboratories to U.S. generics giant Mylan Laboratories (Charts).

"There's a far more mature and benevolent environment for private equity in India," says Leo Puri, director of McKinsey & Co. in India. "Unlike East Asia, there has historically been no distress associated with the involvement of private equity in India."

At first, foreign private equity chased India's IT and outsourcing boom. But now the opportunities are far broader, involving everything from finance to pharmaceuticals. Rising corporate profitability - the profits of listed companies have been growing 20 to 30 percent annually - has been drawing some of the biggest names in the industry.

more....

[54anickel]

26. Pimco's Hurricane Yields Drive Wall Street Into Insurance Bonds

http://www.bloomberg.com/apps/news?pid=20601109&sid=a_exlgAKUAY8&refer=exclusive

snip>

``You can't match these yields,'' said Brynjolfsson, who holds $1 billion of catastrophe bonds at Newport Beach, California-based Pimco. ``They fully compensate the investor for the risks that are being underwritten and provide an additional premium. I'm making a real strong push with issuers and Wall Street to bring out more of these securities for my investors.''

Underwriting Fees

Fund managers like Brynjolfsson are turning insurance into the next frontier for securitization, the technique Wall Street perfected to package everything from credit-card bills to mortgages to car loans into tradable bonds. They want high- yielding securities that aren't tied to stock or bond markets, and the insurers themselves, still reeling from Hurricane Katrina and pressured by regulators to conserve capital, are searching for ways to offload risk.

Roger Ferguson, who became Swiss Re's head of financial services last year after quitting as vice chairman of the U.S. Federal Reserve, said in December that insurance-linked securities may offer the growth potential of mortgage bonds, a market that has mushroomed to more than $6 trillion from almost nothing in the late 1970s. Fees in the capital market for insurance also are more lucrative.

snip>

Buyers of AAA-rated mortgage bonds get yields of 1 percent more than benchmark interest rates for assuming the risk that homeowners won't prepay their loans or default. The stakes -- and potential payoff -- on catastrophe bonds are higher.

Katrina's Sting

A disaster such as a typhoon or pandemic flu can trigger claims that consume a bond's principal. Four months after Swiss Re sold $190 million of ``Kamp Re'' bonds in July 2005, the company said investors probably wouldn't get their money back because of Katrina's devastation.

Standard & Poor's lowered its credit rating on the bonds to CC, two steps from a default, in October 2005. Pimco valued its $5 million of Kamp Re bonds at $3,000 in a filing two months ago, down from $2.47 million a year earlier. The bonds mature this year on Dec. 14.

In the middle of Lehman's midtown Manhattan trading floor, 32-year-old Brett Houghton stands out among his colleagues. While they monitor rows of flat panels that flicker with the latest changes in interest rates and Treasury bond prices, Houghton's eyes are glued to screens displaying radar readings from the U.S. National Weather Service and seismic data from the U.S. Geological Survey. He trades in catastrophic risk.

more...

[54anickel]

27. 12:12 lunchtime check

Dow 12,644.52 17.22 (0.14%)
Nasdaq 2,457.51 13.09 (0.53%)
S&P 500 1,444.61 2.38 (0.16%)
10-yr Bond 4.7920% 0.0160
30-yr Bond 4.89% 0.01
NYSE Volume 1,136,499,000
Nasdaq Volume 958,557,000

12:00 pm : Stocks are trading lower midday as investors begin to price in worsening conditions on the earnings front as growth concerns return. Investors are also showing some apprehension ahead of testimony from Fed Chairman Bernanke (1:30 ET).

With virtually every sector expected to show slower growth in coming quarters, and earnings forecasts in the Tech sector coming down noticeably of late, investors were placing early bets that bellwether Cisco Systems (CSCO 27.24 -0.27) would be an exception. However, some renewed uncertainty about Cisco's Q2 report tonight now removes some notable leadership and exacerbates growth prospects for the sector, especially after National Semiconductor (NSM 22.32 -1.00) warned last night that Q3 revenues will miss forecasts.

On a positive note, the most influential sector of them all, Financials, is turning in a notable performance and minimizing blue-chip losses. An analyst upgrade on State Street (STT 68.20 +1.12) is giving Asset Managers a boost while investors are applauding MGIC Investment (MTG 69.70 +6.77) decision to acquire Radian Group (RDN 66.49 +5.65) for $4.9 bln in stock. Providing additional sector support is Principal Financial Group (PFG 63.00 +0.76), which is surging to an all-time higher after posting a 15% rise in Q4 profits.

However, another strong report within the sector also serves as a reminder that, without an estimated 8% contribution in aggregate earnings growth from Financials, Q4 profit growth would stand at just 3% for the S&P 500. Growth for aggregate earnings is currently on track to be up 11% year/year, just one percentage point above expectations at the start of the quarter. DJ30 -12.89 NASDAQ -12.26 SOX -1.6% SP500 -1.81 NASDAQ Dec/Adv/Vol 1500/1341/830 mln NYSE Dec/Adv/Vol 1348/1746/558 mln

11:30 am : The indices are still languishing in negative territory as further uncertainty about Tech's growth prospects pushes the Nasdaq to morning lows. Growing concerns that Cisco Systems (CSCO 27.32 -0.19) might not exceed Wall Street's revenue growth forecasts tonight for the first time in five quarters continue to act as an overhang. Declines of at least 1.0% from tech leaders like QCOM, DELL, ORCL, AMAT, BRCM, SYMC, and NTAP are also taking on toll on the S&P 500's second most influential sector.DJ30 -9.73 NASDAQ -11.25 SOX -1.4% SP500 -1.74 NASDAQ Dec/Adv/Vol 1478/1312/730 mln NYSE Dec/Adv/Vol 1312/1726/480 mln

11:00 am : A renewed wave of selling interest now leaves all three major averages trading in negative territory. Further deterioration in Technology (-0.5%), which now paces the way lower among the seven sectors losing ground, remains the biggest constraint for the bulls. Oil prices now trading near session lows, in sympathy with a reversal in natural gas futures, are now placing added emphasis on growth concerns for Energy (-0.4%), especially following Anadarko Petroleum's (APC 42.49 -0.46) Q4 shortfall.

It appears further analysis of Treasury Secretary Paulson saying earlier that the economy is in transition from above trend growth to a sustainable rate of about 3% is curbing some of the recent enthusiasm tied to further evidence that the economy is getting back on track. DJ30 -9.88 NASDAQ -9.79 SOX -1.3% SP500 -0.92 XOI -0.7% NASDAQ Dec/Adv/Vol 1283/1442/520 mln NYSE Dec/Adv/Vol 1109/1875/350 mln

10:30 am : After briefly slipping into negative territory, amid a reversal in Technology, the Nasdaq is now trading relatively flat. Cisco Systems (CSCO 27.49 -0.02) was up as much as 1% earlier, but some renewed uncertainty about its Q2 report tonight now leaves the bellwether in the red. Chip stocks are also under pressure after National Semiconductor (NSM 22.64 -0.68) warned last night that Q3 revenues will miss forecasts. DJ30 +7.05 NASDAQ +0.67 SOX -0.6% SP500 +1.89 NASDAQ Dec/Adv/Vol 1228/1432/360 mln NYSE Dec/Adv/Vol 1095/1806/236 mln

[54anickel]

29. Family leave act being reviewed

Businesses' complaints that workers abuse the law prompt the U.S. to seek public comment.

http://www.latimes.com/business/la-fi-leave6feb06,1,349510.story?coll=la-headlines-business

Business groups, which say workers are gaming the landmark 1993 Family and Medical Leave Act by taking extended time off for relatively minor ailments such as a headache or a sore back, are seeking to tighten the standards in the measure. Their complaints helped prompt the Labor Department to seek public comment on the law.

The agency's call — the first since President Clinton signed the measure — has stoked fears among labor and women's groups that the Bush administration intends to make it more difficult for workers to take extended leaves for serious illnesses or family needs. That would particularly hurt the 47% of the private workforce with no employer-paid sick leave, these groups say.

The act is "one of the most important advances for families in this nation's history," says Debra Ness, president of the National Partnership for Women & Families. Although she agreed that people with minor ailments aren't entitled to take leaves, business-backed changes could go too far, she said.

snip>

Although many employers are reluctant to discuss their concerns on the record for fear they'll be labeled as unsympathetic to their employees, Labor Department officials say a review is in order.

"We've realized we need some fresh information and fresh thinking on the issues that have developed over nearly a dozen years since the regulations were implemented," Victoria Lipnic, assistant secretary for the agency's Employment Standards Administration, said.

snip>

Ness of the National Partnership for Women & Families, a major supporter of the leave law that helped draft it, contends that workers who are gaming the system by repeatedly calling in sick are "discipline problems," not evidence of problems with the law.

She said the law provides enough provisions for employers to crack down on abusers. Toughening the law could make it more difficult for people with legitimately serious needs to take leaves, she said.

more...

[AnneD]

41. All they need...

is one pandemic spread unnecerrarily by workers scared of loosing their jobs and attitudes would change.

I am dealing with one of the worst batches of illnesses at our elementary school because parents are sending them to school sick or masking their illness by giving them tylenol or sending them back to school before they are well. All they are doing is spreading the illness. Our absences are through the roof right now.:mad:

[54anickel]

32. Political Power and the Rule of Law (Ron Paul)

http://www.house.gov/paul/tst/tst2007/tst020507.htm

With the elections over and the 110th Congress settling in, the media have been reporting ad nauseam about who has assumed new political power in Washington. We're subjected to breathless reports about emerging power brokers in Congress; how so-and-so is now the powerful chair of an important committee; how certain candidates are amassing power for the 2008 elections, and so on. Nobody questions this use of the word "power," or considers its connotations. It's simply assumed, in Washington and the mainstream media, that political power is proper and inevitable.

The problem is that politicians are not supposed to have power over us-- we're supposed to be free. We seem to have forgotten that freedom means the absence of government coercion. So when politicians and the media celebrate political power, they really are celebrating the power of certain individuals to use coercive state force.

Remember that one's relationship with the state is never voluntary. Every government edict, policy, regulation, court decision, and law ultimately is backed up by force, in the form of police, guns, and jails. That is why political power must be fiercely constrained by the American people.

The desire for power over other human beings is not something to celebrate, but something to condemn! The 20th century's worst tyrants were political figures, men who fanatically sought power over others through the apparatus of the state. They wielded that power absolutely, without regard for the rule of law.

snip>

Political power is not like the power possessed by those who otherwise obtain fame and fortune. After all, even the wealthiest individual cannot force anyone to buy a particular good or service; even the most famous celebrities cannot force anyone to pay attention to them. It is only when elites become politically connected that they begin to impose their views on all of us.

more...

[54anickel]

36. Harley sets layoffs, output cuts

http://today.reuters.com/news/articlebusiness.aspx?type=ousiv&storyID=2007-02-06T174106Z_01_N02303638_RTRIDST_0_BUSINESSPRO-HARLEYDAVIDSON-STRIKE-DC.XML&from=business

BOSTON/CHICAGO (Reuters) - Harley-Davidson Inc. (HOG.N: Quote, Profile , Research) is laying off 740 workers and cutting production at two sites because of a strike at its largest motorcycle plant, the company said.

Negotiators for the company and the strikers planned to meet with a federal mediator today, Harley said. No details on the meeting were made public.

Nearly 2,800 workers at Harley's York, Pennsylvania, plant, which makes some of the company's most profitable motorcycles, walked off the job on February 2 after their contract expired. Harley is seeking a variety of concessions from the workers.

In a statement posted on its Web site, dated February 5, Harley said it would reduce production of engines, transmissions and components at two plants that supply parts to the York facility. That will mean the temporary layoff of about 740 workers at the plants in Menomonee Falls and Tomahawk, Wisconsin, it said.

snip>

In a note to clients, RBC Capital Markets analyst Edward Aaron said that dealers who carry the motorcycles -- an icon for the nation's aging baby boomers -- view the strike as a positive in its early days, as it will provide them an opportunity to sell down existing inventory.

"This can only be a positive event if Harley has been over-producing motorcycles," Aaron wrote. "To acknowledge that Harley has been over-producing is to acknowledge that Harley has been over-earning."

more...

[54anickel]

38. Nearly 1 million toy ovens recalled (Easy-Bake)

http://www.cnn.com/2007/HEALTH/02/06/toy.oven.recall/

NEW YORK (CNNMoney.com) -- Toymaker Hasbro and the Consumer Product Safety Commission on Tuesday recalled 985,000 Easy-Bake toy ovens after finding that kids' hands and fingers can get caught in the oven's opening, thereby posing serious risk of burns.

The CPSC said it has received 29 reports of children getting their hands or fingers caught in the oven's opening, including five reports of burns.

The Easy-Bake Ovens that are being recalled are made of purple and pink plastic and resemble a kitchen range with four burners on top and a front-loading oven.

"Easy Bake" is printed on the front of the toy ovens that were manufactured in China. Model number 65805 and "Hasbro" are stamped into the plastic on the back of the oven.

The CPSC said the Easy Bake Oven is an electric toy and is not recommended for children under 8 years of age.

snip>

Ovens sold before May 2006 are not included in this recall, the agency said.

more...

[Roland99]

46. Ruh roh. Bought an Easy Bake oven for my daughter for Christmas!

I better check this out when I get home!

[citizen snips]

42. BP 4Q Profit Falls 22 Pct to 2-Year Low

LONDON (AP) -- Declining oil prices and mounting safety spending sent BP PLC's fourth-quarter profit down 22 percent to a two-year low, the oil company said Tuesday.

Following a series of high-profile mishaps including a deadly refinery blast in Texas and an oil spill in Alaska, BP also slashed its growth targets and raised its capital expenditure forecast for this year.

BP said adjusted net profit dropped to $2.88 billion, from $3.69 billion a year ago. Adjusted net profit measures earnings before extraordinary items and excluding changes in the value of inventories.

Revenue for the fourth quarter, including asset disposals, fell 1.6 percent to $62.8 billion.

more...
http://biz.yahoo.com/ap/070206/earns_britain_bp.html?.v=6

[Roland99]

47. but how much over the norm was that profit level just 2 years ago?

Quite a bit I'd imagine.

[citizen snips]

43. Wall Street Weighed by Tech Stocks

NEW YORK (AP) -- Wall Street fell for a second straight session Tuesday as National Semiconductor Corp. issued a profit warning that sent technology stocks tumbling, and investors awaited results from network Cisco Systems Inc.

National Semi, which makes chips used in mobile telephones, said late Monday it expects sales to post a steeper drop than previously expected. This triggered a sell-off among chip makers, including Texas Instruments Inc., Intel Corp., and Advanced Micro Devices Inc.

Investors also awaited results from Cisco Systems, often considered a bellwether for the technology sector, after the market closes. The report marks one of the last closely-watched companies to issue results as fourth-quarter earnings season winds down.

Investors have been reluctant to buy into the market without some kind of catalyst that might indicate where the economy or corporate earnings are heading. The market gained some traction, but then again drifted lower, after a speech by Federal Reserve Chairman Ben Bernanke failed to address interest rates. The Fed left rates unchanged last week.

more...
http://biz.yahoo.com/ap/070206/wall_street.html?.v=30

[citizen snips]

44. Emerson Sets Quarterly Dividend

ST. LOUIS (AP) -- Emerson Electric Co., which makes electrical, electromechanical and electronic products, on Tuesday declared a regular quarterly cash dividend of 26.25 per share.

The company will pay the dividend on March 9 to stockholders of record on Feb. 16.

http://biz.yahoo.com/ap/070206/emerson_dividend.html?.v=1

[citizen snips]

45. InterActiveCorp 4Q Profit, Shares Fall

NEW YORK (AP) -- Barry Diller's media conglomerate IAC/InterActiveCorp, which includes HSN, Ticketmaster and CitySearch, said Tuesday hefty charges pushed down profit by 85 percent in the fourth quarter, but revenue climbed in each of its divisions. Its shares dropped 3 percent in afternoon trading.

Net income after paying preferred dividends dropped to $16.7 million, or 5 cents per share, in the three months ended Dec. 31 from $113.1 million, or 33 cents per share, a year ago.

Excluding a $214 million charge related to the company's entertainment publications segment, the company posted adjusted profit of $211.6 million, or 67 cents per share, up 21 percent from $174.3 million, or 50 cents per share, last year.

Revenue rose 8 percent to $1.82 billion from $1.69 billion in the prior-year period.

more...
http://biz.yahoo.com/ap/070206/earns_interactivecorp.html?.v=7

[citizen snips]

48. Sector Snap: Airline Stocks Mixed

NEW YORK (AP) -- Airline stocks were mixed Tuesday, as discounter AirTran Holdings Inc. surged on a Raymond James upgrade and rising crude prices weighed on other carriers' shares.

The Amex Airline Index rose nearly 2 percent, with nine of its 11 component stocks gaining. Most percentage swings were slight, less than 2 percent.

Hurting shares was a barrel of crude gaining 55 cents to $59.29 on the New York Mercantile Exchange, due to jet fuel being one of the industry's top costs. Prices touched as high as $59.99 per barrel earlier in the session.

Leading the index up was AirTran, whose shares jumped 65 cents, or 5.8 percent, to $11.83 on the New York Stock Exchange.

more...
http://biz.yahoo.com/ap/070206/airlines_sector_snap.html?.v=1

[citizen snips]

49. Treasuries Rise as 3-Year Notes Draw Yield of 4.8% at Auction

Feb. 6 (Bloomberg) -- U.S. Treasuries rose a third straight day after a $16 billion auction of three-year notes drew a yield of 4.800 percent, indicating demand outpaced dealer expectations.

The three-year note sale was the smallest since May 1998, when sales of the security were suspended until 2001 because of a shrinking federal budget deficit. The Treasury Department last week said it may again suspend three-year note sales after the next quarterly auctions in May because the deficit is expected to narrow for a third straight year.

``It's an aggressively bid auction, in part because it's a smaller auction and investors rolled over maturing debt into the new issue,'' said Roseanne Briggen, a Treasury market analyst at Informa Global Markets in New York. The auction ``went well in part because of the scarcity factor.''

The benchmark 10-year note's yield, which moves inversely to its price, declined more than 3 basis points, or 0.03 percentage point, to 4.77 percent at 2:07 p.m. in New York, according to Cantor Fitzgerald LP. The price of the 4 5/8 percent security maturing in November 2016 rose 9/32, or $2.81 per $1,000 face amount, to 98 7/8.

more...
http://www.bloomberg.com/apps/news?pid=20601009&sid=acIMPfYj_NPs&refer=bond

[citizen snips]

50. Gold Climbs for Second Day on Expectations Dollar Will Weaken

Feb. 6 (Bloomberg) -- Gold prices rose for a second straight day in New York on speculation the dollar will weaken, boosting the appeal of the metal as an alternative investment.

Gold sometimes moves in the opposite direction of the U.S. currency, which today fell against the euro and touched a four- week low against the yen. Gold rose 23 percent last year when the dollar lost 7 percent against a basket of six major currencies.

``The weaker dollar is helping fuel the gold rally,'' said Nick Ruggiero, a trader at Eagle Futures Inc. in New York.

Gold futures for April delivery rose $2.60, or 0.4 percent, to $658.70 an ounce on the Comex division of the New York Mercantile Exchange. Gold gained 0.7 percent yesterday.

more...
http://www.bloomberg.com/apps/news?pid=20601012&sid=at9idPwntiRg&refer=commodities

[citizen snips]

51. Euro, Pound Advance Versus Dollar on Interest-Rate Outlook

Feb. 6 (Bloomberg) -- The euro and the British pound gained against the dollar as signs of growth raised speculation European central banks may keep raising borrowing costs this year.

Investors bought the European currencies after an industry survey showed sales at U.K. retailers climbed in January at the fastest pace in six months. The Bank of England and European Central Bank will meet to set interest rates on Feb. 8. The two currencies also gained against the yen after U.S. Treasury Secretary Henry Paulson said the Japanese currency is traded in ``an open, competitive marketplace.''

``The market is thinking that European central banks will continue to push up interest rates,'' said David Powell, currency strategist at research firm IDEAglobal in New York. ``The BOE may surprise the market again. It helped push up the currencies against the dollar. The dollar is generally in a negative tone today.''

The euro advanced to $1.2983 at 2:19 p.m. in New York from $1.2929 yesterday. The pound rose to $1.9708 from $1.9603.

more...
http://www.bloomberg.com/apps/news?pid=20601083&sid=a_glRRs1QEvc&refer=currency

[citizen snips]

52. Court Says Wal-Mart Must Face Bias Trial

SAN FRANCISCO (AP) -- A federal appeals court ruled Tuesday that Wal-Mart Stores Inc., the world's largest private employer, must face a class-action lawsuit alleging female employees were discriminated against in pay and promotions.

The ruling by the 9th U.S. Circuit Court of Appeals upholds a 2004 federal judge's decision to let the nation's largest class-action employment discrimination lawsuit go to trial. The suit claims that as many as 1.5 million current and former female employees earned less than men and were bypassed for promotions.

The lawsuit exposes the Bentonville, Ark.-based retailing powerhouse to the possibility of billions of dollars in damages.

Wal-Mart claimed that the conventional rules of class actions should not apply in the case because its 3,400 stores, including Sam's Club warehouse outlets, operate like independent businesses, and that the company did not have a policy of discriminating against women.

more...
http://biz.yahoo.com/ap/070206/wal_mart_discrimination.html?.v=9

[citizen snips]

53. Chips Snap: Rambus, National Semi Sink

NEW YORK (AP) -- Chip stocks slipped in Tuesday's trading, with National Semiconductor Corp. among the biggest losers.

Late Monday, the chip maker warned third-quarter sales would decline more than previously expected, prompting at least two analysts to downgrade. In Tuesday afternoon trading, the stock lost 67 cents, or 2.9 percent, to $22.65 on the New York Stock Exchange.

Also among the losers was memory chip technology licensor Rambus Inc., which gave back some gains after soaring 24 percent on Monday.

The company said on Monday the Federal Trade Commission ordered caps on royalties the company can charge for use of some of its patented technology.

more...
http://biz.yahoo.com/ap/070206/semiconductors_sector_snap.html?.v=1

[citizen snips]

54. After the Close: Cisco, Lincoln National

NEW YORK (AP) -- Shares of Cisco Systems Inc. fell slightly ahead of the technology company's fiscal second-quarter earnings report after the bell Tuesday.

Cisco, which makes products for telecommunications networks, is considered a bellwether for technology stocks. Analysts polled by Thomson Financial forecast second-quarter profit of 31 cents per share on $8.28 billion revenue. The San Jose, Calif.-based company's stock fell 17 cents to $27.35 in afternoon trading on the Nasdaq.

Another stock moving in anticipation of earnings was Lincoln National Corp., a Philadelphia-based insurer that reports Tuesday afternoon.

Wall Street forecasts earnings of $1.23 per share on $2.57 billion revenue for the fourth quarter. Shares of Lincoln National rose 57 cents to $68.68 in afternoon trading on the New York Stock Exchange.

more...
http://biz.yahoo.com/ap/070206/after_the_close_cisco.html?.v=1

[citizen snips]

55. Overstock.com Surges Despite 4Q Miss

NEW YORK (AP) -- Shares of Overstock.com Inc. surged Tuesday afternoon, as some analysts said the discount retailer hit bottom with its wider-than-expected fourth-quarter loss and can only go up from here.

The Salt Lake City-based company's stock shot up $3.43, or 23.4 percent, to $18.09 on the Nasdaq. In the past year, shares have traded as low as $13.40 and as high as $32.73.

On Monday, the company posted a quarterly loss of $1.92 per share, widely missing Wall Street's expectations for a smaller loss of 85 cents per share. Overstock.com blamed the miss on lower Web site traffic and the fallout from what Chief Executive Officer Patrick Byrne called "hastily implemented system upgrades" in 2005.

During the quarter, Overstock.com said it "consciously and aggressively discounted old inventory." The result was less -- and less undesirable -- inventory on the books, but also lower margins.

more...
http://biz.yahoo.com/ap/070206/overstock_com_mover.html?.v=1

[citizen snips]

56. Vasco Shares Slide After Stock Downgrade

NEW YORK (AP) -- Vasco Data Security International Inc. shares slipped Tuesday after an analyst downgraded the computer security systems company, citing its increase in value over the last month.

Brean Murray analyst Andrey Glukhov downgraded the stock from "Buy" to "Hold." In a client note, Glukhov said Vasco has "very strong business momentum" and is doing more international business. He expects it to exceed its revenue forecast in 2007.

However, its stock price has increased $2.90, or 24.2 percent, since Jan. 3. As a result, Glukhov said, it does not have much upside for 2007.

"We remain fans of Vasco and consider it to be a very well-run company with a significant opportunity in the fast-growing authentication space," Glukhov said.

more...
http://biz.yahoo.com/ap/070206/vasco_data_mover.html?.v=1

[citizen snips]

57. General Motors Sets Quarterly Dividend

DETROIT (AP) -- General Motors Corp. on Tuesday declared a first-quarter dividend of 25 cents per share.

The Big Three automaker will pay the dividend on March 10 to shareholders of record on Feb. 16.

http://biz.yahoo.com/ap/070206/general_motors_dividend.html?.v=1

[citizen snips]

58. Exxon Mobil Challenges Record Verdict

MONTGOMERY, Ala. (AP) -- The largest verdict in Alabama history went before the Alabama Supreme Court on Tuesday with Exxon Mobil arguing that the $3.6 billion judgment is unjustified because the oil company committed no fraud against the state.

"Of course, this case is notorious. It's notorious because it involved an outrageous award of punitive damages," Exxon Mobil attorney Chris King told the court.

The state's attorney defended the verdict, saying Exxon Mobil intentionally shortchanged the state on royalty payments from offshore wells because its executives knew Alabama was inexperienced in the natural gas business.

"Exxon decided plainly and simply to cheat the state out of this money," Charles Cooper said.

more...
http://biz.yahoo.com/ap/070206/exxon_mobil.html?.v=1

[citizen snips]

59. L-3 Communications Ups Dividend 33 Pct.

NEW YORK (AP) -- Defense contractor L-3 Communications Holdings Inc. said Tuesday its board of directors approved a 33 percent increase in its regular quarterly dividend.

The company said the dividend rose from about 18.75 cents per share to 25 cents per share. The latest dividend is payable on March 15 to shareholders of record on Feb. 21.

L-3 Communications shares fell 11 cents to $85.79 in afternoon trading on the New York Stock Exchange.

http://biz.yahoo.com/ap/070206/l_3_communications_dividend.html?.v=1

[citizen snips]

60. Wall Street Trades Sideways

NEW YORK (AP) -- Wall Street traded sideways Thursday as investors were unfazed by speeches from central bankers, yet remained wary about technology stocks after a profit warning from chip maker National Semiconductor Corp.

Major indexes edged higher after extending Monday's losses throughout most of the session. Investors have been reluctant to buy into the market without some kind of catalyst that might indicate where the economy or corporate earnings are heading.

Federal Reserve Chairman Ben Bernanke's speech did not address interest rates, which central bankers left unchanged last week. With his speech out of the way, and corporate earnings season winding down, investors were still seeking a direction for the market.

That could come after the closing bell when networker Cisco Systems Inc., considered a bellwether for technology stocks, report quarterly earnings. Technology stocks stumbled through most of the day after National Semi warned sales will fall steeper than expected.

more...
http://biz.yahoo.com/ap/070206/wall_street.html?.v=34

[citizen snips]

61. Dollar Falls Against Major Currencies

NEW YORK (AP) -- The dollar fell against most major currencies Tuesday amid a lack of new economic data and ahead of two foreign central bank policy meetings this week.

The 13-nation euro bought $1.2978 in afternoon New York trading, up from $1.2927 in New York late Monday. The British pound rose to $1.9704 from $1.9596 on sentiment the Bank of England may surprise markets with another rate increase when it meets Thursday.

The euro stands to gain if the European Central Bank sets a hawkish tone for the upcoming months when it meets Thursday. The ECB is expected to keep its interest rate unchanged at 3.5 percent, but set the stage for an increase in March.

Last week, the Federal Reserve left interest rates unchanged at 5.25 percent for the fifth straight time.

more...
http://biz.yahoo.com/ap/070206/dollar.html?.v=2

[citizen snips]

62. Sector Snap: Printer Makers

NEW YORK (AP) -- The launch of Eastman Kodak Co.'s "all-in-one" printer, which features cheaper replacement ink cartridges than its rivals, is unlikely to hurt Hewlett Packard Co. much, analysts said Tuesday.

Citigroup analyst Richard Gardner in a client note noted that inkjet printer makers usually sell printers at a loss, and make money on supplies such as inkjet cartridges.

But Kodak "is betting that it can convince consumers to pay more for hardware in exchange for lower ink prices," noted Gardner.

"Given Kodak's limited model selection and distribution network, we don't believe Kodak poses a significant challenge to HP this year and perhaps not next year," wrote Gardner. "If Kodak is successful, it will place pressure on competitors' inkjet margins long term."

more...
http://biz.yahoo.com/ap/070206/printer_makers_sector_snap.html?.v=1

[citizen snips]

63. Grains, Soybeans Drop Lower

CHICAGO (AP) -- Grain and soybean futures declined Tuesday on the Chicago Board of Trade.

Wheat for March delivery fell 7 1/2 cents to $4.51 a bushel; March corn fell 5 1/2 cents to $3.96 1/2 a bushel; March oats fell 3 3/4 cents to $2.54 a bushel; March soybeans fell 1 1/4 cent to $7.38 3/4 a bushel.

Beef futures advanced and pork futures finished mixed on the Chicago Mercantile Exchange.

April live cattle rose .13 cent to 95.45 cents a pound; March feeder cattle rose 1.82 cent to 99.02 cents a pound; April lean hogs fell .25 cent to 67.32 cents a pound; March pork bellies rose 2.02 cents to $1.0397 a pound.

http://biz.yahoo.com/ap/070206/board_of_trade.html?.v=3

[citizen snips]

64. Nike to Open 100 Stores Over 3 Years

BEAVERTON, Ore. (AP) -- Athletic shoe and apparel maker Nike Inc. on Tuesday said it expects to open 100 new stores in the next three years -- half in the U.S. -- as part of its strategy to grow revenue 53 percent to $23 billion by fiscal 2011 from $15 billion last year.

Nike said 75 percent of the growth will be generated by the Nike brand, as the company targets further geographic expansion and deeper market penetration in all regions. But Nike also plans to grow its affiliate brands, which include Cole Haan, Converse, Exeter Brands, Hurley International, Nike Bauer Hockey and Nike Golf and collectively make up nearly $2 billion in sales.

Specifically, Nike said it wants to expand in the U.S., Britain, Japan and China as well as invest "aggressively" in Russia, India and Brazil.

While the company's wholesale business will continue to be its primary driver, with retail partners expected to continue to generate more than 80 percent of sales in 2011, Nike also wants to expand its own retail and direct-to-consumer business.

more...
http://biz.yahoo.com/ap/070206/nike_outlook.html?.v=1

[54anickel]

65. Closing time - everyone's back in the black

Dow 12,666.31 4.57 (0.04%)
Nasdaq 2,471.49 0.89 (0.04%)
S&P 500 1,448.00 1.01 (0.07%)
10-yr Bond 4.7650% 0.0430
30-yr Bond 4.87% 0.04
NYSE Volume 2,575,727,000
Nasdaq Volume 2,194,244,000

4:20 pm : For a second straight day, stocks looked lethargic as the lack of catalysts this week continues to leave investors indecisive about the sustainability of last week's impressive rally.

While the absence of potentially troubling economic data cleared way for the bulls to build on recent market gains right out of the gate, renewed concerns about Tech's growth prospects, oil prices making another run at $60/bbl intraday, and some apprehension ahead of several speeches from Fed officials underpinned a sense of caution throughout the session.

Even with Fed Chairman Bernanke's testimony out of the way around 1:30 ET, which made no mention of interest rates or the economy, investors struggled to find much incentive to get back into a market ripe for a pullback on the heels of the S&P 500's best weekly performance since August.

Of the five sectors closing higher, Utilities turned in the best performance as falling bond yields made dividend-paying stocks more attractive. The Dow Jones Utilities Index was up for the seventh straight day and closed at an all-time high.

The yield on the 10-year note fell four basis points to 4.76% after this week's first refunding auction garnered surprisingly strong demand from foreign central banks. The $16 bln 3-year note auction drew a solid 2.97 bid-to-cover with indirect bidder participation checking in at 32.3%, the biggest share since May 2005.

The rate-sensitive and much more influential Financials sector, though, provided the bulk of market support that merely helped the S&P 500 claw back after falling for the first time in five days. REITs were among the day's best performers after Blackstone raised its all-cash offer for Equity Office Properties (EOP 55.95 +0.49) to $39 bln. Investors also applauded MGIC Investment's (MTG 70.00 +7.07) decision to acquire Radian Group (RDN 66.54 +5.70) for $4.9 bln in stock while an analyst upgrade on State Street (STT 68.21 +1.13) gave Asset Managers a boost.

Providing additional sector support was Principal Financial Group (PFG 63.03 +0.79), which closed at an all-time higher after posting a 15% rise in Q4 profits. However, another strong profit report within the sector also served as a reminder that, without an estimated 8% contribution in aggregate earnings growth from Financials, Q4 profit growth for the S&P 500 stands at an unimpressive 3%.

Among the five sectors losing ground, Technology was the day's most influential laggard. A Q3 revenue warning from National Semiconductor (NSM 22.71 -0.61) Monday night gave investors another reason to rotate out of semiconductor stocks. A change of heart regarding tonight's Q2 report from Cisco Systems (CSCO 27.28 -0.23), which was up 1.0% earlier in anticipation of a solid report from the tech bellwether, also took away what little momentum stocks were exhibiting early on.

Energy was another disappointment as the sector failed to benefit from a late-day rebound in crude. Even with oil prices near their highest levels of the year, Anadarko Petroleum's (APC 42.40 -0.55) Q4 shortfall offset a 3.5% surge in Grant-Prideco (GRP 40.88 +1.37). The latter is a suggested holding in Briefing.com's Active Portfolio and it handily topped Wall Street forecasts and issued upside FY07 EPS guidance. BTK -0.2% DJ30 +4.57 DJUA +0.8% NASDAQ +0.89 NQ100 -0.1% R2K +0.4% SOX -0.5% SP400 0.5% SP500 +1.01 XOI -0.5% NASDAQ Dec/Adv/Vol 1323/1673/2.14 bln NYSE Dec/Adv/Vol 1197/2087/1.42 bln

3:30 pm : The Nasdaq has now joined its blue-chip brethren to the upside; but gains are modest at best and by no means guarantees that all three major averages will finish in positive territory. Technology, Health Care and Staples still posting losses remain a concern, especially since today's best performers are also two of the least influential sectors -- Materials and Utilities -- in the S&P 500. However, Tech's intraday decline of nearly 1.0% now standing at only 0.1% is contributing to the increasingly improved tone going into the close. DJ30 +9.86 NASDAQ +2.73 SP500 +1.88 NASDAQ Dec/Adv/Vol 1393/1598/1.75 bln NYSE Dec/Adv/Vol 1201/2058/1.17 bln

3:00 pm : Stocks continue to trade relatively sideways, but the Dow and S&P 500 recently climbing back above the flat line further underscores the lack of conviction on the part of sellers responsible for keeping the indices under water throughout most of the session. As reflected in the A/D line, advancers have held a widening edge over decliners all afternoon while advancers on the Nasdaq now outpace decliners for the first time since 11:00 this morning.DJ30 +5.61 NASDAQ -1.14 SP500 +1.21 NASDAQ Dec/Adv/Vol 1476/1494/1.58 bln NYSE Dec/Adv/Vol 1286/1935/1.06 bln

2:30 pm : Stocks remain mired in relatively tight trading ranges, showing little reaction this time around as bond yields hit fresh session lows. The rate-sensitive Utilities sector, however, continues to benefit as dividend-paying stocks become more attractive. It is worth noting that the Dow Jones Utilities Index is up for the seventh straight day and is at an all-time high. Be that as it may, the Utilities sector's 0.7% advance merely speaks to the market's defensive stance while its position as one of the lowest weighted sectors in the S&P 500 is also unable to offset the weakness in Technology.DJ30 -6.97 DJUA +0.6% NASDAQ -5.85 SP500 -0.77 NASDAQ Dec/Adv/Vol 1480/1448/1.48 bln NYSE Dec/Adv/Vol 1315/1888/992 mln

2:00 pm : Oil prices recently slipping into negative territory, especially after making another run at $60/bbl earlier, have improved sentiment; so much so that the Dow and S&P 500 briefly inched into the green about 30 minutes ago. However, the Energy sector (-0.7%) deteriorating in response to oil's recent downturn and now failing to regain momentum as oil bounces back into positive territory remains a concern from a leadership standpoint.

Separately, investors are also sifting through the recent release of Fed Chairman Bernanke's prepared testimony; but no mention of interest rates or the economy in his remarks gives investors little incentive to more aggressively get back into a market ripe for a pullback following last week's sizable run-up. DJ30 -3.56 NASDAQ -4.22 SP500 -0.48 NASDAQ Dec/Adv/Vol 1507/1428/1.33 bln NYSE Dec/Adv/Vol 1302/1895/900 mln

1:30 pm : Recent declines on all three indices have been halved within the last 30 minutes, as equity investors take a bullish cue from increasing buying efforts in Treasuries. The yield on the 10-year note (+8/32) is now down to 4.76% as traders rally around a bond auction that drew a solid 2.97 bid-to-cover with indirect bidder participation of 32.3%, which was much better than the meager 22.3% showing from the previous 3-year auction. Since higher interest rates spark valuation concerns among growth stocks and greatly impact the borrowing power of smaller companies, the Russell 2000 has turned positive while Technology has also pared some of its intraday losses. DJ30 -6.97 NASDAQ -7.64 SP500 -1.09 NASDAQ Dec/Adv/Vol 1559/1360/1.22 bln NYSE Dec/Adv/Vol 1339/1847/832 mln

1:00 pm : More of the same for stocks as the Nasdaq continues to outpace its blue-chip counterparts to the downside. While weakness in everything from Semiconductors (-1.3%) to Hardware (HWI -1.4%) is weighing most heavily on the Composite, tech stocks aren't the index's only Achilles' heel. Biotech (e.g. BIIB -2.1%, CELG -1.5%, GENZ -1.6%), Human Resources (e.g. MNST -2.0%), and Retail (e.g. SHLD -1.1%, PETM -1.1%) are also prompting investors to question the sustainability of the Nasdaq's 2.3% year-to-date advance in the face of decelerating earnings growth. DJ30 -15.51 NASDAQ -13.00 SP500 -2.15 NASDAQ Dec/Adv/Vol 1619/1296/1.08 bln NYSE Dec/Adv/Vol 1488/1665/742 mln

12:30 pm : Not much has changed since the last update as selling remains widespread across most areas. Bonds, however, have recently turned the corner as traders believe the Treasury's upcoming $16 bln auction (1:00 ET) of three-year notes will draw some solid interest from foreign central banks. Traders are also pricing in a small possibility that Fed Chairman Bernanke will stay on message with his upcoming speech (1:30 ET) on the level and distribution of economic well-being.DJ30 -13.54 NASDAQ -12.79 SP500 -2.11 NASDAQ Dec/Adv/Vol 1644/1245/980 mln NYSE Dec/Adv/Vol 1479/1650/660 mln