STOCK MARKET WATCH, Monday February 12

[ozymandius]

Monday February 12, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 707 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2240 DAYS
WHERE'S OSAMA BIN-LADEN? 1944 DAYS
DAYS SINCE ENRON COLLAPSE = 1904
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 9, 2007

Dow... 12,580.83 -56.80 (-0.45%)
Nasdaq... 2,459.82 -28.85 (-1.16%)
S&P 500... 1,438.06 -10.25 (-0.71%)
Gold future... 672.30 +9.50 (+1.41%)
30-Year Bond 4.87% +0.03 (+0.58%)
10-Yr Bond... 4.78% +0.05 (+1.14%)






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

The Dow Theory
BY TIM W. WOOD

I thought he had gone away.

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

[ozymandius]

2. Today's Report

2:00 PM Treasury Budget Jan
Briefing Forecast $40.0B
Market Expects $40.0B
Prior $21.0B

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

[Ghost Dog]

26. A Bush View Of The Economy

http://www.forbes.com/beltway/2007/02/09/cea-bush-economy-biz-wash-cx_bw_0212econ.html

The Council of Economic Advisers issues its annual "Economic Report of the President" Monday, and it is expected to place a heavy emphasis on economic growth through international trade and low taxes.

But don't expect it to push too hard for other countries, particularly China, to revalue their currency to reduce the trade deficit.

Officials from the council (CEA) and the White House have kept mum about the report's findings, but we do know it will address the following issues: productivity growth, pro-growth tax policy, the fiscal challenges facing Medicare, catastrophe risk insurance, energy and infrastructure in the transportation sector, currency markets, international trade and investment and immigration. These subjects, which each receive a chapter in the report, differ markedly from last year's CEA outlook, which highlighted the capital account surplus, workforce skills, retirement savings, intellectual property and agriculture. However, several themes from 2006--such as energy, trade and financial services--will be repeated this year.

According to Martin Neil Baily, a senior fellow at the Peterson Institute for International Economics in Washington, the "striking thing" about last year's report was that it painted a rosy view of the trade imbalance by focusing on the capital account surplus, rather than its inverse, the current account deficit. "One thing that will be interesting to see is whether they sort of maintain that position or whether they see any threat to future economic growth," he says, wondering aloud how much longer the trade deficit can be sustained.

Generally issued a week after the annual budget, the CEA report does not carry the fanfare of the budget request (Congress, after all, does not participate). But because it is created by the president's top economic advisers, it is seen as perhaps the plainest example of how the administration views the country's overall economic outlook.

Perhaps the best indicator of what the report will include comes from remarks earlier this month by CEA Chairman Edward Lazear in a speech to the Chicago Council on Global Affairs. Lazear pointedly stated that he expects strong growth due to high productivity and low taxes, adding that "two trends are most important when looking at last year's economic picture and the scene as we move into 2007"--the labor market and export growth.

Lazear noted that unemployment fell to 4.5% in 2006 from 5% in 2005, adding that 2 million payroll jobs were added last year while real wages grew at a post-inflation rate of 1.7%. On the trade side, he said exports grew at 13% from November 2005 to November 2006 while imports increased by just 5%--reducing the trade deficit by $5.8 billion.

...

Another strong indicator of what the president's 2007 economic report will include is the CEA's most recent economic forecast, from November. That forecast predicted a 2.9% growth for real gross domestic product in 2007, noting that growth might be sluggish due to uncertainties surrounding the housing sector. It also predicted low inflation (2.6%), low unemployment (4.6%) and the addition of about 129,000 jobs per month throughout the year.

...

In addition, the CEA has indicated that currency markets will play a major role in the report Monday, but don't expect it to push for a revaluation of China's currency, which many believed to be undervalued, thus contributing to the U.S. trade deficit.

"I think what they will talk about is not the exchange rate per se, but the importance in allowing market determination of exchange rates," says Baily, who added that it is his opinion that the dollar probably needs to decline by another 15% to 20% in order to make a serious dent in the deficit.

/...

[Ghost Dog]

30. Bush makes fresh pitch for free-trade policies as way to keep economy healthy

http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=564962373501584973

WASHINGTON (AP) - Free-trade policies making it easier for U.S. companies to sell their products around the globe are an important ingredient to the economy's vitality, President Bush said Monday as he projected another year of good - though somewhat slower - economic growth.

Bush, in his annual economic report to Congress, made a fresh pitch for breaking down trade barriers and energizing global trade talks. He called on Congress to extend his authority to negotiate free-trade deals, a request that likely will face an uphill battle in the Democrat-controlled Congress.

''This authority is essential to completing good trade agreements,'' Bush wrote in the introduction to the report. ''The Congress must renew it if we are to improve our competitiveness in the global economy.''

With the United States racking up record trade deficits and facing intense competition from rapidly growing China and India, global trade tensions have intensified.

Democrats blame Bush's free-trade policies for contributing to the trade deficit, costing U.S. factories jobs and exposing U.S. workers to unfair competition from low-wage countries.

Against that backdrop, Bush faces a daunting challenge in getting Congress to renew the Trade Promotion Authority, also known as fast-track authority. It lets the president negotiate trade deals that Congress must approve without amendments. That authority expires on July 1.

The Bush administration argues that the way to deal with the trade deficit is to through free-trade policies that make it easier for U.S. companies to do business abroad. Getting China to move to a more flexible currency system, another administration goal, also would help U.S. exporters.

/...

[Ghost Dog]

32. US economic growth 'robust', White House says

http://www.channelnewsasia.com/stories/afp_world_business/view/258185/1/.html

WASHINGTON : The United States is experiencing "robust" economic growth, in part because of a strong labour market and moderate inflation, a White House economic report showed on Monday.

The annual economic report, endorsed by President George W. Bush, stressed that the world's largest economy has grown at a faster pace than any other major industrialised economy of late.

"The US economy continues to exhibit robust growth, with a strong labour market and moderate inflation," the hefty 358-page Economic Report of the President stated.

"Our economy is on the move and we can keep it that way by continuing to pursue sound economic policy based on free-market principles," Bush said in a signed statement.

However, the US president cautioned that "unfunded liabilities" in large government welfare programs such as Social Security, Medicare and Medicaid - for health care and pensions - will need to be tackled in coming months and years, especially as millions of so-called baby-boomers enter retirement.

Bush said his tax cut programme of recent years had helped fire up the US economy and called for his tax cuts to be made permanent in the report which was also delivered to the newly Democratic-controlled Congress.

/... :Ugh:

[Ghost Dog]

34. Fact Sheet: The Economic Report of the President

http://www.whitehouse.gov/news/releases/2007/02/20070212-2.html

"Our economy is on the move and we can keep it that way by continuing to pursue sound economic policy based on free-market principles."

- President George W. Bush, 2/12/07

Today, The White House Released The Economic Report Of The President. The Economic Report of the President is an annual report written by the Council of Economic Advisors. It overviews the Nation's economic progress and is transmitted to Congress no later than 10 days after the submission of the Budget of the United States Government.

* The Full Economic Report Of The President Is Available At: http://www.whitehouse.gov/cea/pubs.html.

/...

:flyingpigs: :silly:

[54anickel]

47. Please, no more fast-track authority, we're barely hanging on as it is!

[Ghost Dog]

35. Treasury Budget Jan

Actual $38.2B
Briefing Forecast $40.0B
Market expected $40.0B
Prior $21.0B

[54anickel]

48. U.S. posts $38.24 bln budget surplus in January

http://www.reuters.com/article/bondsNews/idUSN1240753820070212

WASHINGTON, Feb 12 (Reuters) - The U.S. government posted a $38.24 billion budget surplus in January, up 82.4 percent from the year-ago surplus, as both tax receipts and spending rose to new January records, the Treasury Department said on Monday.

Last month's surplus, however, was shy of the $40 billion surplus forecast by Wall Street analysts in a Reuters poll.

The January surplus allowed the government to more than halve its cumulative budget deficit for the first four months of fiscal 2007, which began Oct. 1, 2006, to $42.17 billion from $98.42 billion for the same period of fiscal 2006, the Treasury said.

snip>

Bush administration officials have cited strong tax receipts in recent months as an optimistic sign that President George W. Bush can accomplish his goal of balancing the budget by 2012 while continuing to funding the Iraq war and making tax cuts permanent.

more... :eyes:

[ozymandius]

3. Oil prices fall to $58.45 a barrel

SINGAPORE - Oil prices fell back Monday, after Friday's brief climb above the psychological $60 barrier on unrelenting cold U.S. weather.

But Monday marked a retreat, with light, sweet crude for March delivery down 55 cents to $59.34 a barrel in midmorning Asian electronic trading on the New York Mercantile Exchange.

Brent crude for March dropped 56 cents to $58.45 a barrel at London's ICE Futures exchange.

-cut-

Expectations for the Organization of Petroleum Exporting Countries to stand pat on production also undermined sentiment, although robust winter demand in the Northern Hemisphere will likely shore up near-term prices.

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

[ozymandius]

4. Oil sheds 1 percent on Saudi comments

SYDNEY (Reuters) - Oil tumbled more than 1 percent on Monday after Saudi Arabia's oil minister signaled satisfaction with market conditions and some Asian refiners reported a rise in anticipated Saudi supplies next month.

Ali al-Naimi, oil minister of the world's biggest exporter, and the cartel's most powerful voice, told the Wall Street Journal that the market was much healthier than before and that OPEC may not need to change output.

U.S. crude stood 53 cents lower at $59.36 a barrel at 0434 GMT, having fallen as much as 82 cents earlier in the day.

News late on Friday that production should resume soon at Occidental Petroleum Corp's Elk Hills oil and gas field in California added to the selloff, dealers said.

more

[Roland99]

49. Oil dropped so, of course, gas jumped over $0.20.

:wtf:

[ozymandius]

5. Wall Street looking to Bernanke comments

NEW YORK - Wall Street has been running short on inspiration lately and will look to a stream of economic data in the coming week for clues on whether stocks can push beyond the range in which they have been mired in recent weeks.

The reports include figures on housing starts and inflation.

After a short-lived pop following the Federal Reserve's Jan. 31 decision to stand pat on interest rates, stocks have shown little will to move higher, though they also haven't ceded much ground. Some investors see a need for a more substantive pullback before stocks can build on the gains of the second half of 2006, while others are simply awaiting the next catalyst, arguing stocks have paused long enough.

more

[Ghost Dog]

28. Bernanke, Democrats May Spar Over Whether Times Are Good or Bad

http://www.bloomberg.com/apps/news?pid=20601103&sid=amukBXWM16Zw&refer=us

Feb. 12 (Bloomberg) -- When Ben S. Bernanke testifies before Congress's new Democratic majorities this week, it may be hard to tell that he and his questioners are talking about the same economy.

The Federal Reserve chairman will use his semiannual appearances before House and Senate banking panels to describe a healthy economy and a strong job market. Democrats such as Representative Paul Hodes of New Hampshire will paint a much different picture -- of stagnant incomes and jobs lost to foreign competition.

``Part of the reason I was elected and many of my colleagues were elected was because of the deep concerns that folks have about the economy,'' says Hodes, president of the freshman House Democrats and a member of the Financial Services Committee that will hear from Bernanke Feb. 15.

...

Maximum Employment

Massachusetts Democrat Barney Frank, the new chairman of the House committee, says he wants his hearings to focus on the Fed's mandate to seek maximum employment, as well as to control inflation. The U.S. unemployment rate was 4.6 percent in January, up from 4.5 percent the month before, as the economy added fewer new jobs than economists had forecast.

``While the economy is good for people at the top, it's not so good for a steelworker in Lorain, Ohio, or a small-business owner in Dayton,'' says newly elected Senator Sherrod Brown, an Ohio Democrat who serves on the banking committee. Of Bernanke, he says: ``I'd like to hear a recognition from him of that and what he's going to do about it.''

...

Increasing Inequality

``The key question is, `How do we get public policies that continue to support economic growth, but in a way that does not increase inequality the way it has recently?'' Frank, 66, said at a breakfast meeting with Bloomberg reporters Feb. 7.

Such concerns are starting to show up in public comments from the Fed. Bernanke himself told an audience in Omaha last week that ``by many measures, inequality in economic outcomes has increased over time.'' New York Fed President Timothy Geithner said in a speech last month that political support for ``global economic integration'' may be difficult to sustain ``because of what has happened to the distribution of income and economic insecurity.''

/...

[Ghost Dog]

31. Market expects 'bullish' Bernanke

http://www.thestreet.com/_tsclsii/markets/metals/10338373.html

Gold was dipping Monday as the greenback rallied in anticipation of bullish comments by Federal Reserve Chairman Ben Bernanke later this week.

April-dated contracts were easing $3.60 at $668.70 an ounce on the Comex division of the New York Mercantile Exchange. The PowerShares DB Gold (DGL - Cramer's Take - Stockpickr) exchange-traded fund, which tracks futures prices, was dipping 0.2%. The bullion ETFs that hold inventories of gold, iShares Comex Gold Trust (IAU - Cramer's Take - Stockpickr - Rating) and streetTracks Gold Shares (GLD - Cramer's Take - Stockpickr - Rating), were down 0.4% and 0.3%, respectively.

"The market is expecting a more hawkish tone from Federal Reserve Chairman Ben Bernanke, opening the door to monetary tightening," says Alan Gayle, senior investment strategist at Trusco Capital Management, in Richmond, Va.

...

A robust economy would likely steer policymakers toward hiking interest rates, which would in turn help support the greenback. Foreign-exchange investors often choose currencies on the basis of yield on short-term government debt.

/...

[ozymandius]

6. Chipmakers fall on Micron warning, profit worries

SEOUL (Reuters) - Shares of major memory chip makers such as Samsung Electronics and Hynix fell on Monday as worries about first-quarter profit were rekindled after U.S. maker Micron warned on Friday about steep price declines.

Samsung Electronics Co. Ltd. (005930.KS: Quote, Profile, Research), the world's top maker of memory chips, fell 2.22 percent to 572,000 won, its lowest close since June 23.

Hynix Semiconductor Inc. (000660.KS: Quote, Profile, Research), the world's second-biggest maker, fell 2.22 percent to 30,800 won, its lowest finish since July 19, after losing as much as 3.49 percent.

http://www.reuters.com/article/hotStocksNews/idUSSEO1464420070212

[ozymandius]

7. U.S. stock futures adrift without trigger to buy`

LONDON (MarketWatch) -- U.S. stock futures on Monday were adrift after some recent weakness, with Bristol-Myers Squibb lower in overseas trading on diminished hopes the pharmaceutical will be taken over.

S&P 500 futures slipped 0.1 of a point at 1,442.80 and Nasdaq 100 futures dropped 1.25 points at 1,791.25. Dow industrial futures slipped 8 points.

U.S. stocks finished Friday on a sour note after a rise in crude-oil futures, comments by Fed officials that left open the possibility for more rate hikes and concerns by Micron Technology executives about memory chip demand and prices.

http://www.marketwatch.com/News/Story/Story.aspx?column=Indications

[ozymandius]

8. Momentum builds for universal health care

WASHINGTON (MarketWatch) -- They weren't ready to hug each other, but when the president of the nation's largest union and the chief executive of the world's biggest retailer joined together to talk about the need for a new American health-care system, people took notice.

And what was worth noting about a press conference this week in which the longtime adversaries -- Wal-Mart Stores Inc. CEO Lee Scott and Service Employees International Union President Andrew Stern -- both called for the virtual scrapping of the employer-based health care system by 2012?

-cut-

The issue is also becoming an important theme of the 2008 presidential election, with Sen. Barack Obama calling for universal health care as he launched his candidacy on Saturday. See full story.

Beyond the high-profile pairing of Scott and Stern, health policy experts have been impressed by an ever-growing coalition of strange bedfellows who are beating the drum for universal health care coverage -- a potential sea change on an issue that proved to be dangerous political dynamite for Bill Clinton's presidency and has been almost taboo on the national political stage for more than a decade.

http://www.marketwatch.com/news/story/momentum-grows-universal-health-care/story.aspx?guid=%7B6BA609A4%2D7C71%2D44F6%2DBEB2%2D741CCBC8DECE%7D

[modrepub]

10. Stick us with the bill

Great idea (sarcasm)! Let's dump this stinking pile on the tax payers. Without some serious structural changes I really don't want this mess no matter how bad its gotten to this point. If big business can't make any progress on health-care cost increases then what makes anyone think the lobby-infested halls of Congress can??

[dweller]

9. bwahhaaha !

that cartoon is a keeper!

dp

[UpInArms]

11. dollar watch

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

Last trade 85.10 Change +0.22 (+0.26%)

Event Risk Trader: US Trade Balance

http://www.dailyfx.com/story/special_report/special_reports/Event_Risk_Trader__US_Trade_1171270500369.html

How To Trade This?



As always, the general rule of thumb in trading event risk is to wait at least 5 minutes before putting the trade on in order to observe if the market price responds to the fundamentals. In the case of the Trade Deficit that principle is double important as markets often probe the price levels only to quickly reject them. Therefore it is critical to see that candles do not leave long wicks before considering a trade.

...more...

Dollar Stalemate Continues

http://www.dailyfx.com/story/strategy_pieces/trade_or_fade/Dollar_Stalemate_Continues_1171258872559.html

On one of the quietest calendar weeks in memory, the trade in the EURUSD was dominated by extraneous factors. At the beginning of the week the greenback weakened off carry trade flows into the EURJPY, then gained some ground after softer than expected data from the Euro-zone caused some selling in the pair, only to finally weaken once again when Jean Claude Trichet chaired a surprisingly hawkish ECB press conference on Thursday. Overall however, as we noted on Friday, “For now markets appear to be at a stalemate.”

Next week the action should become much more interesting albeit not until Wednesday when US economic data of note will begin to hit the tape. US Retail Sales will be the key release of the week as traders will want to know if the strength in US consumption is for real or simply a function of unusually warm weather in December. Latest figures from same store sales of apparel retailers give dollar bulls some reason for hope, Furthermore, the rise in energy prices over the past month is likely to have increased gasoline prices which paradoxically will skew retail sales upward. The market anticipates a sharp falloff to 0.3% growth from 0.9% the month prior, so any upside surprise could put the bid back in the greenback. On the other hand, if the data misses or worse shows a contraction, the damage to the dollar could be severe an its not inconceivable that the EUR/USD could climb back to challenge its late 2006 highs.

Retail Sales are of course not the only story next week. The calendar is full of Industrial sector data with Empire. Philly Fed and IP all on the docket and all except the New York survey expected to be lower. Finally the Trade/TICS numbers be out but unless there is a shockingly surprising skew in the TICS the impact is likely to be minimal. – BS

...more...

[Ghost Dog]

13. G7 seen as green light for carry; yen hits record low

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070212:MTFH11186_2007-02-12_08-53-17_L12227263&type=comktNews&rpc=44

LONDON, Feb 12 (Reuters) - The yen hit a record low against the euro on Monday as investors re-entered short positions after Group of Seven officials meeting over the weekend spoke out only indirectly against the Japanese currency's weakness.

Rather than putting pressure on Tokyo to tackle the yen's depreciation against other major currencies, G7 finance ministers and central bankers called on investors to consider Japan's strengthening economy and be wary of one-way bets in foreign exchange.

The absence of an explicit reference to the yen in the G7 communique undermined the currency.

"The fact that the communique stopped short of mentioning yen weakness is pretty much the green light to reinstate carry trades," said Tania Kotsos, currency strategist at RBC Capital Markets.

RBC forecasts that the euro will rise towards 165 yen in three to six months' time.

/..

[Ghost Dog]

14. Asia follows yen down, G7 causes few waves

http://asia.news.yahoo.com/070212/3/2xcjy.html

SINGAPORE, Feb 12 (Reuters) - Most Asian currencies edged down on Monday, taking their cue from a soft yen, which drew little support from a weekend G7 meeting that sought to warn the market against selling Japan's currency too aggressively.

Group of Seven finance ministers and central bankers meeting in Germany said in a communique that Japan's economic recovery was on track and that such developments would be recognised by market participants.

The statement did not specifically mention the yen but officials warned against the carry trade, an investment play that compounds the weakness of the yen, a favourite vehicle for such deals.

Despite the G7 stance, the market was sceptical that the authorities would intervene to prop up the yen, and carry trades selling the low-yielding currency to invest in higher-yielding currencies remained popular, dealers said.

That meant the yen would stay under pressure for now, they said.

The South Korean won fell just over a third of a percent to a one-week low at about 937.50 per dollar.

The Singapore dollar dipped as much as 0.2 percent to 1.5355 to the U.S. dollar, while the Taiwan dollar eased a similar amount to around 33.05 per U.S. dollar, within a whisker of last week's three-month trough.

"Not much will change after the G7 meeting and Asian currencies should still outperform the yen," said a trader at Bayerische Hypo und Vereinsbank. "I don't think the Bank of Japan needs to intervene at this point in time."

The yen traded at about 121.90 per dollar, down about 0.4 percent from levels seen late in Asia on Friday. It hit a record low against the euro.

"The G7 has been a non-event and essentially there is no clear direction right now," said DBS Bank currency strategist Philip Wee.

Trade was relatively subdued, with Japanese markets closed for a holiday.

/...

[Ghost Dog]

15. G7 carry trade warning fails to push up Swiss franc

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070212:MTFH08715_2007-02-12_06-39-04_L09702907&type=comktNews&rpc=44

ZURICH, Feb 12 (Reuters) - The Swiss franc traded close to recent 8-year lows against the euro in early trade on Monday as a warning from top G7 financial officials against the risks of carry trades failed to push the currency higher.

By 0625 GMT, the franc was slightly lower compared to Friday's close at 1.6245 per euro <EURCHF=>, having hit a 8-year low at 1.6275 per euro last week.

The franc was slightly stronger versus the dollar at 1.2471 per dollar <CHF=>.

The franc has been under pressure for months together with the yen as investors use the low-yielding currencies to fund investments in higher-yielding currencies.

At the weekend meeting of the Group of Seven industrial nations, the group's finance ministers and central bankers sent a warning to markets.

"We want the markets to be aware of the risks of one-way bets, in particular on the foreign exchange market," European Central Bank President Jean-Claude Trichet said, adding he was not talking only about yen-based carry trades.

"One-way bets in the present circumstances would not be, it seems to us, appropriate. We want the markets to be aware of the risks they contain," Trichet said.

Switzerland's short-term benchmark interest rate of 2.00 percent is among the lowest in the world, making the franc an ideal currency to fund carry trades.

/..

[Ghost Dog]

16. Paulson says strong dollar is in US interest

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070212:MTFH10991_2007-02-12_08-44-06_L12854930&type=comktNews&rpc=44

BERLIN, Feb 12 (Reuters) - A strong dollar is in the United States' interests and exchange rates should be determined by market forces, U.S. Treasury Secretary Henry Paulson said in an newspaper interview published on Monday. "It is clear: a strong dollar is in the interest of our country. And the exchange rate should be determined by competition," he was quoted as saying in the Frankfurter Allgemeine Zeitung, according to the German text of the article.

Paulson said the U.S. trade deficit was a problem of global trade imbalances.

"I see in the U.S. that we have a low savings quota but the American economy is one of the biggest engines of growth in the world," he said. "And in other regions like Japan, China and to some extent Europe there is a lack of demand.

/...

[Ghost Dog]

17. Yen hits record low against euro

http://www.ft.com/cms/s/75795282-ba8b-11db-bbf3-0000779e2340.html

The yen fell to a fresh all-time low against the euro on Monday after the communique following the Group of Seven meeting of finance ministers and central bankers over the weekend made no specific reference to the currency’s recent weakness.

...

The dollar also advanced against the euro, rising 0.3 per cent to $1.2960, as investors looked ahead to the semi-annual monetary policy report from Ben Bernanke, chairman of the Federal Reserve, due to be delivered to the US Congress on Wednesday and on Thursday.

Marc Chandler, foreign exchange strategist at Brown Brothers & Harriman, said reports that Mr Bernanke would use the testimony to signal a more neutral stance on monetary policy were likely to be wide of the mark. According to Mr Chandler, Mr Bernanke was likely to emphasise instead the potential upside pressure on prices in the US. “The market has consistently under-estimated the duration and magnitude of Fed tightening,” said Mr Chandler. “Beware of suggestions that Bernanke will soften the Fed’s stance.”

The dollar also edged 0.2 per cent higher against the pound to $1.9470 as UK producer price inflation came in weaker than expected.

/...

[Ghost Dog]

25. China Trade Surplus Up 67 Pct in Jan.

http://www.examiner.com/a-560839~China_Trade_Surplus_Up_67_Pct_in_Jan_.html

BEIJING - China's surging trade surplus jumped 67 percent in January from the same month last year to $15.88 billion, the General Administration of Customs said Monday.

China's trade gap has soared as the country has become the world's low-cost manufacturing center, cranking out toys, shoes and other goods, but the surplus has been accompanied by complaints China keeps the value of its currency artificially low to make its products more competitive.

That criticism was repeated over the weekend by finance ministers and central bankers from the Group of Seven industrialized nations at a meeting in Germany.

"In emerging economies with large and growing current account surpluses, especially China, it is desirable that their effective exchange rates move so that necessary adjustments will occur," they said in a communique.

China's exports hit $86.62 billion, up 33 percent from January 2006, while imports totaled $70.74 billion, up 27.5 percent from a year earlier, the customs bureau said.

It did not say how the data may have been affected by the Lunar New Year holiday, which falls in February this year. Last year part of the holiday fell in January, when the surplus was $9.49 billion. December's surplus was $21 billion.

For all of 2006, China's global trade surplus jumped nearly 75 percent from the previous year to a record $177.5 billion.

/...

[UpInArms]

12. Is this year to burst CEO pay balloon?

http://news.yahoo.com/s/ap/20070209/ap_on_bi_ge/executive_pay_solutions

NEW YORK - Will Robert Nardelli and Henry A. McKinnell do for executive pay what Enron Corp. did for corporate governance? Just as Enron Corp.'s meltdown led to tougher corporate governance regulations, the eye-popping packages those executives received when they exited CEO jobs at Home Depot and Pfizer have caused everyone from President Bush to professional compensation consultants to suggest runaway pay needs to be reined in.

The topic is shaping up to be the No. 1 issue at this year's annual meetings of public companies.

Investor activists are buzzing about potential solutions, including shareholder advisory votes on executive pay packages and the end to provisions that give executives huge windfalls when companies are sold. And a handful of companies have shown a new willingness to talk to advocates about pay changes.

"There's a sort of silver lining to the whole Nardelli, Home Depot thing," said Chicago-based compensation consultant Donald Delves. "At least the shareholders finally spoke up."

Nardelli left Home Depot Inc. in January after months of shareholder complaints about his pay and the lagging performance of the company's stock versus home improvement competitor Lowe's Cos. And McKinnell's exit from Pfizer Inc. in July came 19 months earlier than expected in part due to growing shareholder anger about what had been disclosed about his lucrative retirement package.

But the true shock came when the details later emerged about just how large their severance deals were: Nardelli's was valued at about $210 million and McKinnell's came to almost $200 million, according to company filings with the Securities and Exchange Commission.

...more...

[Ghost Dog]

23. Mutiny in the ranks

http://economist.com/finance/displaystory.cfm?story_id=8679931
Feb 8th 2007
From The Economist print edition
Reasons not to savour that fat bonus cheque

“IT'S the rich wot gets the pleasure, it's the poor wot gets the blame.” The soldiers who sang that ditty in the first world war may have been reflecting on the contrast between their lice-ridden, shell-shocked existence and the creature comforts available to aristocrats back home.

There was an enormous disparity between the income and wealth of the top and bottom classes of society in the early days of the 20th century, as there is today, another era of boisterous global trade. The issue of inequality prompted Ben Bernanke, the Federal Reserve chairman, to make a speech on February 6th calling for improvements in education and training to help displaced workers.

Ajay Kapur and Niall Macleod, two Citigroup strategists, have invented the term “plutonomy” to describe an economy where the spending power of the elite holds sway. They argue that American savings data are distorted by the top 20% of the population. Whereas many Americans are reasonably thrifty, the wealthiest group spends more than it earns.

The rich need not save because financial markets are doing their savings for them. Rising equity and house prices drove up the net-worth-to-income ratio of the wealthiest tenth of Americans from 5.8 in 1989 to 8.4 in 2004. That gives them a licence to spend and makes them immune to petty worries like higher petrol prices.

Furthermore, Messrs Kapur and Macleod say the rise of wealthy elites in Russia and Asia may help explain why America finds it so easy to fund its current-account deficit. Emerging-market plutocrats are nervous about keeping their fortunes at home, lest the political winds change. So they seek to move as much of it as possible to richer countries. This, together with reserve management by the central banks in Asia and oil-exporting countries, provides a steady source of demand for American assets.

But what has caused this great dispersion of wealth? It is not happening in all countries. The gap has been widening in America, Britain and Canada but has barely budged in France, Japan or the Netherlands. The two strategists cite numerous factors, including rising executive pay and technological innovation, which have rewarded high-skilled individuals. Globalisation, which seems to have lowered the relative cost of unskilled labour and boosted the return to capital, has also played its part.

Actually, if one looks at a broad sweep of history, it is the relatively egalitarian 20th century that seems the exception. Mass democracy is only 100 years old and it ushered in both the welfare state and redistributive taxation. The rise of democracy, in turn, was driven by the economic power of workers, especially those gathered in large groups to work in mining, manufacturing and transport. As those industries have ebbed, so have the forces of economic equality.

/read on...

(Also perhaps worth noting this guy Daniel Altman's writings in this field. ('Rational right-winger?') Eg: http://www.thinkingpeace.com/pages/arts2/arts202.html

...

Wealthier people derive more of their income from returns on saving—both in dollar terms and as a proportion of income—than poor people do. When taxes on the return from savings suddenly disappear, the wealthy benefit the most. It may be that people who depend on their jobs for income will benefit, too, in the long run, thanks to an expanding economy and rising wages. But for several years, in all likelihood, the income gap will continue to widen.

That income gap poses some real dangers to the economy and even to the earnings of the wealthy. With rising inequality, it's harder for poor people to obtain economic opportunities, because chances to get education and training, or to bring ideas to market, depend on money as well as talent, and because the number of these opportunities is limited.

The Bush administration has done little to alleviate either of these conditions. So, when income gaps widen, more of the potential of poor people—even the smartest and most innovative poor people—will inevitably be wasted. The wealthier people who own America's companies won't have as skilled a workforce, or as fast a flow of new ideas, as they might have had otherwise.

Perhaps more important, abolishing taxes on saving would give people every incentive to receive all their income from financial assets rather than wages and salaries. For some, spending all day adjusting one's portfolio might make more sense than taking a job. Even people who work will seek ways to avoid taxes, for example by being paid solely in stock options or high-interest bonds.

Of course, those people would probably be chief executives and other financial sophisticates, rather than home health workers, call-center operators, and short-order cooks. Eventually, the new incentives could lead to a whole new way of classifying people: working and upper-class would be replaced by taxpayer and free-rider. Titans of industry, heirs and heiresses, and wizards of Wall Street wouldn't pay for national defense, cancer research, or President Bush's trip to Mars. All those costs would be borne by America's breadwinners.

It sounds like a recipe for the kind of social unrest that can make an economy stagger, stagnate, or worse. A political backlash would seem almost inevitable. And something worse—like a riotous manifestation of anticapitalist sentiment—would become a real possibility for the first time in decades. And that's what could happen if the theory works.

[Ghost Dog]

18. Germany’s hedge fund plan wins G7 support

http://www.ft.com/cms/s/581e2aee-b9cf-11db-89c8-0000779e2340.html

Fast-growth in the global hedge fund industry requires a “vigilant” stance by governments and central banks, the G7 summit in Essen concluded.

Germany won support – including from the US and UK - at the summit for a package of proposals intended to encourage greater transparency in the trillion-dollar hedge fund industry, without calling into question its economic benefits. “Whenever something is growing as quickly as this, it bears looking at,” said Hank Paulson, US treasury secretary.

Although the global financial system has been relative free of financial crises in recent years, European central bankers and finance ministers in particular have expressed concern about hidden “systemic” risks that may have been created by hedge funds, particularly given the opaqueness and complexity of many deals. The US has also stressed the importance of investor protection.

The UK and US were wary of any initiative that could have created regulatory hurdles for hedge funds and the German presidency had tailored its proposal accordingly, scaling back its original ambition to agree on a set of instruments to monitor hedge funds by the end of the year.

The focus among G7 countries in recent months has been on encouraging voluntary steps by the industry and on the risk management by regulated institutions, such as banks, that act for hedge funds. Still, Germany is hopeful that member states will agree on concrete measures to improve the sector’s transparency under Japan’s presidency of the G7 next year.

Speaking after the Essen summit, Jean-Claude Trichet, president of the European Central Bank, said that there had been “a lot of reflection in the industry” but there had not yet been agreement on standards and codes that would form a system of self-assessment. “I’m sure that the industry will crystallise on an appropriate concept,” he said.

Under the proposals agreed at the weekend’s G7 summit, Gerald Corrigan, former president of the New York Federal Reserve, who compiled a report in 2005 on ways to improve the stability of financial markets, will help encourage direct contacts between national finance ministries and hedge fund managers.

...

Along with other advanced financial techniques, including credit derivatives, hedge funds “have contributed significantly to the efficiency of the financial system,” the Essen summit communiqué said. “Nevertheless the assessment of potential systemic and operational risks associated with these activities has become more complex and challenging. Given the strong growth of the hedge fund industry and the instruments they trade, we need to be vigilant.”

Axel Weber, president of Germany’s Bundesbank, said that “vigilant means that we are anything other than complacent”. Rodrigo Rato, managing director of the International Monetary Fund, said that the evolution of recent financial markets had helped spread risk “but there are maybe new vulnerabilities possible”.

“We should be aware that the currently very benign financial scenario could lead to complacent attitudes in some parts of the financial sector,” Mr Rato said. “This is a possible threat.”

/...

[Ghost Dog]

19. Vodafone wins India's Hutch Essar

http://investing.reuters.co.uk/news/articlebusiness.aspx?type=businessNews&storyID=2007-02-12T165019Z_01_SP243639_RTRUKOC_0_UK-HUTCHISON-INDIA.xml

BARCELONA/HONG KONG (Reuters) - Vodafone (VOD.L: Quote, Profile , Research) shares climbed to a 15-month high on Monday after it beat rival suitors with an $11.1 billion (5.7 billion pounds) bid for a controlling stake in Hutchison Essar, India's fourth-biggest mobile phone firm.

The deal, announced on Sunday, gives Vodafone a powerful stake in the world's fastest-growing mobile phone market which will help offset slowing growth in its core European operations.

It also earns a $9.6-billion profit for Hong Kong tycoon Li Ka-shing's Hutchison Telecommunications (2332.HK: Quote, Profile , Research), which sold its 67 percent stake in Hutchison Essar to Vodafone.

The deal values the whole of Hutchison Essar at $18.8 billion, including debt, and has high stakes for Vodafone, the world's biggest mobile phone operator by subscribers outside China, which has been accused by some investors of overpaying for acquisitions.

/...

[Ghost Dog]

20. Europe ends lower as techs and banks fall

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39125.4938888889-889277378&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

European equities were lower on Monday as technology stocks, industrial groups and financial services companies slipped following gains last week. A number of chip-related stocks fell after Micron of the US warned over the weekend that prices for NAND memory chips, used in cameras and MP3 players, would slide this quarter due to a glut in the market. ASML Holding, which makes equipment for manufacturing memory chips, fell 2.7 per cent to €19.16, while Franco-Italian chipmaker STMicroelectronics shed 1.4 per cent to €14.53. By the close, the FTSE Eurofirst 300 was down 0.6 per cent to 1,533.0, Frankfurt’s Xetra Dax shed 0.8 per cent to 6,859.45, the CAC 40 in Paris lost 0.9 per cent to 5,643.95 and London’s FTSE 100 slipped 0.5 per cent to 6,353.5.

European stocks close down, hit by oil firms

LONDON, Feb 12 (Reuters) - European shares ended lower on Monday, weighed by oil stocks such as BP (BP.L: Quote, Profile , Research) and Total (TOTF.PA: Quote, Profile , Research) as oil prices fell more than 3 percent to below $58 a barrel but Vodafone (VD.L: Quote, Profile , Research) gained on an Indian acquisition.

Shares in BP fell 1.1 percent while those in France's Total were down 1.2 percent.

But shares in Vodafone rose to an intra-day 15-month high after it beat rival suitors with a $11.1 billion bid for a controlling stake in Hutchisson Essar, India's fourth-biggest mobile firm. Its shares were up 1.3 percent.

The pan-European FTSEurofirst 300 index <.FTEU3> was down 0.6 percent at an unofficial close of 1,533.0 -- its lowest closing level since February 1.

[Ghost Dog]

21. FTSE extends losses after weak start on Wall Street

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39125.4915856481-889277192&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

London equities closed sharply lower on Monday following a disappointing start to trade in the US and as oil heavyweights weighed on sentiment as US crude futures fell more than $2 to below $58 a barrel. The biggest corporate story of the day was Vodafone after it sealed the $18.8bn battle for control of Hutchison Essar. Shares in the company closed 1.3 per cent higher at 151.5p. Oil and gas companies led decliners with Cairn Energy down 3.3 per cent at 1627p and BG Group off 2.1 per cent at 724p. The FTSE 100 closed 0.5 per cent lower at 6,353.5 while the mid-cap FTSE 250 also fell, down 0.6 per cent to 11,454.8.

[Ghost Dog]

24. Rate rises will lead to economic slowdown in UK, say forecasters

http://money.guardian.co.uk/businessnews/story/0,,-2010880,00.html

The UK economy will see a sharp slowdown this year due to the string of interest rate rises by the Bank of England, two leading economic forecasters warn today.

In its quarterly economic forecast, the British Chambers of Commerce (BCC) said a combination of three 0.25% interest rate rises in six months and the marked appreciation of sterling will dampen year-on-year growth to 2.2% in the first quarter of 2008 from an above-trend pace of 3% in the last quarter of 2006.

With inflation at a 15-year high of 3%, the BCC said squeezed disposable incomes, coupled with a general global slowdown, would place additional brakes on the rate of Britain's economic growth.

"We believe that the cumulative effects of three interest increases implemented since August 2006, and the marked appreciation in the value of sterling, will prove to be very significant," said David Kern, economic adviser to the BCC. "There is a distinct risk that the slowdown could be worse. A marked deceleration in activity is highly likely even if the Bank rate stays at 5.25%. But if the rate goes up to 5.5%, growth could fall below 2%."

/...

[Ghost Dog]

22. US markets: Friday's sell-off continues

Dow 12,568.49 Down 12.34 (0.10%)
Nasdaq 2,451.37 Down 8.45 (0.34%)
S&P 500 1,435.39 Down 2.67 (0.19%)
10-Yr Bond 4.7960% Up 0.0120
NYSE Volume 993,285,000
Nasdaq Volume 882,546,000

12:00 pm : Friday's sell-off continues to weigh on investor psyche midday as the major averages add to last week's losses. While there are no influential earnings reports or potentially troubling economic data this morning, mixed news on the M&A front and a muted response to plunging oil prices have done little to get buying efforts back on track. The market is also showing some reluctance to bounce back ahead of upcoming testimony Fed Chairman Bernanke later in the week.

Home Depot (HD 41.41 +0.41) mulling the spin-off, IPO, or even a sale of its HD Supply unit had the Dow component up as much as 2.5% at one point. Other deals making headlines include Vodaphone (VOD 29.51 +0.56) winning a majority stake in Hutchison Essar for $11.1 bln, Hindalco Industries buying Alcan spinoff Novelis (NVL 43.77 +5.23) for $6 bln and Four Seasons (FS 81.38 -2.50) accepting a $3.8 bln buyout.

However, since none of today's deals were blockbusters, investors continue to err on the side of caution and question the market's weakening fundamentals. Reports that Sanofi-Aventis (SNY 44.05 +0.27) called off merger talks with Bristol-Myers (BMY 27.31 -1.21) and Nasdaq (NDAQ 35.27 -1.93) has failed again to get shareholder approval for its hostile takeover of the London Stock Exchange have also diminished the impact of other deals.

On a positive note, oil prices are plunging 3.3% and are back below $58/bbl after briefly eclipsing the $60/bbl mark on Friday. Crude for March delivery is now down 2.6% at $58.30/bbl after Saudi oil minister suggested production cuts may not be necessary.

Be that as it may, policy makers removing the "impetus from energy prices" as an inflation risk from the Fed's latest FOMC statement places more of an emphasis on a 1.2% sell-off in Energy instead of oil's weakening inflationary potential. In fact, Energy's decline speaks to its influence as a leadership group since the other four sectors trading lower are only posting losses of between 0.1% and 0.2%. BTK -1.0% DJ30 -10.93 DJUA +0.3% DOT -0.4% NASDAQ -8.05 NQ100 -0.3% R2K -0.3% SOX -0.8% SP400 -0.3% SP500 -2.26 XOI -1.0% NASDAQ Dec/Adv/Vol 1732/1150/816 mln NYSE Dec/Adv/Vol 1930/1152/482 mln

11:30 am : Little changed since the last update as the major averages continue to vacillate in roughly the same ranges. It is worth noting, though, that market losses are modest at best as the lack of overwhelming positive catalysts to convince buyers that a bottom has formed leaves the door open for sellers to keep consolidating recent gains. The sluggish action also reflects the market’s apprehension ahead of potential clues about the interest rate outlook from Fed Chairman Bernanke's upcoming testimony later in the week. DJ30 -14.05 NASDAQ -8.61 SP500 -3.07 NASDAQ Dec/Adv/Vol 1669/1176/690 mln NYSE Dec/Adv/Vol 1806/1231/398 mln

11:00 am : All three indices are still lingering below the flat line as further deterioration in oil prices does little to incite buying interest. Crude for March delivery is now down 2.6% at $58.30/bbl after Saudi oil minister suggested production cuts may not be necessary. However, with policy makers recently believing that the "impetus from energy prices" has been reduced so much that there was no mention of it whatsoever in the Fed's latest FOMC statement, the absence of leadership in the Energy sector (-1.1%) is acting as an offset to oil's weakening inflationary potential.DJ30 -15.54 NASDAQ -8.82 SP500 -3.09 XOI -1.1% NASDAQ Dec/Adv/Vol 1682/1121/552 mln NYSE Dec/Adv/Vol 1802/1204/310 mln

10:30 am : Stocks continue to weaken as the absence of spirited leadership from a number of blue chips now has the Dow languishing in the red. Of the 20 components trading lower, Intel (INTC 20.81 -0.22) is pacing the way, tacking a 1.1% decline onto Friday's 1.5% pullback. Follow-through selling is also weighing on American Express (AXP 56.90 -0.63), which is now down 2.5% over the last two sessions. DJ30 -11.68 NASDAQ -7.55 SP500 -2.39 NASDAQ Dec/Adv/Vol 1708/1022/408 mln NYSE Dec/Adv/Vol 1784/1119/216 mln

10:00 am : The major averages are now mixed as split industry leadership dictates this morning's lackluster action. Among the five sectors attracting buyers, the only sector posting a noticeable gain is Materials (+0.6%), which is also the least influential of the 10 S&P 500 sectors. Of the five trading lower, Energy paces the way (-0.6%) in sympathy with oil prices slipping below $59/bbl (-1.5%) while the failure by Technology to bounce back following Friday's 1.3% sell-off further underscores the early sense of apprehension.DJ30 +10.66 NASDAQ -7.46 SP500 -1.09 NASDAQ Dec/Adv/Vol 1206/1300/150 mln NYSE Dec/Adv/Vol 1058/1123/54 mln

09:40 am : Stocks open with little fanfare as investors sift through some mixed M&A news. Home Depot (HD 41.70 +0.70) mulling the spin-off or sale of its HD Supply unit has the Dow component up nearly 2%. Other deals making headlines include Vodaphone (VOD 29.60 +0.65) winning a majority stake in Hutchison Essar for $11.1 bln, Hindalco Industries buying Alcan spinoff Novelis (NVL 44.01 +5.47) for $6 bln and Four Seasons (FS 81.51 -2.37) accepting a $3.8 bln buyout.

However, since none of today's deals were blockbusters, investors continue to err on the side of caution and question the market's weakening fundamentals. Reports that Sanofi-Aventis (SNY 44.13 +0.35) called off merger talks with Bristol-Myers (BMY 27.19 -1.33) and Nasdaq (NDAQ 36.20 -1.00) has failed again to get shareholder approval for its hostile takeover of the London Stock Exchange also diminish the impact of other deals. DJ30 +14.64 NASDAQ +0.16 SP500 +0.65 NASDAQ Vol 88 mln NYSE Vol 44 mln

[Ghost Dog]

29. Wall St lower on concerns over housing market

http://www.ft.com/cms/s/e0ea6460-baa0-11db-bbf3-0000779e2340.html

US stocks were slightly lower at midday on Monday, dragged down by lingering worries over mortgage lending and the housing market.

Shares in homebuilders, mortgage lenders and real estate investment trusts continued their decline as investors brooded over last week’s warnings about lending to borrowers with weak credit and what this may imply for the property market and wider US economy.

New Century Financial, the sub prime lender, slipped a further 4.5 per cent to 17.91 and Countrywide was 3.6 per cent down at $40.68.

Fears that rising defaults in the sub-prime sector might be the harbinger of wider troubles also hit shares in Reits, with the MSCI US Reit Index 1.5 per cent lower. Among homebuilders, DR Horton was 1.7 per cent weaker at $27.56.

/...

[Ghost Dog]

27. (For goldbugs & chartists) ELLIOTT WAVE GOLD UPDATE XI

http://www.gold-eagle.com/editorials_05/field021107.html
Alf Field
"The time has come," the Walrus said, "to talk of many things."- Lewis Carroll in "Alice in Wonderland"

The time has come to talk about the imminent major upward surge in the gold price. The stars are aligned, the fundamentals are in place, the technical situation is positive and the Elliott Wave analysis suggests that wave 3 (the strongest wave) of the current sequence is underway. The gold price should soon move to new highs for the current bull market.

I am actually not sure whether the stars are positively aligned, but the fundamentals have certainly been positive for years. Conventional technical analysis reveals that a "Teacup and Handle" formation has formed. This is a formation which has a long record of being a powerful base from which major up-moves can be anticipated with great confidence. The PM London fixing of $664.50 on Friday 9 February 2007 was an upside break from the Teacup and Handle base formation. This is a technical buy signal indicating sharply higher prices ahead.

The Elliott Wave analysis appears to be on the positive track anticipated in Update X. The gold price is in the early stages of wave 3 of wave I, which should be the strong upward surge in this sequence. Indeed, it could be wave iii of 3, making it even more powerful. The following chart is the updated picture of the London PM Gold fixings:



Data Updated to 9 February 2007.

The near term target price for gold from the Teacup and Saucer base is approximately $760, a level that would accord well with a possible peak for the Elliott wave 3 of wave I, the wave that is presently underway. In Update X it was explained that the likely peak of wave I would be $870, from which point a 16% correction should occur. The expectation was that there would be 2 corrections of approximately 8% on the way from the $560 low to the anticipated $870 peak. The size of these corrections is estimated from the rhythms found in major wave ONE, which lasted from the $253 low in 2001 to the $725 peak in May 2006.

...

The following is the forecast template for the entire extent of Major Wave THREE as depicted and explained in Update X:



We are currently in wave I of major wave THREE. We can now insert the first two minor waves of wave I and make a rough guess at the remainder of wave I as follows:



If this forecast is correct, some exciting times lie directly ahead for the gold market.

Warning: There is still a small possibility that the current up-move is wave B of a much bigger correction from the May 2006 peak. If the market rises sluggishly instead of powerfully, especially as the price approaches $680-$700, one should bear this possibility in mind. A rise above $725 would eliminate this residual concern.

:shrug:

[Ghost Dog]

33. US markets: bearish cue from further deterioration in Treasuries

Dow 12,554.63 Down 26.20 (0.21%)
Nasdaq 2,447.74 Down 12.08 (0.49%)
S&P 500 1,433.47 Down 4.59 (0.32%)
10-Yr Bond 4.8100% Up 0.0260
NYSE Volume 1,464,438,000
Nasdaq Volume 1,241,183,000

2:00 pm : The indices are extending their reach into negative territory, as stocks take a bearish cue from further deterioration in Treasuries. Within the last 30 minutes, investors have digested the release of a White House Economic report that sees U.S. productivity growth staying strong, averaging 2.6% growth. While that bodes well from a wage-based inflation standpoint, since productivity gains push unit labor costs lower, the strong data have also been translated to suggest a reduced likelihood that the Fed will cut rates anytime soon. DJ30 -36.05 NASDAQ -14.54 SP500 -5.81 NASDAQ Dec/Adv/Vol 1826/1154/1.20 bln NYSE Dec/Adv/Vol 1925/1251/762 mln

1:30 pm : The market's recent attempt to pare losses has run into some resistance. The bloodletting in oil continues, with crude for March delivery now down 4% near $57.50/bbl. While that is certainly bullish for consumers and bodes from an earnings standpoint for the broader market as a whole, the inability by economically sensitive areas like Transports to more aggressively take notice lends little credibility behind just how long oil will stay at these levels.

As a reminder, oil prices on January 30 soared more than 5% -- the biggest one-day move since Hurricane Katrina, and, due in large part to Energy's leadership that day (+1.6%), the market actually posted respectable gains. Energy is down 1.4% today and acting as an offset to oil's decline; 31 of the sector's 33 components are posting losses. ..OIX -1.4%. ..OSX -1.7%. ..OIH -1.7%.DJ30 -14.61 DJTA +0.3% NASDAQ -9.02 SP500 -3.09 XOI -1.5% NASDAQ Dec/Adv/Vol 1761/1195/1.10 bln NYSE Dec/Adv/Vol 1905/1247/680 mln

[citizen snips]

36. Stocks Decline in Late Afternoon Trading

NEW YORK (AP) -- Wall Street extended its losses Monday as investors awaited a stream of key economic data this week and were left disappointed by the collapse of several closely-watched acquisition deals.

The markets, which pulled back last week amid concern about inflation's impact on interest rates, traded cautiously with Federal Reserve Chairman Ben Bernanke set to speak before Congress on Wednesday. Government data due on Friday should shed light on wholesale inflation and the state of the housing market.

Unlike recent Mondays, there was a dearth of acquisition announcements to give the market a lift. Instead, investors had to deal with news that the Nasdaq Stock Market Inc. failed in its bid to buy the London Stock Exchange and that French drugmaker Sanofi-Aventis called off talks for a possible deal with Bristol-Myers Squibb Co.

Onyx Pharmaceuticals Inc. and Bayer AG advanced after the companies released data from a clinical trial that shows an experimental drug is effective in fighting liver cancer. Apple Inc. moved higher after being upgraded in anticipation of big product launches set this year.

more...
http://biz.yahoo.com/ap/070212/wall_street.html?.v=28

[citizen snips]

37. U.S. Stocks Fall, Led by Exxon on Oil; Real Estate Shares Drop

Feb. 12 (Bloomberg) -- U.S. stocks dropped as falling oil prices sent energy shares to their lowest this month and real estate shares tumbled the most since November on concern they've risen too far during a four-year rally.

Exxon Mobil Corp. led a drop in fuel producers as crude's drop below $58 a barrel threatens to reduce the companies' profits. Real-estate investment trusts declined for a third day, adding to the selloff in homebuilders and mortgage lenders, after a Federal Reserve official last week said interest rates may increase and lenders misjudged some of their risks.

Earnings at energy companies helped drive the Standard & Poor's 500 Index last year to its best annual performance since 2003. This quarter, analysts expect the group's net income to drop 1.6 percent from a year earlier, according to estimates compiled by Bloomberg, as oil's 5.6 percent decline in 2007 erodes the companies' profit margins.

``Our expectation has been for about a plus 5 to plus 6 percent growth rate in earnings on the S&P 500'' in 2007, said Craig Hester, who oversees about $1.4 billion as president of Hester Capital Management in Austin, Texas. ``That's a fairly dramatic slowdown from last year. It will cause the market to not have as good of returns this year as we've experienced the last few years.''

more...
http://www.bloomberg.com/apps/news?pid=20601084&sid=aCoN79GtxQU0&refer=stocks

[citizen snips]

38. Gold Prices Fall From Six-Month High as Dollar Strengthens

Feb. 12 (Bloomberg) -- Gold prices in New York fell from a six-month high after the dollar strengthened, reducing the precious metal's appeal as an alternative investment.

Gold generally moves in the opposite direction of the U.S. dollar, which today rose against 15 of 16 major currencies tracked by Bloomberg. The metal climbed 23 percent last year while gold fell 7 percent against a basket of six major currencies.

``We could see dollar strength be a downside issue for gold,'' said Nick Ruggiero, a trader at Eagle Futures Inc. in New York.

Gold futures for April delivery fell $5, or 0.7 percent, to $667.30 an ounce on the Comex division of the New York Mercantile Exchange. Prices climbed 3.2 percent last week to the highest since August.

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

[citizen snips]

39. Wal-Mart Eyes Russia Expansion

Wal-Mart Stores Inc. is interested in moving into Russia after strong growth in that giant country's retail spending, the world's largest retailer said Monday.

Wal-Mart's international division is smaller but is growing faster than the company's flagship U.S. business. Russia would mark another move into large but underdeveloped markets like Latin America and China, where it is already established, and India, where Wal-Mart plans to open stores with a local partner company.

Angela Hofmann, a spokeswoman for Wal-Mart International, said Wal-Mart has been watching the Russian retail market for several years and likes what it sees.

"We've been watching impressive growth and it has piqued our interest," Hofmann said. "We are definitely interested in the Russian market."

more...

http://biz.yahoo.com/ap/070212/wal_mart_russia.html?.v=4

[citizen snips]

40. Chips Snap: Nvidia, OmniVision Shares Up

NEW YORK (AP) -- As earnings season for semiconductor companies draws to a close, chip stocks edged down in Monday's trading, although there were significant gains made by Nvidia Corp. and OmniVision Technologies.

The Philadelphia Semiconductor Sector Index dropped 3.24 points, or .7 percent, to 459.94.

Graphics chip maker Nvidia Corp. shot up ahead of fourth-quarter results, which are scheduled to be released on Tuesday, after market close.

Caris & Co. analyst Nicholas Aberle, predicts fourth-quarter results will "cap off a well-executed fiscal 2007 which demonstrated strong revenue growth and multiple upside earnings revisions.

more...
http://biz.yahoo.com/ap/070212/sector_snap_semiconductors.html?.v=1

[citizen snips]

41. Treasuries Fall on Rate Concern Before Fed Chairman's Testimony

Feb. 12 (Bloomberg) -- Treasuries fell amid speculation Federal Reserve Chairman Ben S. Bernanke's congressional testimony this week will reduce expectations for interest-rate cuts this year.

Three Federal Reserve officials in speeches Feb. 9 mentioned the possibility of an increase in borrowing costs by the central bank. A rally in Treasuries that drove the benchmark 10-year note's yield as low as 4.4 percent on Dec. 1 was fueled by bets on a rate cut by midyear.

``The Fed has been pretty consistent in their hawkish leaning,'' said Michael Pond, an interest-rate strategist in New York at Barclays Capital Inc. While traders are not ``pricing in hikes, the longer the Fed maintains its relative hawkishness, the more that's going to change.''

The yield on the benchmark 10-year note rose 2 basis points, or 0.02 percentage point, to 4.80 percent at 3:33 p.m. in New York, according to New York-based bond broker Cantor Fitzgerald LP. The price of the 4 5/8 percent security due in February 2017 fell 5/32, or $1.56 per $1,000 face amount, to 98 19/32. Bond yields move inversely to prices.

more...
http://www.bloomberg.com/apps/news?pid=20601009&sid=afUOppYQL8Mw&refer=bond

[citizen snips]

42. Monday's biggest stock gainers and decliners

Adeza Biomedical Corp. (NasdaqGS:ADZA - News) shares soared 53% Monday after the company agreed to be bought by Cytyc Corp. (NasdaqGS:CYTC - News) for $24 a share, or approximately $450 million, Cytyc will fund the purchase through existing cash, the cash on Adeza's balance sheet, and existing credit facilities. The deal, which is subject to customary closing conditions and regulatory approvals, is expected to be completed before the end of March. Cytyc said that, excluding one-time costs related to the acquisition, it expects the acquisition to be break-even to earnings in 2007 and at least accretive by 5 cents to 2008 earnings per share.

Apogee Enterprises (NasdaqGS:APOG - News) shares surged 10% after the company lifted its outlook for fiscal 2007, saying it now sees earnings of $1.04 to $1.10 a share. Its previous projection was for a profit of 98 cents to $1.04 a share for the year. The average estimate of analysts polled by Thomson Financial is for a profit of $1.01 a share in 2007. The Minneapolis-based glass products maker anticipates it will post revenue growth near the top of its prior range of 12% to 15%. For fiscal 2008, Apogee forecast earnings of $1.20 to $1.30 a share on revenue growth of 8% to 11%. Wall Street's current consensus estimate is for a profit of $1.19 a share in fiscal 2008.

Asta Funding (NasdaqGS:ASFI - News) shares rose 10% after the company agreed to acquire a portfolio with a face value of $6.9 billion for a purchase price of $300 million. Asta said the portfolio is made up of primarily credit card accounts.

Brush Engineered (NYSE:BW - News) shares jumped 33% after the company said its fourth-quarter earnings jumped to $30.3 million, or $1.48 a share, from $4.1 million, or 93 cents a share, a year earlier, boosted by a $21.3 million benefit related to the reversal of the company's deferred tax valuation allowance. The Cleveland supplier of metal products and engineered material systems said excluding the allowance, the company earned 44 cents a share. Revenue rose 48% to $207.8 million from $140.6 million a year ago. Analysts surveyed by Thomson Financial expected, on average, earnings of 41 cents a share on revenue of $189 million. Analyst earnings forecasts typically exclude unusual items. In addition, Brush Engineered said it expects 2007 sales to rise 25% to 30%to $950 million to $1 billion, with earnings of $3 to $3.75 a share, including a $1-per-share benefit from the sale of inventory.

more...
http://biz.yahoo.com/cbsm/070212/b6285cdb3a894b74a2d77d64074d7e03.html?.v=4

[citizen snips]

43. DJIA Leaders & Laggards: DIS, HD

NEW YORK (AP) -- Walt Disney Co. ended lower Monday and posted the biggest loss on the Dow Jones Industrial Average.

The Dow declined 28.28 at 12,552.55.

Walt Disney declined for the third straight day and lost 44 cents to end at $33.92 on the New York Stock Exchange, despite an upgrade from a CIBC World Markets analyst.

Chipmaker Intel Corp. declined for the second day in a row, giving up 23 cents to finish at $20.80 on the Nasdaq. The San Jose, Calif., company revealed an experimental computer chip that can perform about a trillion calculations per second while using little power, but it is unclear if there is a computer operating system that could control the chip, which might not even make it to production.

Boeing Co. also declined 80 cents to close at $89.22 on the Big Board. In a client note, Lehman Brothers analyst Joseph Campbell raised concerns about the risks Boeing faces while trying to ramp up its 787 aircraft program.

more...
http://biz.yahoo.com/ap/070212/apfn_djia_laggards.html?.v=1

[citizen snips]

44. S&P 500 Leaders & Laggards: BMC, LUV

NEW YORK (AP) -- BMC Software Inc. helped drag the Standard & Poor's 500 Index to a lower close Monday after an analyst warned of top-line trouble.

The S&P 500 index gave up 4.69 to end at 1,433.37.

Stifel Nicolaus & Co. analyst Todd C. Weller said it was not certain whether BMC can drive revenue growth better than mid-single digits in coming periods. The stock sank $1.76, or 5.3 percent, to finish at $31.18 on the New York Stock Exchange.

Bristol-Myers Squibb Co. tumbled after a report indicated that French drugmaker Sanofi-Aventis called off talks on a possible combination with U.S.-based Bristol-Myers, sending shares of the New York company down 93 cents, or 3.3 percent, for a $27.59 finish on the NYSE.

more...
http://biz.yahoo.com/ap/070212/s_p_500_laggards.html?.v=1

[citizen snips]

45. Nasdaq 100 Leaders & Laggards: XMSR NVDA

NEW YORK (AP) -- A Goldman Sachs analyst's comments that any merger agreement between XM Satellite Radio Holdings Inc.'s and rival Sirius Satellite Radio would be unlikely to garner regulatory approval prompted XM's shares to post the biggest loss Monday on the Nasdaq 100.

The Nasdaq 100 finished down 7.11 at 1,778.42, while the Nasdaq declined 9.44 to 2,450.38.

Shares of XM lost 41 cents, or 3.1 percent, to end at $13.03.

Broadcom Corp. gave up $1.02, or 3 percent, to end at $33.20.

Online retailer eBay Inc. declined 71 cents, or 2.1 percent, to end at $32.80. Earlier Monday, Bear Stearns analyst Robert Peck indicated that eBay may team up with Yahoo Inc. to create a clone of Google's Checkout badges next to ads on Yahoo's new Panama ad platform.

more...
http://biz.yahoo.com/ap/070212/nasdaq_100_laggards_close.html?.v=1

[ozymandius]

46. closing numbers and blather

Dow 12,552.55 Down 28.28 (0.22%)
Nasdaq 2,450.38 Down 9.44 (0.38%)
S&P 500 1,433.37 Down 4.69 (0.33%)
10-Yr Bond 4.804% Up 0.02
NYSE Volume 2,395,676,000
Nasdaq Volume 1,904,474,000

4:20 pm : The selling continued Monday as investors weighed ongoing uncertainty about Fed policy and the collapse of some noteworthy M&A deals against a sell-off in oil.

Per usual for a Monday, there was some acquisition news to digest. Home Depot (HD 41.48 +0.48) mulling the spin-off, IPO, or even a sale of its HD Supply unit had the Dow component up as much as 2.5% at one point. Vodaphone (VOD 29.53 +0.58) won a majority stake in Hutchison Essar for $11.1 bln. Hindalco Industries agreed to buy Alcan spin-off Novelis (NVL 43.67 +5.13) for $6 bln -- a sizable 16% premium on top of two weeks of takeover speculation.

However, reports that Sanofi-Aventis (SNY 44.29 +0.51) called off merger talks with Bristol-Myers (BMY 27.59 -0.93) and that the Nasdaq (NDAQ 35.10 -2.10) failed again to get shareholder approval for its hostile takeover of the London Stock Exchange left investors questioning valuations and the market's weakening fundamentals.

Stocks running virtually unabated since July of last year, without any real setback, has raised concerns that a correction is coming; worries that we believe will make it difficult for any sustained move to the upside in the near-term.

Market participants also erred on the side of caution as they awaited clues about the interest rate outlook. All eyes this week will be on Fed Chairman Bernanke as he goes before the Senate and House Committees Wednesday and Thursday, respectively, to provide his semi-annual testimony on the economy and monetary policy.

As a reminder, now that 75% of S&P 500 constituents have reported quarterly results, the focus has shifted from Q4 earnings to the general economic outlook.

On a positive note, oil prices plunged 4.0% and closed near $57.50/bbl after briefly eclipsing the psychologically important $60/bbl mark on Friday. Crude for March delivery was initially under pressure after the Saudi oil minister suggested production cuts may not be necessary; but the commodity's decline was exacerbated by this year's biggest one-day decline (-7.6%) in natural gas futures.

As one might expect, the oil price retreat weighed on the Energy sector, which was the day's worst-performing economic sector with a loss of 1.20%. BTK -1.0% DJ30 -28.28 DJTA +0.4% DJUA -0.1% DOT -0.4% NASDAQ -9.44 NQ100 -0.4% R2K -0.1% SOX -1.0% SP400 -0.3% SP500 -4.69 XOI -1.3% NASDAQ Dec/Adv/Vol 1740/1326/1.87 bln NYSE Dec/Adv/Vol 2004/1259/1.26 bln