Thursday, June 23, 2005

Stocks Fall on Growth Concerns and Trade Relations with China

S&P 500 1,200.73 -1.08%
DJIA 10,421.44 -1.57%
NASDAQ 2,070.66 -1.02%
Russell 2000 634.12 -1.45%
DJ Wilshire 5000 11,917.06 -1.04%
S&P Barra Growth 573.14 -1.23%
S&P Barra Value 623.46 -.94%
Morgan Stanley Consumer 575.83 -1.18%
Morgan Stanley Cyclical 722.15 -1.99%
Morgan Stanley Technology 482.06 -.98%
Transports 3,457.46 -3.11%
Utilities 383.42 +.39%
Put/Call .75 -16.67%
NYSE Arms 1.14 +6.89%
Volatility(VIX) 12.13 +9.77%
ISE Sentiment 158.00 -9.20%
US Dollar 89.12 +.63%
CRB 311.45 +.14%

Futures Spot Prices
Crude Oil 59.62 +.34%
Unleaded Gasoline 165.55 -.07%
Natural Gas 7.50 +.36%
Heating Oil 167.50 -.04%
Gold 442.80 -.09%
Base Metals 123.13 -1.51%
Copper 152.00 -.49%
10-year US Treasury Yield 3.95% +.34%

Leading Sectors
Oil Service +.98%
Oil Tankers +.55%
Gold & Silver +.54%

Lagging Sectors
Tobacco -2.09%
Airlines -3.68%
Steel -4.90%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Underperform on DRI and FGP.

Afternoon/Evening Headlines
- Billionaire investor Warren Buffett said state and federal probes into his Berkshire’s General Re unit is “costing money” and will weigh further on the company.
- Tata Steel, India’s second-largest steel producer, and Chinese cranemaker Shanghai Zhenhua Port Machinery were among this week’s Asian borrowers tapping the loan market for funds to boost production.
- Imposing trade sanctions of China would be misguided and put the future of the US economy at risk, Fed Chairman Greenspan told lawmakers who are considering such penalties.
- GM bonds are having their biggest monthly rally in at least eight years, fueled by high-yield and hedge funds attracted by the carmaker’s plan to cut costs and wring concessions out of its unions.
- US home prices set another record in May as previously owned homes continued to sell at a near-record rate, spurred by low borrowing costs and rising incomes.
- Chevron, close to winning regulatory approval for its agreement to buy Unocal, may be forced to increase its bid to counter an $18.5 billion offer from China’s CNOOC Ltd.
- Crude oil prices in NY rose to a record $60 a barrel on speculation supplies won’t be adequate to meet surging demand this fall.

- Bill Gross, who manages the world’s largest bond fund, said yields will likely fall through 2006 and 2007.

Financial Times:
- Rambus is being investigated by the European Commission in connection with patent abuses.

BOTTOM LINE: The Portfolio finished unchanged as gains in my Tech longs and Steel shorts offset losses in my Retail and Gaming longs. I added a few shorts in the afternoon, thus leaving the Portfolio 50% net long. One of my new shorts is PD and I am using a $95 stop-loss on this position. The tone of the market was negative today as the advance/decline finished substantially lower, most sectors fell and volume was above average. Measures of investor anxiety were mostly higher into the close. Overall, today’s market action was negative. Stocks declined on worries over slowing global growth and concerns over issues with China. Tomorrow should be a key day for oil and the markets.

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