Monday, October 10, 2005

Stocks Finish at Session Lows as Energy Prices Bounce and Worries Over GM Rise

Indices
S&P 500 1,187.33 -.72%
DJIA 10,238.76 -.52%
NASDAQ 2,078.92 -.55%
Russell 2000 637.97 -.99%
DJ Wilshire 5000 11,853.65 -.74%
S&P Barra Growth 569.41 -.53%
S&P Barra Value 613.77 -.90%
Morgan Stanley Consumer 576.85 -.28%
Morgan Stanley Cyclical 691.24 -2.06%
Morgan Stanley Technology 490.90 -.85%
Transports 3,665.85 -.35%
Utilities 406.03 -1.88%
Put/Call 1.01 +8.60%
NYSE Arms 1.59 +81.33%
Volatility(VIX) 15.55 +6.58%
ISE Sentiment 130.00 -18.75%
US Dollar 89.46 +.33%
CRB 325.96 +.23%

Futures Spot Prices
Crude Oil 62.32 +.78%
Unleaded Gasoline 181.31 -.88%
Natural Gas 13.14 +1.27%
Heating Oil 198.20 +.52%
Gold 478.10 +.02%
Base Metals 133.49 -.09%
Copper 180.60 unch.
10-year US Treasury Yield 4.35% -.36%

Leading Sectors
Disk Drives +.37%
HMOs +.15%
Restaurants +.13%

Lagging Sectors
Homebuilders -2.60%
Alternative Energy -3.07%
Semis -3.24%

Evening Review
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In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on DNA.

Afternoon/Evening Headlines
Bloomberg:
- The euro fell the most in a week on concern a German government led by Christian Democratic leader Angela Merkel will struggle to push through tax cuts and labor law changes to revive Europe’s largest economy.
- NY Mayor Bloomberg said police would be “slowly winding down” the intensity of subway patrols, after the target date cited in a federal waning about a possible terrorist attack passed without incident.
- Average levels of a type of cholesterol linked to heart disease fell 10% in US mean from 2001 to 2004, according to Quest Diagnostic, the nation’s biggest operator of medical-testing labs.
- EBay’s PayPal will buy VeriSign’s payment gateway business for about $370 million.
- The San Francisco area has a 25% change of being struck by a magnitude 7 or greater earthquake in the next 20 years, according to a study based on a new forecasting method that will be published tomorrow in the journal Proceedings of the National Academy of Sciences.
- Genentech said third-quarter earnings rose 56% as new uses for its Avastin and Herceptin cancer treatments helped spur sales.

Financial Times:
- Global economic growth may slow to 1.7% a year over the next 30 years unless people stay in work until they are older to offset falling birth rates, citing the OECD.
BOTTOM LINE: The Portfolio finished unchanged today as gains in my Energy-related shorts offset losses in my Semiconductor longs. I added back to my IWM and QQQQ shorts, thus leaving the Portfolio 25% net long. The tone of the market was negative today as the advance/decline line finished lower, most sectors declined and volume was light. Measures of investor anxiety were higher into the close. Overall, today’s market action was negative. November lumber futures have fallen 12% from highs seen after Hurricane Katrina. It appears the downtrend in lumber pricing has resumed even with massive hurricane rebuilding on the horizon.

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