Thursday, October 06, 2005

Stocks Finish Lower Despite Tumbling Energy Prices on Fed Worries

Indices
S&P 500 1,191.49 -.41%
DJIA 10,287.10 -.29%
NASDAQ 2,084.08 -.90%
Russell 2000 639.45 -.86%
DJ Wilshire 5000 11,891.88 -.54%
S&P Barra Growth 570.61 -.29%
S&P Barra Value 616.74 -.52%
Morgan Stanley Consumer 580.14 -.13%
Morgan Stanley Cyclical 698.38 -1.0%
Morgan Stanley Technology 492.44 -.96%
Transports 3,650.21 +.74%
Utilities 408.68 -1.56%
Put/Call 1.07 +5.94%
NYSE Arms 1.14 -47.91%
Volatility(VIX) 14.96 +2.82%
ISE Sentiment 165.00 +6.45%
US Dollar 88.68 -1.44%
CRB 323.93 -1.30%

Futures Spot Prices
Crude Oil 61.77 +.64%
Unleaded Gasoline 185.70 +.90%
Natural Gas 13.30 -.56%
Heating Oil 196.84 +.91%
Gold 476.20 +.25%
Base Metals 132.76 +.70%
Copper 178.30 unch.
10-year US Treasury Yield 4.38% +1.09%

Leading Sectors
Airlines +4.43%
Gold & Silver +2.79%
Restaurants +1.03%

Lagging Sectors
Energy -2.45%
Biotech -2.69%
Alternative Energy -3.37%

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
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on IMCL, AMGN and RE.

Afternoon/Evening Headlines
Bloomberg:
- Federal Reserve Bank of Dallas President Richard Fisher said policy makers must prevent an “inflation virus” from disrupting the US economy and financial system.
- JPMorgan Chase and Morgan Stanley, forced to spit by lawmakers more than 70 years ago, may reunite, Prudential’s Mayo said.
- Sales at US retailers jumped 4% in September, beating analysts’ estimates, even as two hurricanes disrupted business.
- Merck said an experimental vaccine prevented cervical cancer caused by two common forms of a sexually transmitted virus, which infects more than 5.5 million Americans each year.
- UTStarcom, the biggest supplier of wireless-telephone systems in China, said third-quarter sales missed its forecast and US regulators began a probe of the company’s financials.
- NY police stepped up counter-terrorism patrols on the city’s subways after receiving a “specific threat,” Mayor Bloomberg said.
- Crude oil tumbled to a two-month low and gasoline slid for a sixth session as US fuel imports surged and demand stagnated.

Financial Times:
- The US has dismissed EU hopes that the decision by Airbus SAS shareholders to build a new aircraft without state aid could restart trans-Atlantic negotiations over aircraft subsidies.
BOTTOM LINE: The Portfolio finished substantially higher today on gains in my Energy-related shorts, Steel shorts, Internet longs and Retail longs. I added SCHN short and took some profits in other shorts in the afternoon, thus leaving the Portfolio 50% net long. The tone of the market was negative today as the advance/decline line finished lower, most sectors declined and volume was heavy. Measures of investor anxiety were lower into the close. Overall, today’s market action was negative. Take a look at the charts of ENER (-10.1%), CPST (-7.06%), NGS (-23.6%), ABP (-19.9%), SGY (-14.14%), SYNM (-3.44%) and BCON(-12.1%). There are many, many others. These formally loved speculative energy stocks are collapsing. This reminds me very much of what happened to the Internet stocks in March of 2000. There were many vigorous rallies thereafter and they were all sells.

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