Wednesday, May 17, 2006

Stocks Finish Sharply Lower as Investor Angst Spikes Higher

S&P 500 1,270.32 -1.68%
DJIA 11,205.61 -1.88%
NASDAQ 2,195.80 -1.50%
Russell 2000 725.85 -1.58%
Wilshire 5000 12,816.75 -1.66%
S&P Barra Growth 588.92 -1.49%
S&P Barra Value 679.52 -1.87%
Morgan Stanley Consumer 603.86 -1.22%
Morgan Stanley Cyclical 836.24 -2.44%
Morgan Stanley Technology 505.77 -1.25%
Transports 4,670.97 -2.66%
Utilities 392.62 -1.85%
Put/Call 1.47 +48.48%
NYSE Arms 2.04 +57.02%
Volatility(VIX) 16.21 +21.42%
ISE Sentiment 119.00 -23.72%
US Dollar 84.92 +.89%
CRB 349.38 -1.08%

Futures Spot Prices
Crude Oil 68.70 +.01%
Unleaded Gasoline 197.55 +.02%
Natural Gas 6.11 -.24%
Heating Oil 192.12 -1.55%
Gold 688.00 -.55%
Base Metals 237.86 -1.76%
Copper 362.80 -1.18%
10-year US Treasury Yield 5.14% +1.07%

Leading Sectors
Hospitals +.31%
Computer Hardware +.26%
HMOs -.03%

Lagging Sectors
Energy -2.60%
Gold & Silver -3.37%
Steel -3.61%

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
Morgan Stanley:
- Rated (FDC) Overweight, target $54.
- Rated (ADP) Overweight, target $50.
- Rated (DST) Underweight.

Afternoon/Evening Headlines
- Honda Motor will build its sixth North American auto-assembly plant in the US Midwest as part of a $1.46 billion expansion plan.
- The US dollar rallied sharply, posting its biggest gain against the yen in 11 months, after France’s finance minister said he would attempt to keep the euro from strengthening and US consumer prices rose more than estimates.
- Gasoline futures in NY fell to their lowest price in six weeks after a government report showed a third straight week of US inventory gains.
BOTTOM LINE: The Portfolio finished slightly lower today as losses in my Retail longs and Medical longs more than offset gains in my Internet longs, Semi longs, Energy-related shorts and Base metal shorts. I added back (IWM) and (QQQQ) shorts in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was very negative today as the advance/decline line finished substantially lower, almost every sector fell and volume was heavy. Measures of investor anxiety were higher into the close. Overall, today's market performance was bearish. Today's action is the type I would expect to see near an intermediate-term bottom in the major averages. If the 10-year yield begins heading lower over the coming weeks, as I expect, recent action should prove to be an excellent buying opportunity. I will closely monitor the bond market's reaction to tomorrow's economic data before further shifting market exposure.

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