Saturday, March 31, 2007
Friday, March 30, 2007
Weekly Scoreboard*
Indices
S&P 500 1,420.86 -1.06%
DJIA 12,354.35 -1.01%
NASDAQ 2,421.64 -1.11%
Russell 2000 800.71 -1.08%
Wilshire 5000 14,354.03 -1.01%
Russell 1000 Growth 558.59 -1.22%
Russell 1000 Value 823.02 -.86%
Morgan Stanley Consumer 702.15 -.81%
Morgan Stanley Cyclical 955.53 -1.0%
Morgan Stanley Technology 556.42 -.77%
Transports 4,810.70 -3.2%
Utilities 500.18 +.12%
MSCI Emerging Markets 118.32 +1.64%
Sentiment/Internals
NYSE Cumulative A/D Line 68,908 -1.9%
Bloomberg New Highs-Lows Index +94 -72.2%
Bloomberg Crude Oil % Bulls 39.0% -50.0%
CFTC Oil Large Speculative Longs 179,645 +5.1%
Total Put/Call 1.19 +32.2%
NYSE Arms 1.45 +61.1%
Volatility(VIX) 14.64 +13.05%
ISE Sentiment 94.0 -16.8%
AAII % Bulls 42.68 -2.73%
AAII % Bears 25.61 -22.6%
Futures Spot Prices
Crude Oil 65.72 +5.87%
Reformulated Gasoline 205.25 +5.65%
Natural Gas 7.71 +4.37%
Heating Oil 186.75 +8.57%
Gold 669.40 +.81%
Base Metals 249.55 +.75%
Copper 314.85 +2.27%
Economy
10-year US Treasury Yield 4.64% +3 basis points
4-Wk MA of Jobless Claims 316,800 -2.2%
Average 30-year Mortgage Rate 6.16% unch.
Weekly Mortgage Applications 671.0 -.16%
Weekly Retail Sales +3.9%
Nationwide Gas $2.63/gallon +.06/gallon
US Heating Demand Next 7 Days 13.3% below normal
ECRI Weekly Leading Economic Index 140.60 +.36%
US Dollar Index 82.93 -.42%
CRB Index 316.88 +1.91%
Leading Sectors
Nanotechnology +2.73%
Steel +2.0%
Tobacco +1.6%
Telecom +.83%
Internet +.51%
Lagging Sectors
I-Banks -2.93%
Oil Tankers -3.4%
Coal -3.6%
Airlines -3.6%
Homebuilders -4.8%
One-Week High-Volume Gainers
One-Week High-Volume Losers
*5-Day Change
S&P 500 1,420.86 -1.06%
DJIA 12,354.35 -1.01%
NASDAQ 2,421.64 -1.11%
Russell 2000 800.71 -1.08%
Wilshire 5000 14,354.03 -1.01%
Russell 1000 Growth 558.59 -1.22%
Russell 1000 Value 823.02 -.86%
Morgan Stanley Consumer 702.15 -.81%
Morgan Stanley Cyclical 955.53 -1.0%
Morgan Stanley Technology 556.42 -.77%
Transports 4,810.70 -3.2%
Utilities 500.18 +.12%
MSCI Emerging Markets 118.32 +1.64%
Sentiment/Internals
NYSE Cumulative A/D Line 68,908 -1.9%
Bloomberg New Highs-Lows Index +94 -72.2%
Bloomberg Crude Oil % Bulls 39.0% -50.0%
CFTC Oil Large Speculative Longs 179,645 +5.1%
Total Put/Call 1.19 +32.2%
NYSE Arms 1.45 +61.1%
Volatility(VIX) 14.64 +13.05%
ISE Sentiment 94.0 -16.8%
AAII % Bulls 42.68 -2.73%
AAII % Bears 25.61 -22.6%
Futures Spot Prices
Crude Oil 65.72 +5.87%
Reformulated Gasoline 205.25 +5.65%
Natural Gas 7.71 +4.37%
Heating Oil 186.75 +8.57%
Gold 669.40 +.81%
Base Metals 249.55 +.75%
Copper 314.85 +2.27%
Economy
10-year US Treasury Yield 4.64% +3 basis points
4-Wk MA of Jobless Claims 316,800 -2.2%
Average 30-year Mortgage Rate 6.16% unch.
Weekly Mortgage Applications 671.0 -.16%
Weekly Retail Sales +3.9%
Nationwide Gas $2.63/gallon +.06/gallon
US Heating Demand Next 7 Days 13.3% below normal
ECRI Weekly Leading Economic Index 140.60 +.36%
US Dollar Index 82.93 -.42%
CRB Index 316.88 +1.91%
Leading Sectors
Nanotechnology +2.73%
Steel +2.0%
Tobacco +1.6%
Telecom +.83%
Internet +.51%
Lagging Sectors
I-Banks -2.93%
Oil Tankers -3.4%
Coal -3.6%
Airlines -3.6%
Homebuilders -4.8%
One-Week High-Volume Gainers
One-Week High-Volume Losers
*5-Day Change
Today's Headlines
Bloomberg:
- Crude oil is falling .13/bbl., notwithstanding rumors surrounding the situation with Iran and the UK sailors.
- Corn prices are falling the maximum daily limit of 5% after a government survey showed US farmers plan to sow more of the grain than analysts expected this spring and the most since 1944. Soybeans and wheat are also falling on the report.
- Brazilian President Luiz Inacio Lula da Silva, seeking to bolster his nation’s influence in Latin America, heads to Camp David tomorrow for the first state visit to the US presidential retreat in 16 years by a leader from the region.
- The US dollar fell against the euro and declined versus the yen as the US added tariffs on imports from China.
- European Union foreign ministers pressed Iran to release 15 captive British sailors and marines, calling the arrest a “big mistake” that could do further damage to Iran’s international standing.
Wall Street Journal:
- Germany’s economic recovery is benefiting the west of the country far more than the east, where jobs remain scarce and unemployment levels much higher.
NY Times:
- An increasing number of US middle-aged and elderly people are playing non-violent, intellectually challenging video games to keep their minds sharp.
Financial Times:
- Global mergers and acquisitions reached $1.13 trillion in the first three months of 2007, a 14% increase from the same period last year, citing data provider Dealogic.
Marine Link:
- Azerbaijan plans to double its oil output by 2010, pushing it to 65 million tons a year, citing the country’s energy minister.
Xinhua News Agency:
- Volkswagen AG plans to make its China-made cars at least 20% more fuel efficient by 2010.
- Crude oil is falling .13/bbl., notwithstanding rumors surrounding the situation with Iran and the UK sailors.
- Corn prices are falling the maximum daily limit of 5% after a government survey showed US farmers plan to sow more of the grain than analysts expected this spring and the most since 1944. Soybeans and wheat are also falling on the report.
- Brazilian President Luiz Inacio Lula da Silva, seeking to bolster his nation’s influence in Latin America, heads to Camp David tomorrow for the first state visit to the US presidential retreat in 16 years by a leader from the region.
- The US dollar fell against the euro and declined versus the yen as the US added tariffs on imports from China.
- European Union foreign ministers pressed Iran to release 15 captive British sailors and marines, calling the arrest a “big mistake” that could do further damage to Iran’s international standing.
Wall Street Journal:
- Germany’s economic recovery is benefiting the west of the country far more than the east, where jobs remain scarce and unemployment levels much higher.
NY Times:
- An increasing number of US middle-aged and elderly people are playing non-violent, intellectually challenging video games to keep their minds sharp.
Financial Times:
- Global mergers and acquisitions reached $1.13 trillion in the first three months of 2007, a 14% increase from the same period last year, citing data provider Dealogic.
Marine Link:
- Azerbaijan plans to double its oil output by 2010, pushing it to 65 million tons a year, citing the country’s energy minister.
Xinhua News Agency:
- Volkswagen AG plans to make its China-made cars at least 20% more fuel efficient by 2010.
Personal Income/Spending Surges, Core PCE Above Estimates, Chicago PMI Jumps Most on Record, Confidence Slightly Below Estimates
- Personal Income for February rose .6% versus estimates of a .3% gain and a 1.0% rise in January.
- Personal Spending for February rose .6% versus estimates of a .3% gain and a .5% rise in January.
- The PCE Core for February rose .3% versus estimates of a .2% gain and a .2% rise in January.
- The Chicago Purchasing Manager Index for March rose to 61.7 versus estimates of 49.3 and a reading of 47.9 in February.
- The Final Univ. of Mich. Consumer Confidence reading for March fell to 88.4 versus estimates of 88.5 and a prior estimate of 88.8.
- Personal Spending for February rose .6% versus estimates of a .3% gain and a .5% rise in January.
- The PCE Core for February rose .3% versus estimates of a .2% gain and a .2% rise in January.
- The Chicago Purchasing Manager Index for March rose to 61.7 versus estimates of 49.3 and a reading of 47.9 in February.
- The Final Univ. of Mich. Consumer Confidence reading for March fell to 88.4 versus estimates of 88.5 and a prior estimate of 88.8.
BOTTOM LINE: Consumer spending and incomes rose more than expected last month, Bloomberg reported. The report suggests the US economy will continue to weather the slump in housing. The PCE Core for February, the Fed’s favorite inflation gauge, rose 2.4% year-over-year versus a 2.2% rise in January. I continue to believe consumer spending is accelerating into the spring as income growth substantially outpaces inflation and Americans’ median net worth is at all-time high levels.
A gauge of US business activity unexpectedly expanded this month at the fastest pace in almost two years, signaling the economy may be gaining momentum heading into the second quarter, Bloomberg said. The increase was the largest since at least 1968 when record-keeping began. Readings greater than 50 indicate expansion. A surge in orders and production gains point to the US economy overcoming the drag of housing on manufacturing. The New Orders component of the index also gained the most in history, soaring from 48.7 to 72.2. The Inventories component of the index fell to 48.8 from 54.5, which shows inventories are falling. The Employment component of the index fell to 45 from 50.6 the prior month. The Prices Paid component fell to 59.1 from 63.2 the prior month. I continue to believe the worst of the manufacturing slowdown is over and that inventory rebuilding in the second quarter will help boost overall economic growth.
US construction spending unexpectedly rose last month by the most in almost a year, as work increased on factories, commercial buildings and highways, Bloomberg said. Commercial and government-funded construction spending more than offset the drag from declining residential construction. Non-residential construction, including public projects rose 13.6% year-over-year in February. Private non-residential construction is being supported by corporate hiring that has resulted in increased demand for office space and decreased vacancy rates. I expect residential construction spending to remain a drag on overall construction throughout the year, notwithstanding February’s increase.
Consumer confidence fell slightly more than expected in March as gas prices rose, Bloomberg reported. The current conditions component of the index fell from 103.5 from 106.7 in February. Gasoline prices rose to $2.59/gallon on March 26 from $2.40 at the end of February. While recent confidence readings have declined modestly, consumer spending appears to be accelerating as unemployment remains low and wages outpace inflation. I still expect confidence to make new cycle highs later this year as gas prices fall, interest rates remain low, inflation decelerates further, the job market remains healthy, housing sales stabilize at relatively high levels and stock prices rise further.
Friday Watch
Late-Night Headlines
Bloomberg:
- Thailand’s inflation probably slowed to the lowest in three years in March as consumption stalled amid a slump in confidence and protests against the military-backed government.
- Dissident investors led by OppenheimerFunds won control of Take-Two Interactive(TTWO) and installed a new CEO.
- Japan’s household spending rose at double the pace forecast by analysts and industrial production fell less than expected in February.
- Japan’s consumer prices fell for the first time in 10 months and economists say further declines will keep the central bank from raising interest rates until the second half of the year.
- Toyota Motor(TM) employees in Kentucky are being courted by the United Auto Workers union, which so far has failed to organize any US factories built by Japanese automakers.
- MMC Norilsk Nickel, the world’s largest producer of the metal, said the market may be in surplus this year on increasing “unconventional” supplies from China.
- Los Angeles billionaires Ron Burkle and Eli Broad raised their takeover bid for Tribune(TRB) to $34 a share, topping an offer by Sam Zell.
- China produced 27% more copper in 2006 than the official estimate because government statistics didn’t include output from the country’s smallest refineries, China Minmetals Corp. said. The discovery of 26.8 million tons of new copper deposits will offset the country’s “heavy dependency” on imports of the metal and copper prices will fall, said Huang Guoping, vp of China Minmetals Nonferrous Metals Co., a unit of the country’s biggest metals trader.
- The UN Security Council today expressed concern at the detention of 15 British sailors and marines seized by Iran in the Persian Gulf and asked that they be released.
- Amaranth Advisors LLC, the hedge-fund firm that collapsed under a record $6.6 billion in losses in September, was sued by the San Diego County retirement fund. The San Diego County Employees Retirement Association filed a complaint today in federal court in NY that names Amaranth founder Nicholas Maounis, former energy trader Brian Hunter and other fund executives.
- President Pervez Musharraf has failed to tackle Islamic extremism in Pakistan’s religious schools, which continue to promote a holy war against the West and foment terrorism, the International Crisis Group said.
- China National Petroleum and Argentina’s Pluspetrol SA discovered a new oil deposit in the northern Peruvian Jungle, Peru’s Energy Minister said.
- Joseph Brusuelas, chief US economist at IDEAglobal, said US subprime mortgage problems will not spread and economic growth will firm up mid-year.
Business Week:
- Cerberus Capital Management LP, a private-equity firm that was bidding for Chrysler Group jointly with Magna Intl., has called off the partnership. Instead, Magna, which is still interested in a minority stake in Chrysler, is teaming up with NY-based Ripplewood Holdings. Chrysler is receiving bids of more than $6 billion.
Financial Times:
- Man Group Plc will today announce plans for the stock-exchange listing of its US-based brokerage unit, which could be valued at $5 billion.
Shanghai Securities News:
- China’s economic growth will slow to 10% this year while inflation will accelerate to about 2.3%, the central bank’s research bureau forecast in a report published in today’s China Securities Journal. The Chinese central bank will sell more bills, raise bank reserve ratios and boost interest rates to curb excess liquidity, according to the report.
Late Buy/Sell Recommendations
Citigroup:
- Upgraded (RATE) to Buy, target $44.
- Reiterated Buy on (LNCR), target $48.
Sanford C. Bernstein:
- Sun Microsystems(SUNW) would most likely team up with Dell Inc.(DELL) should the world’s third-largest server-computer maker decide to boost its support services business.
Night Trading
Asian Indices are unch. to +.50% on average.
S&P 500 indicated +.10%.
NASDAQ 100 indicated +.04%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (BAMM)/.81
- (CKP)/.39
- (GPN)/.41
Upcoming Splits
- (APH) 2-for-1
- (COG) 2-for-1
- (BBD) 2-for-1
- (BWS) 3-for-2
- (NKE) 2-for-1
Economic Releases
8:30 am EST
- Personal Income for February is estimated to rise .3% versus a 1.0% gain in January.
- Personal Spending for February is estimated to rise .3% versus a .5% increase in January.
- The PCE Core for February is estimated to rise .2% versus a .3% increase in January.
9:45 am EST
- The Chicago Purchasing Manager for March is estimated to rise to 49.4 versus 47.9 in February.
10:00 am EST
- Construction Spending for February is estimated to fall -.4% versus a -.8% decline in January.
- Final Univ. of Mich. Consumer Confidence for March is estimated to fall to 88.5 from 88.8 in February.
Bloomberg:
- Thailand’s inflation probably slowed to the lowest in three years in March as consumption stalled amid a slump in confidence and protests against the military-backed government.
- Dissident investors led by OppenheimerFunds won control of Take-Two Interactive(TTWO) and installed a new CEO.
- Japan’s household spending rose at double the pace forecast by analysts and industrial production fell less than expected in February.
- Japan’s consumer prices fell for the first time in 10 months and economists say further declines will keep the central bank from raising interest rates until the second half of the year.
- Toyota Motor(TM) employees in Kentucky are being courted by the United Auto Workers union, which so far has failed to organize any US factories built by Japanese automakers.
- MMC Norilsk Nickel, the world’s largest producer of the metal, said the market may be in surplus this year on increasing “unconventional” supplies from China.
- Los Angeles billionaires Ron Burkle and Eli Broad raised their takeover bid for Tribune(TRB) to $34 a share, topping an offer by Sam Zell.
- China produced 27% more copper in 2006 than the official estimate because government statistics didn’t include output from the country’s smallest refineries, China Minmetals Corp. said. The discovery of 26.8 million tons of new copper deposits will offset the country’s “heavy dependency” on imports of the metal and copper prices will fall, said Huang Guoping, vp of China Minmetals Nonferrous Metals Co., a unit of the country’s biggest metals trader.
- The UN Security Council today expressed concern at the detention of 15 British sailors and marines seized by Iran in the Persian Gulf and asked that they be released.
- Amaranth Advisors LLC, the hedge-fund firm that collapsed under a record $6.6 billion in losses in September, was sued by the San Diego County retirement fund. The San Diego County Employees Retirement Association filed a complaint today in federal court in NY that names Amaranth founder Nicholas Maounis, former energy trader Brian Hunter and other fund executives.
- President Pervez Musharraf has failed to tackle Islamic extremism in Pakistan’s religious schools, which continue to promote a holy war against the West and foment terrorism, the International Crisis Group said.
- China National Petroleum and Argentina’s Pluspetrol SA discovered a new oil deposit in the northern Peruvian Jungle, Peru’s Energy Minister said.
- Joseph Brusuelas, chief US economist at IDEAglobal, said US subprime mortgage problems will not spread and economic growth will firm up mid-year.
Business Week:
- Cerberus Capital Management LP, a private-equity firm that was bidding for Chrysler Group jointly with Magna Intl., has called off the partnership. Instead, Magna, which is still interested in a minority stake in Chrysler, is teaming up with NY-based Ripplewood Holdings. Chrysler is receiving bids of more than $6 billion.
Financial Times:
- Man Group Plc will today announce plans for the stock-exchange listing of its US-based brokerage unit, which could be valued at $5 billion.
Shanghai Securities News:
- China’s economic growth will slow to 10% this year while inflation will accelerate to about 2.3%, the central bank’s research bureau forecast in a report published in today’s China Securities Journal. The Chinese central bank will sell more bills, raise bank reserve ratios and boost interest rates to curb excess liquidity, according to the report.
Late Buy/Sell Recommendations
Citigroup:
- Upgraded (RATE) to Buy, target $44.
- Reiterated Buy on (LNCR), target $48.
Sanford C. Bernstein:
- Sun Microsystems(SUNW) would most likely team up with Dell Inc.(DELL) should the world’s third-largest server-computer maker decide to boost its support services business.
Night Trading
Asian Indices are unch. to +.50% on average.
S&P 500 indicated +.10%.
NASDAQ 100 indicated +.04%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (BAMM)/.81
- (CKP)/.39
- (GPN)/.41
Upcoming Splits
- (APH) 2-for-1
- (COG) 2-for-1
- (BBD) 2-for-1
- (BWS) 3-for-2
- (NKE) 2-for-1
Economic Releases
8:30 am EST
- Personal Income for February is estimated to rise .3% versus a 1.0% gain in January.
- Personal Spending for February is estimated to rise .3% versus a .5% increase in January.
- The PCE Core for February is estimated to rise .2% versus a .3% increase in January.
9:45 am EST
- The Chicago Purchasing Manager for March is estimated to rise to 49.4 versus 47.9 in February.
10:00 am EST
- Construction Spending for February is estimated to fall -.4% versus a -.8% decline in January.
- Final Univ. of Mich. Consumer Confidence for March is estimated to fall to 88.5 from 88.8 in February.
BOTTOM LINE: Asian indices are higher, boosted by financial and automaker shares in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.
Thursday, March 29, 2007
Stocks Finish Higher Despite Iran Concerns
Indices
S&P 500 1,422.53 +.37%
DJIA 12,348.75 +.39%
NASDAQ 2,417.88 +.03%
Russell 2000 798.94 +.19%
Wilshire 5000 14,360.64 +.32%
Russell 1000 Growth 558.37 +.16%
Russell 1000 Value 824.58 +.50%
Morgan Stanley Consumer 701.34 +.38%
Morgan Stanley Cyclical 954.11 +.50%
Morgan Stanley Technology 556.37 -.09%
Transports 4,802.51 +.18%
Utilities 503.37 +.38%
MSCI Emerging Markets 116.30 +1.54%
Sentiment/Internals
Total Put/Call 1.16 -12.78%
NYSE Arms .98 -37.15%
Volatility(VIX) 15.14 +1.07%
ISE Sentiment 92.0 -13.21%
Futures Spot Prices
Crude Oil 66.13 +3.17%
Reformulated Gasoline 213.30 +3.68%
Natural Gas 7.62 -.68%
Heating Oil 187.70 +2.71%
Gold 667.50 -.80%
Base Metals 243.92 -.39%
Copper 309.05 +.91%
Economy
10-year US Treasury Yield 4.64% +2 basis point
US Dollar 83.07 +.05%
CRB Index 317.73 +1.07%
Leading Sectors
Steel +3.49%
Oil Service +1.23%
Telecom +1.05%
Lagging Sectors
Semis -.86%
HMOs -1.49%
Coal -2.87%
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
SunTrust Robinson:
- Rated (SXE) and (ELY) Buy.
Afternoon/Evening Headlines
Bloomberg:
- US Treasuries declined modestly after US economic growth came in above prior estimates and jobless claims fell.
- Dell Inc.(DELL) said it found evidence of misconduct and errors in its accounting amid investigations into the computer maker’s financial results. The shares fell .60 to 22.84 in after-hours trading.
- Beazer Homes USA(BZH) received a grand jury subpoena from the US Attorney’s office in the Western District of North Carolina for documents related to its mortgage origination business. The stock is trading down .29 to $29 in after-hours trading.
- Bear Stearns(BSC) said the surge of defaults in subprime home loans won’t spread to other parts of the mortgage market, and IndyMac Bancop said losses from more creditworthy customers are far below industry averages.
- Dendreon Corp.’s(DNDN) prostate cancer drug Provenge was recommended for approval by a US regulatory panel that found it safe and “substantially” effective.
- McClatchy(MNI) is in talks to form advertising partnerships with Google(GOOG), Yahoo!(YHOO) and Microsoft(MSFT) to grab a greater share of Internet spending, CEO Gary Pruitt said.
- 54% of Americans said they’re happy the Democrats won control of Congress, down 6 percentage points since November, according to a poll by the Pew Research Center.
- Crude oil rose above $66/bbl. in NY, closing at a six month high, as speculators raised bets over the potential for production disruptions.
S&P 500 1,422.53 +.37%
DJIA 12,348.75 +.39%
NASDAQ 2,417.88 +.03%
Russell 2000 798.94 +.19%
Wilshire 5000 14,360.64 +.32%
Russell 1000 Growth 558.37 +.16%
Russell 1000 Value 824.58 +.50%
Morgan Stanley Consumer 701.34 +.38%
Morgan Stanley Cyclical 954.11 +.50%
Morgan Stanley Technology 556.37 -.09%
Transports 4,802.51 +.18%
Utilities 503.37 +.38%
MSCI Emerging Markets 116.30 +1.54%
Sentiment/Internals
Total Put/Call 1.16 -12.78%
NYSE Arms .98 -37.15%
Volatility(VIX) 15.14 +1.07%
ISE Sentiment 92.0 -13.21%
Futures Spot Prices
Crude Oil 66.13 +3.17%
Reformulated Gasoline 213.30 +3.68%
Natural Gas 7.62 -.68%
Heating Oil 187.70 +2.71%
Gold 667.50 -.80%
Base Metals 243.92 -.39%
Copper 309.05 +.91%
Economy
10-year US Treasury Yield 4.64% +2 basis point
US Dollar 83.07 +.05%
CRB Index 317.73 +1.07%
Leading Sectors
Steel +3.49%
Oil Service +1.23%
Telecom +1.05%
Lagging Sectors
Semis -.86%
HMOs -1.49%
Coal -2.87%
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
SunTrust Robinson:
- Rated (SXE) and (ELY) Buy.
Afternoon/Evening Headlines
Bloomberg:
- US Treasuries declined modestly after US economic growth came in above prior estimates and jobless claims fell.
- Dell Inc.(DELL) said it found evidence of misconduct and errors in its accounting amid investigations into the computer maker’s financial results. The shares fell .60 to 22.84 in after-hours trading.
- Beazer Homes USA(BZH) received a grand jury subpoena from the US Attorney’s office in the Western District of North Carolina for documents related to its mortgage origination business. The stock is trading down .29 to $29 in after-hours trading.
- Bear Stearns(BSC) said the surge of defaults in subprime home loans won’t spread to other parts of the mortgage market, and IndyMac Bancop said losses from more creditworthy customers are far below industry averages.
- Dendreon Corp.’s(DNDN) prostate cancer drug Provenge was recommended for approval by a US regulatory panel that found it safe and “substantially” effective.
- McClatchy(MNI) is in talks to form advertising partnerships with Google(GOOG), Yahoo!(YHOO) and Microsoft(MSFT) to grab a greater share of Internet spending, CEO Gary Pruitt said.
- 54% of Americans said they’re happy the Democrats won control of Congress, down 6 percentage points since November, according to a poll by the Pew Research Center.
- Crude oil rose above $66/bbl. in NY, closing at a six month high, as speculators raised bets over the potential for production disruptions.
BOTTOM LINE: The Portfolio finished about even today as losses in my Retail longs and Telecom longs were offset by gains in my Medical longs and Biotech longs. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was neutral today as the advance/decline line finished about even, sector performance was mixed and volume was above average. Measures of investor anxiety were above average into the close. Today's overall market action was mildly bullish as the major averages and breadth finish mixed, but well off session lows. The underlying tone was never too bad, even with the market at its intraday low. Considering the jump in oil, today's market action was more impressive. I suspect we will build on this afternoon's gains tomorrow, notwithstanding any morning weakness on quarter-end short-covering and bargain hunting.
Stocks Mixed into Final Hour Ahead of Quarter's End
BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Telecom long and Retail longs. I covered my(IWM) and (QQQQ) hedges into afternoon weakness, thus leaving the Portfolio 100% net long. The tone of the market is negative as the advance/decline line is lower, sector performance is mixed and volume is about average. Overall, economic data has improved modestly of late, notwithstanding fears by many over an economic hard landing. Oil is $5 higher since the Iranian/UK situation began, which is a rather muted reaction, and commercials continue to build their net short position into recent strength. Moreover, the price of gold has a very high correlation with oil. However, the two have diverged in price of late. Natural gas inventories fell -22 bcf this week versus estimates of a -19 bcf withdrawal. Supplies are now 21.5% above the five-year average for this time of year and poised to hit record highs barring any significant disruptions. I expect US stocks to trade modestly higher into the close on short-covering and bargain-hunting ahead of quarter’s end.
Today's Headlines
Bloomberg:
- China, the world’s biggest nickel user, produced 15.1% more of the industrial metal, used in stainless steel, in February compared with the year ago month. Output in the first two months rose 16.8% to 20,400 tons.
- Crude oil is rising above $66/bbl. in NY, approaching a six-month high, as investment fund speculation is increasing on Iran concerns.
- The Senate approved a spending measure with a deadline for withdrawing US troops from Iraq, setting up a showdown with President Bush.
- Hedge funds opened last year at the slowest pace since 2000 as returns trailed those of the S&P 500, according to Hedge Fund Research.
- AT&T(T), Verizon Communications(VZ) and Qwest Communications(Q) won the right to bid on orders under a government telecom contract worth at least $20 billion, the biggest-ever federal award.
- Apple Inc.(AAPL) started a service that lets customers buy full albums from its iTunes music store at a discount when they’ve already bought a single from the same album.
- US Steel(X) agreed to buy Lone Star Technologies(LSS) for $2.1 billion in cash to become North America’s largest supplier of pipes to crude-oil and natural gas producers.
- Gold is falling $5/oz., diverging from oil, after a government report signaled growth in the US economy, which eroded demand for the metal as an alternative asset.
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, may have found 10 billion barrels of crude oil reserves in a new field off the coast of Rio de Janeiro.
NY Times:
- More than half of the legal immigrants living in the US are naturalized, the highest in two decades. The last time more than half of legal immigrants were naturalized was in 1980.
- NYC is averaging one homicide a day so far this year, which is the lowest point since at least 1962, when the Police Dept. started tracking crime using current record-keeping techniques.
Market News International:
- Outgoing European Central Bank council member Mitja Gaspari said he would be surprised if the benchmark interest rate climbed to 4.25% this year. The current rate of 3.75% “is okay for now,” he said.
Washington Post:
- The Shiite militia of Moqtada al-Sadr is fragmenting. At the same time, the anti-US cleric, who may now be in Iran, is facing new challenges to his leadership in Iraq.
Het Financieele Dagblad:
- Fortis is looking to make more acquisitions in the US, citing the company’s head in the region.
- China, the world’s biggest nickel user, produced 15.1% more of the industrial metal, used in stainless steel, in February compared with the year ago month. Output in the first two months rose 16.8% to 20,400 tons.
- Crude oil is rising above $66/bbl. in NY, approaching a six-month high, as investment fund speculation is increasing on Iran concerns.
- The Senate approved a spending measure with a deadline for withdrawing US troops from Iraq, setting up a showdown with President Bush.
- Hedge funds opened last year at the slowest pace since 2000 as returns trailed those of the S&P 500, according to Hedge Fund Research.
- AT&T(T), Verizon Communications(VZ) and Qwest Communications(Q) won the right to bid on orders under a government telecom contract worth at least $20 billion, the biggest-ever federal award.
- Apple Inc.(AAPL) started a service that lets customers buy full albums from its iTunes music store at a discount when they’ve already bought a single from the same album.
- US Steel(X) agreed to buy Lone Star Technologies(LSS) for $2.1 billion in cash to become North America’s largest supplier of pipes to crude-oil and natural gas producers.
- Gold is falling $5/oz., diverging from oil, after a government report signaled growth in the US economy, which eroded demand for the metal as an alternative asset.
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, may have found 10 billion barrels of crude oil reserves in a new field off the coast of Rio de Janeiro.
NY Times:
- More than half of the legal immigrants living in the US are naturalized, the highest in two decades. The last time more than half of legal immigrants were naturalized was in 1980.
- NYC is averaging one homicide a day so far this year, which is the lowest point since at least 1962, when the Police Dept. started tracking crime using current record-keeping techniques.
Market News International:
- Outgoing European Central Bank council member Mitja Gaspari said he would be surprised if the benchmark interest rate climbed to 4.25% this year. The current rate of 3.75% “is okay for now,” he said.
Washington Post:
- The Shiite militia of Moqtada al-Sadr is fragmenting. At the same time, the anti-US cleric, who may now be in Iran, is facing new challenges to his leadership in Iraq.
Het Financieele Dagblad:
- Fortis is looking to make more acquisitions in the US, citing the company’s head in the region.
GDP Revised Higher, Measure of Inflation Revised Lower, Jobless Claims Fall Again
- Final 4Q GDP rose 2.5% versus estimates of a 2.2% gain and a prior estimate of 2.2%.
- Final 4Q Personal Consumption rose 4.2% versus estimates of a 4.2% gain and a prior estimate of a 4.2% increase.
- Final 4Q GDP Price Index rose 1.7% versus estimates of a 1.7% gain and a prior estimate of a 1.7% increase.
- Final 4Q Core PCE rose 1.8% versus estimates of a 1.9% gain and a prior estimate of a 1.9% increase.
- Initial Jobless Claims for last week fell to 308K versus estimates of 320K and 318K the prior week.
- Continuing Claims rose to 2527K versus estimates of 2518K and 2495K prior.
- Final 4Q Personal Consumption rose 4.2% versus estimates of a 4.2% gain and a prior estimate of a 4.2% increase.
- Final 4Q GDP Price Index rose 1.7% versus estimates of a 1.7% gain and a prior estimate of a 1.7% increase.
- Final 4Q Core PCE rose 1.8% versus estimates of a 1.9% gain and a prior estimate of a 1.9% increase.
- Initial Jobless Claims for last week fell to 308K versus estimates of 320K and 318K the prior week.
- Continuing Claims rose to 2527K versus estimates of 2518K and 2495K prior.
BOTTOM LINE: The US economy grew at an annual rate of 2.5% in the fourth quarter, faster than previously thought, Bloomberg reported. As well, a measure of inflation closely watched by the Fed rose less than forecasts. For all of last year, the US economy rose 3.3% versus 3.2% in 2005 and the long-term average of 3.1%. Growth will likely come in around 2% this quarter before bouncing back to more average rates through year-end.
The number of Americans filing first-time claims for unemployment benefits unexpectedly fell last week to the lowest since January, suggesting the labor market remains very healthy, Bloomberg reported. The four-week average of jobless claims fell to 316,750 from 324,000 the prior week. The unemployment rate among those eligible to collect benefits, which tracks the US unemployment rate, remained steady at 1.9%. I continue to believe the labor market will remain healthy over the intermediate-term without generating significant unit labor cost increases.
Wednesday, March 28, 2007
Thursday Watch
Late-Night Headlines
Bloomberg:
- Exxon Mobil(XOM) and four other US gas retailers must face a lawsuit accusing them of conspiring to drive up the price of gasoline, a federal judge ruled. Exxon(XOM), Marathon Oil(MRO), Citgo Petroleum and US affiliates of Royal Dutch Shell and BP Plc(BP) are accused in the complaint of intentionally limiting the available gasoline supply, driving up prices and boosting profits.
- DoubleClick’s(DCLK) owners put the Internet advertising company up for sale and may seek about $2 billion.
- Democratic Senator Chuck Schumer plans to introduce subprime home loan legislation in the next few weeks that would establish a national system for regulating mortgage brokers.
- A New Jersey state senator wants to crate a program to help homeowners refinance mortgages they can’t afford, mirroring a similar plan in Ohio.
- US Treasury Secretary Paulson said the subprime market turmoil is “largely contained.”
- UN Secretary-General Ban Ki-moon said he will ask Iran to free 15 UK sailors and Marines detained March 23 for allegedly entering Iranian territorial waters.
- The yen fell after a government report showed Japan’s retail sales unexpectedly fell for a fourth month in February.
Late Buy/Sell Recommendations
CIBC:
- Rated (MCK) and (CAH) Sector Outperform.
Night Trading
Asian Indices are +.25% to +.75% on average.
S&P 500 indicated +.52%.
NASDAQ 100 indicated +.57%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (AGE)/1.06
- (KMX)/.21
- (CKR)/.18
- (CLE)/.83
- (DSW)/.30
- (FDO)/.60
- (FINL)/.51
- (MOV)/.37
- (RHT)/.14
- (SLR)/.05
- (SCS)/.17
- (SRR)/.32
- (TXI)/.57
- (TIBX)/.07
- (UTIW)/.26
- (WOR)/.06
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- Final 4Q GDP is estimated to rise 2.2% versus prior estimates of a 2.2% gain.
- Final 4Q Personal Consumption is estimated to rise 4.2% versus prior estimates of a 4.2% increase.
- The 4Q GDP Price Index is estimated to rise 1.7% versus prior estimates of a 1.7% increase.
- The Final 4Q Core PCE is estimated to rise 1.9% versus prior estimates of a 1.9% gain.
- Initial Jobless Claims for last week are estimated to rise to 320K versus 316K the prior week.
- Continuing Claims for last week are estimated to rise to 2518K versus 2501K prior.
Bloomberg:
- Exxon Mobil(XOM) and four other US gas retailers must face a lawsuit accusing them of conspiring to drive up the price of gasoline, a federal judge ruled. Exxon(XOM), Marathon Oil(MRO), Citgo Petroleum and US affiliates of Royal Dutch Shell and BP Plc(BP) are accused in the complaint of intentionally limiting the available gasoline supply, driving up prices and boosting profits.
- DoubleClick’s(DCLK) owners put the Internet advertising company up for sale and may seek about $2 billion.
- Democratic Senator Chuck Schumer plans to introduce subprime home loan legislation in the next few weeks that would establish a national system for regulating mortgage brokers.
- A New Jersey state senator wants to crate a program to help homeowners refinance mortgages they can’t afford, mirroring a similar plan in Ohio.
- US Treasury Secretary Paulson said the subprime market turmoil is “largely contained.”
- UN Secretary-General Ban Ki-moon said he will ask Iran to free 15 UK sailors and Marines detained March 23 for allegedly entering Iranian territorial waters.
- The yen fell after a government report showed Japan’s retail sales unexpectedly fell for a fourth month in February.
Late Buy/Sell Recommendations
CIBC:
- Rated (MCK) and (CAH) Sector Outperform.
Night Trading
Asian Indices are +.25% to +.75% on average.
S&P 500 indicated +.52%.
NASDAQ 100 indicated +.57%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (AGE)/1.06
- (KMX)/.21
- (CKR)/.18
- (CLE)/.83
- (DSW)/.30
- (FDO)/.60
- (FINL)/.51
- (MOV)/.37
- (RHT)/.14
- (SLR)/.05
- (SCS)/.17
- (SRR)/.32
- (TXI)/.57
- (TIBX)/.07
- (UTIW)/.26
- (WOR)/.06
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- Final 4Q GDP is estimated to rise 2.2% versus prior estimates of a 2.2% gain.
- Final 4Q Personal Consumption is estimated to rise 4.2% versus prior estimates of a 4.2% increase.
- The 4Q GDP Price Index is estimated to rise 1.7% versus prior estimates of a 1.7% increase.
- The Final 4Q Core PCE is estimated to rise 1.9% versus prior estimates of a 1.9% gain.
- Initial Jobless Claims for last week are estimated to rise to 320K versus 316K the prior week.
- Continuing Claims for last week are estimated to rise to 2518K versus 2501K prior.
BOTTOM LINE: Asian indices are higher, boosted by technology and automaker shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.
Stocks Finish Lower on Iran Concerns, Housing
Indices
S&P 500 1,417.23 -.80%
DJIA 12,300.36 -.78%
NASDAQ 2,417.10 -.83%
Russell 2000 797.40 -.62%
Wilshire 5000 14,314.84 -.73%
Russell 1000 Growth 557.49 -.76%
Russell 1000 Value 820.44 -.75%
Morgan Stanley Consumer 698.67 -.51%
Morgan Stanley Cyclical 949.40 -.93%
Morgan Stanley Technology 556.88 -1.03%
Transports 4,793.65 -1.21%
Utilities 501.46 -.03%
MSCI Emerging Markets 114.55 -.93%
Sentiment/Internals
Total Put/Call 1.33 +40.0%
NYSE Arms 1.56 +30.4%
Volatility(VIX) 14.98 +11.1%
ISE Sentiment 104.0 -18.75%
Futures Spot Prices
Crude Oil 63.97 +1.65%
Reformulated Gasoline 206.30 -.48%
Natural Gas 7.55 +.73%
Heating Oil 182.0 +1.88%
Gold 672.70 +.60%
Base Metals 244.88 -.75%
Copper 306.60 +.28%
Economy
10-year US Treasury Yield 4.62% +1 basis point
US Dollar 83.09 +.10%
CRB Index 314.37 +.81%
Leading Sectors
Tobacco +.24%
Computer Services -.10%
Medical Supplies -.16%
Lagging Sectors
Steel -1.50%
Computer Hardware -1.66%
Homebuilders -2.24%
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
Oppenheimer:
- Rated (HLS) Sell, target $18.
Afternoon/Evening Headlines
Bloomberg:
- Time Warner Cable(TWX) will add to last year’s purchase of cable systems from Adelphia Communications Corp. with more takeovers if they “make sense,” Chief Financial Officer John Martin said.
- The United Auto Workers union rejected wage concessions proposed by Delphi Corp. and a group of private equity firms, jeopardizing a $3.4 billion investment aimed at pulling the auto-parts maker out of bankruptcy.
- Corn futures in Chicago fell to the lowest in more than two months on speculation that livestock producers are using less of the biggest US crop as feed.
- Gasoline futures fell after the government showed a small-than-expected decline in US inventories.
- PetroChina Co. made a discovery in an offshore oil field in eastern Bohai Bay that may be the largest in East Asia in 33 years. The field may hold as much as 2.2 billion barrels of oil. The field may produce 200,800 barrels of oil per day within 3 years, enough to meet 95% of the needs of PetroChina’s largest refinery in Dalian. That would put the field on par with Chevron’s(CVX) $3.5 billion Tahiti field in the Gulf of Mexico, which is scheduled to begin production next year.
S&P 500 1,417.23 -.80%
DJIA 12,300.36 -.78%
NASDAQ 2,417.10 -.83%
Russell 2000 797.40 -.62%
Wilshire 5000 14,314.84 -.73%
Russell 1000 Growth 557.49 -.76%
Russell 1000 Value 820.44 -.75%
Morgan Stanley Consumer 698.67 -.51%
Morgan Stanley Cyclical 949.40 -.93%
Morgan Stanley Technology 556.88 -1.03%
Transports 4,793.65 -1.21%
Utilities 501.46 -.03%
MSCI Emerging Markets 114.55 -.93%
Sentiment/Internals
Total Put/Call 1.33 +40.0%
NYSE Arms 1.56 +30.4%
Volatility(VIX) 14.98 +11.1%
ISE Sentiment 104.0 -18.75%
Futures Spot Prices
Crude Oil 63.97 +1.65%
Reformulated Gasoline 206.30 -.48%
Natural Gas 7.55 +.73%
Heating Oil 182.0 +1.88%
Gold 672.70 +.60%
Base Metals 244.88 -.75%
Copper 306.60 +.28%
Economy
10-year US Treasury Yield 4.62% +1 basis point
US Dollar 83.09 +.10%
CRB Index 314.37 +.81%
Leading Sectors
Tobacco +.24%
Computer Services -.10%
Medical Supplies -.16%
Lagging Sectors
Steel -1.50%
Computer Hardware -1.66%
Homebuilders -2.24%
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
Oppenheimer:
- Rated (HLS) Sell, target $18.
Afternoon/Evening Headlines
Bloomberg:
- Time Warner Cable(TWX) will add to last year’s purchase of cable systems from Adelphia Communications Corp. with more takeovers if they “make sense,” Chief Financial Officer John Martin said.
- The United Auto Workers union rejected wage concessions proposed by Delphi Corp. and a group of private equity firms, jeopardizing a $3.4 billion investment aimed at pulling the auto-parts maker out of bankruptcy.
- Corn futures in Chicago fell to the lowest in more than two months on speculation that livestock producers are using less of the biggest US crop as feed.
- Gasoline futures fell after the government showed a small-than-expected decline in US inventories.
- PetroChina Co. made a discovery in an offshore oil field in eastern Bohai Bay that may be the largest in East Asia in 33 years. The field may hold as much as 2.2 billion barrels of oil. The field may produce 200,800 barrels of oil per day within 3 years, enough to meet 95% of the needs of PetroChina’s largest refinery in Dalian. That would put the field on par with Chevron’s(CVX) $3.5 billion Tahiti field in the Gulf of Mexico, which is scheduled to begin production next year.
BOTTOM LINE: The Portfolio finished lower today on losses in my Technology longs. I added (IWM) and (QQQQ) hedges in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was negative today as the advance/decline line finished lower, almost every sector fell and volume was above average. Measures of investor anxiety were elevated into the close. Today's overall market action was bearish as the major averages and breadth finished near session lows. Homebuilders and financials bore the brunt of the selling. On the positive side, the average stock outperformed the broad market again and losses in many market-leading stocks were muted. My intraday gauge of investor angst finished at an elevated level. I wouldn't be surprised to see some more weakness on the open tomorrow as Asian equities will likely come under pressure tonight. The Nikkei is indicated down about 100 points on the open.
Stocks Lower into Final Hour on Iran Concerns, Weakness in Homebuilders
BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Technology longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is negative as the advance/decline line is lower, almost every sector is lower and volume is about average. Merrill Lynch put out its monthly short interest report today. It said that its composite Average Short Interest Ratio (ASIR) model for the S&P 1500 soared to a record 7.2 during mid-February through mid-March vs. 5.7 the prior month. This is an all-time record high level. The ASIR S&P 1500 model is now above two standard deviations from its historical average. Merrill said that short levels are clearly higher in the small- to mid-cap space with a concentration in the consumer discretionary, utility and financial sectors. This may be why the average stock is holding up better than the major averages. As I said the other day, there is a huge wall of worry for stocks to climb substantially from current levels by year-end. I expect US stocks to trade mixed-to-higher into the close on short-covering and bargain-hunting.
Today's Headlines
Bloomberg:
- Late payments on subprime mortgages that are used in credit indexes rose more slowly in February, according to research reports from firms such as Barclays Capital and Bear Stearns(BSC). The reports suggested the deterioration may be over for the performance of home loans backing bonds in two of three so-called ABX indexes.
- US Treasuries pared gains and declined after Fed Chairman Bernanke told Congress’ Joint Economic Committee that the economy “appears likely to continue to expand at a moderate pace over coming quarters.” Bernanke said the effects of subprime mortgages on the housing market will be moderate.
- Crude oil rose to a six-month high as investment funds speculate tensions with Iran will escalate.
- Prime Minister Tony Blair stepped up a diplomatic push on Iran to release 15 UK sailors and Marines held six days ago, asking for help from allies and saying Britain’s boats were 1.7 miles insides Iraqi waters when the raid occurred.
- AMR Corp.’s(AMR) American Airlines, the world’s largest carrier, will buy 47 Boeing Co.(BA) 737 jets four years earlier than planned to begin replacing some of its oldest planes.
- President Bush attacked the Senate’s $122 billion Iraq war-spending bill, which calls for a troop withdrawal, and said he will hold Democrats responsible if they delay funding military operations. “The clock is ticking for our troops in the field,” Bush said. Money for US military operations in Iraq and Afghanistan begins running out in mid-April.
Wall Street Journal:
- The SEC will from now on exercise more influence over the Financial Accounting Standards Board, a private body that sets accounting rules for public and private companies.
- Best Buy’s(BBY) chief information officer, Robert Willet, said most of the retailer’s merchandise will be tagged with radio-frequency identification chips, or RFID, to permit remote monitoring of inventory.
- Microsoft Corp.(MSFT) is in talks to acquire DoubleClick Inc.(DCLK), the Internet advertising firm owned by private-equity firm Hellman & Friedman LLC.
NY Times:
- Burger King Holdings(BKC) will buy some pork from suppliers who raise uncrated hogs and chickens in order to stay ahead of consumer trends and push farmers into humane practices.
- Wal-Mart Stores(WMT) might never open a store in NYC, CEO Lee Scott Jr. said. At a meeting with the newspaper’s editorial board, Scott said the high cost of conducting business in NYC and the opposition the discount chain has faced makes it less likely Manhattan will have a Wal-Mart.
- A game in which teenagers suffocate themselves to the point of unconsciousness to achieve a high, which has killed several children, is drawing scrutiny by healthy officials, educators and parents. While asphyxiation games aren’t new, the so-called choking game, is getting more attention after several well-publicized deaths in the US, couples with a realization that teenagers are seeing the game on Internet sites like YouTube, and playing it in more threatening variations.
TheDeal.com:
- Initial bids for NBTY(NTI), a nutritional supplement company with a $3.3 billion market value, are due in early April.
National Post:
- US investors in Canadian income trusts may pay twice as much tax on the dividends they receive under a proposed tax change. A bill filed in the US House of Representatives by Democratic Congressman Richard E. Neal would remove a special tax treatment for dividends from foreign investments such as Canadian income and real estate trusts.
USA Today:
- The Transportation Security Administration plans to more closely screen airport workers in a so-called “surge” strategy to increase safety at airports across the country.
AP:
- The Sacramento Country, California, Sheriff’s Dept. will hold an auction April 17 for the rights to OJ Simpson’s book, in which the former star football player tells how he would have murdered his ex-wife Nicole Brown Simpson and her friend Ron Goldman.
CNBC:
- Former Home Depot CEO Nardelli has been offered a position with hedge fund manager Cerberus Capital Management.
Financial Times:
- Economic statistics that show a booming Asian economy may demonstrate that investing in the region is a slightly risky bet that the world economy will stay healthy. Domestic consumption in the region is unexceptional, and the economies are very dependent on foreign demand.
- Late payments on subprime mortgages that are used in credit indexes rose more slowly in February, according to research reports from firms such as Barclays Capital and Bear Stearns(BSC). The reports suggested the deterioration may be over for the performance of home loans backing bonds in two of three so-called ABX indexes.
- US Treasuries pared gains and declined after Fed Chairman Bernanke told Congress’ Joint Economic Committee that the economy “appears likely to continue to expand at a moderate pace over coming quarters.” Bernanke said the effects of subprime mortgages on the housing market will be moderate.
- Crude oil rose to a six-month high as investment funds speculate tensions with Iran will escalate.
- Prime Minister Tony Blair stepped up a diplomatic push on Iran to release 15 UK sailors and Marines held six days ago, asking for help from allies and saying Britain’s boats were 1.7 miles insides Iraqi waters when the raid occurred.
- AMR Corp.’s(AMR) American Airlines, the world’s largest carrier, will buy 47 Boeing Co.(BA) 737 jets four years earlier than planned to begin replacing some of its oldest planes.
- President Bush attacked the Senate’s $122 billion Iraq war-spending bill, which calls for a troop withdrawal, and said he will hold Democrats responsible if they delay funding military operations. “The clock is ticking for our troops in the field,” Bush said. Money for US military operations in Iraq and Afghanistan begins running out in mid-April.
Wall Street Journal:
- The SEC will from now on exercise more influence over the Financial Accounting Standards Board, a private body that sets accounting rules for public and private companies.
- Best Buy’s(BBY) chief information officer, Robert Willet, said most of the retailer’s merchandise will be tagged with radio-frequency identification chips, or RFID, to permit remote monitoring of inventory.
- Microsoft Corp.(MSFT) is in talks to acquire DoubleClick Inc.(DCLK), the Internet advertising firm owned by private-equity firm Hellman & Friedman LLC.
NY Times:
- Burger King Holdings(BKC) will buy some pork from suppliers who raise uncrated hogs and chickens in order to stay ahead of consumer trends and push farmers into humane practices.
- Wal-Mart Stores(WMT) might never open a store in NYC, CEO Lee Scott Jr. said. At a meeting with the newspaper’s editorial board, Scott said the high cost of conducting business in NYC and the opposition the discount chain has faced makes it less likely Manhattan will have a Wal-Mart.
- A game in which teenagers suffocate themselves to the point of unconsciousness to achieve a high, which has killed several children, is drawing scrutiny by healthy officials, educators and parents. While asphyxiation games aren’t new, the so-called choking game, is getting more attention after several well-publicized deaths in the US, couples with a realization that teenagers are seeing the game on Internet sites like YouTube, and playing it in more threatening variations.
TheDeal.com:
- Initial bids for NBTY(NTI), a nutritional supplement company with a $3.3 billion market value, are due in early April.
National Post:
- US investors in Canadian income trusts may pay twice as much tax on the dividends they receive under a proposed tax change. A bill filed in the US House of Representatives by Democratic Congressman Richard E. Neal would remove a special tax treatment for dividends from foreign investments such as Canadian income and real estate trusts.
USA Today:
- The Transportation Security Administration plans to more closely screen airport workers in a so-called “surge” strategy to increase safety at airports across the country.
AP:
- The Sacramento Country, California, Sheriff’s Dept. will hold an auction April 17 for the rights to OJ Simpson’s book, in which the former star football player tells how he would have murdered his ex-wife Nicole Brown Simpson and her friend Ron Goldman.
CNBC:
- Former Home Depot CEO Nardelli has been offered a position with hedge fund manager Cerberus Capital Management.
Financial Times:
- Economic statistics that show a booming Asian economy may demonstrate that investing in the region is a slightly risky bet that the world economy will stay healthy. Domestic consumption in the region is unexceptional, and the economies are very dependent on foreign demand.
Durable Goods Orders Rise Less Than Estimates
- Durable Goods Orders for February rose 2.5% versus estimates of a 3.5% gain and a -9.3% decline in January.
- Durables Ex Transportation for February fell -.1% versus estimates of a 1.8% increase and a -4.0% decline in January.
- Durables Ex Transportation for February fell -.1% versus estimates of a 1.8% increase and a -4.0% decline in January.
BOTTOM LINE: Orders for durable goods rose less than forecast in February, limited by lower demand for metals, machinery and appliances, Bloomberg reported. Orders for non-defense capital goods excluding aircraft, a gauge of future business investment, fell 1.2% versus a 3.3% decline the prior month. Aircraft orders soared 88% after dropping 60% the prior month. Orders for computers and related products rose 4.8% versus a 3.4% decline the prior month. Motor vehicle and parts bookings gained 1.3% versus a 9.2% decline in January. Other manufacturing reports this month showed factory production may be starting to rebound. Manufacturing gained the most in five months in February, according to the most recent ISM Manufacturing report. I continue to believe manufacturing activity will rebound next quarter and add to economic growth after subtracting from growth this quarter.
Wednesday Watch
Late-Night Headlines
Bloomberg:
- Crude oil is rising $.97/bbl. in NY on investment fund speculation of a confrontation in the Persian Gulf between US or British forces and Iran. US military and State Department officials said they had no information about a naval incident between Iran and the US. There is no US military activity in the Gulf outside of previously scheduled exercises, US Navy Commander Kevin Aandahl, a spokesman for the Fifth Fleet in Bahrain, said. “I’ve seen this happen before where there’s a totally unsubstantiated rumor” that has an effect on world markets, he said.
- China’s failure to curb investment may lead to overcapacity and falling prices, turning its expansion into a “curse,” the Asian Development Bank said.
- The yen strengthened on speculation Japanese investors are bringing funds back before the financial year ends on March 30. Gains may prove short-lived on speculation newly established mutual funds will buy higher-yielding overseas assets when the financial year begins next week.
- Kevin Bannon, who helps oversee $120 billion as chief investment officer at Bank of New York, see US economic growth of 2.5% and says stocks look cheap.
San Francisco Chronicle:
- San Francisco became the first US city to ban Walgreen Co.(WAG), Rite Aid Corp.(RAD) and other chains from using petroleum-based plastic checkout bags. The city’s board of supervisors voted 10-1 today to require that the stores use biodegradable plastic or recyclable paper bags starting in about six months for 50 large supermarkets and in a year for chain drugstores.
London-based Times:
- General Motors(GM) will not take part in the first round of bids for Chrysler. Canadia auto-parts supplier Magna Intl., Cerberus Capital Management LP and a group led by Blackstrone Group LP and Centerbridge Capital Partners LLC may submit bids in the first round.
AFP:
- Germany, which holds the presidency of the European Union, has told Iran it must give the UK consular access to the 15 British sailors and marines it has been holding since March 23.
Late Buy/Sell Recommendations
Citigroup:
- Commentary on overall handset demand has been constructive thus far. Brightpoint(CELL) expects global volumes for 1Q07 to decline around 10% Q-Q, at the high end of its 10%-15% Q-Q decline forecast. They noted that February turned out better than January(A surprise given the sluggish start to the month) and March looks good industry-wide.
CSFB:
- Reiterated Outperform on (GS), raised target to $225-$235.
Night Trading
Asian Indices are -.25% to +.25% on average.
S&P 500 indicated -.27%.
NASDAQ 100 indicated -.33%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (PAYX)/.35
- (RECN)/.27
- (SHFL)/.07
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- Durable Goods Orders for February are estimated to rise 3.5% versus a -8.7% decline in January.
- Durables Ex Transportation for February are estimated to rise 1.8% versus a -4.0% decline in January.
10:30 am EST
Bloomberg consensus estimates call for a weekly crude oil build of 2,025,000 barrels versus a 3,924,000 barrel increase the prior week. Gasoline supplies are expected to fall by -2,050,000 barrels versus a -3,450,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,500,000 barrels versus a -1,710,000 barrel decrease the prior week. Refinery Utilization is expected to rise by .5% versus a .74% increase the prior week.
Bloomberg:
- Crude oil is rising $.97/bbl. in NY on investment fund speculation of a confrontation in the Persian Gulf between US or British forces and Iran. US military and State Department officials said they had no information about a naval incident between Iran and the US. There is no US military activity in the Gulf outside of previously scheduled exercises, US Navy Commander Kevin Aandahl, a spokesman for the Fifth Fleet in Bahrain, said. “I’ve seen this happen before where there’s a totally unsubstantiated rumor” that has an effect on world markets, he said.
- China’s failure to curb investment may lead to overcapacity and falling prices, turning its expansion into a “curse,” the Asian Development Bank said.
- The yen strengthened on speculation Japanese investors are bringing funds back before the financial year ends on March 30. Gains may prove short-lived on speculation newly established mutual funds will buy higher-yielding overseas assets when the financial year begins next week.
- Kevin Bannon, who helps oversee $120 billion as chief investment officer at Bank of New York, see US economic growth of 2.5% and says stocks look cheap.
San Francisco Chronicle:
- San Francisco became the first US city to ban Walgreen Co.(WAG), Rite Aid Corp.(RAD) and other chains from using petroleum-based plastic checkout bags. The city’s board of supervisors voted 10-1 today to require that the stores use biodegradable plastic or recyclable paper bags starting in about six months for 50 large supermarkets and in a year for chain drugstores.
London-based Times:
- General Motors(GM) will not take part in the first round of bids for Chrysler. Canadia auto-parts supplier Magna Intl., Cerberus Capital Management LP and a group led by Blackstrone Group LP and Centerbridge Capital Partners LLC may submit bids in the first round.
AFP:
- Germany, which holds the presidency of the European Union, has told Iran it must give the UK consular access to the 15 British sailors and marines it has been holding since March 23.
Late Buy/Sell Recommendations
Citigroup:
- Commentary on overall handset demand has been constructive thus far. Brightpoint(CELL) expects global volumes for 1Q07 to decline around 10% Q-Q, at the high end of its 10%-15% Q-Q decline forecast. They noted that February turned out better than January(A surprise given the sluggish start to the month) and March looks good industry-wide.
CSFB:
- Reiterated Outperform on (GS), raised target to $225-$235.
Night Trading
Asian Indices are -.25% to +.25% on average.
S&P 500 indicated -.27%.
NASDAQ 100 indicated -.33%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (PAYX)/.35
- (RECN)/.27
- (SHFL)/.07
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- Durable Goods Orders for February are estimated to rise 3.5% versus a -8.7% decline in January.
- Durables Ex Transportation for February are estimated to rise 1.8% versus a -4.0% decline in January.
10:30 am EST
Bloomberg consensus estimates call for a weekly crude oil build of 2,025,000 barrels versus a 3,924,000 barrel increase the prior week. Gasoline supplies are expected to fall by -2,050,000 barrels versus a -3,450,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,500,000 barrels versus a -1,710,000 barrel decrease the prior week. Refinery Utilization is expected to rise by .5% versus a .74% increase the prior week.
BOTTOM LINE: Asian indices are mixed as slight gains in energy shares are offsetting slight losses in automaker shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.
Tuesday, March 27, 2007
Stocks Finish Lower on Economic Concerns and Profit-taking
Indices
S&P 500 1,428.61 -.62%
DJIA 12,397.29 -.58%
NASDAQ 2,437.43 -.74%
Russell 2000 802.36 -.81%
Wilshire 5000 14,420.19 -.61%
Russell 1000 Growth 561.76 -.73%
Russell 1000 Value 826.67 -.48%
Morgan Stanley Consumer 702.25 -.96%
Morgan Stanley Cyclical 958.28 -.89%
Morgan Stanley Technology 562.65 -.38%
Transports 4,852.60 -1.15%
Utilities 501.63 -.23%
MSCI Emerging Markets 115.80 -.49%
Sentiment/Internals
Total Put/Call .95 -4.04%
NYSE Arms 1.20 +24.73%
Volatility(VIX) 13.48 +2.43%
ISE Sentiment 131.0 -14.94%
Futures Spot Prices
Crude Oil 63.01 +.16%
Reformulated Gasoline 207.20 +.26%
Natural Gas 7.50 +3.39%
Heating Oil 178.91 +.73%
Gold 662.40 -.23%
Base Metals 246.74 -.04%
Copper 304.55 -2.96%
Economy
10-year US Treasury Yield 4.61% +1 basis point
US Dollar 82.97 -.13%
CRB Index 311.85 -.13%
Leading Sectors
Biotech +.59%
Telecom +.24%
Alternative Energy +.08%
Lagging Sectors
Homebuilders -1.04%
Airlines -1.10%
Gold -1.28%
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
Oppenheimer:
- Rated (TWC) Buy, target $47.
Lehman Brothers:
- Rated (BSC) and (MER) Overweight.
AG Edwards:
- Rated (GOOG), (AQNT), (MNST), (YHOO), (VCLK) Buy.
Afternoon/Evening Headlines
Bloomberg:
- Goldman Sachs’(GS) sixth buyout fund may top $20 billion, CEO Blankfein told shareholders at today’s annual meeting.
- Accenture Ltd.(ACN), the world’s second-biggest consulting firm, said profit soared. The shares rose $1 to $77.22 in after-hours trading.
- US imports of finished steel products fell 10% in February from a month earlier after rising inventories led customers to hold off placing new orders.
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, may help upgrade two Brazilian rivers to transport sugar cane-based ethanol from the country’s agricultural frontier to export markets.
- Merck’s(MRK) Vioxx painkiller didn’t contribute to an Illinois woman’s fatal heart attack in 2003, an Illinois jury decided, giving the company its 10th victory in a trial involving the drug.
Business Week:
- Beazer Homes USA(BZH), the ninth largest US homebuilder by revenue, is the target of a federal investigation into its lending and financial practices. Beazer’s mortgage arm is being probed for possible mortgage fraud by a group including the FBI, Justice Dept., Inspector General of Housing and Urban Development and IRS. The stock is falling 14% in after-hours trading.
S&P 500 1,428.61 -.62%
DJIA 12,397.29 -.58%
NASDAQ 2,437.43 -.74%
Russell 2000 802.36 -.81%
Wilshire 5000 14,420.19 -.61%
Russell 1000 Growth 561.76 -.73%
Russell 1000 Value 826.67 -.48%
Morgan Stanley Consumer 702.25 -.96%
Morgan Stanley Cyclical 958.28 -.89%
Morgan Stanley Technology 562.65 -.38%
Transports 4,852.60 -1.15%
Utilities 501.63 -.23%
MSCI Emerging Markets 115.80 -.49%
Sentiment/Internals
Total Put/Call .95 -4.04%
NYSE Arms 1.20 +24.73%
Volatility(VIX) 13.48 +2.43%
ISE Sentiment 131.0 -14.94%
Futures Spot Prices
Crude Oil 63.01 +.16%
Reformulated Gasoline 207.20 +.26%
Natural Gas 7.50 +3.39%
Heating Oil 178.91 +.73%
Gold 662.40 -.23%
Base Metals 246.74 -.04%
Copper 304.55 -2.96%
Economy
10-year US Treasury Yield 4.61% +1 basis point
US Dollar 82.97 -.13%
CRB Index 311.85 -.13%
Leading Sectors
Biotech +.59%
Telecom +.24%
Alternative Energy +.08%
Lagging Sectors
Homebuilders -1.04%
Airlines -1.10%
Gold -1.28%
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
Oppenheimer:
- Rated (TWC) Buy, target $47.
Lehman Brothers:
- Rated (BSC) and (MER) Overweight.
AG Edwards:
- Rated (GOOG), (AQNT), (MNST), (YHOO), (VCLK) Buy.
Afternoon/Evening Headlines
Bloomberg:
- Goldman Sachs’(GS) sixth buyout fund may top $20 billion, CEO Blankfein told shareholders at today’s annual meeting.
- Accenture Ltd.(ACN), the world’s second-biggest consulting firm, said profit soared. The shares rose $1 to $77.22 in after-hours trading.
- US imports of finished steel products fell 10% in February from a month earlier after rising inventories led customers to hold off placing new orders.
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, may help upgrade two Brazilian rivers to transport sugar cane-based ethanol from the country’s agricultural frontier to export markets.
- Merck’s(MRK) Vioxx painkiller didn’t contribute to an Illinois woman’s fatal heart attack in 2003, an Illinois jury decided, giving the company its 10th victory in a trial involving the drug.
Business Week:
- Beazer Homes USA(BZH), the ninth largest US homebuilder by revenue, is the target of a federal investigation into its lending and financial practices. Beazer’s mortgage arm is being probed for possible mortgage fraud by a group including the FBI, Justice Dept., Inspector General of Housing and Urban Development and IRS. The stock is falling 14% in after-hours trading.
BOTTOM LINE: The Portfolio finished slightly lower today on losses in my Retail longs and Technology longs. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was negative today as the advance/decline line finished lower, sector performance was mostly negative and volume was about average. Measures of investor anxiety were above-average into the close. Today's overall market action was mildly bearish as the major averages and breadth finished lower, but off session lows. While breadth was weak today, I had an abnormal number of stocks on my monitor pages that rose. Biotech was a standout sector today, rising about 0.59%, with a number of small/mid-cap biotechs breaking out on volume. The Homebuilding Index finished 1.04% lower; however, Lennar (LEN) finished near session highs. As well, the Case-Shiller August housing futures ticked higher today to $214,400 from $214,000. The 10-year yield was stable throughout the day at 4.61%. The U.S. Dollar Index was also stable. The underlying action today was more constructive than the major averages suggest. My intraday gauge of investor angst finished at an above-average level. I suspect we will see some more short-covering and bargain-hunting into the last few days of the quarter, considering the extent to which massive hedges were put in place earlier this month.
Stocks Lower into Final Hour on Economic Concerns and Profit-taking
BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Retail longs and Technology longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are lower and volume is about average. Johnson Redbook weekly retail sales surged 3.9% last week vs. a 3.7% gain the prior week and 2.4% during this week last year. This is well above the long-term average and the highest weekly increase since the last week of September last year. Weekly retail sales have gained 3.4%, 3.7% and 3.9% over the last three weeks vs. weekly gains of around 2.75% the prior 3 months. In my opinion, this shows that while consumers are more concerned about the future, they feel better about their present situation, which is what this morning's confidence report showed. Anecdotally, I went to one of the largest malls in the country over the weekend. It was sunny and 75 degrees, yet the mall was packed and people were carrying bags. I continue to believe monthly retail sales are bouncing back sharply into the spring. Last week, I posted about the new all-time high in NYSE short interest. Last night, the Nasdaq reported that short interest also jumped to an all-time record. From mid February through mid March, short interest on the Nasdaq rose 12.1% to 7,890,000,000 shares. This was the largest monthly percentage increase since Bloomberg began tracking short interest in 1991. This is just more evidence of the very high wall of worry that was created earlier this month.
Here are the 20 Nasdaq stocks with the largest percentage increase in their short interest relative to their float from mid February through mid March:
1. LEND +34.8%
2. BLDR +23.2%
3. HCBK +22.8%
4. TTWO +18.8%
5. PRGX +16.7%
6. CPSL +16.1%
7. POSH +12.1%
8. NTRI +9.7%
9. NETL +9.2%
10. LJPC +8.7%
11. MALL +8.2%
12. VNDA+8.0%
13. ANDE +7.8%
14. ORBC +7.7%
15. PFCB +7.7%
16. CHCI +7.7%
17. BKUNA +7.5%
18. SFLY +7.4%
19. CAKE +7.1%
20. CBRL +7.0%
I expect US stocks to trade mixed-to-higher into the close on short-covering and bargain-hunting.
Today's Headlines
Bloomberg:
- Gasoline futures are falling 1.4%, notwithstanding concerns over Iran and low US refinery utilization. Refineries in states including California and Texas are operating at reduced rates due to “recent unit failures and fires.” The margin, or crack spread, earned by refiners for turning crude oil into gasoline and heating oil is about 54% wider than a year ago.
- UK Prime Minister Tony Blair said that efforts to release 15 British sailors and Marines seized by Iran will enter a “different phase” if negotiations fail.
- US forces in Iraq arrested two men suspected of leading a terrorist cell responsible for car bombings that have killed about 900 civilians in Iraq.
- Mark Walton, head of the world’s largest animal cloning company, sees his biotech lab in Austin, Texas, as the next frontier in food production.
- Lennar Corp.(LEN), the largest US homebuilder by revenue, said earnings fell 73% during the fiscal first-quarter. The stock is near session highs, falling .7% on the report.
- White House Press Secretary Tony Snow has been diagnosed with recurrence of cancer and the disease has spread to his liver.
- Police in Belgium, France, Luxembourg and Italy raided about 30 offices and homes today in a corruption probe aimed at European Commission employees.
- K2 Advisors LLC, a Stamford, Connecticut-based investment firm with $5.5 billion in client money allocated to hedge funds, sold a minority stake of itself to buyout firm TA Associates.
- Luxury-home values in London, the world’s most expensive city, will probably increase 20% this year as wealthy buyers compete for a shrinking number of properties, real estate company Savills Plc said.
- US consumption of renewable fuels such as ethanol and biodiesel would increase under legislation introduced today in the Senate Energy and Natural Resources Committee. The bill would mandate that 8.5 billion gallons of renewable fuels be used to replace petroleum-based fuels by next year, rising to 36 billion gallons within 9 years. The bill has bipartisan support.
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, and Eni SpA, Europe’s fourth-largest oil company, agreed to share technology for crop-based fuels production.
- Canada and Russia, the only net crude-oil exporters in the Group of Eight nations, will seek ways to promote joint energy projects that may lead to a global supply network, ministers from both countries said.
- FuelCell Enegy’s(FCEL) shares soared 20% after the Connecticut Clean Energy Fund recommended that utilities buy power from six planned projects using the company’s fuel-cell technology.
- Libya, the holder of Africa’s largest oil reserves, is prepared to sell a majority stake in its oilfield-services company to a foreign partner such as Schlumberger Ltd.(SLB) or Halliburton(HAL), to increase exploration.
Wall Street Journal:
- The SEC is to review so-called 12b-1 fees, which mutual funds charge to pay for marketing services.
NY Times:
- Senator Hillary Clinton, the would-be Democratic nominee for the presidency, is cultivazting relationships with the military to avoid criticism her husband faced during his tenure in the office. The goal is to ease voter perceptions that associate her with her opposition to the Vietnam War, and criticism of President Bush’s current campaign to liberate Iraq.
Washington Post:
- Maryland’s state senate passed a bill to ban smoking in bars and restaurants.
Financial Times:
- Thomason Financial will start selling an international news service to clients in May as part of a plan to compete more widely with Bloomberg LP and Reuters Group Plc.
Handelsblatt:
- DaimlerChrysler AG(DCX) may complete a sale of its unprofitable Chrysler division by June, citing unidentified bankers.
Xinhua News Agency:
- Crude oil output at Shengli oilfield, China’s second largest, may rise 6% this year as the field’s operator expands exploration, citing the Shengli Petroleum Administrative Bureau. The field’s 2007 crude oil output may rise to 550,000 barrels per day.
- Gasoline futures are falling 1.4%, notwithstanding concerns over Iran and low US refinery utilization. Refineries in states including California and Texas are operating at reduced rates due to “recent unit failures and fires.” The margin, or crack spread, earned by refiners for turning crude oil into gasoline and heating oil is about 54% wider than a year ago.
- UK Prime Minister Tony Blair said that efforts to release 15 British sailors and Marines seized by Iran will enter a “different phase” if negotiations fail.
- US forces in Iraq arrested two men suspected of leading a terrorist cell responsible for car bombings that have killed about 900 civilians in Iraq.
- Mark Walton, head of the world’s largest animal cloning company, sees his biotech lab in Austin, Texas, as the next frontier in food production.
- Lennar Corp.(LEN), the largest US homebuilder by revenue, said earnings fell 73% during the fiscal first-quarter. The stock is near session highs, falling .7% on the report.
- White House Press Secretary Tony Snow has been diagnosed with recurrence of cancer and the disease has spread to his liver.
- Police in Belgium, France, Luxembourg and Italy raided about 30 offices and homes today in a corruption probe aimed at European Commission employees.
- K2 Advisors LLC, a Stamford, Connecticut-based investment firm with $5.5 billion in client money allocated to hedge funds, sold a minority stake of itself to buyout firm TA Associates.
- Luxury-home values in London, the world’s most expensive city, will probably increase 20% this year as wealthy buyers compete for a shrinking number of properties, real estate company Savills Plc said.
- US consumption of renewable fuels such as ethanol and biodiesel would increase under legislation introduced today in the Senate Energy and Natural Resources Committee. The bill would mandate that 8.5 billion gallons of renewable fuels be used to replace petroleum-based fuels by next year, rising to 36 billion gallons within 9 years. The bill has bipartisan support.
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, and Eni SpA, Europe’s fourth-largest oil company, agreed to share technology for crop-based fuels production.
- Canada and Russia, the only net crude-oil exporters in the Group of Eight nations, will seek ways to promote joint energy projects that may lead to a global supply network, ministers from both countries said.
- FuelCell Enegy’s(FCEL) shares soared 20% after the Connecticut Clean Energy Fund recommended that utilities buy power from six planned projects using the company’s fuel-cell technology.
- Libya, the holder of Africa’s largest oil reserves, is prepared to sell a majority stake in its oilfield-services company to a foreign partner such as Schlumberger Ltd.(SLB) or Halliburton(HAL), to increase exploration.
Wall Street Journal:
- The SEC is to review so-called 12b-1 fees, which mutual funds charge to pay for marketing services.
NY Times:
- Senator Hillary Clinton, the would-be Democratic nominee for the presidency, is cultivazting relationships with the military to avoid criticism her husband faced during his tenure in the office. The goal is to ease voter perceptions that associate her with her opposition to the Vietnam War, and criticism of President Bush’s current campaign to liberate Iraq.
Washington Post:
- Maryland’s state senate passed a bill to ban smoking in bars and restaurants.
Financial Times:
- Thomason Financial will start selling an international news service to clients in May as part of a plan to compete more widely with Bloomberg LP and Reuters Group Plc.
Handelsblatt:
- DaimlerChrysler AG(DCX) may complete a sale of its unprofitable Chrysler division by June, citing unidentified bankers.
Xinhua News Agency:
- Crude oil output at Shengli oilfield, China’s second largest, may rise 6% this year as the field’s operator expands exploration, citing the Shengli Petroleum Administrative Bureau. The field’s 2007 crude oil output may rise to 550,000 barrels per day.
Consumer Confidence Falls from 5-year Highs
- Consumer Confidence for March fell to 107.2 versus estimates of 108.5 and 111.2 the prior month.
BOTTOM LINE: Confidence among US consumers slid this month from a five-year high as fuel prices rose and concerns over housing rose, Bloomberg reported. However, more consumers said they saw jobs as plentiful than at any time in more than five years. The Jobs Are Plentiful component surged to 30.5% from 27.8% in February. Moreover, the present conditions component rose to 137.6, the highest since August 2001, versus 137.1 the prior month. The average price of regular gas rose to $2.58 as of March 25, the highest since last September. The Expectations component of the index fell to 86.9 from 93.8. The overall decline in consumer confidence was mostly a function of the decline in expectations, which isn’t surprising considering the media’s obsession with housing and the general lack of acknowledgment of the many positives in the current macro environment. As well, depressed Northeastern sentiment continues to skew the entire gauge, which is very interesting considering the states with the largest housing drags are not in the northeast. Here is a breakdown by region of the overall confidence readings:
Northeast Central 65.5
New England 90.6
Mid Atlantic 91.5
Northwest Central 105.80
South Atlantic 117.10
Pacific 121.50
Southeast Central 122.20
Southwest Central 130.0
Mountain 142.70
I continue to believe consumer confidence will break above recent cycle highs later this year as stocks continue to rise, housing sales stabilize at relatively high levels, interest rates remain low, inflation decelerates, gas prices fall and the job market remains healthy.
Tuesday Watch
Late-Night Headlines
Bloomberg:
- Federal Reserve Bank of Chicago President Michael Moskow said the Fed’s next monetary policy actions depend on incoming data, dropping reference in speeches since August to “additional firming” in interest rates.
- Nanya Technology Co. and Realtek Semiconductor Corp. will supply parts for an Apple Inc.(AAPL) product that allows Internet downloads to be shown on televisions. Nanya will supply memory chips for the Apple TV, or iTV, scheduled for release last this year, while Realtek will supply audio-conversion and networking semiconductors.
- CBS Corp.(CBS) replaced Joel Hollander as CEO of CBS Radio, naming veteran executive Dan Mason to take his place.
- Republican presidential candidate Rudy Giuliani said he favors simplifying the US tax code by reducing rates and eliminating deductions, as well as getting rid of the death tax.
- MySpace.com, News Corp.’s(NWS/A) social-networking site, sued Sanford Wallace, who became known as the King of Spam in the 1990s, for setting up dummy profiles to direct MySpace users to Web sites such as Real-vegas-sins.com.
- BHP Billiton(BHP), the world’s largest miner, and rivals may spend more in 2007 on exploration than last year’s record $7.13 billion to search for metals in Asia and Africa. Miners will boost budgets again this year, after increasing expenditures 40% in 2006 from a year earlier, said Jason Goulden, director of corporate exploration at Metals Economics Group, a research company.
- Danny Bowman, vp for customer equipment at Sprint Nextel(S) says smart phones are Sprint’s fastest-growing business.
- Vinod Khosla, co-founder of Sun Microsystems and owner of venture capital firm Khosla Ventures, sees ethanol at a $1 a gallon within 10 years.
Wall Street Journal:
- New Century Financial Corp.(NEWC) may file for bankruptcy “imminently” after Barclays Plc and Morgan Stanley said they would take possession of loans previously used to secure financing, citing analysts.
AFP:
- Pakistani tribesmen in a region bordering Afghanistan signed an agreement with authorities to stop sheltering al-Qaeda and Taliban gunmen.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (NT), target $35.
Banc of America:
- Rated (FSLR) and (SPWR) Buy.
Night Trading
Asian Indices are -.25% to +.25% on average.
S&P 500 indicated +.01%.
NASDAQ 100 indicated +.01%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (ACN)/.42
- (GME)/.80
- (FUL)/.28
- (LEN)/.40
- (MKC)/.31
Upcoming Splits
- None of note
Economic Releases
10:00 am EST
- Consumer Confidence for March is estimated to fall to 108.5 versus 112.5 in February.
Bloomberg:
- Federal Reserve Bank of Chicago President Michael Moskow said the Fed’s next monetary policy actions depend on incoming data, dropping reference in speeches since August to “additional firming” in interest rates.
- Nanya Technology Co. and Realtek Semiconductor Corp. will supply parts for an Apple Inc.(AAPL) product that allows Internet downloads to be shown on televisions. Nanya will supply memory chips for the Apple TV, or iTV, scheduled for release last this year, while Realtek will supply audio-conversion and networking semiconductors.
- CBS Corp.(CBS) replaced Joel Hollander as CEO of CBS Radio, naming veteran executive Dan Mason to take his place.
- Republican presidential candidate Rudy Giuliani said he favors simplifying the US tax code by reducing rates and eliminating deductions, as well as getting rid of the death tax.
- MySpace.com, News Corp.’s(NWS/A) social-networking site, sued Sanford Wallace, who became known as the King of Spam in the 1990s, for setting up dummy profiles to direct MySpace users to Web sites such as Real-vegas-sins.com.
- BHP Billiton(BHP), the world’s largest miner, and rivals may spend more in 2007 on exploration than last year’s record $7.13 billion to search for metals in Asia and Africa. Miners will boost budgets again this year, after increasing expenditures 40% in 2006 from a year earlier, said Jason Goulden, director of corporate exploration at Metals Economics Group, a research company.
- Danny Bowman, vp for customer equipment at Sprint Nextel(S) says smart phones are Sprint’s fastest-growing business.
- Vinod Khosla, co-founder of Sun Microsystems and owner of venture capital firm Khosla Ventures, sees ethanol at a $1 a gallon within 10 years.
Wall Street Journal:
- New Century Financial Corp.(NEWC) may file for bankruptcy “imminently” after Barclays Plc and Morgan Stanley said they would take possession of loans previously used to secure financing, citing analysts.
AFP:
- Pakistani tribesmen in a region bordering Afghanistan signed an agreement with authorities to stop sheltering al-Qaeda and Taliban gunmen.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (NT), target $35.
Banc of America:
- Rated (FSLR) and (SPWR) Buy.
Night Trading
Asian Indices are -.25% to +.25% on average.
S&P 500 indicated +.01%.
NASDAQ 100 indicated +.01%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (ACN)/.42
- (GME)/.80
- (FUL)/.28
- (LEN)/.40
- (MKC)/.31
Upcoming Splits
- None of note
Economic Releases
10:00 am EST
- Consumer Confidence for March is estimated to fall to 108.5 versus 112.5 in February.
BOTTOM LINE: Asian indices are mixed as slight gains in energy shares are offsetting slight losses in technology shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.
Monday, March 26, 2007
Stocks Rally into Close, Recoup Morning Losses
Indices
S&P 500 1,437.50 +.10%
DJIA 12,469.07 -.10%
NASDAQ 2,455.63 +.27%
Russell 2000 808.94 -.07%
Wilshire 5000 14,508.75 +.06%
Russell 1000 Growth 565.87 +.07%
Russell 1000 Value 830.65 +.06%
Morgan Stanley Consumer 709.06 +.17%
Morgan Stanley Cyclical 966.84 +.17%
Morgan Stanley Technology 564.77 +.72%
Transports 4,909.15 -1.29%
Utilities 502.81 +.65%
MSCI Emerging Markets 116.39 -.22%
Sentiment/Internals
Total Put/Call .99 +10.0%
NYSE Arms .96 +6.93%
Volatility(VIX) 13.16 +1.62%
ISE Sentiment 154.0 +36.28%
Futures Spot Prices
Crude Oil 62.97 +1.11%
Reformulated Gasoline 206.88 +3.53%
Natural Gas 7.27 +.14%
Heating Oil 177.30 +3.62%
Gold 664.50 +1.10%
Base Metals 246.83 -.35%
Copper 314.15 +2.36%
Economy
10-year US Treasury Yield 4.60% -1 basis point
US Dollar 83.07 -.25%
CRB Index 312.27 +.43%
Leading Sectors
Internet +2.4%
Networking +1.24%
Computer Hardware +1.0%
Lagging Sectors
Coal -1.50%
Biotech -1.53%
Airlines -1.76%
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
CSFB:
- Rated (NCMI) Outperform.
Stifel:
- Upgraded (TIF) to Buy, target $54.
Afternoon/Evening Headlines
Bloomberg:
- Target Corp.(TGT), the second-largest US discount chain, said sales at stores open at least a year will rise as much as 13% in March. The last time Target posted a gain of 11% or greater was November 2001. Same-store sales at about 80 retailers tracked by the Intl. Council of Shopping Centers in New York last month gained 2.5% after the coldest February since 1979. Most retailers will report final March results on April 12.
- Women who take aspirin in low or moderate doses reduce their risk of dying from any cause, particularly heart disease, a study concluded.
- Corn prices in Chicago fell to a 10-week low on speculation drier weather starting in the US Midwest in April will allow farmers to plant the crop quickly, leading to a bigger harvest.
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, and Eni SpA, Europe’s fourth-largest oil company, may cooperate on ethanol projects in Africa, Italian Prime Minister Romano Prodi said.
- Fraser Armstrong says he’s discovered a renewable resource that’s all around us: microscopic organisms that create electricity from hydrogen in the air. Armstrong, a professor of chemistry at England’s Oxford University, unveiled a device at the American Chemistry Society’s spring meeting in Chicago today that harnesses the electricity produced by microbes when they consume hydrogen particles.
- US automakers’ CEOs urged President Bush to back incentives to bring ethanol and biodiesel to more pumps as the companies boost output of so-called flex-fuel vehicles. Half the vehicles made by GM(GM), Ford Motor(F) and DaimlerChrysler(DCX) could be able to run on biodiesel or E85, a blend of 85% ethanol and 15% gasoline, within 5 years, the CEOs said.
- Drugs are just as good as the medical devices called stents in helping patients with heart disease live longer and avoid heart attacks, a study found.
Barron’s:
- Shares of Telanetix Inc.(TNXI) rose as much as 44% after analyst Joe Noel of Dutton Assoc. said in Barron’s that the Internet-based video-conferencing company could become a takeover target.
S&P 500 1,437.50 +.10%
DJIA 12,469.07 -.10%
NASDAQ 2,455.63 +.27%
Russell 2000 808.94 -.07%
Wilshire 5000 14,508.75 +.06%
Russell 1000 Growth 565.87 +.07%
Russell 1000 Value 830.65 +.06%
Morgan Stanley Consumer 709.06 +.17%
Morgan Stanley Cyclical 966.84 +.17%
Morgan Stanley Technology 564.77 +.72%
Transports 4,909.15 -1.29%
Utilities 502.81 +.65%
MSCI Emerging Markets 116.39 -.22%
Sentiment/Internals
Total Put/Call .99 +10.0%
NYSE Arms .96 +6.93%
Volatility(VIX) 13.16 +1.62%
ISE Sentiment 154.0 +36.28%
Futures Spot Prices
Crude Oil 62.97 +1.11%
Reformulated Gasoline 206.88 +3.53%
Natural Gas 7.27 +.14%
Heating Oil 177.30 +3.62%
Gold 664.50 +1.10%
Base Metals 246.83 -.35%
Copper 314.15 +2.36%
Economy
10-year US Treasury Yield 4.60% -1 basis point
US Dollar 83.07 -.25%
CRB Index 312.27 +.43%
Leading Sectors
Internet +2.4%
Networking +1.24%
Computer Hardware +1.0%
Lagging Sectors
Coal -1.50%
Biotech -1.53%
Airlines -1.76%
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
CSFB:
- Rated (NCMI) Outperform.
Stifel:
- Upgraded (TIF) to Buy, target $54.
Afternoon/Evening Headlines
Bloomberg:
- Target Corp.(TGT), the second-largest US discount chain, said sales at stores open at least a year will rise as much as 13% in March. The last time Target posted a gain of 11% or greater was November 2001. Same-store sales at about 80 retailers tracked by the Intl. Council of Shopping Centers in New York last month gained 2.5% after the coldest February since 1979. Most retailers will report final March results on April 12.
- Women who take aspirin in low or moderate doses reduce their risk of dying from any cause, particularly heart disease, a study concluded.
- Corn prices in Chicago fell to a 10-week low on speculation drier weather starting in the US Midwest in April will allow farmers to plant the crop quickly, leading to a bigger harvest.
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, and Eni SpA, Europe’s fourth-largest oil company, may cooperate on ethanol projects in Africa, Italian Prime Minister Romano Prodi said.
- Fraser Armstrong says he’s discovered a renewable resource that’s all around us: microscopic organisms that create electricity from hydrogen in the air. Armstrong, a professor of chemistry at England’s Oxford University, unveiled a device at the American Chemistry Society’s spring meeting in Chicago today that harnesses the electricity produced by microbes when they consume hydrogen particles.
- US automakers’ CEOs urged President Bush to back incentives to bring ethanol and biodiesel to more pumps as the companies boost output of so-called flex-fuel vehicles. Half the vehicles made by GM(GM), Ford Motor(F) and DaimlerChrysler(DCX) could be able to run on biodiesel or E85, a blend of 85% ethanol and 15% gasoline, within 5 years, the CEOs said.
- Drugs are just as good as the medical devices called stents in helping patients with heart disease live longer and avoid heart attacks, a study found.
Barron’s:
- Shares of Telanetix Inc.(TNXI) rose as much as 44% after analyst Joe Noel of Dutton Assoc. said in Barron’s that the Internet-based video-conferencing company could become a takeover target.
BOTTOM LINE: The Portfolio finished higher today on gains in my Medical longs, Computer longs, Internet longs and Semi longs. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was modestly negative today as the advance/decline line finished slightly lower, sector performance was mixed and volume was above average. Measures of investor anxiety were slightly above-average into the close. Today's overall market action was bullish as the major averages and breadth recouped much of this morning's weakness. Considering there was little in the way of an upside catalyst, today's rebound was even more impressive. As well, the 10-year yield only finished 1 basis point lower despite today's new home sales report. It is interesting to note that corn trades very weak technically, falling another 3% today despite all the talk over the potential for a shortage related to increasing ethanol production. I suspect corn has at the very least made a meaningful intermediate-term top. Oil is about .67 higher today, which isn't too bad considering the Iranian situation has yet to improve. Internet stocks were today's best performing group, rising over 2%. I suspect Google (GOOG) is about to bust back above its 50-day moving average. Google is still my largest long position, however Apple (AAPL) is a close second due to recent appreciation. I expect tomorrow's consumer confidence report to come in below estimates due to the huge spike in anxiety surrounding the early March stock decline. Recent market gains will affect the April reading in a positive way. This will likely lead to some more early morning market weakness tomorrow.
Stocks Lower into Final Hour on Lingering Housing Concerns, Higher Oil Prices
BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Computer longs, Medical longs and Semiconductor longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is modestly negative as the advance/decline line is lower, sector performance is mostly negative and volume is above average. Last week, a director of Bear Stearns (BSC) purchased 50,000 shares in three separate transactions at an average price of $148.32 per share. This brings his total holdings to 175,000 shares, a 40% increase. This is especially interesting considering investors' concerns over the company's subprime exposure. Last week, the NYSE cumulative advance/decline line made a new all-time high. As I said recently, this has been one of the better markets I can remember for stockpickers. Many individual stocks are posting huge gains for the year already. As well, the broad stock market is outperforming the major averages this year as the Value Line Geometric Index is 3.7% higher. Stocks have pared this morning's losses substantially as many market leaders are gaining upside traction. Tech shares are leading the major averages higher. I expect US stocks to trade mixed-to-higher into the close on short-covering and bargain-hunting.
Today's Headlines
Bloomberg:
- Chinese President Hu Jintao and his Russian counterpart Vladimir Putin said an impasse over Iran’s nuclear program must be resolved by peaceful means. The leaders called on Iran to “take the necessary and constructive steps to fulfill the resolutions of the UN Security Council.”
- Crude oil is rising .56/bbl. on increased speculation from investment funds as global tensions with Iran rise despite commercials increasing their net short position into the latest increase in oil prices.
- The Financial Services Authority, the UK’s markets regulator, plans to tighten monitoring of commodity markets as trading of oil, metals and agricultural produce increases.
- Dell Inc.(DELL) was raised to “buy” at Goldman Sachs(GS) as the firm recommended investors purchase the shares ahead of a turnaround at the company.
- Iranian officials are interrogating 15 members of the UK military accused by the Islamic Republic of violating the country’s territorial waters, the government in Tehran said.
- Alcatel-Lucent(ALU) won a three-year contract worth about $6 billion from Verizon Communications(VZ) to expand the US company’s mobile-phone network.
- Ginnie Mae and the Federal Housing Administration, created by the US government to boost mortgage financing, say the subprime lending shakeout will help end their more than four-year decline in market share.
- Corn prices in Chicago fell for a third straight session, dropping another 2.6%, on speculation drier weather starting in the US Midwest in April will allow farmers to plant the crop quickly, leading to a bigger harvest.
- Copper is rising in 2.0% NY as global stockpiles declined, signaling stronger demand for the metal.
- Mitsubishi Corp., Japan’s largest trading company, signed a 30-year ethanol supply agreement with Sao Martinho SA and will buy a stake in a Brazilian mill.
- World stainless steel production jumped 17% last year after Chinese producers increased output, surpassing Japan as Asia’s largest producer of the metal for the first time, the International Stainless Steel Forum said.
- Saudi Arabia’s Tadawul stock index plunged 6.1% last night despite the recent rise in oil prices.
Wall Street Journal:
- Boeing Co.(BA) is increasing production gradually, despite two years of record orders, to avoid fracturing its supply chain.
- Austin, Texas Mayor Will Wynn is promoting plug-in electric cars as part of a system to generate cleaner energy for Texas’ capital city.
- President Bush’s second meeting with executives of Detroit’s Big Three automakers will likely focus on alternative fuels. Chief executives Rick Wagoner of General Motors(GM), Alan Mulally of Ford Motor(F), and Tom LaSorda of DaimlerChrysler AG(DCX) are scheduled to meet with Bush for about 30 minutes in the Oval Office today before they each show the president one of their flex-fuel vehicles, capable of using conventional and alternative fuels.
NY Times:
- Gameloft, a maker of games for cell phones, will announce today that it is producing a line of games for the BlackBerry.
Chronicle of Higher Education:
- Midlevel college administrators got an average 3.8% pay raise this year, citing a survey by the College and University Professional Assoc. for Human Resources. Workers at public institutions received the highest average increase of 4% while those at private schools received 3.6%.
NY Post:
- Morgan Stanley(MS) will auction $2.48 billion in mortgages from subprime lender New Century Financial(NEWC).
Detroit News:
- General Motors’(GM) bid for Chrysler, which included less than 10% in GM stock and a $1 billion payment from parent DaimlerChrysler AG(DCX), was rejected for being too low.
USA Today:
- Democratic Senate Majority Leader Harry Reid added a provision to the recent war spending bill that would help billboard advertisers, an industry that donated tens of thousands of dollars to candidates in the 2006 election. The addition to the emergency spending bill for military operations and Hurricane Katrina victims would exempt some billboards in 13 southern states from the 1965 Highway Beautification Act regulations.
Washington Post:
- NYC Mayor Michael Bloomberg may be considering a self-financed, third-party candidacy for president.
Reuters:
- Federal Reserve Bank of Chicago President Michael Moskow said US inflation will slow at the end of the year and in 2008. Moscow also said that US subprime mortgage problems are not spilling over and that the housing market is in the process of stabilizing.
Financial Times:
- Hedge funds do best for their first two years, and usually produce lower yet more consistent returns as they grow larger, citing a Pertrac Financial Solutions study.
Interfax:
- A unit of China Petrochemical will sign an agreement to buy about 60,000 barrels a day of crude oil from Russia’s state-run OAO Rosneft.
Globo:
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, is close to confirming the discovery of a “gigantic” field of light-grade crude under the Campos Basin. The field, if confirmed, would be one of the largest of its type in the world.
- Chinese President Hu Jintao and his Russian counterpart Vladimir Putin said an impasse over Iran’s nuclear program must be resolved by peaceful means. The leaders called on Iran to “take the necessary and constructive steps to fulfill the resolutions of the UN Security Council.”
- Crude oil is rising .56/bbl. on increased speculation from investment funds as global tensions with Iran rise despite commercials increasing their net short position into the latest increase in oil prices.
- The Financial Services Authority, the UK’s markets regulator, plans to tighten monitoring of commodity markets as trading of oil, metals and agricultural produce increases.
- Dell Inc.(DELL) was raised to “buy” at Goldman Sachs(GS) as the firm recommended investors purchase the shares ahead of a turnaround at the company.
- Iranian officials are interrogating 15 members of the UK military accused by the Islamic Republic of violating the country’s territorial waters, the government in Tehran said.
- Alcatel-Lucent(ALU) won a three-year contract worth about $6 billion from Verizon Communications(VZ) to expand the US company’s mobile-phone network.
- Ginnie Mae and the Federal Housing Administration, created by the US government to boost mortgage financing, say the subprime lending shakeout will help end their more than four-year decline in market share.
- Corn prices in Chicago fell for a third straight session, dropping another 2.6%, on speculation drier weather starting in the US Midwest in April will allow farmers to plant the crop quickly, leading to a bigger harvest.
- Copper is rising in 2.0% NY as global stockpiles declined, signaling stronger demand for the metal.
- Mitsubishi Corp., Japan’s largest trading company, signed a 30-year ethanol supply agreement with Sao Martinho SA and will buy a stake in a Brazilian mill.
- World stainless steel production jumped 17% last year after Chinese producers increased output, surpassing Japan as Asia’s largest producer of the metal for the first time, the International Stainless Steel Forum said.
- Saudi Arabia’s Tadawul stock index plunged 6.1% last night despite the recent rise in oil prices.
Wall Street Journal:
- Boeing Co.(BA) is increasing production gradually, despite two years of record orders, to avoid fracturing its supply chain.
- Austin, Texas Mayor Will Wynn is promoting plug-in electric cars as part of a system to generate cleaner energy for Texas’ capital city.
- President Bush’s second meeting with executives of Detroit’s Big Three automakers will likely focus on alternative fuels. Chief executives Rick Wagoner of General Motors(GM), Alan Mulally of Ford Motor(F), and Tom LaSorda of DaimlerChrysler AG(DCX) are scheduled to meet with Bush for about 30 minutes in the Oval Office today before they each show the president one of their flex-fuel vehicles, capable of using conventional and alternative fuels.
NY Times:
- Gameloft, a maker of games for cell phones, will announce today that it is producing a line of games for the BlackBerry.
Chronicle of Higher Education:
- Midlevel college administrators got an average 3.8% pay raise this year, citing a survey by the College and University Professional Assoc. for Human Resources. Workers at public institutions received the highest average increase of 4% while those at private schools received 3.6%.
NY Post:
- Morgan Stanley(MS) will auction $2.48 billion in mortgages from subprime lender New Century Financial(NEWC).
Detroit News:
- General Motors’(GM) bid for Chrysler, which included less than 10% in GM stock and a $1 billion payment from parent DaimlerChrysler AG(DCX), was rejected for being too low.
USA Today:
- Democratic Senate Majority Leader Harry Reid added a provision to the recent war spending bill that would help billboard advertisers, an industry that donated tens of thousands of dollars to candidates in the 2006 election. The addition to the emergency spending bill for military operations and Hurricane Katrina victims would exempt some billboards in 13 southern states from the 1965 Highway Beautification Act regulations.
Washington Post:
- NYC Mayor Michael Bloomberg may be considering a self-financed, third-party candidacy for president.
Reuters:
- Federal Reserve Bank of Chicago President Michael Moskow said US inflation will slow at the end of the year and in 2008. Moscow also said that US subprime mortgage problems are not spilling over and that the housing market is in the process of stabilizing.
Financial Times:
- Hedge funds do best for their first two years, and usually produce lower yet more consistent returns as they grow larger, citing a Pertrac Financial Solutions study.
Interfax:
- A unit of China Petrochemical will sign an agreement to buy about 60,000 barrels a day of crude oil from Russia’s state-run OAO Rosneft.
Globo:
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, is close to confirming the discovery of a “gigantic” field of light-grade crude under the Campos Basin. The field, if confirmed, would be one of the largest of its type in the world.
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