Wednesday, March 28, 2007

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
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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.

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