Wednesday, March 07, 2007

Stocks Finish Slightly Lower, Consolidating Yesterday's Gains

Indices
S&P 500 1,391.97 -.25%
DJIA 12,192.45 -.12%
NASDAQ 2,374.64 -.44%
Russell 2000 775.90 -.38%
Wilshire 5000 14,036.83 -.21%
Russell 1000 Growth 549.29 -.25%
Russell 1000 Value 802.23 -.23%
Morgan Stanley Consumer 684.21 -.49%
Morgan Stanley Cyclical 932.20 +.26%
Morgan Stanley Technology 552.54 -.96%
Transports 4,793.22 +.52%
Utilities 474.71 -.01%
MSCI Emerging Markets 108.81 -.34%

Sentiment/Internals
Total Put/Call 1.16 -4.92%
NYSE Arms .99 +207.64%
Volatility(VIX) 15.24 -4.51%
ISE Sentiment 66.0 -30.53%

Futures Spot Prices
Crude Oil 61.85 +1.93%
Reformulated Gasoline 189.65 +2.33%
Natural Gas 7.31 -2.07%
Heating Oil 176.57 +1.05%
Gold 651.0 +.74%
Base Metals 235.46 +.56%
Copper 279.15 +2.87%

Economy
10-year US Treasury Yield 4.49% - 4 basis points
US Dollar 83.74 -.36%
CRB Index 310.67 +1.23%

Leading Sectors
Oil Service +2.01%
Energy +1.46%
Retail +.98%

Lagging Sectors
Airlines -1.27%
Telecom -1.24%
REITs -1.41%

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
- None of note

Afternoon/Evening Headlines
Bloomberg:
- Fremont General Corp. and New Century Financial Corp. led mortgage-lending stocks higher for a second day, buoyed by a report showing an increase in home-loan refinancing and rising prospects for takeovers.
- US Senator Charles Grassley proposed a legislative amendment that would subject hedge funds to increased oversight and routine inspections, reinstating rules struck down by a federal court last year.
- Brazil can ensure supplies of ethanol to Japan should the Asian country require that gasoline contain 3% of the biofuel, Agriculture Minister Luis Carlos Guedes Pinto said.
- Automakers will use higher-strength steel, aluminum and magnesium to lop 3.5% from the weight of their cars and light trucks by 2015, a materials-forecasting company predicted.
- Microsoft’s(MSFT) top executive in charge of the Internet search program will leave the company, the second defection from the online unit this week as the world’s largest software maker tries to narrow the gap with Google Inc.(GOOG).
- New Zealand’s central bank raised the benchmark interest rate a quarter point to a record to 7.5% and said it can’t rule out another increase.
- Former NY Mayor Rudolph Giuliani leads the Republican presidential candidates and is favored in a match-up against Democratic frontrunner Senator Hillary Clinton, a poll of three swing states found.

BOTTOM LINE: The Portfolio finished about even today as gains in my Retail longs offset losses in my Energy-related shorts. I added back (IWM)/(QQQQ) hedges in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was slightly negative today as the advance/decline line finished modestly lower, sector performance was mostly negative and volume was above-average. Measures of investor anxiety were higher into the close. Today's overall market action was neutral after yesterday's sharp gains. However, the tech sector underperformed throughout the day. Natural gas is 2.2% lower as heating demand is projected at 23% below normal the next seven days. Nikkei futures are indicating a 29 point lower open in Japan. The Fed released its Beige Book earlier this afternoon. Here is a summary via Bloomberg:
- Dallas, New York, St. Louis and Boston noted some slowing.
- Most districts reported modest expansion.
- Housing market remained weak, but some signs of stabilization were noted.
- Price pressures are little changed.
- Pay increases moderate overall.
- Most districts showed labor market expansion.
- Steady growth in retail sales in most districts.
- Manufacturing is steady or expanding.
Surprisingly, the general tone of this report was upbeat. Moreover, it is very surprising and a big positive that manufacturing is "steady or expanding." I am disappointed with today's finish considering the news was better. I wouldn't be surprised to see some pre-jobs report jitters tomorrow.

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