Stocks Finish at Session Lows on Credit Fears, Technical Selling

Indices
S&P 500 1,406.70 -1.39%
DJIA 12,861.47 -1.29%
NASDAQ 2,458.83 -1.61%
Russell 2000 751.54 -1.49%
Wilshire 5000 14,109.85 -1.48%
Russell 1000 Growth 565.49 -1.67%
Russell 1000 Value 787.02 -1.34%
Morgan Stanley Consumer 696.81 -1.03%
Morgan Stanley Cyclical 973.05 -2.45%
Morgan Stanley Technology 602.15 -1.85%
Transports 4,692.32 -3.26%
Utilities 475.63 -1.40%
MSCI Emerging Markets 122.74 -3.41%

Sentiment/Internals
Total Put/Call 1.39 +1.46%
NYSE Arms 1.30 -31.78%
Volatility(VIX) 30.67 +10.80%
ISE Sentiment 79.0 -21.78%

Futures Spot Prices
Crude Oil 73.26 +1.22%
Reformulated Gasoline 201.0 +1.83%
Natural Gas 6.86 -1.15%
Heating Oil 202.55 +2.17%
Gold 679.0 -.12%
Base Metals 234.20 -3.81%
Copper 330.05 -1.76%

Economy
10-year US Treasury Yield 4.71% -1 basis points
US Dollar 81.85 +.43%
CRB Index 311.88 +.20%

Leading Sectors
HMOs -.26%
Computer Hardware -.67%
Banks -.85%

Lagging Sectors
Homebuilders -4.5%
Steel -5.23%
Gold -5.50%

Evening Review
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
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Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Stock Quote
In Play

Afternoon Recommendations
Bank of America:
- Rated (TWC) Buy, target $43.
- Rated (CMCSA) Buy, target $32.

CSFB:
- Upgraded (INTC) to Outperform.

Afternoon/Evening Headlines
Bloomberg:
- Bruce Bent, who manages about $65 billion in assets as chairman of Reserve Funds, says credit market woes are “blown out of proportion,” but that the crisis will continue “until sanity prevails.”
- Copper fell to a seven-week low in NY on speculation global economic growth may slow, reducing demand for the metal used in wires and pipes.
- Nestle SA, Sara Lee(SLE) and HJ Heinz(HNZ) reported profit that exceeded analysts’ estimates as they increased sales of healthier foods and raised prices.
- US three-month bill yields feel the most since October 1989 as investors sought out the safety of government debt amid a flight from risky assets.
- Network Appliance(NTAP) forecast fiscal second-quarter sales that beat analysts’ estimates. The stock surged 7% in after-hours trading.
- Billionaire Paul Allen may try to buy or recapitalize Charter Communications(CHTR), the company he controls.
- Ralph Acampora, the 40-year Wall Street veteran who helped pioneer the use of past price movements to make stock market predictions, is hanging up his charts.

BOTTOM LINE: The Portfolio finished lower today on losses in my Computer longs, Semi longs and Internet longs. I did not trade in the final hour, thus leaving the Portfolio 50% net long. The tone of the market was very negative today as the advance/decline line finished substantially lower, almost every sector fell and volume was above average. Measures of investor anxiety were very elevated into the close. Today's overall market action was bearish. The averages have convincingly taken out their recent lows, however, the longer-term uptrend since 2002 remains well in tact. A durable bottom isn't likely until the financials at least stabilize and begin ignoring negative news. While the higher-quality names in the financial sector are likely near tradable bottoms, I expect the sector to continue to underperform more growth-oriented areas over the intermediate term. The weakness in energy shares is telling considering the recent rise in oil. As well, steel (-5.3%) and gold (-5.5%) were two of today's worst-performing sectors. I continue to believe global growth has likely peaked for a number of years and that those securities priced as though the global boom would continue indefinitely will underperform the most over the intermediate term. I do not believe global growth will fall dramatically, but a return to more average rates is likely. U.S. high-quality “growth” stocks should remain solid outperformers in this type of macro environment. The VIX is finishing above 30.0 for the first time since the first quarter of 2003. Other gauges of investor angst are very elevated as well. I expect a sharp rally to materialize sometime over the next week, but it could be from lower levels. Keep watching the financials and their reaction to negative news as a tell for a potential rally. The Nikkei futures are indicating a down 200 open in Japan.