Monday, August 27, 2007

Stocks Finish Mildly Lower on Low Volume

S&P 500 1,466.79 -.85%
DJIA 13,322.13 -.42%
NASDAQ 2,561.25 -.60%
Russell 2000 789.45 -1.19%
Wilshire 5000 14,726.63 -.87%
Russell 1000 Growth 587.22 -.72%
Russell 1000 Value 824.88 -.99%
Morgan Stanley Consumer 714.60 -.63%
Morgan Stanley Cyclical 1,024.25 -.74%
Morgan Stanley Technology 625.69 -.64%
Transports 4,866.97 -1.0%
Utilities 482.81 -3.21%
MSCI Emerging Markets 130.71 +.85%

Total Put/Call .95 -11.21%
NYSE Arms 1.37 +120.89%
Volatility(VIX) 22.72 +9.65%
ISE Sentiment 133.0 +15.65%

Futures Spot Prices
Crude Oil 72.05 +1.35%
Reformulated Gasoline 203.93 +2.92%
Natural Gas 5.42 -1.86%
Heating Oil 201.15 +.72%
Gold 676.30 -.18%
Base Metals 233.95 unch.
Copper 337.0 +.60%

10-year US Treasury Yield 4.57% -5 basis points
US Dollar 80.76 +.12%
CRB Index 305.59 -.02%

Leading Sectors
Defense -.13%
Internet -.14%
Medical Equipment -.25%

Lagging Sectors
Coal -2.30%
Homebuilders -2.90%
Utilities -3.21%

Evening Review
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
PM Market Call
After-hours Commentary
After-hours Movers

After-hours Stock Quote
In Play

Afternoon Recommendations

- Rated (CYH) and (UHS) Outperform.
- Rated (HMA) and (THC) Underperform.

William Blair:
- Rated (CELG) Outperform.

Afternoon/Evening Headlines
- Tiffany & Co.(TIF) rose the most in six weeks after Goldman(GS) and Bear(BSC) recommended the largest US luxury retailers on an undervalued stock price and expectations of growing demand for luxury goods.
- Mark Amberson, who runs the $5.7 billion Russell Money Market Fund at Russell Investment Group sees the asset-backed commercial paper market is “improving.”
- Chinese stocks trading in the US rallied the most in 3 ½ years on optimism the country’s economic growth with propel earnings.
- Sony Corp.’s(SNE) “Superbad” pushed Hollywood’s US summer box-office sales to a record $4 billion this past weekend, surpassing the industry’s previous high established in 2004.
- Crude oil in NY rose to the highest since Aug. 15 on speculation that US gasoline supplies declined for a fourth week as refiners curtailed production again.
- US options prices rose for the first time in seven days amid reduced speculation that the Fed will lower its benchmark lending rate.

- NYSE Euronext(NYX) and Australia’s ASX Ltd. may be considering purchasing part of Nasdaq Stock Market’s(NDAQ) stake in London Stock Exchange Plc.

BOTTOM LINE: The Portfolio finished lower today on losses in my Retail longs, Computer 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 mildly negative today as the advance/decline line finished modestly lower, most sectors fell and volume was light. Measures of investor anxiety were above-average into the close. Today's overall market action was just slightly bearish. Considering recent gains, financial industry estimate cuts and today's nonstop scary housing rhetoric, today's performance wasn't too bad. The 10-year yield is at session lows at 4.57% and is testing levels seen during the peak of credit fears on Aug. 16. The 10-year is trading as if a break below 4.5% is coming soon, which will greatly increase the odds of a Fed rate cut, in my opinion. The weakness in utilities today was notable, especially considering another drop in interest rates. As well, energy shares were under pressure despite the reversal higher in energy prices. The release of the Case-Shiller Home Price Index and Consumer Confidence reading for August will likely make for more gloomy headlines early tomorrow. I still expect stocks to finish the week on a more positive note.

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