Stocks Lower into Final Hour on Economic Data, Profit-taking

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Computer longs, Semi longs and Retail longs. I have not traded today, thus leaving the Portfolio 100% net long. The overall tone of the market is negative today as the advance/decline line is lower, almost every sector is declining and volume is about average. My intraday gauge of investor angst is at elevated levels. The 10-year yield is falling 8 basis points, to 4.47%, on today’s economic reports. Below 4.5% is the level I pointed out several months ago that would likely have to be breached to dramatically increase the odds of a Fed rate cut. This, combined with today's economic data, and Friday's likely weaker-than-expected employment report should give the Fed the freedom to cut the Fed Funds rate 25 basis points at the upcoming meeting. The OECD said today that U.S., European and Japanese economic growth is less buoyant and more uncertain. I continue to believe global economic growth is in the process of decelerating from booming levels to more average rates, which will continue to spur growth stock outperformance for several years, in my opinion. Apple's stock is selling off on today’s news of new iPods and a price cut for the iPhone. However, everything is falling into place for the stock to move substantially higher during fourth quarter as earnings exceed even optimistic estimates and growth stock multiple expansion gains steam. I still see $180/share as likely before year-end. Goldman Sachs is also defending the shares, saying to buy on weakness. I expect US stocks to trade mixed into the close from current levels as short-covering offsets profit-taking.