Stocks Finish Lower on Profit-takinga and Bounce in Oil

Indices
S&P 500 1,472.42 -.59%
DJIA 13,314.57 -.43%
NASDAQ 2,637.13 -.90%
Russell 2000 759.97 -1.02%
Wilshire 5000 14,784.40 -.57%
Russell 1000 Growth 611.21 -.59%
Russell 1000 Value 801.55 -.52%
Morgan Stanley Consumer 749.83 -.59%
Morgan Stanley Cyclical 985.49 -.69%
Morgan Stanley Technology 612.12 -.70%
Transports 4,622.17 -.84%
Utilities 537.52 +.99%
MSCI Emerging Markets 153.61 -.03%

Sentiment/Internals
Total Put/Call .83 -22.43%
NYSE Arms 1.35 +61.98%
Volatility(VIX) 23.61 +3.24%
ISE Sentiment 137.0 +42.71%

Futures Spot Prices
Crude Oil $89.76 +1.18%
Reformulated Gasoline 226.35 +1.47%
Natural Gas 7.26 -.59%
Heating Oil 252.75 +.50%
Gold 797.70 +1.09%
Base Metals 222.33 -1.16%
Copper 306.15 -3.86%

Economy
10-year US Treasury Yield 3.85% -9 basis points
US Dollar 75.96 -.25%
CRB Index 339.92 +.02%

Leading Sectors
Oil Service +1.16%
Utilities +.99%
Construction +.80%

Lagging Sectors
Coal -1.89%
Airlines -2.05%
Oil Tankers -3.49%

Evening Review
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
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Timely Economic Charts
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PM Market Call
After-hours Commentary
After-hours Movers
After-hours Stock Quote
In Play

Afternoon Recommendations
Merrill Lynch:
- Upgraded (PHM) to Neutral from Sell.

Pacific Crest:
- Reiterated Buy on (RIMM), sees no slowdown in enterprise business.

Afternoon/Evening Headlines
Bloomberg:
- US airline flights with chronic delays fell for the second consecutive month after regulators threatened to fine carriers that didn’t adjust schedules.
- Federal Reserve Bank of San Francisco President Janet Yellen said financial conditions and consumer spending have deteriorated more than she expected in the past month, signaling she supports cutting interest rates next week.
- Transocean Inc.(RIG) plans to sell $8.5 billion of corporate bonds and convertible debt to help repay a bridge loan used to finance its purchase of rival GlobalSantaFe Corp. The stock fell 3% in after-hours trading.

Silicon Alley Insider:
- News Corp.’s(NWS/A) 20^th Century Fox studio is talking with Apple(AAPL) about selling its movies through iTunes.

TimesOnline:
- Hedge funds are set to record their worst monthly investment performance since near the turn of the millennium, despite widespread predictions that the industry is booming and heading for stellar full-year profits.

Nikkei English News:
- EBay Inc(EBAY) and Yahoo Japan Corp. may announce a cross-listing partnership as soon as this week.

BOTTOM LINE: The Portfolio finished slightly lower today on losses in my Internet longs, Computer longs and Retail longs. I did not trade 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, most sectors fell and volume was about average. Measures of investor anxiety were slightly above average into the close. Today's overall market action was mildly bearish. The main negative today was the relative weakness in some market-leading stocks. However, I wouldn’t read too much into this yet, considering most were up more than the market from their recent lows. The sharp decline in the 10-year yield gives the Fed much more leeway, in my opinion, to cut the benchmark fed funds rate by 50 basis points at next week’s meeting. Given recent Fed rhetoric and the decline in yields, I believe the odds of a 50 basis point cut should be higher than the 40% chance fed fund futures currently imply.