Weekly Scoreboard*

Indices

• S&P 500 1,079.25 -3.78%
  
• DJIA 10,303.15 -3.29%
  
• NASDAQ 2,173.48 -5.02%
  
• Russell 2000 609.49 -6.33%
  
• Wilshire 5000 11,093.23 -4.06%
  
• Russell 1000 Growth 479.69 -4.14%
  
• Russell 1000 Value 554.90 -3.61%
  
• Morgan Stanley Consumer 669.89 -2.48%
  
• Morgan Stanley Cyclical 826.47 -5.55%
• Morgan Stanley Technology 529.64 -5.85%
  
• Transports 4,201.81 -5.73%
  
• Utilities 387.70 -1.53%
  
• MSCI Emerging Markets 40.69 -3.20%
  
• Lyxor L/S Equity Long Bias Index 971.02 +.08%
  
• Lyxor L/S Equity Variable Bias Index 851.27 -.18%
  
• Lyxor L/S Equity Short Bias Index 847.06 -.75%
  

Sentiment/Internals

• NYSE Cumulative A/D Line +92,422 -3.14%
  
• Bloomberg New Highs-Lows Index -281 -384
  
• Bloomberg Crude Oil % Bulls 17.0 -34.62%
  
• CFTC Oil Net Speculative Position +60,336 +8.37%
  
• CFTC Oil Total Open Interest 1,274,605 +3.24%
  
• Total Put/Call .98 +5.38%
  
• OEX Put/Call .79 -27.52%
  
• ISE Sentiment 68.0 -30.61%
  
• NYSE Arms 1.19 -26.54%
  
• Volatility(VIX) 26.24 +20.70%
  
• G7 Currency Volatility (VXY) 12.32 +4.38%
  
• Smart Money Flow Index 9,028.17 +.50%
  
• Money Mkt Mutual Fund Assets $2.822 Trillion +.1%
  
• AAII % Bulls 39.76 +30.83%
  
• AAII % Bears 30.12 -21.23%
  

Futures Spot Prices

• CRB Index 268.79 -2.15%
  
• Crude Oil 75.39 -6.52%
  
• Reformulated Gasoline 193.96 -7.92%
  
• Natural Gas 4.33 -3.46%
  
• Heating Oil 199.56 -6.92%
  
• Gold 1,216.60 +.79%
  
• Bloomberg Base Metals 207.21 -3.07%
  
• Copper 327.25 -3.21%
  
• US No. 1 Heavy Melt Scrap Steel 296.67 USD/Ton -11.13%
  
• China Hot Rolled Domestic Steel Sheet 4,252 Yuan/Ton +.28%
• S&P GSCI Agriculture 376.23 +3.13%
  

Economy

• ECRI Weekly Leading Economic Index 122.40 +.58%
  
• Citi US Economic Surprise Index -57.40 -24.5 points
  
• Fed Fund Futures imply 66.0% chance of no change, 34.0% chance of 25 basis point cut on 9/21
• US Dollar Index 82.92 +3.15%
  
• Yield Curve 214.0 -17 basis points
  
• 10-Year US Treasury Yield 2.67% -15 basis points
  
• Federal Reserve's Balance Sheet $2.310 Trillion +.05%
  
• U.S. Sovereign Debt Credit Default Swap 48.14 +23.97%
• U.S. Municipal CDS Index 222.93 +6.95%
  
• Western Europe Sovereign Debt Credit Default Swap Index 136.77 +13.86%
  
• 10-Year TIPS Spread 1.65% -13 basis points
  
• TED Spread 22.0 -5 basis points
  
• N. America Investment Grade Credit Default Swap Index 107.98 +3.97%
  
• Euro Financial Sector Credit Default Swap Index 114.73 +13.08%
  
• Emerging Markets Credit Default Swap Index 228.49 +8.16%
  
• CMBS Super Senior AAA 10-Year Treasury Spread 275.0 +23 basis points
  
• M1 Money Supply $1.737 Trillion +.60%
• Business Loans 604.80 +1.66%
  
• 4-Week Moving Average of Jobless Claims 473,500 +3.1%
  
• Continuing Claims Unemployment Rate 3.5% -10 basis points
  
• Average 30-Year Mortgage Rate 4.44% -5 basis points
  
• Weekly Mortgage Applications 734.30 +.56%
  
• ABC Consumer Confidence -47 +3 points
  
• Weekly Retail Sales +3.0% +10 basis points
  
• Nationwide Gas $2.77/gallon -.01
  
• U.S. Cooling Demand Next 7 Days 25.0% above normal
• Baltic Dry Index 2,437 +23.20%
  
• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 40.0 -5.88%
  
• Rail Freight Carloads 231,208 -.72%
  
• Iraqi 2028 Government Bonds 85.65 +.86%
  

Best Performing Style

• Large-Cap Value -3.61%

Worst Performing Style

• Small-Cap Growth -6.35%

Leading Sectors

• Telecom +.44%
• Food -.70%
• Gold -.80%
• Drugs -1.17%
• Airlines -1.53%

Lagging Sectors

• Coal -7.08%
• Alternative Energy -7.66%
• Disk Drives -8.37%
  
• Semis -8.59%
• Education -9.61%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Lower into Final Hour on Eurozone Debt Worries, Rising Economic Fears, China Concerns, Technical Selling

Broad Market Tone:

• Advance/Decline Line: Lower
  
• Sector Performance: Mixed
  
• Volume: Below Average
  
• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• VIX 25.86 +.51%
  
• ISE Sentiment Index 67.0 -44.63%
  
• Total Put/Call .97 -2.02%
  
• NYSE Arms 1.01 -17.09%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 107.98 bps -2.39%
  
• European Financial Sector CDS Index 115.66 bps -1.0%
  
• Western Europe Sovereign Debt CDS Index 136.0 bps -.72%
  
• Emerging Market CDS Index 225.81 bps -.29%
  
• 2-Year Swap Spread 20.0 +1 bp
  
• TED Spread 22.0 -1 bp
  

Economic Gauges:

• 3-Month T-Bill Yield .14% unch.
  
• Yield Curve 215.0 -4 bps
  
• China Import Iron Ore Spot $148.30/Metric Tonne unch.
  
• Citi US Economic Surprise Index -57.40 -1.3 points
  
• 10-Year TIPS Spread 1.65% -3 bps
  

Overseas Futures:

• Nikkei Futures: Indicating -28 open in Japan
• DAX Futures: Indicating +13 open in Germany

Portfolio:

• Slightly Higher: On gains in my Tech and Ag long positions
  
• Disclosed Trades: None
  
• Market Exposure: 50% Net Long

BOTTOM LINE: Today's overall market action is mildly bearish as the S&P 500 is trading lower, below its 50-day moving average, despite a bounce in Asian equities and positive economic data from Germany. On the positive side, Airline, Gaming, Computer and Paper stocks are especially strong, rising .75%+. The S&P GSCI Ag Spot Index is rising another +.5%. The Libor-OIS and TED spreads continue to trend lower. Tech shares are trading somewhat better today. On the negative side, Education, Alt Energy, Gold, Wireless and I-Banking shares are especially weak, falling .75%+. Small-caps have underperformed throughout the day. Some key stocks are trading poorly. The UK sovereign cds is up +8.6% today and has risen +22.8% over the last five days to 71.59 bps. Moreover, the Greece sovereign cds is rising +3.0% today to 841.80 bps. The 10-year yield is falling -7 bps, back near Wed.'s lows, to 2.68%. Copper is also falling -1.0% today and the euro continues to trade poorly despite its recent sell-off and Germany's positive economic data. With volume so light, it is hard to read too much into today's action, but the averages still feel a bit heavy and trading is very sloppy. I will wait to see the market's reaction to Monday's economic data before further shifting market exposure. I expect US stocks to trade mixed-to-lower into the close from current levels on more shorting, rising economic fear, sovereign debt concerns, technical selling and China worries.

Today's Headlines

Bloomberg:

• Spanish Bonds Fall on Economy Concern; Bunds Yield Record Low. Spanish bonds fell and the extra yield investors demand for holding Greek debt instead of German bunds rose to the most since May on concern flagging growth in nations on Europe’s periphery will crimp the region’s recovery. The yield on the Spanish 10-year bond climbed six basis points to 4.27 percent as of 4:20 p.m. in London. The extra yield, or spread, investors demand to hold Greek 10-year securities instead of equivalent-maturity German debt, Europe’s benchmark, rose 13 basis points to 810 basis points. That’s the most since May 7, before the European Union announced a 750 billion-euro financial backstop for the region’s most indebted nations. The yield on the bund fell three basis points to 2.39 percent, after earlier sliding to 2.37 percent, the lowest since Bloomberg began compiling this data in 1989. “The divergence suggests this is a two-speed economy, and that raises questions about sustainability of German economic growth going forward,” said Orlando Green, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London. The drag from “austerity measures will kick in at some point. Rates in the core bond market should remain subdued.”
• Corn, Soybean Futures Rise as Heat May Cut Yields in U.S. Corn and soybeans rose on speculation that a heat wave in the U.S. will cut yields of crops projected to be the biggest ever. Corn futures for December delivery rose 6.75 cents, or 1.6 percent, to $4.285 a bushel at 10:32 a.m. on the Chicago Board of Trade, heading for a third straight weekly gain. Before today, the commodity advanced 23 percent since June 29, the day before the government said farmers planted less this year than they had planned. Soybean futures for November delivery climbed 12.75 cents, or 1.2 percent, to $10.4125 a bushel in Chicago. The most-active contract was up 0.8 percent for the week, after rising 5.2 percent the prior two weeks.
• Washington Post Shorts at 19-Year Highs as Bears Take on Buffett. Bets against shares of Washington Post Co. have increased to the highest level since at least 1991, as the federal government considers rules that could reduce revenue at its Kaplan education unit. Short interest in Post Co. rose to 386,917 shares as of July 30, up nearly three-fold this year, according to New York Stock Exchange data compiled by Bloomberg. It’s the highest level since September 1991, the earliest data in Bloomberg’s database.
• Blackstone(BX) to Buy Dynegy for More Than $540 Million. agreed to acquire Blackstone Group LPDynegy Inc., the Texas power producer that lost 94 percent of its market value in the past three years, for more than $540 million.
• Heebner Fund Exits Investment Banks, Mining Companies. Kenneth Heebner’s Capital Growth Management LP sold stakes in Goldman Sachs Group Inc. and Morgan Stanley and exited its biggest mining holdings during the second quarter, according to a regulatory filing. The firm, based in Boston, sold miners Freeport-McMoran Copper & Gold Inc., Teck Resources Ltd. and Cliff Natural Resources Inc. during the quarter, according to a document filed with the U.S. Securities and Exchange Commission today. The firm’s biggest new purchase was 5.2 million shares of SanDisk Corp., the largest maker of flash-memory cards for digital cameras and phone.
• Hoenig Says Fed Zero-Rate Policy Fans Recovery Doubts. The Federal Reserve’s commitment to keep its target interest rate near zero may backfire by fanning doubts the recovery can be sustained, Kansas City Fed President Thomas Hoenig said. “If in an attempt to add further fuel to the recovery, a zero interest rate is continued, it is as likely to be a negative as a positive in that it brings its own unintended consequences and uncertainty,” Hoenig said today in a speech in Lincoln, Nebraska. Keeping the rate after a year of expansion “gives legitimacy to questions about the sustainability of growth.”
• Iran's Bushehr Nuclear Plant to Start Up Aug. 21. Iran’s first nuclear power plant will start operating Aug. 21, with electricity generation to begin “several months later,” said Rosatom Corp., the Russian state nuclear holding company building the facility. “On the 21st, nuclear fuel will be delivered to the reactor storage facility and from that moment on the plant can be certified as a nuclear power installation,” Rosatom spokesman Sergei Novikov said by phone in Moscow.
• PayPal Said to Talk With Google(GOOG) About Handling Android Payments.
  

Wall Street Journal:

• Rosenberg: Odds of Double Dip Higher Than 50/50.
• Stabbing-Spree Suspect Agrees to Return to Michigan. The suspect in a three-state stabbing spree that left five people dead and 13 others wounded agreed Friday to return to Michigan to face charges in one of the attacks. Elias Abuelazam, 33, was arrested Wednesday night in Atlanta before a flight to Israel, his native country, and charged with attempted murder in a July 27 knife strike in Flint that put the victim in a hospital for a week.

CNBC:

• Would Cutting Corporate Taxes Jumpstart US Economy?
• Stolen Innocence: Theft of Children's Identity Rising.
  

NY Times:

• China to Build State-Run Search Engine. In an apparent bid to extend its control over the Internet and cash in on the rapid growth of mobile devices, China plans to create its own government-controlled search engine. The new venture would be fresh competition for Baidu.com(BIDU), a private company that runs China’s dominant search engine. Baidu has seen its market share grow since Google retreated from the mainland earlier this year.

Business Insider:

• 10 Monster Bubbles Currently in the Making.

Zero Hedge:

• One Possible Explanation for the Plunging Euro: Pension Accounting Change to Impact European Deficit Calculations.

LA Times:

• News Corp.(NWS) Plans National Newspaper for Tablet Computers and Cellphones. It's the latest bid by a major media company to build readership using new devices such as the iPad. The new publication would offer short, snappy stories and operate under the auspices of the New York Post.

Politico:

• Greene Indicted on Porn Charge. South Carolina Democratic Senate nominee Alvin Greene was indicted Friday on felony charges of showing pornography to a college student. Greene, an unemployed 32-year-old military veteran, had refused to discuss the charges, which surfaced after he was the surprise winner of the state’s June Democratic primary over better-known Charleston City Councilman Vic Rawl.

USA Today:

• More Receiving Top Secret Clearance From FBI For Terrorism Cases. More state and local law enforcement officers are getting top-secret clearances from the FBI to access sensitive federal information in terrorism cases than at anytime since the Sept. 11 attacks, a USA TODAY review of bureau records shows. Clearances granted to members of the FBI's network of regional terrorism task forces jumped to 878 in 2009, up from 125 in 2007, signaling intensified attention to domestic terror threats.

Reuters:

• Hedge Funds Short Banks After Stress Tests, Results. Hedge funds have started shorting bank stocks again on concerns last month's stress tests were too weak and failed to reveal underlying problems, although many are cautious of taking big bets in such choppy markets. A wave of what some commentators have seen as good news, including a bumper earnings season, an easing of capital reforms and relatively few failures of the high-profile stress tests, have lifted banks' shares, creating an opportunity for short-sellers betting prices will fall. "Some funds have started to put on shorts again after the strong rally," said Ken Kinsey-Quick, who runs funds of hedge funds at Thames River Capital. "(Managers believe that) until they (the banks) come clean they'll be hugely volatile and remain sick for years to come. They're still sitting with a lot of loans that are not performing." Hedge fund Noster Capital has begun shorting five European banks -- Barclays (BARC.L), UBS (UBSN.VX), Intesa SanPaolo (ISP.MI), UBI (UBI.MI) and BBVA (BBVA.MC). Manager Pedro de Noronha criticized the tests for ignoring sovereign debt that banks hold to maturity.
• US Economic Growth Gauge Rises to 9-Week High - ECRI.
  

Cinco Dias:

• Spain may implement additional austerity measures if it fails to meet its budget deficit targets, citing Deputy Finance Minister Jose Manuel Campa.

China National Radio:

• Chinese Vice Premier Li Keqiang said in Beijing today that measures to tackle property speculation will be kept in place. The supply of affordable housing should be sped up, he said.

Bear Radar

Style Underperformer:

• Large-Cap Growth (-.29%)

Sector Underperformers:

• 1) Education -4.75% 2) Gold -.92% 3) Wireless -.76%

Stocks Falling on Unusual Volume:

• EBS, DLB, CAGC, TSTC, RRGB, LINC, CRZO, DEG and DV
  

Stocks With Unusual Put Option Activity:

• 1) MTG 2) SHLD 3) APOL 4) CX 5) NLY
  

Stocks With Most Negative News Mentions:

• 1) JBLU 2) JCP 3) MF 4) LLY 5) DDS
  

Bull Radar

Style Outperformer:

• Mid-Cap Value (+.20%)

Sector Outperformers:

• 1) Gaming +1.34% 2) Homebuilders +1.11% 3) Computer Hardware +.72%

Stocks Rising on Unusual Volume:

• XEC, AEE, AES, EPAY, ADSK, VIP, UNCA, RMBS, VECO, CHBT, NTAP, TTEK, BYI, SUP and PTI
  

Stocks With Unusual Call Option Activity:

• 1) ADSK 2) VPRT 3) NTAP 4) JWN 5) ADTN
  

Stocks With Most Positive News Mentions:

• 1) BX 2) AAPL 3) IBM 4) BA 5) LMT