Monday, August 08, 2005
Monday Watch
Weekend Headlines
Bloomberg:
- China, producer of 13% of the world’s refined copper, plans to slow the expansion of smaller copper smelters as part of wider efforts to cool its economy.
- Wal-Mart Stores said August sales at its US stores open at least a year are rising within its forecast range of 3-5%.
- President Bush urged Congress to make permanent the tax cuts enacted during his first term and draft legislation to bolster the Social Security program, after lawmakers return from their August break.
- Warren Buffett’s Berkshire Hathaway, under investigation for its role in improper reinsurance accounting at AIG, said the government is inquiring about its own books.
- Seven crew members of a Russian mini-sub trapped underwater off the country’s Pacific coast surfaced alive and well after a UK underwater robot cut the vessel free of entanglements.
- GM and Toyota Motor’s joint venture in California and its union reached a tentative four-year contract agreement yesterday, averting the first work stoppage in 11 years at the state’s sole auto factory.
Forbes:
- Yahoo! is in advanced talks to buy a 35% stake in Alibaba.com, China’s biggest home-grown e-commerce company, for almost $1 billion.
New York Times:
- The FDA, which was the target of criticism by Congress over recent drug withdrawals, has responded by being more cautious and issuing more warnings.
- Delta Air Lines’ low-fare unit Song plans to begin flights between Orlando, Florida, and San Francisco later this year, as well as expanding flights between the northeastern US and Florida.
- About a dozen shipping-industry IPOs are in the Wall Street pipeline, representing about 15 to 20% of the value of prospective NY listings.
NY Post:
- NY Attorney General Eliot Spitzer began an investigation of loans made by a Bronz social services agency to Air America radio.
Time magazine:
- The US CIA plans to create an office that will try to identify threats by combing research articles, Web sites, religious tracts and other publicly available information.
Financial Times:
- Cnooc Ltd. Never got “explicit approval” from China’s government to buy Unocal Corp., contributing to the collapse of the $18.5 billion bid.
- Bear Stearns plans to start a $450 million fund investing in hedge funds that specialize in Asian markets, as more US funds target Asia to make up for waning returns at home.
London-based Times:
- The euro’s future may be at risk if countries that share the currency fail to coordinate their tax and spending policies.
Guardian:
- UK manufacturing confidence has fallen in every region of the country for the first time in two years.
Independent on Sunday:
- News Corp. made a failed bid for Skype Tecnologies SA that may have valued the Internet phone company at almost $3 billion.
AFP:
- India and Pakistan have reached agreements to reduce the risk of an accidental nuclear war.
The Business:
- Cisco Systems is considering buying mobile phonemaker Nokia Oyj following the resignation of Nokia Chief Executive Jorma Ollila.
Business Standard:
- Lehman Brothers Holdings is in talks with India’s ICICI Bank Ltd’s investment-banking unit for an alliance.
Economic Observer:
- China is prepared to take measures aimed at slowing investment inflows driven by expectations that the yuan will appreciate further.
Weekend Recommendations
Bulls and Bears:
- Had guests that were positive on GERN, CELG, THE, N, SCHL and mixed on IBM, GENZ.
Forbes on Fox:
- Had guests that were positive on YHOO, DVY, KLA and mixed on HDI.
Cashin' In:
- Had guests that were positive on CC, STZ, TR, WEN, mixed on BBY, SONC, SBUX and negative on BUD.
Cavuto on Business:
- Had guests that were positive on CAT, BA and mixed JOE.
Barron's:
- Had positive comments on AA, RGC and DWSN.
- Had negative comments on WFMI, NTAP, VNO and SPG.
Goldman Sachs:
- Reiterated Outperform on WON and DNA.
- Reiterated Underperform on DRI and FSS.
Night Trading
Asian indices are -.50% to +.50% on average.
S&P 500 indicated +.06%.
NASDAQ 100 indicated +.09%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/Estimate
AL/.61
ACF/.46
CVTX/1.52
DPH/-.51
DYN/-.12
PCLN/.37
PCU/2.55
Upcoming Splits
HANS 2-for-1
Economic Releases
None of note
Bloomberg:
- China, producer of 13% of the world’s refined copper, plans to slow the expansion of smaller copper smelters as part of wider efforts to cool its economy.
- Wal-Mart Stores said August sales at its US stores open at least a year are rising within its forecast range of 3-5%.
- President Bush urged Congress to make permanent the tax cuts enacted during his first term and draft legislation to bolster the Social Security program, after lawmakers return from their August break.
- Warren Buffett’s Berkshire Hathaway, under investigation for its role in improper reinsurance accounting at AIG, said the government is inquiring about its own books.
- Seven crew members of a Russian mini-sub trapped underwater off the country’s Pacific coast surfaced alive and well after a UK underwater robot cut the vessel free of entanglements.
- GM and Toyota Motor’s joint venture in California and its union reached a tentative four-year contract agreement yesterday, averting the first work stoppage in 11 years at the state’s sole auto factory.
Forbes:
- Yahoo! is in advanced talks to buy a 35% stake in Alibaba.com, China’s biggest home-grown e-commerce company, for almost $1 billion.
New York Times:
- The FDA, which was the target of criticism by Congress over recent drug withdrawals, has responded by being more cautious and issuing more warnings.
- Delta Air Lines’ low-fare unit Song plans to begin flights between Orlando, Florida, and San Francisco later this year, as well as expanding flights between the northeastern US and Florida.
- About a dozen shipping-industry IPOs are in the Wall Street pipeline, representing about 15 to 20% of the value of prospective NY listings.
NY Post:
- NY Attorney General Eliot Spitzer began an investigation of loans made by a Bronz social services agency to Air America radio.
Time magazine:
- The US CIA plans to create an office that will try to identify threats by combing research articles, Web sites, religious tracts and other publicly available information.
Financial Times:
- Cnooc Ltd. Never got “explicit approval” from China’s government to buy Unocal Corp., contributing to the collapse of the $18.5 billion bid.
- Bear Stearns plans to start a $450 million fund investing in hedge funds that specialize in Asian markets, as more US funds target Asia to make up for waning returns at home.
London-based Times:
- The euro’s future may be at risk if countries that share the currency fail to coordinate their tax and spending policies.
Guardian:
- UK manufacturing confidence has fallen in every region of the country for the first time in two years.
Independent on Sunday:
- News Corp. made a failed bid for Skype Tecnologies SA that may have valued the Internet phone company at almost $3 billion.
AFP:
- India and Pakistan have reached agreements to reduce the risk of an accidental nuclear war.
The Business:
- Cisco Systems is considering buying mobile phonemaker Nokia Oyj following the resignation of Nokia Chief Executive Jorma Ollila.
Business Standard:
- Lehman Brothers Holdings is in talks with India’s ICICI Bank Ltd’s investment-banking unit for an alliance.
Economic Observer:
- China is prepared to take measures aimed at slowing investment inflows driven by expectations that the yuan will appreciate further.
Weekend Recommendations
Bulls and Bears:
- Had guests that were positive on GERN, CELG, THE, N, SCHL and mixed on IBM, GENZ.
Forbes on Fox:
- Had guests that were positive on YHOO, DVY, KLA and mixed on HDI.
Cashin' In:
- Had guests that were positive on CC, STZ, TR, WEN, mixed on BBY, SONC, SBUX and negative on BUD.
Cavuto on Business:
- Had guests that were positive on CAT, BA and mixed JOE.
Barron's:
- Had positive comments on AA, RGC and DWSN.
- Had negative comments on WFMI, NTAP, VNO and SPG.
Goldman Sachs:
- Reiterated Outperform on WON and DNA.
- Reiterated Underperform on DRI and FSS.
Night Trading
Asian indices are -.50% to +.50% on average.
S&P 500 indicated +.06%.
NASDAQ 100 indicated +.09%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/Estimate
AL/.61
ACF/.46
CVTX/1.52
DPH/-.51
DYN/-.12
PCLN/.37
PCU/2.55
Upcoming Splits
HANS 2-for-1
Economic Releases
None of note
BOTTOM LINE: Asian Indices are mixed as record energy prices are offsetting economic optimism in the region. I expect US stocks to open mixed ahead of the FOMC rate decision on Tuesday. The Portfolio is 50% net long heading into the week.
Sunday, August 07, 2005
Weekly Outlook
There are several important economic reports and some significant corporate earnings reports scheduled for release this week.
Economic reports for the week include:
Mon. - None of note
Tues. - Preliminary 2Q Non-farm Productivity, Preliminary 2Q Unit Labor Costs, Wholesale Inventories, FOMC Rate Decision
Wed. - Monthly Budget Statement
Thur. - Advance Retail Sales, Initial Jobless Claims, Business Inventories
Fri. - Trade Balance, Import Price Index, Univ. of Mich. Consumer Confidence
A few of the more noteworthy companies that release quarterly earnings this week are:
Mon. - None of note
Tues. - Cisco Systems(CSCO), Clear Channel Communications(CCU), EchoStar Communications(DISH), May Department Stores(MAY), Polo Ralph Lauren(RL), Walt Disney(DIS)
Wed. - Abercrombie & Fitch(ANF), Federated Department Stores(FD)
Thur. -Analog Devices(ADI), Dell Inc.(DELL), Kohl’s Corp.(KSS), Nvidia(NVDA), Urban Outfitters(URBN)
Fri. - Target Corp.(TGT)
Other events that have market-moving potential this week include:
Mon. - Pacific Crest Tech Forum
Tue. - Pacific Crest Tech Forum, Thomas Weisel Telecommunications Connference
Wed. - CIBC Enterprise Software Conference
Thur. - CIBC Enterprise Software Conference
Fri. - None of note
Economic reports for the week include:
Mon. - None of note
Tues. - Preliminary 2Q Non-farm Productivity, Preliminary 2Q Unit Labor Costs, Wholesale Inventories, FOMC Rate Decision
Wed. - Monthly Budget Statement
Thur. - Advance Retail Sales, Initial Jobless Claims, Business Inventories
Fri. - Trade Balance, Import Price Index, Univ. of Mich. Consumer Confidence
A few of the more noteworthy companies that release quarterly earnings this week are:
Mon. - None of note
Tues. - Cisco Systems(CSCO), Clear Channel Communications(CCU), EchoStar Communications(DISH), May Department Stores(MAY), Polo Ralph Lauren(RL), Walt Disney(DIS)
Wed. - Abercrombie & Fitch(ANF), Federated Department Stores(FD)
Thur. -Analog Devices(ADI), Dell Inc.(DELL), Kohl’s Corp.(KSS), Nvidia(NVDA), Urban Outfitters(URBN)
Fri. - Target Corp.(TGT)
Other events that have market-moving potential this week include:
Mon. - Pacific Crest Tech Forum
Tue. - Pacific Crest Tech Forum, Thomas Weisel Telecommunications Connference
Wed. - CIBC Enterprise Software Conference
Thur. - CIBC Enterprise Software Conference
Fri. - None of note
BOTTOM LINE: I expect US stocks to finish the week mixed-to-lower as more hawkish comments from the Fed and worries over high energy prices more than offset economic optimism. I continue to believe we are in a consolidation phase within a significant intermediate-term move higher in the major averages. My trading indicators are still giving bullish signals and the Portfolio is 50% net long heading into the week.
Economic Week in Review
ECRI Weekly Leading Index 134.90 +.37%
Construction Spending for June fell .3% versus estimates of a .7% increase and a downwardly revised 1.7% fall in May. US construction spending unexpectedly declined for a fourth month as the pace of homebuilding slowed, Bloomberg reported. Construction spending is still 7.9% higher year-over-year. “The construction spending figures were not as weak as the headline decline might suggest, since the bulk of the pullback was again concentrated in the home improvement component,” said Stephen Stanley, chief economist at RBS Greenwich Capital.
ISM Manufacturing for July rose to 56.6 versus estimates of 54.5 and a reading of 53.8 in June. ISM Prices Paid for July fell to 48.5 versus estimates of 52.5 and a reading of 50.5 in June. US manufacturing accelerated for a second straight month in July to the best level of the year as gains in both orders and production signaled that factories may add more to economic growth this quarter, Bloomberg reported. The new orders component of index rose to 60.6 versus 57.2 in June. The prices paid component of the index fell to 48.5 last month, the lowest level in 3 years, from 50.5 the prior month. The employment component of the index rose to 53.2 versus 49.9 in June. Finally, the new export orders component rose to 55.9 from 50.4 in June. “The survey is clearly signaling an end to the industrial slowdown,” said Ian Shepherdson, chief US economist at High Frequency Economics. “This is a great start to the third quarter.”
Pending Home Sales for June rose .6% versus estimates of a .8% increase and an upwardly revised 1.5% decline in May. Contracts to buy previously owned US homes rebounded to the third highest level ever in June as buyers took advantage of the lowest long-term mortgage rates in 15 months, Bloomberg reported. The index increased .7% in the Midwest, 3.5% in the West, .4% in the South and fell 3.2% in the Northeast.
Personal Income for June rose .5% versus estimates of a .4% increase and a .2% gain in May. Personal Spending for June rose .8% versus estimates of a .8% gain and an unchanged reading in May. The PCE Core(MoM), the Fed’s favorite inflation measure, for June was unchanged versus estimates of a .1% gain and a .2% increase in May. Incomes are now up 6.6% over the last year, significantly higher than the rate of consumer inflation which is currently around the long-term average of 3.0%. The .8% gain in Personal Spending was the largest rise since July 2004. Spending on long-lasting items such as autos and furniture rose 3.3%, the most since May 2004. “These are very strong numbers and they bode well for the near-term economic outlook,” said David Resler, chief economist at Nomura Securities International.
Factory Orders for June rose 1.0% versus estimates of a 1.0% increase and an upwardly revised 3.6% gain in May. The current streak of factory gains is the longest since the November 1998 to February 1999 period. Orders for non-defense capital goods excluding aircraft, a measure of future corporate investment, rose 3.9% in June which was the largest gain since January. “With the strength in manufacturing and consumer spending, we think economic growth can average 4% in the second half of the year,” said James Knightley, an economist at ING Financial Markets. “Inventories have been driven so low that bringing them back up is going to spur production,” said John Herrmann, Director of Economic Commentary at Cantor Fitzgerald LP.
Total Vehicle Sales for July rose to 20.9M versus estimates of 18.3M and 17.5M in June. Domestic Vehicle Sales for July rose to 17.2M versus estimates of 14.5M and 14.1M in June. General Motors, Ford Motor and DaimlerChrysler, bolstered by employee discounts for all customers, led the second-biggest month ever for US auto sales, Bloomberg reported. GM said its US sales of cars and trucks rose 15%, while Ford posted a gain of 29% and DaimlerChrysler’s sales of Chrysler and Mercedes-Benz vehicles increased 25%. The three companies said they’ll continue to offer employee prices to customers through August. “When the employee-discount plans are removed, there will be a lull,” said Ford sales analyst George Pipas.
ISM Non-Manufacturing for July fell to 60.5 versus estimates of 61.5 and a reading of 62.2 in June. July sales at US services companies remained close to the three-month high reached in June, suggesting growth may accelerate in the second half of the year, Bloomberg reported. This gauge represents 87% of the US economy and is still near its all-time high of 66.9 set in April. The new orders component of the index rose to 61.9 from 59.5 the prior month. The backlogs component of the index rose to 53.5 from 52.5 and the export orders component rose to 53.5 from 50. “This is another indication that economic growth remains quite strong and is accelerating in the second half,” said Dean Maki, chief US economist at Barclays Capital.
The Unemployment Rate for July was 5.0% versus estimates of 5.0% and a reading of 5.0% in June. Average Hourly Earnings for July rose .4% versus estimates of a .2% increase and a .2% gain in June. The Change in Non-farm Payrolls for July was 207K versus estimates of 180K and an upwardly revised 166K in June. The Change in Manufacturing Payrolls for July was -4K versus estimates of -5K and -21K in June. US employers added 207,000 workers in July, a bigger increase than expected, suggesting companies are gaining confidence as the economy accelerates, Bloomberg reported. Moreover, the Unemployment Rate remained at 5.0%, near a 4-year low. An index of the number of industries hiring jumped to 62.9 in July, the highest since May 2004, Bloomberg said. Average monthly job growth is 191,000 this year versus 183,000 last year. “Short-term I’ve never seen a better economy,” said Barry Bosworth, senior economist at the Brookings Institute.
Consumer Credit for June rose to $14.5B versus estimates of $6.0B and an upwardly revised -$1.2B in May. Borrowing by US consumers rose in June by the most in eight months as Americans ran up credit card debt and financed new cars offered at discount prices, Bloomberg reported. Feeling wealthier as incomes and home prices rose, consumers kept borrowing and spending even as oil prices climbed, Bloomberg said. “The whole broad range of data suggest the consumer sector is in pretty good shape and strengthening,” said Patrick Fearon, an economist at AG Edwards.
Construction Spending for June fell .3% versus estimates of a .7% increase and a downwardly revised 1.7% fall in May. US construction spending unexpectedly declined for a fourth month as the pace of homebuilding slowed, Bloomberg reported. Construction spending is still 7.9% higher year-over-year. “The construction spending figures were not as weak as the headline decline might suggest, since the bulk of the pullback was again concentrated in the home improvement component,” said Stephen Stanley, chief economist at RBS Greenwich Capital.
ISM Manufacturing for July rose to 56.6 versus estimates of 54.5 and a reading of 53.8 in June. ISM Prices Paid for July fell to 48.5 versus estimates of 52.5 and a reading of 50.5 in June. US manufacturing accelerated for a second straight month in July to the best level of the year as gains in both orders and production signaled that factories may add more to economic growth this quarter, Bloomberg reported. The new orders component of index rose to 60.6 versus 57.2 in June. The prices paid component of the index fell to 48.5 last month, the lowest level in 3 years, from 50.5 the prior month. The employment component of the index rose to 53.2 versus 49.9 in June. Finally, the new export orders component rose to 55.9 from 50.4 in June. “The survey is clearly signaling an end to the industrial slowdown,” said Ian Shepherdson, chief US economist at High Frequency Economics. “This is a great start to the third quarter.”
Pending Home Sales for June rose .6% versus estimates of a .8% increase and an upwardly revised 1.5% decline in May. Contracts to buy previously owned US homes rebounded to the third highest level ever in June as buyers took advantage of the lowest long-term mortgage rates in 15 months, Bloomberg reported. The index increased .7% in the Midwest, 3.5% in the West, .4% in the South and fell 3.2% in the Northeast.
Personal Income for June rose .5% versus estimates of a .4% increase and a .2% gain in May. Personal Spending for June rose .8% versus estimates of a .8% gain and an unchanged reading in May. The PCE Core(MoM), the Fed’s favorite inflation measure, for June was unchanged versus estimates of a .1% gain and a .2% increase in May. Incomes are now up 6.6% over the last year, significantly higher than the rate of consumer inflation which is currently around the long-term average of 3.0%. The .8% gain in Personal Spending was the largest rise since July 2004. Spending on long-lasting items such as autos and furniture rose 3.3%, the most since May 2004. “These are very strong numbers and they bode well for the near-term economic outlook,” said David Resler, chief economist at Nomura Securities International.
Factory Orders for June rose 1.0% versus estimates of a 1.0% increase and an upwardly revised 3.6% gain in May. The current streak of factory gains is the longest since the November 1998 to February 1999 period. Orders for non-defense capital goods excluding aircraft, a measure of future corporate investment, rose 3.9% in June which was the largest gain since January. “With the strength in manufacturing and consumer spending, we think economic growth can average 4% in the second half of the year,” said James Knightley, an economist at ING Financial Markets. “Inventories have been driven so low that bringing them back up is going to spur production,” said John Herrmann, Director of Economic Commentary at Cantor Fitzgerald LP.
Total Vehicle Sales for July rose to 20.9M versus estimates of 18.3M and 17.5M in June. Domestic Vehicle Sales for July rose to 17.2M versus estimates of 14.5M and 14.1M in June. General Motors, Ford Motor and DaimlerChrysler, bolstered by employee discounts for all customers, led the second-biggest month ever for US auto sales, Bloomberg reported. GM said its US sales of cars and trucks rose 15%, while Ford posted a gain of 29% and DaimlerChrysler’s sales of Chrysler and Mercedes-Benz vehicles increased 25%. The three companies said they’ll continue to offer employee prices to customers through August. “When the employee-discount plans are removed, there will be a lull,” said Ford sales analyst George Pipas.
ISM Non-Manufacturing for July fell to 60.5 versus estimates of 61.5 and a reading of 62.2 in June. July sales at US services companies remained close to the three-month high reached in June, suggesting growth may accelerate in the second half of the year, Bloomberg reported. This gauge represents 87% of the US economy and is still near its all-time high of 66.9 set in April. The new orders component of the index rose to 61.9 from 59.5 the prior month. The backlogs component of the index rose to 53.5 from 52.5 and the export orders component rose to 53.5 from 50. “This is another indication that economic growth remains quite strong and is accelerating in the second half,” said Dean Maki, chief US economist at Barclays Capital.
The Unemployment Rate for July was 5.0% versus estimates of 5.0% and a reading of 5.0% in June. Average Hourly Earnings for July rose .4% versus estimates of a .2% increase and a .2% gain in June. The Change in Non-farm Payrolls for July was 207K versus estimates of 180K and an upwardly revised 166K in June. The Change in Manufacturing Payrolls for July was -4K versus estimates of -5K and -21K in June. US employers added 207,000 workers in July, a bigger increase than expected, suggesting companies are gaining confidence as the economy accelerates, Bloomberg reported. Moreover, the Unemployment Rate remained at 5.0%, near a 4-year low. An index of the number of industries hiring jumped to 62.9 in July, the highest since May 2004, Bloomberg said. Average monthly job growth is 191,000 this year versus 183,000 last year. “Short-term I’ve never seen a better economy,” said Barry Bosworth, senior economist at the Brookings Institute.
Consumer Credit for June rose to $14.5B versus estimates of $6.0B and an upwardly revised -$1.2B in May. Borrowing by US consumers rose in June by the most in eight months as Americans ran up credit card debt and financed new cars offered at discount prices, Bloomberg reported. Feeling wealthier as incomes and home prices rose, consumers kept borrowing and spending even as oil prices climbed, Bloomberg said. “The whole broad range of data suggest the consumer sector is in pretty good shape and strengthening,” said Patrick Fearon, an economist at AG Edwards.
BOTTOM LINE: Overall, last week's economic data were very positive. The recently passed highway bill should boost construction spending going forward. As well, increased commercial construction should offset any slowdown in residential building. There is now overwhelming evidence that manufacturing will add to economic growth going forward. The fact that the recent bounce in commodity prices has not resulted in any noticeable increases in the prices paid indices is a big positive. The rebound in pending home sales bodes well for future home sales, however a substantial moderation in home price appreciation is likely. The recent sharp jump in auto sales may temporarily damp consumer spending on smaller items. However, the strong ISM Non-Manufacturing report paints a healthy picture of the service sector going forward. An improving job market, a rising stock market and booming housing market are continuing to spurt consumer sentiment and spending. Rising incomes are one of the most underappreciated aspects of the current economic environment. The fact that the PCE Core, the Fed’s favorite inflation gauge, was unchanged in June is substantially positive. I continue to believe the Fed is currently raising rates to have ammunition for a future emergency and quell worries over housing froth, not because they are overly worried about inflation. However, if substantial employment gains persist and income increases accelerate, I will become more concerned about another acceleration of inflation readings. It is very likely the US economy will grow a robust 4%+ during the second half of the year. I continue to believe growth will slow early next year. Finally, the ECRI Weekly Leading Index rose .37% to 134.90 and is forecasting modestly accelerating healthy growth.
Saturday, August 06, 2005
Market Week in Review
S&P 500 1,226.42 -.63%*
Click here for the Weekly Wrap by Briefing.com.
*5-day % Change
Click here for the Weekly Wrap by Briefing.com.
BOTTOM LINE: Overall, last week's market performance was modestly negative as profit-taking set in after recent gains. The advance/decline line fell, most sectors declined and volume was about average on the week. Measures of investor anxiety were mostly higher. The AAII % Bulls fell sharply for the week and is now back near average levels. Mortgage rates increased again, but are still only 61 basis points away from all-time lows set in June 2003. The benchmark 10-year T-note yield continued to rise on more positive economic reports and a pullback in the US dollar. Dollar weakness, as a result of some better economic data from Europe and Japan, and rising interest rates also led to substantial underperformance by US small-cap stocks. However, technology shares outperformed on more optimism over increased spending on equipment by corporations. Moreover, Microsoft rose 8.5% for the week, boosting the major tech averages. Finally, crude oil gained again as worries over Iran intensified and a strong US economy further heightened fears of a fourth quarter supply shortfall.
*5-day % Change
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