Stocks Finish Lower, Weighed Down by Airline, Financial and Homebuilding Shares

Evening Review
Market Summary
Top 20 Biz Stories
Today’s Movers
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
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Real-Time Stock Bid/Ask
After-hours Stock Quote
After-hours Stock Chart
In Play

Stocks Lower into Final Hour on Profit-taking, Jump in Oil, Financial Sector Weakness

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Alternative Energy longs and Commodity shorts. I have not traded today, thus leaving the Portfolio 100% net long. The overall tone of the market is bearish as the advance/decline line is lower, most sectors are declining and volume is below average. Investor anxiety is above-average again. Today’s overall market action is mildly bearish. The VIX is rising .5% and remains high at 25.9. The ISE Sentiment Index hit a very low 78.0 and the total put/call hit a high 1.27. Finally, the NYSE Arms has been high most of the day and is currently 1.43. Considering the news today and recent gains, today’s low volume pullback isn’t too bad. Many market leading stocks are actually rising. As well, wireless, commodity, construction, biotech and utility shares are all higher. The announcement by Senator Dodd that he plans an April 3 hearing into the Bear Stearns(BSC) deal seems to have killed a budding rebound in financial stocks, which have been the main source of market weakness today. The Shanghai Composite(-41% from high) continues to display an inability to rally, notwithstanding recent strength in other emerging and developed markets. This is being mostly ignored in the financial press so far. Nikkei futures indicate a -86 open in Japan and DAX futures indicate an +80 open in Germany tomorrow. I expect US stocks to trade modestly higher into the close from current levels on short-covering and bargain-hunting.

Today's Headlines

Bloomberg:
- The number of mortgage applications filed in the US jumped last week as a drop in borrowing costs caused refinancing to almost double.
- Commodities rallied for the third straight day on a decline in the US dollar, a decline in US energy stockpiles and continuing historic speculation by investment funds.
- Emerging-market bonds are falling, led by Argentine securities, after a worse-than-expected report on US durable goods. The so-called spread on Argentine debt swelled 17 basis points, the most in emerging markets, to 5.52 percentage points.
- Apple Inc. has placed a manufacturing order for 109 million updated iPhones that can download from the Internet at a faster rate than current models, Gartner Inc. said. The new phones operated on third-generation, or 3G, wireless networks, analyst Ken Dulaney said today.
- Google Inc.(GOOG) led US search engines in market share for February with 58.7%. Yahoo! came in second at 17.6%.

Wall Street Journal:
- Barack Obama is drawing fire for pledging to hold direct talks with foreign adversaries, an approach both Hillary Clinton and John McCain say they will hit hard. Critics in the foreign-policy establishment and from rival presidential camps said his idea could undercut pro-Western forces and legitimize leaders whose power the US wants to undermine, including Iranian President Mahmoud Ahmadinejad. Increasingly, they are presenting his ideas as a radical departure from standard US doctrine.
- Iraqi Religious Leader Talks Helpful, McFarlane Says.

NY Times:
- Many US Muslims Turn to Home Schooling.

NY Post:
- TV journalist Charlie Gasparino has inked a $400,000 advance for a book on the collapse of Bear Stearns(BSC).

Bear Radar

Style Underperformer:

Mid-cap Value -1.69%

Sector Underperformers:

Airlines (-7.2%), Banks (-4.0%) and Homebuilders (-4.0%)

Stocks Falling on Unusual Volume:

CHIC, AMN and CCU

Stocks With Unusual Put Option Activity:

1) SIRI

2) SHPGY

3) CMI

4) IR

5) JBL

Durable Goods Orders Fall, New Home Sales Exceed Estimates

- Durable Goods Orders for February fell 1.7% versus estimates of a .7% rise and an upwardly revised 4.7% decline in January.

- Durables Ex Transports for February fell 2.6% versus estimates of a .3% decline and an upwardly revised 1.0% decline in January.

- New Home Sales for February were 590K versus estimates of 578K and an upwardly revised 601K in January.

BOTTOM LINE: Orders for US durable goods unexpectedly fell in February, Bloomberg said. Bookings for non-defense capital goods excluding aircraft, a gauge of future business spending, fell 2.6%, the most since October. Shipments of these items, used in computing GDP, fell 2.1%, the most since January 2007. Bookings for military equipment fell 10%. Orders for computers, communications equipment and electrical equipment all rose in February. I had expected GDP growth to average about 1% during the first half of the year. However, recent data suggest GDP will likely be flat during the first half, before accelerating meaningfully during the second half of the year. I expect Durable Goods Orders to bounce back sharply next month.

Sales of new homes in the US fell less than economists had forecast, Bloomberg reported. The median price declined 2.7% from a year earlier to $244,100. Sales in the Northeast fell, while sales in the South and West rose. The number of new homes for sale at the end of February fell to 471,000, the lowest since July 2005. At the current sales pace, the supply of new homes remained at 9.8 months worth. Mortgage Applications surged 48.1% as refis soared 82% and purchase applications jumped 10.6%. According to Bankrate.com, the average 30-year fixed rate mortgage has declined 36 basis points over the last two weeks to 5.72%. I continue to expect home sales to surprise on the upside this spring on pent-up demand, lower prices and lower mortgage rates.

Bull Radar

Style Outperformer:

Small-cap Growth (-.67%)

Sector Outperformers:

Oil Service (+2.8%), Energy (+2.5%) and Utilities (+.27%)

Stocks Rising on Unusual Volume:

ANR, CRK, TESO, BJS, RIO, FCX, CLWR, WSCI, CYBX, VTIV, ICLR, RMBS, ACGY, UTHR, TRAK and WAT