Market Week in Review

S&P 500 1,332.83 -2.7%*

Click here for the Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices
S&P 500 1,332.83 -2.7%
DJIA 12,325.42 -2.3%
NASDAQ 2,290.24 -3.4%
Russell 2000 688.16 -3.6%
Wilshire 5000 13,400.36 -2.7%
Russell 1000 Growth 554.94 -2.3%
Russell 1000 Value 725.80 -3.0%
Morgan Stanley Consumer 688.20 -2.0%
Morgan Stanley Cyclical 940.66 -3.3%
Morgan Stanley Technology 536.37 -3.4%
Transports 4,813.86 -3.3%
Utilities 500.12 +.4%
MSCI Emerging Markets 141.03 +.4%

Sentiment/Internals
NYSE Cumulative A/D Line 56,216 -.8%
Bloomberg New Highs-Lows Index -239
Bloomberg Crude Oil % Bulls 39.0 +34.5%
CFTC Oil Large Speculative Longs 238,230 +5.7%
Total Put/Call 1.35 +12.5%
OEX Put/Call 1.45 -5.2%
ISE Sentiment 93.0 -25.0%
NYSE Arms 2.29 +90.8%
Volatility(VIX) 23.5 +4.5%
G7 Currency Volatility (VXY) 11.9 +2.0%
Smart Money Flow Index 8,670.77 -.05%
AAII % Bulls 45.8 +24.7%
AAII % Bears 37.3 -5.3%

Futures Spot Prices
Crude Oil 110.4 +3.9%
Reformulated Gasoline 280.14 +1.7%
Natural Gas 9.88 +6.6%
Heating Oil 319.57 +6.9%
Gold 928.60 +1.5%
Base Metals 264.14 +2.7%
Copper 395.0 -.2%
Agriculture 433.89 -.1%

Economy
10-year US Treasury Yield 3.47% unch.
10-year TIPS Spread 2.33% +3 basis points
TED Spread 1.53 +17 basis points
N. Amer. Investment Grade Credit Default Swap Index 128.63 +12.7%
Emerging Markets Credit Default Swap Index 249.92 +.2%
Citi US Economic Surprise Index -98.20 -17.2%
Fed Fund Futures 54.0% chance of 25 cut, 46.0% chance of 50 cut on 4/30
Iraqi 2028 Govt Bonds 70.5 +.1%
4-Wk MA of Jobless Claims 378,300 +.7%
Average 30-year Mortgage Rate 5.88% unch.
Weekly Mortgage Applications 725,600 +5.4%
Weekly Retail Sales +1.1%
Nationwide Gas $3.37/gallon +.07/gallon.
US Heating Demand Next 7 Days 2.0% above normal
ECRI Weekly Leading Economic Index 131.90 +1.6%
US Dollar Index 71.90 -.3%
Baltic Dry Index 7,823 +1.7%
CRB Index 407.45 +3.1%

Best Performing Style
Mid-cap Value -2.2%

Worst Performing Style
Small-cap Value -3.6%

Leading Sectors
Steel +.8%
Biotech +.6%
Utilities +.4%
Oil Service +.2%
Energy +.1%

Lagging Sectors
Papers -5.1%
Homebuilders -7.0%
I-Banks -7.4%
Gaming -8.7%
Airlines -8.7%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Sharply Lower into Final Hour on Economic Pessimism, GE Earnings Report

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Medical longs, Computer longs and Alternative Energy longs. I added (IWM)/(QQQQ) hedges and added to my (EEM) short today, thus leaving the Portfolio 75% net long. The overall tone of the market is very bearish as the advance/decline line is substantially lower, almost every sector is declining and volume is below average. Investor anxiety is high. Today’s overall market action is bearish. The VIX is rising 6.1% and remains above average at 23.4. The ISE Sentiment Index is a very low 84.0 and the total put/call is a high 1.30. Finally, the NYSE Arms has been running very high most of the day and is currently 2.13. Considering the news today the financial sector is holding up better than I would have expected. The (XLF) is off session lows, down 1.3%. In my opinion, the market is severely overreacting to the (GE) news. During arguably the greatest global economic boom in history over the last five years, the company has dramatically underachieved. With market volume below average(even with the massive GE volume) and the NYSE Arms at a very high level, it wouldn’t take much buying to see a meaningful bounce into the close. I suspect we will quickly recoup much of today’s losses early next week. Nikkei futures indicate a -280 open in Japan and DAX futures indicate an +35 open in Germany on Monday. I expect US stocks to trade modestly higher into the close on short-covering and bargain hunting.

Today's Headlines

Bloomberg:
- The European Central Bank will act “wisely” to limit the economic fallout of a stronger euro, outgoing Italian Finance Minister Tommaso Padoa-Schioppa said.
- Richard Portes, president of the independent Centre for Economic Policy Research, said a hedge fund tried to convince him to talk down Iceland’s economy and banks and that he had reported the event to regulators. “They spent 30 minutes trying to convince me that Iceland is a disaster,” Portes said. “I found out later it was a senior executive, one of two founding partners at this hedge fund.”
- Washington Mutual’s(WM) full-year loss will be wider than first estimated, according to Goldman Sachs(GS) analysts, who recommended selling the shares short. “They’re in the eye of the storm in terms of the credit markets,” said Brian Horey, president of Aurelian Management LLC, who has sold Washington Mutual short. 162.9 million shares of (WM) are currently sold short.
- The cost of protecting European corporate bonds from default fell, according to traders of credit-default swaps. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-risk, high-yield credit ratings dropped 7.5 basis points to 500.5 today, according to JPMorgan. The Markit iTraxx Europe index of 125 companies with investment-grade ratings fell 3.5 basis points to 101.5. The CDX North America Investment Grade Index was little changed at 123 basis points.
- Crude oil fell in New York after the IEA cut its 2008 global oil-demand forecast for the third straight time.
- A global surplus of sugar may fall faster than estimated as Brazil, the world’s biggest cane grower, makes more ethanol and output declines in India and China.
- Goldman Sachs Group(GS) downgraded shares of General Electric(GE) to “neutral,” saying the company’s surprise first-quarter profit decline raises “credibility concerns.”

NY Post:
- JPMorgan(JPM) Lends $2 Billion to Buy Problem Loans.

BusinessWeek:
- Wall Street Firm Job Cuts May be Limited.

USA Today:
- Spending by independent political groups has more than doubled since 2004, in a sign that outside organizations are gearing up for sweeping influence in the heated presidential contest. More than $8 of every $10 spent has helped Democrats, according to the analysis of “independent expenditures” reported to the Federal Election Commission.

Forbes.com:
- Barack Obama, in remarks he planned to make to reporters Friday morning, wants Congress to pass legislation he has sponsored that would require corporations to have a nonbinding vote by shareholders on executive compensation packages.

TimesOnline:
- The new chip that will let an iPod store 500,000 songs.

Bear Radar

Style Underperformer:

Small-cap Growth -1.96%

Sector Underperformers:

Airlines (-3.97%), Semis (-2.72%) and Gaming (-2.14%)

Stocks Falling on Unusual Volume:

GE, ZRAN, INFA, ISRG, VAR, NVT, HLF and PAC

Stocks With Unusual Put Option Activity:

1) LTD 2) LNG 3) FDRY 4) IOC 5) GE

Bull Radar

Style Outperformer:

Mid-cap Value (-.23%)

Sector Outperformers:

Utilities (+.43%), Road & Rail (+.33%) and Banks (+.21%)

Stocks Rising on Unusual Volume:

TRA, SQM, TRN, BRP, CCI, TZIX, PTRY, FEED, PDLI, FAST, RTRSY, BANR, COLB, FCSX, ATLS, BBBY, UAUA, PODD, WMGI, SPWR, NNI, TWB and CYN

Stocks With Unusual Call Option Activity:

1) LTD 2) NVTL 3) PDLI 4) CVTX 5) GE