Market Week in Review

S&P 500 921.23 -2.64%*

Click here for the Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices
S&P 500 921.23 -2.64%
DJIA 8,539.73 -2.95%
NASDAQ 1,827.47 -1.69%
Russell 2000 512.72 -2.68%
Wilshire 5000 9,348.41 -2.77%
Russell 1000 Growth 410.47 -2.27%
Russell 1000 Value 465.51 -3.31%
Morgan Stanley Consumer 558.93 -1.42%
Morgan Stanley Cyclical 553.18 -6.20%
Morgan Stanley Technology 450.89 -2.41%
Transports 3,219.77 -4.21%
Utilities 351.63 -1.86%
MSCI Emerging Markets 31.89 -5.77%

Sentiment/Internals
NYSE Cumulative A/D Line 32,435 -10.45%
Bloomberg New Highs-Lows Index -45 -287.50%
Bloomberg Crude Oil % Bulls 16.0 -67.35%
CFTC Oil Large Speculative Longs 201,362 -1.53%
Total Put/Call .89 +2.30%
OEX Put/Call .99 -18.85%
ISE Sentiment 117.0 -26.42%
NYSE Arms .93 -5.10%
Volatility(VIX) 27.99 -.57%
G7 Currency Volatility (VXY) 14.41 -76%
Smart Money Flow Index 8,219.79 -1.47%
AAII % Bulls 33.33 -15.08%
AAII % Bears 46.43 +18.29%

Futures Spot Prices
Crude Oil 69.60 -3.65%
Reformulated Gasoline 193.27 -5.44%
Natural Gas 4.06 +4.14%
Heating Oil 179.50 -2.70%
Gold 935.40 -.45%
Base Metals 151.25 -3.27%
Copper 225.30 -5.64%
Agriculture 319.72 -5.51%

Economy
10-year US Treasury Yield 3.78% -1 basis point

U.S. Sovereign Debt Credit Default Swap 44.0 +2.32%

10-year TIPS Spread 1.93% unch.
TED Spread 44.0 -2 basis points
N. Amer. Investment Grade Credit Default Swap Index 138.87 +11.55%
Emerging Markets Credit Default Swap Index 410.88 +8.91%
Citi US Economic Surprise Index +54.50 -11.95ffip%
Fed Fund Futures imply 88.0% chance of no change, 12.0% chance of 25 basis point cut on 6/24
Iraqi 2028 Govt Bonds 66.25 -1.67%
4-Wk MA of Jobless Claims 615,800 -1.1%
Average 30-year Mortgage Rate 5.38% -21 basis points
Weekly Mortgage Applications 514,400 -15.81%
Weekly Retail Sales -4.60%
Nationwide Gas $2.69/gallon +.05/gallon
US Cooling Demand Next 7 Days 24.0% above normal
ECRI Weekly Leading Economic Index 117.10 +.77%
US Dollar Index 80.36 +.2%
Baltic Dry Index 4,073 +16.94%
CRB Index 252.79 -3.61%

Best Performing Style
Large-cap Growth -2.27%

Worst Performing Style
Mid-cap Value -3.80%

Leading Sectors
HMOs +10.14%
Education +3.61%
Medical Equipment +1.50%
Biotech +1.08%
Drugs +1.03%

Lagging Sectors
Steel -6.99%
Oil Tankers -7.24%
Energy -7.42%
Oil Service -9.20%
Coal -12.02%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Finish Higher, Boosted By Gaming, HMO, Bank and Tech 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 Futures
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 Higher into Final Hour on Lower Energy Prices, Falling Long-Term Rates, Short-Covering

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Biotech longs, Medical longs and Technology longs. I covered all my (IWM)/(QQQQ) hedges today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are rising and volume is heavy. Investor anxiety is high. Today’s overall market action is mildly bullish. The VIX is falling 5.66% and is high at 28.33. The ISE Sentiment Index is below average at 113.0 and the total put/call is slightly above average at .90. Finally, the NYSE Arms has been running above average most of the day, hitting 1.41 at its intraday peak, and is currently .97. The Euro Financial Sector Credit Default Swap Index is falling 2.06% today to 113.05 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is falling 1.8% to 138.87 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is rising .72% to 44 basis points. The TED spread is now down 420 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is rising 1.2% to 49.25 basis points. The Libor-OIS spread is falling .77% to 37 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is rising 2 basis points to 1.93%, which is down 71 basis points since July 7th. The 3-month T-Bill is yielding .17%, which is unch. today. The Nasdaq is substantially outperforming the other major averages today, despite weakness in (RIMM) shares. The sell-off in (RIMM) looks overdone to me ahead of many new product announcements over the coming months. (MSFT) has recently become a positive influence on the Naz instead of a drag. The stock looks the best it has in a long time technically, which could further propel Nasdaq outperformance. The weakness in oil is noteworthy given today’s dollar weakness and worries over a flare-up in violence in Iran over the weekend. On the negative side, breadth continues to underwhelm. Nikkei futures indicate an +109 open in Japan and DAX futures indicate a -4 open in Germany on Monday. I expect US stocks to trade modestly higher into the close from current levels on lower energy prices, short-covering, lower long-term rates and less financial sector pessimism.

Today's Headlines

Bloomberg:

- General Electric Co.(GE) objects to elements of U.S. President Barack Obama’s financial-system overhaul that analysts said may force the parent company to cleave away its GE Capital finance unit.

- California’s credit rating, already the lowest among U.S. states, may be cut several levels by Moody’s Investors Service as government leaders seek ways to eliminate a $24 billion budget deficit. The move would affect $72 billion of debt, Moody’s said in a statement today. California’s full faith and credit pledge is rated A2 by Moody’s, five steps below top investment grade.

- Supreme Leader Ayatollah Ali Khamenei said the re-election of President Mahmoud Ahmadinejad was valid and warned of a crackdown on Iran’s “political elites” should protests continue. “Street demonstrations should end,” Khamenei said in a sermon at Friday prayers in Tehran. “If they don’t, leading politicians will be held accountable for the chaos.” He said terrorist acts have been committed against police and militia. “For someone who wants to commit a terrorist act, what is better than to hide amidst a crowd of protesters and marchers?”

- U.S. defense officials will urge Chinese leaders next week to step up action in support of international penalties against North Korea and to reveal more of their military plans and intentions.

- Crude oil fell more than $1 a barrel and gasoline tumbled the most in two months on speculation that supplies of the motor fuel will climb as refineries bolster output and imports gain. Gasoline inventories rose 3.39 million barrels to 205 million last week, the biggest increase since January, the Energy Department said on June 17. Total daily demand for fuels is 6 percent lower than a year ago.

Wall Street Journal:

- Chinese regulators have ordered Google Inc.(GOOG) to suspend search services for foreign Web sites via its Chinese Web site, the official Xinhua News Agency reported Friday, a day after the company was warned over the pornographic content available through its search engine.

CNBC:

- Signs that unemployment pains may be easing in individual US states in April disappeared by May, when jobless rates jumped in 48 states and the District of Columbia, according to data released on Friday.

- The high cost of securing health insurance for all Americans, the top domestic priority of President Obama, has Congressional Democrats scrambling to scale back their proposals or find ways to trim tens of billions of dollars a year from existing health programs.

Fox News:

- The U.S. military is planning to intercept a flagged North Korean ship suspected of proliferating weapons material in violation of a U.N. Security Council resolution passed last Friday, FOX News has learned. The USS John McCain, a navy destroyer, will intercept the ship Kang Nam as soon as it leaves the vicinity off the coast of China, according to a senior U.S. defense official. The order to interdict has not been given yet, but the ship is getting into position.

CNN:

- Just recently, President Obama took to interfering in the Middle East by scolding Israel for its treatment of Palestinians and its settlements in the West Bank. Yet now, in a real disappointment to anyone who values freedom, Obama has declared his reluctance to "meddle" in the aftermath of the disputed Iranian presidential election even as hundreds of thousands of protesters put themselves at risk on the streets of Tehran. Sometimes, the only correct course of action is to meddle. Here you have the brutal repression of political dissent, the suppression of free speech and the beating and gunning down of dissidents. College students are reportedly being beaten in their dormitories by government thugs and threatened with worse if they don't stop protesting. In the street, armed police officers whale on old ladies and teenagers with clubs, as demonstrators carry unconscious comrades bleeding from head wounds. And -- in what served as my wake-up call -- the government shut down foreign media coverage by revoking the press credentials of foreign correspondents and restricting them to their hotels. That was an ominous sign of what may be coming. With the curtain drawn, Iranian President Mahmoud Ahmadinejad must think he can crush his opponents once and for all and the world will be none the wiser.

Rassmussen:

- Most adults in Michigan (69%) say the government should sell its shares in General Motors and Chrysler as soon as possible. A new Rasmussen Reports telephone survey in the state finds that only 13% think the government should hold on to the companies, both based in Michigan, for a long time.

Politico:

- While businesses across the country are cutting back, members of the House saw their own office budgets increase by an average of 7 percent between 2008 and 2009. House officials say the increase is because of — not in spite of — the nation’s economic woes. “The demands on member offices have increased dramatically during our nation’s current financial crisis, and staff have been called on to work harder and smarter to ensure that we are meeting those growing needs,” Rep. Robert Brady (D-Pa.), chairman of the Committee on House Administration, said in a statement provided to POLITICO. An office’s budget — called the Member’s Representational Allowance — is meant to cover the day-to-day costs of running a congressional office: staff payroll, travel expenses, rent for district offices and the like. The average MRA for 2009 is nearly $1.5 million, up almost $100,000 over 2008. While House members have given up the automatic pay raise they would have gotten for 2010, they haven’t turned down the 7 percent hike in their 2009 MRAs — an increase that outstrips the inflation rate, the consumer price index and the 5.8 percent cost-of-living adjustment for recipients of Social Security.

- President Obama's campaign for health care reform by this fall, once considered highly likely to succeed, suddenly appears in real jeopardy. Top White House advisers, especially chief of staff Rahm Emanuel, are still privately predicting massive changes to the health care system in 2009. But for the first time, Democrats on Capitol Hill and in the administration are expressing frank worries about stronger-than-expected opposition from moderate Democrats and worse-than-expected estimates for how much the plan could cost.

Reuters:
- China Unicom, one of China's top three mobile carriers, may be close to a deal that would see it become the exclusive seller of Apple's (AAPL) iPhones in China for two years, a Merrill Lynch analyst said. "Our industry checks reveal that Unicom and Apple have most likely reached a deal for an exclusive 2-plus year agreement," analyst Cynthia Meng wrote in a research note dated June 18. "We expect iPhone products to be available in conjunction with the Unicom commercial scale 3G launch in Q4, starting on Oct 1."

- The overhaul announced Wednesday includes a provision to "establish a fiduciary duty for broker-dealers offering investment advice," to help empower the U.S. Securities and Exchange Commission to increase fairness for investors. Brokers must now simply put clients in suitable investments, not necessarily ones that are less costly or more tax-friendly. Brokers could not ordinarily plow a retiree's investable assets into risky stocks or illiquid investments, for example. The newspaper said a new fiduciary standard would require brokers to disclose potential conflicts of interest, and could also expose them to more lawsuits.

- Federal Reserve Bank of Kansas City President Thomas Hoenig said on Friday that the U.S. central bank was thinking seriously about its exit strategy, but inflation was not yet an imminent danger. "I think the inflation outlook is one that is for the longer term. But I think ... the role of the central bank is to think longer term. And therefore we have to be mindful of that, and that is what this focus on an exit strategy is all about," he told CNBC Television in an interview.

- Texas billionaire Allen Stanford and four associates were indicted on fraud, conspiracy and obstruction charges in a $7 billion pyramid scheme to bilk investors, U.S. Justice Department officials announced on Friday.

Financial Times:
- Banks and insurers may no longer be able to book gains on falls in the value of their own debt under proposals being considered that could remove one of the most controversial elements of mark-to-market accounting. The International Accounting Standards Board (IASB) on Thursday called for comments on the issue, which centers around whether companies can take into account the market’s view of their creditworthiness when reporting liabilities. This means that, when the price of a bank’s debt falls, the bank can write down the value of its liability and report the difference in price as a gain. In theory this reflects the fact that the bank could then buy the bonds back at the lower price, but critics claim the practice flatters earnings because the weaker price probably reflects a bank in trouble, and risks under-reporting the true extent of someone’s liabilities. The plunge in bank debt prices in the past two years means many banks have reported large gains from reporting market prices, although the recent rally will take the gloss off those gains and will mean potentially booking losses.

Bear Radar

Style Underperformer:
Large-cap Value (-.18%)

Sector Underperformers:
Education (-1.42%), Utilities (-1.24%) and Energy (-1.18%)

Stocks Falling on Unusual Volume:
IOC, SSL, VRUS, HES, CHDX, STRL, RIMM, MDS, ITG, TUC and TKG

Stocks With Unusual Put Option Activity:
1) EOG 2) LO 3) APWR 4) MEE 5) NAV