U.S. Week Ahead by MarketWatch (video).
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on rising global growth fears, rising Eurozone debt angst, US "fiscal cliff" concerns, increasing Mid-east unrest, high food/energy prices, more shorting, earnings worries and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.

Market Week in Review

S&P 500 1,440.67 -1.33%*



The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,440.67 -1.33%
• DJIA 13,437.10 -1.05%
• NASDAQ 3,116.22 -2.0%
• Russell 2000 837.45 -2.11%
• Value Line Geometric(broad market) 359.58 -2.03%
• Russell 1000 Growth 670.30 -1.57%
• Russell 1000 Value 710.86 -1.16%
• Morgan Stanley Consumer 835.84 -.56%
• Morgan Stanley Cyclical 968.70 -2.98%
• Morgan Stanley Technology 684.40 -2.03%
• Transports 4,892.62 -.37%
• Utilities 475.75 +.93%
• Bloomberg European Bank/Financial Services 81.48 -4.3%
• MSCI Emerging Markets 41.54 -.46%
• Lyxor L/S Equity Long Bias 1,053.88 +.09%
• Lyxor L/S Equity Variable Bias 804.97 -.28%
• Lyxor L/S Equity Short Bias 539.64 unch.

Sentiment/Internals

• NYSE Cumulative A/D Line 156,383 -.43%
• Bloomberg New Highs-Lows Index 147.0 -22
• Bloomberg Crude Oil % Bulls 37.8 +37.8%
• CFTC Oil Net Speculative Position 231,297 -13.42%
• CFTC Oil Total Open Interest 1,555,863 -3.21%
• Total Put/Call .99 +23.75%
• OEX Put/Call .81 -17.35%
• ISE Sentiment 100.0 -7.41%
• NYSE Arms 1.69 +7.64%
• Volatility(VIX) 15.73 +12.52%
• S&P 500 Implied Correlation 48.83 -3.97%
• G7 Currency Volatility (VXY) 7.92 +.76%
• Smart Money Flow Index 11,644.82 -1.41%
• Money Mkt Mutual Fund Assets $2.576 Trillion +.3%
• AAII % Bulls 36.1 -3.7%
• AAII % Bears 36.5 +7.9%

Futures Spot Prices

• CRB Index 309.30 +.10%
• Crude Oil 92.19 -.83%
• Reformulated Gasoline 292.01 +3.26%
• Natural Gas 3.32 +7.91%
• Heating Oil 315.92 +.74%
• Gold 1,773.90 -.05%
• Bloomberg Base Metals Index 219.34 +.28%
• Copper 375.80 -.33%
• US No. 1 Heavy Melt Scrap Steel 361.33 USD/Ton -.19%
• China Iron Ore Spot 104.20 USD/Ton -2.07%
• Lumber 279.0 +.50%
• UBS-Bloomberg Agriculture 1,696.99 -.03%

Economy

• ECRI Weekly Leading Economic Index Growth Rate +3.8% +110 basis points
• Philly Fed ADS Real-Time Business Conditions Index -.5981 +8.2%
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 111.98 +.07%
• Citi US Economic Surprise Index 5.8 -14.8 points
• Fed Fund Futures imply 56.0% chance of no change, 44.0% chance of 25 basis point cut on 10/24
• US Dollar Index 79.94 +.64%
• Yield Curve 140.0 -9 basis points
• 10-Year US Treasury Yield 1.63% -12 basis points
• Federal Reserve's Balance Sheet $2.787 Trillion -.61%
• U.S. Sovereign Debt Credit Default Swap 33.04 +8.61%
• Illinois Municipal Debt Credit Default Swap 205.0 +.88%
• Western Europe Sovereign Debt Credit Default Swap Index 147.87 +11.86%
  
• Emerging Markets Sovereign Debt CDS Index 215.44 +2.15%
  
• Saudi Sovereign Debt Credit Default Swap 94.0 +6.81%
• Iraq Sovereign Debt Credit Default Swap 464.02 -2.07%
• China Blended Corporate Spread Index 415.0 +4 basis points
• 10-Year TIPS Spread 2.42% -7 basis points
• TED Spread 26.75 unch.
• 2-Year Swap Spread 13.25 +.25 basis point
• 3-Month EUR/USD Cross-Currency Basis Swap -26.25 -5.75 basis points
• N. America Investment Grade Credit Default Swap Index 100.07 +4.09%
  
• European Financial Sector Credit Default Swap Index 203.53 +11.4%
  
• Emerging Markets Credit Default Swap Index 223.28 +4.53%
  
• CMBS Super Senior AAA 10-Year Treasury Spread 97.0 +1 basis point
• M1 Money Supply $2.371 Trillion -1.81%
• Commercial Paper Outstanding 990.10 -1.80%
• 4-Week Moving Average of Jobless Claims 374,00 -3,800
• Continuing Claims Unemployment Rate 2.6% unch.
• Average 30-Year Mortgage Rate 3.40% -9 basis points
• Weekly Mortgage Applications 875.10 +2.8%
• Bloomberg Consumer Comfort -39.6 +1.2 points
• Weekly Retail Sales +2.40% -10 basis points
• Nationwide Gas $3.79/gallon -.04/gallon
• U.S. Cooling Demand Next 7 Days 25.0% above normal
• Baltic Dry Index 744.0 -3.88%
• China (Export) Containerized Freight Index 1,227.03 -.66%
• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50-18.2%
• Rail Freight Carloads 250,253 -.58%

Best Performing Style

• Large-Cap Value -1.16%

Worst Performing Style

• Small-Cap Value -2.24%

Leading Sectors

• Gaming +1.91%
• Utilities +.93%
• Computer Services +.51%
• Hospitals +.07%
• Foods -.17%

Lagging Sectors

• Networking -4.25%
• Steel -4.28%
• Oil Service -4.55%
• Coal -5.28%
• Homebuilding -6.02%

Weekly High-Volume Stock Gainers (15)

• ELOQ, EPOC, AM, KBH, THR, NEOG, WCBO, MDCA, MRLN, CSU, VPHM, MTN, NC, DORM and LBTYA

Weekly High-Volume Stock Losers (13)

• AI, PNNT, USNA, WWD, AXE, SNX, CPHD, FTNT, FWRD, FUL, JBL, VVUS and BTH

Weekly Charts
ETFs

• High-Volume Gainers
• High-Volume Losers

Stocks

• High-Volume Gainers
• High-Volume Losers

*5-Day Change

Stocks Lower into Final Hour on Rising Global Growth Fears, More Weak US Economic Data, Rising Eurozone Debt Angst, Earnings Worries

Today's Market Take:

Broad Market Tone:

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

Equity Investor Angst:

• VIX 15.57 +4.92%
• ISE Sentiment Index 97.0 -24.22%
• Total Put/Call .99 +22.22%
• NYSE Arms 1.86 +191.18%

Credit Investor Angst:

• North American Investment Grade CDS Index 99.21 bps +.67%
• European Financial Sector CDS Index 203.45 bps +1.15%
• Western Europe Sovereign Debt CDS Index 150.03 +2.63%
• Emerging Market CDS Index 224.09 -.59%
• 2-Year Swap Spread 13.50 -1.0 basis point
• TED Spread 26.75 -.75 basis point
• 3-Month EUR/USD Cross-Currency Basis Swap -26.25 +.25 basis point

Economic Gauges:

• 3-Month T-Bill Yield .09% unch.
• Yield Curve 139.0 +1 basis point
• China Import Iron Ore Spot $104.20/Metric Tonne unch.
• Citi US Economic Surprise Index 5.8 -3.0 points
• 10-Year TIPS Spread 2.42 -2 basis points

Overseas Futures:

• Nikkei Futures: Indicating -25 open in Japan
• DAX Futures: Indicating +19 open in Germany

Portfolio:

• Slightly Higher: On gains in my Biotech sector longs and index hedges
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short
• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg:

• Spain Banks Have $76 Billion Capital Deficit in Stress Test. Spain’s banks have a capital deficit of 59.3 billion euros ($76.3 billion), less than previously estimated, according to a test designed to lift doubts about a financial industry hit by real estate losses. The Bankia (BKIA) group, a nationalized lender, had a 24.7 billion-euro capital deficit in the tests conducted by management consultants Oliver Wyman that also showed Banco Popular Espanol SA (POP) had a 3.22 billion-euro shortfall. The stress tests of 14 lenders showed no capital deficit for seven banks, including Banco Santander SA, Banco Bilbao Vizcaya Argentaria SA (BBVA) and Banco Sabadell SA, the Bank of Spain and Economy Ministry said in a joint statement today.  
• U.K. AAA Rating Now Faces Greater Downgrade Risk, Fitch Says. The U.K. faces an increased risk of a downgrade to its top credit rating after Fitch Ratings said that government debt will peak at a higher level and later than it previously predicted. Fitch affirmed Britain’s AAA level and kept the nation on negative outlook, according to a statement released today in London. The ratings company said it doesn’t expect to resolve the question mark hanging over the top grade until 2014. “The negative outlook on the U.K. rating reflects the very limited fiscal space, at the ’AAA’ level, to absorb further adverse economic shocks in light of the U.K.’s elevated debt levels and uncertain growth outlook,” Fitch said in the statement. “Weaker than expected growth and fiscal outturns in 2012 have increased pressure on the U.K.’s AAA rating.”
• ECB’s Asmussen Joins IMF in Warning Greece May Need More Aid. European Central Bank Executive Board member Joerg Asmussen said Greece may need more aid, joining the International Monetary Fund in expressing doubt that the two existing bailouts will suffice. Even if Greece meets its budget goals, “there could be additional need for external financing because, for example, growth is worse than was initially anticipated,” Asmussen said at an event in Berlin today. Such financial aid can only come “from the member states of the euro zone,” he said, ruling out ECB involvement because that would be “prohibited monetary state financing.” The comments mean two thirds of the so-called troika that’s inspecting Greece’s financial position have now publicly spoken about the possible need for an additional bailout.
• Hollande Raises Tax on Rich, Companies to Cut French Deficit. President Francois Hollande’s first annual budget raised taxes on the rich and big companies and included a minimum of spending cuts to reduce the deficit. The 2013 blueprint relies on 20 billion euros ($26 billion) in tax increases, including a levy of 75 percent on incomes over 1 million euros, and eliminating limits on the wealth tax. Hollande aims to reduce spending by 10 billion euros, bringing the deficit to 3 percent of output from 4.5 percent in 2012. The budget predicts growth of 0.8 percent.  
• Spanish Bonds Have Weekly Drop Amid Bailout-Request Speculation. Spain’s 10-year bonds had a weekly decline as the nation held off from seeking a bailout that would enable the European Central Bank to buy its debt. The securities erased an intra-day decline, and the market closed before stress tests conducted by management consultants Oliver Wyman showed Spain’s banks have a combined capital shortfall of 59.3 billion euros ($76.3 billion). German bunds extended their longest run of quarterly gains since 1998 even as a report showed euro-area inflation accelerated in September. French bonds rose for the first week since August as President Francois Hollande’s government delivered its budget.
• European Stocks Decline to Lowest in Three Weeks. Hennes & Mauritz AB declined 1.7 percent after SEB AB and CA Cheuvreux SA advised investors to sell the shares. Electrocomponents Plc (ECM) plunged the most in more than seven years after saying full-year profit will miss projections. Cap Gemini SA (CAP) rose 0.8 percent after Accenture Plc forecast full-year earnings that topped analyst estimates. Air France-KLM gained 4.6 percent after UBS AG upgraded the shares. The Stoxx 600 lost 1.2 percent to 268.48 at the close of trading in London, the lowest since Sept. 5, as investors awaited the stress-test report from Oliver Wyman, a New York- based management consulting firm. The gauge, which lost 2.7 percent this week, has still rallied 6.9 percent this quarter as global central banks expanded stimulus.
• S&P 500 Poised for Worst Week Since June on Economy. U.S. stocks fell, sending the Standard & Poor’s 500 Index toward its worst week since June, as business activity unexpectedly contracted in September.
• New York Plaza District Offices Empty as Banks Cut Space. Manhattan’s Plaza district, the area near Central Park that commands the nation’s highest office rents, has a glut of space as financial firms cut back and tenants seek trendier neighborhoods south of Midtown. The availability rate for offices in the Plaza submarket reached 12.3 percent last month, a two-year high, as space leased to Citigroup Inc. (C) and General Motors Co. (GM) went on the market, according to data from brokerage Colliers International. It was 10.5 percent in the third quarter of last year.

Wall St. Journal: 

• Romney: Under Obama, U.S. on Road to Greece. Republican presidential candidate Mitt Romney said in a new radio interview the U.S. economy would show little improvement and could get worse in the next two years if President Barack Obama were re-elected. Mr. Romney, speaking to WMAL in Washington, D.C., offered a range of criticisms of Mr. Obama, suggesting the White House is not showing enough leadership to head off the so-called fiscal cliff, and claiming efforts by the Federal Reserve to boost the economy have not worked. “I think you’re going to see America on the road to Greece unless we change course,” Mr. Romney said when asked what the economy would look like under Mr. Obama two years from now. He added, “I believe you’d see continued extraordinarily slow economic growth and perhaps even contraction.”
• As Yuan Tests Dollar High, Beijing Comes to Pivot Point. China's yuan on Friday briefly hit its highest level against the U.S. dollar since the launch of the modern Chinese currency-trading system in 1994, underscoring the global impact of U.S. efforts to juice its economy and raising tough questions for Beijing over whether to tolerate or stop further strengthening. Traders and analysts attributed the recent rally to renewed weakness in the dollar in the wake of the latest round of bond purchases launched by the U.S. Federal Reserve, in a move known as quantitative easing.
• Rebel Offensive Intensifies in Syria's Largest City. Rebels in Syria's largest city, Aleppo, said they are pushing into new neighborhoods as fighting intensified in a "decisive battle" to break a stalemate on a key front line in the civil war. Antigovernment fighters in Damascus said they were regrouping for a parallel push in the capital to capitalize on the momentum from an attack on army command headquarters there Wednesday, a security breach that illustrated the growing sophistication of rebel operations.

CNBC: 

• Post Office Expects to Default This Weekend...Again. The struggling U.S. Postal Service expects to default this weekend, the second time in recent months the cash-strapped agency will have missed a deadline to set aside funds for future retiree health benefits. 
• CEO Tim Cook Is ‘Extremely Sorry’ About Apple(AAPL) Maps. 
• The Drones Are Coming...And Americans Are Scared. More than a third of Americans worry their privacy will suffer if drones like those used to spy on U.S. enemies overseas become the latest police tool for tracking suspected criminals at home, according to an Associated Press-National Constitution Center poll. Congress has directed the Federal Aviation Administration to come up with safety regulations that will clear the way for routine domestic use of unmanned aircraft within the next three years.

Zero Hedge:

• China Delivers Crude Supertanker To Iran.
• Chart Of The Day: The Misery In Spain Is Everywhere... And Has Never Been Higher.
• Cue Stagflationary Recession: Chicago PMI Huge Sub-50 Miss, Back To September 2009 Levels; Prices Paid Spikes.
• Goldman(GS) Cuts Q3 GDP Forecast To Stall Speed 1.9%.

Business Insider: 

• Human Sex Trafficking Is Now Affecting America's Elite Communities.
• Obama Demands China Divest From Windfarm, And Rip Up Everything They've Already Built. 
• Check Out The Stunning Two-Page Ad China Daily Took Out In The New York Times. 
• The Chicago PMI Report Was One Of The Nastiest Pieces Of Economic Data We've Seen In A Long Time. (table) 
• SNL Mocks Obama: 'Frankly, I Might Be Long Dead' Before The Economy Gets Better. (video) 
• Libya Is Becoming A Bigger And Bigger Problem For Obama. 
• France's Soak-The-Rich Budget Scheme Has The Same Big Flaw As Spain's. 
• Income Growth Slows — Americans Forced To Reduce Their Savings Rate To Keep On Spending. 
• Food Prices Are Soaring Further Into The Danger Zone. (graph) 
• France's Economic Outlook Is Getting Darker And Social Unrest Is Brewing. 
• A Top Law School's Email Gaffe Reveals Just How Bad Things Look For Its Grads. 

 RasmussenReports: 

• Swing State Daily Tracking: 51% Disapprove of Job Obama is Doing.
• 51% Trust Romney More on Economy, 44% Trust Obama More.

Reuters: 

• Fed's Fisher says U.S. is 'drowning' in unemployment. The United States is "drowning in unemployment," its economy is running at stall speed and inflation is "not a problem," but easier monetary policy is not the answer, one of the Federal Reserve's most hawkish policymakers said on Friday. "We've had a recovery that is quite disappointing," Dallas Fed President Richard Fisher said. But without more certainty on tax policy and regulation, he said, "all the monetary accommodation in the world" will not get businesses hiring again. In particular, businesses are unable to plan for the future as long as a raft of spending cuts and tax increases dubbed the 'fiscal cliff' looms at the end of the year, he said. "A short-term fix to the fiscal cliff will do nothing but push out the envelope of indecision and we will continue to be plagued by high unemployment," Fisher said.  
• TEXT-S&P: growth in U.S. capital goods is likely to moderate. 
• Iran will stop at nothing to protect Syria-Clinton.

Telegraph:  

• French budget and Spanish bank stress tests: live. Spain has revealed that it needs almost €60bn to shore up its battered banking sector, as France's 2013 budget shows that a new 75pc tax rate will raise just €200m in extra revenue next year.

Bild:

• Hahn Says Bundesbank Mustn't Buy Bonds If Deemed Illegal. Joerg-Uwe Hahn, justice minister in the German state of Hesse said the Bundesbank mustn't participate in the ECB's announced bond-buying program if its lawyers conclude the program violates the law.

Bear Radar

Style Underperformer:

• Small-Cap Value -.41%

Sector Underperformer:

• 1) Oil Tankers -2.20% 2) Networking -1.50% 3) Restaurants -1.20%
  

Stocks Faling on Unusual Volume:

• TEF, E, HMC, TOT, FTE, AAPL, GPN, NRG, WMC, EXP, ADTN, WAIR, ENL, PHG, CAJ, CRI, MO, FWRD, FTNT, TM, CPHD, MLM, MCD, RBA, ASML, NSC, ICUI, TMH, KORS, MT and HTGC
  

Stocks With Unusual Put Option Activity:

• 1) ETP 2) UA 3) COH 4) RIMM 5) NKE
  

Stocks With Most Negative News Mentions:

• 1) BAC 2) MCD 3) WAG 4) BHI 5) ROST
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume