Tuesday, May 31, 2005

Stocks Finish Modestly Lower on Growth Concerns and a Rebound in Oil Prices

S&P 500 1,191.50 -.61%
DJIA 10,467.48 -.71%
NASDAQ 2,068.22 -.36%
Russell 2000 616.71 -.03%
DJ Wilshire 5000 11,778.43 -.47%
S&P Barra Growth 575.74 -.72%
S&P Barra Value 611.31 -.50%
Morgan Stanley Consumer 584.50 -.70%
Morgan Stanley Cyclical 720.28 -.75%
Morgan Stanley Technology 478.84 -.53%
Transports 3,599.58 -.65%
Utilities 363.33 +.23%
Put/Call .97 +19.75%
NYSE Arms 1.55 +25.94%
Volatility(VIX) 13.29 +9.38%
ISE Sentiment 192.00 +12.28%
US Dollar 87.76 +.94%
CRB 300.83 -.02%

Futures Spot Prices
Crude Oil 52.14 +.56%
Unleaded Gasoline 146.94 -.40%
Natural Gas 6.43 +.94%
Heating Oil 145.19 +.42%
Gold 419.10 -.85%
Base Metals 120.86 -.97%
Copper 145.10 +.52%
10-year US Treasury Yield 3.98% -2.16%

Leading Sectors
Airlines +1.11%
Hospitals +.88%
I-Banks +.78%

Lagging Sectors
Biotech -.98%
Computer Hardware -1.20%
Oil Tankers -1.71%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on DIS, BSX, MSFT and BC.

Afternoon/Evening Headlines
- United Airlines and the Machinists union reached an agreement on concessions from about 20,000 bad handlers, reservation agents and customer-service workers, the final labor accord the carrier sought to help exit bankruptcy.
- Walt Disney’s ABC broadcast television network said advance advertising sales for next season rose about 30% to $2.7 billion after ABC gained viewers with hits including “Desperate Housewives.”
- US Treasuries rose the most in three months after an index of Chicago-area business fell more than forecast and a reading of inflation fell, pushing 10-year yields below 4% for the first time since February.

Financial Times:
- Chinese publicly traded companies should prepare for the sale of unlisted, state-owned shares.

Nihon Keizai:
- Yahoo Japan Corp. will work with Nikko Cordial Securities and E*Trade Securities to begin brokerage business as early as August.

BOTTOM LINE: The Portfolio finished higher today on gains in my Internet longs and Base Metal and Energy-related shorts. I did not trade in the afternoon, thus leaving the Portfolio 50% net long. The tone of the market was mildly negative today as the advance/decline finished slightly lower, most sectors declined and volume was light. Measures of investor anxiety were mostly higher into the close. Overall, today’s market action was slightly negative. I expect economic data tomorrow to come in mixed, resulting in another mildly negative day for stocks. An ISM reading below 50, which I expect, would make it very hard for the Fed to continue raising rates at the current pace. I continue to expect 10-year T-note yields to test 04 lows over the coming weeks.

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