Monday, December 19, 2005

Stocks Finish Lower After Housing Index Unexpectedly Declines

S&P 500 1,259.92 -.58%
DJIA 10,836.53 -.36%
NASDAQ 2,222.74 -1.32%
Russell 2000 672.25 -1.59%
DJ Wilshire 5000 12,577.35 -.71%
S&P Barra Growth 603.91 -.43%
S&P Barra Value 651.53 -.74%
Morgan Stanley Consumer 600.51 +.20%
Morgan Stanley Cyclical 780.26 -.83%
Morgan Stanley Technology 525.84 -1.64%
Transports 4,108.15 -.83%
Utilities 412.14 -1.36%
Put/Call .93 +16.25%
NYSE Arms .88 -7.90%
Volatility(VIX) 11.38 +6.55%
ISE Sentiment 230.00 +23.66%
US Dollar 89.88 +.21%
CRB 326.06 -.08%

Futures Spot Prices
Crude Oil 57.40 +.10%
Unleaded Gasoline 152.69 -2.68%
Natural Gas 14.18 +.98%
Heating Oil 170.75 +.25%
Gold 506.60 +.10%
Base Metals 152.12 -.76%
Copper 201.10 -.10%
10-year US Treasury Yield 4.43% +.09%

Leading Sectors
Drugs +2.56%
Disk Drives +.01%
Telecom -.07%

Lagging Sectors
Steel -1.65%
Biotech -1.84%
Semis -2.30%

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 KR.

Afternoon/Evening Headlines
- El Paso said it agreed to sell the majority of its remaining wholesale power trading portfolio to Morgan Stanley Capital Group for $442 million.
- Ford Motor was cut to junk by Fitch Ratings amid falling sales, forcing the bonds of its finance unit out of Lehman Brothers Holdings’ investment-grade index.
- New York’s economy has been hurt by a threatened bus and subway strike as negotiations between transit workers and the state-run Metropolitan Transportation Authority approach a midnight deadline.
- Crude oil and heating oil fell to the lowest this month on forecasts that a warm weather system will move across the northern US.

Dow Jones Newswire:
- The NY Merc, the word’s largest energy market, received an expression of interest from the Chicago Merc for a possible investment stake.

BOTTOM LINE: The Portfolio finished slightly lower today on losses in my Semi longs and Airline longs. I added to my IWM and QQQQ shorts in the afternoon and took profits in a few existing longs, thus leaving the Portfolio 50% net long. The tone of the market was negative today as the advance/decline line finished substantially lower, almost every sector fell and volume was average. Measures of investor anxiety were mixed into the close. Overall, today's action was bearish as the major indices and breadth finished near session lows. This is even more disappointing for the bulls, considering another drop in oil and stable long-term rates. It appears as though investors are factoring in a substantial slowdown in consumer spending on technology products. I believe this fear will prove unfounded. However, the technical action of late leads me to conclude more sideways action is in store.

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