Tuesday, December 27, 2005

Stocks Finish Near Session Lows, Led by Energy Shares

S&P 500 1,256.54 -.96%
DJIA 10,777.77 -.97%
NASDAQ 2,226.89 -1.0%
Russell 2000 676.58 -1.44%
DJ Wilshire 5000 12,566.31 -1.0%
S&P Barra Growth 600.91 -1.03%
S&P Barra Value 651.33 -.88%
Morgan Stanley Consumer 595.44 -.60%
Morgan Stanley Cyclical 786.89 -.75%
Morgan Stanley Technology 528.46 -.84%
Transports 4,216.26 -1.18%
Utilities 409.02 -.64%
Put/Call .88 +27.54%
NYSE Arms 1.66 +27.86%
Volatility(VIX) 11.57 +12.66%
ISE Sentiment 197.00 +23.13%
US Dollar 91.17 +.43%
CRB 324.59 -.53%

Futures Spot Prices
Crude Oil 57.80 -.62%
Unleaded Gasoline 151.30 -.03%
Natural Gas 10.97 -.43%
Heating Oil 163.65 -.03%
Gold 510.10 unch.
Base Metals 153.51 +.63%
Copper 206.95 +.10%
10-year US Treasury Yield 4.33% -.98%

Leading Sectors
Airlines +1.55%
Homebuilders -.05%
Telecom -.15%

Lagging Sectors
Coal -1.98%
Energy -2.82%
Oil Service -3.13%

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 BSX.

Afternoon/Evening Headlines
- First Data Corp. shares rose as much as 1.6% after a report today that the company is in discussions with unidentified private equity firms about a sale of its Western Union subsidiary.
- Poland’s two-month-old government plans to keep soldiers in Iraq next year, countering the previous cabinet’s pledge to pull out of the US-led operation by this week.
- Fidelity National Financial, the biggest US title insurer, agreed to buy Sedgwick CMS Holdings for $635 million to offer third-party claims management services to Fortune 500 companies.
- Natural gas futures plunged 10%, the largest one-day drop in almost 3 years, as warmer-than-normal weather slashed demand for the furnace fuel.
- US Treasury notes rose on speculation a decline in 10-year yields to below two-year yields may foreshadow an economic slowdown.
- Hurricanes Katrina, Rita and Wilma may cost insurers $57.6 billion, more than double the annual record for US natural disasters, a consulting firm said.

- Iraq’s political leaders plan to meet their country’s interim president in his Kurdish homeland in the next few days to lay the groundwork for a new government, citing a senior government official.

- Mortgage-backed securities are attractive because of their high yields relative to government and corporate debt and their credit quality, Paul McCulley, a managing director at PIMCO said.
BOTTOM LINE: The Portfolio finished lower today on losses in my Medical longs, Internet longs and Semi longs. I covered some of my IWM and QQQQ shorts, thus leaving the Portfolio 75% 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 very light. Measures of investor anxiety were mostly higher into the close. The 4-basis-point decline in the 10-year Treasury note yield, besides energy declines, worried traders today. I continue to believe U.S. growth is slowing to average rates from vigorous levels before the hurricanes. This, combined with decelerating inflation readings and rising demand for U.S. assets, helped boost bonds. I do not believe bond gains are foreshadowing a meaningful slowdown in U.S. economic activity.

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