Tuesday, February 21, 2006

Stocks Finish Lower as Fed Signals More Rate Increases Necessary

Indices
S&P 500 1,283.03 -.33%
DJIA 11,069.06 -.42%
NASDAQ 2,262.49 -.87%
Russell 2000 726.78 -.57%
S&P Barra Growth 606.97 -.42%
S&P Barra Value 672.52 -.23%
Morgan Stanley Consumer 601.91 -.40%
Morgan Stanley Cyclical 798.84 -.43%
Morgan Stanley Technology 528.31 -1.40%
Transports 4,395.22 -.21%
Utilities 411.14 +.36%
Put/Call .90 +11.11%
NYSE Arms 1.07 -11.24%
Volatility(VIX) 12.41 +3.33%
ISE Sentiment 146.00 -15.61%
US Dollar 90.60 +.20%
CRB 330.26 +1.09%

Futures Spot Prices
Crude Oil 62.50 -.38%
Unleaded Gasoline 147.00 -.39%
Natural Gas 7.77 +.50%
Heating Oil 166.10 -.32%
Gold 556.30 -.05%
Base Metals 167.79 +1.65%
Copper 226.95 -.18%
10-year US Treasury Yield 4.56% +.61%

Leading Sectors
Oil Service +3.77%
Oil Tankers +1.81%
Coal +1.80%

Lagging Sectors
Networking -1.55%
Computer Hardware -1.99%
Semis -2.17%

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
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on (HD), (TRI) and (FD).

Afternoon/Evening Headlines
Bloomberg:
- Level 3 Communications(LVLT) bonds are trading at their highest price in more than two years on prospects its cash flow will increase, two months after the long-distance phone operator defaulted on debt.
- Medtronic(MDT) said fiscal third-quarter profit rose 23% on sales of defibrillators as its biggest competitor struggled to shake off the effects of product recalls.


San Francisco Chronicle:
- California officials are working with Norcal Waste Systems, chemists and farmers to examine ways that animal waste can be transformed into methane energy.

Nikkei English News:
- Honda Motor may start selling a hybrid model of its Fit subcompact car around the world by fiscal 2007.
BOTTOM LINE: The Portfolio finished lower today on losses in my Biotech longs, Semi longs, Networking longs and Energy-related shorts. I did not trade in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was negative today as the advance/decline line finished lower, most sectors fell and volume was below average. Measures of investor anxiety were mostly higher into the close. Overall, today's performance was moderately bearish. However, it was a positive that the bears were unable to gain traction on the downside. As well, the homebuilders (HGX), which have been the source of recent angst, finished near session highs, rising .23% for the day. I will closely watch the market's reaction to tomorrow's CPI report before further shifting market exposure.

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