Monday, May 22, 2006

Stocks Finish Lower on Worries Over Future Growth

Indices
S&P 500 1,262.07 -.39%
DJIA 11,125.33 -.17%
NASDAQ 2,172.86 -.96%
Russell 2000 715.25 -1.01%
Wilshire 5000 12,709.79 -.52%
S&P Barra Growth 585.03 -.37%
S&P Barra Value 675.18 -.41%
Morgan Stanley Consumer 602.64 +.03%
Morgan Stanley Cyclical 823.87 -1.32%
Morgan Stanley Technology 501.44 -.77%
Transports 4,650.34 +.52%
Utilities 399.55 +.71%
Put/Call 1.21 -.82%
NYSE Arms 1.54 +72.87%
Volatility(VIX) 17.54 +3.03%
ISE Sentiment 191.00 +36.43%
US Dollar 84.33 -.65%
CRB 344.21 +1.64%

Futures Spot Prices
Crude Oil 69.23 +1.02%
Unleaded Gasoline 205.85 +.05%
Natural Gas 6.30 +.41%
Heating Oil 193.26 +.65%
Gold 656.50 -.18%
Base Metals 225.00 +1.12%
Copper 343.50 -.77%
10-year US Treasury Yield 5.03% -.44%

Leading Sectors
Broadcasting +.79%
Utilities +.71%
Tobacco +.50%

Lagging Sectors
Semis -4.19%
Alternative Energy -4.54%
Steel -4.94%

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
- None of note

Afternoon/Evening Headlines
Bloomberg:
- People over 65, who are at greatest risk of death from influenza, may need four times the standard level of flu vaccine for effective protection, researchers say.
- Investment strategists Thomas McManus of Banc of America Securities and Ed Keon of Prudential Equity Group defended US stocks amid their biggest correction in three years.
- The average US pump price for regular gasoline fell 6.4 cents to $2.88 a gallon in the week ended today, the US Energy Dept. said.

AP:
- Stephens Inc., the brokerage firm based in Little Rock, Arkansas, said it will divide its business into two segments with each controlled by different family members.

Memphis Commercial Appeal:
- FedEx Corp.(FDX) will buy trucking company Watkins Motor Lines to extend freight services into Mexico and Canada.
BOTTOM LINE: The Portfolio finished lower today as losses in my Semi longs and Medical longs more than offset gains in my Base Metal shorts and Energy-related shorts. I covered some of my (IWM) and (QQQQ) shorts 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, almost every sector fell and volume was above average. Measures of investor anxiety were mixed into the close. Overall, today's market performance was mildly bearish. The problem with today's slight comeback from morning lows is that it was led mainly by energy stocks as oil reversed higher. I don't think a broad market rally is sustainable that is led by commodities. Having said that, I am still hopeful a double bottom in the major averages occurred this morning as anxiety measures spiked higher. I will closely monitor signs of emerging leadership before becoming further convinced of a bottom in equities.

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