Tuesday, May 30, 2006

Stocks Finish Sharply Lower on Economic Worries

Indices
S&P 500 1,259.88 -1.58%
DJIA 11,094.43 -1.63%
NASDAQ 2,164.74 -2.06%
Russell 2000 711.04 -2.54%
Wilshire 5000 12,686.26 -1.62%
S&P Barra Growth 583.92 -1.60%
S&P Barra Value 674.11 -1.57%
Morgan Stanley Consumer 601.92 -1.12%
Morgan Stanley Cyclical 826.36 -1.93%
Morgan Stanley Technology 499.49 -2.15%
Transports 4,578.80 -2.07%
Utilities 400.39 -.93%
Put/Call 1.17 +58.11%
NYSE Arms 2.23 +252.05%
Volatility(VIX) 18.66 +30.86%
ISE Sentiment 101.00 -30.82%
US Dollar 84.35 -.81%
CRB 347.88 +.02%

Futures Spot Prices
Crude Oil 71.90 -.18%
Unleaded Gasoline 214.00 -.46%
Natural Gas 6.13 +.20%
Heating Oil 200.39 +1.18%
Gold 662.00 +.23%
Base Metals 232.86 -3.46%
Copper 368.90 +.41%
10-year US Treasury Yield 5.07% +.52%

Leading Sectors
Broadcasting +.12%
HMOs -.38%
Hospitals -.80%

Lagging Sectors
Internet -3.75%
Airlines -3.92%
Steel -5.04%

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:
- Emerging-market stocks resumed their decline on concern global growth will slow.
- Engelhard Corp.(EC), inventor of the catalytic converter, accepted a sweetened $5 billion takeover offer from BASF AG of Germany, ending five months of negotiations that began with a hostile bid.
- The US dollar fell the most in six weeks against the euro on speculation Treasury secretary nominee Henry Paulson won’t trey to stop a slide in the US currency.

CNBC:
- Quest Diagnostics(DGX) may make a counteroffer for Fisher Scientific(FSH), which agreed this month to be bought by Thermo Electron, Mergermarket.com reported.
BOTTOM LINE: The Portfolio finished lower today on losses in my Networking longs, Semi longs and Medical longs. I added to my (EEM), (IWM) and (QQQQ) shorts in the final hour, 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 below average. Measures of investor anxiety were higher into the close. Overall, today's market performance was bearish. The market's inability to even stage a modest bounce today was telling. As well, the 10-year yield remained higher throughout the day, even as stock losses worsened. A retest of recent equity lows appears imminent as economic data disappoint. On the positive side, today's sell-off was accompanied by below-average volume and measures of investor angst were elevated. The NYSE Arms closed at a very high 2.23. Moreover, the ISE Sentiment Index closed down 31%, to a depressed level. Tomorrow's Chicago Purchasing Manager report and Fed minutes may further stoke recession fears. I continue to believe U.S. growth is just slowing, not plunging, and that the recent correction presents a very attractive opportunity for longer-term investors.

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