Tuesday, March 27, 2007

Stocks Finish Lower on Economic Concerns and Profit-taking

Indices
S&P 500 1,428.61 -.62%
DJIA 12,397.29 -.58%
NASDAQ 2,437.43 -.74%
Russell 2000 802.36 -.81%
Wilshire 5000 14,420.19 -.61%
Russell 1000 Growth 561.76 -.73%
Russell 1000 Value 826.67 -.48%
Morgan Stanley Consumer 702.25 -.96%
Morgan Stanley Cyclical 958.28 -.89%
Morgan Stanley Technology 562.65 -.38%
Transports 4,852.60 -1.15%
Utilities 501.63 -.23%
MSCI Emerging Markets 115.80 -.49%

Sentiment/Internals
Total Put/Call .95 -4.04%
NYSE Arms 1.20 +24.73%
Volatility(VIX) 13.48 +2.43%
ISE Sentiment 131.0 -14.94%

Futures Spot Prices
Crude Oil 63.01 +.16%
Reformulated Gasoline 207.20 +.26%
Natural Gas 7.50 +3.39%
Heating Oil 178.91 +.73%
Gold 662.40 -.23%
Base Metals 246.74 -.04%
Copper 304.55 -2.96%

Economy
10-year US Treasury Yield 4.61% +1 basis point
US Dollar 82.97 -.13%
CRB Index 311.85 -.13%

Leading Sectors
Biotech +.59%
Telecom +.24%
Alternative Energy +.08%

Lagging Sectors
Homebuilders -1.04%
Airlines -1.10%
Gold -1.28%

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
Oppenheimer:
- Rated (TWC) Buy, target $47.

Lehman Brothers:
- Rated (BSC) and (MER) Overweight.

AG Edwards:
- Rated (GOOG), (AQNT), (MNST), (YHOO), (VCLK) Buy.

Afternoon/Evening Headlines
Bloomberg:
- Goldman Sachs’(GS) sixth buyout fund may top $20 billion, CEO Blankfein told shareholders at today’s annual meeting.
- Accenture Ltd.(ACN), the world’s second-biggest consulting firm, said profit soared. The shares rose $1 to $77.22 in after-hours trading.
- US imports of finished steel products fell 10% in February from a month earlier after rising inventories led customers to hold off placing new orders.
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, may help upgrade two Brazilian rivers to transport sugar cane-based ethanol from the country’s agricultural frontier to export markets.
- Merck’s(MRK) Vioxx painkiller didn’t contribute to an Illinois woman’s fatal heart attack in 2003, an Illinois jury decided, giving the company its 10th victory in a trial involving the drug.

Business Week:
- Beazer Homes USA(BZH), the ninth largest US homebuilder by revenue, is the target of a federal investigation into its lending and financial practices. Beazer’s mortgage arm is being probed for possible mortgage fraud by a group including the FBI, Justice Dept., Inspector General of Housing and Urban Development and IRS. The stock is falling 14% in after-hours trading.

BOTTOM LINE: The Portfolio finished slightly lower today on losses in my Retail longs and Technology longs. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was negative today as the advance/decline line finished lower, sector performance was mostly negative and volume was about average. Measures of investor anxiety were above-average into the close. Today's overall market action was mildly bearish as the major averages and breadth finished lower, but off session lows. While breadth was weak today, I had an abnormal number of stocks on my monitor pages that rose. Biotech was a standout sector today, rising about 0.59%, with a number of small/mid-cap biotechs breaking out on volume. The Homebuilding Index finished 1.04% lower; however, Lennar (LEN) finished near session highs. As well, the Case-Shiller August housing futures ticked higher today to $214,400 from $214,000. The 10-year yield was stable throughout the day at 4.61%. The U.S. Dollar Index was also stable. The underlying action today was more constructive than the major averages suggest. My intraday gauge of investor angst finished at an above-average level. I suspect we will see some more short-covering and bargain-hunting into the last few days of the quarter, considering the extent to which massive hedges were put in place earlier this month.

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