Monday, December 17, 2007

Stocks Finish Near Session Lows on Overseas Weakness, Profit-taking

S&P 500 1,445.90 -1.50%
DJIA 13,167.20 -1.29%
NASDAQ 2,574.46 -2.32%
Russell 2000 739.06 -1.97%
Wilshire 5000 14,494.65 -1.60%
Russell 1000 Growth 601.60 -1.73%
Russell 1000 Value 784.40 -1.31%
Morgan Stanley Consumer 738.14 -1.15%
Morgan Stanley Cyclical 967.64 -2.10%
Morgan Stanley Technology 608.12 -2.41%
Transports 4,643.05 -.74%
Utilities 533.11 -1.15%
MSCI Emerging Markets 145.65 -3.76%

Total Put/Call 1.11 +6.73%
NYSE Arms 1.12 -32.75%
Volatility(VIX) 24.52 +5.37%
ISE Sentiment 106.0 -13.82%

Futures Spot Prices
Crude Oil $90.72 -.60%
Reformulated Gasoline 233.55 -.26%
Natural Gas 7.03 +.07%
Heating Oil 260.02 -.30%
Gold 796.0 -.25%
Base Metals 206.57 -1.23%
Copper 288.0 -2.59%

10-year US Treasury Yield 4.15% -8 basis points
US Dollar 77.40 -.05%
CRB Index 347.99 -.17%

Leading Sectors
Retail -.12%
Insurance -.58%
Disk Drives -.62%

Lagging Sectors
Steel -4.30%
Gold -4.40%
Airlines -5.27%

Evening Review
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
PM Market Call
After-hours Commentary
After-hours Movers

After-hours Stock Quote
In Play

Afternoon Recommendations
Bank of America:

- Rated (MFLX) Buy, target $23.

- Rated (SUNH) Outperform, target $20.
- Rated (PSYS) Underperform, target $30.

Afternoon/Evening Headlines
- Treasury Secretary Henry Paulson said Fannie Mae(FNM) and Freddie Mac(FRE), the largest sources of finance for American mortgages, may help “jump start” the market for the largest home loans.
- The US dollar may extend its rally against the euro on speculation the US government will come up with measures to mitigate subprime mortgage losses.
- General Electric(GE) won an order for 200 wind turbines from EDF Energies Nouvelles SA to help the Paris-based company expand US operations.
- Adobe Systems(ADBE), the biggest maker of graphic-design software, reported a 21% increase in profit and issued a forecast that beat analysts’ estimates on increased demand for its Creative Suite program.
- Bill Gross said mortgage-backed securities guaranteed by government-chartered companies such as Fannie Mae(FNM) and Freddie Mac(FRE) “offer very compelling value.”
- Research In Motion(RIMM), the maker of the BlackBerry e-mail device, will open a US headquarters in Irving, Texas, stepping up efforts to reach American consumers and businesses.

- The boards of directors at Citigroup Inc.(C), Merrill Lynch(MER), UBS AG(UBS) and “possibly” JPMorgan(JPM) may make emergency injections into the companies’ bonus pools. The firms are concerned that Goldman Sachs(GS), with its “intact bonus pool,” will try to hire away their “top people.”

BOTTOM LINE: The Portfolio finished lower today on losses in my Internet longs, Computer longs, Medical longs and Retail longs. I did not trade in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was very negative today as the advance/decline line finished substantially lower, every sector fell and volume was slightly below average. Measures of investor anxiety were above average into the close. Today's overall market action was bearish. Goldman Sachs(GS) reports earnings before the open in the morning. As well, we get more housing data. I want to gauge the market’s reaction to these market movers before further shifting market exposure. Gauges of credit market angst fell today and financials displayed relative strength. Recent market bottoms have been preceded by the type of severe negative action that took place today in market leading stocks. Nikkei futures are indicating a down 125 open in Japan.

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