Market Week in Review

S&P 500 1,213.27 -3.33%*

Click here for the Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices
S&P 500 1,213.27 -3.33%
DJIA 11,143.13 -2.15%
NASDAQ 2,183.34 -3.98%
Russell 2000 704.79 -6.49%
Wilshire 5000 12,298.47 -4.04%
Russell 1000 Growth 503.34 -3.40%
Russell 1000 Value 656.96 -4.12%
Morgan Stanley Consumer 671.96 -1.61%
Morgan Stanley Cyclical 807.32 -7.35%
Morgan Stanley Technology 497.21 -4.49%
Transports 4,750.86 -6.85%
Utilities 445.11 -1.45%
MSCI Emerging Markets 35.49 -2.21%

Sentiment/Internals
NYSE Cumulative A/D Line 35,404 -9.64%
Bloomberg New Highs-Lows Index -853 -457.52%
Bloomberg Crude Oil % Bulls 28.0 -38.8%
CFTC Oil Large Speculative Longs 204,940 +1.35%
Total Put/Call 1.02 +27.50%
OEX Put/Call .77 -34.19%
ISE Sentiment 112.0 +69.70%
NYSE Arms .72 -42.40%
Volatility(VIX) 34.74 +8.33%
G7 Currency Volatility (VXY) 13.26 +2.85%
Smart Money Flow Index 7,816.12 -5.99%
AAII % Bulls 34.04 +25.1%
AAII % Bears 45.74 -15.95%

Futures Spot Prices
Crude Oil 106.89 +4.04%
Reformulated Gasoline 266.51 +3.20%
Natural Gas 7.63 -2.48%
Heating Oil 299.49 +3.63%
Gold 888.50 +1.37%
Base Metals 202.45 +1.51%
Copper 307.45 -3.73%
Agriculture 377.32 +.61%

Economy
10-year US Treasury Yield 3.85% +4 basis points
10-year TIPS Spread 1.77% -15 basis points
TED Spread 2.92 +59 basis points
N. Amer. Investment Grade Credit Default Swap Index 161.97 +3.09%
Emerging Markets Credit Default Swap Index 315.34 +1.10%
Citi US Economic Surprise Index +16.10 -52.08%
Fed Fund Futures imply 68.0% chance of 25 basis point cut, 32.0% chance of 50 basis point cut on 10/29
Iraqi 2028 Govt Bonds 67.0 +.15%
4-Wk MA of Jobless Claims 462,500 +3.6%
Average 30-year Mortgage Rate 6.09% +31 basis points
Weekly Mortgage Applications 591,400 -10.62%
Weekly Retail Sales +1.5%
Nationwide Gas $3.68/gallon -.13/gallon
US Cooling Demand Next 7 Days 1.0% below normal
ECRI Weekly Leading Economic Index 122.20 -2.24%
US Dollar Index 76.95 -.94%
Baltic Dry Index 3,746 -16.03%
CRB Index 364.57 +1.39%

Best Performing Style
Large-cap Growth -3.4%

Worst Performing Style
Small-cap Value -6.93%

Leading Sectors
Software +2.80%
Drugs +.28%
Computer Services -.67%
Medical Equipment -1.27%
Biotech -1.29%

Lagging Sectors
Banks -10.53%
Construction -12.03%
Steel -12.95%
Airlines -14.71%
Coal -14.98%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Finish at Session Highs, Led by Gaming, REIT, HMO and Financial Shares

Evening Review
Market Summary
Top 20 Biz Stories
Today’s Movers
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
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Real-Time Stock Bid/Ask
After-hours Stock Quote
After-hours Stock Chart
In Play

Stocks Mostly Lower into Final Hour on Global Growth Worries, Rescue Package Uncertainty

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Medical longs, Biotech longs, Gaming longs and Emerging Market/Commodity shorts. I haven’t traded today, thus leaving the Portfolio 100% net long. The tone of the market is negative as the advance/decline line is lower, sector performance is mixed and volume is below average. Investor anxiety is above average. Today’s overall market action is mildly bullish. The VIX is rising 6.2% and is very high at 34.94. The ISE Sentiment Index is low at 109.0 and the total put/call is above average at 1.03. Finally, the NYSE Arms has been running below average most of the day and is currently .73. The Euro Financial Sector Credit Default Swap Index is rising 13.2% today to 122.0 basis points. This index is up from a low of 52.66 on May 5^th, but down from 157.81 on Sept. 16^th. The North American Investment Grade Credit Default Swap Index is falling .58% to 161.52 basis points. The TED spread is falling 3.6% to 2.91 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is down 3 basis points to 1.76%, which is down 86 basis points in about 10 weeks and at the lowest level since July 2003, when deflation was the concern. Gauges of credit angst are mixed today, which is somewhat positive given the news. Action in the (XLF) is very encouraging. As well, the US dollar remains steady despite worries over the costs of the rescue package and weaker economic data. Oil will likely see another temporary surge on an announcement of the rescue package next week, but should begin to weaken again shortly thereafter. The Hedge Fund VIP Index(favorite longs of the hedge fund community) is falling another 2.3% today, substantially underperforming the broad market. I cautioned several months ago about the popularity of the fertilizer stocks and they are getting hit hard today. These stocks are getting oversold again short-term, but still have further downside, in my opinion. I continue to believe that most investors are still underestimating the impact of the global slowdown on commodity/infrastructure plays. One of my largest longs, (AAPL), is down today in sympathy with (RIMM). I think this is a mistake and will look to add again to my position on any meaningful downside in the shares from current levels. Nikkei futures indicate a +212 open in Japan and DAX futures indicate an +80 open in Germany on Monday. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, diminishing financial sector pessimism, lower credit market angst, falling commodity prices and bargain-hunting.

Today's Headlines

Bloomberg:
- President George W. Bush said Congress would resolve any disagreements and approve a financial rescue, as the Senate's Democratic and Republican leaders vowed Congress would stay in session until a deal is reached. ``We are going to get a package passed,'' Bush said in a statement at the White House today. ``We will rise to the occasion, where Republicans and Democrats will come together and pass a substantial rescue plan.''

- Terra Industries Inc.(TRA) plummeted to the lowest in almost a year after an analyst at Citigroup Inc. said prices for nitrogen-based crop nutrients may extend declines. Terra dropped $7.88, or 21 percent, to $30.02 at 11:32 a.m. in New York Stock Exchange composite trading. A close at that price would be the lowest since Oct. 8. Sioux City, Iowa-based Terra tumbled 21 percent this year through yesterday. Terra, the largest U.S. maker of liquid-nitrogen fertilizer, was downgraded to ``hold'' from ``buy'' after prices for urea, a form of nitrogen-based fertilizer, lost 15 percent in the past week, analyst Brian Yu said in a note to clients. Citigroup also downgraded Calgary-based Agrium(AGU) Inc. and Deerfield, Illinois-based CF Industries Holdings Inc.(CF). ``The risk is that urea prices continue to decline as buyers delay their purchases and draw down inventories deeper than usual in anticipation of even lower prices,'' Yu said.

- JPMorgan Chase & Co.(JPM) raised $10 billion in a stock sale to cover writedowns and losses after taking on deposits and branches of Washington Mutual Inc., the biggest U.S. savings and loan, for $1.9 billion. The stock is rising 6.8% on the news.

- Sadia SA and Aracruz Celulose SA, two of Brazil's largest exporters, reported losses on bad currency bets, spurring speculation more producers in the commodities-driven economy are at risk from the real's 16 percent tumble since Aug 1.

- Secretary of State Condoleezza Rice asked the United Nations Security Council to hold an emergency meeting to condemn Iranian President Mahmoud Ahmadinejad's speech this week in which he said Israel was on a ``slope to collapse.'' Rice, speaking at a council meeting called by Arab leaders to discuss Israeli settlement construction in the West Bank and Gaza Strip, said Ahmadinejad's statements that the Jewish state should be destroyed were a greater threat to peace in the region. ``This is simply unacceptable,'' the U.S. secretary of State said. ``The U.S. will ask the Security Council to convene again to take up the matter.''

- Excel Maritime Carriers Ltd.(EXM) fell as much as 15 percent and Genco Shipping & Trading Ltd.(GNK) declined 12 percent as shipping rates for raw commodities fell to the lowest since August 2006 amid an iron-ore pricing standoff. Excel traded as low as $16.75 and was down $2.25, or 11 percent, to $17.48 at 11:21 a.m. in New York Stock Exchange composite trading. Genco fell as low as $34.58 and was down $4.62, or 11 percent, to $35.90. DryShips Inc. fell as low as $39.28 and was down $3.56, or 8.2 percent, to $39.92. Eagle Bulk Shipping Inc. was down $1.04, or 5.9 percent, to $16.54. Diana Shipping Inc. fell $1.11, or 5.1 percent, to $20.48. ``There is no change in direction in the dry-bulk market, with rates continuing to fall hard as steel prices come under pressure,'' Omar Nokta, an analyst at Dahlman Rose & Co. in New York, said. The Bloomberg Dry Ships Index, which includes 12 shipping companies, fell 6.9 percent to 2,928.04. The index has fallen 46 percent in the past year, compared with a loss of 19 percent for the Standard & Poor's 500 Index.

Wall Street Journal:

- McCain Agrees to Tonight’s Debate, Citing Progress on Bailout.

- Honda Motor Co. will delay opening its second car factory in India by at least six months to mid-2010, as the company is concerned growth in the market may slow.

NY Post:

- The squeeze on short sellers could continue even after the Securities and Exchange Commission's ban on short selling is lifted - and this time, it will have nothing to do with government intervention. At issue is a behind-the-scenes discussion about a little-known practice that fuels short selling known as security lending. The concern is that the entities that engage in this business, primarily mutual funds and pensions, may have lost money when Lehman Brothers went bankrupt. Now the industry is debating whether the returns generated from lending is worth the risk.

USA Today:
- A private group says a $630 billion spending bill nearing approval in Congress includes $6.6 billion in special projects for lawmakers, including $515 million for 18 projects requested by Democratic vice presidential nominee Senator Joe Biden of Delaware.

TradeWinds:

- Dry-bulk vessels have lost half their value in recent months and owners are struggling to recoup investments made during an industry boom. Some vessels are selling at not much more than scrap value and many Chinese owners want to dispose of their ships. Potential buyers are struggling to find finance and are unwilling to pay asking prices.

BBC:
- The Scottish economy is "grinding to a halt". We've lost our oldest bank and our only nuclear energy company. 30,000 jobs have gone in the construction industry. The Celtic Lion is in danger of following the Celtic Tiger into recession.

Globe and Mail:
- Onex Corp. is adding distressed U.S. banks to its shopping list. The Toronto-based buyout firm is on the hunt for acquisitions of small banks that have run into trouble during the financial crisis.

Vedomosti:

- Russian developers cut prices for retail space amid a squeeze on credit, citing X5 Retail Group NV CEO Khasis. Developers are offering shopping space for 30% to 40% less than a month ago and prices may fall further, Khasis said.

Bear Radar

Style Underperformer:
Mid-cap Growth (-1.88%)

Sector Underperformers:
Coal (-5.92%), Steel (-4.21%) and Construction (-3.59%)

Stocks Falling on Unusual Volume:
RTP, HES, AWC, STO, ELON, RIMM, SONC, CVLT, SVNT, ARA, NX, PKE, CMI and ARP

Stocks With Unusual Put Option Activity:
1) NCC 2) PHM 3) AES 4) NTAP 5) YGE