Market Week in Review

S&P 500 825.88 -.73%*

Click here for the Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices
S&P 500 825.88 -.73%
DJIA 8,000.86 -.95%
NASDAQ 1,476.42 -.06%
Russell 2000 444.53 -.19%
Wilshire 5000 8,305.12 -.62%
Russell 1000 Growth 353.11 -.53%
Russell 1000 Value 430.08 -.97%
Morgan Stanley Consumer 514.99 -1.21%
Morgan Stanley Cyclical 411.91 -3.20%
Morgan Stanley Technology 334.68 -.49%
Transports 2,965.69 unch.
Utilities 369.70 +.96%
MSCI Emerging Markets 22.76 +3.21%

Sentiment/Internals
NYSE Cumulative A/D Line 19,831 +3.99%
Bloomberg New Highs-Lows Index -410 +25.18%
Bloomberg Crude Oil % Bulls 38.0 -11.63%
CFTC Oil Large Speculative Longs 226,101 +.30%
Total Put/Call 1.02 +34.21%
OEX Put/Call .53 -49.04%
ISE Sentiment 100.0 -41.86%
NYSE Arms 2.21 +262.29%
Volatility(VIX) 44.84 -5.14%
G7 Currency Volatility (VXY) 19.90 -4.41%
Smart Money Flow Index 7,508.50 +1.43%
AAII % Bulls 25.27 -7.13%
AAII % Bears 47.25 +2.01%

Futures Spot Prices
Crude Oil 41.68 -9.35%
Reformulated Gasoline 126.87 +8.44%
Natural Gas 4.42 -1.43%
Heating Oil 143.40 +.48%
Gold 927.30 +3.18%
Base Metals 104.42 +1.15%
Copper 146.85 -.17%
Agriculture 299.15 -2.14%

Economy
10-year US Treasury Yield 2.84% +22 basis points
10-year TIPS Spread 1.10% +38 basis points
TED Spread .96 -11 basis points
N. Amer. Investment Grade Credit Default Swap Index 197.12 -7.54%
Emerging Markets Credit Default Swap Index 742.48 -1.53%
Citi US Economic Surprise Index -39.20 +48.62%
Fed Fund Futures imply 82.0% chance of no change, 18.0% chance of 25 basis point hike on 3/17
Iraqi 2028 Govt Bonds 45.75 +12.21%
4-Wk MA of Jobless Claims 542,500 +4.7%
Average 30-year Mortgage Rate 5.10% -2 basis points
Weekly Mortgage Applications 732,100 -38.75%
Weekly Retail Sales -2.20%
Nationwide Gas $1.85/gallon unch.
US Heating Demand Next 7 Days 2.0% below normal
ECRI Weekly Leading Economic Index 107.30 -.19%
US Dollar Index 86.0 +.46%
Baltic Dry Index 1,070 +9.18%
CRB Index 220.37 -2.40%

Best Performing Style
Small-cap Growth +.93%

Worst Performing Style
Mid-cap Value -2.16%

Leading Sectors
Road & Rail +5.13%
Medical Equipment +4.72%
HMOs +4.60%
Biotech +3.42%
Alternative Energy +3.20%

Lagging Sectors
REITs -4.13%
Construction -4.26%
Education -4.29%
Networking -5.60%
Airlines -13.05%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Finish Lower, Weighed Down by Coal, Airline, Construction, Financial, Networking, Computer and Steel 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 Lower into Final Hour on Financial Sector Pessimism, More Shorting

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Retail longs and Financial longs. I added to my (IWM)/(QQQQ) hedges and to my (EEM) short today, thus leaving the Portfolio 50% net long. The tone of the market is negative as the advance/decline line is lower, almost every sector is falling and volume is below average. Investor anxiety is above average. Today’s overall market action is bearish. The VIX is rising 6.4% and is very high at 45.38. The ISE Sentiment Index is low at 91.0 and the total put/call is above average at 1.01. Finally, the NYSE Arms has been running very high most of the day, hitting 6.58 at its intraday peak, and is currently 2.62. The Euro Financial Sector Credit Default Swap Index is rising 2.98% today to 117.0 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 rising .87% to 197.12 basis points. The TED spread is rising .66% to 96 basis points. The TED spread is now down 370 basis points in over three months. The 2-year swap spread is rising 6.01% to 61.75 basis points. The Libor-OIS spread is falling 2.56% to 92 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is up 9 basis points to 1.11%, which is down 159 basis points in over six months. The 10-year TIPS spread bottomed at .65% in October 1998 during the Asian financial crisis and at 1.24% in October 2001 during the technology bubble-bursting meltdown. The 3-month T-Bill is yielding .23%, which is unch. today. Stocks are falling today on increasingly hostile rhetoric from the new administration towards the business community and disappointment over news that the government is temporarily abandoning the “bad bank” idea to buy troubled assets. Given stock losses this month, it is also a negative that stocks were unable to bounce on today’s better-than-feared GDP report or month-end short-covering. On the positive side, market-leading stocks are holding up relatively well again. There is also an unusual number of stocks rising on volume today given the losses in the major averages. Stockpicking skills are becoming increasingly important. Last year, the vast majority of stocks fell despite their fundamentals or valuation. This year, select stocks that can grow relatively well in this environment should continue to outperform the S&P 500 significantly. Nikkei futures indicate a -110 open in Japan and DAX futures indicate a -15 open in Germany tomorrow. I expect US stocks to trade modestly lower into the close from current levels on more shorting and financial sector pessimism.

Today's Headlines

Bloomberg:

- Fortress(FIG) Blocks Redemptions as Shareholders Lose 96% Since IPO.

- Dealers of credit-default swaps plan to overhaul the $28 trillion market in March to make the derivatives more like bonds and create a body that will arbitrate disputes. For the first time, the market will have a committee of banks and investors making binding decisions that determine when buyers of the insurance-like derivatives can demand payment and could influence how much they get, industry leaders said yesterday at a conference in New York. Traders also will revamp the way the contracts are traded, including requiring upfront payments to make them more like the bonds they’re linked to.

- Plunging DVD sales threaten to reduce profit for studio owners Time Warner Inc.,Walt Disney Co., Viacom Inc. and News Corp., and may force them to write down the value of movies, analysts said. Fourth-quarter shipments fell 32 percent in the U.S. and Canada to 453.6 million DVDs, according to Los Angeles-based Digital Entertainment Group. The drop is the biggest since the industry-funded researcher started keeping track in 1997. The decline is being fueled by viewer shifts toward rental services such as Netflix Inc.(NFLX), the U.S. recession and technology that makes it easier to stream Web videos to televisions.

- Northern Trust Corp.’s withdrawal from exchange-traded funds foreshadows a shakeout that will reduce the number of U.S. funds for the first time, according to Ronald E. Rowland, chief investment officer of Capital Cities Asset Management.

Wall Street Journal:

- Peter Schiff predicted a collapse of the U.S. financial system. The bust-up he didn't foresee was the one that made mincemeat of investors who took his advice in 2008. Mr. Schiff's Darien, Conn., broker-dealer firm, Euro Pacific Capital Inc., advised its clients to bet that the dollar would weaken significantly and that foreign stocks would outpace their U.S. peers. Instead, the dollar advanced against most currencies, magnifying the losses from foreign stocks Mr. Schiff steered his investors into. Investors open accounts at Euro Pacific to take advantage of Mr. Schiff's investment advice, which generally involves shunning investments in dollars. Individual returns can vary. Some investors may like gold-mining stocks, while others prefer energy-focused stocks. Most had one thing in common last year: heavy losses. A number of investors said their Euro Pacific portfolios lost 50% or more in 2008, worse than the 38% drop in the Standard & Poor's 500-stock index last year. People familiar with the firm say that hardly any securities recommended by Euro Pacific brokers gained ground in 2008. In 2008, investors nervous about the state of the U.S. economy who were impressed by Mr. Schiff's track record poured money into Euro Pacific, nearly doubling the number of accounts to 16,000. But many did so at the worst time possible, much like investors who piled into Internet stocks as the dot-com bubble peaked. Mr. Schiff is still riding high on his housing-market call. This week, he spoke at a global competitiveness conference in Riyadh, Saudi Arabia, alongside former heads of state, prime ministers and American gold-medal swimmer Michael Phelps. He is the subject of more than 3,000 YouTube videos, including one called "Peter Schiff Was Right." His admirers even created Web sites supporting a possible run for the U.S. Senate in 2010. Mr. Schiff, who was economic adviser to independent presidential candidate Ron Paul in 2008, says he has no plans to run for the Senate but "anything's possible." Early last year, Richard De Gennaro, a retired Harvard University librarian, put $100,000, about 15% of his assets, into a Euro Pacific account that included Canadian Oil Sands Trust, which focuses on crude-oil projects in Canada, and the India Capital Growth Fund, which holds investments in companies that do business in India. Both investments took big hits in 2008, compounded by the fact that the Canadian dollar and the Indian rupee fell 18% and 19%, respectively, against the U.S. dollar. The 83-year-old retiree's account is now worth about $37,000, a 63% plunge. Mr. Schiff "goes around saying that he was right," says Mr. De Gennaro. "He was right about one thing and wrong about everything else."

- The nation's top economic officials are discussing a new way to stabilize the financial system by buying a portion of banks' bad assets and offering guarantees against future losses on some of the remainder, in an effort to help banks while trying to mitigate the cost to taxpayers.

NY Times:

- A month after imposing a property tax increase, Mayor Michael R. Bloomberg is expected to call for a $900 million increase in the city’s sales tax on Friday, as the city confronts a loss of revenue due to the economic downturn. New York City already has one of the highest sales taxes in the nation, at 8.375 percent, and retailers are likely to fight the increase.

Boston Globe:

- A day after handing labor unions a major victory by signing an equal-pay law, President Obama today issued a series of executive orders that he said should "level the playing field" for labor against management. The orders, which union officials say will undo Bush administration policies that favored employers, will:

-- Require federal contractors to offer jobs to current workers when contracts change.
-- Reverse a Bush order requiring federal contractors to post notices that workers can limit financial support of unions.
-- Prevent federal contractors from being reimbursed for expenses meant to influence workers deciding whether to form a union.

"I do not view the labor movement as part of the problem. To me, it's part of the solution," Obama said to applause as he signed the orders at a launch of a task force on the middle class, where its chairman, Vice President Biden, explicitly welcomed labor leaders back to the White House.

Washington Post:

- The Obama administration is delaying a planned crackdown on federal contractors that hire illegal immigrants to determine if the electronic system set up to check workers' documents can handle the surge in workload, Homeland Security Secretary Janet Napolitano said yesterday. The federal government planned to require all contractors to use that government system, known as E-Verify, to screen all workers on contracts worth more than $100,000 after Jan. 15, but the Bush administration delayed the rule until Feb. 20 because of a lawsuit filed by the U.S. Chamber of Commerce. This week, the new administration postponed it until May 21 to give itself "an adequate opportunity to review the rule."

LA Times:

- Civic activists in LA have growing appetite to curb medical marijuana clinics.

Portfolio.com:

- Russia isn't officially in a recession, but economic troubles have hit luxury brands in the country as high-end boutiques like Alexander McQueen and Stella McCartney shut down.

Reuters:
- President Barack Obama is considering picking Republican Senator Judd Gregg of New Hampshire as commerce secretary, a Democratic source said on Thursday. If Gregg left the Senate, the state's Democratic governor, John Lynch, could name a Democrat to replace him. If that occurred and Al Franken survives a court challenge to his apparent narrow victory in Minnesota, the Democrats would have a majority of 60 seats in the Senate, enough to prevent procedural roadblocks to legislation. But the source predicted Lynch would more likely appoint a Republican, saying that naming a fellow Democrat "could be a highly unpopular move in the state." Obama's first pick for the commerce post, New Mexico Governor Bill Richardson, withdrew from consideration earlier this month in the face of a legal inquiry.

- U.S. Senator John McCain said on Friday he and other Republican senators are working to develop a package that would be an alternative to President Barack Obama's economic stimulus plan. Speaking to Reuters, McCain said the alternative package would include what he described as "more effective tax cuts, such as a payroll tax cuts" and spending on projects aimed at immediately creating jobs.

Bear Radar

Style Underperformer:
Mid-cap Value (-2.71%)

Sector Underperformers:
Airlines (-7.01%), Networking (-4.48%) and Steel (-3.88%)

Stocks Falling on Unusual Volume:
PCU, LUK, SGP, PG, DDUP, RPRX, JNPR, AVID, COLM, BRCM, WYNN, RDK, WMS, LNN, VMI, PKI and WL

Stocks With Unusual Put Option Activity:
1) MAS 2) DDUP 3) AUY 4) GCI 5) PCU