STOCK MARKET WATCH, Friday 4 March

Divergences in the Real Estate Related Stocks
“This Time it Really IS Different”

Last week the homebuilder’s vertical and decisive rally has many wondering if indeed, trees really do grow to the sky because the performance of these stocks has been phenomenal. For example, NVR Homes was recognized in Tuesday’s Wall Street Journal as the top performing stock over the last 5 years. So will the homebuilding stocks keep going up forever? While it seems that one cannot rule out this potential, divergences apparent in many housing-related technical charts may be suggesting that we are at or near a top in the homebuilders’ index. I will illustrate tonight why these divergences warrant attention and may be signaling that the latest rally in homebuilding stocks is probably unsustainable.

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Is It Different This Time?

Homebuilder stocks appeared on the ropes several times over the last year, yet is anything different this time? The new trend of interest and mortgage rates is now “UP.” Although this has occurred before in the last two years, the behavior of the stocks in the home finance sector has failed to confirm the bearish outlook for the bond market…until recently. The homebuilding stock whose 5-year performance suggests it is in the most intelligent hands, NVR, failed to participate in the latest good news rally, and is lagging the rest of the homebuilding stocks in the short term. This all suggests the latest surge in both homebuilding fundamentals and stocks is being driven by a rush to beat rising interest rates. While it may be too early to sell or short real estate-related stocks, it appears that the bull market in housing is probably drawing to a close. What would change this outlook? A decisive rally in the home finance sector stocks such as Countrywide (CFC), Accredited Home Lenders (LEND), Redwood Trust (RWT), Washington Mutual (WM), New Century Financial (NEW) Fannie Mae (FNM), and Freddie Mac (FRE) would confirm the bullish outlook in the homebuilders. Yet with many of their charts suffering serious technical damage, this appears to be unlikely.

more...

http://www.financialsense.com/Market/wrapup.htm

I watched his report the other day and said to myself, "this guy HAS to be in bed with the bushies"! He droned on and on for hours and didn't say a single thing. I'm convinced, as the cartoon indicates, that everything he says now is scripted. He talks about the deficit as if it's a pesky bug flying around his head. :eyes: Why should I expect anything different?

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_berry&sid=ai1nGyM50dOs

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And the long-term impact of all this has been obscured, quite deliberately, by administration changes in budget documents. For instance, it switched from a 10-year budget window to a five-year window.

In addition, exactly the sort of long-term fiscal analysis Greenspan says is so crucial in making budget choices, which used to appear each year in a budget document entitled ``Analytical Perspectives,'' is no longer included.

These attempts to hide the real impact of tax and spending proposals have been possible only because most members of Congress have gone along with the fictions. After all, in 2001, Congress played numerous games with the revenue loss associated with that year's big tax cut, including repealing its provisions in year 10.

In that case, the fiction was there for all to see. Still, it allowed everyone favoring the tax cut provisions to understate the revenue loss with a straight face. And those were the numbers in the news story headlines.

There is a level of dishonesty in all of this that's appalling, and no one much seems to care. The alternative, after all, might be to make some of those ``difficult choices among budget priorities.''

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Fed Chief Alan Greenspan, Perhaps With an Eye on His Legacy, Is Man of Many Words These Days

http://biz.yahoo.com/ap/050304/gabby_greenspan_7.html

WASHINGTON (AP) -- Federal Reserve Chairman Alan Greenspan seems like he's everywhere these days, peering out from black horn-rimmed glasses and waxing on about Social Security, Medicare, deficits, consumption taxes, financial illiteracy, even liquefied natural gas.

Although owlishly inscrutable when he wants to be, the Fed chief isn't shy about offering his views on all sorts of things. And lately, with his retirement looming, he seems to be on a roll.

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"He is venturing out more," said Sung Won Sohn, president and chief economist of Hanmi Bank. "He is probably considering his role in history books. He wants to make an impact on major issues while he has the bully pulpit."

In the last few weeks, Greenspan, in appearances before Congress, has, among other things, urged a go-slow approach on personal Social Security accounts, saying that while he embraces the idea central to President Bush's proposed overhaul, he is concerned about stability in financial markets.

That gave both supporters and opponents of the president's plan ammunition, hardly the first time something he has said has played both ways in a debate.

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Senate Minority Leader Harry Reid of Nevada, D-Nev., in an interview on CNN Thursday, called Greenspan "one of the biggest political hacks we have in Washington."

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edit for strange looking characters

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=41088
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Replying to a question about funding Social Security Senator Jack Reed (Dem - R.I.), Greenspan put the fundamental problem of the inflationary welfare state in a nutshell, saying:
"We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power."

In other words, money can always be created - there's just no guarantee it will buy anything once it has been (Sage Capital Axiom No. 1: Money does not equal Wealth).

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The Fed Chairman thus stoutly refuted the claim that he has had in any part to play in helping Federal debt grow, of late, at a rate of $1.7 billion a day ¨C which torrid gain has meant it has risen by over a third in less than three years.

He further denied any complicity in helping money supply swell by a third since late 2000.

He protested that he was innocent of any involvement in helping the US import $665 bln more goods than it exports (equivalent to $5.5 mln every minute of every eight-hour working day).

He swore that he certainly never encouraged personal indebtedness to grow the $3.1 trillion it has in the past four years - an average of $25,000 or so per household; a pace twice as fast as income has gained over the period; a sum six times the (significantly overstated) amount of personal savings simultaneously made; and an increment equal to a little more than the total of all the debt accumulated in all the years leading up to Greenspan¡¯s appointment to the Fed Chairmanship, back in 1987.

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http://www.nytimes.com/financialtimes/business/FT20050303_29144_33365.html

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"Share repurchase remains a priority use of our cash, even as we continue to internally fund the fastest, most profitable growth in our industry," said James Schneider, Dell's chief financial officer.

Since 1996, Dell has spent $18 billion to repurchase 1.2bn shares. In the current quarter, the company has spent $1.3bn on its own stock - well above the $900m that it told investors it was likely to invest.

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Until two years ago, the US tax system encouraged companies to return surplus capital to shareholders via share buy-backs rather than cash dividends by taxing income at higher rates than capital gains.

However, under tax reforms introduced in 2003, the rate of taxation of dividend income and capital gains are broadly equal.

Stock repurchase programmes push share prices higher by reducing the number of share in issue and increasing earnings per share. :eyes: We've had THAT discussion here before

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Meanwhile, meet the "competition" that also provides US computer makers, including Dell, most of their components.

Taiwan Remains Top Computer Maker in 2004

Taiwan Remains Top Computer Maker in 2004, Though Most Were Made in China

TAIPEI, Taiwan (AP) -- Taiwanese firms produced US$67 billion (euro49 billion) worth of computer hardware in 2004, a 23 percent increase over the previous year and tops in the world, an industry report said Thursday. However, most of the goods were made in China by Taiwanese firms.

Taiwanese companies, which have invested more than US$100 billion (euro74 billion) in China, are continuing to shift production to the mainland to capitalize on cheap labor and production costs, the report said.

About 73 percent of the total value of the output by Taiwanese computer makers in 2004 came from their factories in China, it added.

"Taiwanese firms are making more goods in the Chinese mainland so as to achieve the best economic benefits," the the semi-official Institute for Information Industry said. "This has helped them obtain orders from the big computer firms in the world."

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http://www.bls.gov/news.release/empsit.nr0.htm

Nonfarm payroll employment increased by 262,000 in February and the unemployment rate edged up to 5.4 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job growth occurred in both goods-producing and service-providing industries.

Unemployment (Household Survey Data)

n February, both the number of unemployed persons, 8.0 million, and the unemployment rate, 5.4 percent, returned to their December levels after dipping in January. The jobless rate had been either 5.4 or 5.5 percent during each of the last 6 months of 2004. In February, the unemployment rates for the major worker groups--adult men (4.9 percent), adult women (4.7 percent), teenagers (17.5 percent), whites (4.6 percent), blacks (10.9 percent), and Hispanics or Latinos (6.4 percent)--showed little change. The unemployment rate for Asians was 4.5 percent in February, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed--those unemployed for 27 weeks and over remained at 1.6 million in February. This group accounted for 1 in 5 unemployed persons. (See table A-9.)

Total Employment and the Labor Force (Household Survey Data)

In February, total employment was about unchanged at 140.1 million, seasonally adjusted. The employment-population ratio--the proportion of the population age 16 and over with jobs--was little changed over the month at 62.3 percent. The rate has fluctuated between 62.1 and 62.5 percent for the past 2 years. In February, the civilian labor force was essentially unchanged at 148.1 million, and the participation rate held at 65.8 percent.
(See table A-1.)

Over the year, the number of persons who held more than one job increased by 432,000 to 7.7 million, not seasonally adjusted. These multiple jobholders represented 5.5 percent of total employment in February, up from 5.3 percent a year earlier. (See table A-13.)

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http://quote.bloomberg.com/apps/news?pid=10000006&sid=aAlb2G4oLTG0&refer=home

March 4 (Bloomberg) -- U.S. employers added 262,000 workers in February, the most since October, suggesting companies have greater confidence in the economy.

The gain in payrolls follows a revised 132,000 increase in January that was less than previously estimated, the Labor Department said today in Washington. The unemployment rate rose to 5.4 percent from a three-year low of 5.2 percent in January.

The increased hiring gives consumers the income needed to keep spending as interest rates rise, extending the economic expansion. Federal Reserve Chairman Alan Greenspan said this week the economy is proceeding at a ``reasonably good pace.'' Companies are investing in plants and equipment, and manufacturing jobs rose for the first time since August.

``The way the numbers are falling is consistent with economic growth slightly above trend,'' said Ken Mayland, president of Pepper Pike, Ohio-based ClearView Economics LLC and the best overall forecaster in Bloomberg News surveys for the year ended in June. ``There's no glaring argument for the Fed to accelerate'' its pace of interest-rate increases. Mayland predicted a gain of 225,000 jobs.

The U.S. has added jobs every month since June 2003. In January, employers added enough payroll jobs to regain all those lost since the peak in February 2001, a month before an eight- month recession started, and enough to give President George W. Bush a net gain during his first term in office. The 2.2 million jobs added in 2004 were the most since 1999.

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22,000 were in construction and manufacturing, the rest were in the low-paying service industry.

As well as the surging CRB which leads the next deficit report?

www.jobwatch.org

Since the start of the recession 46 months ago (March 2001), a negligible 62,000 jobs have been added in the U.S. economy. Private sector jobs are still down by 703,000, a contraction of 0.6%. Both represent the worst job performance since the Bureau of Labor Statistics began collecting monthly jobs data in 1939 (at the end of the Great Depression).

To put this performance in historical perspective, in every previous episode of recession and job decline since 1939, the number of jobs had fully recovered to above the pre-recession peak within at least 31 months after the start of the recession. (The average, excluding the 1991 recovery, has been a full recovery of jobs by the 21st month). In the three downturns since the early 1970s, the economy had not only recovered all the jobs lost during the recession but had also generated 5.7% more jobs than existed at the start of the recession. If this historical standard had prevailed, the economy would have had a positive job gain of 7,568,000 by what is now the 46th month of recovery, or 7,502,000 more jobs than we have today.

have a recovery because the recession was not allowed to take it's normal required cleansing course. Instead the economy was propped up by a huge amount of stimulus before the previous excesses were allowed to be flushed out of the system. Our economy is floating on tons of excess liquidity slooshing around.

Sort of like a plugged up toilet. Push that lever a second time before getting that backed up water down the drain and before you know it - there's shit everywhere. :evilgrin:

Again, just my 2 cents worth.

However, I and others are living in Job purgatory because we cannot find suitable employment.

I am now unemployed for 59 Months.

These pathetic stories on Job creation don't do anything to help myself and others find suitable employment.

through the normal venues after only 18 months of unemployment.

I've hung out my "Anything for a Buck" shingle and pick up whatever odd jobs I can find. Not a steady income by any means, but it helps pay the bills. Then there's that minor issue of healthcare still hanging over my head. :eyes:

The Jobs recovery when professionals cannot find suitable employment in the economy.

Hidden behind these jobs numbers is the reality that most of these jobs are low wage, low skill, low benefit positions - hardly suitable for degreed professionals.

Similarly, since the bulk of these new jobs require little skill, I have found that people like ourselves are virtually never considered - too qualified.

Some days I wish I was omnipotent and could count exactly how many college graduates were unemployed or underemployed. My gut tells me that the numbers would be shocking.

Inflation outpacing wage growth over this last "recovery."

Nice charts.

With imports going up in price, and the dollar down, and charts like this, the dollar could go down much more?

Securities and Exchange Commission Is Investigating Stock Sales by ChoicePoint's Top Two Execs

ATLANTA (AP) -- Data collector ChoicePoint Inc. announced the Securities and Exchange Commission is investigating stock sales by its top two executives. The company also said it will stop selling personal information about consumers to small businesses.

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The SEC probe involves stock sales by chief executive Derek Smith and president Douglas Curling that resulted in a combined $16.6 million profit in the months after the company learned that its massive database had been breached but before the breach was made public.

ChoicePoint's stock has dropped about 10 percent since the personal information breach at the data warehouser was announced Feb. 15.

Corporate governance experts say the pattern and timing of the trading by Smith and Curling raises questions, while ChoicePoint has said the stock trading was prearranged under a plan approved by the company's board.

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http://biz.yahoo.com/ap/050304/choicepoint_4.html

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=s

Last trade 83.26 Change -0.02 (-0.02%)

Settle 83.28 Settle Time 00:35

Open 83.33 Previous Close 83.28

High 83.38 Low 83.22


The June Dollar was slightly lower overnight as it consolidates above the 50% retracement level of this year's rally crossing at 83.07. Stochastics and the RSI have turned bullish signaling that a short-term low might be in or is near. However, closes above last Tuesday's gap crossing at 83.45 are needed before a short-term low can be confirmed. If June renews the decline off February's high, the 75% retracement level of this year's rally crossing at .8187 is the next downside target. Overnight action sets the stage for a steady to lower opening in early- day session trading.

The June Euro was steady to slightly higher overnight and is working on a possible inside day as it consolidates below the 10-day moving average crossing at 132.098. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near-term. If June extends this week's decline, the 20-day moving average crossing at 130.728 is the next downside target. If June renews the rally off February's low, the 62% retracement level of the December-February decline crossing at 133.395 is the next upside target. Overnight action sets the stage for a steady to higher opening in early-day session trading.

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The June Canadian Dollar was slightly lower overnight as it extends this week's breakout below the 20-day moving average crossing at .8077. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the reaction low crossing at .8008 would open the door for a possible test of January's low crossing at .7952. Closes above last week's high crossing at .8184 are needed to renew the short covering rebound off February's low. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The June Japanese Yen was slightly lower overnight as it extends Thursday's breakout below the 10-day moving average crossing at .9611. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near-term. Closes below the reaction low crossing at .9495 would confirm that February's a-b-c corrective rally has come to an end. Closes above last Tuesday's high crossing at .9710 are needed to confirm that a low has been posted. Overnight action sets the stage for a steady to lower opening in early-day session trading.


Dollar Holds Ground Vs. Major Currencies
http://www.reuters.com/newsArticle.jhtml?jsessionid=IONMHW2P1HDGYCRBAE0CFFA?type=businessNews&storyID=7808521

LONDON (Reuters) - The dollar held its ground against major currencies on Friday as investors waited for U.S. jobs data later in the day to provide clues on how fast U.S. interest rates would rise.

So far this week, market expectations for an upbeat non-farm payrolls reading have supported the dollar, leading investors to bet on a faster pace of monetary tightening.

The jobs data is due at 8:30 a.m. EST and expected to show that around 220,000 new jobs were created in February compared with 146,000 the previous month.

"We had an adjustment in positions in the market and people were mildly short the dollar. Some of those positions are now being taken out giving the dollar a bit of a lift," said Derek Halpenny, currency economist at Bank of Tokyo Mitsubishi (BTM).

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"The market is a little optimistic about the numbers, maybe a bit too optimistic," said a trader at a European brokerage.

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Taiwan's Feb forex reserves hit record US$246.63b
http://business-times.asia1.com.sg/sub/latest/story/0,4574,147541,00.html?



TAIPEI - Taiwan's foreign exchange reserves hit a record high of US$246.63 billion at the end of February, the central bank said on Friday.

The figure was up from the US$242.74 billion in January and the US$241.74 billion at the end of December 2004, the central bank said in a statement.

The increase mainly reflected returns from foreign exchange reserve management, net foreign capital inflows and the appreciation of the euro and other major currencies against the US dollar, it added.


Dollar Braces for Payroll Strength
http://www.forexnews.com/NA/default.asp

Payrolls seen at 170K (SURPRISE!!! B-)

We expect this morning’s US non-farm payrolls to show a rise of 170K in February compared to consensus estimates of 220-225K, with the unemployment rate and average hourly earnings both steady at 5.2% 0.2%. The reason to our lower forecasts lies in our expectations for continued job losses in manufacturing and a slower rate of job creation in services. Although we expect construction jobs to have reverted to positive territory, employment in the retail sector remained languid. Many economists explain their bullishness via the continued declines in weekly jobless claims, which have fallen to 4-1/2 year lows. But past history suggests that we need a few more months of weekly jobless claims in the 300-320K range for payrolls to regain above the 200K mark.

February’s employment index from the services ISM survey showed a 7-point gain, producing 17 months of expanding employment, yet it does not alter our forecasts for a creation of 150K services jobs in the industry. The employment index for manufacturing ISM slipped 0.7 point, reflecting a generally slower rate of expansion. The ISM manufacturing jobs index did not fairly reflect that manufacturing payrolls in January dropped 25K, posting the 5th consecutive monthly loss and the biggest decline since August 2003.

The dollar has hardly budged showing modest gains ahead of the jobs report, remaining above the $1.31 figure against the euro and 105.30s against the yen. Only a figure above 180K would be instrumental in boosting the dollar. A figure below 150K could be dollar negative especially if oil prices remain above $53.50 per barrel.

Yen still struggles on oil

Japan’s heavy dependence on imported is keeping its currency near a 2-week low against the dollar, lifting supporting USDJPY 105.30s. The Nikkei has closed up for the 7th consecutive day reflecting stepped up foreign purchases of Japanese stocks. For the month of February, foreign net buying of Japanese stocks reached 764.2 billion yen, up for the 9th straight month. But the yen was pummeled yesterday by the renewed spike in oil.

USDJPY faces resistance at 105.50—the 38% retracement of the fall from the 111.73 high thru the 101.66 low. Subsequent highs seen at 105.80 and 106.18. Support starts at 104.70s, backed by 104.25.

Euro on defensive, nears 100-day MA

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http://biz.yahoo.com/rb/050304/markets_forex_4.html

NEW YORK (Reuters) - The dollar slipped against the euro on Friday after a U.S. employment report, while stronger than expected, disappointed traders who were hoping for a blockbuster number.
The U.S. economy created 262,000 jobs last month, the biggest gain in four months, exceeding market expectations that the world's biggest economy would create some 220,000 non-farm jobs in February.

However, the details of report were not as strong as the headline number suggested. The unemployment rate rose to 5.4 percent in February, from January's 5.2 percent. The length of the average workweek was unchanged at 33.7 and so were hourly earnings at $15.90, after a 5-cent gain in January.

"The dollar is a bit softer on this. I think underneath the headline, it's actually not as strong a number as it might appear," said Bob Sinche, global head of foreign exchange Strategy at Bank of America in New York.

"Although the payrolls number was stronger, the workweek was unchanged, hourly earnings were unchanged. The unemployment rate was up. It's not a terrible number, but it's not spectacular," he added.

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(Edit to fix another stinkin' reuters link)
http://www.reuters.com/newsArticle.jhtml?jsessionid=FYKTXKGBHME2UCRBAEZSFEY?type=businessNews&storyID=7809897

NEW YORK (Reuters) - U.S. Treasuries prices edged higher in choppy trade on Friday after the latest U.S. jobs report proved robust, but not as strong as many were betting on.

The unemployment rate also surprised again by rising to 5.4 percent, reversing January's decline and tempering recent worries that a tightening labor market might cause wage-driven inflation.

Non-farm payrolls rose 262,000 in February after a revised 132,000 gain in January. Median forecasts had been for a rise of 220,000 but recent strength in other employment indicators had much of the market looking for a far higher number.
Some sort of disconnect in the reports again? Hard keeping the market moving lies straight after a while I guess. :evilgrin:

The benchmark 10-year note (US10YT=RR: Quote, Profile, Research) firmed 3/32 in price, lowering its yield to 4.37 percent from 4.38 percent on Thursday. Yields on the two-year note (US30YT=RR: Quote, Profile, Research) edged down to 3.57 percent from 3.58 percent.

wasn't good enough to move those bond vigilantes again?) :shrug:


Stocks Soar on a Surprisingly Strong Job Creation Report; Dow Near Highest Level in a Year

http://biz.yahoo.com/ap/050304/wall_street_9.html

NEW YORK (AP) -- A surprisingly strong job creation report sent stocks soaring Friday as investors grew more confident about the economy and corporate earnings. The Dow Jones industrials neared their highest level in a year, while the Standard & Poor's 500 set a new 52-week high.

Wall Street was elated following the Labor Department's report that 262,000 jobs were created in February, far more than the 225,000 economists expected and the most in four months. Jobs were created throughout the economy, from retail to manufacturing.

Investors fears about inflation and higher interest rates found comfort in the report. The nation's unemployment rate ticked up to 5.4 percent, from 5.2 percent in January. And hourly earnings were surprisingly flat, which means workers' paychecks aren't growing and that businesses may have a hard time raising prices.

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The bond market welcomed the jobs report by sending most bond prices higher, with the yield on the 10-year Treasury note falling to 4.36 percent. Gold prices moved higher, as did the dollar against most major currencies, while crude oil futures fell 45 cents to $53.12 on the New York Mercantile Exchange.

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Interest rate sensitive areas rallying at the same time things like steel, oil, and the CRB are breaking out to new highs?

But the dollar down and gold up? Could it be massive imports going up in price???

The only explanation is someone sat down somewhere and did the math on the deficit situation, which is set to spiral out of control, all variables considered.

Yet the VIX is plumetting against this backdrop.

The only model that resembles this is a hybrid 1929/1987 scenario.

http://cbs.marketwatch.com/news/story.asp?guid=%7BC58882CA%2D13DA%2D4207%2D90B2%2D609697D3648F%7D&siteid=mktw

WASHINGTON (MarketWatch) -- Metals futures opened with smart gains Friday, carried higher in reaction to growth in U.S. payrolls for February, as mining shares rallied as well.

"Gold surged right after the employment numbers and that shows gold is defying the typical expectations," said Kevin Kerr of Kerr Trading International.

Bolstering the move in gold, the U.S. dollar fell against both the euro and the Japanese yen in foreign-exchange trading. See Currencies.

The U.S. employment registered its first appreciable growth in nine months during February, with nonfarm payrolls expanding by an above-consensus 262,000, according to Labor Department data. See full story.

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Dow 10,874.50 +41.47 (+0.38%)
Nasdaq 2,066.78 +8.38 (+0.41%)
S&P 500 1,215.60 +5.13 (+0.42%)
10-yr Bond 43.51 -0.32 (-0.73%)
30-yr Bond 47.09 -0.28 (-0.59%)
NYSE Volume 121,508,000
Nasdaq Volume 194,644,000

9:40AM : Stocks open sharply higher following stronger than expected employment data... Feb nonfarm payrolls rose 262K, above expectations of 225K, recording the largest gain in four months and surpassing the 200K mark for just the second time since May... The unemployment rate showed a slight 0.2% increase to 5.4% over last month's figure, but the average workweek and average hourly earnings - the latter having implications for inflationary pressure through wage increases - were both unchanged at 33.7 hours and +0.2%, respectively...

Overall, the data, which translates into a 2.4% annual rate of growth and remains consistent with real GDP growth expectations of at least 3.5-4.0% in the first half of 2005, clearly indicated rapid economic expansion while concurrently easing inflation worries and tempering fears about more aggressive Fed tightening... Meanwhile, yields on the 10-year note continue to fall, as the benchmark Treasury is now up 9 ticks to yield 4.34%... At 10:00 ET, Jan Factory Orders (consensus 0.0%) will be released while investors will get a final read on Feb consumer sentiment (consensus 94.3) before the top of the hour...

9:15AM : S&P futures vs fair value: +7.2. Nasdaq futures vs fair value: +11.5. Still shaping up to be a higher open for equities as futures indications trade well above fair value... Stocks in focus include AIG, after reports suggest a Federal investigation into a deal between AIG and BRK.A's General Reinsurance unit, and DELL, which has announced an additional $10 bln stock buyback program... Biogen Idec (BIIB) and Elan (ELN) should also be in focus (again) amid confirmation that a second Tysabri patient is suffering from an often fatal infection

9:00AM : S&P futures vs fair value: +6.2. Nasdaq futures vs fair value: +10.5. Stage remains set for the cash market to open on an upbeat note, as futures trade still holds a positive bias... This morning's strong payrolls data, which should mitigate concerns about the Fed endorsing a more aggressive tightening stance (i.e. 50 bp vs. 25 bp) at its March 22 FOMC meeting, has provided the largest boost to underlying sentiment... However, a slight easing in oil prices to $53.40/bbl (-$0.17) and modest gains in European markets have also provided some early support for stocks

8:33AM : S&P futures vs fair value: +4.7. Nasdaq futures vs fair value: +8.0. Feb nonfarm payrolls just checked in at 262K, well above forecasts, versus a downward revision to last month's read of 146K to 132K, while the unemployment rate rose to 5.4%... As a result, futures trade has strengthened and now suggests a higher open for the indices... Bonds have also climbed as the 10-year note is up 8 ticks to yield 4.34%

8:00AM : S&P futures vs fair value: flat. Nasdaq futures vs fair value: +1.0. Futures market versus fair value suggesting a relatively flat open for the cash market as investors await employment data... At 8:30 ET, the Labor Dept. will release Feb. nonfarm payrolls (consensus 225K), unemployment rate (consensus 5.2%), hourly earnings (consensus +0.2%) and average workweek (consensus 33.8) figures

6:21AM : S&P futures vs fair value: -0.6. Nasdaq futures vs fair value: -2.0.

Report says pump prices could shoot up by about 25 cents a gallon in coming days to new record.

http://money.cnn.com/2005/03/04/news/economy/gas_prices/index.htm

NEW YORK (CNN/Money) - Gasoline prices could rise by about quarter a gallon in the coming days to new record levels, according to a published report Friday.

USA Today, quoting energy experts and analysts, reported that a gain of 24 to 28 cents a gallon is possible as stations scramble to keep up with recent increases in oil and wholesale gasoline prices.

An increase of 24 cents a gallon would put the average retail price of a gallon of regular gas at about $2.16 a gallon, according to the Energy Information Agency, the Department of Energy unit that tracks prices. The EIA's survey put the average price at $1.928 in Monday's survey, up 2.3 cents from a week earlier.

The EIA's earlier record of $2.02 a gallon for regular was hit in May of 2004.

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Sure, isn't there another holiday coming up here? Just in time for that trip to G-mas for Easter dinner.

http://www.freep.com/realestate/renews/flip4n_20050304.htm

Real estate speculators are buying at a pace that far exceeds previous estimates of their influence on the housing market, according to a first-of-its kind report the National Association of Realtors released this week.

Collectively, investors and second-home buyers bought more than one of every three homes sold in last year's record market, the report said.

"I am astonished," said David Lereah, the association's chief economist. He said the data suggest a sea change in the role of real estate in the nation's economy.

"What we're seeing is that real estate is no longer just a place to live. It's a viable alternative to stocks and bonds," Lereah said. "Sept. 11 changed real estate forever, the way people look at it. They're nervous about stocks and bonds and they're placing money in real estate, which has proven to be a stable and wealth-building asset."

The report, based on two surveys, found that investors accounted for 23 percent of the nation's 2004 home sale transactions and second-home buyers made an additional 13 percent of all sales transactions. Previous estimates gleaned from other databases had suggested that 8.5 percent of all 2004 sales transactions were investments.

more...


But there's no real estate bubble, honest!

http://www.jsonline.com/homes/buy/mar05/306655.asp

snip>

"To afford the things we want in life, we can't invest in the stock market, can't expect our company's 401(k) will make it for us," said Brett McPherson, a 30-year-old realty sales associate. "So we're doing it ourselves."

Two years ago, McPherson bought a water-damaged three-story home for $140,000 on Milwaukee's east side, "a neighborhood I couldn't otherwise afford." He's been rehabbing it ever since, and it's his primary residence. Its current value: $400,000, he said.

"It's probably taken 80 percent of my disposable income, and has meant no expensive vacations or $9 martinis, but I won't have to struggle ever again to buy a house," McPherson said. "Real estate makes sense. You know exactly where your dollars are, and it's not a matter of fluctuating value."

It sure isn't. Average U.S. home prices have outpaced inflation for more than a decade and have soared 50% in the past five years, the Federal Deposit Insurance Corp. reported last month. Although the rate of appreciation has fluctuated in other regions - and housing prices have sometimes fallen after run-ups in speculative markets such as California - Milwaukee has a history of slow, relentless appreciation.

more...


Hmmmm, isn't it usually a sign of a peak when suddenly EVERYONE is into it, and they all believe they can't possibly loose? Starting to sound like the Tech bubble, ain't it? :shrug:

http://www.lewrockwell.com/orig5/duffy3.html

To the seasoned investor, four of the most dangerous words in the English language are "It’s different this time." Five years ago, this country experienced the mania to end all manias for anything tech-related. Today it seems the public has merely shifted to all things credit-related.

Manias share four common characteristics:

A feeding frenzy sends prices parabolic. In March, 2000 the Nasdaq Composite briefly touched 5000, up 44% per year over a five-year period. Homebuilding stocks today are up 46% annually in five years. The median price of a home is up 8.2% per year over the same period. Adjusted for 5-to-1 leverage on a typical mortgage, the humble abode has appreciated 41% annually.
The public jumps in with both feet. During the late 1990s, stock ownership climbed to roughly 50% of households. Today "home ownership" has passed 70%, a record.
Valuations detach from economic reality. In 2000 many tech stocks traded for over 50 times earnings. Today, in some of the hotter markets such as Southern California, home prices command as much as 50 times their rental incomes.
Rationalizations abound for why valuations are reasonable and the trend will continue. Talk of a "New Economy" has been replaced by the politically-sanctioned euphemism "Ownership Society." Then, as now, favorable demographics and an accommodative Fed were expected to keep the party going.
Admittedly, there are differences. In 2000 Wall Street underwriters raised equity for marginal businesses; today they raise debt for marginal consumers. Five years ago the federal government enjoyed a surplus; today deficits run as far as the eye can see. In 2000, the dollar was strong, inflation dead, and commodities weak. In the five years since, the U.S. Dollar Index dropped 22%, money supply (M3) grew 44%, and the CRB Index gained 40%.

One question keeps nagging us. Manias are rare occurrences, gracing us with their presence every 30 or 40 years. How can a crowd delude itself twice in just five years? Perhaps at least part of the answer is that there are actually two crowds at work. The tech mania, it seems, was primarily driven by testosterone – Ferrari driving CEOs of dot-com and Silicon Valley startups, napkin-scribbling venture capitalists, master of the universe investment bankers, and hyperactive day traders. The present day mania appears to have more balance, with women playing a greater role. Men are more prone to think in terms of abstractions and do things like chase technology stocks into the stratosphere, while a house is tangible and appeals to both sexes.

more...

I disagree that it has anything to do with the male vs. female crowd. I think it has to do more with "where do you get your information from" crowds. The talking head Kudlow propaganda following crowd vs. do your own homework crowd. I do agree with the notion that we are in yet another mania.

The talking head Kudlow propaganda following crowd vs. do your own homework crowd.

Things seem to be "busting out all over" this morning. Wall St., dollar, debt and housing... I've given up making sense out of it. I think it's gone beyond the "PPT" (that folks here used to talk about) and off into something none of us are able to explain.

:hi:

hands of the PPT at this point, must be cheaper to use the vast propaganda machine for now to steer if not totally confuse the markets.

Then again, I think a lot has to do with the fact that the Fed and Treasury have become totally confused as well. Their tangled web of lies have left them impotent in directing the markets anymore. The puppet-master strings are so tangled that tugging the string that used to move one market tends to move another in a completely opposite direction than anticipated. The once graceful waltz is looking like some strange combination of a minuet with the chicken dance.

The tumble from positive to negative and back again had neither nuance nor cogent trend. Blather was pulled out of a hat from hour to hour. We are dealing with a market that appears built on shorts. If a stock disappoints after six weeks it's traded away.

That's my trend story and I'm sticking with it.

EDIT: This short market, too, is more complex than my summary states. However I will admit this shortcoming, unlike Mr. Duffy who is paid for his opinions.

Kudlow looked like he was back on his coke...just about jumping out of his seat in his thrill over the Bush Economy firing on all cylinders with Jobs, Growth and Econmy signalling our great recovery. He didn't have his lapel "flag pin" on this a.m. Has traded it for a new symbol (a round white object)... I hate to think what it is...:-(

Their floor trader was screaming his head off about Dow 11,000.

I think you make a good point, Ozy. Traders Market. Been one for awhile. Just can't see how this isn't all going to blow up in their faces...but they manage to keep shifting that big pot of money around and printing more. Unbelievable.

Anyone who believes that men are from Mars and women are from Venus deserves to be stuffed into a rocket and sent there. Lemming psychology is far more complex than what the author proposes.

Dow 10,912.99 +79.96 (+0.74%)
Nasdaq 2,070.22 +11.82 (+0.57%)
S&P 500 1,219.84 +9.37 (+0.77%)
10-Yr Bond 43.19 -0.64 (-1.46%)

NYSE Volume 598,905,000
Nasdaq Volume 782,798,000

Just plain weird - even the bond market is rallying.

http://finance.yahoo.com/mo

11:00AM: Buyers remain in control of the action as a firmly bullish bias remains intact... Advancers on the NYSE hold a more than 3 to 1 advantage over decliners while advancing issues hold a 17 to 10 edge over declining issues... The ratio of up to down volume also reflects a similarly positive sentiment with a nearly 3 to 1 advantage at both the Big Board and the Composite... The Dow has held above its March/Dec highs but has run into resistances near the 10915/10925 mark...

The S&P 500 has pushed through its Dec. high (1217.90) and strengthened just above resistance near 1219 while the Nasdaq has pushed to a minor new session high (2076.59) and maintained intra-day support...NYSE Adv/Dec 2294/653, Nasdaq Adv/Dec 1709/1009

10:30AM: Market trades near its best levels of the session as oil prices continue to slide... Modest profit taking in crude oil futures, amid a week of strong gains, has kept the commodity well below yesterday's intra-day high of $55.20/bbl at $53.10/bbl -$0.47... Separately, investors have recently sifted through the day's last two economic reports... Jan factory orders increased 0.2%, fairly close to the expected unchanged level, as durables orders were down 1.3% and nondurable orders were up 1.8%...

Feb Michigan Consumer Sentiment Index came in at a revised 94.1, roughly in line with expectations (94.3) and a prior read of 94.2, still standing above a 15-year average of 92.0... But neither report has had much of an impact on the market as the durables data was already released, Jan nondurables data is not a leading economic indicator and the sentiment data has more to do with consumer mood than consumer spending patterns...

seeing a lot of unwinding and covering of bets made leading up to the "surprising economists :eyes: (again)" jobs report? :shrug:

http://www.antiwar.com/engelhardt/?articleid=5057

snip>

Measured by Hobbes' test, the superpower looks less super. Its military has been stretched to the breaking point by the occupation of a single weak country, Iraq. Its economy is held hostage by Himalayas of external debt, much of it in the hands of a strategic rival, China, holder of nearly $200 billion in Treasury bills. Its domestic debt, caused in part by the war expenditures, also towers to the skies. The United States has dramatically failed to make progress in its main declared foreign policy objective, the nonproliferation of weapons of mass destruction. While searching fruitlessly for nuclear programs in Iraq, where they did not exist, it temporized with North Korea, where they apparently do exist, and now it seems at a loss for a policy that will stop Iran from taking the same path. The president has just announced that the "end of tyranny" is his goal, but in his first term the global democracy movement suffered its greatest setback since the Cold War – Russia's slide toward authoritarianism.

The shaky foundations of America's power were on display in the president's recent travels. Shortly before Bush landed in Brussels, Chancellor Gerhard Schroeder of Germany quietly but firmly repudiated the president's militarized, U.S.-centered approach to world affairs. NATO, he heretically announced, should no longer be "the primary venue" of the Atlantic relationship. Did that mean that Europe would continue to take direction from Washington through some other venue? Hardly: he was, he said, formulating German policy "in Europe, for Europe, and from Europe." The superpower's penchant for military action was also rejected. The chancellor said, "Challenges lie today beyond the North Atlantic Alliance's former zone of mutual assistance. And they do not primarily require military responses."

Schroeder was standing on solid ground at home. A poll in the German newspaper Die Welt revealed that "Vladimir Putin is seen as more trustworthy than George W. Bush, France as a more important partner for German foreign and security policy than the United States. Closer harmonization of German foreign policy with America is not wanted, either."

Meanwhile, offstage, in an apparent extension of constitution-building at home, Europe was taking the lead in building cooperative global instruments, including the Kyoto Protocol on global warming and the International Criminal Court. No sooner had the president arrived in Europe than an economic trapdoor seemed briefly to open beneath his feet when the South Korean Central Bank stated that it intended to move some of its holdings from the dollar to other currencies, causing a 174-point drop in the Dow Jones average. The next day, the bank disavowed its report and the dollar recovered, but not before the fragility of America's economic position in the world had been revealed.

snip>

In history, the rise of imperial pretenders has usually led to military alliances against them. Such was the case, for instance, when a previous imperial republic, Napoleon's France, conquered most of Europe but then was defeated by an oddly assorted alliance of Britain, Russia, and Austria-Hungary. Such is not the case today. Europe seems determined to bypass rather than fight the American challenge. And power? The American kind is poor in "future goods." There is rivalry in the air, but it no longer takes a martial form. Instead, Europe seems bent for now on building itself up economically and knitting itself together politically – readying, it appears, another kind of power, based more on cooperation, both within its own borders and with the world, and less on military force.

more...

It makes this nation look like a beached whale. Big, yes. Strong, possibly. But totally incapable of navigating without extreme help.

11:30AM: Onward and upward remains the driving mantra this morning as even bonds are getting in on the action... Treasurys have recently hit new session highs across the board following the Labor Dept.'s employment report, as the benchmark 10-year note has surged 15 ticks to yield 4.31%... Bonds initially sold off, lifting 10-year yields through the important 4.4% mark, as the employment data was above expectations but well below the "whisper" numbers; but quickly recovered with help from option activity...

In contrast, the strong jobs report has hammered the greenback, as the dollar has fallen nearly 1.0% against the euro (1.3239) and is down 0.7% against the yen (104.51), renewing interest in gold futures, which have surged 1.0% to $435.20 an ounce...NYSE Adv/Dec 2248/806, Nasdaq Adv/Dec 1594/1215

****

"Help from option activity?"

The markets have become nothing but a game of speculation, puts, calls and covering when you bet on the wrong side of things. Sheesh, you'd be better off at the Roulette wheel in Vegas these days. :eyes:

US steel maker stocks rise as price hikes continue

Fri Mar 4, 2005 11:47 AM ET
NEW YORK, March 4 (Reuters) - Shares of U.S. steel makers rose on Friday as another major international manufacturer said it would increase prices because of higher raw material costs.

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh38372_2005-03-04_16-47-27_n04615705_newsml

Interesting argument for deflation vs. hyperinflation....

http://www.gold-eagle.com/gold_digest_05/fekete030105.html

snip>

...I just call attention to the fact that big multinational companies are losing pricing-power. Companies don't respond in the traditional way, by beefing up capital. Quite to the contrary, they thin it out. That is to say, they redeploy capital from production into bond speculation, euphemistically called "consumer finance". General Electric that pioneered the move out of production into speculation is now followed by General Motors. This redeployment of capital is responsible for outsourcing and the loss of well-paid industrial jobs in the United States which are replaced by low-paid service jobs. The trouble is that these service jobs won't last. When the workers are at the end of the rope and can no longer refinance their mortgages to get spending cash, the hamburger-flipping jobs will go the way of the tool-making jobs. The signs portending deflation are all-around for those who have eyes to see.

Fed governors have found it necessary to shout from their rooftops that, yes, they do have contingency plans to combat deflation. So far so good, but what about contingency plans to combat inflation, and hyperinflation to boot? Here we meet with deep silence. The Fed is not saying how it plans to meet the emergency if the dollar hits skid-row and foreign holders of dollars start crying that the Emperor has no clothes. Let me tell you that the Fed's silence on its ability to combat hyperinflation is extremely ominous. It is not that the Fed may have no contingency plans to meet such an emergency. It is that the plans it has are unorthodox, unethical, and they can only work clandestinely. They cannot succeed in the light of the day. The Fed plans to trap bond-bears and other speculators shorting the dollar.

Here I stumble into conjecture, hypotheses that nobody can prove or disprove because of the tight secrecy surrounding the plan. It is risky business to make conjectures about the clandestine operations of a government agency, but we are forced to take this risk in view of the web of lies the Fed weaves around itself.

The Fed's contingency plan is essentially a check-kiting scheme in conspiracy with the Bank of Japan. The Fed swaps interest-bearing Treasury debt for non-interest-bearing yen balances over and above its needs to finance the trade deficit. As the Fed buys the bonds in the open market, it will pull the rug from underneath the bond-bears, and speculators shorting the dollar will burn their fingers right to the armpit. How do we know that this is what the Fed is planning to do or is already doing? By a process of elimination. Short of making the dollar gold-redeemable, and throwing all ethical considerations aside, this plan offers the best chance for saving the dollar from the sudden-death syndrome, the congenital disease of all irredeemable currencies. Note that the Fed's plan is basically the elevation of the yen-carry trade to official status. It eliminates the risk on the short leg since there are no borrowing costs. The yens are not borrowed, they are simply created on the balance sheet of the Bank of Japan. The rate of interest on dollar loans will continue to fall. Speculators will be forced to cover their short positions on the dollar with a loss; survivors will go long. Here is the perfect example of "running on empty". Just as check-kiting can tap into the pocket-book of everybody using the bank's services, this plan of the Fed taps into the public purse. It plunders all the savers and all the producers in the United States in order to save the immoral regime of irredeemable currency.

Note that the Fed's contingency plan to steer away from hyperinflation is essentially deflationary. It is designed to massacre all short sellers of dollars mercilessly by relentlessly pushing interest rates further down. The trouble with this plan is that it makes bond speculation on the long side of the market risk-free. If you now recall that speculators frustrate the Fed's anti-deflationary measures by speculating, risk-free, also on the long side of the bond market, then you will understand why I am inclined consider the deflationary scenario as more likely than the inflationary, at least for the rest of this decade, but possibly for the next one as well.

Be prepared for further mind-boggling increases in the money supply as the Fed is desperately pumping liquidity into the economy. Contrary to expectations the dollar will not get much weaker, and may indeed get stronger because the new money, rather than flowing to the commodity market as the handlers of the speculators would hope, is flowing to the bond market where speculation has been made risk free by the Fed's foolish policies. The deflationary spiral under the long-wave Kondratiev cycle is far from over, in spite of appearances. Please understand I don't suggest that you invest in bonds. I just suggest that you... well... fasten your seat belts...

more...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1283500


http://www.latimes.com/news/nationworld/nation/la-na-bankruptcy4mar04,0,7113947.story?coll=la-home-headlines

WASHINGTON — In the eight years since they began pressing for the tough bankruptcy bill being debated in the Senate, America's big credit card companies have effectively inoculated themselves from many of the problems that sparked their call for the measure.

By charging customers different interest rates depending on how likely they are to repay their debts and by adding substantial fees for an array of items such as late payments and foreign currency transactions, the major card companies have managed to keep their profits rising steadily even as personal bankruptcies have soared, industry figures show.

As a result, while they continue to press for legislation that would make it harder for individuals to declare bankruptcy, the companies have found ways to make money even on cardholders who eventually go broke.

At the same time, under the companies' new systems, many cardholders — especially low-income users — have ended up on a financial treadmill, required to make ever-larger monthly payments to keep their credit card balances from rising and to avoid insolvency.

"Most of the credit cards that end up in bankruptcy proceedings have already made a profit for the companies that issued them," said Robert R. Weed, a Virginia bankruptcy lawyer and onetime aide to former Republican House Speaker Newt Gingrich.

more...

12:55
Dow 10,930.20 +97.17 (+0.90%)
Nasdaq 2,073.69 +15.29 (+0.74%)
S&P 500 1,221.81 +11.34 (+0.94%)
10-Yr Bond 43.23 -0.60 (-1.37%)

NYSE Volume 873,797,000
Nasdaq Volume 1,059,561,000

Dow 10,930.61 +97.58 (+0.90%)
Nasdaq 2,072.57 +14.17 (+0.69%)
S&P 500 1,221.69 +11.22 (+0.93%)
10-yr Bond 4.319% -0.06
30-yr Bond 4.666% -0.07
NYSE Volume 1,019,086,000
Nasdaq Volume 1,197,912,000


1:30PM : Holding steady at sharply higher levels as technology trails its blue chip counterparts but remains strong across most areas... Computer hardware (+0.9%) has been lifted in part by news of a $10 bln stock buyback program at DELL (40.90 +0.90)...
Software (+0.8%) has also been strong, led in part by strength from Oracle (ORCL 13.41 +0.32) which was upgraded to Buy from Hold by FTN Midwest while disk drive (+0.9%) has been strong amid job cuts (up to 5,500) at Maxtor (MXO 5.89 +0.09) and positive comments from Goldman Sachs about Seagate Technology (STX 18.72 +0.34) and its upcoming (Mar. 7) mid-quarter update... Semiconductor, however, continues to struggle following downgrades on a handful of leading semi cap equipment makers (i.e. AMAT, NVLS and KLAC)... SOX -0.3, NYSE Adv/Dec 2467/756, Nasdaq Adv/Dec 1841/1165

1:00PM : Blue chip indices touch new session highs as buyers rally around a recent drop in oil prices... Crude oil futures have recently fallen to $53.25/bbl (-$0.32) amid growing uncertainty on whether or not OPEC will boost production quotas at its upcoming meeting (Mar 16)... Reports suggest that OPEC will issue a statement on Monday to reassure its intentions to keep the market well-supplied... NYSE Adv/Dec 2407/776, Nasdaq Adv/Dec 1751/1225

12:30PM : Indices are off their highs, but hold on to the bulk of today's gains, with spirited leadership from a number of blue chip industry groups... On the Dow, McDonald's (MCD 33.86 +0.45) has been strong amid positive comments from Smith Barney regarding improved Feb same store sales forecasts while Johnson & Johnson (JNJ 67.36 +0.61) has climbed on news that it will buy Closure Medical (CLSR) for $370 mln...

Hewlett-Packard (HPQ 20.67 -0.14) , however, has been one of just four components under pressure after Prudential recommended investors swap HPQ shares for DELL stock following the latter's $10 bln stock buyback announcement... AIG (64.68 -0.28) has also been under pressure after reports suggest a financial transaction between AIG and Berkshire Hathaway's General Reinsurance unit has attracted the attention of Federal regulators... Other notable movers include AA (1.6%), C (+1.1%), CAT (+1.5%), DD (+1.8%), MMM (+1.5%), UTX (+1.1%) and XOM (+1.2%)...NYSE Adv/Dec 2415/755, Nasdaq Adv/Dec 1703/1234

12:00PM : Market continues to trade at improved levels midday after employment data showed strong job expansion without concerns of inflation... While nonfarm payrolls grew at the fastest rate since Oct. 2004, checking in at 262K (consensus 252K), signs that inflation remains under control, due to an unchanged reading in average hourly wages, has been the driving catalyst behind today's rally...

Lower bond yields have also contributed to the overall positive sentiment as Treasurys, despite initially selling off as the nonfarm payrolls figure was below a more aggressively inflated "whisper" number, have also climbed amid lessened inflation fears... The benchmark 10-year note is up 13 ticks to yield 4.32%... That said, interest-rate sensitive groups, like homebuilding (+2.2%), financial (+1.0%) and utility (+1.9%), have been some of the morning's best performing groups, as evidenced by a new 52-week high in the latter's Dow Jones Index...

Airline (+2.3%), amid oversold conditions and firming fundamentals, has led the charge behind a new 52-week high in the Dow Jones Transportation Average, while a weaker greenback has lent support for materials (+2.3%) stocks, paced by strength in steel (+4.2%) and gold (+2.9%)... The dollar has fallen for the first time in a week, losing nearly 1.0% against both the euro (1.3239) and the yen (104.51) as the jobs data fell shy of some economists' forecasts... Also strong have been energy, despite oil prices stabilizing near $53/bbl, health care, retail, consumer staples and telecom services while gains in hardware, disk drive and software have offset weakness in semiconductor... Chip stocks have been under pressure following downgrades on several leading chip names (i.e. AMAT, NVLS and KLAC)...

Biotech has also been weak following more disappointing Tysabri data from BIIB (-3.2%) and ELN (-5.9%)... Separately, investors also got a read on Jan factory orders and Feb consumer sentiment, both of which came in fairly close to expectations, but neither release had much of an impact on the market... DJTA +1.5, DJUA +1.9, DOT +0.5, Nasdaq 100 +0.7, Russell 2000 +0.5, SOX -0.3, S&P Midcap 400 +0.8, XOI +1.5, NYSE Adv/Dec 2364/754, Nasdaq Adv/Dec 1676/1222


And the buck - look at that chart, big drop followed by a flatline
http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=s

Last trade 82.50 Change -0.78 (-0.94%)

Settle 83.28 Settle Time 00:35

Open 83.33 Previous Close 83.28

High 83.41 Low 82.41

Dow 10,958.14 +125.11 (+1.15%)
Nasdaq 2,077.05 +18.65 (+0.91%)
S&P 500 1,224.54 +14.07 (+1.16%)
10-yr Bond 4.315% -0.07
30-yr Bond 4.662% -0.08
NYSE Volume 1,083,669,000
Nasdaq Volume 1,266,996,000

2:00PM: Renewed enthusiasm for equities again sends the indices to new session highs despite total volume running at a roughly average pace... While blue chips have maintained a slight edge to the upside over the Nasdaq, volume on the NYSE has only just now surpassed 1.0 shares... Meanwhile, the S&P has so far erased 2005 losses and is on pace to close at levels not seen since Aug. 2001 while new 52-week highs have been realized on all three of the Dow Indices...
Notable S&P constituents trading higher include LPX +7.7%, MON +5.9%, FCX +5.6%, NUE +5.5% and ATI +5.3% while those underperforming the most include DPH -14.1%, VC -6.5%, BIIB -4.2%, MU -3.4%, AV -2.5%... ..DJIA +1.2%... NYSE Adv/Dec 2443/797, Nasdaq Adv/Dec 1806/1221

Advances & Declines
NYSE Nasdaq
Advances 2464 (72%) 1831 (57%)
Declines 789 (23%) 1209 (37%)
Unchanged 134 (3%) 148 (4%)

--------------------------------------------------------------------------------

Up Vol* 739 (73%) 759 (62%)
Down Vol* 260 (25%) 438 (36%)
Unch. Vol* 12 (1%) 11 (0%)

--------------------------------------------------------------------------------

New Hi's 370 116
New Lo's 13 38

you took the numbers and blather right out of my mouth. Volume is average and traders are reportedly ho-hum with the employment and income reports. Whazzup with that?

don't pass the smell test here. Is there some investment flow coming in today - 401K, pensions, etc? That wouldn't explain the so-so volumes though, would it?

Funny, I got a call from my "money guy" earlier today trying to coax me back in...wonder if there are a lot of them on some weird calling spree. :shrug:

Where is that animation that Mauve had yesterday, with the lemmings?

http://www.nytimes.com/2005/03/04/business/worldbusiness/04goldman.html?pagewanted=1

BEIJING - Shortly after a SARS crisis scared many people off the streets of this city, Henry M. Paulson Jr., the chief executive of Goldman Sachs, flew here for a quiet dinner on June 4, 2003, with two of China's most influential power brokers.

They worked out a remarkable deal, approved last year by President Hu Jintao, that marks a triumph for Goldman - the creation of a joint venture that gives the firm greater access than any other foreign investment bank to China's increasingly lucrative financial services market.

But to gain that access, Goldman engaged in an unusual horse trade. In exchange for making a $67 million "donation" to cover investor losses at a failed Chinese brokerage firm, Goldman won government approval to set up its own joint-venture investment bank in Beijing.

And to jump-start the venture, Goldman also agreed to lend $100 million to one of the men Mr. Paulson met that evening at the marble-columned Noble Court restaurant in the Grand Hyatt: a 52-year-old Chinese banker named Fang Feng Lei.

The Goldman deal, which the company hopes will mean millions of dollars in profits in the coming years, offers a rare glimpse into the maneuvers that many foreign companies undertake to get a leg up in the rough-and-tumble race to establish business in China. And like others before it, the joint venture was years in the making, involving frequent huddles with high Communist Party officials.

What was so unusual about the Goldman deal is that a blueblood American firm was willing to pay $67 million to help the government dissolve an entirely unrelated state-owned enterprise, Hainan Securities, whose officials have been accused in lawsuits of embezzling millions of dollars from investor accounts.

more...

Imagine what it would be doing if the darn oil was not $52 per barrel!

I think oil's a little higher than that, too. But 107 opints would be good--if we could take our winnings in gold or the Euro--right?

http://www.macleans.ca/topstories/world/article.jsp?content=20050307_101541_101541

David Walker can see the future, and it scares the hell out of him.

That wouldn't be terribly unusual if he were one of the thousands of lobbyists, legislators and activists crawling all over Washington on any given day, pontificating about the urgency of their pet issues. There is a thriving industry here built on pushing policy prescriptions for every ailment, real or imagined. But Walker isn't a lobbyist or an activist, he's an accountant. His title is comptroller general of the United States, which makes him the head auditor for the most important and powerful government in the world. And he's desperately trying to get a message out to anyone who'll listen: the United States of America's public finances are a shambles. They're getting rapidly worse. And if something major isn't done soon to solve the country's intractable budget problems, the world will face an economic shakeup unlike anything ever seen before.

Seated in his wood-panelled office in downtown Washington, Walker measures his words, trying to walk the fine line between raising an alarm and fostering panic. He cringes when he hears prominent economists warning about a financial "Armageddon," but he makes no bones about the fact the situation is dire. "I don't like using words that are overly inflammatory," he says, leaning forward in his chair. "At the same time, I think it is critically important that the American people, as well as their elected representatives, get a better understanding of just how serious our situation is."

snip>

HOW DID THE U.S. GET INTO THIS MESS?
In January 2001, George W. Bush took over leadership of a nation that was on its most solid financial footing in decades, thanks to years of strong economic growth and a booming stock market. That very month, the Congressional Budget Office projected that the federal government could expect US$5.6 trillion in surpluses over the coming 10 years. The key political issue of the day was how to spend the windfall. Bush's team was determined to return the money to the voters in the form of massive and widespread tax relief. What the world didn't know was that this surplus cash was largely illusory, the result of faulty bookkeeping.

The CBO's rosy outlook was based on a few deeply flawed assumptions, in particular that most government spending would not exceed the pace of inflation over the following decade, even though the rest of the economy and tax revenues were projected to grow much faster. Laurence Kotlikoff, a professor of economics at Boston University and a prominent critic of U.S. budgetary planning, released a paper that year drawing attention to what he called the CBO's "fiscal fantasy." But his was a single, lonely voice, and few on Capitol Hill were listening. The tax-cut agenda had taken hold, and there would be no stopping it.

more....

Arithmetic error my a$$ Greenspin! Isn't that what he said yesterday?

http://biz.yahoo.com/ibd/050303/corner_1.html

snip>

In the past, before a stock broke down it would usually flash multiple technical warning signs. You might see it wedge to new highs in weak volume. Or the stock might churn, showing little price movement in heavy trade. The stock's sharp decline would occur over weeks, not on a single day.

Now earnings disappointments can lead to more violent sell-offs. Companies that beat earnings estimates can still sell off. The firm may have missed sales views, or its guidance may have been soft.

What's causing the bigger losses? Many say it's Regulation Fair Disclosure. The rule requires that when a public company releases any information, it must do so in a way that the general public has access to it at the same time as institutional investors and analysts.

While Reg FD has helped level the playing field, there's also been an unintended consequence. With big-money investors now no longer privy to inside dope, leading stocks can be more at risk of nasty, unexpected falls come earnings day.

more...

I hadn't heard of this Regulation Fair Disclosure before. Heh, seems it may have broken a bit of the old Ponzi scheme. I'm sure the big-money investors will figure out another work-around. :eyes:

Dow 10947.65 +114.62 (+1.06%)
Nasdaq 2074.21 +15.81 (+0.77%)
S&P 500 1223.45 +12.98 (+1.07%)
10-Yr Bond 4.304% -0.79
NYSE Volume 1,197,899,000
Nasdaq Volume 1,377,818,000


2:30PM: Little changed since the last update as the major averages continue to vacillate in roughly the same ranges... Treasurys, however, have continued to move higher heading into the last half hour of bond trading... Yields on the 10-year note (-19/32) have now fallen to 4.29%, as the inflation picture remains tame in the wake of today's jobs data... While the hourly earnings component has eased concerns about more aggressive Fed tightening at upcoming meetings, Fed Funds futures still forecast a 100% chance that the Fed will raise its target rate to 3.25% by the end of July...NYSE Adv/Dec 2555/723, Nasdaq Adv/Dec 1859/1192

2:00PM: Renewed enthusiasm for equities again sends the indices to new session highs despite total volume running at a roughly average pace... While blue chips have maintained a slight edge to the upside over the Nasdaq, volume on the NYSE has only just now surpassed 1.0 bln shares... Meanwhile, the S&P has so far erased 2005 losses and is on pace to close at levels not seen since June 2001 while new 52-week highs have been realized on all three of the Dow Indices...

Notable S&P constituents trading higher include LPX +7.7%, MON +5.9%, FCX +5.6%, NUE +5.5% and ATI +5.3% while those underperforming include DPH -14.1%, VC -6.5%, BIIB -4.2%, MU -3.4%, AV -2.5%... ..DJIA +1.2%...DJTA +2.1, DJUA +2.1, NYSE Adv/Dec 2443/797, Nasdaq Adv/Dec 1806/1221


who 11,000 you leave for a couple of days and what the heck happens, Im going to have to catch up on a lot. Wonder if its *sh buddys trying to help puch privatization.

Bush made the statement that the gov't has been spending the SS money on "other things" and can't afford to pay back those IOUs.

Wonder how the rest of the world is going to take that bit of news? I didn't see a post with a link yet.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1283787#1283866

Is this guy stupid or what??????

What kind of signal is that to the foreign governments buying our debt.......

I'd guess his remarks didn't get much play. Did anyone ever find a link for that?

It this is the correct speech, it seems the comments were taken out of context somewhat. Maybe it was one of his other stump speeches. :shrug:

http://www.whitehouse.gov/news/releases/2005/03/20050304-9.html

If you look over here, in the '50s, 16 people were paying into the system to pay for one retiree. So if that person was to get $14,200, say, it would be $900 a payer. The system now is 3.3 people paying into the system. In a decade it's going to be two people paying in the system. Now, this is a pay-as-you-go system. In other words, it says when you retire, somebody is going to have to pay for your benefits. This is not a -- this is not a savings account. One of the myths of Social Security is that your money is going into it and the government is holding it and saving it for you. That's not the way it works. Your money is going into the system and it's getting spent -- some of it on retirement benefits, other parts on just general government. And there's an IOU, a paper IOU accumulating. But it's not just sitting there. There's not an account with your name that's saying, on behalf of you, the government has now got your money. That's not the way it works. So it's a pay-as-you-go. It goes in and goes out.

big snip>

Let me tell you why it makes sense to me that -- first of all, the government can't meet its promises.....


more...

I plan to ramp up publicity on this issue on my website.

Dow 10,940.55 +107.52 (+0.99%)
Nasdaq 2,070.61 +12.21 (+0.59%)
S&P 500 1,222.12 +11.65 (+0.96%)
10-Yr Bond 43.10 -0.73 (-1.67%)

NYSE Volume 1,636,123,000
Nasdaq Volume 1,828,872,000

...and the blather...

Close: Stronger than expected job creation, absent worries of inflation, ignited a broad-based rally that kept a bullish bias intact and closed the blue chip indices at 3 1/2-year highs... All three major Dow Indices hit new 52-week highs, as the Dow Industrials surpassed the 10,900 level for the first time since June 2001 as gains were realized in 27 of its 30 components...

The S&P 500 erased 2005 losses while the S&P 400 MidCap (+1.1%) and the S&P 600 Small Cap 600 Index (+1.2%) both touched all-time highs and the Russell 2000 Index (+1.0%) also surged but remains just shy of a new 2005 high, as the index touched 654.27 on Jan. 3... The Nasdaq, however, despite a strong performance, is still off roughly 4.8% in 2005... Feb nonfarm payrolls checked in at 262K (consensus 252K), recording the largest gain since Oct. 2004 and surpassing the 200K mark for just the second time since May, as manufacturing jobs increased for the first time since Aug...

An unexpected 0.2% increase in the unemployment rate, to 5.4% from last month's figure of 5.2%, raised an eyebrow amongst bond traders, but did little to alter the minds of equity investors as average hourly earnings - which acts as an inflationary measure through wage increases - and the average workweek, both came in unchanged at +0.2% and 33.7 hours, respectively... The data translated into a 2.4% annual rate of growth and remains consistent with real GDP growth expectations of at least 3.5-4.0% in the first half of 2005, clearly sustaining economic expansion but without increasing inflation worries and accelerating the pace of interest rate hikes...

You folks have a great weekend! See you at the casino Monday in the AM.

Ozy :hi:

you put into this topic/thread everyday. I look for this every morning and it is not a DU day if I don't see the stock market thread.