STOCK MARKET WATCH, Tuesday 6 December

CRUDE OIL VS. NAT. GAS -- A CONTRARIAN'S HYPOTHESIS

Last week in this space, I wrote about the recent – post Katrina/Rita - pull back in the prices of energy (crude oil and Nat. Gas specifically). I went on to surmise that, in light of demonstrable and ongoing Gulf Region energy related infrastructure impairment – that pitching one’s energy investments on the basis of these recent price declines might be foolhardy – suggesting that folks should perhaps pay close attention to the weather prognosis for the Northern U.S. as it relates to and determines heating demand. To draw a little more attention to last week’s summary; I would like everyone to take a look at the following (Nov. 29, 2005) research prepared by the ‘widely read’ Kurt H. Wulff, CFA of Independent Energy Valuation:

Summary and Recommendation

Attesting to global supply limitations, some energy prices have taken flight in Europe with the advent of colder weather. Current daily price for German electricity and U.K. natural gas about tripled in recent weeks. An acute need for immediate supply of clean energy has consumers in the U.K., Spain, the U.S. and Japan scrambling for the few tanker loads of liquefied natural gas that may be obtained in the spot market. Our natural gas mentor and pioneering consultant on global natural gas and LNG, Mr. Jim Jensen, tells Barrons, “You could get a bidding war for Atlantic LNG cargoes”.

Mr. Wulff goes on at length singling out “clean energy” – discussing the merits of individual oil and gas companies, as well as refiners – from small to mid to large cap - with a splendid analysis of numerous individual companies using his own proprietary rating system.

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Now Consider

The U.S. government is often accused of utilizing surreptitious activity to influence the gold market – utilizing ‘Central Bank physical’ and a generous array of derivatives or ‘paper gold.’ If, for a moment – you accept the notion that there may be a shred of truth to these accusations – would it not be logical to consider that similar activity would be undertaken in a similarly strategic commodity like oil?

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My Hypothesis and Conclusion

Over the next few months, let’s track the changes in price of crude oil versus Natural Gas, shall we. My hunch is that there will be a rather large divergence in relative prices – because Natural Gas is perhaps the only strategic commodity that is truly “above being rigged” – only because no one has enough of it to do so.

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

8:30 AM Productivity-Rev. for Q3
Briefing Forecast 4.5%
Market Expects 4.5%
Prior 4.1%

10:00 AM Factory Orders for Oct
Briefing Forecast 1.3%
Market Expects 2.2%
Prior -1.7%

8:30am 12/06/05 U.S. REAL HOURLY COMPENSATION UP 1.2% IN PAST YEAR

8:30am 12/06/05 U.S. UNIT LABOR COSTS UP 1.8% IN PAST YEAR

8:30am 12/06/05 U.S. PRODUCTIVITY UP 3.1% IN PAST YEAR

8:30am 12/06/05 U.S. 2Q UNIT LABOR COSTS REVISED TO -1.2% VS. UP 1.8%

8:30am 12/06/05 U.S. 3Q NONFINANCIAL UNIT LABOR COSTS UP 1.3%

8:30am 12/06/05 U.S. 3Q NONFINANCIAL PRODUCTIVITY UP 3.2%

8:30am 12/06/05 U.S.3Q UNIT LABOR COSTS FALL 1.0% VS. UP 0.8%

8:30am 12/06/05 U.S. 3Q PRODUCTIVITY REVISED TO 4.7% ANNUALIZED VS. 4.1%

This is nothing for most of us to celebrate.

10:00am 12/06/05 U.S. OCT. FACTORY ORDERS EX-TRANSPORTATION UP 0.6%

10:00am 12/06/05 U.S. OCT. DURABLE ORDERS UP REVISED UP 3.7% VS 3.4% PREV

10:00am 12/06/05 U.S. SEPT. FACTORY ORDER DOWN REVISED 1.4% VS 1.7% PREV

10:00am 12/06/05 U.S. OCT. FACTORY ORDERS UP 2.2% VS 2.1% FORECAST

10:00am 12/06/05 U.S. OCT. PENDING HOME SALES DOWN 3.3% YEAR-ON-YEAR

10:00am 12/06/05 U.S. OCT. PENDING HOME SALES INDEX FALLS 3.2%

What's up with the major revisions on the reports these days? :eyes:

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38692.4167575116-853429122&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - Orders for U.S.-made factory goods increased 2.2% in October, more than reversing a decline in September, the Commerce Department estimated Tuesday. The increase in October was in line with Wall Street estimates, according to a survey conducted by MarketWatch. Factory orders fell 1.4% in September. Strong demand for durable goods fueled the October increase. Orders for durable goods were revised up to a 3.7% gain in October, compared with the initial estimate of a 3.4% rise. Orders for nondurable goods increased 0.5%. Shipments of factory goods rose 1.0% in October. Inventories increased 0.6%, while unfilled orders rose 1.6%.

VIENNA, Austria - Crude futures dipped further under $60 a barrel Tuesday despite continued cold weather across the U.S. East Coast that boosted demand for heating fuels.

The trend appeared to reflect market sentiment that for now, requirements were being met by increasing production and imports into the key U.S. market. Still, analyst said prices would likely head upward as the winter chill continued.

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10:05am 12/06/05 JAN CRUDE FALLS 11C TO $59.80/BRL IN EARLY NY TRADE

10:05am 12/06/05 JAN NATURAL GAS DOWN 6C, OR 0.4%, AT $13.60/MLN BTUS

12:31pm 12/06/05 ENERGY DEPT SEES FASTER RECOVERY OF GULF ENERGY THAN IN NOV.

12:31pm 12/06/05 ENERGY DEPT. SEES HEATING BILLS UP $203 OR 25.7% VS YEAR AGO

12:31pm 12/06/05 ENERGY DEPT. LOWERS FORECAST FOR WINTER HEATING BILLS

here's the spinner's headline:

Energy Dept. lowers forecast for winter heating bills

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38692.5312979398-853445201&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- U.S. heating bills are likely to be about $203 or 26% higher than a year ago, the Energy Department said Tuesday in its monthly short-term energy outlook. The forecast is lower than earlier forecasts of a $258 increase because warm weather prevailed in October and November. The government said it expects oil and gas production in the Gulf of Mexico to recover slightly faster than previous estimates. Crude oil prices are expected to average $63 per barrel in 2006. Retail gasoline prices are expected to average $2.41 a gallon. Natural gas prices are expected to average $9.30 per thousand cubic feet in 2006.

Now maybe those fraidycats will go and shop for Xmas!

12:21pm 12/06/05 JAN CRUDE UP 24C AT $60.15/BRL AFTER $59.55 LOW

12:21pm 12/06/05 JAN NATURAL GAS UUP 4C AT $13.70/MLN BTUS AFTER $13.415 LOW

2:17pm 12/06/05 JAN CRUDE FALLS 16C TO $59.75/BRL IN LAST FEW MIN OF TRADING

2:17pm 12/06/05 JAN NATURAL GAS DOWN 27C, OR 2%, AT $13.39/MLN BTUS

2:57pm 12/06/05 JAN NATURAL GAS FALLS 17.1C TO CLOSE AT $13.489/MLN BTUS

2:56pm 12/06/05 JAN CRUDE CLOSES AT $59.94/BRL, UP 3C FOR THE SESSION

http://www.knoxstudio.com/shns/story.cfm?pk=WAR-RATIONALE-12-06-05&cat=WW

excerpt:

Bush, meanwhile, now cites Iraqi oil as a reason for keeping American troops stationed there, warning that extremists would confiscate oil resources if U.S. troops left too soon.

"They'd seize oil fields to fund their ambitions," he said.

SAN FRANCISCO - The New York Stock Exchange said Monday it plans to delist Calpine Corp. in a move reflecting Wall Street's dismay as the debt-plagued power merchant considers bankruptcy.

The decision represents the investment community's latest snub of a company whose shares have been eroding as its debts and losses mount.

Calpine lost its spot in the Standard & Poor's 500 late last week after its market value shriveled to less than $310 million — the lowest in the blue-chip stock index.

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A Delaware judge ruled Calpine improperly spent $313 million that had been held in escrow for lenders and last week order the company to repay the money, plus interest, by Jan. 22. The requirement threatens to create a cash crunch so severe that management has acknowledged the company might seek refuge in bankruptcy court.

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But he's not talking about your wages.

WASHINGTON (Reuters) - Treasury Secretary John Snow said on Monday that a steadily expanding U.S. economy has reached a point where it should start generating good news about incomes and jobs.

"We're about at a tipping-point here where we're going to see much improvement in wage rates and compensation," Snow said during an interview on CNBC television.

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see today's report - productivity up - labor costs down.

I see oil prices way ahead of anything forcast by industry insiders even 3-4 months ago. The view (I know, I stopped watching it) on MSNBC was that the decreased driving in the cold months would bring the demand for oil down so that the barrel price would fall to the $40-50 range. It's now hovering at the $60 range as you posted with signs pointing that it will go nowhere but up from here.

Also, during the summer the concensus was for the fed to stop raising it's short term rates when it hit 4-4 1/2%. I see that not happening until the rate hits at least 5% as the economy is still chugging along at about 3 1/2-3 3/4% GDP with still high initial inflation. The 2 and 3 year treasuries had an inversion last week and today remain the same rate. bush may have tied his hopes of a resurgance of good poll numbers to the wrong index. I see the economy taking a dive after a month or so of this 'santa claus' rally the markets are enjoying.

IMVHO!

:donut: and a special :hi: to you greiner3 and other lurkers. Yes, I share your POV. They are busy making happy with the economic news but many of us here on Main Street remain unconvinced.
Well, I had a late app with a Chiropractor friend and did not make it to the welcoming committee. I hear that it was impressive and got play time this am on the morning news shows. Too bad about the conspiracy charges. Hope they can make the money laundering charges stick. I think they will. We have SO few campaign laws here in Tx, and he surely did use corp. money on this redistricting campaign. He has such a long history of shady fund raising-he really pushes the envelope.
I don't see him surviving another term in his district or regaining his position of whip. He has made too many enemies among GOP and even if he were to get back in that position, too many of the moderate GOP would rebel against his heavy handed arm twisting.

no blaming it on the weather. Surely it is a post Katrina/Rita slump. Maybe they'll pull out that chestnut next week.

Epsilon in the Atlantic...I see potential weather problems, esp hurricanes, affecting sales the rest of the holidays.

weather.

:evilgrin:

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

Last trade 91.55 Change +0.07 (+0.08%)

Dollar Is Down But Not Out

http://www.dailyfx.com/index.php?option=com_content&task=view&id=5282&Itemid=39

EUR/USD – Euro bulls once again pushed the pair toward the ranges 1.1863, a level marked by the 23. Fib of the 23.6 Fib of the 1.2588-1.1639 USD rally only to see their efforts wasted following the failure on the part of the single currency longs to gain momentum above the 1.1800 handle. As the pair remains confined to a .1700-1.1863 consolidation range, a push toward the 1.1900 figure will most likely see the prospective greenback longs sell into the single currency rally and push it back down toward 1.1751, a level marked by the 20-day SMA. As greenback longs continue to build a short Euro position and get ready to break below the 1.1700-1.1863 consolidation range, a confirmed break below 1.1639, the most recent 2005 low, will most likely see the pair head lower and test the euro’s bids around 1.1546, an October 17, 2003 daily low. Indicators are mixed with positive momentum above the zero line and negative MACD sloping upward toward the zero line, while neutral oscillators give either side enough room to maneuver.

<snip>

USD/JPY – Japanese Yen remains in a trend mode as the pair continues to gather momentum above the 121.00 handle as more dollar traders entered the market following the collapse of the 120.0 figure. As an upward movement remains intact, a sustained momentum to upside the will most likely see the pair head higher and take on the offers around the 121.92, a level marked by the March 24, 2003. A sustained momentum to the upside will most likely see the pair aim for the 123.08, a significant level marked by the 1.50 Fib Extension of the May-July 900 pip USD rally. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, with ADX above 25 at 40.28 signaling an existence of a trend, not a direction of one, while both overbought RSI and Stochastic add to the trending outlook.

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Since this is the contra-government, I suppose that means that retirees had better watch out!

http://www.forbes.com/business/feeds/ap/2005/12/05/ap2370909.html

President Bush said Monday that American companies must honor promises to their retired workers, and he urged Congress to pass tough legislation so retirees don't see their pension checks slashed.

"In our society, we've had some companies - big companies - go bankrupt, and workers at those companies know what I'm talking about," Bush said. "And so my message to corporate America is: You need to fulfill your promises."

With millions of baby boomers approaching retirement age, there is growing anxiety about the security of workers' pensions and the prospect that taxpayers will get stuck with a massive bill for bailing out failed pension funds in the airline and steel industries. Automakers say that they, too, are being hammered by high labor, pension and health care costs.

Bush sought to relieve economic anxieties in a speech at a Deere-Hitachi Construction Machinery plant near Greensboro, where workers gave him a warm reception.

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they need to take Bush up on this instead of the lame argument Reid gave! Introduce legislation that puts the workers pension fund at the head of the line to receive money when a company goes though bankruptcy. Disallow companies to jettison pensions (or use them) to enhance their bottom line. I would grab that 'olive branch' and beat the shat out of Bush with it. If he gets a little credit for it OK-just name it after a well know DEM and make sure the DEM's are united on it. If he doesn't back it (which I think he wouldn't)he and the GOP will look bad to most workers in this country.

9:47
Dow 10,867.26 +32.25 (+0.30%)
Nasdaq 2,267.69 +10.05 (+0.45%)
S&P 500 1,265.69 +3.60 (+0.29%)
10-Yr Bond 45.37 -0.30 (-0.66%)
NYSE Volume 2,333,121,000
Nasdaq Volume 145,084,000

9:40AM: Market rebounds nicely following yesterday's energy-induced pullback. While most of the corporate news has been encouraging, investors have embraced an upward revision to Q3 productivity (to 4.7% from 4.1%). More notably, the report was accompanied by a larger than expected 1.0% decline in unit labor costs -- an important inflation factor. Energy costs have soared as a business input cost, but since labor costs are a much larger factor in total business expenses, eased concerns about a rise in pricing pressures one week before the FOMC's next meeting bodes well for stocks.

http://www.bloomberg.com/apps/news?pid=10000103&sid=aS.khYscYP80&refer=us

Dec. 6 (Bloomberg) -- A rally in U.S. Treasuries sent the 10-year note to its biggest gain in three weeks after a government report showing labor costs fell last quarter more than initially estimated eased concern inflation will accelerate.

``You have no inflation in these numbers at all,'' said Michael Franzese, head of U.S. Treasury trading at Zions First National Bank in Jersey City, New Jersey. The data argues for just one more interest-rate increase by the Federal Reserve after next week, he said. ``This market has abundant opportunities once the Fed removes itself from the equation.''

The advance, also sparked by a drop in an index measuring pending home sales, pushed 10-year yields down from the highest since Nov. 15 and wiped out all of yesterday's decrease. The rise may help lower the government's borrowing costs as it auctions $21 billion of five- and 10-year notes starting tomorrow.

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Isn't is a rosy freakin' world when the only inflation that is recognized is "wage inflation"?

It becomes more and more apparent that people can starve, freeze to death, drown or become homeless and it is not even considered.

9:48am 12/06/05 FEB GOLD FALLS $3.20 TO $509.40/OZ IN MORNING NY TRADE

9:48am 12/06/05 MARCH COPPER DOWN 2.45C, OR 1.2%, AT $1.983/LB

1:52pm 12/06/05 DEC GOLD CLOSES UP $1.30 AT $510.20 AN OUNCE

1:52pm 12/06/05 DEC SILVER CLOSES UP 3.80C AT $8.67 AN OUNCE

Ron Paul's article dated today raises some scary questions, and show a bleak future scenario.
http://www.lewrockwell.com/paul/paul293.html
Gold is history’s oldest and most stable currency. Central bankers and politicians don’t want a gold-backed currency system, because it denies them the power to create money out of thin air. Governments by their very nature want to expand, whether to finance military intervention abroad or a welfare state at home. Expansion costs money, and politicians don’t want spending limited to the amounts they can tax or borrow. This is precisely why central banks now manage all of the world’s major currencies.

Yet while politicians favor central bank control of money, history and the laws of economics are on the side of gold. Even though central banks try to mask their inflationary policies and suppress the price of gold by surreptitiously selling it, the gold markets always cut through the smokescreen eventually. Rising gold prices like we see today historically signify trouble for paper currencies, and the dollar is no exception.

President Nixon finally severed the last tenuous links between the dollar and gold in 1971. Since 1971, the Federal Reserve and U.S. Treasury have employed a pure fiat money system, meaning government can create money whenever it decrees simply by printing more dollars. The "value" of each newly minted dollar is determined by the faith of the public, the money supply, and the financial markets. In other words, fiat dollars have no intrinsic value.

What does this mean for you and your family? Since your dollars have no intrinsic value, they are subject to currency market fluctuations and ruinous government policies, especially Fed inflationary policies. Every time new dollars are printed and the money supply increases, your income and savings are worth less. Even as you save for retirement, the Fed is working against you. Inflation is nothing more than government counterfeiting by the Fed printing presses."
Yikes, now I'm really scared:scared: I better be looking for some refrigerator boxes quick!

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-06T152913Z_01_N06346367_RTRIDST_0_FOOD-CHIQUITA-PLANTS-UPDATE-1.XML

NEW YORK, Dec 6 (Reuters) - Chiquita Brands International Inc. (CQB.N: Quote, Profile, Research) on Tuesday said it would close facilities in Manteno, Illinois, and Kansas City, Missouri, by February to reduce costs and eliminate redundancies in its fresh-cut fruit processing.

The closures will affect about 100 employees and result in a charge of $7 million for the Manteno plant and a $4 million adjustment to goodwill for closing the Fresh Express plant in Kansas City.

Chiquita said it expects the actions to save $3 million, which will begin taking effect in the second quarter of 2006.

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(on edit: better link - more info)

12:43
Dow 10,911.93 +76.92 (+0.71%)
Nasdaq 2,274.79 +17.15 (+0.76%)
S&P 500 1,271.59 +9.50 (+0.75%)
10-Yr Bond 44.98 -0.69 (-1.51%)
NYSE Volume 1,050,036,000
Nasdaq Volume 908,139,000

12:00PM : Market trading near session highs midday as encouraging Q3 productivity data and upbeat corporate news improve sentiment. Even though the Labor Dept.'s productivity report seldom has a significant impact on trading, an upward revision to 4.7% (from 4.1%) for Q3 amid a bigger than expected decline in unit labor costs during times of inflationary uncertainty has helped underpin a positive tone for the market. Of the nine economic sectors trading higher, Technology remains the most influential leader to the upside amid strength in everything from semiconductor - optimistic guidance from Maxim Integrated (MXIM 39.44 +1.94) and Altera (ALTR 19.33 +1.03) - and software to networking and hardware. Apple Computer (AAPL 74.42 +2.60) has surged after UBS raised FY06-07 estimates and upped their target to $86 (from $74). Oil prices turning positive and surpassing $60/bbl within the last 10 minutes has helped Energy extend its leading 33% year-to-date surge. The rate-sensitive Financial sector has also been a leader as borrowing costs continue to improve. Losses that left the yield on the 10-yr note yesterday at its highest level (4.57%) since Nov. 14 have been erased, as eased inflation fears have renewed buying interest in bonds. The 10-yr note is up 16 ticks to yield 4.50%. Consumer Discretionary has also posted a 0.5% gain, as reaffirmed Dec. comps growth guidance of 4-5% from Target (TGT 53.58 +0.97) has helped retail while the Industrials sector has benefited from an analyst upgrade on FedEx (FDX 98.99 +3.20). Separately, Oct. factory orders growth of 2.2% matched economists' expectations; however, since the report is very predictable, and non-durables (+0.5%) is the only new component, the data have been largely ignored. DJTA +1.3, DOT +0.4, Nasdaq 100 +0.9, Russell 2000 +0.4, SOX +1.9, S&P Midcap 400 +0.3, XOI +0.7, NYSE Adv/Dec 1800/1225, Nasdaq Adv/Dec 1737/1127

12:30PM: Indices extend their reach to the upside as the recent rebound in oil prices now has the influential Energy sector up 1.3%. Continued demand for chip stocks has also been a source of support, lifting the Tech sector (+1.2%) and inching the Nasdaq toward its best levels in four years. SOX +2.3, XOI +0.9, NYSE Adv/Dec 1940/1152, Nasdaq Adv/Dec 1840/1061

Dow 10,910.65 +75.64 (+0.70%)
Nasdaq 2,276.48 +18.84 (+0.83%)
S&P 500 1,271.51 +9.42 (+0.75%)
10-Yr Bond 44.88 -0.79 (-1.73%)
NYSE Volume 1,166,628,000
Nasdaq Volume 1,003,412,000


1:00PM: Market is off its best levels but continues to put together a solid advance, as strong buying interest in Treasuries acts as an additional catalyst behind the day's rally. While the knock back through 4.50% on the 10-year note (+21/32) yield is less significant in a holiday (approaching) market, it does remain a psychological factor and may prove compelling for the remainder of the session. NYSE Adv/Dec 2070/1046, Nasdaq Adv/Dec 1855/1066

http://news.yahoo.com/news?tmpl=story&cid=123&e=6&u=/ucrr/20051203/cm_ucrr/isgeorgebushtheworstpresidentever

excerpt:

There are some numbers. The History News Network at George Mason University has just polled historians informally on the Bush record. Four hundred and fifteen, about a third of those contacted, answered -- maybe they were all crazed liberals -- making the project as unofficial as it was interesting. These were the results: 338 said they believed Bush was failing, while 77 said he was succeeding. Fifty said they thought he was the worst president ever. Worse than Buchanan.

This is what those historians said -- and it should be noted that some of the criticism about deficit spending and misuse of the military came from self-identified conservatives -- about the Bush record:

He has taken the country into an unwinnable war and alienated friend and foe alike in the process;

He is bankrupting the country with a combination of aggressive military spending and reduced taxation of the rich;

He has deliberately and dangerously attacked separation of church and state;

<snip>

He has sacrificed American employment (including the toleration of pension and benefit elimination) to increase overall productivity;

<snip>

He has tolerated or ignored one of the republic's oldest problems, corporate cheating in supplying the military in wartime.

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professors that thought he was succeeding were from Bob Jones, Baylor, and Oral Roberts University. Which begs the question- In what, exactly, is it that he is succeeding?

Dow 10,879.91 +44.90 (+0.41%)
Nasdaq 2,266.93 +9.29 (+0.41%)
S&P 500 1,266.95 +4.86 (+0.39%)
10-Yr Bond 4.496 -0.71 (-1.55%)

NYSE Volume 1,667,369,000
Nasdaq Volume 1,450,764,000

3:00PM: Stocks continue to trade sideways heading into the final hour of trading, showing little reaction to further upside momentum in the Materials sector as gold futures close at their highest levels in over 20 years. Nonetheless, since Materials is the least influential of the ten economic sectors, a new session high for the group has had little impact on overall trading. NYSE Adv/Dec 2113/1148, Nasdaq Adv/Dec 1926/1082

2:30PM: Range-bound trading persists as virtually every industry continues to sport gains. Bucking the bullish bias, however, has been Education Services (-1.6%), as shares of Apollo Group (APOL 70.35 -1.23) have lost ground in sympathy with an 11% drubbing in Career Education (CECO 34.55 -4.29), which was put on one-year probation. Food retail (-0.8%) has traded lower after Kroger (KR 19.76 -0.47) merely matched analayts' Q3 forecasts while Fertilizers & Agricultural Chemicals (-0.8%) has also been weak after Monsanto (MON 77.55 -0.52) was downgraded to Neutral at Banc of America. NYSE Adv/Dec 2126/1100, Nasdaq Adv/Dec 1916/1078

2:00PM: Bullish breadth figures and strong industry leadership to the upside continue to bode well for equities. As reflected in the A/D line, advancers on both the NYSE and Nasdaq still hold a roughly 2-to-1 edge over decliners. Adding to today's broad-based buying efforts have been the indices' ability to break above last week's highs, as resistance levels of 1272 and 2277 for the S&P 500 and Nasdaq, respectively, have recently been breached.NYSE Adv/Dec 2118/1073, Nasdaq Adv/Dec 1946/996

Dow 10,856.86 +21.85 (+0.20%)
Nasdaq 2,260.76 +3.12 (+0.14%)
S&P 500 1,263.70 +1.61 (+0.13%)
10-Yr Bond 44.94 -0.73 (-1.60%)
NYSE Volume 2,110,712,000
Nasdaq Volume 1,828,859,000

The market showed some resilience in the face of late-day consolidation efforts, as stocks, which were much higher throughout the session amid tame inflation data and upbeat corporate news, limped into the close just above the flat line. Before the bell, investors embraced an upward revision to Q3 productivity (to 4.7% from 4.1%) and eased inflation concerns following a larger than expected 1.0% decline in unit labor costs. The latter part of the Labor Dept.'s report, which typically has limited significance on trading unless times of inflationary uncertainty warrant more importance, boded especially well for bond traders, as renewed buying interest in Treasuries knocked the yield on the 10-year note (+21/32) down to 4.48%. Nonetheless, while the influential Financial sector initially took notice, participants eventually locked in recent gains that had taken the AMEX Securities Broker/Dealer Index to historic highs and year-to-date gains to a sector leading 29%. Of the five economic sectors which helped the major averages cling to small gains, the Materials sector turned in the day's best performance as gold futures again closed near their best levels in over 20 years. Providing more leadership, however, was Technology. Hardware led the way higher, as raised FY06-07 estimates and a revised price target to $86 (from $74) at UBS helped Apple Computer (AAPL 74.07 +2.25) close at a new all-time high. Chip stocks were another bright spot, getting a boost following optimistic guidance from Maxim Integrated (MXIM 39.06 +1.56) and Altera (ALTR 19.40 +1.10). Consumer Discretionary also traded higher as reaffirmed Dec. same-store sales growth guidance of 4-5% from Target (TGT 53.20 +0.59) helped retail regain positive footing for the year. Energy, supported in part by a mid-day rebound in oil prices, and Industrials, benefiting from an analyst upgrade on FedEx (FDX 99.01 +3.22), helped offset weakness in Health Care and Consumer Staples. The latter lost ground after Kroger (KR 19.52 -0.71) merely matched analysts' Q3 expectations while weakness in biotech, drug and medical devices weighed on the former. Separately, Oct. factory orders growth of 2.2% matched economists' forecasts, however, since the report is very predictable, and non-durables (+0.5%) was the only new component, the data was largely ignored. DJTA +1.0, DOT -0.2, Nasdaq 100 +0.4, Russell 2000 +0.1, SOX +1.0, XOI +0.2, NYSE Adv/Dec 1774/1514, Nasdaq Adv/Dec 1625/1398