STOCK MARKET WATCH, Thursday March 1

Transportation & Other Economic Data Point Towards
Continued Economic Weakness Ahead
BY CHRIS PUPLAVA

The market yesterday seemed to answer the question to last week’s article entitled, “Bad Moon Rising?” as I wrote about a few developments that pointed towards a market correction. I wanted to update the figures presented last week and put forth a few more that point towards economic weakness ahead, which is likely to weigh on the markets going forward.

First off, last week I presented Westpac Strategy Group’s economic surprise indices that have a great track record of turning prior to or at least coinciding with turns in the S&P 500. I showed last week how both the percent surprise index and the size of surprise index had both turned lower and hinted at a coming market correction. The updated versions are provided below.

-see chart-

Negative Economic Trends Point Toward Continued Economic Deceleration

The recent trend reversal behind consumer staples is likely to continue as more economic data is pointing towards continued deceleration in the economy, an environment defensive sectors thrive in due to sector rotation. Transportation data has been corroborating the slowdown in U.S. GDP and questions the rebound in the Dow Jones Transportation Average, which is likely the result of falling oil prices, not a turnaround in economic activity. Truck tonnage in shipments continues to move south on a year-over-year (YOY) basis as it has prior to recessions and mid-cycle slowdowns in the past.

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Not only is trucking data pointing towards continued economic weakness but so is railcar data. Railcar shipments peaked in late 2003 and 2004 on a YOY basis and have continued to decelerate since then, turning negative in the middle of 2006. There is a fairly strong directional correlation between the consumer discretionary relative strength ratio with railcar shipments as seen below. As trucking data questions the strength in the Dow Jones Transportation Average, so does railcar shipping data question the recent relative strength in the consumer discretionary sector. Who’s telling the right story -- investors or economic data? My belief is in the latter.

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

http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20070301/ZNYT01/703010874/1018/NEWS02

Analysts have been stumped by the apparent resilience of the American economy, which seemed to be bounding ahead at a 3.5 percent pace in the final quarter of last year even as the housing market fell and the Federal Reserve raised interest rates.

The paradox has been solved: the economy was not bounding. The Commerce Department reported yesterday that economic growth inched ahead by 2.2 percent in the fourth quarter of last year, only slightly faster than the 2 percent growth recorded in the third quarter and substantially below the economy’s long-term trend rate of growth

The downward revision, by 1.3 percentage points, in the preliminary estimate of gross domestic product was almost three times the average adjustment since the early 1980s, which is 0.5 percentage point.

Coupled with a 17 percent decline in new-home sales in January and a 7.8 percent drop last month in orders of durable goods like computers and washing machines, the new data indicated the economy was much weaker than it seemed.

“I think we are going to discover that the economy is softer than the Fed thinks,” said Robert Barbera, chief economist at ITG Hoenig.

/...

8:30 AM Personal Income Jan
Briefing Forecast 0.3%
Market Expects 0.3%
Prior 0.5%

8:30 AM Personal Spending Jan
Briefing Forecast 0.4%
Market Expects 0.4%
Prior 0.7%

8:30 AM Initial Claims 02/24
Briefing Forecast 325K
Market Expects 325K
Prior 332K

10:00 AM Construction Spending Jan
Briefing Forecast -0.2%
Market Expects -0.4%
Prior -0.4%

10:00 AM ISM Index Feb
Briefing Forecast 50.5
Market Expects 50.0
Prior 49.3

5:00 PM Auto Sales Feb
Briefing Forecast 5.1M
Market Expects 5.1M
Prior 5.2M

5:00 PM Truck Sales Feb
Briefing Forecast 7.2M
Market Expects 7.3M
Prior 7.5M

http://biz.yahoo.com/c/e.html

05. U.S. 4-week avg. continuing jobless claims rise to 2.54 mln
8:30 AM ET, Mar 01, 2007 - 3 minutes ago

06. U.S. Jan. real disposable incomes up 0.5%
8:30 AM ET, Mar 01, 2007 - 3 minutes ago

07. U.S. continuing jobless claims rise 134,000 to 2.64 million
8:30 AM ET, Mar 01, 2007 - 3 minutes ago

08. U.S. Jan. real consumer spending up 0.3%
8:30 AM ET, Mar 01, 2007 - 3 minutes ago

09. U.S. Jan. personal savings rate improves to -1.2%
8:30 AM ET, Mar 01, 2007 - 3 minutes ago

10. U.S. 4-wk. avg. initial jobless claims up 7,500 to 335,250
8:30 AM ET, Mar 01, 2007 - 3 minutes ago

11. U.S. Jan. consumer spending up 0.5% vs. 0.4% expected
8:30 AM ET, Mar 01, 2007 - 3 minutes ago

12. U.S. weekly initial jobless claims rise 7,000 to 338,000
8:30 AM ET, Mar 01, 2007 - 3 minutes ago

13. U.S. Jan. personal incomes up 1% on bonus payments
8:30 AM ET, Mar 01, 2007 - 3 minutes ago

14. U.S. core PCE price index up 2.3% y-o-y, vs. 2.2%
8:30 AM ET, Mar 01, 2007 - 3 minutes ago

15. U.S. Jan. core PCE price index up 0.3% as expected
8:30 AM ET, Mar 01, 2007 - 3 minutes ago

01. U.S. Jan. federal construction spending up 9.7%
10:00 AM ET, Mar 01, 2007 - 1 minute ago

02. U.S. Jan. private residential construction outlays fall 1.8%
10:00 AM ET, Mar 01, 2007 - 1 minute ago

03. U.S. Jan. private construction spending falls 1.2%
10:00 AM ET, Mar 01, 2007 - 1 minute ago

04. U.S. Jan. construction spending falls 0.8%
10:00 AM ET, Mar 01, 2007 - 1 minute ago

01. U.S. Jan. federal construction spending up 9.7%
10:00 AM ET, Mar 01, 2007 - 1 minute ago

02. U.S. Jan. private residential construction outlays fall 1.8%
10:00 AM ET, Mar 01, 2007 - 1 minute ago

03. U.S. Jan. private construction spending falls 1.2%
10:00 AM ET, Mar 01, 2007 - 1 minute ago

04. U.S. Jan. construction spending falls 0.8%
10:00 AM ET, Mar 01, 2007 - 1 minute ago

adding ISM info on edit:

09. U.S. Feb. ISM inventories 44.6% vs 39.9% in Jan
10:02 AM ET, Mar 01, 2007 - 3 minutes ago

15. U.S. Feb. ISM new orders 54.9% vs 50.3% in Jan
10:01 AM ET, Mar 01, 2007 - 4 minutes ago

16. U.S. Feb. ISM employment 51.1% vs 49.5% in Jan
10:01 AM ET, Mar 01, 2007 - 4 minutes ago

SINGAPORE - Oil prices dropped slightly Thursday as traders responded to gains a day earlier caused by a report showing declining U.S. crude inventories.

Light, sweet crude for April delivery fell 18 cents to $61.82 a barrel in mid-afternoon Asian electronic trading on the New York Mercantile Exchange.

-cut-

On Wednesday, prices hit a two-month high following a U.S. government report that stockpiles of gasoline and distillates, which include heating oil and diesel fuel, dropped last week by a larger amount than analysts had forecast.

-cut-

U.S. crude inventories climbed 1.4 million barrels to 329.0 million barrels last week, the Energy Information Administration said Wednesday in its weekly report. But gasoline inventories fell by 1.9 million barrels to 220.2 million barrels, and distillate inventories fell by 3.8 million barrels to 124.5 million barrels. Both drops were a bit larger than most analysts were expecting.

http://news.yahoo.com/s/ap/oil_prices

DOHA, Qatar — Legendary Texas oilman T. Boone Pickens sees today's stubbornly high oil price as evidence that daily global production capacity is at — or very near — its peak.

<snip>
"If I'm right, we're already at the peak," Pickens said earlier this week in Doha, on the sidelines of the Forbes magazine CEO conference. "The price will have to go up."

The 78-year-old former wildcatter, who now heads the Dallas-based hedge fund BP Capital, is credited with a history of prescient predictions about the direction of oil markets. His bets have paid off handsomely. BP Capital's returns have exceeded 800 percent since 2001, he said.

Still, most industry and government analysts are far less pessimistic than the straight-talking Texan. Most believe petroleum will be a growing energy source for decades. The U.S. government expects oil demand to rise to 120 million barrels a day by 2030 and says a peak in output — the point at which half of the world's reserves are depleted — won't arrive until mid-century.

<snip>

http://www.chron.com/disp/story.mpl/business/4592240.html

OK, we have some bad blood between us but I do give the guy grudging respect and he died in the wool wildcatter. I trust his assesment more that the government:eyes:
What stood out for me was that later in the article, he was drinking a coke :wtf: That is not the T Bone I have heard of in legend-but then I looked at the geography. :rofl:

Ford Motor Co. said Wednesday that its restructuring plan would likely cost $11.18 billion, with more than half of the expenses devoted to programs for laid-off workers.

In a filing with the Securities and Exchange Commission, the No. 2 U.S. automaker estimated spending $5.96 billion on a jobs bank and other "personnel-reduction programs," $2.74 billion to scale back its pensions, $2.2 billion for fixed asset impairment charges and $281 million to idle plants.

The company also disclosed that it has pledged all its buildings, trademarks, intellectual property, shares in the main company, and shares in Volvo, Jaguar, Aston Martin, Ford Motor Credit Co. (nyse: FCJ - news - people ) and other operations as collateral for a $23.4 billion line of credit to fund its restructuring plan and cover losses expected until 2009.

http://www.forbes.com/feeds/ap/2007/03/01/ap3474474.html

Fair exchange.





:sarcasm:

TOKYO - Major Asian stock markets retreated for a third session Thursday amid persistent unease about the global economy, while European markets opened cautiously higher after a rebound on Wall Street that was buttressed by upbeat comments from U.S. Federal Reserve Chairman Ben Bernanke.

Shares in Japan, Australia, Taiwan, Hong Kong, Singapore and Malaysia all retreated mildly, while the Shanghai market — whose plunge Tuesday triggered a global sell-off — fell 2.91 percent.

But markets in the Philippines and New Zealand rebounded.

The losses across much of Asia underlined lingering worries about the outlook for the U.S. and global economy as well as overvalued stock prices. While analysts said the global jolt was most likely a correction to cool surging markets, some said market volatility could persist for months.

http://news.yahoo.com/s/ap/20070301/ap_on_bi_ge/world_markets

TOKYO (Reuters) -- The Nikkei average fell 0.9 percent Thursday, extending losses from the previous session as Toyota Motor Corp. and other exporters lost ground due to concern about U.S. economic growth.

Shares in Softbank Corp. (Charts) slid more than 7 percent in busy trade after a brokerage issued a report citing what it called "red flags" in the Internet conglomerate's accounting. The company, which operates Japan's third-largest mobile phone service, said it would issue "strong objections" to both the brokerage, Calyon Capital Markets Asia, and the author of the report.

"The markets have been pricing in a Goldilocks scenario for the last couple of months," he said. "Apart from the falls in the Chinese market, which affect sentiment and particularly the risk appetite, I think there are one or two economic worries as well in the background."

http://money.cnn.com/2007/03/01/news/international/bc.markets.japan.stocks.reut/index.htm?postversion=2007030106

http://asia.news.yahoo.com/070301/afp/070301082344business.html

TOKYO (AFP) - Asian investors sweated Thursday as the aftershocks from the recent global stock market rout reverberated around the region, pushing Tokyo and Shanghai back into negative territory.

Markets waited nervously to see if selling pressure would ease -- as many analysts predict -- or whether the recent signs of stabilisation in many markets are merely the eye of the storm before a further selloff.

Analysts have been quick to point out that the Asian economies remain in good shape, but after the sharp falls of recent days nerves were still frayed.

After clawing back some of their massive losses on Wednesday, Chinese share prices turned lower again, closing down 2.91 percent as the rollercoaster ride continued following Tuesday's worst selloff for a decade.

Dealers said investors remained jittery despite a turnaround of nearly four percent Wednesday and volatility was expected to continue given the Chinese market was up more nearly 130 percent over the last 12 months.

"Investors are still wondering if the storm is actually over or not," said Masatoshi Sato, a senior strategist at Mizuho Investors Securities in Tokyo.

"Aftershocks in some markets, where prices are overvalued, may be seen from now on. Volatile and sensitive trading is likely to continue at least until mid-March," he said.

In Tokyo the benchmark Nikkei-225 index closed down 0.86 percent as an overnight rebound on Wall Street helped to reassure nervous investors after the index slumped 2.85 percent on Wednesday.

Hong Kong was also down almost one percent in late trade and Sydney ended 0.38 lower, while New Zealand shares eked out a gain of 0.29 percent and Manila closed up 4.0 percent.

"I don't think people are panicky but they're nervous the correction may have further to go," said Ric Klusman of Aequs Securities.

"They fear the rise on Wall Street may turn out to be the dead cat bounce."

/...

that a while back Chineese Government owned 30% of all the Chineese stocks on the stock market anyway they offered it up to the public

my gut feeling is the Chineese have nevered really had stock market experience and they are getting one now

The panic came with worry about the war with Iran and slowdown in America

WASHINGTON (Reuters) - U.S. banking regulators plan to issue eagerly awaited guidance on the subprime mortgage market as early as Thursday afternoon, two sources familiar with the matter told Reuters on Wednesday.

The proposed regulation affecting borrowers with poor credit histories will be issued by agencies, including the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.

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The subprime loans are so-called "2-28 mortgages" that feature a fixed interest rate for two years before resetting as much as 6 percentage points higher.

The additional guidance on subprime mortgages will come at a time when rising delinquencies have reverberated throughout U.S. financial markets. A growing number of subprime borrowers face foreclosure and their lenders face insolvency.

http://news.yahoo.com/s/nm/20070301/bs_nm/usa_subprime_government1_dc

Several of the world's largest investment banks have decided to join a new trading system called BIDS - the Block Interest Discovery System - in an attempt to allow cheap and anonymous exchanges of large blocks of shares.

BIDS is one of the latest examples of so-called dark books, or dark pools of liquidity.

These systems serve as alternatives to traditional exchanges by providing private access to the order flow of an individual bank, or, in the case of BIDS, a group of banks.

The system was founded by Citigroup, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley and UBS, in an attempt to increase competition and liquidity in equities trading.

http://news.yahoo.com/s/ft/20070228/bs_ft/fto022820071818456427

Sounds like another scheme to help the PPT keep those numbers looking happy no matter what the fundamentals say.

Beijing -- For a nation that loves to gamble, the allure of soaring stock markets and their promise of fast wealth have proved irresistible.

Yet as the earth-rattling tumble in China's markets Tuesday and the bounce back a day later illustrate, Chinese stock markets present a riskier roll of the dice than most. The exchanges are young, volatile and undergoing a government overhaul designed to increase transparency and bring them up to international standards.

It's a reform agenda that might prove more difficult to complete because of what most analysts agree is a major investment bubble. Analysts say the markets in Shanghai and Shenzhen are vastly overvalued -- the Shanghai composite index has more than doubled in the last 12 months -- and a downturn far worse that Tuesday's relative dip could come anytime.

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Chinese media is rife with reports of investors pawning property, selling homes and taking out large loans to buy stocks. If a bubble bursts, investors stand to lose far more than pocket money.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/03/01/BUG1MOD0U61.DTL

as I really don't understand the stock market, BUT ... I received an e-mail a few days ago that quoted Alan Greenspan (I know, he's retired) as saying we're are on our way to a recession, yet the talking heads this morning said the stock market recovered yesterday (yeah, 52 points is a recovery?) and that Ben Bernake says the economy is on solid ground. WTF?

Nevermind that Greenspan is no longer the Federal Reserve chairman - his 18 year tenure still grants him residual importance when evaluating domestic economic vitality. That is to say - his words are important to people who move huge piles of money through the markets.

A 52-point gain is not much of a recovery. That is a boost provided by scavengers looking for sweet things to eat. Anyway, here's a link to an article that examines what Greenspan said with what some think he said.



http://www.zeenews.com/znnew/articles.asp?rep=2&aid=357411&ssid=51&sid=BUS

It seems like all he has to do is answer a question these days, and poof, there go 75 points on the Dow.

The market is fucked if you ask me...but you didn't! :)

DETROIT -- Consumer Reports' latest auto reliability and survey rankings find overall domination by Japanese automakers, gains from the Detroit Three, and stumbles from Europe.

For the second time in 10 years, all the magazine's top-10 picks are Japanese nameplates. This year's list includes five new models: the Toyota RAV4, Infiniti G35, Toyota Sienna, Mazda MX-5 Miata, and the Honda Fit.

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The Toyota Prius ranked as the most satisfying vehicle overall for the fourth straight year based on the percentage of respondents who said they would buy the same model again, according to the magazine's annual car owner satisfaction survey.

http://www.boston.com/business/globe/articles/2007/03/01/japanese_vehicles_dominate_consumer_reports_rankings/

http://money.cnn.com/2007/03/01/news/international/bc.daimlerchrysler.bmw.reut/index.htm?section=money_news_international

FRANKFURT (Reuters) -- German carmakers BMW and DaimlerChrysler have agreed to co-develop hybrid transmission systems for rear-wheel-drive premium cars, they said Thursday.

The accord on so-called "mild hybrids" aims to start rolling out products within the next three years, they said in a statement, citing benefits of sharing costs, combining know-how and reaping economies of scale once the hybrids go on sale.

The move reflects German carmakers' grudging acceptance that hybrids - long dismissed as a fad in German boardrooms but made successful by Japan's Toyota Motor Corp (Charts) - appeal to consumers, especially given worries about global warming.

The project complements a three-way alliance with General Motors to develop "full" hybrids that link an electric motor and batteries to a standard combustion engine.

/...

http://uk.reuters.com/article/topNews/idUKL2817326720070301?&src=030107_1309_TOPSTORY_petrol_fears_probed

LONDON (Reuters) - Investigations gathered pace on Thursday into whether contaminated petrol was responsible for a mysterious problem that has damaged the engines of hundreds of cars across the country.

Retailers and suppliers said they were carrying out tests on fuel but had so far found no evidence of any abnormalities after trading standards authorities announced they were probing up to 100 complaints from motorists in southeast England.
Photo

Broadcasters have been bombarded with emails from angry car owners across the country saying their vehicles had suffered breakdowns after leaving filling station forecourts.

The Society of Motor Manufacturers and Traders (SMMT) said it believed suspect fuel might have damaged sensors in some cars' systems, leading them to cut power to prevent damage to the engine.

"It's still fairly unclear what's going on," said SMMT spokesman Nigel Wonnacott.

He said cars about 2-5 years old seemed to be most affected.

"It's affecting all types of cars but it tends to be cars which are 3 years old-plus. It doesn't seem to be so much of a problem as far as we are aware with brand new cars," he said.

/...

Weird huh? Top UK Reuters headline at the moment...

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

Last trade 83.58 Change 0.00 (0.00%)

US Dollar: Central Banks Try to Pacify the Markets, But Traders Do Not Believe Them

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar__Central_Banks_Try_1172702975191.html

US Dollar - After yesterday’s wild moves, the global financial markets spent the day licking its wounds. Although government officials from around the world tried to pacify the markets by suggesting that things may not be as bad as they seemed the degree of today’s recoveries indicate that traders may not be buying it. They will be reluctant to get back into the markets in force after having bailed out as quickly as they did. Starting with the Chinese government, officials at the Ministry of Finance reassured international investors that they are not planning to take some heat off of the economy by enacting a capital gains tax. The initial trigger for yesterday’s liquidation was concerns about Chinese growth and tighter restriction on foreign investment. In theUS, members of the NYSE attributed the collapse in the Dow to a computer glitch and not necessarily mass bearish sentiment. Federal Reserve Chairman Ben Bernanke confirmed his positive outlook on economic growth and indicated that the latest move in the stock prices will not alter the Fed’s plans for monetary policy. Yet, the real concerns about the US economy still remain. Manufacturing conditions in the Chicago region continued to contract while new home sales saw the largest percentage drop in 13 years. Sales of new homes are a more leading indicator for the housing market than sales of existing homes. Supply of new homes also increased significantly which suggests that the worst may be yet to come. Problems in the subprime lending sector continue to keep the markets jittery. The US’ third largest subprime lender announced that they will have to delay their fourth quarter results, triggering a 20 percent drop in its stock price. Fourth quarter GDP was also revised lower form 3.5 percent to 2.2 percent. The price index was revised higher from 1.5 percent to 1.7 percent, but core PCE was revised down from 2.1 to 1.9 percent. At this point, the revisions are no surprise given the slower inventory accumulation and weaker residential investment. In fact, the market is already expecting slow growth in the first quarter. Looking ahead, personal income, manufacturing sector ISM and construction spending are on the docket. Both manufacturing activity in the Chicago and Philadelphia region was very weak. This suggests that any improvements in the national index should be minimal. Both personal income and construction spending are not expected to be very dollar friendly either.

...more...=

Euro, Pound Hold Tight Ranges Ahead of US Data

http://www.dailyfx.com/story/dailyfx_reports/daily_brief/Euro__Pound_Hold_Tight_Ranges_1172749706762.html

FX markets refused to budge from critical levels ahead of the release of ISM manufacturing in the US, leaving traders frustrated and anxiously awaiting the next big move amidst the recent return to volatility. Euro bounced between 1.3200 - 1.3245 throughout early European trading, with shifts in price based on greenback sentiment. The same applied to Cable price action, with the pair struggling to break out of the 1.9575 - 1.9630 range. Yen, on the other hand, fought to gain steam after USDJPY tested the 118.10 level over and over again, but never quite broke through.

Economic data didn’t leave much to sway the markets in any particular direction either. Although manufacturing PMI for the Euro-zone improved slightly in February to 55.6, the figure still missed estimates of 55.7. A breakdown of the data showed a sharp rise in the output reading and a mild gain in new orders. Meanwhile, price components dropped off while employment eased back to 52.9, but still remained well above 50, thus signaling ongoing expansion. Initial estimates for Euro-zone CPI were estimated to have eased back to 1.8% in February from 1.9% the month prior, backing the price components of manufacturing PMI. Inflation remains relatively tepid amidst lower prices, but January core CPI readings have started to accelerate, signaling that second round inflation effects may be picking up. Overall, the core CPI figure keeps the European Central Bank on track to hike rates next week to 3.75%, but the moderating headline results will probably lead the central bank to pause thereafter until evidence of greater price pressures come to fruition.

...more...

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070301:MTFH35654_2007-03-01_08-38-38_L01207514&type=comktNews&rpc=44
Thu Mar 1, 2007 3:38am ET

LONDON, March 1 (Reuters) - The yen rose against the dollar and the euro on Thursday, as stock market declines across Asia made investors edgy about a further slide in risky assets.

Falls in global stock markets, a rise in the price of oil, growing tensions over Iran's nuclear programme and a run of weaker than expected U.S. data have all contributed to a sharp fall in risk appetite in recent sessions.

As a result, investors have become less comfortable about borrowing cheaply in yen or Swiss francs to fund investments in higher yielding units such as the dollar, euro or sterling.

The unwinding of such carry trades drove the low-yielding Japanese currency up for its largest one-day gain in 14 months against the dollar earlier this week. "We think that the yen is probably due for another one or two days of strength," said Teis Knuthsen, FX and fixed income strategist at Danske Bank in Copenhagen.

"U.S. economic numbers have been clearly weaker than most people had thought....another issue is the political side, the Iran story just will not go away," he added.

By 0820 GMT, the dollar had slipped 0.2 percent to 118.20 yen <JPY=>. On Tuesday, the dollar fell below 117.50 yen to its weakest since Dec 15. The euro fell to 156.42 yen <EURJPY=>.

/...

http://asia.news.yahoo.com/070301/kyodo/d8nj9f200.html

(Kyodo) _ The U.S. dollar dropped to the lower 118 yen level Thursday in Tokyo on concerns over the U.S. economic outlook and continued stock falls in Tokyo and elsewhere.

At 5 p.m., the dollar was quoted at 118.10-12 yen, down from Wednesday's 5 p.m. quotes of 118.52-62 yen in New York and 118.58-60 yen in Tokyo.

It traded between 118.08 yen and 118.87 yen during the day, most often at 118.30 yen.

The euro fetched $1.3227-3229 and 156.22-26 yen, compared with Wednesday's 5 p.m. quotes of $1.3225-3235 and 156.82-92 yen in New York and $1.3209-3211 and 156.64-68 yen in Tokyo.

Early in the morning, the dollar gained ground to around 118.80 yen, with some market players buying back the currency which had fallen to a two-month low of 117.50 yen earlier this week. But later, the dollar gradually lost ground, falling into the lower 118 yen level.

"Strong buying that can push the dollar into the 119 yen level was absent," said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp. "With weak U.S. GDP data, it was hard to aggressively buy back the currency from the perspective of fundamentals."

She was referring to the sharp downward revisions to U.S. October-December gross domestic product growth released the previous day. The U.S. Commerce Department cut fourth-quarter GDP growth to an annualized real 2.2 percent from an initially estimated 3.5 percent.

/..

http://asia.news.yahoo.com/070301/kyodo/d8nj9m3g0.html

(Kyodo) _ Bank of Japan Governor Toshihiko Fukui said Thursday that the country's money markets should develop further so that they will be resilient enough to global capital transfers.

Fukui said at the bank's seminar on the improvement of money market functions, "I believe enhancing the efficiency of transaction methods and settlement systems is important so that markets can deal with global capital movements."

The BOJ chief also said making money markets more efficient would "improve the infrastructure of the Tokyo market as an international financial center."

Fukui pointed out that for five years up to last July, functions of Japan's money markets had been "suppressed" because of the BOJ's ultra-loose quantitative monetary policy.

Under the ultra-easy policy introduced in March 2001, the central bank had flooded the financial system with ample liquidity using current account deposits to anchor the short-term interest rates at near zero.

Since the BOJ ditched that policy in March 2006 and lifted the key short-term rate to 0.25 percent last July, money market functions "have been recovering steadily," Fukui said.

But the environment surrounding money markets has been rapidly changing due to the globalization of the economy and innovations in financial and information technology sectors, he said.

"Markets are expected to be more sophisticated. When upgraded money markets function well, effects of (the BOJ's) monetary policy adjustments will get across to markets and the economy," Fukui said.

/...

http://www.forbes.com/afxnewslimited/feeds/afx/2007/03/01/afx3474885.html

BEIJING (XFN-ASIA) - China will improve the yuan exchange rate formation mechanism and boost management and profitability of the country's foreign exchange reserves, Premier Wen Jiabao said in a speech, quoted in the Qiu Shi Journal, a communist party-owned magazine.

Premier Wen's speech was made at a financial work meeting on Jan 19-20 and was briefly reported on by news agencies at the time. Today's magazine report carried more details.

'Solving the imbalance in the international balance of payments will be a problem we will face for a considerable period of time,' Wen said.

The premier also said the government will further improve the yuan formation mechanism and gradually increase exchange rate flexibility.

But 'a perfect exchange rate regime should consider our country's economic situation and the ability of the economy and companies to bear such changes and ensure there are no big fluctuations in the economy,' Wen said.

/...

-snippet-

"We don't even accept regular U.S. dollars anymore," said Union, NJ 7-Eleven manager Rick Grove, echoing the sentiments of merchants nationwide. "We've gotten stung a few times taking in the real ones. I always tell my cashiers, if it feels fake to the touch, and you can't see both sides when you hold it up to the light, it's fine."

where else?

I am watching the credit markets move this morning - very volatile and jittery now. Going to be another fun day!

http://www.nytimes.com/2007/03/01/business/01scene.html?ex=1330405200&en=f717e8825b953e28&ei=5088&partner=rssnyt&emc=rss

excerpt:

For 2006, the Slate 60 not including Mr. Buffett pledged or gave a little over $7 billion to charity. Yet as of September 2006, the 60 richest Americans had an estimated $630 billion of wealth, up more than $62 billion (about 10 percent) from the year before. People are accumulating money much faster than they are giving it away.

Professor Carroll says the super-rich can’t be accumulating the money with the intention of spending it, either, because no one could spend that much.

To see his point, take Oracle’s founder, Lawrence J. Ellison. Mr. Ellison’s net worth last year was around $16 billion. And it will probably be much bigger when the list comes out in a few weeks. With $16 billion and a 10 percent rate of return, Mr. Ellison would need to spend more than $30 million a week simply to keep from accumulating more money than he already has, to say nothing of trying to spend down the $16 billion itself.

He spent something like $100 million on his Japanese-style mansion in Woodside, Calif., making it among the more expensive private residences ever built. But that is only about three weeks worth of the interest he earns on his wealth. And a house doesn’t actually spend down his net worth because it is an asset that can be resold. At least part of the $100 million is just a different way of saving.

Mr. Ellison would have to spend that $30 million a week — $183,000 an hour — on things that can’t be resold, like parties or meals, just to avoid increasing his wealth. While somebody might be able to spend like that — Paris Hilton, maybe — it certainly wouldn’t be easy, and it can’t explain why the super-rich accumulate.

The last of the seemingly rational explanations is that the billionaires want to pass it on to their children. But, again, their fortunes are growing far faster than their number of heirs, so each of the children will have the same problems spending the money that their parents had.

...more...

Remember Dolly Levi: "Money is like manure...it should be spread around helping young things grow!" Not piled up rotting, smelling and breeding flies like Richard Scaife!

You know, I'd be happy to trade some of my problems for their "how do I spend all this" one! :eyes:

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=2007-03-01T100955Z_01_L01656944_RTRIDST_0_MARKETS-EUROPE-STOCKS-UPDATE-1.XML
Thu Mar 1, 2007 5:10am ET

FRANKFURT, March 1 (Reuters) - European share indexes edged up in early trade on Thursday, boosted by upbeat company results and as investors scooped up shares made cheaper by this week's slide, but some players said they remained cautious.

"I don't think that we are done with the correction yet after such a long profitable phase," said Boris Boehm, head of equity fund management at Nordinvest. "I don't trust the situation," he added.

At 0947 GMT the FTSEurofirst index of top European shares <.FTEU3> was up 0.59 percent at 1,490.60 points.

...

"We are in a situation where overall market risk is more important than company data," Boehm said, adding that some investors were also taking advantage of the lower market levels, scooping up some promising shares.

/...

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39142.2006481482-890790875&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

European equity markets staged a modest recovery on Thursday after two days of sharp losses, led by a rebound in financial stocks, particularly those hardest hit during the market correction. In early trade, the FTSE Eurofirst 300 clawed back 0.3 per cent to 1,485.87, but still down 4.1 per cent from Monday’s six-year closing high of 1,550.34. Frankfurt’s Xetra Dax was up 0.2 per cent to 6,727.22, the CAC 40 in Paris was 0.2 per cent higher at 5,528.09 and London’s FTSE climbed 0.4 per cent to 6,197.0. Wall Street also showed signs of a tentative recovery overnight after Federal Reserve chairman Ben Bernanke strove to soothe the resolve of investors, saying there had been no trigger for the sharp equity declines and that the outlook for the US economy had not changed. The Dow Jones Industrial Average ended 0.4 per cent higher at 12,268.63, the Nasdaq Composite added 0.3 per cent to 2,416.15, while the S&P 500 gained 0.6 per cent to 1,406.82. Back in Europe and Swiss Re gained 4.5 per cent to SFr108.70 after the reinsurer announced a doubling in full-year net profit thanks to lower claims and the acquisition of the reinsurance division of General Electric. The company also announced the launch of SFr6bn share buyback. Munich Re, whose in-line results were overlooked in the previous session’s sell-off, gained 0.8 per cent to €121.41 after a price target upgrade from €100 to €143 by Lehman Brothers.

http://www.bloomberg.com/apps/news?pid=20601068&sid=ajJ9lSSA8XDc&refer=economy

March 1 (Bloomberg) -- Europe's manufacturing growth accelerated in February, a sign the economy is weathering tax increases, higher borrowing costs and a slowdown in the pace of U.S. expansion.

Royal Bank of Scotland Group Plc said its index of manufacturing in the euro area rose to 55.6 from 55.5 in January. A reading above 50 indicates growth. Economists expected the gauge, compiled by NTC Economics Ltd. from a survey of 3,000 purchasing managers, to rise to 55.7, according to median of 31 estimates in a Bloomberg News survey.

Record low unemployment is bolstering domestic demand after booming exports helped the euro-region economy record the fastest growth in six years in 2006. That's raising concern at the European Central Bank that the pace of expansion may fuel wage increases and lead to accelerating inflation later this year.

/...

Xetra Dax 30 down 1.6% at 6,607.51 in Frankfurt 13:00 GMT
CAC 40 down 1.3% at 5,445.10 in lunchtime trade in Paris as US futures slip 12:54
Dow futures predict a 69 point fall on the closely-watched US index 12:46
Weaker Dow futures wipe out FTSE 100’s gains: London blue chips fall 0.7%, or 41 points, to 6,136.6 12:45

London slips from early highs

London equities started to recover on Thursday as investors looked for bargains after two days of selling, but some ground was lost by lunchtime as markets fell to intra-day lows as US stock futures turned negative. Strong earnings news from Reuters and British American Tobacco helped lift the gloom. The FTSE 100 was trading 12.3 points, or 0.2 per cent, higher at 6,183.8, back into positive territory for the year after a fall of more than 4 per cent in two days. The FTSE 250 also stayed higher, up 44.1 points, or 0.4 per cent, to 11,127.1, with support services and investment stocks leading the way.

European shares fall further, yen strength weighs
Thu Mar 1, 2007 12:50 PM GMT

LONDON, March 1 (Reuters) - European shares followed U.S. stock futures lower on Thursday as the strength of the yen fuelled worries over unwinding of the carry trade in that currency.

The FTSEurofirst 300 index of top European shares was down 1.1 percent at 1,465.48 points, its lowest point in the day.

U.S. stock futures for the main indexes were down 0.6 percent as the yen rallied to 117.61 against the dollar <JPY=> and 155.44 against the euro <EURJPY=>.

Investors are worried that this will hit the carry trade, which features borrowing low-yielding yen to invest in higher-yielding assets.

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=2007-03-01T102327Z_01_T300376_RTRIDST_0_JAPAN-GREENSPAN.XML
Thu Mar 1, 2007 5:23am ET

TOKYO, March 1 (Reuters) - Former Federal Reserve Chairman Alan Greenspan was quoted as saying on Thursday that a recession in the United States is possible, though not probable this year as inventory problems in the economy are being addressed quickly, Bloomberg reported.

Greenspan spoke via a satellite link at a forum held by CLSA Japan, and his comments were quoted by a few of the participants, Bloomberg said. The forum was closed to the media.

"By the end of the year, there is the possibility, but not the probability of the U.S. moving into recession," Greenspan told the forum, according to notes by Bernard Key, a former economics professor at Tama University in Tokyo, who attended the event and spoke to Bloomberg.

There are specific housing and general inventory problems that are being addressed quickly, but need to be carefully monitored, he was quoted as saying.

Greenspan's reported comments came a day after Federal Reserve Chairman Ben Bernanke said this week's stock market drop had not changed the Fed's view that the U.S. economy was sound.

/...

"Helicopter" Beaver vs. "Bubble-Blower" Grinspun: moving warily around the ring, eyeing each other up. Who will land the first serious blow? Where's the referee? DING!

09. Dow industrials futures down 114 pts at 12,160
8:06 AM ET, Mar 01, 2007 - 23 minutes ago

12. S&P 500 futures down 16.80 at 1,392.10
8:05 AM ET, Mar 01, 2007 - 24 minutes ago

14. Nasdaq 100 futures down 23.00 at 1,742.50
8:05 AM ET, Mar 01, 2007 - 24 minutes ago

08:00 am : S&P futures vs fair value: -12.8. Nasdaq futures vs fair value: -19.0. Early indications continue to deteriorate, suggesting yesterday's modest rebound will be met with another day of aggressive selling. In fact, recognition that Wednesday's recovery effort wasn't all that convincing when measured against such a meltdown on Tuesday creates an added sense of uneasiness.

With Tuesday's sell-off shifting the balance of sentiment and focus to everything negative, the implications that today’s influential economic data can have on Fed policy and the market's mentality on consumer spending activity are also weighing on sentiment. The upcoming personal income and spending report (8:30 ET) will be watched most closely since it contains the core-PCE deflator -- the Fed's favored inflation measure.

06:17 am : FTSE...6218.40...+46.90...+0.8%. DAX...6741.13...+25.69...+0.4%.

06:17 am : S&P futures vs fair value: +2.2. Nasdaq futures vs fair value: +9.5.

06:17 am : Nikkei...17453.51...-150.61...-0.9%. Hang

expecting this until closer to the end of the quarter. All this excitement would come when I've got too many projects going at once. I've barely got the time to check in to see what's going on.

Thanks everyone for keeping us up to date!

12K chants? Wonder if they'll still be able to defend the 12K level? :shrug:

I don't think they're smilin' now!!!




edit to add....it was October when it hit 12K
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=2589903#2590440

and it's good to "see" you this morning - you were missed yesterday - and I couldn't come back :( - life keeps intruding :D

Speaking of which, I've got to get some "stuff" done around here. Hope to check in at least a little bit today so I'm not THREE days behind on my reading the thread.
I've got a weekend conference going on as well so I've been trying to chisel my way through the previous SMW threads a little at a time.

:donut: and lurkers. We always miss the regulars when they are not here, especially when things are hopping. It's always better to share.:popcorn:

I went to fill up my car yesterday-OMG. The cheap, cheap was $2.19. At least a 15 cent increase in about 2 weeks. Boy are we going to be screwed this spring and summer. And I don't even want to think of what might happen if another hurricane whips through the Gulf.

The spin from WS has really been interesting. It's like a kids that didn't do their homework trying to get their stories straight. Makes no difference how it gets spun, it's still a spin job and these folks got caught with their pants down. The latest think I heard was that it was a necessary 'correction', like a trim to get rid of the split ends to help the healthy hair grow. Well, I don't think Brittney doesn't have split ends at the moment but I wouldn't call her healthy either. I think they may not stay at 12-and the fundamentals are so weak...it is not a robust economy. I think they just want to lure more suckers into the tent.

We were in the upper $1.80s at the end of Jan.

http://www.reuters.com/article/bondsNews/idUSNAT00248220070301

NEW YORK, March 1 (Reuters) - Planned U.S. layoffs rose 33 percent to a five-month high in February, as weakness in the housing market and auto industry seemed to spread into other sectors, an independent report showed on Thursday.

Announced layoffs totaled 84,014 in February, up from 62,975 in January but 4 percent fewer than the 87,437 announced a year earlier, according to Challenger, Gray & Christmas Inc., an employment consulting firm.

The February job cut figure is the highest since the 100,315 announced in September, the report said.

The U.S. automotive industry led all other sectors in terms of planned job cuts last month, with 18,209 or 22 percent of the total, Challenger said.

<snip>

This report comes before the government's weekly initial jobless claims later on Thursday, which is expected to show there were 325,000 new claims in the latest week down from 332,000 in the previous period, according to a Reuters survey.

...more at link...

Initial Claims came in at 338,000 - :(

is not making news. Unbelievable:crazy:

Going into my 3rd month of UE. Laid off the week befor Xmas

Mfg jobs have just about disappeared.
(I'm into material/inventory mgmt and purchasing)

Seems that all there is left is supply side gigs supporting the service/retail sectors. To me those jobs suck.

Life is indeed interesting these days:puke:

"Breaking News: Hedge Funds Still Not Hedged!"

:rofl: :rofl: :rofl: :rofl:

In other news, the HY index of credit spreads is wayyyyyyyy wider this morning - 261 bps now...last close was 245 bps...it was 219 bps before the shit started hitting the fan...these are very big bear moves...the credit markets were in a bubble that blows away the equity markets....tear 'em down! (I was on the wrong side of that bubble most of this month, so these are good times for me - made my month and then some).

Previously, the largest move in this index for the last 6 months was about 10 bps...just for some perspective.

http://www.reuters.com/article/bondsNews/idUSN0137238520070301

NEW YORK, March 1 (Reuters) - Wall Street was set to open sharply lower on Thursday as a strengthening yen stirred concern that investors were being forced to unwind carry trades in a repeat of the risk aversion that sparked Tuesday's global market rout.

Economic data released before the open was mixed. A government report showed both personal consumption expenditures, excluding food and energy costs, rose more than analysts' forecasts, adding to worry about inflation.

At the same time, data showing weekly jobless claims rose more than economists predicted pointed to weakness in the labor market.

Investors will pay close attention to the Institute for Supply Management's February manufacturing index at 10 a.m. (1500 GMT). Analysts forecast a reading of 50. Anything below 50 would signal a contraction in manufacturing growth.

"Futures were getting hit pretty good before this (data) came out. The yen was just another excuse to move the market ... and apparently Europe tanked pretty big," said Victor Pugliese, director of listed equity trading at First Albany Corp. in San Francisco.

...more...

those hedge funds have nothing good in them for this economy :scared:

greatest thing since the printing press sliced bread - according to the Greenspin.

eom

Between 3 and 5pm, CNBC averaged 183,000 demo viewers, topping FNC (154,000), CNN (125,000) and MSNBC (92,000). Jim Cramer had some of its highest viewership ever.

Ha!

Dow 12,089.90 178.73 (1.46%)
Nasdaq 2,364.16 51.99 (2.15%)
S&P 500 1,393.44 13.38 (0.95%)
10-Yr Bond 4.519% 0.031

NYSE Volume 97,210,000
Nasdaq Volume 132,849,000

09:15 am : S&P futures vs fair value: -14.9. Nasdaq futures vs fair value: -30.8.

09:00 am : S&P futures vs fair value: -13.2. Nasdaq futures vs fair value: -28.8. The stage remains set for what is shaping up to be another disastrous day for equities. With a meager 7-point rebound in the S&P 500 following a huge 50-point decline a day earlier already offering limited conviction on the part of buyers, more evidence that speculators, running on borrowed time with borrowed money, are racing for the exits to pay back their yen loans is underpinning an added sense of pessimism.

08:33 am : S&P futures vs fair value: -16.6. Nasdaq futures vs fair value: -28.5. Futures trade continues to languish well below fair value as the yen strengthening considerably within the last 45 minutes continues to fuel fears tied to the unwinding of carry-trades. Meanwhile, January personal income rose 1.0% (consensus 0.3%) while personal spending rose 0.5% (consensus 0.4%). The more closely watched core-PCE rose 0.3% to leave the year-over-year rate at 2.3%. That is above the Fed's comfort zone of 1.0% to 2.0% and raises added concern due to its potential to swing policy expectations. Initial claims unexpectedly rose 7K to 338K (consensus 325K).

How long can you tread water?

Let the tumble roll!

:(

Buy Buy buy! No! Sell sell sell! Wait! Buy! No! Sell!

Aint it good to be poor?

Let the faeries fly!!

they're gonna need Valkyries........:evilgrin:

03. <$VIX> CBOE volatility index for S&P 500 up 24% at 19.07
9:54 AM ET, Mar 01, 2007 - 1 minute ago

05. <$VIX> CBOE volatility index for S&P 500 at 7 1/2-mo. high
9:54 AM ET, Mar 01, 2007 - 1 minute ago

NASDAQ at lowest level since Nov. 8.
S&P500 at lowest level since Nov. 28.

:thumbsup:

:toast:

Dow 12,191.81 76.82 (0.63%)
Nasdaq 2,391.60 24.55 (1.02%)
S&P 500 1,392.20 14.62 (1.04%)
10-Yr Bond 4.517% 0.033

NYSE Volume 635,058,000
Nasdaq Volume 490,037,000

10:00 am : The bottom continues to fall out of equities as investors experience round two of the much talked about market correction. In fact, downside trading collars are now in effect on the NYSE as market internals remain decidedly bearish.

All 10 S&P 500 economic sectors are averaging losses of 1.7% and, of the 147 S&P industry groups, 145 are trading lower as sellers continue to dominate this morning's action. DJ30 -192.74 NASDAQ -51.61 SP500 -23.70 NASDAQ Dec/Adv/Vol 2378/261/294 mln NYSE Dec/Adv/Vol 1983/295/112 mln

09:40 am : Stocks kick off a new month trading sharply lower; all three major averages open down more than 1.0%. With the market now focused on everything negative, as evidenced by a growing sense of risk aversion following Tuesday's global sell-off, renewed concerns about carry-trade unwinding have taken an added toll on a market that is now overly pessimistic.

The yen rallying to the tune of 1.0%, after the Japanese Vice Minister for Finance said "the yen carry trade is not one way," is reminiscent to the 2% yen rally on Tuesday that also accelerated stock declines as speculators dumped stocks in order to pay off yen loans. DJ30 -168.87 NASDAQ -45.29 SP500 -19.94 NASDAQ Vol 120 mln NYSE Vol 80 mln

"He's at 10,000ft, 4,000ft, 5,000ft. He's all over! What an asshole!"



(or something like that)

Everything is fine. Don't worry, be happy.

Is the volume indicative of bulk trades?

but how long will it hold? :shrug:

K&R :toast:

Julie

now I'll be humming all day-thanks Roland... Get out the polyester leisure suit and quiana shirt.:woohoo:

:toast: An appropriate anthem for the day.

Julie

:)

Dow 12,202.14 Down 66.49 (0.54%)
Nasdaq 2,395.38 Down 20.77 (0.86%)
S&P 500 1,400.38 Down 6.44 (0.46%)
10-Yr Bond 4.552% Up 0.002
NYSE Volume 1,214,943,000
Nasdaq Volume 904,612,000

10:30 am : The indices are spiking higher following a strong ISM report and paring more than half of their early losses. After three sub-50 readings in four month, the ISM index in February rising to 52.3, from a January read of 49.3% -- the lowest since April 2003, is helping to alleviate the recession fears that have been unnecessarily building.

With manufacturing activity softening significantly over the last six months and understanding the strong implications that manufacturing as a whole can have on Fed policy decisions, investors are using the ISM data as a rallying cry amid so much recent negativity. The flight-to-quality bid in bonds has also diminished as the 10-year note is now up only 5 ticks to yield 4.54%. DJ30 -61.63 NASDAQ -18.35 SP500 -5.62 NASDAQ Dec/Adv/Vol 2274/479/600 mln NYSE Dec/Adv/Vol 2468/531/442 mln

10:57
Dow 12,250.77 Down 17.86 (0.15%)
Nasdaq 2,406.89 Down 9.26 (0.38%)
S&P 500 1,405.69 Down 1.13 (0.08%)
10-Yr Bond 4.54% Down 0.01
NYSE Volume 1,297,166,000
Nasdaq Volume 963,161,000

I thought bonds tended to rise when stocks fall, right?

When bond yields turn negative - that means that money is flowing steadily into the bond market. More demand brings smaller yield and a smaller demand drives the yield higher in hopes of attracting more buyers.

That was probably a stupid question, but thanks for explaining it to me.

11:12
Dow 12,200.78 Down 67.85 (0.55%)
Nasdaq 2,396.93 Down 19.22 (0.80%)
S&P 500 1,399.65 Down 7.17 (0.51%)
10-Yr Bond 4.552% Up 0.002
NYSE Volume 1,446,677,000
Nasdaq Volume 1,047,228,000

11:00 am : Recent attempts to pare losses have run into some resistance. That's not all that surprising since the market went up within the last hour nearly as fast as it went down at the onset of today's trading.

It is worth noting that all 10 sectors are still posting losses, and until some influential leadership resurfaces, the month of March is likely to begin with no end in sight to the market's potential downside following such a huge run-up in stocks since July. DJ30 -56.51 NASDAQ -16.27 SP500 -5.06 NASDAQ Dec/Adv/Vol 2275/556/830 mln NYSE Dec/Adv/Vol 2435/610/640 mln

Profits only netted $15M, which is small potatoes in I-Bank/Hedge Fund trading...certainly not worht the efforts they went to given that bonuses are a small fraction of that - about 10%ish.

http://www.sec.gov/news/press/2007/2007-28.htm

Washington, D.C., March 1, 2007 - The U.S. Securities and Exchange Commission today charged 14 defendants in a brazen insider trading scheme that netted more than $15 million in illegal insider trading profits on thousands of trades, using information stolen from UBS Securities LLC and Morgan Stanley & Co., Inc. The SEC complaint alleges that eight Wall Street professionals, including a UBS research executive and a Morgan Stanley attorney, two broker-dealers and a day-trading firm participated in the scheme. The defendants also include three hedge funds, which were the biggest beneficiaries of the fraud.

"Our action today is one of several that will make very clear the SEC is targeting hedge fund insider trading as a top priority," said SEC Chairman Christopher Cox.

The scheme involved unlawful trading ahead of upgrades and downgrades by UBS research analysts and corporate acquisition announcements involving Morgan Stanley's investment banking clients. The ringleaders of the UBS part of the scheme went to great lengths to hide their illegal conduct, first through a clandestine meeting at Manhattan's famed Oyster Bar and eventually the use of disposable cell phones, secret codes and cash kickbacks before the scheme unraveled.

"Today's events should send a message to anyone who believes that illegal insider trading is a quick and easy way to get rich. No matter how clever you are, no matter how hard you try to avoid detection, you underestimate us at your peril," said SEC Enforcement Director Linda Chatman Thomsen. "Illegal insider trading undermines the level playing field that is the hallmark of our capital markets. It is, however, particularly pernicious when Wall Street insiders — who derive their already substantial livelihood from the capital markets and those markets' investors — shamelessly compromise the markets' integrity and investors' trust for a quick buck."

SEC Associate Director of Enforcement Scott W. Friestad said, "Today's action is one of the largest SEC insider trading cases against Wall Street professionals since the days of Ivan Boesky and Dennis Levine. It involves fraud by employees of some of the biggest brokerage and investment banking firms in the country. We will do everything possible to make sure that, in addition to any other remedies or sanctions imposed, none of these individuals ever works in the securities industry again."

According to the SEC complaint, Mitchel Guttenberg, an executive director in the equity research department at UBS, provided material, nonpublic information concerning upcoming UBS analyst upgrades and downgrades to traders Eric Franklin and David Tavdy, in exchange for sharing in the illicit profits from their trading on that information. Franklin and Tavdy illegally traded on this inside information personally, for the hedge funds Franklin managed, and for the registered broker-dealers where Tavdy was a trader. Franklin and Tavdy also had a network of downstream tippees who illegally traded on this inside information, including a third hedge fund, a day-trading firm, and three registered representatives at Bear, Stearns & Co., Inc.

Several of those who illegally traded on the UBS information, and others, also traded ahead of corporate acquisition announcements using information stolen from Morgan Stanley. According to the complaint, Randi Collotta, an attorney in the global compliance department of Morgan Stanley, together with her husband, Christopher Collotta, an attorney in private practice, provided material, nonpublic information concerning upcoming corporate acquisitions involving Morgan Stanley's investment banking clients to Marc Jurman, a registered representative at a Florida broker-dealer. Jurman then traded on this information and shared his illicit profits with the Collottas. Jurman also tipped Robert Babcock, a registered representative at Bear Stearns, who traded on the information and tipped Franklin, a hedge fund managed by Franklin, and another registered representative at Bear Stearns.

As a result of the conduct described in the complaint, the Commission alleges that each named defendant violated the antifraud provisions of the federal securities laws. The Commission's complaint seeks permanent injunctive relief, disgorgement of illicit profits with prejudgment interest, and the imposition of civil monetary penalties.

The Commission's complaint names the defendants and includes the allegations set forth below:

Mitchel S. Guttenberg, age 41, who is a registered representative at UBS, and is an executive director and institutional client manager in the firm's equity research department. Guttenberg illegally tipped material, nonpublic information in connection with the UBS part of the scheme, in exchange for sharing in the illicit trading profits.

Erik R. Franklin, age 39, who, at times during the relevant period, was a portfolio manager for the Lyford Cay hedge fund and an employee of Bear Stearns in New York, N.Y., an analyst for the Chelsey Capital hedge fund in New York, N.Y., and a portfolio manager for the Q Capital hedge fund. Franklin illegally traded on and tipped material, nonpublic information from UBS and Morgan Stanley.

David S. Tavdy, age 38, who, at times during the relevant period, was a proprietary trader and registered representative at Andover Brokerage LLC in New York, N.Y.; a proprietary trader and registered representative at Assent, a broker dealer in New York, N.Y., and a trader at Jasper Capital. Tavdy illegally traded on and tipped material, nonpublic information in connection with the UBS part of the scheme.

Mark E. Lenowitz, age 43, who, at times during the relevant period, was a portfolio manager for the Chelsey Capital hedge fund in New York, N.Y., and a limited partner in the Q Capital hedge fund. Lenowitz illegally traded on material, nonpublic information in connection with the UBS part of the scheme.

Robert D. Babcock, age 33, who is a registered representative at Suntrust Capital Markets, Inc. and, during the relevant time period, was a registered representative at Bear Stearns in New York, N.Y., and was associated with the Lyford Cay hedge fund. Babcock illegally traded on and/or tipped material, nonpublic information from UBS and Morgan Stanley.

Andrew A. Srebnik, age 35, who is a registered representative at Jefferies & Company, Inc. and, during the relevant time period, was a registered representative at Bear Stearns in New York, N.Y. Srebnik illegally traded on material, nonpublic information in connection with the UBS part of the scheme.

Ken Okada, age 31, who is a registered representative at Cathay Financial, Inc. and, during the relevant time period, was a registered representative with Bear Stearns in New York, N.Y. Okada illegally traded on and/or tipped material, nonpublic information from UBS and Morgan Stanley.

David A. Glass, age 32, who is the owner and president of Jasper Capital and, at times during the relevant period, also was a registered representative at Assent. Glass traded on material, nonpublic information in connection with the UBS part of the scheme.

Randi E. Collotta, age 30, who is an attorney and the Director of Securities Operations at The Garden City Group, Inc. and, during the relevant time period, was an attorney in the global compliance department of Morgan Stanley in New York, N.Y. Randi Collotta illegally tipped material, nonpublic information she stole from Morgan Stanley, in exchange for sharing in the illicit trading profits.

Christopher K. Collotta, age 34, who is an attorney in private practice. Christopher Collotta illegally tipped material, nonpublic information that his wife, Randi Collotta, stole from Morgan Stanley, in exchange for sharing in the illicit trading profits.

Marc R. Jurman, age 31, who, at times during the relevant period, was a registered representative at the Boca Raton, Fla., branch office of Marlins Capital, LLC, and a registered representative at the Boca Raton, Fla., branch office of Finance 500, Inc. Jurman traded on and tipped material, nonpublic information from Morgan Stanley.

Q Capital Investment Partners, LP, which is a Delaware limited partnership with offices in Fort Lee, N.J. During the relevant time period, Q Capital operated as a hedge fund. Q Capital traded on material, nonpublic information from UBS and Morgan Stanley.

DSJ International Resources Ltd., which does business as Chelsey Capital, and is a New York corporation with offices in New York, N.Y. During the relevant time period, Chelsey Capital operated as a private hedge fund. Chelsey Capital traded on material, nonpublic information in connection with the UBS part of the scheme.

Jasper Capital LLC, which is a New York limited liability company owned by Glass. During the relevant time period, Jasper Capital operated as a day-trading firm from the offices of Assent in New York, N.Y. Jasper Capital traded on material, nonpublic information in connection with the UBS part of the scheme.
The Commission acknowledges the assistance of the United States Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation. The Commission's investigation is ongoing.

Ford said Thursday its U.S. auto sales fell 13.5 percent in February, putting it in danger of being surpassed by Japanese rival Toyota, while DaimlerChrysler posted a 7.7 percent decline.

Ford attributed its sales drop to a 30 percent reduction in fleet sales, while the German-American automaker cited lower demand for vehicles from its U.S.-based Chrysler Group.

Meanwhile, Honda said its U.S. sales rose 3.2 percent on stronger sales of its trucks.

Ford Motor Co. sold 210,194 light vehicles in February, down from 242,912 in the same month of 2006. Car sales fell 22 percent to 70,951, while sales of light trucks decreased 10 percent to 122,644.

more...
http://biz.yahoo.com/ap/070301/auto_sales.html?.v=7

CHICAGO (AP) -- Retailer Sears Holdings Corp. said Thursday its fourth-quarter earnings rose 27 percent, ahead of Wall Street forecasts as margins improved despite weaker sales at established stores.

But the company's stock dipped in early trading after officials at the nation's third-largest retailer said they had less cash on hand -- about $3.3 billion in the U.S. -- than they hoped because of lower-than-expected January sales.

"It is absolutely clear to me that we had it within our capabilities to overcome the fourth-quarter headwinds, had we executed better within a number of our businesses," Chairman Edward Lampert wrote in a note to shareholders.

During the quarter ending Feb. 3, earnings for the operator of Sears and Kmart stores totaled $820 million, or $5.33 per share, up from $648 million, or $4.03 per share, during the same period last year.

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http://biz.yahoo.com/ap/070301/earns_sears.html?.v=9

NEW YORK (AP) -- American shares of Latin American stocks dropped Thursday, following a fitful Wednesday rebound from the prior day's global selloff.

A Chinese market crash Tuesday sparked the global market fall. On Thursday, global markets were again weak.

Argentina's IRSA Investments and Representations Inc. lost 57 cents, or 3.2 percent, to $17.07, while Banco Macro SA shed 27 cents to $33.29, and Telecom Argentina SA fell 69 cents, or 3.2 percent, to $20.85, all on the New York Stock Exchange.

Mexico's Cemex SAB de CV, one of the largest cement producers in the world, declined 89 cents, or 2.6 percent, to $33.12, while Mexican beverage producer Fomento Economico Mexicano SAB de CV gave up $1.37 to $109.21, both on the Big Board.

more...

http://biz.yahoo.com/ap/070301/latin_america_sector_snap.html?.v=1

SAN FRANCISCO (AP) -- Business software maker Oracle Corp. will buy Hyperion Solutions Corp. for $3.3 billion in cash, renewing a shopping spree aimed at toppling rival SAP AG.

The deal announced Thursday will give Oracle an arsenal of Hyperion products that are widely used by SAP's customers. Hyperion's tools, known as "business intelligence" software, help chief financial officers and other top corporate executives track their company's performance.

Santa Clara-based Hyperion represents the largest prey to be devoured by Oracle since it gobbled up Siebel Systems Inc. for $6.1 billion a little over a year ago.

Redwood Shores-based Oracle will pay $52 per share for Hyperion. The price represents a 21 percent premium above the most recent closing price of Hyperion's stock, which has traded between $26.65 and $45.18 during the past year.

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http://biz.yahoo.com/ap/070301/oracle_hyperion_acquisition.html?.v=12

DETROIT (AP) -- General Motors Corp. said Thursday its U.S. auto sales grew an unexpected 3.7 percent in February as stronger truck demand offset some weakness in its cars.

The Detroit-based automaker said it sold 308,411 light vehicles during the month, up from 297,481 in the prior year's February. Car sales fell 3.3 percent to 108,902 units, while truck sales grew 7.9 percent to 199,509.

Analysts expected sales to decline last month.

"Our pickup, SUV and crossover business was terrific across the board," said Mark LaNeve, vice president of GM North American sales, service and marketing, in a statement.

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http://biz.yahoo.com/ap/070301/gm_auto_sales.html?.v=1

March 1 (Bloomberg) -- Treasuries rose as investors sought refuge from global stock market turmoil and signs weakness in housing may lead to a U.S. economic slowdown.

``Clearly there's an increase in fear, and Treasuries are the main beneficiary,'' said Jason Brady, a portfolio manager in Santa Fe, New Mexico, at Thornburg Investment Management, which oversees about $4 billion in bonds.

The 10-year note's yield fell to near its lowest since December before paring its decline as U.S. stocks skirted a global sell-off and a report showed manufacturing unexpectedly expanded. Former Federal Reserve Chairman Alan Greenspan said a U.S. recession is possible, though not probable, this year.

The yield on the 10-year note fell 2 basis points, or 0.02 percentage point, to 4.55 percent at 2:22 p.m. in New York, according to bond broker Cantor Fitzgerald LP. The yield fell as low as 4.49 percent earlier. The price of the 4 5/8 percent security due in February 2017 rose 5/32, or $1.56 per $1,000 face value, to 100 18/32. Bond yields move inversely to prices.

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http://www.bloomberg.com/apps/news?pid=20601009&sid=az9NoKOxJf6s&refer=bond

March 1 (Bloomberg) -- Gold prices in New York fell for a third straight session as a gain in the value of the U.S. dollar reduced the metal's appeal as an alternative investment.

The U.S. currency strengthened against the euro today after a report showed U.S. manufacturing expanded in February more than forecast. Before today, gold had risen 5.4 percent this year while the dollar was little changed against the euro. Bullion often moves in the opposite direction of the U.S. currency.

``You have a stronger dollar right now and that's hurting gold,'' said Marty McNeill, a trader at R.F. Lafferty Inc. in New York.

Gold futures for April delivery fell $6.30, or 0.9 percent, to $666.20 an ounce at 1:41 p.m. on the Comex division of the New York Mercantile Exchange. Prices have dropped 3.5 percent in the past three days.

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http://www.bloomberg.com/apps/news?pid=20601012&sid=agvWLuVuNGe0&refer=commodities

NEW YORK (AP) -- Exchange operator Nasdaq Stock Market Inc. said Thursday it lowered transaction prices for its most active customers, effective immediately.

Nasdaq does not expect the decrease in prices to affect financial results and backed 2007 earnings guidance of $180 million to $190 million, which incorporates the recent price adjustment.

Brian Hyndman, senior vice president of transaction services, said the new pricing reduces fees by a penny to 26 cents per 100 shares for high-volume institutional customers.

"We felt like it was time to get on the offensive with transaction pricing," Hyndman said.

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http://biz.yahoo.com/ap/070301/nasdaq_stock_market_pricing.html?.v=1

NEW YORK (AP) -- Shares in Sun-Times Media Group Inc., publisher of the Chicago Sun-Times newspaper, jumped on Thursday after the company said it had received a favorable review from a foreign tax authority.

The company did not elaborate on the review in a brief statement released after the close of trading Wednesday, and a company spokesman didn't immediately return a call seeking comment. However, the Sun-Times has said previously that it has been in negotiations with Canadian authorities over tax liabilities related to the sale of newspapers there.

Shares in the Sun-Times, which have been steadily declining for the past two years, jumped $1.52 or 38 percent to $5.54 in afternoon trading on the New York Stock Exchange, bringing them back to the level they were trading at last November. They have traded between $3.82 and $9.50 over the past year.

Despite the favorable review, the company also said it had decided not to reverse any of its tax reserves for the moment. In its latest regulatory filing, the company said it had recorded total tax accruals of about $921 million as of the end of 2005.

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http://biz.yahoo.com/ap/070301/sun_times_mover.html?.v=1

WASHINGTON (AP) -- The rate of increase in U.S. home prices remained steady in the fourth quarter of 2006, extending the slowing trend that began earlier in the year, federal regulators reported Thursday.

The figures released by the Office of Federal Housing Enterprise Oversight, the agency that oversees the big mortgage-finance companies Fannie Mae and Freddie Mac, provided yet another indication of the slowdown in the once-booming housing market.

Average home prices rose 1.12 percent in the October-December period, compared with 3.03 percent in the fourth quarter of 2005, the report showed. Over the year, house prices increased by 5.9 percent -- a marked slowdown from the 13.2 percent jump in 2005. Still, the report noted, home prices continued to grow faster than prices of other goods and services.

"These data show that, on the whole, (home) prices are still rising, albeit at a much slower pace," OFHEO Director James B. Lockhart said in a statement. "This suggests that house-price appreciation is, for now, more in line with historical norms."

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http://biz.yahoo.com/ap/070301/home_prices.html?.v=2

Defense stocks slowly gained in afternoon trading on Thursday as markets staged a comeback following an early 200-point drop in the Dow industrials.

The market got a boost from the Institute for Supply Management's index of manufacturing activity, which showed stronger growth than analysts expected.

Shares of the nation's leading defense companies including Northrop Grumman Corp., General Dynamics Corp. and Boeing Co. gained slightly.

Shares of Los Angeles-based Northrop gained 47 cents to $71.92 on the New York Stock Exchange, after dropping to a low of $70.50.

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http://biz.yahoo.com/ap/070301/defense_sector_snap.html?.v=2

the quarter increase in funds in Japan causing a "wipe out" in liquidity for those using margin trades.

Also said the Carry Trade has been buying Real Estate all over the world and this could cause a problem. Also a problem for those buying US Treasuries with Yen to get a 4% profit in the difference in interest between the Yen and Dollar.

It was CNBC's Bob Pisani...who seems to be the most concerned about this having ramifications down the road.

DU's Marketeers have long posted about the "Carry Trade" and the ramifications.

the BOJ kept rates so low and stable for so long...only now have they decided to inject a little rate vol into the highly leveraged markeet.

But could China be getting ticked off at all of our sabre rattleing towards Iran and just wanted to show the US "Who's Your Daddy"?

They have a huge bubble right now. The Shanghai index was up 13% in the six trading sessions prior to the 8.8% plunge. That is the nature of such markets.

communistic government so nothing would surprise me

They were saying this morning, that there was a chance today's figures would show that for the First time ever, the total market share of the 3 U.S. automakers, would be below 50%.

Does anybody know whether that ended up being the case?

CHICAGO (AP) -- Soybean and grain futures finished lower Thursday on the Chicago Board of Trade.

Wheat for May delivery fell 9 cents to $4.79 a bushel; May corn fell 7 1/2 cents to $4.28 a bushel; May oats fell 9 3/4 cents to $2.49 1/2 a bushel; May soybeans fell 25 1/2 cents to $7.62 a bushel.

Beef futures decreased while pork futures were mixed on the Chicago Mercantile Exchange.

April live cattle fell .90 cent to 96.15 cents a pound; April feeder cattle fell .15 cent to $1.04 a pound; April lean hogs fell 1.63 cent to 66.12 cents a pound; May pork bellies rose .52 cent to $1.0462 a pound.

http://biz.yahoo.com/ap/070301/board_of_trade.html?.v=4

NEW YORK (AP) -- Many software stocks staged modest recoveries in Thursday afternoon trading, a day after struggling to regain ground lost on Tuesday in a global market sell-off.

Stock market indexes fell sharply in early morning trading but then recovered. With an hour left to go in Thursday's trading session, the Dow Jones industrial average was down only 11.29 to 12,257.52, and the Nasdaq composite was down 3.54 to 2,412.61.

Oracle shares added 30 cents, or 1.8 percent, to $16.73 in heavy trading. Earlier in the day, the company said it would buy business intelligence software maker Hyperion Solutions for $3.3 billion in cash.

Shares of Adobe Systems Inc. added 7 cents to $39.32 on the Nasdaq, while RealNetworks advanced 5 cents to $8.21.

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http://biz.yahoo.com/ap/070301/software_sector_snap.html?.v=1

NEW YORK (AP) -- Airline stocks were mixed Thursday, carried by the oscillating tide of the broader market.

The Amex Airline Index was up half of 1 percent in afternoon trading, recovering from a drop of 2.6 percent earlier in the session. Seven of 11 components showed gains.

Airlines traced the movements of broader stock market indexes, which fell sharply in early morning trading but then recovered after an upbeat assessment of manufacturing activity eased fears of a weakening economy.

A soft economy would hurt airlines, which count on corporate travelers to pay higher fares for premium services.

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http://biz.yahoo.com/ap/070301/airlines_sector_snap.html?.v=1

NEW YORK (AP) -- Constellation Brands weighed down the S&P 500 Thursday after the beer, wine and spirits producer warned 2008 revenue and profit will soften.

The S&P 500 was down 3.65 points, to end at 1403.17. The U.S. markets tanked at Thursday's open, but recovered much of the loss after a strong Institute for Supply Management's index of manufacturing activity helped ease the slide.

Constellation Brands was down $3.40, or 14.5 percent, to finish at $20.06 on the NYSE after earlier hitting a multiyear low of $18.92.

Also down sharply were shares of Laboratory Corp. of America Holdings after a Piper Jaffray analyst downgraded the shares after Aetna ended a contract with the Burlington, N.C. diagnostic company.

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http://biz.yahoo.com/ap/070301/apfn_s_p_500_laggards.html?.v=1

NEW YORK (AP) -- Intel Corp., the world's biggest chipmaker, absorbed the biggest loss Thursday on the Dow Jones industrial average.

Shares lost 27 cents, to end at $19.59 on the Nasdaq Stock Market

The index was down 34.29, to 12,234.34. The Dow bottomed out with a 209-point loss in morning trading, but rebounded after a strong Institute for Supply Management's index of manufacturing activity report eased fears of an economic decline.

Hewlett-Packard Co. also declined, losing 42 cents to $38.93 on the New York Stock Exchange, a day after a shareholder opposed a proposal in the wake of the company's boardroom spying scandal allowing shareholders to nominate candidates for the company's board of directors.

General Motors Corp. gave up 35 cents to $31.55 on the NYSE after the automaker delayed filing its 2006 annual report with federal regulators, citing a review of accounting issues.

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http://biz.yahoo.com/ap/070301/apfn_djia_laggards.html?.v=1

NEW YORK (AP) -- Biotech drug maker Amgen Inc. helped drag down the Nasdaq 100 Thursday after the company said the Securities and Exchange Commission is conducting an informal inquiry related to its anemia drug, Aranesp.

Amgen shares lost $2.56, or 4 percent, to close at $61.70.

The Nasdaq 100, which includes 100 of the biggest nonfinancial securities traded on the Nasdaq Stock Market, was off 8.20 points to 1,753.45. The broader Nasdaq composite ended down 11.94 points to 2,404.21.

Amylin Pharmaceuticals Inc. shed $1.54, or 4 percent, to $37.37, following lower along with the rest of the drug developing sector.

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http://biz.yahoo.com/ap/070301/apfn_nasdaq_100_laggards.html?.v=1

NEW YORK (AP) -- Small-capitalization stocks pared back earlier losses Thursday, though investors punished shares of companies with disappointing earnings results.

The Russell 2000 fell 2.39 points to 791.40, while the S&P SmallCap 600 index slipped 1.19 to 404.34. Both averages declined more than 2 percent in the first half-hour of trading, then rallied into positive territory before retreating somewhat in late trading.

Large capitalization stocks posted similar declines. The Dow Jones industrial average and the S&P 500 index were about a quarter of a percentage point. The two small-cap indexes are still showing marginal gains for the year while the two large cap benchmarks show slim declines.

NCI Building Systems Inc. dropped $6.20, or 11.1 percent, to $49.71 after the maker of construction products issued guidance for fiscal second-quarter earnings far below analyst expectations. The company's first-quarter results also missed Wall Street estimates.

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http://biz.yahoo.com/ap/070301/small_cap_roundup.html?.v=1

SAN FRANCISCO (AP) -- Gap Inc.'s fourth-quarter profit fell 35 percent in a gloomy performance that triggered a recent management purge and doomed the slumping retailer's newest chain.

The San Francisco-based company said late Thursday that it earned $219 million, or 27 cents per share, for the 14 weeks ended Feb. 3. That compared with net income of $337 million, or 39 cents per share, at the same time in the previous year.

Sales totaled $4.93 billion, a 2 percent increase from $4.82 billion. An extra week in the latest quarter drove the gain.

In a more telling measure of Gap's woes, sales at its stores open for at least a year declined by 7 percent in the fourth quarter. It marked the 10th consecutive quarter of erosion in Gap's same-store sales, considered the best gauge of a merchant's health.

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http://biz.yahoo.com/ap/070301/earns_gap.html?.v=3

DALLAS (AP) -- Dell Inc., which is the subject of a federal probe into its finances, said Thursday that fourth-quarter profits plunged 33 percent due to weak sales of laptops and notebooks, which account for the lion's share of its revenues.

Dell said it earned $673 million, or 30 cents per share in the quarter ended Feb. 2, compared to $1.01 billion, or 43 cents per share a year earlier. Revenue fell 4 percent, to $14.4 billion.

Analysts had expected the PC maker to earn 29 cents per share in the most recent quarter, according to a survey by Thomson Financial. The company didn't provide year-ago figures in its release.

Revenue from mobility products, which includes notebook computers, declined two percent to $3.8 billion despite a 2 percent increase in units shipped. Desktop PCs, meanwhile, saw an 18 percent decline in units year-over-year.

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http://biz.yahoo.com/ap/070301/earns_dell.html?.v=5

Jeebus at the volumes!!
Dow 12,234.34 Down 34.29 (0.28%)
Nasdaq 2,404.21 Down 11.94 (0.49%)
S&P 500 1,403.17 Down 3.65 (0.26%)
10-Yr Bond 4.556% Up 0.006
NYSE Volume 3,886,656,000
Nasdaq Volume 2,821,744,000

4:20 pm : Even though the indices closed well off their lowest levels of the day, they still finished in negative territory and kicked off the month of March on a sour note.

Renewed concerns about the ripple effect of an unwinding of the yen-carry trade weighed most heavily on a market that is now overly pessimistic. Such worries were exacerbated in pre-market trading after Japan's top financial diplomat warned that those carry trades shouldn't be considered "one-way." That pushed the yen up more than 1% to an 11-week high against the dollar, reminiscent of the 2% yen rally on Tuesday that accelerated stock declines across the globe as speculators dumped equities to pay off their yen loans.

In similar fashion to yesterday's action, the idea that the worst may be over subsequently prompted some sellers to cover their short positions. At their opening lows, the Dow, S&P 500 and Nasdaq were down as much as 1.7%, 1.8%, and 2.3%, respectively, but intraday recovery efforts had all three in positive territory temporarily.

A failed rally from session lows positioned bonds yet again as the best place to seek refuge until the dust settles. In fact, recognition that Wednesday's recovery effort wasn't all that convincing, when measured against such a meltdown like the one seen Tuesday, created an added sense of uneasiness.

Yesterday, the Dow snapped a five-day losing streak; but its 52-point advance paled in comparison to the 416-point drubbing it endured a day earlier. The S&P 500 was the best performer among the majors Wednesday, but its modest 0.6% advance after tumbling 3.5% Tuesday also offered very little assurance that a bottom was forming.

As a result, the market was vulnerable Thursday to follow-through selling before the market even opened. Add to that some mixed economic data and a recently overly optimistic market now focused on everything negative struggled to fully embrace a surprisingly strong manufacturing report.

At 10:00 ET, the February ISM survey rose to 52.3 from 49.3 in January. That eased the recession fears that have been unnecessarily building and put a bid in the market that helped to more than halve the market's early losses. However, a 0.3% increase in the Fed's favored inflation gauge -- the core-PCE -- was above expectations and left the year/year increase at 2.3%. Since that was above the Fed's comfort zone of 1% to 2%, and the market needs good numbers right now, the data did not lend much support to improving price stability.DJ30 -34.29 NASDAQ -11.94 SP500 -3.65 NASDAQ Dec/Adv/Vol 2005/1051/2.15 bln NYSE Dec/Adv/Vol 2046/1234/2.09 bln