STOCK MARKET WATCH, Wednesday June 27

Source: DU

Wednesday June 27, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 574 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2364 DAYS
WHERE'S OSAMA BIN-LADEN? 2076 DAYS
DAYS SINCE ENRON COLLAPSE = 2037
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

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AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON June 26, 2007

Dow... 13,337.66 -14.39 (-0.11%)
Nasdaq... 2,574.16 -2.92 (-0.11%)
S&P 500... 1,492.89 -4.85 (-0.32%)
Gold future... 645.30 -9.40 (-1.46%)
30-Year Bond 5.22% +0.03 (+0.50%)
10-Yr Bond... 5.10% +0.02 (+0.45%)






GOLD, EURO, YEN, Loonie and Silver

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PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact actionpost@legitgov.org

For information on protests and other actions Citizens For Legitimate Government

---

Read more: DU

Signs of a Gathering Storm
BY FRANK BARBERA, CMT

It has not been a good week by any measure. In today’s economic news, AP reports that the Case-Shiller Index of US Home Prices fell for the 17th month in a row with all regions reflecting a widespread slowdown in housing. The Index, which covers 10 major US cities, fell 2.7% from a year ago, its steepest decline in 16 years going back to 1991, the last Housing Bear. “No region is immune to the weakening price returns” said Robert Shiller, Chief Economist of MacroMarkets in an interview with AP. In addition, S&P noted that its 20-City Index showed a 2.1% drop in the price of existing single family homes across the US in April, with 14 out of 20 cities showing either flat or lower prices. Elsewhere, the Commerce Department reported Tuesday that sales of new single-family homes dropped for the fourth time in five months, falling by 1.6% last month to a seasonally adjusted annual rate of 915,000 units. The Housing Recession is now well under-way, and for all appearance shows no end in sight.

Elsewhere, Consumer Confidence fell nearly 5 points to 103.90, down from 108.50 according to the Conference Board. At the same time, the Present Situation Index fell to 127.90 in May from 136.10 in April, while the forward looking Expectations Index fell from 90.10 to 87.90 in May. Easily overlooked, most readers probably won’t extract much of a message in today’s Consumer Confidence report. Yet in our view, we note that tucked away in all the rapid-fire headline data is a far more ominous development, a warning of potential recession on the way. In our work, we have always focused on the Ratio of Consumer Expectations to the Present Situation, and over the last few months, even though the Present Situation Index has ‘held up’ well, forward looking Expectations have been deteriorating and showing no rebound capability. This action in the past has spelled R-E-C-E-S-S-I-O-N.

-cut-

Since last week's report, three of our Top Ten Signals have been rendered, Signals #10, #8, and #5, with Goldman Sachs breaking down below its $218 support, the Homebuilding Index plunging below its trendline from 224.80 to 210.50, and with the S&P undercutting its 50 day average and rising trendline. Four other signals are close at hand, #1, #2, #3, and #7. China’s Shanghai market moved down and touched the 50 day average and then bounced, the S&P is very close to a move below 1490, and the Korean Kospi Index is very close to moving below its 20 day average. In addition, Signal #7, the NASDAQ , is very close to breaking its trendline and moving average. As a result, with almost any additional weakness, 7 out of 10 signals would be flashing bright red. The only signals that will need more time are Signal #9, the Bombay Index, which has held up well so far, Signal #6, the PYZ Proshares ETF has also held up well, although there is a potential double top there and lots of bearish divergence hinting at a turn, and finally, Signal #4, the Bovespa has not yet shown enough weakness to cross-over its moving averages. We are continuing to watch the list and will update accordingly.

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

8:30 AM Durable Orders May
Briefing Forecast -2.0%
Market Expects -1.0%
Prior 0.8%

10:30 AM Crude Inventories 06/22
Briefing Forecast NA
Market Expects NA
Prior 6902K

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

WASHINGTON (AP) -- Orders to U.S. factories for big-ticket manufactured goods plunged in May by the largest amount in four months as demand for aircraft, heavy machinery and metals all declined.

The Commerce Department reported Wednesday that new durable goods orders dropped by 2.8 percent last month, a far bigger drop than the 1 percent decline economists had been forecasting.

The weakness was led by a huge 22.7 percent plunge in orders for commercial aircraft, which can be extremely volatile from month to month. But orders were also down for a wide array of other goods, from primary metals such as steel to machinery and electronic appliances.

And in a potentially troubling sign for the future, orders for non-defense capital goods excluding aircraft, considered a good proxy for business investment, fell by 3 percent, the biggest drop since a 4.4 percent plunge in January.

-cut-

The economy slowed to a barely discernible annual growth rate of just 0.6 percent in the first three months of this year. But economists believe growth has rebounded in the April-to-June quarter to a more robust 3.5 percent rate despite the fact that a severe slump in housing is lasting longer than expected.

http://biz.yahoo.com/ap/070627/economy.html?.v=9

09. U.S. May orders data show broad-based declines
8:30 AM ET, Jun 27, 2007 - 26 minutes ago

10. U.S. May civilian aircraft orders fall 22.7%
8:30 AM ET, Jun 27, 2007 - 26 minutes ago

11. U.S. May durable-goods inventories rise 0.2%
8:30 AM ET, Jun 27, 2007 - 26 minutes ago

12. U.S. May durable-goods shipments rise 0.4%
8:30 AM ET, Jun 27, 2007 - 26 minutes ago

13. U.S. April durable-goods orders revised up to 1.1% vs. 0.8%
8:30 AM ET, Jun 27, 2007 - 26 minutes ago

14. U.S. May durable-goods orders ex-transportation fall 1.0%
8:30 AM ET, Jun 27, 2007 - 26 minutes ago

15. U.S. May core capital equipment orders fall 3%
8:30 AM ET, Jun 27, 2007 - 26 minutes ago

16. U.S. May durable-goods orders fall 2.8% vs. -1.7% expected
8:30 AM ET, Jun 27, 2007 - 26 minutes ago

VIENNA, Austria - Oil prices fell Wednesday as traders awaited the release of a U.S. government inventory report expected to show increases in supplies of crude, gasoline and distillates.

Still, comments from OPEC that the group did not plan to increase production in the coming months despite consistently high prices kept a relatively solid floor under markets.

Light, sweet crude for August delivery fell 66 cents to $67.11 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. The contract had fallen $1.41 to settle at $67.77 a barrel Tuesday.

-cut-

The U.S. Energy Department's weekly petroleum supply snapshot has been watched closely during a spring and early summer in which an unusually high number of refinery outages have led to high oil and gasoline futures prices and record U.S. gasoline pump prices.

The report, due later Wednesday in the U.S., was expected to show that gasoline inventories rose 1.1 million barrels in the week ended June 22, according to a Dow Jones Newswires survey of analysts.

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

WASHINGTON - Keeping inflation under control as the economy emerges from a yearlong sluggish spell is certain to be a matter of lively debate for Federal Reserve policymakers.

Fed Chairman Ben Bernanke and his central bank colleagues open a two-day meeting Wednesday, where the economy's current and future performance will be assessed. The strength of the anticipated economic rebound, the depth of the housing slump, problems with risky mortgages, the state of the employment climate, and the direction of gasoline and other energy prices will figure prominently into those discussions.

When it wraps up its meeting Thursday, the Fed is widely expected to hold a key interest rate at 5.25 percent, where it has stood for a year. Given that expectation, Wall Street investors, economists and others are keenly interested in the Fed's assessment of economic conditions and what that might mean for possible rates moves in the future.

http://news.yahoo.com/s/ap/20070627/ap_on_bi_ge/fed_interest_rates

Why don't they just skip the meetings? It's not like they do anything.

Wouldn't it be easier for them if they just had a standard "statement" release, since it hasn't changed in the last 1 1/2 years?

Heck, I could predict their statement for the meeting 6 weeks from now, already: "We're concerned about inflation. BLAH BLAH BLAH!!! BUT, we're not going to change rates AGAIN. BLAH BLAH BLAH!!

The Fed is more concerned with what they don't say and spreading misinformation than they are with informing the public of anything. The Fed represents banks, not us.

WASHINGTON - Home Depot is tired of being forced by local governments to accommodate the day laborers who turn up in its store parking lots seeking construction work. So the Georgia-based company turned to Congress for help.

The Senate could respond this week by attaching language to the immigration bill that would prohibit city councils from requiring home improvement stores to pay for shelters or other services to help maintain orderly day labor sites.

The amendment, sponsored by Sen. Johnny Isakson, R-Ga., is designed to curtail a practice in the California communities of Mountain View and Burbank, where city councils recently have forced Home Depot to build facilities for day laborers onsite or elsewhere, hire security staff and offer bathrooms in order to get the permits necessary for its operations.

-cut-

The local mandates, Isakson says, are a costly intrusion for home improvement stores. Services for day laborers, he said in an interview, should be the responsibility of local governments, and forcing specific companies to provide services as a condition of obtaining permits amounts to "extortion."

http://news.yahoo.com/s/ap/20070627/ap_on_go_co/immigration_day_labor

NEW YORK (Reuters) - Bear Stearns Asset Management CEO Richard Marin is taking a stronger role in managing its two troubled hedge funds and tapped mortgage unit head Thomas Marano to save one of the funds, two sources familiar with the decision said.

-cut-

Bear Stearns Cos. Inc. (NYSE:BSC - news) said on Tuesday it does not plan to bail out the High-Grade Structured Credit Strategies Enhanced Leverage Fund, the second of two struggling hedge funds.

Instead it will provide $1.6 billion of financing to save its High-Grade Structured Credit Strategies Fund. Days earlier the bank had said it would provide up to $3.2 billion in financing.

http://news.yahoo.com/s/nm/20070627/bs_nm/bearstearns_hedgefund_dc

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

Last trade 82.333 Change +0.002 (0.00%)

Carry Traders Come Back Home, Nikkei suffers from the US Woes

http://www.dailyfx.com/story/currency/jpy_news/Carry_Traders_Come_Back_Home__1182944396855.html

BOJ Inoue Sees ‘Huge Amount’ of Capital Flows Leaving Japan – The BOJ official Tetsuya Inoue stated yesterday that a massive capital outflows are anticipated, as households will seek to diversify their portfolios. Finance companies will unload some 1 trillion yen of foreign-currency investment trusts before the end of June, when workers will get their summer bonuses. Source: Bloomberg

Japan retail sales unexpectedly rise in May – The Japanese retail sales have surpassed expectations in May, printing 0.5% increase versus 0.4% previous and expected figures. However, some analysts worry that the corporate activity might be losing momentum as the weaker US exports have been hurting the industrial output in the recent months. The government remains optimistic and stated that Japan’s economic recovery remains strong despite weaknesses in output. Source: Reuters.
http://www.reuters.com/article/economicNews/idUST21287320070627?pageNumber=2

TOKYO: Jasdaq ordered to guard against glitches – The computerized trading system of the exchange for start-up companies was found inadequate to prevent problems according to a report by the Securities and Exchange Surveillance Commission. Financial Services Agency ordered Jusdaq to submit a detailed report that would specify how the exchange will combat the technical difficulties. Source: Asahi Shimbun.
http://www.asahi.com/english/Herald-asahi/TKY200706270086.html

Currency:

The yen was little moved by the higher than expected Retail Trade figures that printed 0.5% versus anticipated 0.4% for the may. Investors as well as some analysts and businesses started questioning the prospects of Japanese growth as the industry output have been hurt by falling US exports. While government remained optimistic, the Small Business Confidence printed 48.9 below the previous and expected 49.3, further away from the benchmark of 50 points that signals expansion. At the same time, carry traders paid attention to Finance Minister Koji Omi’s warnings of high risk of carry trades right now that prompted massive sell-offs. This weakened the high-yielding currencies, such as GBP, USD, NZD and AUD and strengthened the yen. It reached as low as 122.40 today, and analysts predict it can head even lower.

...more...

Can Durable Goods Orders Push The US Dollar To Breakout ?

http://www.dailyfx.com/story/dailyfx_reports/cross_markets_data_reaction/Can_Durable_Goods_Orders_Push_1182893248189.html

Durable Goods Orders (MAY) (12:30 GMT; 08:30 EST)
Expected: -1.0%
Previous: 0.8%

Durable Goods Ex. Transport (MAY) (12:30 GMT; 08:30 EST)
Expected: 0.2%
Previous: 1.9%

How Will The Markets React?

After rising for three consecutive months in April, orders for durable goods are anticipated to plunge -1.0 percent during the month of May. The decline is likely to be led by goods such as aircraft as the durable goods excluding transportation figure is predicted to edge mildly higher after surging in April. However, the key factor the markets will hone in on is capital spending, as business investment remains one of the last legs that US economic expansion has to stand on – the other being consumer spending. Capital spending could suffer as a result of lagging profit margins and softer growth outlooks, which would leave businesses little reason to invest heavily. A drop off in capital spending could also point to potential weakness in labor demand, as firms would not need a larger workforce to boost output. While all of this remains crucial to the US economy and thus, US asset classes across the board, markets are likely to acknowledge the release on Wednesday but may not take substantial action ahead of the FOMC rate decision on Thursday. As a result, the tight ranges we’ve witnessed in bond and FX price action may only continue, even if durable goods orders hit the tape at a surprising figure.

...more...

http://www.bloomberg.com/apps/news?pid=20601083&sid=aKrojJoLTW60&refer=currency


June 27 (Bloomberg) -- The yen rose the most in 10 weeks against the euro and dollar as investors pared holdings of emerging-market bonds and stocks funded by loans in the Japanese currency.

Japan's yen gained against all 16 of the most-actively traded currencies tracked by Bloomberg. The yen extended its rally after global equity markets declined as investors shunned riskier assets, prompting an unwinding of the so-called carry trade. A U.S. report showed sales of durable goods, a proxy for business spending, fell more than forecast.

``We are seeing some trimming of the carry trade because of heightened risk aversion as people are afraid that the subprime problems'' in the U.S. could spill over into the broader economy and spoil a recovery, said Alex Beuzelin, a senior currency analyst at Ruesch International Inc. in Washington.

Against the euro, the yen rose to 164.42 as of 9:27 a.m. in New York, from 165.83 yesterday. It earlier touched 164.24, the biggest gain since April 19. Japan's currency also rose to 122.31 versus the dollar, from 123.26.


more...

http://www.kitcocasey.com/displayArticle.php?id=1464

Good day... As expected, purchases of new homes in the U.S. dropped in May and to add insult to injury, last month's number was revised down. The housing slump, already the worst since 1991, continues to look like it will extend well into next year. The other data release yesterday showed U.S. consumer confidence fell in May to the lowest level since August. More Americans say jobs are getting harder to find, the survey showed, while gasoline prices at near $3 per gallon have also led to a drop in confidence.

The reports released yesterday also show home values in 20 U.S. metropolitan areas fell the most in at least six years, weakened by a record supply of properties for sale. Home values declined 2.1% in April from the same month a year earlier. Elevated inventories of unsold homes, reduced demand and stricter loan requirements will keep prices low the rest of the year. It is a simple case of supply and demand. The supply of homes is growing, and the number of qualified buyers is shrinking. Housing will continue to be a drag on the U.S. economy.

We have been banging on the housing slowdown and the negative impact it will have on the economy for the past several months, but many of the FOMC members seem to want to continue to ignore this negative data. Unfortunately, most of the top talking heads at the Fed are looking at the U.S. economy through rose-colored glasses. The FOMC policy makers, who meet today and tomorrow, continue to hope that productivity - a gauge of employee efficiency - will rebound and rescue the economy. The Federal Reserve policy makers disagree with their own staff economists, and a growing chorus on Wall Street, who say the U.S. economy can't expand as fast as it used to without pushing up prices. The split, signaled in the minutes of May's FOMC meeting, reflects the debate over whether a slowdown in U.S. productivity is permanent. At the last meeting on May 9th, after the staff presented a "slightly" lower estimate of future productivity, "many participants commented that their view of potential output growth was somewhat more optimistic than that of the staff," according to the minutes of the session.

more...

BEIJING - China has closed 180 food factories after inspectors found industrial chemicals being used in products from candy to seafood, state media said Wednesday.

The closures came amid a nationwide crackdown on shoddy and dangerous products launched in December that also uncovered use of recycled or expired food, the China Daily said.

Formaldehyde, illegal dyes, and industrial wax were found being used to make candy, pickles, crackers and seafood, it said, citing Han Yi, an official with the General Administration of Quality Supervision, Inspection and Quarantine, which is responsible for food safety.

http://news.yahoo.com/s/ap/20070627/ap_on_bi_ge/china_tainted_food

Yikes!

I think I am getting sick :(

from Marketwatch via Bonddad


There is absolutely nothing good in any of these reports. Declining sales and prices + high inventory levels + lower earnings from homebuilders + bearish forecasts from homebuilders = a really bad situation in the housing market. And it's just getting worse.

WASHINGTON/CHICAGO (Reuters) - U.S. transportation officials on Tuesday formally insisted a New Jersey importer recall up to 450,000 Chinese-made light truck tires, dismissing the company's claim it cannot financially withstand that step.

Nicole Nason, the National Highway Traffic Safety Administration administrator, also said in an interview the agency is trying to locate tires made by Hangzhou Zhongce Rubber Co. for tests and will ask the manufacturer for information.

"We need to start doing some digging," Nason said of the controversy involving the replacement products.

Although Hangzhou Zhongce disputed the assertion its products were defective, the case broadened an ongoing controversy over Chinese imports in the United States. Recent cases include the widely publicized problem with pet food ingredients as well as recalls of toy trains and toothpaste.

-cut-

The tires have an insufficient or missing gum strip -- which prevents belt separation -- FTS told NHTSA. FTS said tires sold under Westlake, Telluride, Compass and YKS names could fail at highway speeds. It also told regulators at least six other U.S. distributors had sold tires of similar construction by the same manufacturer.

http://www.reuters.com/article/domesticNews/idUSN2628419020070627

like stepping off a cliff...

08:33 am : S&P futures vs fair value: -11.1. Nasdaq futures vs fair value: -9.8. Durable Orders fell for the first time since January, checking in with a larger than expected decline of 2.8% for May (consensus -1.0%) given a decline in aircraft orders. Non-defense capital goods orders excluding transportation, which provide a clearer read on business capital investment, fell 3.0%. Futures trade has dipped further below fair value following the weak data, signaling an even lower start for the cash market. Bonds, though, have strengthened as the 10-year note is now up 10 ticks to yield 5.03%.

08:00 am : S&P futures vs fair value: -9.0. Nasdaq futures vs fair value: -7.0. Early indications are pointing to yet another dismal day for equities as failure to hold intraday gains during the prior two sessions further underscores the recent shift in sentiment.

Investors are also showing some added reserve ahead of the Durables Orders report for May (8:30 ET), especially knowing that today kicks off a two-day FOMC meeting and "incoming" data impact the wording of the closely-watched policy directive. It will hit the wires tomorrow at 14:15 ET.

Is Cheney expected to visit the trading floor today?

09:00 am : S&P futures vs fair value: -11.3. Nasdaq futures vs fair value: -10.3. Bearish bias persists in pre-market action, stalling any chance for the bulls to recoup some of last week's sizable losses. Meanwhile, with higher interest rates acting as the biggest headwind for equities of late, Treasury yields are falling for a fourth straight session. However, with renewed concerns about an unwinding of the so-called carry trade and underlying subprime concerns contributing to the flight-to-quality bid in bonds, the yield on the 10-year note (+11/32) slipping to 5.03% is doing little to comfort equity investors. Expectations that the yield on the 10-year note will remain over 5%, which has stalled the market's upward momentum, recently prompted Briefing.com to lower its market view to Neutral.

OMAHA, Neb. - Despite ongoing costs of recalling its Peter Pan peanut butter, ConAgra Foods Inc. reported its fourth-quarter profit soared Wednesday compared with results weighed down by restructuring charges a year ago.

The food company said a strong quarter from its commodities trading division helped it post a profit of $192 million, or 39 cents per share, during the quarter that ended May 27 versus a profit of $59.2 million, or 11 cents per share, a year ago.

Revenue rose to $3.33 billion from $2.94 billion a year ago.

The latest results include a cost of 2 cents per share, or about $18 million pretax, related to the nationwide recall of all of ConAgra's peanut butter products and a 1 cent per share benefit from lower than expected taxes.

http://news.yahoo.com/s/ap/20070627/ap_on_bi_ge/earns_conagra_foods

http://www.iht.com/articles/2007/06/26/business/Glob27.php

For roughly a century, the United States has had the world's biggest economy. One of its strengths has been its infrastructure, from the rails and telegraph lines laid in the 19th century to the airports and fiber-optic networks of today. But as the United States struggles to stay ahead of China, is its aging infrastructure slowing it down?

In almost every area - from waterworks to bridges and dams, highways to mass transit - many experts have answered "yes." A report card by the American Society of Civil Engineers, issued in 2005, gave the nation C's and D's in 14 of 15 categories, with an "incomplete" added for security.

Some of these deficiencies have very real costs to economic growth. The poor condition of roads, the engineers estimated, costs $120 billion a year in repairs, operating costs and time wasted in traffic - that's equivalent to a full percentage point of the economy.

"There's a tremendous need," said Larry Roth, a professional engineer who is deputy executive director of the engineers' group. "Not only are we not keeping pace with growth, but we're not keeping pace with the maintenance that's required. As a result, our infrastructure is simply crumbling."

more...


...This is going to be a big issue over the next decade, especially in the face of a declining economy, rising energy and material costs, and falling local government revenue - the Fed however can just print the $$$ they need as long as everything they purchase comes from the U.S.

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

June 26 (Bloomberg) -- Moody's Investors Service and Standard & Poor's were duped by the make-up and ``six-inch hooker heels'' of collateralized debt obligations they gave investment-grade ratings, and investors now stand to lose all their money, according to Bill Gross, manager of the world's biggest bond fund.

Subprime mortgage bonds made up about $100 billion of the $375 billion of CDOs sold in the U.S. in 2006, Moody's and Morgan Stanley data show. CDO's are created by bankers and money managers who bundle together securities and divide them into slices with credit ratings as high as AAA.

With defaults on those subprime loans rising, buyers of the BBB pieces of some CDOs stand to lose their entire investment, said Gross, chief investment officer at Pacific Investment Management Co. Gross manages the $103 billion flagship PIMCO Total Return Fund in Newport Beach, California.

``AAA? You were wooed Mr. Moody's and Mr. Poor's by the makeup, those six-inch hooker heels and a `tramp stamp,''' Gross said in his monthly commentary posted on Pimco's Web site today. ``Many of these good looking girls are not high-class assets worth 100 cents on the dollar.''

Subprime mortgages are loans made to borrowers with poor or limited credit histories, or high debt burdens. Mortgages at banks with past due payments are the highest since 1994, according to first-quarter data compiled by the Federal Deposit Insurance Corp., the agency that insures deposits at 8,650 U.S. financial institutions.

more...

Excellent article. Not sure if it was posted yet:

http://finance.yahoo.com/expert/article/richricher/37414


During the height of the real estate bubble, I wrote a column saying that the crash was coming and suggested selling any piece of real estate that was overpriced, questionable, or non-performing. As expected, I received angry replies.

Today, I'm predicting the next crash, what I believe will cause it, and why it'll be a severe blow to the global economy. The signs are already here.

from the article...

Time for a New Standard

While it's tough to predict the future, one thing is for certain: The U.S. dollar will continue to go down in value, and savers will be losers. With people all over the world piling debt upon debt and spending like fools, it might be best to follow the Chinese.

They've never trusted banks, but have always trusted gold. Maybe it's time we started doing the same.

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B8e692853%2Dff1a%2D480b%2D9236%2D0b104868b27a%7D

Speculation that the planned merger between French utilities Gaz de France and Suez could get the go-ahead within days eased some of the pain in Europe’s equity markets on Wednesday. GdF shares rose as reports suggested the French government could soon make official, the €90bn merger that has been 16 months in the making. Earlier in the month, prime minister Francois Fillon said a decision would be made in late June or early July. “We expect the new government to announce its intentions over the next weeks, to support a merger as a defensive move to keep Suez independent,” said Per Lekander at UBS. Although finance minister Christine Lagarde said yesterday that no decision had yet been taken and that there was no timetable for the merger, GdF climbed 3.7 per cent to €37.01, while Suez shares were 1 per cent higher at €41.72. Iberdrola, the Spanish power utility, fell 1 per cent to €40.81 after it announced it was to issue 85m new shares – around 7.3 per cent of total share capital – worth €3.5bn at Tuesday’s closing price. The FTSE Eurofirst 300 fell 0.4 per cent to 1,580.46 as weakness in the banking sector persisted. The CAC 40 lost 0.2 per cent to 5,941.65 and the Xetra Dax 30 finished 0.8 per cent lower at 7,801.23.

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7Bce89d2f3%2Dc69d%2D4c3f%2Dbccc%2D03d45c65fcdf%7D

The FTSE fell on Wednesday as a disappointing trading update from Northern Rock added to concern about rising interest rates. The mortgage bank slumped 12 per cent to 844.5p as it slashed its profit forecasts, blaming a rise in funding costs following a series of rate rises. The bank said it expected annual profits would grow by 15 per cent, less than the 17 per cent expected by the market. Other banks lost ground, with Alliance & Leicester off 2.6 per cent to 1089p, HBOS 2.5 per cent lower at 976.1p and Lloyds TSB down 1.5 per cent to 548.2p. In the wider market, the FTSE 100 closed down 31.7 points to 6,527.6, a loss of 0.5 per cent, while the FTSE 250 fell 145.2 points, or 1.3 per cent, to 11,391.9.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aIOzMPX8kcb0&refer=asia

June 27 (Bloomberg) -- Asian stocks fell to the lowest in two weeks after commodity prices dropped and on concern a U.S. housing slump will curb growth in the region's biggest export market.

Toyota Motor Corp., Japan's largest automaker, declined the most in almost three weeks. BHP Billiton Ltd., the world's biggest mining company, slid for a third day, its longest losing streak since January.

``It's not a great time for exporters, and we have lower commodities driving the miners down too,'' said Hans Kunnen, who helps manage $107 billion at Colonial First State Global Asset Management in Sydney. ``Markets seem unable to push higher as we get more news every day about the U.S. economy, particularly the housing troubles there.''

Shanghai Automotive Co. paced China's CSI 300 Index to a second day of gains after a government report showed profits by industrial companies jumped.

All 10 industry groups that make up the Morgan Stanley Capital International Asia-Pacific Index retreated. The measure, which rose to a record last week, lost 1.2 percent to 151.03 as of 7:33 p.m. in Tokyo, the lowest since June 14 and its biggest slide since June 8.

Japan's Nikkei 225 Stock Average dropped for a fourth day, falling 1.2 percent to 17,849.28, its longest string of declines in three months. Australia's S&P/ASX 200 Index slid 2 percent, the most since March 14. Benchmarks fell elsewhere in the region, except in Thailand and Pakistan.

/...

:wtf:
Dow 13,427.73 Up 90.07 (0.68%)
Nasdaq 2,605.35 Up 31.19 (1.21%)
S&P 500 1,506.34 Up 13.45 (0.90%)
10-Yr Bond 5.07% Down 0.031
NYSE Volume 3,341,301,000
Nasdaq Volume 2,084,090,000

4:20 pm : After struggling to find their footing throughout most of the day, stocks finally garnered some momentum late in the session as investors began to sense that the market had gotten oversold on a short-term basis. All three indices snapped a three-day losing streak and closed near their best levels of the day.

As evidenced by a 1.2% surge on the Nasdaq, it wasn't surprising to see the bulk of today's recovery effort getting a big boost from strength across the board in Technology. Semiconductor Equipment was the standout from a percentage basis but the sector got its initial lift from Oracle (ORCL 19.69 +0.53).

Last night, Oracle topped expectations and guided Q1 sales growth above analysts' forecasts, which helped restore confidence about the tech sector's prospects as a major contributor to aggregate EPS growth on the S&P 500 this year.

Of the other nine sectors trading higher, Energy was the only other to sport a gain of more than 1.0%. Crude for August delivery, which was down more than 1.0% in early action, surged 1.8% to $68.99/bbl after the EIA reported the first drop in distillate supplies in eight weeks.

An afternoon rally in Financials, though, was the more notable development as bargain hunters finally jumped back into the beaten-down sector.

Brokerage stocks (XBD +1.5%), which were down nearly 6% this month alone largely on subprime concerns, was a bright spot following several upbeat remarks from company executives. The sector's resilience in the face of a late-day reversal in Treasuries and ahead of tomorrow's closely-watched Fed policy directive, which we believe will exclude the word "elevated" as it relates to inflation, was also noteworthy.

Bear Stearns (BSC 143.31 +3.96) said its franchise remains "sound," Merrill Lynch's (MER 86.27 +1.79) Chief said the risk of further fallout tied to subprime is "reasonably well contained," and Goldman Sachs' (GS 219.60 +5.43) CEO said private equity hasn't peaked.

Another round of M&A activity also offered some assurance about this year's record pace of deal making. CommScope (CTV 55.95 +0.79) said it will pay about $2.6 bln for Andrew Corp (ANDW 14.40 1.42) while Guitar Center (GTRC 59.98 +9.92) agreed to go private for $2.1 bln.

Separately, durable goods orders fell 2.8% in May and was initially seen as a negative. However, the drop was expected and understandable since orders were up a net 6.2% over the prior two months. :wtf: DJ30 +90.07 NASDAQ +31.19 SP500 +13.45 NASDAQ Dec/Adv/Vol 961/2064/1.99 bln NYSE Dec/Adv/Vol 812/2469/1.63 bln