Dow Jones 30: Industrials Index

[setravis]

All of the near-term trend indicators have sunk into their oversold zones, indicating the market indices are expected to rally soon, but first the market indices are likely to wallow along current levels for a couple of days, so buyers are advised to wait for the bottom to be confirmed when the near-term trend indicators cross up out of their oversold zones and the DJIA rises above 13,200.

The near-term trend indicators can go lower too, but are so close to being in their oversold sub-basements now that a further substantial decline in the market indices is not likely. However, time and time again, experience has demonstrated it wise to wait for a signal and confirmation that a near-term uptrend is in progress. This may take a couple or more days. The signal will occur when near-term trend indicators climb out of their oversold zones and the confirmation will occur when the DJIA rises above 13,200 and stays there.

The catalyzing factors in recent abrupt trade-term trend movements have been the subprime mortgage debacles involving several large financial institutions. Since the underlying real estate blues continue, perhaps the worrying is not over, but the tenor has changed from shock to recrimination about timing of announcements. Therefore, a period of fewer surprises and thus quieter markets may be in store. In any event, the trade-term trend indicators became oversold late Friday, and thus should rally.

[setravis]

Tech Stocks Plummet Anew.......


Monday into the closing 11/12/2007



The Dow Jones Industrial Average closed below 13,000 and tech stocks were punished yet again as Wall Street fell victim to late selling pressure Monday.

Earlier, gains in banks, retailers and transports offset weakness in oil and gas names to send blue-chips higher, but the upward momentum faded in the final hour.

At the close, the Dow had a loss of 55.44 points, or 0.43%, to 12,987.30 -- the first time the index has closed below the 13,000 level since mid-August. The S&P 500 fell 14.52 points, or 1%, to 1439.18.

In what has been a trend of late, the tech-heavy Nasdaq Composite saw the steepest declines. This time, the index was lower by 43.81 points, or 1.67%, at 2584.13.

Pressuring the Nasdaq were losses in Nvidia (NVDA:) and Research In Motion (RIMM:) of 10% and 9.4%, respectively.

Also on the losing side, the Philadelphia Gold and Silver Sector Index dropped 7.7%, and the Philadelphia Oil Service Sector Index sank 5.9%. Those moves came as crude slid $1.70 to $94.62 a barrel, gold tumbled $27 to $807.70 an ounce and silver slid 78 cents to $14.76 an ounce.

The strongest subgroup measure was the Amex Airline Index, which jumped 4.7%. Elsewhere, the KBW Bank Index climbed 1.1%, and the S&P Retail Index rose 1%.

"It was a thinly traded day, and even though we finished lower, it wasn't really disastrous," said Larry Wachtel, senior market analyst with Wachovia Securities.

"There was really a dichotomy with the losers of the last few weeks performing well today and vice versa," he added. "This wasn't a full-blown selloff like Friday, and given the fact it was a quasi-holiday, you can't read much into today. People are still tentative, though."

The major averages entered the day having notched a second losing week in a row, culminated by a sharp decline in the final hour of trading Friday. Over the five sessions last week, the Dow lost 4%, and the S&P was down 3.8%. The Nasdaq suffered the most, tumbling more than 6.5%.

Breadth was weak to start the week. On the New York Stock Exchange 3.75 billion shares changed hands, as decliners toppled advancers by a 2-to-1 margin. Volume on the Nasdaq reached 2.73 billion shares, with losers beating winners 3 to 2.

Paul Nolte, director of investments with Hinsdale Associates, said that the market is due for a bounce, as market internals are near levels that usually jump-start a short-term rally.

"Either the market is setting up for a successful retest of the August lows or it will be a dismal failure and we begin a journey into a new bear market," Nolte said. "However, unlike past instances of buying the dips, we are getting to the point of selling rallies as many of our longer-term models point to generally lower stock prices ahead."

Financial stocks, which were battered in the wake of more writedowns due to the recent credit market woes, got some positive news to start the week. The New York Times reported that a structure for a $75 billion backstop fund from Citigroup (C:) , Bank of America (BAC:) and JPMorgan (JPM:) has been struck.

The same news outlet has also reported that potential bids for restaurant chain Wendy's (WEN:) could be in jeopardy due to the credit crunch. Still, Wendy's closed higher by 36 cents, or 1.2%, at $31.60.

The earnings docket was light to open the week, with Tyson Foods (TSN:) the only S&P 500 company on tap. Tyson swung to a fiscal fourth-quarter profit of 9 cents a share, compared with a loss of 17 cents a year ago. However, both earnings and guidance fell short of Wall Street's estimates, and shares fell 42 cents, or 2.9%, to end at $14.33.

Several brokers were out with ratings changes. Lehman Brothers downgraded both Fannie Mae (FNM:) and Freddie Mac (FRE:) to equal-weight from overweight. Fannie Mae lost 4% to $47.06, and Freddie Mac slumped 4.1% to close at $40.

Shares of E*Trade (ETFC:) spiraled 58.7% lower after Citigroup downgraded the financial company's stock to sell from hold. The firm cited E*Trade's announcement after the previous session of larger-than-expected writedowns.

Merrill Lynch downgraded many of the enterprise software names. Among those, the firm cut its rating for Microsoft (MSFT:) to neutral from buy. Oracle (ORCL:) , Red Hat (RHT:) and Sybase (SY:) were also cut.

Among upgrades, Citigroup raised its rating for chipmaker Altera (ALTR:) to buy from hold. However, the stock was off 4 cents, or 0.2%, to $18.88.

The U.S. bond market was closed in observance of the Veterans Day holiday. Additionally, there were no economic releases scheduled.

Overseas markets were mostly lower. In Asia, Hong Kong's Hang Seng dropped 3.9% and Japan's Nikkei 225 declined 2.5%. Among European bourses, London's FTSE 100 added 0.5%, while Germany's Xetra Dax slipped 0.1%.

Action should pick up Tuesday, with a report on pending home sales, as well as earnings from retailers Wal-Mart (WMT:) , Home Depot (HD:) , and TJX (TJX:) , due before the opening bell.

[setravis]

Stock Futures on the Rise.......


Tuesday 11/13/2007 7:25 AM EST



Stock futures indicated a higher open for U.S. markets Tuesday following an earnings beat by the world's largest retailer.

Futures on the S&P 500 were adding 11.5 points at 1451.70 and were roughly 8 points above fair value. Nasdaq 100 futures were up 11.5 points at 2001 and were 9 points better than fair value.

Before the opening bell, Wal-Mart (WMT:) reported a third-quarter profit that rose 8% from a year ago to top Wall Street's estimates. The retailer also said quarterly revenue came in at $91.95 billion, exceeding forecasts.

Additionally, Wal-Mart offered full-year guidance that was above the Thomson First Call range of estimates.

Home Depot (HD:) was also out with earnings before the open, although its results were shadowed by Wal-Mart. The home-improvement retailer posted a third-quarter profit that dropped nearly 27% from a year ago due to the slowing housing market.

While the retailers'' earnings were grabbing the early headlines, traders were also waiting on key economic data on the housing market. At 10 a.m. EST, a report on pending home sales should show a 2% drop in September.

Last time out, the major averages fluctuated between positive and negative territory before weakening in the final hour of trading. At the close, the Dow Jones Industrial Average had a loss of 55.44 points, or 0.43%, to 12,987.30, the first time the index has closed below the 13,000 level since mid-August.

The S&P 500 fell 14.52 points, or 1%, to 1439.18, and the tech-heavy Nasdaq Composite continued to see the steepest declines. On Monday, the index was lower by 43.81 points, or 1.67%, at 2584.13.

Away from equities, commodities continued to slide. Crude was off 64 cents to $93.98 a barrel, gold dipped $1.70 at $806 an ounce, and silver decreased 11 cents to $14.64 an ounce.

U.S. Treasury bonds, which didn't trade Monday in observance of the Veteran's Day holiday, were losing ground ahead of the new session. The 10-year note was down 4/32 in price, pushing the yield to 4.24%. The 30-year bond was losing 8/32, yielding 4.62%.

Overseas markets were mixed. In Asia, Hong Kong's Hang Seng added 0.5%, and Japan's Nikkei 225 fell 0.5%. The split move came after the Bank of Japan said it would keep key interest rates unchanged. BOJ Governor Toshihiko Fukui said the global economy is at risk if the U.S. housing slump spreads internationally.

Among European bourses, London's FTSE 100 tacked on 0.1%, while Germany's Xetra Dax slipped 0.3%.

[setravis]

The market indices made a third and fourth attempt to get out of their oversold cellars yesterday, to no avail. They wallowed along, trying to form bases upon which to launch near-term rallies. The former support level of DJIA 13,200 is now the ceiling to be exceeded before a near-term rally can be confirmed. A fifth try to start a near-term uptrend is likely to happen this morning, but the real deal is probably still a day or two away.

The only solace for the bulls is that the market indices seem to have leveled out at the 13,000 level. However, the intermediate-term trend still has some room to become more oversold.

[setravis]

Big Bounce for Wall Street.......


Tuesday into the close 11/13/2007


Stocks in the U.S. were sharply higher Tuesday as an earnings beat by the world's largest retailer and reassurance from the financial sector prompted bargain-hunters to go to work.

The Dow Jones Industrial Average skyrocketed 319.54 points, or 2.46%, to 13,307.09, its second-best point gain of the year. The S&P 500 jumped 41.87 points, or 2.91%, at 1481.05. The Nasdaq Composite, the weakest of the three of late, was the best performer this time, soaring 89.52 points, or 3.46%, to 2673.65.

Leading the Dow was Wal-Mart (WMT:) , which reported a third-quarter profit that rose 8% from a year ago to top Wall Street's estimates. The retailer also said quarterly revenue came in at $91.95 billion, exceeding forecasts.

Additionally, Wal-Mart lifted its profit forecast for the full year. Shares jumped $2.65, or 6.1%, to $45.97.

Home Depot (HD:) was also out with earnings, although its results were overshadowed by Wal-Mart's. The home-improvement retailer posted a third-quarter profit that dropped nearly 27% from a year ago because of the slowing housing market. Regardless, Home Depot gained 66 cents, or 2.3%, at $29.12.

Much like the previous session, the retail sector was one of the best performers. The S&P Retail Index added 3.9%. Among other subsector index winners, the Amex Airline Index jumped 5.2%, the Philadelphia Semiconductor Sector Index rose 2.2%, and the KBW Bank Index gained 4.9%.

Boosting financials was Goldman Sachs (GS:) , which jumped 8.5% after CEO Lloyd Blankfein said the investment bank will not suffer writedowns from subprime mortgage exposure as many of its rivals have. The stock jumped $18.33 to end the day at $233.04, and the comments helped lift others in the sector.

Elsewhere, the Philadelphia Housing Sector Index ended 4.4% higher following positive data on the housing market. A late-afternoon report from the National Association of Realtors showed that pending home sales unexpectedly rose 0.2% in September, compared to expectations for a 2% drop.

Ian Shepherdson, chief economist with High Frequency Economics, said the September pending home sales data were a welcome pause following the hefty declines in August and July, but he warned against getting overly optimistic about housing.

"This does not change the trend, which is still sharply downwards," said Shepherdson. "Looking a bit further ahead, though, we expect the decline in sales to continue, because the inventory overhang continues to depress prices and people are reluctant to borrow to buy depreciating assets."

On the New York Stock Exchange, 3.95 billion shares changed hands, as advancers toppled decliners by a 9-to-2 margin. Volume on the Nasdaq reached 2.60 billion shares, with winners beating losers 7 to 3.

Last time out, the major averages fluctuated between positive and negative territory before weakening in the final hour of trading. At the close, the Dow had a loss of 55.44 points, or 0.43%, to 12,987.30, the first time the index has closed below the 13,000 level since mid-August.

The S&P fell 14.52 points, or 1%, to 1439.18, and the tech-heavy Nasdaq continued to see the steepest declines. On Monday, the index was lower by 43.81 points, or 1.67%, at 2584.13.

Elsewhere in corporate news, Corning (GLW:) closed 10% higher after the company hiked its guidance for the fourth quarter. Corning now expects earnings in a range of 38 cents to 40 cents a share, compared with the average estimate of 37 cents a share. Shares added $2.14 at $23.54.

Among ratings changes, CIBC World Markets upgraded Internet search giant Yahoo! (YHOO:) to sector outperform from sector perform. Elsewhere, UBS raised its rating for Yamana Gold (AUY:) to buy from neutral. Yahoo! rose $1.32, or 5.3%, to $26.10. Yamana advanced 63 cents, or 5%, to close at $13.25.

Meanwhile, most commodities continued to slide. Crude dropped $3.45 to $91.17 a barrel, and gold lost $8.70 to finish at $799 an ounce.

"The corporate news is definitely helping, but the market is getting a lot of help from the technicals," said Peter Cardillo, chief market economist with Avalon Partners. "Oil prices are now approaching $90 a barrel, and after a major selloff we were due for this technical rebound. Hopefully good forthcoming economic news will help us stabilization. We need to see the upward momentum continue."

U.S. Treasury bonds, which didn't trade Monday in observance of the Veteran's Day holiday, were lower. The 10-year note was down 11/32 in price, pushing the yield to 4.27%. The 30-year bond was off 6/32, yielding 4.62%.

Overseas markets were mixed. In Asia, Hong Kong's Hang Seng added 0.5%, and Japan's Nikkei 225 fell 0.5%. The split move came after the Bank of Japan said it would keep key interest rates unchanged. BOJ Governor Toshihiko Fukui said the global economy is at risk if the U.S. housing slump spreads internationally.

Among European bourses, London's FTSE 100 tacked on 0.4%, while Germany's Xetra Dax slipped 0.4%.

[setravis]

Stocks Soft Ahead of Data........


Wednesday 11/14/2007 7:48 AM EST



Stocks were set to open lower Wednesday as traders booked profits and awaited the next batch of economic data.

Futures on the S&P 500 were losing 1.90 points at 1481.40 and were roughly 3 points below fair value. Nasdaq 100 futures were up 1.80 points at 2068.50 but were 7.50 points lower than fair value.

The previous session's upward momentum looked to be in jeopardy early. Last time out, strong earnings from Wal-Mart (WMT:) and reassuring comments from Goldman Sachs (GS:NYSE) boosted the Dow Jones Industrial Average 319.54 points, or 2.46%, to 13,307.09, its second-best point gain of the year.

The S&P 500 was up 41.87 points, or 2.91%, at 1481.05. The Nasdaq Composite, the weakest of the three of late, was the best performer this time, soaring 89.52 points, or 3.46%, to 2673.65.

Two key economic reports loomed before the opening bell. At 8:30 a.m. EST, the Commerce Department will post its retail sales data for October, with economists expecting an advance of 0.2% after a 0.6% rise in September.

At the same time, the Labor Department should say that its producer price index rose 0.2% last month. The PPI index, as well as Thursday's consumer price index, will be closely watched by the Federal Reserve for any signs of inflation.

Fed Chairman Ben Bernanke, who hinted the central bank may not cut key interest rates again when he testified before the Joint Economic Committee last week, will speak before the CATO Institute later in the morning about Federal Open Market Committee communications.

As for corporate news, HSBC Holdings (HBC:) became the latest lender to announce writedowns due to the subprime mortgage and credit mess, saying it will take a $3.4 billion charge during the third quarter. However, the bank believes the writedown will be offset by revenue growth in other areas.

On the earnings docket, Macy's (M:) was due to post quarterly results before the start of trading, and chipmaker Applied Materials (AMAT:) is due out after the closing bell.

Several firms were out with ratings changes. Among them, Citigroup upgraded International Paper (IP:) to buy from hold, while Bear Stearns downgraded Hershey Foods (HSY:) to underperform from peer perform.

Away from equities, commodities were rebounding after a multisession slide. Crude was adding $1.10 to $92.27 a barrel, gold jumped $12.10 to $811.10 an ounce, and silver rose 36 cents to $14.97 an ounce.

U.S. Treasury bonds were losing ground ahead of the new session. The 10-year note was down 2/32 in price, pushing the yield to 4.27%. The 30-year bond was losing 3/32, yielding 4.62%.

Overseas markets were higher. In Asia, Hong Kong's Hang Seng surged 4.9%, and Japan's Nikkei 225 advanced 2.5%.

Among European bourses, London's FTSE 100 tacked on 0.4%, while Germany's Xetra Dax climbed 0.1%.

[setravis]

The fifth try was the charm. The DJIA rocketed up through its 13,200 ceiling yesterday as all the indicators turned up. The near-term rally has begun. However, yesterday's run-up caused the market indices to get momentarily overbought and this should be corrected by a pause that refreshes this morning before the near-term uptrend resumes.

This enabled the intermediate-term trend to halt its downward move and reverse the path of the indicators.

The DJIA will need to stay above 13,200 and continue rising. There are about 400 points between yesterday's close and the next ceiling at 13,700. The DJIA appears to be gathering momentum to traverse this gap over the next week.

The trade-term trend is not without some say in this process. It may be catalyzed today by the inflation report due out this morning. However, yesterday's intraday rally gave the indicators little chance to do other than become overbought by day end. That is most likely to result in a corrective move by the market indices, depending on the news- induced mood this morning. The correction could be no more than a sideways move as the buoying effect of the near-term rally is expected to cause the trade-term trend to progressively find higher intraday highs and higher intraday lows over the next few days.

[setravis]

Stocks Keep Rally Going.......

Wednesday 11/14/2007 9:51 AM EST


Stocks were on the rise early Wednesday as well-received comments from Bear Stearns (BSC:NYSE) and favorable economic data allowed Wall Street to extend the prior session's rally.

The Dow Jones Industrial Average was up 42 points at 13,350, and the S&P 500 was gaining 8 points to 1489. The Nasdaq was tacking on 8 points at 2681.

Helping the mood early was Bear Stearns, who said it would take a $1.2 billion writedown in the fourth quarter, but also indicated that it might be getting a handle on the worst of its exposure to troubled debt. As a result, its shares were climbing 6%.

The comments could bolster the financials, and they come a day after Goldman Sachs (GS:NYSE) supported the market by saying it didn't expect any sizable writedowns.

Another positive was the Labor Department's October producer price index, which showed a rise of just 0.1%. The core PPI, a number that excludes food and energy, was unchanged. Both readings were better than forecasts.

Ian Shepherdson, chief economist with High Frequency Economics, said that traders welcomed the PPI figures as the data suggest inflation ought not be a barrier to further Federal Reserve interest rate cuts.

"The headline was lifted entirely by food prices, which jumped 1.0%, while energy prices dipped," he said. "Higher food prices are passing through into the [consumer price index] , but with wage gains slowing, this just means consumers'' real incomes are being squeezed. [It] is not inflationary."

The CPI will be released Thursday.

Fed Chairman Ben Bernanke, who hinted last week that rates might not be lowered again, spoke before the CATO Institute about Federal Open Market Committee communications. Bernanke said the FOMC will release expanded forecasts in a more timely fashion as a measure to make the central bank more transparent.

Also on the economic front, the Commerce Department said that retail sales rose 0.2% last month, as expected. Excluding autos, retail sales were up 0.2%, also in line with estimates.

Last time out, strong earnings from Wal-Mart (WMT:) and the reassuring remarks from Goldman boosted the Dow 319.54 points, or 2.46%, to 13,307.09, its second-best point gain of the year.

The S&P was up 41.87 points, or 2.91%, at 1481.05. The Nasdaq, the weakest of the three of late, was the best performer this time, soaring 89.52 points, or 3.46%, to 2673.65.

Elsewhere, HSBC Holdings (HBC:) said it would take a $3.4 billion charge during the third quarter because of the subprime mortgage and credit mess. However, the bank believes the writedown will be offset by revenue growth in other areas.

On the earnings docket, Macy's (M:) said it swung to a third-quarter profit, topping Wall Street's expectations. The department-store chain also provided guidance for fourth-quarter earnings and revenue that were in line with estimates.

Chipmaker Applied Materials (AMAT:) is due out after the closing bell.

Several firms were out with ratings changes. Among them, Citigroup upgraded International Paper (IP:) to buy from hold, while Bear Stearns downgraded Hershey Foods (HSY:) to underperform from peer perform.

Away from equities, commodities were rebounding after a multisession slide. Crude was adding $1.10 to $92.27 a barrel, gold jumped $12.10 to $811.10 an ounce, and silver rose 36 cents to $14.97 an ounce.

U.S. Treasury bonds were losing ground ahead of the new session. The 10-year note was down 2/32 in price, pushing the yield to 4.27%. The 30-year bond was losing 3/32, yielding 4.62%.

Overseas markets were higher. In Asia, Hong Kong's Hang Seng surged 4.9%, and Japan's Nikkei 225 advanced 2.5%.

Among European bourses, London's FTSE 100 tacked on 0.4%, while Germany's Xetra Dax climbed 0.1%.

[setravis]

Late Selling Hits Stocks.......


Wednesday into the close 11/14/2007


Stocks struggled for direction for much of the session Wednesday, but a fast-developing selloff in the final minutes of trading left the major averages saddled with losses at the close.

The Dow Jones Industrial Average fell 83.16 points, or 0.6%, to 13,223.93, and the S&P 500 lost 10.47 points, or 0.7%, at 1470.58. The Nasdaq Composite declined by 29.33 points, or 1.1%, to 2644.32.

"Without a follow-through to yesterday's advance, there wasn't much participation today and yesterday's rally petered out," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "There was a lack of a catalyst today, and the market unwound late in the day. It certainly doesn't make anyone feel good to see a decline today, but it shouldn't have been all that surprising."

Breadth was negative. On the New York Stock Exchange 3.80 billion shares changed hands, as decliners beat advancers by a 10-to-7 margin. Volume on the Nasdaq reached 2.36 billion shares, with losers topping winners nearly 3 to 2.

"This was extreme volatility, as people were positive one minute and negative the next," said Paul Mendelsohn, chief investment strategist with Windham Financial. "Given the way we closed, we should see weakness carry over from the close into tomorrow. Everyone showed their hand at the end of the day today, and that's why the last half hour was so critical."

He said traders were bothered all day by the bond market, "as yields could've gone up a lot considering how good the economic data was. The bond market is still negative in regards to what's coming."

At 4 p.m. EST, the 10-year Treasury note was up 1/32 in price, yielding 4.26%. The 30-year bond was up 7/32, yielding 4.60%.

Despite the late selling in stocks, one notable bright spot was Bear Stearns (BSC:) , who said it would take a $1.2 billion writedown in the fourth quarter but also indicated that it might be getting a handle on the worst of its exposure to troubled debt. As a result, its shares climbed $2.58, or 2.6%, to $103.45.

Rival Merrill Lynch (MER:) confirmed it will install NYSE Euronext (NYX:) head John Thain as CEO. That sent the stock 1.8% higher to $57.98.

Bear's comments and Merrill's news, though, failed to bolster the financials. The KBW Bank Index was off 1.7%, and the Amex Financial Sub Index ended down 0.6%.

Another positive was the Labor Department's October producer price index, which showed a rise of just 0.1%. The core PPI, a number that excludes food and energy, was unchanged. Both readings were better than forecasts.

Ian Shepherdson, chief economist with High Frequency Economics, said the data suggest inflation ought not be a barrier to further Federal Reserve interest rate cuts.

"The headline was lifted entirely by food prices, which jumped 1.0%, while energy prices dipped," he said. "Higher food prices are passing through into the [consumer price index] , but with wage gains slowing, this just means consumers'' real incomes are being squeezed. [It] is not inflationary."

The CPI, arguably the more important of the two price reports, will be released Thursday.

Fed Chairman Ben Bernanke spoke before the Cato Institute about Federal Open Market Committee communications. Bernanke said the FOMC will release expanded forecasts in a more timely fashion as a measure to make the central bank more transparent.

Starting Nov. 20, the Fed will release expectations for prices, gross domestic product and unemployment figures in the coming three years. The central bank will also release economic forecasts quarterly, up from twice a year.

"The changes will provide a more timely insight into the committee's outlook, will help households and businesses better understand and anticipate how our policy decisions respond to incoming information and will enhance our accountability for the decisions we make," said Bernanke. "The projections also function as a plan for policy -- albeit as a rough and highly provisional one."

Also on the economic front, the Commerce Department said that retail sales rose 0.2% last month, as expected. Excluding autos, retail sales were up 0.2%, also in line with estimates.

Elsewhere, HSBC Holdings (HBC:) said it would take a $3.4 billion charge during the third quarter because of the subprime mortgage and credit mess. However, the bank believes the writedown will be offset by revenue growth in other areas. The stock was up 7 cents, or 0.1%, to $88.85.

Delta Air Lines (DAL:) was one of the Day's winners, rising 4.1% to $19.52 on speculation it might merge with UAL Corp.''s (UAL:) United Airlines. UAL gained 1.5% to $44.17.

On the earnings docket, Macy's (M:) said it swung to a third-quarter profit, topping Wall Street's expectations. The department-store chain also provided guidance for fourth-quarter earnings and revenue that were in line with estimates. Still, shares of Macy's lost $2.18, or 7.1%, to $28.47.

Several firms were out with ratings changes. Among them, Citigroup upgraded International Paper (IP:) to buy from hold, while Bear Stearns downgraded Hershey Foods (HSY:) to underperform from peer perform.

International Paper tacked on 0.7% to $34.49, while Hershey finished 4.4% lower at $40.24.

Away from equities, commodities rebounded after a multisession slide. Crude rallied $2.92 to close at $94.09 a barrel, gold jumped $15.70 to $814.70 an ounce, and silver rose 45 cents to $15.06 an ounce.

Overseas markets were higher. In Asia, Hong Kong's Hang Seng surged 4.9%, and Japan's Nikkei 225 advanced 2.5%. Among European bourses, London's FTSE 100 climbed 1.1%, while Germany's Xetra Dax tacked on 0.1%.

[setravis]

Stocks Take Another Late Slide.......


Thursday into the close 11/15/2007


A late selloff again took U.S. stocks to the downside Thursday, mimicking the action of the day before amid more fears of housing and credit problems.

The Dow Jones Industrial Average spent time in both positive and negative territory during the session, but ultimately slid 120.96 points, or 0.91%, to 13,110.05. Twenty-two of the Dow's 30 components finished with losses, led by 4% declines in AIG (AIG:) and Citigroup (C:) .

Meanwhile, the S&P 500 ended down 19.43 points, or 1.32%, at 1451.15. The tech-heavy Nasdaq Composite declined 25.81 points, or 0.98%, to 2618.51, pressured by a 6.3% drop in Research in Motion (RIMM:) .

The major averages took a turn for the worse late in the afternoon as comments from Wells Fargo (WFC:) CEO John Stumpf pulled down the financials and the homebuilders. Stumpf said the U.S. housing slump is the worst since the Great Depression and that problems in the sector will persist through 2008. Wells Fargo slumped $1.28, or 3.9%, to end the day at $31.97.

Housing stocks D.R. Horton (DHI:) , Lennar (LEN:) , Pulte Homes (PHM:) , Centex (CTX:) and Standard Pacific (SPF:) all lost 2.2% or more.

"The market's inability to break through resistance levels continues to show uncertainty and bearish sentiment over the near-term, especially now after the Wells Fargo comment," said Michael Sheldon, chief market strategist Spencer Clarke. "The market remains on the defensive, and the next big test will be to see if the Dow and S&P 500 can hold above the August lows."

Also weighing on buyers were more writedowns, an event that has become an almost daily occurrence. This time, Barclays (BCS:) said it wrote down the value of its securities by $2.7 billion over the last four months.

On the bright side, the figure was significantly less than the rumors last week that the firm would take a $10 billion-plus hit. Still, Barclays was off 88 cents, or 2%, at $43.

Additionally, General Electric's (GE:) asset-management arm is offering investors in its $5 billion short-term bond fund the opportunity to redeem their holdings at 96 cents on the dollar because it has taken losses related to asset-backed securities.

Shares of GE shed 70 cents, or 1.8%, to close at $38.31.

The energy sector tumbled as oil prices fell 66 cents to $93.43 a barrel following a bearish weekly inventory report from the Energy Department. The Amex Oil Index was down 2.4%, with the worst performers being Valero (VLO:) , Sunoco (SUN:) and Occidental Petroleum (OXY:) .

Other commodities lost ground, as well. Gold slid $27.40 to $787.30 an ounce, and silver fell 58 cents to $14.48 an ounce. The Philadelphia Gold & Silver Sector Index was one of the biggest losers, falling 4.7%.

Breadth was weak. On the New York Stock Exchange 3.82 billion shares changed hands, as decliners blew past advancers by nearly a 4-to-1 margin. Volume on the Nasdaq reached 2.27 billion shares, with losers beating winners 3 to 1.

Stocks had traded sideways for most of the session in the wake of mild inflationary economic data. The key report came when the Labor Department said its October consumer price index rose 0.3% on the headline, and the core number, which excludes food and energy, advanced 0.2%. Both figures matched expectations.

The CPI followed by a day the producer price index, which showed a surprisingly tame read on inflation at the wholesale level. Prices rose just 0.1%, and the core PPI was unchanged.

The inflationary data were perhaps scrutinized a bit more than normal in light of Federal Reserve Chairman Ben Bernanke's announcement Wednesday that the Federal Open Market Committee will look closer at economic releases. Bernanke said that, while core data remain the focus, the central bank will also examine the overall number more closely.

"We were spot on with estimates on the CPI number, so there aren't many surprises," said Art Hogan, chief market analyst with Jefferies. "After Ben Bernanke came out yesterday and said what he did about looking at headline figures, these numbers become concerning. If we're concerned about inflation in terms of monetary policy, it takes the punchbowl away from the party."

Elsewhere on the economic docket, the Labor Department said initial jobless claims jumped by 30,000 last week to 339,000, well above economists'' estimates. The Philadelphia Fed manufacturing index was a bit stronger than expected.

U.S. Treasury bonds rallied. At 4 p.m. EST, the 10-year note was up 25/32 in price, pushing the yield to 4.16%. The 30-year bond was up 1-2/32 in price, yielding 4.54%.

On the corporate news side, a few companies were out with quarterly numbers. Tyco International (TYC:) said that fiscal fourth-quarter earnings plummeted 85% from a year ago, due mostly to restructuring costs and a higher tax rate. However, the company beat the Thomson First Call average estimate by 2 cents. Tyco fell $1.14, or 3.6%, to close at $37.88.

J.C. Penney (JCP:) posted in-line third-quarter results, but lowered expectations for the fourth quarter. The department-store giant now anticipates earnings of $1.65 to $1.80 a share for the important holiday period, compared with Wall Street's projections of $1.91 a share for the fourth quarter. Shares were off $2.40, or 5.1%, to $44.33.

Following the previous close, chip-equipment maker Applied Materials (AMAT:) missed revenue targets for its fiscal fourth-quarter. The company also guided below estimates for the first quarter. Still, Applied Materials finished with a gain of 6 cents, or 0.3%, at $18.87.

Several firms were out with ratings changes on financial firms. Credit Suisse upgraded Merrill Lynch (MER:) to outperform from neutral following the appointment of John Thain as CEO. Also, Punk Ziegel upgraded Lehman Brothers (LEH:) to market perform from sell.

Merrill was down 68 cents, or 1.2%, to close at $57.30. Lehman Brothers lost $2.48, or 3.8%, to $62.97.

At the same time, Punk cut its stock price target for Bear Stearns (BSC:) to $109 a share from $120. Shares shed $3.33, or 3.2%, to $99.94.

Overseas markets were uniformly lower. In Asia, Hong Kong's Hang Seng lost 1.4%, and Japan's Nikkei 225 declined 0.7%. As for European bourses, London's FTSE 100 eased 1.1%, while Germany's Xetra Dax was down 1.5%.

[setravis]

To correct a momentary overbought status, brought on by the sharp run-up on Tuesday, the market indices moved mainly sideways yesterday until late in the day when a brief sell-off ensued. The DJIA dropped down close to its 13,200 level from which the near-term uptrend began. It is expected to continue although this morning will provide the opportunity for the intraday decline to bottom out before the market indices will move on up.

While still preliminary to a full-blown establishment of a new intermediate-term uptrend, the signs are unmistakable.
Uptrends to downtrends flipped from negative to positive.

After a continuation this morning of yesterday's sell-off, the market indices are expected to resume the rally begun on Tuesday. This is supported by the movement of the near-term trend indicators.

There is some potentially catalytic news coming today, which could influence how far the market indices will dip today before resumption of the near-term uptrend. However, by day's end yesterday the trade-term indicators had already become oversold. Therefore, whatever dip happens this morning, it is not expected to last long or be very deep.
Provided, of course, that one of the economic measures is not such a surprise that fear of the worst turns into a selling frenzy. The late day sell-off yesterday appears to have been mainly trade-term pessimism, so the dissipation of that pessimism this morning is expected to provide an opportunity for long stock bargain hunters to establish positions to ride the wave of the evolving near-term uptrend.

[setravis]

Upbeat Finish for Stocks.......


Friday into the close 11/16/2007



The major averages made another sharp move late in the session Friday, but this time, it was to the upside.

After enduring a back-and-forth day, the Dow Jones Industrial Average closed up 66.74 points, or 0.51%, at 13,176.79. The S&P 500 was similarly erratic, but went out ahead by 7.59 points, or 0.52%, to 1458.74. The Nasdaq Composite advanced 18.73 points, or 0.72%, to 2637.24.

"The broad market is still having problems, but we held up today, and that is a positive," said Edgar Peters, chief market strategist with Pan Agora. "It appears things are calming down a little bit, and it's very possible that what happened this week was overdone. There was some bargain-hunting, which people don't like to do on a Friday."

Peters added that if any news comes out during the next week, "it will be very volatile and exaggerated due to the low volume because of the Thanksgiving holiday. Otherwise, we'll probably meander all over the map like we did this week."

During the past two sessions, heavy selling has occurred in final minutes and the indices ended lower both times.

The last hour hit stocks last time out, when the Dow slid to close down more than 100 points to 13,110.05. The S&P 500 fell 19.43 points, or 1.32%, at 1451.15. The tech-heavy Nasdaq declined 25.81 points, or 0.98%, to 2618.51.

For the week, the major averages broke a two-week losing streak, sneaking by with narrow gains after volatile trading over the five sessions. The Dow climbed 1%, and the S&P 500 closed up 0.3%. The Nasdaq gained 0.3%.

Despite a win for the major averages, breadth was weak heading into the weekend. On the New York Stock Exchange 4.06 billion shares changed hands, as decliners toppled advancers by a 10-to-7 margin. Volume on the Nasdaq reached 2.41 billion shares, with losers beating winners nearly 8 to 7.

"When you look at the whole week, the major averages finished up slightly despite being all over the place," said Paul Nolte, director of investments with Hinsdale Associates. "Plus, there were more decliners than advancers for the week, which means strength was consolidated among large-cap names. Investors are still concerned about subprime and housing as well as the implications for what it will all mean for the rest of the economy."

Rhetoric from Federal Reserve bankers was in the spotlight early. Central bank Governor Randall Kroszner offered his views on the economy and monetary policy before a conference at the Institute of International Finance in New York, saying the Fed's approach is the correct one.

"The current stance of monetary policy should help the economy get through the rough patch during the next year, with growth then likely to return to its longer-run sustainable rate," said Kroszner. "A sequence of data releases consistent with the rough patch for economic activity that I expect in coming months would not, by themselves, suggest to me that the current stance of monetary policy is inappropriate."

Elsewhere, St. Louis Fed President William Poole was out with remarks of his own, telling Dow Jones that inflation isn't a major risk to the U.S. economy. However, Poole forecasted that the economy should rebound after the fourth quarter, which cast doubt over whether the Fed would again cut the fed funds rate.

Though many market participants hope to see further easing, those sets of comments would suggest that additional reductions in the near term are hardly a given.

U.S. Treasury bonds were slightly lower after the Fed comments. At 4 p.m. EST, the 10-year note was off 7/32 in price, bumping the yield higher to 4.17%, and the 30-year bond was down 7/32, yielding 4.53%.

With no major earnings releases set and data slim, investors were poring over analyst notes and gearing up for options expiration.

Robert W. Baird downgraded Starbucks (SBUX:) to neutral from outperform after the coffee chain's fiscal fourth-quarter results and forecast, released after the closing bell.

Starbucks posted a 35% jump in year-over-year earnings, matching Wall Street's estimates, but the company cut its outlook for fiscal 2008. Starbucks also said it will open 100 fewer U.S. stores than originally planned as same-store sales growth came in at the low end of expectations. Shares were off 93 cents, or 3.9%, to close at $23.17.

Baird also cut its rating for FedEx (FDX:) to neutral from outperform. Before the opening bell, FedEx cut its fiscal second-quarter and full-year outlook as fuel costs have skyrocketed. FedEx shed $4.57, or 4.5%, to $96.80.

The Dow Jones Transportation Average slipped 1.6 and the Nasdaq Transportation Index was down 1.5% after Dex's guidance cut. Rival UPS (UPS:) finished 1.5% lower in sympathy.

Also on the negative side, UBS downgraded retail giant Target (TGT:) to neutral from buy. Shares slid 98 cents, or 1.8%, to end the day at $53.88.

On the other hand, Deutsche Securities raised its ratings on several oil companies. The firm upgraded Chevron (CVX:) and ConocoPhillips (COP:) to hold from sell, and Marathon Oil (MRO:) to buy from hold. All three names closed higher on the day.

Among other upgrades, Credit Suisse upped its rating for J.C. Penney (JCP:) to neutral from underperform, and Citigroup raised Tyco (TYC:) to hold from sell. J.C. Penney lost 2.6% to close at $43.19, while Tyco advanced 2.2% to $38.73.

Hewlett-Packard (HPQ:) closed 3.8% higher after being upgraded by Morgan Stanley. The stock added $1.85 to $50.75.

On the economic front, the Federal Reserve said industrial production fell 0.5% in October, the largest decline since January. Capacity utilization fell to 81.7% from 82.2% in September.

Commodities were mixed. Crude jumped $1.67 to $95.10 a barrel. Gold eased 30 cents to $787 an ounce. Silver futures were 3 cents higher to close at $14.51 an ounce.

Overseas markets were uniformly lower. In Asia, Hong Kong's Hang Seng dropped 4%, and Japan's Nikkei 225 declined 1.6%. Among European bourses, London's FTSE 100 eased 1.1%, while Germany's Xetra Dax was down 0.7%.

[setravis]

Futures Signal Gains for Stocks.......


Tuesday 7:43 AM EST



Stocks were set to rally Tuesday, as traders hoped to shake off the previous session's decline with help from Hewlett-Packard's (HPQ:) earnings and the minutes from the last Federal Reserve meeting.

Futures on the S&P 500 were rising 11.5 points at 1449 and were more than 11 points above fair value. Nasdaq 100 futures were adding 19 points at 2047 and were 17 points higher than fair value.

The major indices started off the holiday-shortened week on a sour note, falling hard after a downgrade of Citigroup (C:) sent ripples of fear through the financials.

The Dow Jones Industrial Average lost 218.35 points, or 1.66%, to 12,958.44. The S&P 500 was off 25.47 points, or 1.75%, at 1433.27, leaving it just 15 points, or 1%, above its 2006 close. The Nasdaq Composite was weaker by 43.86 points, or 1.66%, at 2593.38.

H-P's earnings report, which came after the close, was a buying catalyst in the early going. The PC maker posted a 28% jump in fiscal fourth-quarter earnings, easily topping the Thomson First Call consensus.

Traders were also betting ahead of the minutes from the two-day Federal Open Market Committee meeting at the end of October, when the central bank decided to lower the fed funds target rate by 25 basis points to 4.50%.

In an accompanying statement, the Fed said that "the upside risks to inflation roughly balance the downside risks to growth," adding that "recent increases in energy and commodity prices, among other factors, may put renewed upward pressure on inflation."

While minutes from a rate policy meeting have typically given more insight to the Fed's decision, the latest release will be scrutinized more in light of Chairman Ben Bernanke's recent remarks that the FOMC will release expanded forecasts in order to make the central bank more transparent.

"The changes will provide a more timely insight into the committee's outlook, will help households and businesses better understand and anticipate how our policy decisions respond to incoming information and will enhance our accountability for the decisions we make," said Bernanke nearly a week ago.

In corporate news, Sears Holdings (SHLD:) said it has purchased a 13.7% stake in Restoration Hardware (RSTO:) and is mulling a takeover of the retailer.

The news comes after Restoration Hardware said it will be taken private by Catterton Partners in a $267 million buyout.

In other retailer news, Nordstrom (JWN:) posted a third-quarter profit that jumped 22% from a year ago, topping forecasts. While the retailer's fourth-quarter guidance was weaker than expectations, Nordstrom's full-year outlook was sturdy.

On the economic front, the lone report of the day will come at 8:30 a.m. EST when the Commerce Department will post housing starts data for October. Economists anticipate starts will tumble to 1.175 million annualized units from 1.191 million units.

U.S. Treasury bonds were falling early. The 10-year note was down 5/32 in price, yielding 4.09%. The 30-year bond was off 3/32, yielding 4.49%.

Commodities were gaining ground. Crude was up 96 cents to $95.60 a barrel, gold was rallying $11.10 to $789.10 an ounce, and silver was 28 cents higher at $14.44 an ounce.

Overseas markets were uniformly higher. In Asia, Hong Kong's Hang Seng and Japan's Nikkei 225 both rose 1.1%. Among European bourses, London's FTSE 100 added 0.6%, and Germany's Xetra Dax was up 1%.

[setravis]

Financials Stymie Stock Rally.......


Tuesday 11/20/2007 1:39 PM EST


Stocks made a dramatic turn lower Tuesday as more worries over the credit market crisis and the Federal Reserve's policy action had buyers running for the sidelines.

The Dow Jones Industrial Average, at one point higher by the triple-digits, lately was down 61 points at 12,897. The S&P 500 was losing 8 points at 1425. The Nasdaq Composite was worse by 21 points to 2572.

The market could not overcome negative headlines out of Freddie Mac (FRE:) , which said it was considering raising capital and chopping its dividend in half after posting a $2 billion loss for the third quarter. Shares were in a nosedive, falling $12.14, or 32.4%, to $25.36.

Freddie's counterpart Fannie Mae (FNM:NYSE) , meanwhile, was dropping 25.5% to $27.99.

Among other financial names, Countrywide Financial (CFC:) tumbled 14.6% to a 52-week low of $9.03. Bear Stearns (BSC:) , Merrill Lynch (MER:) , Morgan Stanley (MS:) , and Citigroup (C:) all were lower by 2.5% or more.

The Amex Securities Broker/Dealer Index was one of the session's weakest sectors, falling 2.3%. The NYSE Financial Sector lost 1.4%, and the KBW Bank Index suffered a 1.6% decline.

The commodity sector was providing a small counterbalance to the weak financials. The Amex Gold Bugs Index was jumping 3.3% thanks to upside moves in Barrick Gold (ABX:) and Hecla Mining (HL:) . The Philadelphia Stock Exchange Gold & Silver Sector Index was rising 3.8%.

At the same time, the Amex Oil Index was higher by 1.6%. Components Exxon Mobil (XOM:) and Hess (HES:) were adding 3.5% after being upgraded at UBS.

The strength came as crude oil was jumping $2.35 to $96.99 a barrel, and gold was climbing $15.50 to $793.50 an ounce. Silver was up 36 cents at $14.52 an ounce.

Speculation making the rounds that the Federal Reserve might be considering an emergency rate reduction was weighing on the dollar and sparking the advance in commodities.

"This would be a remarkable turnaround for Chairman [Ben] Bernanke," said Peter Morici, a professor at the University of Maryland School of Business and former chief economist at the U.S. International Trade Commission." [V] irtually all the economic news has been bad. Wall Street firms are taking mega-writedowns on subprime debt, the stock market has tanked, retail and housing sales are in the sink, commercial real estate values are falling, and industrial production is contracting.

"In the near term, the Fed needs to help avert complete meltdown in the housing sector by bringing down long rates," he added.

Robert Pavlik, chief investment officer with Oaktree Asset Management, said it is extremely doubtful the Fed will hold an emergency meeting to cut interest rates, especially given that it doesn't appear likely the Fed will drop the fed funds rate at its meeting on Dec. 11.

"The Fed will probably remain on hold at the Dec. 11 meeting, although it will do a huge disservice to the economy," said Pavlik. "If they don't cut by 25-basis points in December they will blow it. Recession is largely psychological. A rate cut would boost confidence and people will be more willing to spend."

U.S. Treasury bonds turned higher. The 10-year note was recently up 2/32 in price, yielding 4.06%. The 30-year bond was up 1/32, yielding 4.48%.

Later, all eyes will be on the minutes from the two-day Federal Open Market Committee meeting at the end of October, when the central bank decided to lower the fed funds target rate by 25 basis points to 4.50%. The minutes are due at 2 p.m. EST.

In an accompanying statement, the Fed said that "the upside risks to inflation roughly balance the downside risks to growth," adding that "recent increases in energy and commodity prices, among other factors, may put renewed upward pressure on inflation."

While minutes from a rate policy meeting have typically given more insight to the Fed's decision, the latest release will be scrutinized more in light of Chairman Ben Bernanke's recent remarks that the FOMC will release expanded forecasts in order to make the central bank more transparent.

"The changes will provide a more timely insight into the committee's outlook, will help households and businesses better understand and anticipate how our policy decisions respond to incoming information and will enhance our accountability for the decisions we make," said Bernanke nearly a week ago.

"The Fed minutes will be widely watched by market participants but, given the fact that even the Fed has limited visibility in terms of the outlook for the economy over the next few quarters, we are probably not going to obtain too much valuable information from their comments today," said Sheldon. "More comments won't provide much additional ammunition for the markets."

The major indices began the holiday-shortened week on a sour note, falling hard after a downgrade of Citigroup sent ripples of fear through the financials. The Dow lost 218.35 points, or 1.66%, to 12,958.44, and the Nasdaq was weaker by 43.86 points, or 1.66%, at 2593.38.

Hewlett-Packard's (HPQ:) earnings report, which came after the close, did little to inspire buyers. The PC maker posted a 28% jump in fiscal fourth-quarter earnings, easily topping the Thomson First Call consensus. After opening higher, H-P was losing 65 cents, or 1.3%, at $48.79.

Elsewhere, Target (TGT:) reported an unexpected decline in third-quarter earnings amid soft sales and weaker-than-expected margins. The results were worse than had been anticipated. Target was falling $3.16, or 5.9%, to $50.74.

Nordstrom (JWN:) posted a third-quarter profit that jumped 22% from a year ago, topping forecasts. While the retailer's fourth-quarter guidance was weaker than expectations, Nordstrom''s full-year outlook was sturdy. Shares were rallying $3.09, or 10.1%, to $33.61.

Also in the retail sector, Sears Holdings (SHLD:) said it has purchased a 13.7% stake in Restoration Hardware (RSTO:) and is mulling a takeover of the retailer.

The news comes after Restoration Hardware said it will be taken private by Catterton Partners in a $267 million buyout. Shares of Restoration Hardware were rising 73 cents, or 11.5%, to $7.06.

On the economic front, the lone report of the day came from the Commerce Department, which said housing starts unexpectedly rose 3% in October to 1.229 million annualized units.

Economists thought starts would tumble to 1.175 million annualized units from 1.191 million units. However, building permits plunged 6.6% to 1.178 million, well below the consensus 1.20 million.

"Permits tell us where starts are going," said Ian Shepherdson, chief economist with High Frequency Economics. "The numbers follow the same trends in all but the very short term, and those numbers are just horrific. In short, a disaster, and far worse than the headline suggests."

Overseas markets were uniformly higher. In Asia, Hong Kong's Hang Seng and Japan's Nikkei 225 both rose 1.1%. Among European bourses, London's FTSE 100 added 1.7%, and Germany's Xetra Dax was up 1.6%.

[setravis]

Chaotic Day Ends With Gains.......


Tuesday into the close, 11/20/2007


Stocks swung in a wide range Tuesday before buyers finally took the upper hand late and sent the major averages to a modestly higher close.

The Dow Jones Industrial Average, which at its intraday best was up more than 100 and at its worst down by 100, finished ahead by 51.70 points, or 0.4%, at 13,010.14. All told, the Dow traded in a band of nearly 270 points.

At the same time, the S&P 500 added 6.43 points, or 0.45%, to 1439.70, and the Nasdaq Composite edged up 3.43 points, or 0.13%, to 2596.81, both after enduring their own considerable volatility.

Early on, a rally in commodity stocks and positive earnings from Hewlett-Packard (HPQ:) sent the market higher, but the momentum faded as the release of the Federal Reserve minutes approached.

The selling reached its peak after investors had a chance to digest the central Bank's commentary on the economy and get a view of its thinking at its two-day October meeting. However, a late surge back to the upside erased the losses and sent the indices into positive territory for good.

Robert Pavlik, chief investment strategist with Oaktree Asset Management, said it was hard to attribute the turnaround to anything specific, given the amount of negativity on Wall Street, but that technicals and the perception of some stocks being cheap made for good excuses.

"There is a camp out there that the Fed will really cut rates when Dec. 11 rolls around, and that helped us bounce from the session lows," he said. "If that does come, it will provide some stability to the market. Because of that, there's some bargain-hunting as people are trying to find that stability."

Prior to the late rebound, the major averages were mired in the red following the Fed minutes. During its last meeting, the Federal Open Market Committee cut the fed funds target rate by 25 basis points -- a move that many expected -- as a measure against the liquidity problems in financial markets.

The expanded minutes showed that Fed members regarded the interest rate cut as a "close call," but that the reduction was appropriate to help offset the effects of tighter financial conditions on the economic outlook.

" [M] ost members saw substantial downside risks to the economic outlook and judged that a rate reduction at this meeting would provide valuable additional insurance against an unexpectedly severe weakening in economic activity," the minutes read. "Many members were concerned about the still-sensitive state of financial markets and thought that an easing of policy would help to support improvements in market functioning, thereby mitigating some of the downside risks to economic growth."

The minutes also showed that Fed members found "scant evidence" of spillovers due to the ongoing housing correction to other sectors of the economy.

"There's a tremendous disconnect between what the Fed is saying and what the market is telling the central bank," said Paul Mendelsohn, chief investment strategist with Windham Financial. "The market is saying there is a train wreck ahead, but the Fed seems completely oblivious. The Fed is chasing the market instead of getting in front of it. The market is quickly running out of support."

Lately, bonds have been trending upward, which pushes yields lower, suggesting fixed-income investors are worried about a slowdown in the economy. Mendelsohn said that the Fed will need to do a combination of moves in order to intervene.

"Part of the problem is that the dollar is dropping and oil is rising," he said. "Cutting rates would make that worse than better. The Fed needs to do much more in order to stabilize these forces. They need a multipronged approach to handle things simultaneously."

During the morning, speculation made the rounds that the Fed might be considering an emergency rate reduction. That weighed on the dollar and sparked an advance in commodities.

Pavlik doubts the Fed will hold a special meeting to cut interest rates, and he noted that the Fed could certainly leave rates unchanged at the upcoming gathering, "although it will do a huge disservice to the economy. If they don't cut by 25 basis points in December they will blow it. Recession is largely psychological. A rate cut would boost confidence and people will be more willing to spend."

U.S. Treasury bonds were lower late after seesawing for most of the session. The 10-year note was down 5/32 in price, yielding 4.09%. The 30-year bond lost 10/32, yielding 4.50%.

The stock market had been stronger by more than 1% in the early part of the day before it gave up ground. One big drag was Freddie Mac (FRE:) , which said it might have to raise new funds and chop its dividend in half after posting a $2 billion loss for the third quarter. Shares were in a nosedive, falling $10.76, or 28.7%, to $26.74.

Freddie's counterpart Fannie Mae (FNM:) , dropped 24.8% to $28.25. Countrywide Financial (CFC:) eased 2.7% to $10.28.

The Amex Securities Broker/Dealer Index was one of the session's weakest sectors, falling 0.8%. The NYSE Financial Sector and the KBW Bank Index both suffered a 0.4% drop. Homebuilders and chipmakers were also among the worst decliners.

The commodity sector provided a counterbalance to the weak financials. The Amex Gold Bugs Index jumped 5.3% thanks to upside moves in Barrick Gold (ABX:) and Hecla Mining (HL:) . The Philadelphia Stock Exchange Gold & Silver Sector Index rose 4.7%.

The Amex Oil Index, another of the day's winners, closed higher by 2.7%. Components Exxon Mobil (XOM:) and Hess (HES:) added 4.4% and 4.9%, respectively, after being upgraded at UBS.

Strength in the stocks came as crude oil jumped $3.39 to $98.03 a barrel, its first close above $98. Gold climbed $13.40 to $791.40 an ounce, and silver finished up 34 cents at $14.50 an ounce.

Large-cap technology stocks also finished with gains. Google (GOOG:) added 3.6% after Credit Suisse set a stock price target of $900 a share. Apple (AAPL:) rose 3%, Microsoft (MSFT:) gained 1.8%, and Research In Motion (RIMM:) finished with a 1.7% advance.

"For the entire day, technology held up well, and that's where some of the late-session strength came from," said Art Hogan, chief market analyst with Jefferies. "That plays into the global market, one that is worried about the consumer. People had the realization that everything isn't related to the financials and that there are some stocks that will be fine heading into 2008."

On the New York Stock Exchange 4.79 billion shares changed hands, as advancers nearly matched decliners. Volume on the Nasdaq reached 2.64 billion shares, with losers beating winners by a 3-to-2 margin.

Elsewhere, shares of Hewlett-Packard added 0.2% after posting a 28% jump in fiscal fourth-quarter earnings, easily topping the Thomson First Call consensus. H-P rebounded from a midsession slump to finish with a gain of 12 cents at $49.56.

Target (TGT:) reported an unexpected decline in third-quarter earnings amid soft sales and weaker-than-expected margins. The results were worse than had been anticipated. Target fell $2.21, or 4.1%, to end the session at $51.69.

Nordstrom (JWN:) had a third-quarter profit that jumped 22% from a year ago, exceeding forecasts. While the retailer's fourth-quarter guidance was weaker than expectations, Nordstrom's full-year outlook was sturdy. Shares rallied $3.69, or 12.1%, to $34.21.

Also in the retail sector, Sears Holdings (SHLD:) said it has purchased a 13.7% stake in Restoration Hardware (RSTO:) and is mulling a takeover of the retailer.

The news comes after Restoration Hardware said it will be taken private by Catterton Partners in a $267 million buyout. Shares of Restoration Hardware rose 85 cents, or 13.4%, to end at $7.18.

On the economic front, the lone report of the day came from the Commerce Department, which said housing starts unexpectedly rose 3% in October to 1.229 million annualized units.

Economists thought starts would tumble to 1.175 million annualized units from 1.191 million units. However, building permits plunged 6.6% to 1.178 million, well below the consensus 1.20 million.

"Permits tell us where starts are going," said Ian Shepherdson, chief economist with High Frequency Economics. "The numbers follow the same trends in all but the very short term, and those numbers are just horrific. In short, a disaster, and far worse than the headline suggests."

Overseas markets were uniformly higher. In Asia, Hong Kong's Hang Seng and Japan's Nikkei 225 both rose 1.1%. Among European bourses, London's FTSE 100 added 1.7%, and Germany's Xetra Dax was up 1.6%.