Dow Jones 30: Industrials Index

[setravis]

Stocks Merry Ahead of Holiday.......


Monday into the close 12/24/2007


Stocks in the U.S. extended their gains Monday, as a cash infusion for Merrill Lynch (MER:) bolstered sentiment for the few traders participating in the holiday-shortened session.

The Dow Jones Industrial Average rose 98.68 points, or 0.73%, to 13,549.33, closing near its highs of the session. The S&P 500 rose 11.99 points, or 0.81%, to 1496.45. The Nasdaq Composite added 21.51 points, or 0.8%, to 2713.50.

With the market closing three hours early ahead of the Christmas holiday, volume was light. About 1.24 billion shares changed hands on the New York Stock Exchange, with advancers beating decliners by a 3-to-1 margin. On the Nasdaq, only 733,000 shares were traded, as winners beat losers 3 to 2.

While there was little corporate news, Merrill was in the spotlight after announcing two separate deals that will help boost its capital position. Shortly after the opening bell, the brokerage giant said it has received a combined $6.2 billion cash boost from Singapore's Temasek Holdings and Davis Selected Advisors.

Earlier, General Electrics (GE:) finance arm, GE Capital, said it will purchase most of Merrill's middle-market commercial finance business. The deal is expected to add more than $10 billion in assets to GE Capital during the first quarter of 2008.

Shares of Merrill fell $1.64, or 3%, to $53.90, after media reports indicated that the stock sale will come at a discount to its current price.

Still, financial indices gained ground as the Temasek investment showed that foreign investors continue to have an appetite for the beleaguered sector. The NYSE Financial Sector Index gained 1.6%, the Amex Financial Sub Index rose 1.4%, and the Amex Securities Broker/Dealer Index tacked on 0.4%.

Retail stocks also got a lift, led by Target (TGT:) . Earlier, William Ackman''s hedge fund Pershing Square boosted its stake in the retailer to almost 10%. Target added $1.79, or 3.5%, to close at $52.47.

Among other retail names, Dillard's (DDS:) , Sears Holdings (SHLD:) , Macy's (M:) , Nordstrom (JWN:) , and Saks (SKS:) were all higher by 1.6% or more.

In other deal news, Alcoa (AA:) said late Friday that it agreed to sell its consumer and packaging business to New Zealand's Rank Group for $2.7 billion. Shares of the Dow component jumped 66 cents, or 1.8%, to $37.01.

Elsewhere, United Rentals (URI:) ended its merger agreement with Cerberus Capital Management after losing a legal battle to keep the deal alive. Shares of the rental-equipment firm ended up 79 cents, or 4.4%, at $18.70.

Monday's gains built on a rally Friday, when stronger-than-expected economic data and blowout earnings from Research In Motion (RIMM:) sent stocks jumping.

The Dow rose 205.01 points, or 1.55%, to 13,450.65. The S&P 500 added 24.34 points, or 1.67%, to 1484.46, while the Nasdaq jumped 51.13 points, or 1.94%, to 2691.99.

In the absence of any economic data, U.S. Treasury prices were sliding. The 10-year note eased 10/32 in price, yielding 4.21%. The 30-year bond lost 18/32 in price, yielding 4.61%.

Commodity prices finished the session with gains. Crude oil was up 27 cents to $93.58 a barrel, and gold and silver futures finished slightly higher.

Overseas markets were solidly higher ahead of the holiday. In Asia, Hong Kong's Hang Seng Index finished 1.8% higher overnight. Among European bourses, London's FTSE tacked on 0.7% and the Paris CAC 40 added 0.2%.

The U.S. markets, closed for Christmas Tuesday, will reopen Wednesday.

[setravis]

Wild Ride Ends With a Slide

Monday into the close 12/31/2007


Wall Street ended a tumultuous year on a downbeat note Monday, with stocks tumbling in a lightly traded session as traders closed out their positions for 2007.

The Dow Jones Industrial Average fell 101.05 points, or 0.76%, to 13,264.82. Only seven of the Dow's 30 components advanced, with declines of 1.6% in telecom names AT&T (T:) and Verizon (VZ:) pressuring the index.

Elsewhere, the S&P 500 fell 10.13 points, or 0.69%, to 1468.36, and the Nasdaq Composite dropped 22.18 points, or 0.83%, to 2652.28.

The decline capped a year that was a roller-coaster ride for the markets amid the housing slump and credit meltdown. Still, for all of 2007, the Dow gained 6.4% and the S&P 500 rose 3.5%, both hampered by a weak fourth-quarter performance. The Nasdaq was the best performer, climbing 9.8%.

For the fourth quarter, the losses were 4.5% on the Dow, 1.8% on the Nasdaq and 3.9% on the S&P.

"This year has been one wild ride, and it's finally over," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "People are thankful this year has passed, but next year will bring a whole new set of challenges. We still finished the year with gains, so it was still a decent year with a strong return."

Over the last two years, the Dow has added 23.8%, the Nasdaq has jumped 20.2% and the S&P 500 has climbed 17.6%. In the last five years, the Dow has rallied 59%, the Nasdaq has surged 98.7% and the S&P 500 is higher by 66.8%.

The markets will be closed for New Year's on Tuesday. Volume was thin ahead of the holiday, with 2.39 billion shares trading on the New York Stock Exchange and 1.40 billion changing hands on the Nasdaq. Decliners led advancers by roughly 9 to 7 on both venues.

The lone report on the economic docket came from the National Association of Realtors, which said existing-home sales rose 0.4% to an annualized rate of 5 million units last month, as expected. Still, sales were down 20% from a year ago.

The inventory of homes on the market fell 3.6% last month to a 10.3-month supply.

After initially falling in the wake of the housing data, the Philadelphia Housing Sector Index rallied 1.5%, paced by gains in Beazer Homes (BZH:) and Hovnanian (HOV:) .

U.S. Treasury prices were rising after the home sales report. The 10-year note rose 13/32 in price, yielding 4.03%. The 30-year bond added 24/32 in price to yield 4.45%.

Among corporate news, Legg Mason (LM:) said late Friday it has decreased its exposure to structured investment vehicles, or SIVs, by half to 3.2% of its total liquid assets. The firm is expected to take a hit to its third-quarter earnings of $22.2 million, or 15 cents a share. Legg Mason rose $1.90, or 2.7%, to $73.15.

Elsewhere in financials, Merrill Lynch (MER:) is in talks with Chinese and Middle Eastern sovereign wealth funds to sell another piece of the bank, according to a report in The Observer. After opening lower, shares of Merrill finished up 71 cents, or 1.3%, at $53.68.

Other lenders benefited from a mid-session reversal. On the Dow, JPMorgan Chase (JPM:) and American Express (AXP:) rose 0.9% and 2.3%, respectively. Goldman Sachs (GS:) , Citigroup (C:) , and Bear Stearns (BSC:) were each higher by 0.5% or more.

Away from equities, oil dipped 2 cents to close at $95.98 a barrel. For the year, however, prices surged 57%.

The dollar held steady in the trading day against the world's major currencies, but still saw its second consecutive losing year.

Overseas markets also were mixed. Overnight in Asia, Hong Kong's Hang Seng added 1.6%. Among European bourses, London's FTSE 100 eased 0.3%, and the Paris CAC 40 was off 0.2%.



Happy New Year Everyone !

[setravis]

Jobs Report Pummels Stocks.......


Friday into the close 1/4/2008


Stocks tumbled Friday after the government's latest jobs report showed that hiring was much slower than anticipated in December, fueling fears of a broad economic slowdown.

The Dow Jones Industrial Average sank 256.54 points, or 1.96%, to 12,800.18, and the S&P 500 lost 35.53 points, or 2.46%, at 1411.63.

The Nasdaq Composite plunged 98.03 points, or 3.77%, at 2504.65, its worst point decline in nearly a year. The tech-heavy index was pressured by hefty losses in tech giants Intel (INTC:) , Apple (AAPL:) , Dell (DELL:) and Oracle (ORCL:) .

"Tech took a huge beating, as there's worry people won't have cash to buy these types of products," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "It's certainly overdone, and tech will do better as the year wears on. For now, this is extreme defensive positioning, which will give tech a challenging start to the year."

Each of the major averages finished the holiday-shortened week with their worst losses in several months. The Dow declined by 4.2% for the week, and the S&P 500 ended down 4.5%. The Nasdaq was the worst performer, sliding 6.4%.

The latest pullback came after the Labor Department reported that 18,000 jobs were added in December, well short of economists'' expectation of 70,000. The unemployment rate jumped to 5% from 4.7% in November, surpassing forecasts of 4.8%. Average hourly earnings rose a greater-than-expected 0.4%.

"There is a huge sense of disappointment with this jobs number," said Kenny Landgraf, president of Kenjol Capital Management. "The jump in the unemployment rate combined with higher wages gives us a sense that the economy is indeed slowing down. The market believes the [Federal Reserve] is behind the curve, and now it remains to be seen if the Fed will step in front of this and cut between meetings."

Jason Pride, director of research with Haverford Investments, said the data fall in line with a midcycle slowdown, something the U.S. central bank may be comfortable with as long as inflation doesn't rise too rapidly.

"Because of where inflation is sitting, the Fed will be hesitant to react dramatically," he said. "This isn't necessarily a sign of recession, but the economy is running at a very slow pace. It's not the end of the world, but it's not favorable in the context of everything else going on."

The Fed will discuss interest rate policy at a two-day meeting at the end of the month. Earlier this week, minutes from the Federal Open Market Committee's Dec. 11 meeting showed that members were concerned about rising inflation as well as an "unfavorable feedback loop in which credit market conditions restrained economic growth further."

U.S. Treasury prices traded higher in the wake of the jobs data. The 10-year note climbed 8/32 in price, dropping the yield to 3.86%. The 30-year bond rose 1/32, yielding 4.36%.

"Treasury yields are coming down quickly, as there's more certainty now we're in an economic slowdown," Pride said. "The question now is about the magnitude of a slowdown."

Financial subsector indices were among the weakest of the day. The Amex Securities Broker/Dealer Index shed 3.9%, as Bear Stearns (BSC:) , Merrill Lynch (MER:) , Morgan Stanley (MS:) and Goldman Sachs (GS:) retreated.

Among other decliners, the Philadelphia Semiconductor Sector Index was down 4.7%, the S&P Retail Index sank 3.9%, and the Amex Airline Index was lower by 1.7%.

The weaker-than-anticipated report comes just day after the ADP report on employment said private payrolls exceeded forecasts with a rise of 40,000 in December. Stocks initially cheered the report but gave up their early gains to finish close to the unchanged mark Thursday.

Crude prices remained a focus for traders as oil hovered just below the $100-a-barrel mark. After hitting a record $100.09 a barrel during the previous session, crude finished down $1.27 to close at $97.91.

Gold futures also retreated but held near all-time highs at $865.70 an ounce. Silver was also lower, off 3 cents to $15.46 an ounce. The dollar tumbled against the euro and the yen after the jobs data.

Also on the economic docket, the Institute for Supply Management said its nonmanufacturing index dipped to a reading of 53.9 in December from 54.1 in November. The number came in above economists'' projection of 53.5.

The report comes two days after the ISM manufacturing index showed a decline to 47.7 in December, indicating a contraction in the factory sector.

"Disappointing ISM manufacturing data suggests slowing economic activity," said Bill Stone, chief investment strategist with PNC Wealth Management. " [The] high prices paid component has market participants talking about stagflation."

In corporate news, Intel weighed on the Dow for a third straight session after JPMorgan Chase downgraded the chipmaker to neutral from overweight. The firm cited a slowdown in order rates. Shares were off 8.1% at $22.67.

Overseas markets were mostly lower. Japan's Nikkei 225 reopened after an extended holiday break and dropped 4%, while Hong Kong's Hang Seng rose 2.4%. Among European bourses, London's FTSE 100 slid 2%, and Germany's Xetra Dax was behind by 1.3%.

[setravis]

Erratic Day for Wall Street.......


Monday into the close 1/7/2008


Stocks endured a seesaw session Monday before closing with blue chips to the upside and tech stocks again in the red.

The Dow Jones Industrial Average traded in a range of 148 points and settled up 27.31 points, or 0.21%, at 12,827.49. Alcoa (AA:) was the weakest component, falling 5.1%.

Fellow blue chip index the S&P 500 also fluctuated around the unchanged mark but ultimately rose 4.55 points, or 0.32%, to 1416.18.

On the downside, the Nasdaq Composite fell 5.19 points, or 0.21%, at 2499.49, extending its losing streak to seven sessions. Declines in Sirius Satellite Radio (SIRI:) , Research in Motion (RIMM:) , and Nvidia (NVDA:) weighed on the tech-heavy index.

A sharp pullback from all-time highs in crude prices helped rouse some buyers. After hitting a record $100.09 a barrel Thursday, crude plummeted $2.82 to close at $95.09 a barrel. Earlier, oil futures climbed on word of a standoff between U.S. Navy ships and Iranian vessels in the Strait of Hormuz during the weekend.

Energy stocks bore the brunt of oil's decline, as the Philadelphia Oil Service Sector Index lost 1.6% and the Amex Oil Index eased 0.4%. Brokers and homebuilders also lost ground.

Among advancers, the Philadelphia Utility Sector Index climbed 2.7%, and the Dow Jones Transportation Average rose 0.5%.

Michael Sheldon, chief market strategist with Spencer Clarke LLC, said that market technicals have been deteriorating over the recent weeks, painting an unattractive picture over the near term.

"One positive was the sharp decline in oil which, if sustained, would be a small glimmer of hope," said Sheldon. "There's a lot to dislike about this market. Today's defensive trading and volatility reflect continued investor worries of a recession and a weakening economy."

Volume was heavy to start the week. About 4.13 billion shares changed hands on the New York Stock Exchange, with advancers topping decliners by a 9-to-8 margin. Volume on the Nasdaq reached 2.51 billion shares, as losers edged winners 8 to 7.

U.S. Treasury prices were on the rise. The 10-year note added 9/32 in price, yielding 3.84%. The 30-year bond rose 18/32 in price, yielding 4.34%. The dollar, meanwhile, was strengthening against the world's major currencies.

On Friday, the major averages closed a dismal week on a sour note following a weaker-than-expected report on job growth. The Dow sank 256.54 points, or 1.96%, to 12,800.18, and the S&P 500 lost 35.53 points, or 2.46%, at 1411.63. The Nasdaq plunged 98.03 points, or 3.77%, at 2504.65.

For the week, the indices finished with their worst losses in several months. The Dow declined by 4.2%, and the S&P 500 ended down 4.5%. The Nasdaq was the worst performer, notching a decline of 6.4%.

"Since recent economic numbers have been terrible, we now believe we're a lot closer to a recession than we initially thought," said Paul Nolte, director of investments with Hinsdale Associates. "We're just now starting to price a recession in. The concern over the economy and the weakness we're seeing is the biggest issue facing us."

Later this week, traders will have to deal with several economic reports, monthly same-store sales results from retailers and the start of earnings with Alcoa's numbers due Wednesday.

Additionally, a handful of Federal Reserve members will deliver speeches throughout the week. Fed Chairman Ben Bernanke will offer his take on financial markets and monetary policy on Thursday in Washington, and Fed Governor Fred Mishkin will speak Friday on financial disruptions and risk management in New York.

"The market will be paying very close attention to what the Fed members say, in hopes of seeing some smoothing of recession fears," said Peter Cardillo, chief market economist with Avalon Partners.

Several negative ratings changes were balancing out the decline in oil. UBS downgraded both IBM (IBM:) and Network Appliance (NTAP:) to neutral from buy, citing concerns over slower spending in 2008. IBM lost 0.8%, and Network Appliance dropped 6.1%.

Elsewhere, Bear Stearns lowered its rating for electronics retailer Best Buy (BBY:) to underperform from outperform, and RBC Capital Markets downgraded Motorola (MOT:) to sector perform from outperform. Shares closed down 22 cents, or 0.5%, at $47.26.

On the positive side, JPMorgan Chase upped its rating for retailer Bed Bath & Beyond (BBBY:) to neutral from underweight, after shares shed 4.4% in the prior session following weak fiscal fourth-quarter guidance. The stock gained 18 cents, or 0.7%, to $26.37.

Markets abroad were mostly lower. In Asia, Japan's Nikkei 225 shed 1.3%, and Hong Kong's Hang Seng was lower by 1.2%. In Europe, London's FTSE 100 fell 0.2%, while Germany's Xetra Dax tacked on 0.1%.

[BigSully1]

Inter-meeting US rate cut speculation grows-source
Fri Jan 11, 2008 1:21pm EST  NEW YORK, Jan 11 (Reuters) - Expectations for a U.S. interest rate cut before the U.S. Federal Reserve meets at month-end rose on Friday after influential think tank Medley Global Advisors told clients they expected a cut could come as early as next week, a source told Reuters.

"Medley was out this morning saying they were looking for a cut early next week," said a source who has a copy of the report.

"The stock market though isn't really moving on this and pretty much after what (Federal Reserve Chairman Ben) Bernanke said yesterday, a 50 basis point cut is in the cards. He's definitely prepped the market for it," the source added.

The Fed, which has lowered the benchmark federal funds rate by 1 full percentage point since mid-September to stave off a full blown recession, will meet for two-days Jan. 29-30. The benchmark fed funds rate now stands at 4.25 percent.

On Thursday, Bernanke acknowledged the U.S. economy faces increased risks and indicated the central bank was ready to cut rates aggressively to support growth.

Short-term interest rate futures have fully priced a 50 basis point rate cut by the end of January, and on Friday rallied further to suggest as much as a one-in-three chance that the Fed could lower rates by 75 basis points.

U.S. Treasury yields were slightly lower on the day. The two year note <US2YT=RR> was up 4/32 of a point in price for a yield of 2.625 percent, versus 2.70 percent late on Thursday.

Benchmark U.S. stock market indexes were down in midday trade. The Dow Jones industrial average .DJI was off 1.35 percent while the Standard & Poor's 500 stock index .SPX was down 0.69 percent, reflecting the grim outlook for the U.S. economy. (Reporting by Daniel Bases; Editing by Diane Craft)

[setravis]

DJIA charts.......

Looking at the 1, 2, 3, 5, and 10 year charts, is more than interesting. Without ignoring the many economic concerns, the FED, and the financial status of the US, looking at these charts gets even more curious.....
Back in the fall of '07, I believed we would see some heightened volatility until election '08. So far so good, but going forward, this could even be further exaggerated.

We could discuss trading currencies or gold, or holding some energy stocks or metal stocks, or recession proof equities, or various other strategies... but I am hoping to hear people's opinions about the DJIA in particular. Applying technical analysis involves not only the analysis itself, but the relevance that TA has at any particular time. After first considering the psychology of big money, and then the economic and political foreshadowing, we can then look to TA with much more value..... anyone with thoughts concerning the 'starting point' as '08 begins, for analyzing the charts, and then the charts themselves, might be a worthwhile dialog.

[stout7735]

"Where is the bottom?" is a frequent phrase from stock market TV commentators...Look behind you and see the bloody mass the Bear chewed on...The DOW in the last week of trading has experienced the effects of a "descending triple bottom breakdown", for you TA fans who failed to listen to me and make some money with leveraged ultra short ETFs... My gift--- The DOW near term bottom is11,471....     

[setravis]

Stocks Sell Off Hard.......


Friday into the close 1/25/2008


Stocks in the U.S. started the session higher Friday, but the major averages slipped into the red and closed with losses as investors lightened up on some of their recent buys ahead of next week's earnings and Federal Reserve meeting.

The Dow Jones Industrial Average dropped 171.44 points, or 1.38%, to 12,207.17, and the S&P 500 was off 21.46 points, or 1.59%, at 1330.61. The Nasdaq Composite was off 34.72 points, or 1.47%, to 2326.20.

Despite the decline, blue chip indices ended the holiday-shortened week ahead. The Dow tacked on 0.9% for the week, and the S&P 500 added 0.4%. The Nasdaq lagged, losing 0.6% for the week after a near 20% drop in shares of Apple (AAPL:) .

"The big question is if this is a short-term correction in a bear market or are we still in a volatile bull market," said Art Hogan, chief market analyst with Jefferies. "The good news is that we looked at earnings that weren't from financial companies and we could see some bright spots on an otherwise bleak horizon."

Volume was strong while breadth was negative. On the New York Stock Exchange 4.69 billion shares changed hands, as decliners topped advancers by a 10-to-7 margin. Volume on the Nasdaq reached 2.60 billion shares, with losers beating winners 8 to 7.

Traders were nervous over what the Federal Reserve will do when it convenes for a two-day meeting on Tuesday. Earlier this week, the Fed took the unusual step of making a 75-basis-point cut before its regularly scheduled meeting. The central bank said it made the move in light of a "weakening economic outlook and increasing downside risks to growth."

"There are questions being raised over whether the Fed will cut next week," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "Stocks have been rebounding, which takes more pressure of the Fed, but we have to question whether this will be a long-term rally. If this recovery continues to move forward, there's an argument to be made that the Fed might not cut at all."

Last time out, the Dow climbed 108.44 points, or 0.88%, to 12,378.61. The S&P 500 was up 13.47 points, or 1.01%, at 1352.07. The Nasdaq gained 44.51 points, or 1.92%, to 2360.92.

Marc Pado, U.S. market strategist with Cantor Fitzgerald, said he was expecting to see more caution heading into the weekend.

"Technically, yesterday was day two of the reversal rally," said Pado. "It is still too early to be definitive, but we are at the point where the economic data is a reflection of where rates were and not considered an indication of the future."

Microsoft (MSFT:) fell into negative territory despite posting quarterly results late Thursday that beat estimates on both the top and bottom lines. The software giant also lifted its full-year forecast for earnings and revenue. After opening sharply higher, Microsoft ended down 31 cents, or 0.9%, at $32.94.

Two Dow components were out with quarterly results before the new session. Honeywell (HON:) posted an 18% rise in fourth-quarter profits and Caterpillar (CAT:) had a 14% increase in earnings from last year. Both matched the consensus forecasts. Honeywell was higher by 3.7% to $58.25, and Caterpillar was up 1% to close at $65.93.

Financials slipped after a Reuters report that Goldman Sachs (GS:) would cut about 5% of its workforce, or about 1,500 employees. The investment bank said the information was misinterpreted, but shares of Goldman finished down 3.8% at $191.37.

Among subsector indices, the NYSE Financial Sector Index fell 2.1%, and the Amex Securities Broker/Dealer Index slid 2%.

Also in financials, E*Trade Financial (ETFC:) rallied 8.1% to $3.76. The advance came after the company said it plans to cut costs in 2008 by $360 million following a fourth-quarter loss of $1.7 billion.

Commerce Bancorp (CBH:) said that fourth-quarter profit fell by 47% from the year-ago period as credit losses swelled. Commerce, which is being acquired by Canada's Toronto-Dominion Bank (TD:) , was down 0.8% to close at $36.85.

Shares of Ambac Financial (ABK:) jumped early on speculation billionaire investor Wilbur Ross would acquire the troubled bond insurer. By the end of the session, the stock was unchanged at $11.33. Fellow bond insurer MBIA (MBI:) lost 2.7% to $14.01.

Away from equities, U.S. Treasury prices rallied. The 10-year note was up 1-10/32 in price to yield 3.55%, and the 30-year bond was higher by 2-12/32 in price, yielding 4.26%.

Commodity prices were also stronger. Oil advanced $1.30 to close at $90.71 a share, and gold futures tacked on $4.90 to $910.70 an ounce.

Overseas, European stocks gave back some of the previous Day's rebound. Germany's Xetra Dax and London's FTSE 100 dipped 0.1%. Asian markets surged overnight. Hong Kong's Hang Seng soared 6.7%, and Japan's Nikkei 225 rose 4.1%.

[setravis]

Stocks Claw Way Higher.......


Friday into the close 2/1/2008


Wall Street perked up late Friday and closed higher as the prospect of a potential blockbuster deal in the tech sector and unexpectedly strong manufacturing data overshadowed a horrid report on U.S. employment and more worry over bond insurers.

The Dow Jones Industrial Average added 92.83 points, or 0.73%, to 12,743.19, and the S&P 500 tacked on 16.87 points, or 1.22%, to 1395.42. The Nasdaq Composite advanced 23.50 points, or 0.98%, at 2413.36, despite an 8.6% drop in shares of Google (GOOG:) .

The winning session punctuated a strong week for the major averages. The Dow climbed 4.4%, and the S&P 500 added 4.9% for the week. The Nasdaq advanced 3.7% over the five sessions.

Volume and breadth were firm to end the week. On the New York Stock Exchange 4.54 billion shares changed hands, as advancers topped decliners by nearly a 4-to-1 margin. Volume on the Nasdaq reached 3.06 billion shares, with winners beating losers 2 to 1.

The session's action was influenced by a number of significant news events. One of them was Microsoft's (MSFT:) disclosure it has made an unsolicited bid to acquire Yahoo! (YHOO:) for $31 a share, roughly a 62% premium above Thursday's closing price.

Yahoo! soared 48% to finish the day at $28.38, while Microsoft headed 6.6% lower to $30.45.

Meanwhile, the Institute for Supply Management said its manufacturing index surprisingly rose to a reading of 50.7 last month from 48.4 in December. Readings above 50 indicate that manufacturing activity is expanding, a welcome sign to those concerned over recession prospects.

"After the horrible Philly Fed survey and the drop in the Chicago [purchasing managers'' index] this is something of a relief, though we very much doubt it means the ISM has bottomed out," said Ian Shepherdson, chief economist with High Frequency Economics.

While on many days those developments might spur buying, the Labor Department's nonfarm payrolls report, which showed that the U.S. economy unexpectedly lost 17,000 jobs in January, dampened the mood. Economists had anticipated growth of 65,000 jobs.

The unemployment rate dipped to 4.9% from 5% last month, and average hourly earnings rose 0.2%.

As expected, job growth in the prior two months was revised. November payrolls data were taken lower by 55,000 and December's number was modified higher by 64,000, a total net revision of 9,000 additional jobs.

"It's a good thing we had the Microsoft news or we'd be in bad shape today," said Paul Mendelsohn, chief investment strategist with Windham Financial. "These data indicate the economy is really struggling. We've already had the Federal Reserve drop interest rates, so we know they're attacking the problem. But any way you look at this, we're losing jobs and this scores one in the recession column."

U.S. Treasury prices rose following the employment report. The 10-year note was up 1/32 in price, dropping the yield 3.59%. The 30-year bond gained 6/32 in price to yield 4.31%.

"The movement in bonds indicates that traders believe additional rate cuts are coming," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "The payroll report is certainly a huge disappointment and will strengthen the recession argument, thus the expectation of further rate cuts increases."

Google's latest earnings report, released after the previous close, was eclipsed by the Microsoft and Yahoo! news. The Internet search giant missed fourth-quarter earnings targets by a penny. Google's net revenue also fell short of the Thomson First Call estimate, and shares tumbled $48.40, or 8.6%, to $515.90.

Also on the negative side, Moody's said it was reviewing its stance on bond insurers, including MBIA (MBI:) and Ambac Financial (ABK:) , and that downgrades would likely follow.

Earlier, CNBC reported that a consortium of banks would join forces to bail out the troubled bond insurers, saving them from near-certain downgrades. The insurers'' triple-A ratings are key to their ability to write new business, and any downgrades would lower the ratings on debt securities that are already insured and may force additional writedowns by owners of the instruments.

Last time out, the major stock averages closed out a dismal month on a high note, as the Dow Jones Industrial Average rallied from a near-200 point decline to finish up 207 points, or 1.7%, at 12,650.

The S&P 500 and the Nasdaq also finished into the black. The S&P 500 gained 22.69 points, or 1.68%, to 1378.50, and the Nasdaq advanced by 40.68 points, or 1.74%, to 2389.86.

Elsewhere on the economic docket, the Census Bureau said that construction spending fell a greater-than-expected 1.1% in December. Also, the University of Michigan consumer confidence index rose to a reading to 78.4 in January from 75.5 in December.

Several other earnings releases were in focus, with two oil titans reports ahead of the opening bell. Dow component Exxon Mobil (XOM:) posted a record annual profit of $40.6 billion, while Chevron (CVX:) also reported a sharp increase in earnings to beat the Thomson First Call consensus. Both were trading higher in the premarket session.

Still, Exxon was lower by 45 cents, or 0.5%, at $85.95. Chevron was off 76 cents, or 0.9%, at $82.49.

In other M&A news, Alcoa (AA:) and Aluminum Corp. of China said they have acquired a 12% stake in Rio Tinto (RTP:) , setting up a showdown with Rio suitor BHP Billiton (BHP:) . Rio Tinto jumped 8.4%. Both Alcoa and BHP Billiton also ended up on the day.

Commodity prices were sinking. Crude oil fell $2.79 to end at $88.96 a barrel, and gold futures slid $14.50 to close at $913.50 an ounce.

Overseas markets were mostly higher. Hong Kong's Hang Seng jumped 2.9%, while Japan's Nikkei 225 slid 0.7%. Among European bourses, the Paris CAC 40, London's FTSE 100 and Germany's Xetra Dax were all higher by at least 1.5%.

[setravis]

Dow, Nasdaq Fall, but S&P Edges Up.......


Friday into the Close 2/15/2008


Stocks in New York closed narrowly mixed Friday as continuing concerns about the health of the bond insurers, lackluster economic data and a profit shortfall from a key consumer-electronics retailer kept buyers sidelined.

The Dow Jones Industrial Average was off nearly 100 points earlier before paring those losses to end down 28.77 points, or 0.23%, at 12,348.21. The Nasdaq Composite gave back 10.74 points, or 0.46%, to 2321.80. The S&P 500 spent much of the session in the red before ending higher by 1.13 points, or 0.08%, at 1349.99.

The major averages head into a long holiday weekend having notched a winning week. The Dow and S&P 500 climbed 1.4%, and the Nasdaq tacked on 0.7%. The stock market will be closed Monday in observance of Presidents'' Day.

Breadth was poor. On the New York Stock Exchange 3.47 billion shares changed hands, as decliners beat advancers by nearly a 9-to-7 margin. Volume on the Nasdaq reached 1.99 billion shares, with losers topping winners 9 to 5.

The selling pressure came as the financial arena was once again in focus for investors. On Thursday, a congressional subcommittee on capital markets heard testimony on the monoline insurers, whose future has come into question because of worries about their structured-finance businesses.

Now, closely held bond insurer Financial Guarantee Insurance, which saw its debt rating with Moody's lowered to A3 from triple-A late in the previous trading session, has told the New York State Insurance Department that it wants to be split into two separate companies, an idea regulators were already considering.

During comments a day ago, New York Governor Eliot Spitzer outlined the potential problems a failure of the bond insurers would mean for the economy, but MBIA (MBI:NYSE) Chief Financial Officer Charles Chaplin tried to convince legislators his company will survive the mortgage crisis and that neither a bailout nor new federal regulations are needed.

Shares of MBIA and competitor Ambac Financial (ABK:) dropped 3% and 2.9%, respectively.

The thought of a collapse of the bond insurers was rippling through financial companies. According to Citigroup, Swiss bank UBS (UBS:) may write down an additional $18 billion in collateralized debt obligations, or CDOs, should conditions for the insurers worsen. UBS slid 80 cents, or 2.4%, to $33.14.

Meanwhile, Bloomberg.com reported that UBS, in its own analysis, said the world's banks may have to write down an additional $203 billion due to a combination of losses in CDOs, structured investment vehicles, commercial mortgage-backed securities and leveraged buyouts.

"We still have not seen the complete ripple effect of subprime losses," said Paul Nolte, director of investments with Hinsdale Associates. "Investors are still scared because we still don't know how far-reaching this problem is. This is going to persist until all the news comes out."

Equities were also hit following the release of the New York Federal Reserves Empire State manufacturing index, which fell to a reading of negative 11.7. It was the first negative number for the index since May 2005, indicating that manufacturing activity is worsening in the region.

Elsewhere on the economic front, the Labor Department said import prices jumped 1.7% last month. Export prices rose 1.2% in January, the largest increase in 19 years. Additionally, the Fed said industrial production rose 0.1% in January as expected.

Also, the University of Michigan's preliminary consumer sentiment for this month fell to 69.6 from 78.4 in January, a number than was worse than analysts were looking for.

On the corporate side, Best Buy (BBY:) disappointed the market by saying its fiscal 2008 earnings will probably come in below its previous estimates. That sent shares of the music, computers and video-games seller down $1.15, or 2.5%, to close at $44.62.

Best Buoy's loss weighed on the S&P Retail Index, which dipped 0.2%. Among other subsector losers, the Philadelphia Semiconductor Sector Index eased 1.6%. On the positive side, the Amex Airline Index advanced 2%.

As for earnings, apparel retailer Abercrombie & Fitch (ANF:) topped expectations, but offered weak guidance. Campbell Soup (CPB:) said its profits declined, though sales rose. Abercrombie was off 0.9% to $75.38, and Campbell Soup jumped 6.1% to $33.44.

Shares of Kraft Foods (KFT:) also merited watching after billionaire Warren Buffet's investment vehicle Berkshire Hathaway (BRK.A:) divulged an 8.6% stake in the company. Kraft ended up $2.02, or 6.9%, to $31.33.

Away from stocks, Treasury prices were higher. The 10-year note was up 11/32 in price to yield 3.77%. The 30-year bond was rising 31/32 in price, yielding 4.58%.

Commodity prices were mixed. Crude oil rose 4 cents to $95.50 a barrel. Gold futures fell $4.70 to close at $906.10 an ounce.

Overseas markets were mostly lower. Hong Kong's Hang Seng added 0.5%, while Japan's Nikkei 225 eased 0.1%. In Europe, London's FTSE 100 was down 1.6%, and Germany's Xetra Dax fell 1.9%.

[setravis]

Stocks End Little Changed.......

Wednesday into the Close 2/27/2008


Stocks in New York bounced between positive and negative territory Wednesday but didn't move a great deal in either direction, and by the end of the session the major averages stood near where they started.

When the closing bell rang, the Dow Jones Industrial Average had gained 9.36 points, or 0.1%, to 12,694.28, and the S&P 500 was down 1.27 points, or 0.1%, at 1380.02. The Nasdaq tacked on 8.79 points, or 0.4%, at 2353.78.

The market opened to the downside before going higher at midmorning on word that U.S. regulators will strike the portfolio-size limits on government-sponsored mortgage buyers Fannie Mae (FNM:NYSE) and Freddie Mac (FRE:NYSE) .

The Office of Federal Housing Enterprise Oversight said restrictions on the size of the mortgage portfolios held by Fannie and Freddie will be removed March 1. The caps were created following the discovery of accounting errors at the firms, and their removal will give both more power to purchase mortgages.

The announcement initially propelled Fannie and Freddie some 17% higher, though shares of the companies pulled back to gain 1.1% and lose 0.5%, respectively. Earlier, Fannie fell after posting a fourth-quarter loss of $3.6 billion, or $3.80 a share, owing to the collapse in the housing market.

Similarly, stocks overall got a boost, but by the afternoon the momentum had faded considerably.

Bill Stone, chief investment strategist with PNC Wealth Management, said investors are likely wary of leaving their profits on the table after a rare three-day winning streak for the major indices, since "seemingly around every corner is more bad economic news or more credit problems."

He added that it's uncertain exactly how much good OFHEO's move will do, in light of Fannie and Freddie's less-than-stellar cash levels. "It's not a negative," he emphasized. "Just a question of how positive."

Also taking center stage was Ben Bernanke's testimony before legislators on Capitol Hill. Though the Federal Reserve chairman did note that consumer price inflation is being observed, he spent the bulk of his remarks discussing the difficulties facing the economy, leaving open the possibility of more rate cuts or other moves aimed at staving off a recession.

Addressing the Committee on Financial Services of the House of Representatives, Bernanke said the economic situation has become "distinctly less favorable" since last summer, as the stress in the financial markets has persisted and credit conditions have tightened.

The primary culprit, he pointed out, has been the decline in the housing market, which "is expected to continue to weigh on economic activity in coming quarters."

Referring to the Fed's decision earlier this month to lower its gross domestic product growth forecast and increase its unemployment projection, Bernanke said "risks to this outlook remain to the downside." In particular, he said, housing or the labor market could worsen more than expected and credit might become harder to access.

Policymakers, he concluded "will be carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks."

That implies more potential easings of the fed funds target rate -- currently at 3% after having been slashed 225 basis points since September -- and investors have reacted positively so far.

But Matt King, chief investment officer for Bell Investment Advisors, hopes the cuts are temporary. "My main concern lies with inflation, and it doesn't seem the Fed is paying enough attention to that," he said. "We realize [they''re] in a tight space here, but long-term we don't want rates to stay too low for too long. That exacerbates inflation and slows economic growth."

Stone, meanwhile, isn't worried about inflation, saying that this will only become a concern "when wages start chasing the inflated prices." He pointed out that labor costs were up only 1% year over year. And as long as people continue to feel the burn of product inflation, he said, that will help keep a lid on prices.

"That's the economic viewpoint," he admitted. "People are probably wishing their wages were going up at the same rate."

On Tuesday the producer price index, a measure of inflation at the wholesale level, came in well above what economists anticipated, rattling Wall Street. A big buyback and improved profit forecast from IBM (IBM:NYSE) , however, changed the course of the major averages and sent stocks to a higher close.

Meanwhile, oil prices, a day after their highest-ever close, shed $1.24 to settle at $99.64 a barrel after hitting the $102 mark earlier.

Bernanke, in his congressional question-and-answer session, said it is "relatively unlikely" that oil will continue surging as high as it has over the past year.

He conceded, though, that he doesn't know precisely how crude will behave, and that if this price trend continues unabated "it's going to create a very difficult problem for our economy," spurring more inflation, as well as more weakness in spending, because it acts like a "tax" on Americans.

Stone agreed with Bernanke's prediction on crude prices and even tentatively predicted they could retreat within the next year.

The dollar was a story in its own right, breaking the $1.50 mark against the euro for the first time and proceeding to drop even further at $1.5143. The yen rose to 106.38 from 107.24, up 0.8%.

Gold, meanwhile, added $12.10 to $961 an ounce after hitting a new intraday record of $967.70.

Headliners from the corporate side included Microsoft (MSFT:Nasdaq) , who was fined $1.35 billion by European Union regulators for alleged antitrust violations. Shares of Microsoft ticked down 12 cents at $28.26.

Also out with news was Nortel (NT:Nasdaq) , which said its fourth-quarter loss swelled to $844 million, or $1.70 a share, from $80 million and 19 cents a share last year, following a $1 billion charge.

The networker also set plans to cut more than 2,000 jobs. Revenue, the company said, dropped nearly 4% to $3.2 billion. Shares tanked 13.3%.

Design-software firm Autodesk (ADSK:NYSE) was downgraded by at least two analysts after posting an essentially flat fourth-quarter profit, while adjusted income fell short. Shares finished down 15.6%.

Elsewhere in the tech space, The Wall Street Journal reported that Qwest Communications (Q:NYSE) is in talks to revamp the way it sells bundles of services, in part by offering Verizon's (VZ:NYSE) wireless services.

Luxury homebuilder Toll Brothers (TOL:) said that huge writedowns on land and other assets forced it into a fourth-quarter loss, reversing a year-ago profit. Shares began lower but recovered to add 3.1% at $23.83.

Notable decliners were Delta Air Lines (DAL:NYSE) and Northwest (NWA:NYSE) , a day after news broke that their potential merger could be in danger of falling apart. Both stocks lost more than 5%.

On the economic front, the Commerce Department reported that new orders for durable goods slid a steeper-than-expected 5.3% in January. Excluding transportation, orders dropped 1.6%. Separately, the Census Bureau said new-home-sales last month fell 2.8% to a 588,000 annual pace, a larger fall-off than predicted.

Treasury prices were little changed. The 10-year note was flat to yield 3.86%. The 30-year bond gained 3/32 in price, yielding 4.65%.

Overnight in Asia, Hong Kong's Hang Seng surged 3.2%, and Japan's Nikkei 225 climbed 1.5%. Europe's major markets, meanwhile, were buoyed late by the U.S. market's upturn. London's FTSE 100 dipped 0.2%, recovering from deeper losses, and Germany's Xetra Dax rose 0.2%.

[setravis]

Financial Worries Drub Wall Street.......


Into the close Friday 2/29/2008


Stocks in New York tumbled Friday amid more trouble in the financial sector and a fresh stack of sour economic reports.

The Dow Jones Industrial Average slid 315.79 points, or 2.5%, to 12,266.39, pulled down by a 6.6% drop in component AIG (AIG:NYSE) following the insurer's report of record fourth-quarter losses. The S&P 500 sank 37.05 points, or 2.7%, to 1330.63. The Nasdaq shed 60.09 points, or 2.6%, to 2271.48.

The plunge erased all of the gains stocks reaped over the past week, when the major averages had a rare three-session win streak, and contributed to the market's fourth monthly loss in a row.

For the week, the Dow fell 0.9%, the S&P fell 1.7%, and the Nasdaq lost 1.4%, putting the indices lower by 3%, 3.5% and 5%, respectively, for the month of February.

Fred Dickson, senior vice president and market strategist with D.A. Davidson, said gains over the past week -- including last Friday's late-session reversal -- came about as "short sellers in the marketplace were reacting with laser trigger fingers at any signs of positive news in the credit market."

Today, however, "the news that was on the table, was on the table," he said.

The dismal report from insurance giant AIG raised new credit worries for investors. The company swung to a $5.29 billion loss in the fourth quarter, its biggest ever, largely thanks to the plummeting value of certain derivatives contracts. AIG disclosed earlier this month that the portfolio had deteriorated at a far worse rate than it had initially estimated, and now it puts total fourth-quarter writedowns on the investments at $11.12 billion, pretax.

Elsewhere, bond insurers were in focus after a report on CNBC said the Ambac (ABK:) rescue proposal has run into a "snag" and that rating agencies want a bigger capital infusion for the bond insurer from its potential bank saviors. However, the report said that doesn't mean the deal won't be completed. Ambac shares fell 5.6%.

Separately, fellow monoline MBIA (MBI:) said in documents filed with regulators that it expects further mark-to-market losses for January because of conditions in the credit market. The stock dropped 7.8%.

Bond insurer Assured Guaranty (AGO:) , however, had a piece of good news, surging 12.6% after billionaire Wilbur Ross said he would invest up to $1 billion in the company, one of the rare firms in the sector that hasn't been struggling.

Those developments came as a UBS report said financial firms could wind up recording losses of as much as $600 billion because of rotting debt amid the uncertainty rippling through financial markets.

Dickson said he wasn't surprised the week ended on a down note. "What we continue to have is that dark credit cloud hanging over Wall Street -- a thunderstorm sending lightning bolts from above," he said. And today's big credit-crunch shocker, he believes, was AIG''s massive writedown disclosure.

"If there were bullish investors somewhere in the Himalayas," he said. "They wanted to get a bit more of an all-clear signal. It was a whirlwind of bad news hitting the market all at once."

Indeed, a new batch of data signaling trouble for the economy worked to accelerate stocks'' losses. Shortly after the open, the Chicago purchasing managers'' index came in at 44.5, indicating the most severe contraction of the manufacturing sector in the Midwest since December 2001. The index's break-even point is 50, and last month the figure came in at 51.5, indicating slight growth.

Investors tend to view the Chicago PMI as a foreshadowing of nationwide manufacturing trends. The data come ahead of a report on national manufacturing activity from the Institute for Supply Management Monday.

Ian Sheperdson, chief U.S. economist with High Frequency Economics, said the reading represents one "awful" manufacturing report too many. He now expects the economy to shrink next quarter and said that the government's tax rebate plan is the only factor preventing another GDP drop in the following one.

"We'd better hope at least some people spend [the money] ," he said.

Elsewhere, the Michigan Consumer Sentiment Index showed a 7.6-point decline in February from the prior month to 70.8, which hovers around the levels of 16 years ago, when the country was reeling from a recession.

Personal spending in January rose 0.4% -- a tenth of a point better than expected -- but stripping out the effects of inflation, the figure was unchanged from last year. That echoes results from December. Personal income added 0.3% year over year, missing the 0.5% consensus.

Meanwhile, Americans saved 0.1% less in that month than they did a year earlier. The core personal consumption expenditures index, the preferred measure of inflation by the Federal Reserve, was up 2.2% over last year, above the central Bank's comfort zone of 1% to 2%.

Treasury prices spiked after the weak data. The 10-year note jumped 1-6/32 in price to yield 3.52%. The 30-year bond surged 1-16/32 in price, yielding 4.42%.

Last time out, the major indices slid after traders received a sluggish gross domestic product and a worse-than-expected jobless claims report, while Fed Chairman Ben Bernanke said some smaller banks might be lost entirely in the undertow of the housing market.

By the end of the day, the Dow fell 112.59 points to 12,581.69, the S&P shed 12.38 points to 1367.64, and the Nasdaq dropped 22.21 points at 2331.57. All three were down about 0.9%.

Following the prior close, Dell (DELL:Nasdaq) reported that its fourth-quarter profit declined 6% year over year, but revenue didn't rise enough to meet expectations. Shares lost 4.7% to $19.90.

In other earnings reports, software company Novell (NOVL:NYSE) surpassed Wall Street projections and beefed up its full-year guidance. Shares jumped 13.9%.

Gap (GPS:NYSE) said its profit rose 21% despite lower sales, and the clothing retailer also authorized $1 billion for a stock buyback. Shares rose 3.7%.

Among other equity news, 3Com (COMS:NYSE) soared after The Wall Street Journal reported that Bain Capital and China-based Huawei will take another stab at garnering approval for their proposed $2.2 billion buyout of the networking company. 3Com shares closed up 13.1% to $3.29.

Automaker General Motors (GM:NYSE) , a member of the Dow, shed 5% on word it will halt operations at three more of its plants, owing to a strike against supplier American Axle & Manufacturing (AXL:NYSE) , according to reports.

In commodities, crude oil hit another milestone, traversing $103 a barrel for the first time, but it closed off 75 cents to $101.84. Gold futures added $6.50 to $967.50 an ounce.

Overseas, the major markets mostly took steep losses following the U.S. plunge on Thursday. In Asia, Tokyo's Nikkei 225 was hit particularly hard after the Japanese government reported that its core consumer price index, a key inflation metric, had its biggest rise in 10 years. The Nikkei lost 2.3% to 13,603, and Hong Kong's Hang Seng gave up 1.1% to 24,332.

As for European bourses, London's FTSE 100 was down 1.4% to 5884, and Germany's Xetra Dax slid 1.7% at 6748.

[setravis]

Credit Fears Crush Wall Street.......


Into the Close, Thursday 3/6/2008


Stocks in New York sank Thursday as worries about margin calls and low-priced asset sales kept credit-related jitters alive, pressuring the financials and dragging down Wall Street.

The Dow Jones Industrial Average lost 214.60 points, or 1.8%, to 12,040.39, and the S&P 500 was off 29.36 points, or 2.2%, at 1304.34. The Nasdaq tumbled 52.31 points, or 2.3%, at 2220.50. The S&P and the Nasdaq haven't been this low since September 2006.

Breadth was very poor. About 4.06 billion shares changed hands on the New York Stock Exchange, with decliners beating advancers by a 9-to-1 margin. Volume on the Nasdaq reached 2.16 billion shares as losers beat winners 4 to 1.

One of the primary culprits for the retreat was Thornburg Mortgage (TMA:NYSE) , who couldn't meet a $28 million margin call from JPMorgan Chase (JPM:NYSE) . That set off a series of defaults and sent Thornburg's shares plunging 51.5% to $1.65 as investors fretted about its future.

Meanwhile, UBS (UBS:NYSE) delivered another blow as reports came out that the Swiss financial-services giant might have sold $24 billion in mortgage securities on the cheap. Shares of UBS closed down 4.3% at $29.52.

At the same time, word emerged that a publicly traded Carlyle Group U.K.-based bond fund has been handed a default notice after it wasn't able to meet four margin calls.

With few signs the credit crisis that began in earnest last year is abating, traders found no impetus to buy, and as has been the case for months, the financial sector was at the center of the storm.

"What's unnerving everybody is that the root of the [market] declines are tied to our biggest financial institutions," said Steven Sheldon, CFA and principal with SMS Capital Management. "Excesses in the financial sector are kind of scary, because we need healthy banks to drive the economy forward."

The biggest securities firms lost ground after Keefe Bruyette lowered their earnings estimates, cutting its view on Bear Stearns (BSC:NYSE) , Goldman Sachs (GS:NYSE) , Lehman Brothers (LEH:NYSE) , Merrill Lynch (MER:NYSE) and Morgan Stanley (MS:NYSE) , in order to account for possible writedowns related to their commercial real estate exposure.

Shares of those names lost at least 3.8% apiece, and Merrill was one of the hardest hit, falling 7%.

Also smarting from negative analyst research was Washington Mutual (WM:NYSE) , shares of which slumped 8.1% after Standard & Poor's cut some of the Bank's ratings and placed it on credit watch negative, citing broad worries about the continued slide of the housing market.

Not to be left out, Citigroup (C:NYSE) shed 4.4%, and Bank of America (BAC:NYSE) gave back 2.7%. The NYSE Financial Sector Index lost 3.3%, the KBW Bank Index surrendered 3.7%, and the Amex Securities Broker/Dealer Index slid 4.9%.

It was only last month that Thornburg was heralded as a stalwart survivor of the subprime mess, having confirmed a return to profitability in the fourth quarter following mammoth losses in the prior one. The lender had also reinstated its dividend in December.

So the fact that the firm has plunged back into the abyss is very worrying, said Sheldon. Investors "don't have any sense of where or when we're going to hit bottom with regard to financials," he said. "And you've got to see strength in financials before the rest of the market can recover."

He noted that investors were hoping that the epidemic of bad loans would stay contained to the residential real estate market, but "now it's clear that it's spreading to commercial real estate, and we're seeing it impacting the stock prices of other financial intermediaries. And when you see these banks get lower and lower, people get scared and think of the worst -- potential big failures and the ramifications of that."

In the prior session, the major averages lost their early strength after bond insurer Ambac (ABK:) announced a cash-injection plan that was less impressive than expected, though stocks recovered enough to end on an uptick.

This time, Ambac finished down 14.7%. Shares stayed under water even after CNBC reported that the company's stock-and-equity offering will have a backstop, according to sources, meaning if the offer isn't fully subscribed, banks will agree to pick up the difference. The network also said the deal will ultimately be worth more than $1.5 billion.

MBIA (MBI:NYSE) , another monoline, declined 4.8%.

The new day also brought monthly sales from the bulk of the nation's chain stores. Wal-Mart (WMT:NYSE) said its comparable sales jumped 2.6% in February, more than doubling analysts'' consensus estimate of a 1.1% increase.

Total sales for the world's biggest merchant rose 8.9% to $29.2 billion last month. Additionally, Wal-Mart set plans to boost its annual dividend 8% to 95 cents a share. Wal-Mart's stock added 0.9%.

At Target (TGT:NYSE) , same-store sales rose 0.5%, whereas analysts were expecting a 0.2% decline. Total sales were up almost 6% to $4.4 billion. Shares of Target lost 1%.

Most retailers exceeded their anticipated numbers, but among those coming up short was Gap (GPS:NYSE) , who had a 6% decline in comps. The estimate was for a drop of 2.8%. Shares of Gap fell 5.6%.

As for earnings, pet-supply store PetSmart (PETM:) , reported a receding fourth-quarter profit and predicted its bottom line will probably drop in 2008, as well. Also disappointing was women''s-apparel chain store Coldwater Creek (CWTR:) , which said it swung to a fourth-quarter loss on dwindling sales, compared with a year-earlier profit.

Shares of PetSmart sank 11.7%, and Coldwater plummeted 19.8%.

Urban Outfitters (URBN:) , however, topped expectations with surging earnings. Same-store sales spiked 11% from last year. Still, shares eased by 2.9%.

Elsewhere, tax preparer H&R Block (HRB:) tacked on 3.4% after reporting that its fiscal third-quarter loss had narrowed from a year earlier thanks to subsiding costs from subprime-lending unit Option One, as well as rising revenue.

On the data side, the Labor Department said weekly initial jobless claims totaled 351,000, about 9,000 fewer than forecast. The prior week was revised up by 2,000 to 375,000.

Separately, pending home sales for January were unchanged from the previous month, according to the National Association of Realtors, while the Mortgage Bankers Association said that mortgage foreclosures in the U.S. hit a record high at the end of last year.

In another noteworthy development, the Federal Reserve reported homeowners' equity sinking to 47.9% last quarter in relation to mortgage debt -- the lowest ratio since the central bank began recording those numbers in 1945, according to reports. The Fed also revised data from last year to reflect second-quarter home equity slipping under the 50% mark, also for the first time since the end of World War II.

As for commodities, crude oil closed above the $105 a barrel mark for the first time, ending up 95 cents to $105.47. Earlier, it reached an intraday high of $105.97. Gold futures, however, were off $11.40 to settle at $977.10 an ounce.

The U.S. dollar once again slid to a new low against the euro, this time at $1.5388, to extend its freefall over the past few days.

Treasury prices were climbing. The 10-year note was up 26/32 in price to yield 3.59%. The 30-year bond gained 16/32 in price, yielding 4.57%.

Overseas markets were mixed. In Asia, Tokyo's Nikkei 225 jumped 1.9%, and Hong Kong's Hang Seng climbed 1%. European bourses, however, sank in tandem with the U.S. market. London's FTSE 100 lost 1.5%, and Germany's Xetra Dax was off 1.4%. Both the Bank of England and the European Central Bank maintained their benchmark lending rates.

[setravis]

Dow Soars More Than 400 Points.......


Into the Close...Tuesday, 3/11/2008


Stocks in the U.S. staged a mammoth rally Tuesday after the Federal Reserve's latest attempt to stabilize the markets brought in droves of buyers and forced traders who were heavily short to run for cover.

The Dow Jones Industrial Average bolted up 416.66 points, or 3.6%, to 12,156.81, and the S&P 500 jumped 47.28 points, or 3.7%, to 1320.65. The Nasdaq climbed 86.42 points, or 4%, at 2255.76.

Breadth was positive. Some 5.25 billion shares changed hands on the New York Stock Exchange, with advancers outpacing decliners by a 4-to-1 margin. Volume on the Nasdaq reached 2.5 billion shares as winners beat losers 7 to 3.

The major indices have been taking such huge hits in recent months that all three are still down substantially for the year -- the Dow by 8.3%, the S&P by 10.1%, and the Nasdaq by 14.9%. But, for the month thus far, all three indices have pared back their losses to under 1% apiece.

Equity measures climbed after the central bank said it was putting another $200 billion of liquidity into the markets through an arrangement that will lend Treasuries to primary dealers in exchange for mortgage-related paper.

The new Term Securities Lending Facility will provide 28-day loans in exchange for collateral including debt and residential-mortgage-backed securities from government-sponsored entities Fannie Mae (FNM:NYSE) and Freddie Mac (FRE:NYSE) , along with nonagency highly rated private-label residential mortgage-backed securities.

Additionally, the Federal Open Market Committee, the policymaking arm of the Fed, has authorized an increase in its existing currency swaps with the European Central Bank and the Swiss National Bank.

James Glassman, senior economist with JPMorgan Chase, said it was the first creative thing he has seen the Fed do since the advent of the credit crunch. "It provides a little more of a calming backdrop, and it takes pressure off those institutions," Glassman said. He also pointed to the deals psychologically important global reach, given the Fed's collaboration with some of its foreign counterparts.

Brandon Thomas, chief investment officer with Portfolio Management Consultants, the investment arm of Envestnet Asset Management, noted that the market has become accustomed to rate cuts from the Fed, whereas this latest action is a far more targeted tool, allowing banks to borrow against illiquid issues such as mortgage-backed securities for longer periods of time.

"It's not going to be a panacea for all the ills in the economy, but it will get liquidity coursing through the system," he said. "Rate cuts can do that, but that's a much blunter instrument that the banks may or may not take advantage of, depending on whether they choose to lend more money."

The central Bank's move comes on the heels of its decision last week to inject an added $140 billion in short-term credit and to take on difficult-to-sell asset-backed paper as collateral.

Since the credit crisis began in earnest last summer, the Fed has taken steps to help the banking arena regain its footing, including cutting its overnight lending rate, the fed funds target rate, by 225 basis points to 3%. However, many traders have felt Chairman Ben Bernanke and his lieutenants haven't been aggressive enough in mitigating the turmoil.

Glassman, for his part, said, "I don't really think the rate decision the Fed makes is really that critical anymore," referring to the Fed's next meeting on March 18, which is expected to result in an easing of as much as three-quarters of a point.

Futures are now pricing in only a 76% chance that the Fed will cut rates by 75 basis points, down from 100% odds on Monday.

"Figuring out how to crack through the barrier of fear is the main thing," Glassman said. "The markets are highly illiquid, and these kinds of actions are more of what's needed."

Thomas said the newest measure should give the market some time to find its footing. "But eventually investors are going to want to see some hard data, particularly improvements in employment and in the GDP," he said.

Still, given the magnitude of the rally, he expects the upturn to sustain itself for at least the remainder of the week.

The new day brought one optimistic economic indicator from the University of California at Los Angeles, whose quarterly Anderson Forecast projected that the U.S. would not enter a recession this year unless the credit crisis worsens even further.

However, a Bloomberg survey showed that economists believe the slowdown in the U.S. will be worse than previously expected and the recovery not as pronounced as had been thought.

For now though, financial stocks were rising virtually across the board. Citigroup (C:NYSE) jumped 9.1%, and Bank of America (BAC:NYSE) rose 6.8%. Wells Fargo (WFC:NYSE) was up 10.5%.

Washington Mutual (WM:NYSE) spiked 18.3%, meanwhile, as rumors swirled that it might receive investments from Warren Buffett or Goldman Sachs (GS:NYSE) .

Goldman itself, along with fellow investment banks JPMorgan Chase (JPM:NYSE) and Morgan Stanley (MS:NYSE) , were advancing between 5% and 11%.

Elsewhere in the financial space, bond insurers MBIA (MBI:NYSE) and Ambac (ABK:NYSE) climbed 12.7% and 6%, respectively, while Freddie and Fannie gained 15.9% and 11.1%, respectively.

Jumping on the bandwagon was Thornburg Mortgage (TMA:NYSE) , whose shares more than doubled. The mortgage lender restated year-ago earnings far downward to reflect the shrunken value of mortgage-backed assets, but also said it was working with its lenders to meet margin calls, news of which had pounded its stock last week. Shares vaulted 120% to $1.56.

Separately, Citi is putting $1 billion in six of its municipal bond funds in order to protect them from margin calls, according to a report in The New York Times. The funds, the report said, have $15 billion in assets, and have already received roughly $600 million.

Also leaping was Hovnanian Enterprises (HOV:NYSE) even though the struggling homebuilder widened its fiscal first-quarter loss from a year earlier and missed estimates. Then, CEO Ara Hovnanian told CNBC that he couldn't call a bottom in the housing contraction just yet. Still, shares were better by 16.4%.

Over in the tech sector, Google (GOOG:NYSE) has closed its deal to buy Web ad-services firm DoubleClick on the heels of approval from the European Commission, which said the merger wouldn't unfairly hurt competitors. Google shares added 6.3% to $439.84.

As most parts of the market rallied, however, health insurers struggled mightily. WellPoint (WLP:NYSE) was one of the hardest hit, slumping more than 28% to $47.26 after it downwardly revised its profit forecast.

At the same time, Aetna (AET:NYSE) sank 8.3% to $42.65 after it repeated its projection that full-year operating earnings would be $4 a share and first-quarter profits would be 92 cents. While Aetna said the same thing before, both are below estimates.

UnitedHealth (UNH:NYSE) , Humana (HUM:NYSE) Coventry Health (CVH:NYSE) lost between 13% and 24%.

Shares of Texas Instruments (TXN:) fell 3% to $28.76 after the chipmaker whittled down its current-quarter forecast for both income and revenue, saying that an unidentified cell-phone maker has cut down on orders.

Boeing (BA:) said it will file a formal protest after losing a $40 billion Air Force contract to Northrop Grumman (NOC:NYSE) and European Aeronautic Defence & Space. Shares of Boeing shed 1.3%.

Following the last close, Bear Stearns (BSC:) CEO Alan Schwartz echoed Ace Greenberg, chairman of the company's executive committee, in brushing off speculation that the firm has liquidity problems. In a statement, he said "Bear Stearns'' balance sheet, liquidity and capital remain strong." Bear's shares saw action on both sides of the flat line, and finished up 1.1%.

On the economic front, the sole government release revealed a February trade deficit that, at $58.2 billion, was slightly better than the expected $59 billion. That figure, issued by the Census Bureau, represents the value by which imports into the U.S. outweighed exports last month.

As for commodities, crude oil resumed its red-hot surge into prices never before seen, bouncing to $109.72, another record, before deflating to a gain of 85 cents at $108.75. Also, unleaded gas prices at the pump picked up slightly to a new U.S. record -- $3.227 a gallon, on average, according to AAA. Gold futures tacked on $4.30 to $974.20.

Treasury prices were pulling back. The 10-year bond tumbled 1-9/32 in price to yield 3.61%, and the 30-year note slid 27/32 in price, yielding 4.52%.

Overseas markets were mostly higher. The Nikkei 225 added 1% to 12,658.28, and Hong Kong's Hang Seng Index rose 1.3% to 22,995. As for Europe, the FTSE 100 Index of London gained 1.1%, and Germany's Xetra Dax was up 1.2%.

[setravis]

Stocks Close Lower After Erratic Day.......


Into the Close...Wednesday, 3/12/2008


New York's major averages, a day removed from a pronounced run-up, returned to the form of the past few months Wednesday, bouncing between positive and negative territory before closing modestly lower.

The Dow Jones Industrial Average lost 46.57 points, or 0.4%, at 12,110.24. The index had opened to the upside, then dipped into the red before rising more than 100 points. Eventually, though, the momentum faded and the industrials went negative late.

The S&P 500 was the worst-performing index, shedding 11.88 points, or 0.9%, to 1308.77, partially thanks to losses at Humana (HUM:NYSE) . The Nasdaq Composite fell 11.89 points, or 0.5%, to 2243.87.

Despite the market's extended stay in the green, overall breadth was poor. Around 4.31 billion shares changed hands on the New York Stock Exchange, with decliners topping advancers by a 3-to-2 margin. Volume on the Nasdaq reached 2.08 billion shares, as losers beat winners 5 to 4.

The action follows an exuberant rally for equities Tuesday after the Federal Reserve announced a plan to provide $200 billion in 28-day Treasury loans to banks in exchange for mortgage-backed securities and other illiquid assets.

The Dow soared 417 points to 12,157 -- its biggest one-day gain in five years. The S&P jumped 47 points to 1321, and the Nasdaq climbed 86 points to 2256. All three were up 3.6% or more.

"This is a really big disappointment," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "Not getting a follow-through rally and giving up even a small amount of yesterday's gains feels like a tremendous negative."

Pavlik said, however, that if the market can avoid big losses for another month or two -- before the Bush administration's tax-rebate stimulus and further rate cuts by the Federal Reserve kick in -- it will be in fairly good shape.

As for the Fed's possible response to the market's action, Pavlik noted that, just yesterday, he had thought a 50-basis-point cut at next week's meeting was the most likely possibility. "But if this action continues to drift further south," he said, "I think the Fed will look to that 75-basis-point cut, whether right or wrong. And despite the fact that it'll mean a weakening dollar, I think that would be the right move to make."

Treasury prices were surging to take back some of the prior session's big losses. The 10-year note was up 1-08/32 in price to yield 3.45%, and the 30-year bond shot up 1-30/32 in price, yielding 4.39%.

The yield on the 10-year note is now down some 100 basis points from a year earlier, said Joe Schatz, senior government bond strategist with Merrill Lynch. "Whenever you're in an environment of uncertainty and credit-market turmoil, you're going to have a flight to quality, so money continues to flow into the treasury," he said.

As for Treasury prices'' upward move Wednesday, Schatz noted that the market might have realized that it had overreacted yesterday to just how much the Fed's action will help the credit markets.

Meanwhile, crude oil hit a new all-time high of $110.20 a barrel even after the Energy Department reported that crude stockpiles rose by 6.18 million barrels from the prior week, well above expectations for a gain of 1.68 million barrels. Crude, which pulled back slightly to a $1.17 gain at $109.92, has now reached record intraday prices for six consecutive trading sessions.

"This oil thing is really being pushed aside," Pavlik said. "Nobody believes oil should be at these levels. There's a lot of fast money in this. I think it's going to correct majorly to the downside."

As for gold, futures closed at $978.80 an ounce, unchanged from the prior settlement. The dollar remained weak against the euro, sliding to a fresh record low of $1.5519, despite the Fed's latest liquidity-boosting measure aimed at eventually getting the U.S. economy back on its feet.

Marc Chandler, chief foreign exchange strategist with Brown Brothers Harriman and a contributor to RealMoney.com, said, "what concerns some people regarding the dollar is that providing more liquidity means increasing supply of dollars." Chandler noted that there is a distinction to be made between liquidity provisions and efforts to prevent a sharper economic downturn.

He also said, however, that the latest move for the greenback owes more to a strengthening euro than to softening dollar.

Among equities, health insurers were in focus again after another member of the group, this time Humana, cut its outlook. The company chopped its current-quarter earnings view nearly in half, blaming higher-than-expected claims for standalone prescription-drug plans. Shares came well off their worst levels for the day, but they still closed off 13.7% to $40.88.

The entire space was crushed in the last session following a downbeat profit outlook from WellPoint (WLP:NYSE) . Aetna (AET:NYSE) was soft after reaffirming its own forecast, which was lower than analysts'' targets.

Heavy-machinery purveyor Caterpillar (CAT:) climbed 3.6% after reiterating its forecast for 5% to 15% earnings growth in 2008. It also lifted its longer-term revenue forecast.

J. Crew (JCG:) , the preppy-clothes seller, came in 2 cents above analyst expectations in the fourth quarter with adjusted earnings of 41 cents a share. Sales rose to $399.9 million. The company also pegged full-year earnings above the Wall Street consensus. Shares lifted 3.7%.

Among analyst actions, Oppenheimer upgraded cell-phone maker Nokia (NOK:NYSE) , but cut KLA-Tencor (KLAC:Nasdaq) , a chip-equipment maker, to underperform. Nokia stock had an erratic day, finishing down 0.5%. KLA slid 9.9% to $37.80.

Baird lowered the rating of data-storage company Network Appliance (NTAP:NYSE) , sending shares down 3.8%. Home-improvement goods retailer Lowe's (LOW:NYSE) saw mixed trading after Morgan Keegan cut the stock to underperform, ending the day down 1.8%.

Bear Stearns upgraded embattled mortgage lender Thornburg Mortgage (TMA:NYSE) , and shares vaulted 82.7% to $2.85, extending the prior session's surge. Last week, the stock plunged after the company said it couldn't meet some margin calls.

JPMorgan slashed its profit estimates and ratings on several airline stocks. Northwest Airlines (NWA:NYSE) , UAL (UAUA:NYSE) , US Airways (LCC:NYSE) , Alaska Air (ALK:NYSE) and AMR (AMR:NYSE) were lowered to underweight from overweight, and shares lost between 9.5% and 18.4%.

The firm also took Continental (CAL:NYSE) and Delta (DAL:NYSE) down to neutral from overweight, knocking shares down by 9.6% and 16.4%, respectively.

Back on the economic docket, the Treasury Department reported that the federal budget registered a February deficit of $175.6 billion, slightly worse than the $170 billion consensus.

The major overseas markets were mostly higher. Tokyo's Nikkei 225 rose 1.6% to 12,861, and Hong Kong's Hang Seng climbed 1.9% to 23,423. As for European bourses, London's FTSE 100 and the Paris Cac were each better by 1.5%. Germany's Xetra Dax added 1.2%.

On the political front, New York Gov. Eliot Spitzer, who crusaded against greed on Wall Street earlier in this decade when he was the state attorney general, said he will resign effective March 17. His decision comes two days after news broke that he patronized a high-priced prostitution ring.