Dow Jones 30: Industrials Index

[setravis]

Stocks Hold Gains After Fed Cuts.......


Tuesday  3/18/2008


Stocks in the U.S. remained sharply higher Tuesday after the Federal Reserve cut the overnight bank lending rate by three-quarters of a point and eased for the second time in three days rates on loans to discount-window borrowers.

The Dow Jones Industrial Average was bouncing 201 points, or 1.7%, to 12,173, with all of its components trading in the green. The S&P 500 was up 29 points, or 2.2%, at 1305, and the Nasdaq was surging 52 points, or 2.4%, to 2229.

Following its latest meeting, the Fed said it would lower the fed funds target rate to 2.25%. Many traders were hoping for a full-point reduction, but thus far they seemed satisfied with what they got. The central bank also dropped the discount rate by 75 basis points to 2.50%, on the heels of an emergency 25-point cut Sunday.

Since last September, the fed funds rate has come down 300 basis points.

Before the outcome of the policy gathering was known, the market bolted higher thanks to Goldman Sachs (GS:NYSE) and Lehman Brothers (LEH:NYSE) , who posted first-quarter profits that topped analyst estimates by a wide margin.

The reports helped to soothe worries brought on by the downfall of Bear Stearns (BSC:NYSE) that financial firms are facing deep deterioration in their results.

Goldman had a first-quarter profit of $3.23 a share, well ahead of the $2.58 that was expected, and Lehman posted 81 cents in the latest quarter, 9 cents better than anticipated. Both companies'' results, however, were sharply lower than last year due to the credit market's trevails.

Shares of Goldman were jumping 13.7%, while Lehman rocketed 37%, completely erasing the prior session's losses in both cases.

The financial space was battered Monday on news that JPMorgan (JPM:NYSE) agreed to take over Bear Stearns at a fire-sale price following a rapid meltdown at the brokerage. The unprecedented turn of events brought on worries that other collapses are to come.

The market's broad upturn is "a bit of a relief rally," said Georges Yared, chief investment strategist with Yared Investment Research.

"It appears that, even though [Goldman and Lehman] took their hits, they're not getting crushed, and they're better than what investors had expected," said Yared. "Still, the ice is thin."

Other financial stocks were surging. Merrill Lynch (MER:NYSE) was adding 8.1% to $44.52, Citigroup (C:NYSE) climbed 8.6% to $20.22, and Morgan Stanley (MS:NYSE) leaped 15.5% to $42.02.

As for broad sector trackers, NYSE Financial Sector shot up 5.5%, and the Amex Securities Broker-Dealer Index, buoyed especially by big recoveries in both Bear and Lehman, rose 10.1%.

"Everybody kind of took a collective sigh, thinking, ''okay, it's not as bad as we all thought,''" said Paul Nolte, director of investments with Hinsdale Associates.

Bear shares were advancing nearly 50% to $7.06 as traders bet that JPMorgan would, in the end, be forced to part with more than the $2 a share that it agreed to pay for the securities firm.

Also jumping was NYSE Euronext (NYX:NYSE) , which added 10.2% after setting plans to buy back $1 billion worth of its shares and boost its annual dividend by 20% to $1.20 a share.

Elsewhere on the economic front, housing starts for February were stronger than the consensus view, coming in at 1.065 million. Building permits, though, were weaker than expected, at 978,000.

Also, the producer price index for last month rose 0.3% from January and was a bit cooler than expected, but the core rate, which excludes food and energy, more than doubled estimates with a 0.5% increase. Year over year, the PPI was up 6.4%, and the core rate rose 2.4%.

Among commodities, crude oil was rising $2.33 to $108.01 a barrel, a modest performance compared with the past couple of weeks, over which it has hit a string of record-breaking prices. Gold futures were up $1.20 to $1,003.80.

In another sign that investors'' fears are at least temporarily calmed, treasury prices were losing substantial ground. The 10-year bond was off 19/32 in price to yield 3.38%, and the 30-year note lost 18/32 in price, yielding 4.31%.

In other corporate news, Internet portal Yahoo! (INTC:Nasdaq) , who reaffirmed its outlook for the first quarter and fiscal 2008. Shares of Yahoo were gaining 5.8% to $27.36.

Delta Air Lines (DAL:NYSE) said it will offer buyouts to more than half of its employees, while also cutting capacity in the U.S. as it grapples with soaring fuel costs. Shares jumped 7.3% to $9.90.

During the last session, the overall market closed mixed despite the Bear news. The Dow, down nearly 200 points in the morning, rallied to finish up 21.16 points, or 0.2%, at 11,972.25. At the same time, the S&P 500 slipped 11.54 points, or 0.9%, to 1276.60, and the Nasdaq was off 35.48 points, or 1.6%, at 2177.01.

Markets abroad were on the rise. Tokyo's Nikkei was up 1.5%, and Hong Kong's Hang Seng advanced 1.4%. European bourses, meanwhile, intensified their gains as the U.S. market surged. The FTSE in London was gaining 3.5%, and Frankfurt's Dax was ahead by 3.4%.

[setravis]

Fed, Financials Fuel Wall Street Rally.......


Tuesday  3/18/2008


Stocks in the U.S., buoyed by a rally in financials, soared to session highs late Tuesday after the Federal Reserve lowered the overnight bank lending rate by three-quarters of a point and signaled that more cuts could be coming.

The Dow Jones Industrial Average was bouncing 311 points, or 2.6%, to 12,283, with all of its components trading in the green. The S&P 500 was up 42 points, or 3.3%, at 1319, and the Nasdaq was surging 66 points, or 3%, to 2243.

Following its latest meeting, the Fed said it would lower the fed funds target rate to 2.25%. The central bank also dropped the discount rate by 75 basis points to 2.50%, on the heels of an emergency 25-point cut Sunday. Since last September, the fed funds rate has come down 300 basis points.

"I guess 75 is better than 50," said Georges Yared, chief investment strategist with Yared Investment Research, who had been among those betting on a full-point cut. He also believes, however, that the Fed could be holding back for another potential move in April.

Indeed, the Federal Open Market Committee, the policymaking arm of the Fed, noted that "downside risks to growth remain" and said it "will act in a timely manner as needed to promote sustainable economic growth and price stability."

At the same time, the central bank also expressed greater concern about the inflationary outlook, which could explain why the FOMC didn't cut by a full point, as traders in the futures markets had projected it would.

But Ian Shepherdson, chief U.S. economist with High Frequency Economics, believes that the "act as needed" statement was the key message. "None of this means inflation is back on the agenda," he said.

Instead, Shepherdson predicted that Fed Chairman Ben Bernanke should, by April 30, "be able to extract another 50 basis points from his more reluctant colleagues."

Richard Fisher and President Charles Plosser, the Fed presidents from Dallas and Philadelphia, respectively, were two dissenting committee members who preferred "less aggressive action" at the FOMC meeting, according to the Fed's statement.

"This will all make no difference to the near-term data, but it is a necessary precondition for recovery, eventually," Shepherdson added.

The market already was sharply higher before the Fed's announcement, thanks to earnings reports from Goldman Sachs (GS:NYSE) and Lehman Brothers (LEH:NYSE) that topped analyst estimates by a wide margin.

The reports helped to soothe worries brought on by the downfall of Bear Stearns (BSC:NYSE) that financial firms are facing deep deterioration in their results.

Goldman had a first-quarter profit of $3.23 a share, well ahead of the $2.58 that was expected, and Lehman posted 81 cents in the latest quarter, 9 cents better than anticipated. Both companies'' results, however, were sharply lower than last year due to the credit market's trevails.

Shares of Goldman were jumping 12%, while Lehman rocketed 34.8%, completely erasing the prior session's losses in both cases.

The financial space was battered Monday on news that JPMorgan (JPM:NYSE) agreed to take over Bear Stearns at a fire-sale price following a rapid meltdown at the brokerage. The unprecedented turn of events brought on worries that other collapses are to come.

Yared said he believes the market's broad upturn is "a bit of a relief rally."

"It appears that, even though [Goldman and Lehman] took their hits, they're not getting crushed, and they're better than what investors had expected," he said. "Still, the ice is thin."

Other financial stocks surged. Merrill Lynch (MER:NYSE) added 9.6% to $45.13, Citigroup (C:NYSE) climbed 5.9% to $19.72, and Morgan Stanley (MS:NYSE) leaped 15% to $41.84.

As for broad sector trackers, NYSE Financial Sector shot up 3.9%, and the Amex Securities Broker-Dealer Index, buoyed especially by big recoveries in both Bear and Lehman, rose 7.9%.

"Everybody kind of took a collective sigh, thinking, ''okay, it's not as bad as we all thought,''" said Paul Nolte, director of investments with Hinsdale Associates.

Bear shares were advancing more than 30% to $6.28 as traders bet that JPMorgan would, in the end, be forced to part with more than the $2 a share that it agreed to pay for the securities firm.

Also jumping was NYSE Euronext (NYX:NYSE) , which added 7.3% after setting plans to buy back $1 billion worth of its shares and boost its annual dividend by 20% to $1.20 a share.

Back on the economic front, housing starts for February were stronger than the consensus view, coming in at 1.065 million. Building permits, though, were weaker than expected, at 978,000.

Also, the producer price index for last month rose 0.3% from January and was a bit cooler than expected, but the core rate, which excludes food and energy, more than doubled estimates with a 0.5% increase. Year over year, the PPI was up 6.4%, and the core rate rose 2.4%.

Among commodities, crude oil was rising $2.33 to $108.01 a barrel, a modest performance compared with the past couple of weeks, over which it has hit a string of record-breaking prices. Gold futures were up $1.20 to $1,003.80.

In another sign that investors'' fears are at least temporarily calmed, treasury prices were losing ground. The 10-year bond was off 21/32 in price to yield 3.39%, and the 30-year note lost 5/32 in price, yielding 4.28%.

In other corporate news, Internet portal Yahoo! (YHOO:Nasdaq) , who reaffirmed its outlook for the first quarter and fiscal 2008. Shares of Yahoo were gaining 5.3% to $27.22

Delta Air Lines (DAL:NYSE) said it will offer buyouts to more than half of its employees, while also cutting capacity in the U.S. as it grapples with soaring fuel costs. Shares jumped 5.2 % to $9.71.

During the last session, the overall market closed mixed despite the Bear news. The Dow, down nearly 200 points in the morning, rallied to finish up 21.16 points, or 0.2%, at 11,972.25. At the same time, the S&P 500 slipped 11.54 points, or 0.9%, to 1276.60, and the Nasdaq was off 35.48 points, or 1.6%, at 2177.01.

Markets abroad were on the rise. Tokyo's Nikkei was up 1.5%, and Hong Kong's Hang Seng advanced 1.4%. European bourses, meanwhile, intensified their gains as the U.S. market surged. The FTSE in London was gaining 3.5%, and Frankfurt's Dax was ahead by 3.4%.

[stout7735]

The Fed is rapidly running out of feel good to fix the markets...When the Fed rate gets down to 1%, do investors face going  "cold turkey"    

[setravis]

Do you suppose people were ignoring the high/low line because of the market turn around rather than just ignoring bad news. That they were just focusing on the turn around and figuring it was a given that with the market down that far, what a was it 118XX., it was bound to set a bunch of lows.

With oil and NG at such high prices and food commondies like wheat, corn, cocoa, coffee, etc. up so dramatically that it has to be costing the heck out of you and me. Consumers. I mean isn't that what inflation is all about? The only cheap thing is houses. Wow that's good news. Cars are so expensive that dealers offer 72 months financing. Gas at over 3 bucks at most stations in the country and might hit 4 bucks this summer. People are alright cutting back on driving if you can believe the polls. This isn't a political poll or a feel good poll so there is no real reason to lie.

I know it is always different this time and it is. It always is. Humans are always different. There is the end with the big blow off and the end with the whimper and a bunch in between. Who knows how this will end? How many times will the market test 11800? Who the heck knows? How come the commodities market took a big hit yesterday? How far will that go?

The standard of living in the world is going to get way better and the countries that are going to suffer are the ones that are now enjoying a really good standard of living now. Why? Because there isn't enough goodies to go around. What ever idiot in Congress decided to use food for fuel should be literally tarred and feathered. That is beyond pure stupid. That is what one gets when these elected (and I use the term loosely) Congress people through the media feel that they can BS an unthinking (and I use this term succinctly) populous.

My point is that the bottom in this downturn probably will take some time in coming. JMHO, we are going to get more false starts before it is finished. But then who the heck am I.

Rule- A good way to spot a TRUE bottom is when people start ignoring bad news.

A word of caution. If the markets don't try to form a bottom on rate cuts of .75 or more. Then it means real trouble.

[setravis]

13200 before 11200.

Is today the beginning of a 1000 point rally?
Or, do we sell the rally to protect capital?
Head to the sidelines?

Barton Biggs Expects 1,000-Point Gain in Dow Average

By Brian Sullivan and Michael Patterson

March 14 (Bloomberg) -- The decline in U.S. stocks is ``way overdone'' and the Dow Jones Industrial Average may rally 1,000 points, investor Barton Biggs said.

``We're in a financial panic,'' Biggs said during a telephone interview with Bloomberg Television from New York. ``We're setting up for a really big rally. I don't mean three or four hundred points on the Dow, I mean 1,000 points on the Dow. I don't know if we're going to get it next week or the week after. But this thing has gotten crazy and is overdone.''

Biggs, a former Morgan Stanley strategist who now runs the $1.5 billion hedge fund Traxis Partners LLC, said stock markets from Germany to Hong Kong may bottom out soon after tumbling this year. Biggs's prediction in March 2007 that U.S. stocks were near a low preceded a 16 percent rally in the Dow average during the next four months. His forecast that the Dow would climb as much as 19 percent in 2007 overshot its actual gain by almost 13 percentage points.

``We're at a really crucial point,'' Biggs said. ``This is a time to be buying stocks around the world and not to be selling them.''

The Dow average has tumbled 16 percent to 11,951.09 since reaching a record in October after the subprime-mortgage market's collapse caused $195 billion in asset writedowns and credit losses at global financial firms including Citigroup Inc. and Bank of America Corp. A 1,000-point gain in the Dow from today's (March 14) close would amount to an 8.4 percent rise.
``Yeah, it's scary. It's always scary at bottoms...."

We shall see.

[stout7735]

Cramer also called a bottom...My leveraged shorts ( added more SKF today at $119) are going to make me RICH !!!     

[stout7735]

The "rally" did not survive even 48 hours...setravis said yesterday," If markets don't try to form a bottom on rate cuts of .75 or more,Then it means real trouble." What say you now???   

[setravis]

Stocks Follow Rally With Steep Selloff.......


Into the close, Wednesday 3/19/2008


Stocks in New York pulled back sharply Wednesday as a decline in commodities and renewed credit-related fears left Wall Street unable to follow through on the mammoth rally that took place in the prior session.

Following a back-and-forth morning, a steady decline turned into a steep selloff in the afternoon. The Dow Jones Industrial Average closed with a loss of 293 points, or 2.4%, to 12,099.66, wiping out more than half of the index's 420-point surge Tuesday.

The S&P 500 sank 32.32 points, or 2.4%, to 1298.42, and the Nasdaq Composite plunged 58.3 points, or 2.6%, to 2209.96.

Commodity stocks were among the worst performers in the rout. Dow names Alcoa (AA:NYSE) , Chevron (CVX:NYSE) and Exxon Mobil (XOM:NYSE) were some of the weakest of the 30 index components.

"It seems we are in a rinse-and-repeat cycle," said Steven Sheldon, CFA and principal with SMS Capital Management. "Every time the market shoots back up people think the worst is over, and then they want to jump back in, only to be disappointed."

"The only difference now," he said, "is that we are certainly further along in the financial crisis."

Kenny Landgraf, president and founder of Kenjol Capital Management, pointed out that since the markets will be closed for Good Friday, traders may be starting to pare back their positions for fear of what may happen between now and Monday.

"Given what happened last weekend, people don't want to be hanging out there, exposed for a three-day weekend," Landgraf said, referring to the rapid collapse of Bear Stearns (BSC:NYSE) a few days ago.

Overall, stocks'' breadth was poor. Roughly 5.4 billion shares changed hands on the New York Stock Exchange, and the Nasdaq saw volume reach 2.32 billion shares, as decliners outpaced advancers 7 to 3.

The declines came as futures in crude oil and gold finally pulled back in earnest after their weeks-long run into record-breaking territory.

Crude finished down $4.94 to $104.48 a barrel even after the U.S. Energy Information Administration reported that crude stockpiles were up by a fraction of what analysts were looking for, rising by just 200,000 barrels last week to 311.8 million.

"It's about time," said James Williams, an economist with energy-research firm WTRG Economics, on the drop in crude. "If you look at total petroleum consumption, it's down 3.2% from a year ago, and that's clearly reflective of a weaker economy. And in the last 30 years, we do not have an example of a U.S. recession that was not accompanied by a drop in oil prices."

He added, "It certainly could be the beginning of a correction, and a return to more fundamental numbers, which would put you to $80 [per barrel] at best."

At the same time, gold futures tumbled $61.60 to $942.60 an ounce, sending down shares of miners Barrick Gold (ABX:NYSE) , Goldcorp (GG:NYSE) , and Newmont Mining (NEM:NYSE) by 4.3% or more.

"This is quite a hefty pullback," said Bart Melek, global commodities strategist with BMO Capital Markets. He believes the selloff was triggered after the Federal Reserve cut the fed funds target rate by just 75 basis points yesterday, which was less than the full point the market anticipated.

A bigger cut, he pointed out, would have essentially weakened the U.S. dollar even further against other currencies. And the greenback's decline is what has generated so much interest in gold lately.

Meanwhile, credit-market jitters emerged yet again, with Merrill Lynch (MER:NYSE) diving 11.1% on news that it has sued Security Capital Assurance (SCA:NYSE) . Merrill is seeking to force the bond insurer to stick to its obligations to guarantee risky debt.

That news overshadowed what was otherwise a positive day for financials. Before the bell, the Office of Federal Housing Enterprise Oversight, the regulator of Fannie Mae (FNM:NYSE) and Freddie Mac (FRE:NYSE) , lowered the excess capital requirements on both, potentially freeing up as much as $200 billion of liquidity for the mortgage market.

A seize-up in the mortgage arena, particularly subprime, was the genesis last year of the credit crisis that regulators and banks are still trying to tame. Fannie and Freddie shares finished higher by 8.8% and 14.9%, respectively.

"With all this liquidity being thrown at financial institutions, it would not be surprising that, once the liquidity crisis ends, the ones that are left standing will be in pretty good condition," said Sheldon.

As for the immediate term, Sheldon said, "Until the next crisis, we may see calm. I think we're in the wait-and-see mode. People are getting a little more cautious about moving in too quickly, and just kind of trying to see how the economy unfolds."

Elsewhere in financials, shares of Visa (V:NYSE) soared 28.4% in their highly anticipated debut. The company priced its initial public offering at $44 a share, raising $17.9 billion, and the Day's trading lifted it $12.50 to $56.50.

In another boost for the financial space, Morgan Stanley (MS:NYSE) posted a first-quarter profit of $1.53 billion, or $1.45 a share, after the cost of preferred dividends. That represents a sharp decline from last year, but it topped analysts'' forecast for a profit of $1.03 a share. The stock climbed 1.4%.

Morgan's results follow suit with Goldman Sachs (GS:NYSE) and Lehman Brothers (LEH:NYSE) , who in the prior session helped fuel the market's rally with their own better-than-expected numbers.

The surge only intensified after the Fed slashed 75 basis points off both the fed funds target rate and the discount rate. By the end of the day, the Dow had soared 420 points to 12,393. The S&P 500 rose 54 points at 1331, and the Nasdaq leaped 91 points at 2268.

Among other earnings reports, credit-card company Discover (DFS:NYSE) suffered a 65% profit drop in the fiscal first-quarter earnings after selling its Britain-based Goldfish unit. Stripping out the sale, Discover made 50 cents a share, a dime more than expected. Still, shares lost 12.6%.

Foodmaker General Mills (GIS:NYSE) was faring better, adding 1.2% after reporting a 61% jump in fiscal third-quarter earnings to $430.1 million. Excluding investment-related gains, adjusted income comfortably beat analysts'' estimate.

And Adobe (ADBE:NYSE) , maker of Acrobat and other software applications, also beat analyst estimates as its bottom line swelled to $219.4 million. Shares spiked 9% to $34.75.

Treasury prices were taking back ground lost in the last session. The 10-year note was up 30/32 in price to yield 3.37%, and the 30-year bond soared 2-03/32 in price, yielding 4.22%.

Overseas markets were mixed. Tokyo's Nikkei 225 climbed 2.5% overnight, and the Hang Seng Index in Hong Kong added 2.3%. In Europe, London's FTSE sank 1.1%, Germany's Xetra Dax shed 0.5%, and the Paris Cac gave up 0.6%.

[setravis]

Data Cheer Up Market.......


Into the close, Thursday 3/20/2008


Stocks in the U.S. stampeded to a sharply higher finish Thursday as investors snatched up bargains and covered short positions at the end of a chaotic week, buoyed by economic data that wasn't quite as soft as expected.

The Dow Jones Industrial Average bolted ahead by 261.66 points, or 2.2%, to 12,361.32, and the S&P 500 added 31.09 points, or 2.4%, at 1321.51. The Nasdaq Composite jumped 48.15 points, or 2.2%, at 2258.11.

The gains essentially wiped out losses from the prior session's selloff, giving all three indices gains for the shortened week. Led by a big rally Tuesday, the Dow surged 3.9%, the S&P bounced 2.8%, and the Nasdaq climbed 2.1% over the past four days.

The U.S. market is closed Friday for the Good Friday holiday.

"There's a lot of things cooking in this market," said James Park, managing director with Rodman & Renshaw. "I think right now people are still digesting all the recent news. There's still a lot of malaise on the Street. With this kind of volatility, it's very difficult to really have conviction, especially when you're seeing your stocks move up and down on a daily basis."

Phillip Roth, chief technical market analyst with Miller Tabak, said the rise could represent an oversold market getting a bounce and pointed to the lingering perception that, regardless of anything else, the Federal Reserve has saved the financial system with its aggressive actions following the collapse of Bear Stearns (BSC:NYSE) .

Park concurred. "The Fed actions seem to have put a Band-Aid on the market, at least for the time being," he said, noting that a great deal of short-covering also is in play. "This is the last day of the week, and a lot of people have been dealing with a lot of bad news. I would say this kind of strength was expected."

Robert Pavlik, chief investment officer with Oaktree Asset Management, said the rally could merely be the effect of people buying into the prior session's dip, but he also believes that much of the upward pressure and volatility stemmed from the expiration of options and futures.

The Dow also broached the Dow's 50-day moving average of 12,335, which Pavlik noted would be a key technical move for traders.

Breadth was positive. About 6.16 billion shares changed hands on the New York Stock Exchange, with advancers topping decliners by a 7-to-3 margin. The Nasdaq saw volume reach roughly 2.77 billion, as winners outpaced losers 2 to 1.

The rally began after the Philadelphia Fed Index, a key survey of manufacturing in the Northeast, came in at a slightly better-than-expected reading of negative 17.4. That indicates substantial shrinkage from the break-even point of zero, but it's also a marked improvement from minus 24 in February.

"The key message from this survey is that things are quite bad, but that sentiment has, so far, weakened further than hard activity," said Ian Shepherdson, chief U.S. economist with High Frequency Economics. "Manufacturing growth is slow but the sector is not in meltdown."

Less encouraging numbers came from the Labor Department, which reported that the number of people applying for unemployment benefits last week jumped by a bigger-than-expected 22,000 to 378,000. In February the total amount of payroll jobs sank by 63,000, nearly tripling the decline from that of January.

"It is very tempting to see this rise in claims as clear evidence of a further deterioration in the labor market, but one week's data prove nothing," Shepherdson said, though he still added, "we have no doubt that the trend in claims is upwards and is approaching the levels seen in the earlier stage of the recession in 2001."

Leading indicators, an assemblage of previously released economic data from the Conference Board, were down 0.3%, sagging especially under mounting initial jobless claims and declining building permits.

As for the seemingly reactive spike in stocks, Roth said, "the market is just discounting bad news, because none of this is good news."

Last time out, the major averages had a back-and-forth morning before sellers took over amid plummeting commodities prices, erasing much of the prior Day's massive rally.

By the end of it all, the Dow lost 293 points to 12,100, and the S&P 500 sank 32 points at 1298. The Nasdaq plunged 58 points to 2210.

Commodities continued to cool down in the new session. Crude oil lost 70 cents to $101.84 a barrel as the front-month contract turned over to May, and gold futures closed off $2.68 to $25.30.

That was accompanied by a U.S. dollar that firmed to $1.5420 against the euro. The greenback rose fractionally against the yen to 99.395.

In corporate news, Citigroup (C:NYSE) shares picked up 10.2% a day after The New York Times reported that the banking giant is planning to cut another 2,000 employees on top of the 4,200 layoffs it announced in January, according people close to the situation.

Elsewhere in the financial space, Fannie Mae (FNM:NYSE) and Freddie Mac (FRE:NYSE) rose sharply after the government-backed mortgage buyers were upgraded to outperform at Keefe Bruyette. A day ago, the firms were essentially granted up to $200 billion in extra liquidity after their regulator, the Office of Federal Housing Enterprise Oversight, lowered the pair's excess-capital requirements.

Fannie and Freddie climbed 11.7% and 9%, respectively.

CIT (CIT:NYSE) , however, dropped as much as 45% after the lender said it had drawn on its $7.3 billion line of credit in order to repay debt, citing "the protracted disruption in the capital markets as well as recent actions by the rating agencies." In addition, the firm is seeking further funding while considering the sale of "non-strategic" assets. Shares pared losses to finish down 17.3%.

Away from financials, footwear maker Nike (NKE:) said its quarterly profit leaped 32% to $463.8 million compared with a year ago, thanks largely to soaring foreign sales. Those results beat the consensus analyst target, as well. Shares were better by 8.8%.

Also, Borders (BGP:) plunged 28.6% after the bookseller signed a financing deal with largest shareholder Pershing Square Capital Management amid signs of potential liquidity trouble. The company also is mulling a company sale.

Elsewhere, shipping-services outfit FedEx (FDX:NYSE) said that broad-market woes and spiking fuel prices have hurt its bottom line. While the company's results for the most recent quarter topped estimates, FedEx's guidance for the current period was below Wall Street targets. Still, shares closed up 0.9%.

Back in analyst actions, Dow component General Electric (GE:NYSE) tacked on 5.3% after a Merrill Lynch analyst said the company is well-positioned to withstand a recession thanks to its wide variety of businesses. Amgen (AMGN:NYSE) , however, was cut to market perform at Wachovia. Shares ticked up marginally after spending most of the day in the red.

Treasury prices were rising. The 10-year note was up 1/32 in price to yield 3.33%, and the 30-year bond climbed 22/32 in price, yielding 4.17%.

Overseas markets were mostly sinking. In Asia, the Hang Seng Index in Hong Kong lost 3.5% overnight, and Tokyo's Nikkei 225 was closed for a national holiday. In Europe, London's FTSE and Germany's Xetra Dax lost 0.9% and 0.7%, respectively. The Paris Cac surrendered 0.5%.

[setravis]

Global Bull
correction bottoms

commodities top (for now)

money rotates

growth flexes

life goes on

[stout7735]

AHHHHH.....Exuberance !!! I see the USDX headed back down tomorrow ,and gold and commodities headed back up... Housing sales climbed at fire sale prices...The financial industry has Fed provided liquidity but lacks solvency...Hedge funds are finding loans hard to come by, and selling positions to cover their Yen carry trade loans... The consumer is tapped out and will be crushed by impending inflation....Celebration of a bottom being set for a return of the Bull appears to be a wee bit premature...The old saying,"don't fight the Fed", does not apply when they are shooting blanks and running out of ammo...     

[setravis]

Stocks Hit the Flat Line.......


Friday 3/28/2008


Stocks in New York were little changed Friday as investors dealt with mixed economic data and a disappointing outlook from retail giant J.C. Penney (JCP:NYSE) .

After spending the morning in positive territory, the Dow Jones Industrial Average recently edged down 9 points to 12,293, and the S&P 500 slipped a fraction to 1325. The Nasdaq Composite was tacking on 1 point at 2281.

Ahead of the bell, the Commerce Department released personal income and spending numbers, along with data on personal consumption expenditures -- the Federal Reserve''s preferred measure of inflation.

According to the report, incomes were up 0.5% in February, topping the 0.3% consensus estimate. Spending was in line with expectations at a 0.1% increase, down from 0.4% in the prior month. The core PCE, which excludes food and energy prices, also ticked up 0.1%, as expected.

Paul Nolte, director of investments with Hinsdale Associates, said these are encouraging numbers in the long term. "It confirms the fact that the consumer's pulling back," he said. "That's not good for stocks, but it's good for the health of the consumer."

Elsewhere, the University of Michigan's final consumer-sentiment reading for March came in at 69.5, a full point lower than the preliminary figure. The figure marks a downturn from 70.8 in February, and is a half-point worse than economists expected.

In the last session, disappointing sales at Oracle (ORCL:) and continuing financial-sector worries pulled the major averages substantially lower. In the end, the Dow lost 120 points to 12,303, and the S&P 500 slipped 15 points at 1326. The Nasdaq, under pressure from Oracle, slid 44 points to 2281.

After the close, Bear Stearns (BSC:NYSE) Chairman James Cayne disclosed in a regulatory filing that he sold off his 5.66-million-share stake in his company for $61 million. The news derailed any investor hopes that Cayne might attempt to launch a rival bid to JPMorgan's (JPM:NYSE) buyout of the broker, sending Bear shares down 5%.

Meanwhile, Citigroup (C:NYSE) is reshuffling some of its executives again as it realigns its operations geographically, rather than based on business type. Among the changes, Terri Dial, who currently heads Lloyds TSB Group's U.K. consumer banking division, will join Citi to build its U.S. retail banking and consumer finance operations, according to published reports. Citi shares were losing 2.3%.

Elsewhere in the sector, Lehman Brothers (LEH:) saw mixed trading after Citigroup lifted its rating to buy from hold a day after shares were pummeled by resurfacing rumors that the investment bank is facing severe liquidity problems. Lehman shares dipped into negative territory earlier, but were recently up 1.9%.

Retail shares were under pressure after JC Penney (JCP:) offered a first-quarter profit outlook that was significantly below what analysts wanted to see. The department-store operator now plans to earn 50 cents a share in the quarter, whereas 75 cents was expected. Shares were plunging 7.4%.

Competitors Macy's (M:NYSE) and Sears Holding (SHLD:NYSE) were dropping 4.2% and 1.8%, respectively. The S&P Retail Index lost 3%.

KB Home (KBH:NYSE) was off 3.4% after the homebuilder said deteriorating home prices forced it to report a fiscal first-quarter loss of $268.2 million, or $3.47 a share, reversing a year-earlier profit.

Lehman, meanwhile, downgraded WellPoint (WLP:NYSE) to equal-weight from overweight and cut its price targets on a number of other health insurers, among them Molina Healthcare (MOH:) , Cigna (CI:) and Aetna (AET:) . The move comes a couple of weeks after several names in the group cut their earnings forecasts. All were losing ground recently.

UnitedHealth (UNH:NYSE) and Humana (HUM:NYSE) , however, had their price targets raised at the brokerage. UnitedHealth shares ticked up 1.1% as Humana declined by that same amount.

Among commodities, crude oil was losing $1.75 to $105.83 a barrel. Gold futures were sliding $17.60 to $931.20 an ounce.

Treasury prices were rising. The 10-year note was off 8/32 in price to yield 3.50%, and the 30-year bond dipped 19/32 in price, yielding 4.36%.

Overseas markets were mixed. In Asia, the Nikkei 225 in Tokyo added 1.7% to 12,820, and Hong Kong's Hang Seng Index added 2.7% to 23,986. In Europe, however, London's FTSE 100, Germany's Xetra Dax and the Paris Cac were all shedding 0.4%.

[setravis]

Bustling Bank Stocks Push Market Higher.......


Into the close...Tuesday...4/1/2008


Stocks in the U.S. blasted higher Tuesday as investors bet that the world's biggest banks are finally nearing the end of the mammoth writedowns that have plagued financial markets since last year.

The Dow Jones Industrial Average barely let up today, surging 393.91 points, or 3.2%, to finish at 12,656.80 -- only 3 points off the Day's high. The S&P 500 vaulted by 47.48 points, or 3.6%, to 1370.18, and the Nasdaq Composite jumped 83.65 points, or 3.7%, to 2362.75.

Breadth was positive. Around 4.75 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 roughly 2.16 billion as winners beat losers 7 to 2.

"What better way to start a new quarter after two lousy ones?" said Steven Sheldon, CFA and principal with SMS Capital Capital Management. "I think there's probably some hopeful buying going on today, that maybe we're finally due for a decent run here, or at least that the worst is behind us."

Owen Fitzpatrick, head of equity strategy with Deutsche Bank Private Wealth Management, pointed out that money managers could be positioning themselves ahead of an expected recovery. "Whether today is a head-fake or not, we will see, but at some point it'll become real. There are a lot of reasons why equities should recover from their lows at year-end," he said.

The beginning of the second quarter saw more financial names predicting they will write down large swaths of bad assets. UBS (UBS:) announced that it will write off $19 billion for the first quarter and take a loss of $11.94 billion. The Swiss bank also said it will raise money by selling $15.1 billion in new shares and that Chairman Marcel Ospel will step down and be replaced by Peter Kurer.

Still, said Fitzpatrick, "I think people are getting comfortable that maybe the peak of the writeoffs is approaching, that maybe this is the quarter where we see the proverbial kitchen sink thrown in."

Richard Yamarone, chief economist with Argus Research, remained cautious. "It would be great if that comes true," he said. "It's almost, ''Ding dong, the witch is dead, nothing but blue skies ahead.'' And I hope that's the case. But hope is an emotion; it's not a strategy, so I would be cautious here. I would accept it as a potential turning point."

As investors nursed those hopes, UBS shares ramped up 14.6%. The stock also got an upgrade to buy from hold at Deutsche Bank, and a JPMorgan analyst suggested that the company is trying to leave its subprime woes behind in order to focus on core operations.

Deutsche Bank (DB:) itself, meanwhile, rose 4.2% despite pegging its first-quarter writedowns at $4 billion.

Similarly, both Citigroup (C:NYSE) and Merrill Lynch (MER:NYSE) spiked even though Goldman Sachs cut bottom-line estimates on each for the first quarter, predicting that more writedowns will force the firms into quarterly losses, according to Bloomberg. Shares added 11.3% and 13%, respectively.

At the same time, Lehman Brothers (LEH:) set plans to offer up to 3.45 million shares of convertible preferred stock, after which shares bounced 17.8% in very heavy trading.

That helped boost the Amex Securities Broker-Dealer Index, which soared 8.6%. The NYSE Financial Sector Index rocketed 6.1%, and the KBW Bank Index was up 7.1%.

"It's interesting to see things rallying in the face of two pretty good-sized writedowns," said Bill Stone, chief investment strategist with PNC Wealth Management. "I think it's come to where people are able to take some of the worst-case off the table because [financial firms] are raising capital ahead of when they need it," he added, referring particularly to Lehman.

Sheldon noted that it's probably premature to proclaim an end to the writedowns, and Fitzgerald concurred, saying that these will "definitely" linger for at least a couple more quarters. He added, however, that the year-over-year comparisons will get much better in the third quarter, the anniversary of when financials began taking massive hits. "The market always seems to react to that even though everyone already knows about it," he said.

Elsewhere, Thornburg Mortgage (TMA:) , climbed 19.8% on word the beleaguered mortgage lender has succeeded in raising $1.35 billion in bonds, warrants and a "participation in certain mortgage-related assets." Thornburg said it will use the $1.15 billion in proceeds to pay off margin calls that had threatened its continued existence last month.

Also brightening the mood were positive nationwide manufacturing data from the Institute for Supply Management. The ISM index came in at a better-than-expected 48.6 in March, indicating a somewhat less severe contraction than the prior month's reading of 48.3. Economists were looking for 47.5.

"Any time you get any slightly better-than-expected news, it's the same as the writeoffs," said Stone. "There's a sigh of relief: ''the world's not ending today.''"

Home-construction spending, meanwhile, slowed its decline to just 0.3% in February, compared with the prior month's slide of 1.7%, according to the Commerce Department. The consensus had called for negative 0.9%.

As traders piled into equities, Treasury prices plummeted. The 10-year note was sinking 1-10/32 in price to yield 3.57%, and the 30-year bond was off 1-31/32 in price, yielding 4.41%.

Commodities also lost ground. Crude oil shed 60 cents to settle at $100.98 a barrel, and gold futures gave up $33.70 to $887.80 as the front-month contract turned over to June.

The U.S. dollar was strengthening significantly earlier in the day but dropped back to $1.5600 against the euro, a fraction worse than yesterday. The greenback erased its gains against the yen, as well, dipping 0.1% to 101.92.

Back on the corporate front, The Wall Street Journal reported that Microsoft (MSFT:NYSE) probably won't sweeten its $44.6 billion takeout bid for Yahoo! (YHOO:NYSE) , according to people close to the company. Microsoft shares rose 4%, while Yahoo! dropped 1.5%.

Fellow tech name Dell (DELL:NYSE) tacked on 2% after saying it will close its Texas desktop-manufacturing plant as part of a three-year push ultimately to save $3 billion a year. The plan also includes more layoffs, as previously announced, which should in the end total at least 8,800.

In notable analyst actions, VMWare (VMW:NYSE) was simultaneously upgraded to outperform at Wachovia and cut to underperform at Credit Suisse. Shares of the software company ended up 6.8%.

Home-furnishing retailer Pier 1 Imports (PIR:NYSE) was upped to buy from hold at Deutsche Bank, bringing shares higher by 9.9%. Wachovia began coverage of Level 3 (LVLT:NYSE) with an underperform rating, and NYSE Euronext (NYX:NYSE) had its price target cut at Jefferies. Level 3 stock closed off 0.5%, but shares of NYSE were better by 7%.

The major overseas markets were climbing. In Asia, Tokyo's Nikkei 225 rose 1%, and Hong Kong's Hang Seng Index added 1.3%. European exchanges, meanwhile, revved up their gains amid the surge in U.S. shares. London's FTSE leapt 2.6%, Germany's Xetra Dax gained 2.8%, and the Paris Cac advanced 3.4%.

[stout7735]

April  Fools !!!!!     

[BigSully1]

April  Fools !!!!!     

HeHe. Maybe Bernanke should have kept his mouth shut!

AP
Bernanke Warns of Possible Recession
Wednesday April 2, 1:31 pm ET
By Jeannine Aversa, AP Economics Writer 
Fed Chief Bernanke Warns Economy May Shrink Over 1st Half 2008 and 'Recession Is Possible'


WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke said Wednesday a recession is possible and policymakers are "fighting against the wind" in trying to steady a shaky economy. He would not say if further interest rate cuts are planned.
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Bernanke's testimony before the Joint Economic Committee of Congress was a more pessimistic assessment of the economy's immediate prospects than a report he delivered earlier this year. His appearance on Capitol Hill came amid a trio of economic slumps in the housing, credit and financial areas.

"It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly," Bernanke told lawmakers. GDP measures the value of all goods and services produced within the United States and is the best barometer of the United States' economic health. Under one rule, six straight months of declining GDP, would constitute a recession.

Bernanke said "a recession is possible" but he also said he expects more economic growth in the second half of this year and into 2009, helped by the government's $168 billion stimulus package of tax rebates for people and tax breaks for businesses as well as the Fed's aggressive reductions to a key interest rate.

"Much necessary economic and financial adjustment has already taken place, and monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year," Bernanke said.

To try to limit the damage, the Federal Reserve has aggressively cut a key interest rate, now at 2.25 percent, to spur buying and investing by individuals and businesses. At the Fed's last meeting in March, however, two members dissented from the Fed's decision to sharply cut rates, showing a rare division in the often unified front the Fed shows the public. The dissenting officials, who had reputations for being extra concerned about inflation, favored a smaller reduction. Although Bernanke said he hopes inflation will moderate in coming quarters, he acknowledged that high energy prices have clouded the inflation outlook.

Many economists had predicted the Fed might drop it key that rate again when it next meets April 29-30, although Bernanke's remarks cast some doubt on that scenario.

"We are fighting against the wind," Bernanke said. The Fed's interest rate cuts and other actions are working their way through the economy and are having the effect of "at least offsetting significantly the headwinds coming from these financial factors," he said.

On Wall Street, stocks initially dropped after the Fed chief's remarks but later turned slightly positive.

Housing, credit and financial woes are threatening to push the country into a deep recession. The situation has emerged as a top concern for presidential contenders and a hot-button issue for Congress. It has thrust the White House and the Fed into crisis-management mode.

Faced with mounting home foreclosures and job losses, Bernanke has been under immense political and public pressure to provide relief and help turn around a faltering economy.

Committee Chairman Sen. Charles Schumer, D-N.Y., peppered Bernanke with questions about the Fed's moves to aid once mighty Wall Street firm Bears Stearns and then juxtaposed that with what he believed was a lack of help to millions of people at risk of losing their homes.

"I hope that you will use your position to jawbone this administration to get behind the housing relief effort before Congress." Schumer said. "Addressing the housing crisis head-on will do as much to instill confidence in the markets as lowering interest rates or bolstering regulatory oversight of wayward mortgage lenders and financial institutions. We need to do all of it."

Sen. John Sununu, R-N.H., countered that government is taking steps to help. "The suggestion that the Fed's taken action but nothing else has been done I think is a little bit misleading," he said.

Bernanke urged Congress to take steps to help bolster the sickly housing market -- a major source of economic stress -- and to aid homeowners in danger of losing their homes.

Many private analysts believe the economy contracted in the first three months of this year, signaling the start of a recession. The government releases first-quarter results later this month. The economy lost jobs in January and February, with many economists bracing for more losses when the report for March is released on Friday. Bernanke said he expected unemployment to move "somewhat higher in coming months."

"Clearly, the U.S. economy is going through a very difficult period," he told lawmakers, adding that all the problems have weighed heavily on consumers whose spending is indispensable to economic vitality.

The Fed also has taken a series of extraordinary steps in recent weeks and months to prop up the nation's financial system, which has been in a state of high jeopardy.

In a controversial move, the Fed backed a $29 billion lifeline as part of JP Morgan's deal to take over the troubled Bear Stearns, the nation's fifth largest investment house, which was on the brink of bankruptcy. Bear Stearns had invested heavily in risky mortgage-backed securities that eventually soured with the collapse of the housing market.

Bernanke defended the move. "With financial conditions fragile, the sudden failure of Bear Stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence," he said. "The damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain."

Although the taxpayers are on the hook for the $29 billion, Bernanke said he was "reasonably confident we'll be able to recover the full amount." He also said that Bear Stearns' investments that the Fed took control of "are entirely investment grade."

The Fed's unprecedented involvement was meant as a one-time event, Bernanke said. "It has never happened before, and I hope it never happens again."

In addition, the Fed -- in the broadest use of its credit authority since the 1930s -- agreed to temporarily let big investment firms obtain emergency financing from the Fed, a privilege that previously had been granted only to commercial banks.

Those actions have prompted criticism from Democrats and others who contend that the Fed is bailing out Wall Street and putting billions of taxpayers' dollars at potential risk. Bernanke and the Bush administration argued that the actions were warranted to avert a potential meltdown in the entire financial system, something that would have devastating consequences for the overall economy.

Asked about the Bush administration's plan to revamp the country's creaky financial system, Bernanke said it was vital for the Fed to have sufficient enforcement powers. Under the plan, the Fed would become a top cop in charge of financial market stability but would lose its day-to-day supervision of U.S. banks.

Joint Economic Committee: http://www.jec.senate.gov