STOCK MARKET WATCH, Thursday 20 October

[ozymandius]

Thursday October 20, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 94 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1764 DAYS
WHERE'S OSAMA BIN-LADEN? 1463 DAYS
DAYS SINCE ENRON COLLAPSE = 1425
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




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

AT THE CLOSING BELL ON October 19, 2005

Dow... 10,414.13 +128.87 (+1.25%)
Nasdaq... 2,091.24 +35.24 (+1.71%)
S&P 500... 1,195.76 +17.62 (+1.50%)
10-Yr Bond... 4.46% -0.02 (-0.40%)
Gold future... 465.80 -8.80 (-1.89%)






GOLD, EURO, YEN, Dollars and Loonie


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Mike Hartman

Relentless Rate Increases from the Fed

At the opening bell stock prices showed weakness across the board as declining stocks outpaced advancers by a four to one margin. The semiconductor sector was hit hard when Intel announced disappointing guidance for fourth quarter sales, and Kraft Foods reported a 13.5% drop in third quarter earnings due to higher commodity and energy costs. In a recent survey conducted by Merrill Lynch & Co., three out of every four U.S. investors believes profit growth for publicly traded U.S. companies will slow in the next 12 months. According to the survey, global investors were the most pessimistic on U.S. stocks in more than six years. High energy costs and rising interest rates are taking their toll on the stock market, but the residential real estate market is still on fire!

The Commerce Department announced housing starts unexpectedly rose in September to 2.108 million annualized units while analysts were calling for a decline to 1.97 million units. Builders broke ground on 2.108 million units and the number looks even stronger when we see the preliminary figures for August were revised higher. Building permits were forecast to decline to a 2.075 million annual rate, but came in much stronger than expected at 2.189 annualized. This is a 32-year high for building permits! The Fed hasn’t been able to take the punch bowl away from the party in real estate because long rates are still not rising significantly, though mortgage rates are beginning to creep higher.

-cut-

Back to the Markets

The stock bulls are now saying, “What a great turn-around for stocks after such a weak opening!” Stocks got a mid-morning bounce with the release of oil inventories from the Energy Department. Crude was expected to build 2.25 million barrels, but the bigger than expected inventory increase came in at 5.6 million barrels according to the Feds, and the API reported a build of 11.3mb. Unleaded gasoline was forecast to decline 1.5mb, but instead grew larger by 2.9mb per the Energy Department, and the API reported a build of 2.8mb. Distillates were forecast to decline 2.3mb, but declined slightly less by 1.9mb, and by 0.9mb according to the API. Clearly the oil numbers were better than expected and worked to push the entire energy complex lower.

-cut-

Overkill by the Federal Reserve

The Fed is being relentless in their mantra to raise interest rates…it came out in their Beige Book today and was reiterated by four more Fed Governors out on the speaking tour. Will they cut off their nose to spite their face??? It looks like the deflation scare a couple years ago was nothing more than a smokescreen for the Fed to inflate, and now they have to deal with the aftermath of an overshoot to the 1% Fed Funds rate. The 1% Fed Funds rate came as a response to the bursting of the stock bubble, but that overshoot to 1% is now getting another overshoot to higher rates when the economy really can’t take it. I will be very curious to see where real estate prices go in a few years if mortgage rates move back to the 8% to 9% area.

more...

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

[ozymandius]

2. Crude Oil Prices Slip Below $62 a Barrel

SINGAPORE - Crude futures fell Thursday on news that U.S. gasoline stocks rose last week and as forecasts predicted Hurricane Wilma will likely avoid key U.S. oil facilities along the Gulf of Mexico coast.

Light, sweet crude for November delivery slipped 41 cents to $62 a barrel on the New York Mercantile Exchange in Asian electronic trading. The contract, which expires Thursday, closed at $62.41 on Wednesday, down 79 cents.

-cut-

Wilma, which weakened slightly to a still-powerful Category 4 hurricane, was centered in the northwestern Caribbean Sea. The Miami-based
National Hurricane Center warned it could re-intensify into a Category 5 storm Thursday, move into the Gulf of Mexico and then swerve east, toward Florida.

But some analysts said it was risky to assume the storm wouldn't disrupt the ongoing recovery of oil and gas operations in and around Texas and Louisiana, and recalled that some traders had discounted the impact of Hurricanes Katrina and Rita too early.

more

[ozymandius]

5. Soaring oil prices a thing of the past?

NEW YORK (CNN/Money) - Oil prices tumbled again Wednesday, and industry experts say $70-a-barrel oil is going the way of warm days and green leaves as crude stocks swell and Gulf refineries start to recover in earnest from last month's devastating storms.

But the experts cautioned that a return to cheap oil -- or even $40 a barrel oil -- is unlikely any time soon.

-cut-

"The market has been kind of playing Russian roulette with the weather," said Mike Fitzpatrick vice president of energy risk management at Fimat U.S.A. in New York. "If the weather stays mild and continues to cooperate, $55 to $56 a barrel is probably reasonable."

Many in the industry put oil's target price over the next three months at somewhere in the mid $50s to mid $60s, but most also said underlying fundamentals such as strong worldwide demand are unlikely to let prices slip too much further.

more...

http://money.cnn.com/2005/10/19/markets/eia_oil/index.htm

[UpInArms]

22. contra-view: Oil guru says crude price could hit $190 this winter

http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=57467&version=1&template_id=48&parent_id=28

OTTAWA: Consumers should brace for crude oil and natural gas prices possibly doubling or tripling this winter, Matthew Simmons, a best-selling author and oil-supply bear, said yesterday.

“Prices are really cheap today and they need to go a lot higher, and they probably will go a lot higher,” Simmons said in Ottawa.

“I am very concerned, given the destructive damage done by (Hurricanes) Katrina and Rita, that the US must be closer to starting to see significant product shortages than we’ve seen since 1979.”

Too much got destroyed and too little has been brought back on stream, the Houston-based analyst said. He also said that cold weather this winter could bring a very high risk of natural gas curtailment in the US.

“Either one of those events (oil product shortage or natural gas shortage) could send prices two to three times higher than they are today,” he said after a speech in Ottawa.

That could translate into natural gas prices of $40 per million British thermal units from more than $13 now, he said. Doubling or tripling crude would put it in the range of $125 to $190 per barrel.

...more...

[UpInArms]

46. Crude falls; natural gas down 2.5% ahead of supply data

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.4248522569-846849080&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (MarketWatch) -- Crude futures fell Thursday morning, extending a two-session decline on the heels of last week's climb in U.S. crude and gasoline inventories and a fall in month-to-month demand for products. November crude was down 61 cents at $61.80 a barrel. The December contract, which becomes the lead-month at the session's end, fell 51 cents to $61. November natural gas was down 35.9 cents at $13.19 per million British thermal units ahead of a U.S. report. Wachovia Corp. expects the data to show a climb of 61 billion cubic feet for last week.

[UpInArms]

49. DOE: NatGas stocks up 75 bln cubic ft

10:31am 10/20/05 U.S. NATURAL GAS STKS UP 75 BLN CUBIC FT: ENERGY DEPT

10:31am 10/20/05 NATURAL GAS STKS TOP 3 TRILLION CUBIC FT, 1ST TIME SINCE DEC

Natural gas drops as much as 5%
Stocks highest since December; crude down 2%

http://www.marketwatch.com/news/story.asp?guid=%7B90C78046%2D8CF1%2D4EE7%2D9508%2DA07088C6B78D%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) -- Natural-gas futures fell as much as 5% Thursday after a government report revealed that domestic supplies of the heating fuel climbed above 3 trillion cubic feet for the first time since mid-December of last year.

November natural gas dropped to a four-session, intraday low of $12.85 per million British thermal units on the New York Mercantile Exchange. It was last at $12.95, down 59.9 cents, or 4.4%.

Supplies of the heating fuel climbed 75 billion cubic for the week ended Oct. 14, the Energy Department said Thursday. Stocks in storage now total 3.062 trillion cubic feet.

The 3 trillion-cubic-foot level is the amount historically seen as adequate to meet heating demand for a normal winter. And supplies haven't topped that mark since Dec. 17, 2004, according to government data.

The weekly inventory climb also surpassed market expectations. IFR was looking for an increase of between 40 billion and 50 billion cubic feet, and Wachovia expected something closer to 61 billion.

Overall, total stocks are down 152 billion cubic feet from the year-ago level but up 53 billion cubic feet from the five-year average, the data showed.

...more...

[UpInArms]

59. Nov Crude @ $60.25 bbl - NatGas @ $12.76 mln btus

11:25am 10/20/05 CRUDE FUTURES DROP TO THEIR LOWEST LEVELS SINCE LATE JULY

11:25am 10/20/05 NOV CRUDE DOWN $2.16 AT $60.25/BRL AFTER $60.20 LOW

11:25am 10/20/05 DEC CRUDE DOWN $1.91 AT $59.60/BRL AFTER $59.40 LOW

11:25am 10/20/05 NOV NATGAS DOWN 5.8% AT $12.76/MLN BTUS

[UpInArms]

88. Nov Crude closes @ $61.03 bbl - NatGas @ $12.977 mln btus

3:02pm 10/20/05 NOV CRUDE FINISHED AT $61.03/BRL, DOWN $1.38, OR 2.2%

2:55pm 10/20/05 NOV NATURAL GAS ENDS AT $12.977/MLN BTUS, DOWN 57.2C, OR 4%

[ozymandius]

63. Oil plunges more than $2

NEW YORK (Reuters) - NYMEX crude oil futures fell more than $2 in late morning trading Thursday after government data showed a larger-than-expected rise in natural gas supplies on top of a big increase in crude oil inventories reported Wednesday.

The threat of Hurricane Wilma to U.S. production in the Gulf of Mexico receded, fueling the downturn.

short blurb

[UpInArms]

67. FERC Chief: Energy Customers Must Reduce Demand this Winter

12:02pm 10/20/05 FERC CHIEF: ENERGY CUSTOMERS MUST REDUCE DEMAND THIS WINTER

OkieDokie!

[UpInArms]

91. U.S. stocks drop as cheaper oil hits energy shares (Big Oil suffers)

:nopity:

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T192111Z_01_N20347004_RTRIDST_0_MARKETS-STOCKS-UPDATE-9.XML

NEW YORK, Oct 20 (Reuters) - U.S. stocks fell sharply on Thursday as a drop in crude oil prices of more than $1 a barrel weighed on shares of big energy companies, including Exxon Mobil Corp. (XOM.N: Quote, Profile, Research)

Dow component Exxon Mobil slid 3.2 percent to $55.30 and Chevron Corp. (CVX.N: Quote, Profile, Research) dropped 4.7 percent to $55.63, both on the New York Stock Exchange.

U.S. crude for November delivery slid $1.38 to settle at $61.03 a barrel, reflecting ample supplies and less concern about damage to oil facilities from Hurricane Wilma, analysts said.

Around midday, the market declined after a report that showed a key U.S. regional inflation measure jumped to a 25-year high. Disappointing quarterly results from Pfizer Inc. (PFE.N: Quote, Profile, Research) also prompted investors to unload some stocks.

The slide follows Wednesday's sharp rally, when the Dow average ended up 128 points.

...more...

[ozymandius]

3. Storms Fail to Hamper Economic Activity

Too early to assess the full impact, I say. -ozymandius

WASHINGTON - Most of the country managed decent economic growth in September and early October even amid soaring energy prices from hurricanes Katrina and Rita, the Federal Reserve reported Wednesday.

The Fed survey, the latest snapshot of business activity nationwide, is based on information collected before Oct. 11 and supplied by the 12 regional Federal Reserve banks. The report will figure into the discussions and decision-making of Fed policymakers at their next meeting on Nov. 1, when it is likely they will continue raising interest rates.

-cut-

The stock market welcomed the Fed report and got a boost from falling crude oil futures as investors overcame their disappointment about Intel Corp.'s earnings and troubling sales forecasts. The Dow Jones industrials gained almost 129 points to close at just over 10,414.

The impact from the hurricanes could be seen everywhere, according to the Fed's survey. All regions reported rising costs for energy, building materials, shipping and other items. Reports from several regions suggested that some of the increased costs are being passed along to consumers in the form of higher retail prices.

more

[UpInArms]

42. (Chopper Ben) Bernanke sees U.S. growth risks from energy prices

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T141052Z_01_WAT004240_RTRIDST_0_ECONOMY-BERNANKE-URGENT.XML

WASHINGTON, Oct 20 (Reuters) - Rising energy costs have had a modest impact on U.S. economic expansion so far but could hurt growth rates if they persist, White House economic adviser Ben Bernanke said on Thursday.

"High energy prices are burdening household budgets and raising production costs, and continued increases would at some point restrain economic growth," Bernanke told a joint economic committee of the U.S. Congress.

<snip>

The big U.S. current account deficit "presents some economic challenges," Bernanke said, calling on other countries to help bridge global trade imbalances.

"Our trading partners must also play a role in reducing imbalances by becoming less reliant on export-led growth and increasing domestic spending, and by allowing their exchange rates to move flexibly as determined by the market," he said.

...more at link...

Huh? Other countries are to become less "export-led"? Isn't that what is supposed to "drive" the US economy? So, is it let the US be "export-led" and everyone else needs to stop that!?!

[hatrack]

44. " . . .sees U.S. growth risks from energy prices" Wow! Really?!?!?

He must be one smart economist!!!!

BTW, why is it "Chopper Ben"? Just curious.

[UpInArms]

47. Chopper Ben - Printing Press Ben -

Helicopter Money

http://images.google.com/imgres?imgurl=&imgrefurl=http://www.idorfman.com/Charts/&h=357&w=289&sz=21&tbnid=UxRTRphicxsJ:&tbnh=116&tbnw=94&start=3&prev=/images%3Fq%3Dhelicopter%2Bmoney%26hl%3Den%26lr%3D%26sa%3DN

[hatrack]

106. Ah, now I understand!

Great compilation of charts, by the way!!

:toast:

[UpInArms]

53. (Chopper Ben) Bernanke says cut spending before raising taxes

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T150702Z_01_WAT004242_RTRIDST_0_ECONOMY-BERNANKE-SPENDING-URGENT.XML

WASHINGTON, Oct 20 (Reuters) - The United States should cut spending on government programs before it considers hiking taxes to raise revenue, a top White House adviser said on Thursday.

White House economic adviser Ben Bernanke also told the Senate-House Joint Economic Committee that recent recessions have been less severe because inflation has been low and steady thanks to the Federal Reserve's focus on price stability.

Bernanke, a former Federal Reserve governor, is regarded as one of the top contenders to succeed Fed Chairman Alan Greenspan when he retires in January.

Bernanke, in response to a question from the panel, also said he does not anticipate foreign holders of U.S. debt will eventually find the investment too risky to hold.

...a bit more...

Bernanke background:

http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/default.htm

excerpt:

What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

[UpInArms]

57. (Chopper Ben) Bernanke says US tax cut delay could impact growth

cornered badgers are dangerous creatures - do I detect a whiff of fear from the WH?

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T151920Z_01_WAT004243_RTRIDST_0_ECONOMY-BERNANKE-TAX-URGENT.XML

WASHINGTON, Oct 20 (Reuters) - U.S. economic growth could be impacted if Congress delays action on two of President George W. Bush's tax cuts and causes uncertainty in the market, a top White House adviser said on Thursday.

"I do think uncertainty and delay, all else being equal, would be costly in the sense that investors would not know what to anticipate," White House economic adviser Ben Bernanke told the Senate-House Joint Economic Committee.

"There would be an increase in uncertainty and there may be some impact on growth" if Congress delays action on the dividend and capital gains tax measures, said Bernanke, the former Federal Reserve governor regarded as one of the top contenders to succeed Fed Chairman Alan Greenspan when he retires in January.

[ozymandius]

4. Nagging doubts

NEW YORK (CNN/Money) - Stocks showed signs of weakness Thursday after a caution on upcoming results from eBay caused another sell-off in the Internet bellwether's shares.

U.S. stock futures were down in early trading, indicating a lower opening for stocks, after eBay (Research) reported a large jump in earnings late Wednesday that met forecasts, but gave fourth-quarter earnings and sales guidance that missed forecasts. Shares of the online auctioneer lost more than 5 percent in after-hours trading.

Earnings reports are due from four Dow components -- Coca-Cola (Research), McDonald's (Research), Pfizer (Research) and SBC (Research), as well as United Parcel Service (Research) and many of the nation's major airlines. Google (Research) reports after the market close.

more...

[UpInArms]

6. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 90.06 Change +0.07 (+0.08%)

Euro Rebounds Against Dollar on Less Optimistic Beige Book Report

http://www.dailyfx.com/index.php?option=com_content&task=view&id=4299&Itemid=39

US Dollar
For our readers who were trading during the European session, the price action was extremely exciting as the EURUSD made a fresh 3 month high and then reversed the entire down move by the open of the US markets. Our US traders on the other hand contended with continued range trading as the dollar sold off in response to a combination of profit taking and bottom fishing by Euro bulls. US housing data released this morning for the month of September was very much in favor of a continued dollar rally with housing starts, building permits and mortgage applications all rising smartly. However, as we have warned, the risk for a housing market slowdown grows as the market becomes even more overextended. The Beige Book report released this afternoon validated our belief that the housing market is already beginning to slow with the New York, Boston, Chicago and Kansas City regions all reporting that homes either remained on the market for a longer period of time or that inventories were increasing. The report in general was slightly less optimistic than the market may have been expecting as the dollar continued to slide in the late afternoon session. Although all districts reported expanding activity, they also noted that the pace of growth was only “moderate or gradual” with local retail sales falling short of expectations and consumer confidence sliding. However, by the same token, all of the districts also reported widespread increases in prices. Not only were gasoline prices higher but goods that may be indirectly affected by energy prices such as building materials and shipping have also increased. As a result, even though the outlook for the economy seems to be softer going into the November 1st FOMC meeting, inflation is still so much of a concern that the report did little to dent rate hike expectations. According to speeches by Fed Presidents Kohn and Pianalto, the rate hikes must go on. Kohn said that the Fed has not reached a point where they can stop raising rates while Pianalto confirmed that the central bank’s best policy is to keep raising interest rates gradually. Therefore any retracements in the dollar will probably me limited to the 1.2050 level against the Euro.

Euro
The Euro is rebounding as the market continues to ponder if the ECB will be delivering its first rate hike in over 2 years in 2006. This morning, an exceptionally strong Eurozone industrial production number helped the EURUSD reverse earlier losses. Although activity in Germany contracted, improvements in France, Italy and Spain more than compensated for the difference. Although any rate hikes will be done with caution, the ECB is already thinking ahead. Chief Economist Issing said yesterday that headline inflation was most likely going to sit above 2.00% for most of next year due to high oil prices. The June 2006 Euribor contracts are already gradually pricing in a higher possibility of a rate hike. As a result, the market is transfixed on when the central bank will makes it first move and if it really is next year whether it will come at a time when the Fed is ready to take a pause. If so, this could be extremely positive for the EURUSD in 2006.

...more...

[UpInArms]

15. BOJ's Fukui: ending current policy not tightening

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T064256Z_01_TKV002263_RTRIDST_0_ECONOMY-JAPAN-FUKUI-TIGHTENING.XML

TOKYO, Oct 20 (Reuters) - Bank of Japan Governor Toshihiko Fukui said on Thursday that ending its "quantitative easing" monetary policy was not the same as embarking on a monetary tightening cycle.

"It's not as if we're headed right into a tightening cycle. It just returns us to a normal monetary policy, in which we use interest rates to take policy steps to reflect the economy," Fukui told a parliamentary committee.

"Therefore I would like you to first understand that an amendment to the quantitative easing framework and rushing immediately into a tightening mode are two very different things."

With consumer prices showing signs they could soon halt more than seven years of slide, expectation is growing that the BOJ will end "quantitative easing", in which the bank floods the money market with surplus funds, as early as early next year.

...a bit more...

[UpInArms]

61. U.S. dollar needs to ease further - BoC's Dodge

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T154901Z_01_TOR000678_RTRIDST_0_ECONOMY-CANADA-USDOLLAR-URGENT.XML

OTTAWA, Oct 20 (Reuters) - The U.S. dollar will need to depreciate over time to help correct global imbalances related to the U.S. trade position, Bank of Canada Governor David Dodge said on Thursday.

"We do see a need for some depreciation of the U.S. dollar over time, but that's to correct the global imbalances that are out there," Dodge told reporters after the release of the bank's Monetary Monetary Policy Report.

[UpInArms]

72. Dollar kept near highs by Fed speeches

http://news.ft.com/cms/s/c4c81c96-414d-11da-a45d-00000e2511c8.html

The dollar was supported near its recent highs by expectations of higher US interest rates bolstered by comments from three Federal Reserve officials suggesting continued tightening of monetary policy.

Sandra Pianalto, Cleveland Fed president, said higher rates may be needed if longer-term inflation expectations build, while Fed Governor Donald Kohn said it was not time to stop increasing rates. Richard Fisher, president of the Dallas Fed, said he would continue to push for policy that kept inflation expectations in check.

Rising risk aversion swelled by inflation worries pushed investors to bail out of equities and take positions short-term in the higher-yielding US money markets. This also buoyed the greenback.

...more...

[UpInArms]

7. Today's Reports (It's MaeveDay!):

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

Oct 20	8:30 AM		Initial Claims		10/15	-	350K	365K	389K	-	
Oct 20	10:00 AM	Leading Indicators	Sep	-	-0.7%	-0.5%	-0.2%	-	
Oct 20	12:00 PM	Philadelphia Fed	Oct	-	15.0	10.0	2.2	-

[UpInArms]

30. Initial claims report:

8:30am 10/20/05 U.S. INSURED EMPLOYMENT RATE 2.3% VS. 2.2%

8:30am 10/20/05 U.S. CONTINUING JOBLESS CLAIMS RISE 36,000 TO 2.89MLN

8:30am 10/20/05 HURRICANE-RELATED FILINGS 40,000 LAST WEEK, 478,000 TOTAL

8:30am 10/20/05 U.S. 4-WK AVG JOBLESS CLAIMS FALL 20,000 TO 376,000

8:30am 10/20/05 U.S. INITIAL JOBLESS CLAIMS FALL 35,000 TO 355,000

last week revised up 1,000 to 390,000

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.3542393519-846833295&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) - First-time filings for state unemployment benefits dropped by 35,000 to 355,000 in the week ending Oct. 15, the Labor Department said Thursday. It's the lowest level since the week of Sept. 3. About 40,000 of last week's new claims were related to Hurricanes Katrina and Rita, a Labor Department spokesman said, bringing the storms' cumulative total to 478,000 new claims. The four-week average of initial claims fell by 20,000 to 376,000, also the lowest since the week Katrina hit. The number of Americans collecting jobless benefits rose by 36,000 to 2.89 million in the week ending Oct. 8, the most since August 2004.

[UpInArms]

39. Leading Indicators fall 0.7% - more "surprised" economists!

10:00am 10/20/05 SLOWER U.S. GROWTH EXPECTED FOR REST OF YEAR: CONF. BOARD

10:00am 10/20/05 U.S. SEPT. LAGGING INDICATORS RISE 0.2%

10:00am 10/20/05 U.S. SEPT. COINCIDENT INDICATORS FALL 0.1%

10:00am 10/20/05 U.S. LEADING INDICATORS DOWN 3 MONTHS IN A ROW

10:00am 10/20/05 U.S. SEPT. LEADING INDICATORS FALL 0.7% V. -0.5% EXPECTED

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.4167806019-846847361&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) - A gauge of future U.S. economic activity declined in September for the third month in a row, indicating slower growth for the rest of the year, the Conference Board said Thursday. The index of leading economic indicators fell 0.7% in September, as the impact of the hurricanes in the Gulf began to be felt in the economic data. It was the biggest decline since March. Economists were expecting the index to fall 0.5%, according to a survey conducted by MarketWatch. The coincident index fell 0.1% in September, the second decline in a row, while the lagging index rose 0.2%.

[UpInArms]

64. Oct. Philly Fed Survey reported at 17.3 - Oopsie on the Prices Rec'd!

12:00pm 10/20/05 OCT. PHILLY FED SURVEY 17.3 VS. 10.4 EXPECTED

12:01pm 10/20/05 OCT. PHILLY FED NEW ORDERS 18.6 VS. -0.5 SEPT.

12:01pm 10/20/05 OCT. PHILLY FED SHIPMENTS 19.5 VS. 13.2 SEPT.

12:01pm 10/20/05 OCT. PHILLY FED PRICES RECEIVED 32.6 VS. 8.6 SEPT

I'd say that there is a whiff of inflation in the "Prices Rec'd"

department!

(edited to add link and blurb)

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.5034780208-846865459&siteID=mktw&scid=0&doctype=806&

WASHINGTON (MarketWatch) -- Manufacturing activity rebounded in the Philadelphia region in October, the Federal Reserve Bank of Philadelphia saied Thursday. The Philly Fed index rose to 17.3 in October from 2.2 in September, ahead of the 10.4 expected by economists. Readings over zero indicate growth. New orders improved to 18.6 from negative 0.5. Shipments rose to 19.5 from 13.2. Prices received increased to 32.6 from 8.6, while prices paid rose to 67.6 from 52.7.

[UpInArms]

75. Key inflation measure hits 25-year high

http://www.washingtonpost.com/wp-dyn/content/article/2005/10/20/AR2005102001059.html

NEW YORK (Reuters) - Factory activity in the U.S. Mid-Atlantic region recovered in October from a post-Katrina slump as new orders jumped, but a key inflation measure spiked to its highest in 25 years, fanning inflation fears.

The Philadelphia Federal Reserve Bank said on Thursday its business activity index rebounded to 17.3 from September's 2.2, well above economists' median forecast for a rise to 10.0.

<snip>

But in October, prices unexpectedly surged higher again, with the key prices paid index jumping to 67.6 from 52.7. That was the highest reading since November 1980, according to the Philadelphia Fed.

<snip>

"Higher prices for final manufactured goods were also more widespread this month, suggesting that higher costs have been passed on to customers," the Philadelphia Fed said.

...more...

[UpInArms]

8. Fed's Pianalto-Current acct deficit not sustainable

http://today.reuters.com/investing/FinanceArticle.aspx?type=economicNews&storyID=URI:urn:newsml:reuters.com:20051019:MTFH46769_2005-10-19_17-37-59_WAT004229:1

COLUMBUS, Ohio, Oct 19 (Reuters) - The United States cannot go on living beyond its means and relying on the savings of foreigners to pay the bill, Cleveland Federal Reserve President Sandra Pianalto said on Wednesday.

"The current account deficit is at a record level, as a percent of GDP (gross domestic product). We're now at 6.5 percent. That is a very large number that cannot be sustained," Pianalto told the Columbus Metropolitan Club after delivering a speech here.

"Action on both the fiscal deficit and our international trade situation have to take place. If they are done in an ordely fashion, they won't be disruptive to our economy," she added.

[UpInArms]

76. Fed's Guynn says Fed can keep inflation in check

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T170527Z_01_WAT004249_RTRIDST_0_ECONOMY-FED-GUYNN-URGENT.XML

ATLANTA, Oct 20 (Reuters) - Atlanta Federal Reserve President Jack Guynn said on Thursday that continuing to lift interest rates to a "neutral" level was appropriate and would help to keep inflation and inflation expectations in check.

But he also said that the U.S. central bank should be alert to surprises to either growth or prices as consumers and businesses adjust to the recent increase in energy costs.

"Clearly, the risks to inflation are elevated, but I believe price increases are likely transitory and will not significantly change the long-term inflation outlook," he told the President's Forum of Atlanta.

"At this point, I believe inflation and inflation expectations will be largely contained by competitive market forces and continuing adjustments to the stance of monetary policy," he said.

...more yada at link...

[UpInArms]

81. Energy may explain slowing business spending-Guynn - US not on sustainable

path.

Wait! What happened to all the "business investment" crap that Meanspin was spewing?

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T175322Z_01_WAT004250_RTRIDST_0_ECONOMY-FED-GUYNN-BUSINESS-URGENT.XML

ATLANTA, Oct 20 (Reuters) - Atlanta Federal Reserve Bank President Jack Guynn on Thursday said a slowdown in business spending may reflect an effort to protect profits as energy costs surged, but that it was too soon to say for sure.

"It's something I think we will have to watch to see whether or not the elevated energy prices, and those cost pressures that come from that, continue to slow the rate of business investment spending," Guynn said in response to a question after speaking to the President's Forum of Atlanta.

Guynn, who moves into a voting seat on the Fed's policy panel next year, also told the group U.S. fiscal policy was not on a sustainable path, expressing concern over both current high deficits and the prospects of larger deficits to come as baby boomers retire.

[UpInArms]

84. Fed has "more work to do" to get to neutral-Guynn

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T183623Z_01_WBT004056_RTRIDST_0_ECONOMY-FED-GUYNN-NEUTRAL-URGENT.XML

ATLANTA, Oct 20 (Reuters) - The Federal Reserve is not yet close enough to the end of its rate-hiking campaign to start clearly signaling this message to financial markets, one of its top policy-makers indicated on Thursday.

"Policy is still accommodative and we have still got some more work to do to get back to a neutral setting" of monetary policy, Atlanta Federal Reserve Bank President Jack Guynn told reporters after delivering a speech here on the economy.

Guynn, who is not a voting member of the Fed's policy-setting committee this year, said that policy was clearly less accommodative than than a year or six months ago. But he declined to pin down what he saw as the the neutral rate -- the level of official interest rates that neither hinders nor helps economic activity.

"There is not some specific numerical point ... to policy neutrality," he said, explaining that it was a dynamic concept that was shaped by forces like growth, growth potential and inflation rates, which the U.S. central bank must constantly assess as it makes policy.

[UpInArms]

9. Refco in 4th Biggest Bankruptcy

http://www.themoscowtimes.com/stories/2005/10/20/260.html

NEW YORK -- Refco, the futures broker under investigation for hiding a $430 million debt, has filed for court protection from creditors in the fourth-largest U.S. bankruptcy.

Shares of Refco plunged, wiping out about $924 million in market value, after the company asked a U.S. bankruptcy court in Manhattan for permission to reorganize its $48.6 billion in liabilities. In the filing, New York-based Refco left out the units it plans to sell to a buyout group led by J.C. Flowers & Co. for $768 million.

Refco's collapse comes 10 weeks after it sold shares to the public for the first time, and may set up a contest between the Flowers group and the government of Dubai, whose offers to purchase the whole company have been rebuffed.

"It's a mess, an absolute mess," said Kevin Starke, who covers distressed and recently bankrupt companies for Weeden & Co. in Connecticut. "The one goal they have to have right away is providing the largest recovery for creditors. You see that Flowers is going to want to lowball them as much as possible. It sounds like he's almost buying the assets for nothing."

...more...

[UpInArms]

10. Leading law firm involved in Refco case

http://news.ft.com/cms/s/e18d0856-40d4-11da-b3f9-00000e2511c8.html

Mayer, Brown, Rowe & Maw - one of the world's top law firms - worked on the loans that were used by Phillip Bennett, the former chief executive of Refco, to disguise his debt of $430m to the brokerage group.

The firm drew up documentation for the loans made to and from Liberty Corner Capital Strategies, a New Jersey-based hedge fund, that were allegedly used by Mr Bennett to hide the true nature of the debt to the group, which collapsed into bankruptcy on Monday.

...more only for subscribers :( ...

[UpInArms]

11. Insiders Collected $1 Billion Before Refco Collapse

http://www.nytimes.com/2005/10/20/business/20refco.html

In the year before Refco sold shares to the public and then promptly made the fourth-largest bankruptcy filing in United States history, insiders at the firm received more than $1 billion in cash, according to the firm's financial statements.

And one insider, Robert Trosten, received $45 million when he left his post as chief financial officer a year ago, according to testimony at an arbitration hearing earlier this year.

A great deal of mystery still surrounds the collapse of Refco, a decades-old firm that conducted billions of dollars in trades in foreign currencies, United States Treasury securities and commodities for more than 200,000 clients last year. But investors and customers who are facing losses in Refco's bankruptcy will certainly want to understand how insiders could drain $1.124 billion from the firm's coffers in the year or so leading up to its demise.

To some degree, the money that insiders took out of the firm is not surprising, given that Refco's executives sold a big stake in the company to Thomas H. Lee Partners, a private equity firm in Boston, in August 2004. Indeed, most of the money insiders received - $1.057 billion - was paid upon the completion of that deal.

Two Refco insiders were on the receiving end of those payouts: Phillip R. Bennett, the former chief executive who has been charged with defrauding investors by concealing a $435 million loan he arranged with the firm, and Tone Grant, Refco's longtime chief executive before Mr. Bennett.

...more...

[salin]

20. It is a sign of how bad things are in DC that this is getting

almost so little coverage in terms of "top stories" on news shows. There are just too many scandals unraveling. But this sounds as bad, if not worse, than the corporate implosions of 2002.

[UpInArms]

21. this is jmho - but perhaps the reason

that the MSM is not saying much about this - is that the "economists" they use as "experts" may be somehow involved - either in recommending this IPO or investing in it with the funds that they are involved in - and now there is too much egg to wipe off to even speak of it?

[salin]

23. that had been true with Enron and Worldcom - but when it got so bad

it suddenly became very frequently discussed.

I would venture an alternative guess - fear of creating another mini panic? Remember the market dropped down to around 7,000 after the worldcom dive... and that was after a recovery after the 911 declines.

[UpInArms]

24. the unspoken words on the MSM are derivatives and hedge funds

there is so much going on with big money players - I just wish I knew the answers but I probably don't even have the questions right.

:(

[salin]

25. I have to run to work

but I have dropped my close attention to some of these strands. Sometime soon perhaps you can fill me in on what is going on with the derivatives and hedgefunds? :hi:

[UpInArms]

27. have a great day salin

and I'll do my best to try to dig out the details

:hi:

[AnneD]

33. Morning Marketeers,

:donut: The 'Stros won:woohoo: :applause: :party: :party: :party:
I have followed the 'Stros since 67 so I am thrilled. I also root for the Cubs-oh well. If Wall St is a casino, hedge funds I think are Keno or Craps. I am a 21 kinda investor gal- simple rules and the odds are the most in my favor. What I remember about hedge funds just seemed too much risk for too little reward (not that I am opposed to risk).
Happy hunting and watch out for the bears.

[UpInArms]

36. from what I think I understand (?) about

derivatives and hedge funds, it appears that these "vehicles" are just stupid made up crap.

No back office paperwork that documents who has what invested where.

Huh?

:wtf:

[UpInArms]

48. here are some charts to study

they just aren't very current :(

[UpInArms]

69. Refco's Demise Stirs Memories of Previous Wall Street Meltdowns

http://quote.bloomberg.com/apps/news?pid=10000103&sid=ajimTaEce1.Y&refer=news_index

Oct. 19 (Bloomberg) -- Refco Inc.'s two-week slide into insolvency stirred memories of the last time a big Wall Street firm teetered, then collapsed -- except it was quicker.

Fifteen years ago, rumors swirled for weeks that Drexel Burnham Lambert Inc. was being targeted by regulators before the 1980s junk-bond financer filed for bankruptcy, author Martin Mayer said. The demise of Refco took just seven days.

``This was very quick,'' said Mayer, who interviewed top Refco executives for ``Markets: Who Plays, Who Risks, Who Gains, Who Loses'' (Norton, 1988). ``There is nothing between Drexel and Refco that is comparable in terms of speed and violence.''

<snip>

Between Drexel and Refco, at least half a dozen major financial companies have melted down. Long-Term Capital Management LP, a hedge fund run by John Meriwether, lost $4 billion in 1998 after a debt default by Russia. Fourteen securities firms and banks organized a $3.6 billion bailout in September of that year to avert the turmoil a forced sale of LTCM's investments would have caused.

Barings Plc, a 233-year-old British merchant bank, collapsed three years earlier after Singapore-based trader Nick Leeson racked up $1.4 billion in losses. That same year, Tokyo- based Daiwa Bank Ltd. was forced to shut U.S. branches after revealing a $1.1 billion loss from 11 years of unauthorized trading by its chief New York government bond trader, Toshihide Iguchi.

...more...

[UpInArms]

12. Refco Owes Jim Rogers Fund $362 Million

http://www.thestreet.com/_googlen/markets/matthewgoldstein/10247967.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

Investment guru Jim Rogers could be one of the losers in the collapse of Refco (RFX:NYSE - commentary - research - Cramer's Take), the scandal-tarred commodities and derivatives brokerage.

A Rogers-managed investment fund is one of the largest unsecured creditors of Refco, according to the bankruptcy petition filed by Refco Inc. in New York.

The Rogers Raw Material Fund is owed more than $362 million, according to the filing. The fund is managed by Chicago-based Beeland Management Co., of which Rogers is majority owner. It trades in a portfolio of exchange-traded commodity futures and forward contracts.

Rogers was not immediately available for comment. An employee with Beeland said the fund's officials were meeting Tuesday to discuss the situation.

Rogers, a frequent guest on television business shows, has written several popular investment books.

...more...

I wonder if Mr. Rogers is one of our "surprised" economists? :eyes:

[punpirate]

45. Sounds as if the mood is...

... downright glum in Mr. Rogers' neighborhood....

[UpInArms]

52. Rogers fund halts Oct. 31 redeptions due to Refco

perhaps that word should be "bleak" instead of "glum"?

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T145455Z_01_N20525668_RTRIDST_0_FINANCIAL-REFCO-ROGERS-URGENT.XML

NEW YORK, Oct 20 (Reuters) - Managers of a fund that tracks a commodities index created by investor Jim Rogers said on Thursday they expected no redemptions to be processed for Oct. 31 since almost two-thirds of the assets are held by a unit of bankrupt Refco.

Beeland Management Co. LLC, a Chicago-based adviser for the Rogers International Raw Materials Fund LP, said it was unsure the fund would sustain any loss on the assets held by Refco (RFXCQ.PK: Quote, Profile, Research) unit Refco Capital Markets, and that it was unable to provide an accurate value of the fund's units.

Beeland said it anticipated no redemptions will be processed for Oct. 31. If Beeland is successful in persuading a bankruptcy court to release the fund's assets, a special redemption date for those investors wishing to redeem their assets will be announced, it said.

Refco, the largest U.S. independent commodities and future brokerage, and certain subsidiaries filed for Chapter 11 bankruptcy protection on Monday, after its chief executive was charged with fraud and the company's stock price collapsed.

...more...

[UpInArms]

13. Refco court documents reveal huge discrepancy

http://business.timesonline.co.uk/article/0,,9063-1834324,00.html

A TOTAL of $32 billion of assets and $32 billion of liabilities were wiped off the balance sheet of Refco, the collapsing commodities trading firm, between February and August this year, it emerged last night.

According to a revised bankruptcy petition published last night by Refco, the company’s assets were listed as $16.5 billion (£9.3 billion), with liabilities of $16.8 billion for the end of August. The firm listed on the New York Stock Exchange on August 11.

However, in its original Chapter 11 bankruptcy filing of Monday night, Refco claimed to have $48.7 billion of assets and $48.6 billion of liabilities as of February 28.

<snip>

The bankruptcy filing also showed that clients of Refco’s over-the-counter trading businesses stand to lose more than $2.5 billion as many of their accounts were held in unregulated parts of the group and are now listed as unsecured debts.

...more...

With discrepancies that large, how can any judge allow the bankruptcy to go to an immediate sale? Would that not allow financial losses in the untold amounts to occur if the accounting is shoddy and shoved through without proper documentation of debts outstanding?

[UpInArms]

14. Thomas Lee May Delay Fund After Refco, Person Says

http://www.bloomberg.com/apps/news?pid=10000103&refer=news_index&sid=aWIjWOKApjE8

Oct. 20 (Bloomberg) -- Billionaire Thomas H. Lee's firm may delay raising a $7.5 billion buyout fund because of losses from the collapse of U.S. futures broker Refco Inc., said a person familiar with his plans.

A fund managed by Thomas H. Lee Partners LP has been Refco's biggest investor for more than a year and sustained losses of more than $275 million in the company's bankruptcy this week. A New York court will hold a second day of hearings on selling Refco assets today. The investment is Lee's worst since his Boston-based firm lost about $400 million on Conseco Inc. after the U.S. insurer filed for bankruptcy in 2002.

Lee, whose company was going to begin fund-raising by the end of the year, is considering whether to put that off, said the person, who declined to be identified. Lee, 61, doesn't plan to be involved personally in raising money or managing the new fund, the person said.

<snip>

Refco, the biggest independent U.S. futures trader, collapsed within a week of announcing former chief executive Phillip R. Bennett had been placed on leave for covering up $430 million of uncollectible debts. Refco shares plunged 45 percent to $15.60 on Oct. 10, the day of the announcement. Refco filed for bankruptcy protection on Oct. 17, and the stock closed at 84 cents yesterday, down 96 percent from the $22 IPO price.

``We're paying a lot of money to general partners to do due diligence, and if this could have been avoided, then Tom Lee is in trouble,'' Atwood said.

...more...

[UpInArms]

26. Refco's collapse underscores risks in derivatives

http://www.post-gazette.com/pg/05292/591299.stm

A month hasn't gone by recently without some regulator or obscure commission sounding an alarm about privately negotiated derivative deals.

If you wade through their speeches and reports, you find out there's a small problem with these fast-growing markets: Traders don't have a clear idea about who ultimately is on the other side of derivative trades that aren't executed on regulated exchanges.

The debacle at Refco, the commodities and securities firm that filed for bankruptcy-law protection this week, gives us all a reason to care about this stuff. So far the spectacularly rapid flameout has been mere spectator sport for most investors. There has been little market fallout. There is good news: Refco doesn't appear to have been a significant broker in the main area of regulatory concern, credit derivatives, where investors buy protection against bond defaults. And the longer the markets go without panicking, the lower the risk.

<snip>

The financial-statement line detailing Refco's receivables (what its customers owed) should have jumped out at investors who read its initial public offering documents. (There must be someone out there who did beforehand, right?) That now-unreliable document said receivables related to "foreign currency and other OTC derivatives transactions" took a gigantic leap to $811 million as of Feb. 28, compared with just $38 million a year earlier. That's Refco's derivatives exposure -- the money it put up to make all those deals go through -- and raises potential risk to entities on the other sides of these trades.

...more...

[UpInArms]

28. Time 'running out' for Refco rescue

http://www.thisismoney.co.uk/news/article.html?in_article_id=404486&in_page_id=2

excerpt:

The Wall Street firms which underwrote the share offering, including Goldman Sachs and accountant Grant Thornton, are also the focus of legal actions.

• THE global hedge fund industry faces a £568m hit from the collapse of Refco.

The black hole could materialise because 11 large hedge funds were significant owners of Refco bonds. Their price has collapsed from 108¼p a week ago to 53¼p last night.

Sizeable players including US-based VR Capital and two funds run by well-known commodities manager Jim Rogers are among the affected funds.

The potential losses will send shock waves across the hedge fund industry, rocked by the similar collapse of Long Term Capital Management in 1998.

Meanwhile Collins Stewart Tullett's £1.5bn sale has been delayed by at a least a month following Refco's collapse. The UK money broker is to offer its three remaining bidders more time to look through its books.

...more...

[UpInArms]

50. (Liberty Corner) Hedge fund says it's not target in Refco criminal probe

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.446150544-846853600&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Hedge fund Liberty Corner Capital Strategies, LLC on Thursday said it's not a target in the criminal inquiry surrounding Refco. The Summit, N.J. firm had been named in reports as the customer in a series of loan transactions with Refco entities. The hedge fund said it's been "advised that neither LCCS nor its principal, William Terrence Pigott, are targets of the criminal investigation into Refco that became public last week." LCCS said it expects to file suit against Bennett and Refco this week, "for damages caused by the deception alleged in the federal criminal complaint."

[UpInArms]

68. What's in a name? Reputation, say Refco watchers

http://today.reuters.com/business/newsarticle.aspx?type=reutersEdge&storyID=2005-10-20T151931Z_01_KWA055069_RTRIDST_0_PICKS-FINANCIAL-REFCO-NAME-DC.XML

excerpt:

The company, the largest independent futures broker whose name is derived from the initials of founder Ray E. Friedman, ran a profitable, regulated, clearing and trading business.

Customers, from individual investors to big hedge funds, gravitated to Refco in part because of its sheer size and market power.

Still, even in what can look like an honor-among-thieves world in the pits, where traders rowdily pick each others' pockets, buying and selling to set prices on commodities and financial derivatives, Refco stood out for having numerous scrapes with regulators and clients over the years.

Refco was fined $250,000 by the Chicago Mercantile Exchange in 1979 for record keeping violations. In 1994 it was fined $1.25 million for using customer funds, which are supposed to be segregated from its own monies, to pay down loans on its books.

The Commodity Futures and Trading Commission also ordered Refco to pay $7 million in 1999 for failing to comply with rules on order taking and record keeping of customer orders, and failing to investigate indications of improper handling of trades.

...more...

[UpInArms]

80. Does Goldman Sachs avoid conflicts of interest?

http://www.post-gazette.com/pg/05293/592031.stm

Consumed by a crisis last week, Refco Inc. turned to a familiar face for emergency advice: Goldman Sachs Group Inc. The Wall Street firm had nine weeks earlier helped oversee a $583 million initial public offering of stock for the commodities broker -- a process that failed to uncover the hidden debts that precipitated Refco's implosion.

With customers fleeing Refco by the hour, a savior emerged: J. Christopher Flowers, a former Goldman banker who counts the bank's asset-management division as an investor. His investment group for the Refco deal includes Silver Point, a hedge fund founded by two other former Goldman partners. And if his bid to buy the firm prevails, Mr. Flowers says he will turn to yet another pair of Goldman alumni to run it.

Goldman's intertwined relationship with Refco comes at a time when Wall Street and the courts are increasingly sensitive to potential conflicts of interest. Experts stress that Goldman did nothing wrong by taking on last week's advisory assignment, but they wonder aloud why Refco would have chosen an adviser that faces potential legal liability for failing to ferret out allegedly fraudulent bookkeeping.

Goldman "is asking for an additional layer of trouble by doing all these roles," said Michael Klausner, a professor of law and business at Stanford University.

...more...

[UpInArms]

16. Pfizer profit tumbles 52%, cuts 2005 guidance

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.2921050463-846818784&siteID=mktw&scid=0&doctype=806&

LONDON (MarketWatch) -- Pfizer Inc. (PFE) said third-quarter net profit tumbled 52% at $1.59 billion, or 22 cents a share, with revenue down 5% at $12.2 billion due to generic drug sales and lower sales of the selective COX-2 inhibitors. Worldwide Lipitor revenue grew 6% at $2.9 billion. Pfizer's adjusted earnings of 51 cents were ahead of analyst forecasts of 48 cents a share, while revenue came in below the $12.5 billion forecast, according to Thomson First Call. Pfizer also cut adjusted EPS to $1.92 to $1.94 range and diluted EPS to a $1.02 to $1.04 range; brokers were looking for $1.98 a share in earnings for the year. It sees more than $600 million in cost savings for the year, and said cost savings will accelerate over the following three years, with about $2 billion in savings targeted for 2006, about $3.5 billion in 2007, and about $4 billion upon completion in 2008. The cost savings will cost $4 billion to $5 billion.

[UpInArms]

18. Ford posts quarterly loss as SUV sales decline

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T110201Z_01_WAA000105_RTRIDST_0_AUTOS-FORD-EARNS-URGENT.XML

DETROIT, Oct 20 (Reuters) - Ford Motor Co. (F.N: Quote, Profile, Research) on Thursday said it swung to a loss in the third quarter as sales of high-margin sport utility vehicles declined and its key North American unit remained in the red.

The No. 2 U.S. automaker, facing a deepening financial crisis, reported a net loss of $284 million, or 15 cents per share, compared with a profit of $266 million, or 15 cents a share, a year earlier.

Excluding special charges, the company lost $191 million, or 10 cents a share. On that basis, analysts' average forecast was a loss of 9 cents a share, according to Reuters Estimates.

Ford and cross-town rival General Motors Corp. (GM.N: Quote, Profile, Research), which reported a $1.6 billion quarterly loss earlier this week, have seen their margins squeezed by intense competition in the U.S. market and a dramatic slowdown in sales of profitable mid-size and large SUVs amid high gasoline prices.

...more...

[UpInArms]

35. Ford Motor plans "significant plant closings"

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T131805Z_01_N20303028_RTRIDST_0_AUTOS-FORD-RESTRUCTURING-URGENT.XML

DETROIT, Oct 20 (Reuters) - Ford Motor Co. (F.N: Quote, Profile, Research) Chairman and Chief Executive Bill Ford Jr. said on Thursday the automaker will announce a restructuring plan in January that will include "significant plant closings."

"Our industry is beginning a dramatic restructuring which is sorely needed," Bill Ford said on a conference call. "We have some difficult days ahead of us."

"We need a dramatically different business structure," he added.

...very short newstory...

[ozymandius]

65. longer story

DETROIT (Reuters) - Ford Motor Co. (NYSE:F - news) on Thursday said it swung to a loss in the third quarter as sales of sport utility vehicles declined, and Chief Executive Bill Ford Jr. warned of "significant plant closings" to help slash costs in North America.

The quarterly loss, the first for Ford since the fourth quarter of 2003, follows a protracted decline in the company's U.S. market share and deepening financial woes. U.S. sales of Ford vehicles are down 1.3 percent so far this year despite a massive discount program that helped clear inventory of unsold vehicles.

Ford and cross-town rival General Motors Corp. (NYSE:GM - news), which reported a $1.6 billion quarterly loss earlier this week, have seen their margins squeezed by intense competition in the U.S. market and by a dramatic slowdown in sales of mid-size and large SUVs, their former cash cows, due to high gasoline prices.

The companies are also struggling with higher costs and a cut in their credit ratings to high-yield, or "junk," status this year.

more

[UpInArms]

41. New Ford advertising campaign

http://www.freep.com/money/autonews/fordads20e_20051020.htm

excerpt:

The new corporate ads try to convey that change to consumers -- tugging at patriotic heartstrings and growing public concerns about fuel economy. One ad lasts 30 seconds and the other 60 seconds.

Some television viewers got a sneak preview Tuesday night, when the ads were accidentally aired during a "Seinfeld" rerun on TBS. However, the ads are slated to officially kick off today during popular network and cable TV shows.

In the ads, Bill Ford, the 48-year-old great-grandson of company founder Henry Ford, casually sits on a stool in an auto design studio, looks into the camera and talks about the company's commitment to "American innovation" and environmentally friendly vehicles that are powered by hybrid gasoline-electric engines or those that can run on ethanol. Ethanol is made from grain, which can be grown in the United States.

Ford says he is "dramatically ramping up" that commitment to get "this country less dependent upon foreign oil."

<snip>

The U.S. flag is on display in many of the scenes, and emotional music plays in the background.

...more...

[UpInArms]

29. Dana Corporation cutting staff (5%) and closing 2 factories (645 jobs)

8:24am 10/20/05 DANA TO CUT 5% OF SALARIED STAFF THROUGH 2006

8:23am 10/20/05 DANA SEES RESTRUCTURING SAVINGS STARTING IN 2ND-HALF 2007

8:22am 10/20/05 DANA EXPECTS $9M PRETAX CHARGE IN Q4

8:20am 10/20/05 DANA TO CLOSE TWO VIRGINIA FACTORIES

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.3532043981-846833170&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Dana Corp. (DCN) Thursday said its board has approved a number of restructuring activities that will put the company's focus on light- and heavy-vehicle drivetrain products, associated structures, sealing, and thermal products. The company plans to divest three non-core businesses - hard parts, fluid products, and pump products - that currently employ about 9,800 people and logged revenue of about $1.3 billion in 2004. Dana expects to record charges of about $315 million in 2005 related to the reduction of these assets to fair value. Also, Dana plans to close two facilities in its automotive systems group, and shift certain production lines to other locations. In addition, the company is eliminating its employee stock purchase plan, reducing its shares of the cost of U.S. medical benefit plans, and suspending matching contributions of employee long-term savings plans in the U.S. and Canada. The stock closed Wednesday at $7.56, up 8.5%.

edited to add the following:

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T124311Z_01_WEN1664_RTRIDST_0_AUTOS-DANA-RESTRUCTURING-URGENT.XML

excerpt:

The Toledo-based company said it expects to take various charges under the plans. Plant closings and consolidations are expected to cut 645 employees and the company plans to cut the salaried work force through 2006 mainly through attrition.

...more at link...

[UpInArms]

51. Allstate shares slip after $1.55B loss (from Katrina)

http://www.marketwatch.com/news/story.asp?guid=%7BEE8C4310%2D1C43%2D438F%2DBFBE%2D1029CEA4193C%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) -- Allstate Corp. shares slipped Thursday after the second-largest U.S. property and casualty insurer reported a $1.55 billion quarterly loss late Wednesday as it absorbed multiple hits from Hurricane Katrina and other storms.

Allstate stock declined 1.7% to $53.46 in early morning trading on Thursday.

The company said it lost $1.55 billion, or $2.36 per share, in the period, versus net income of $56 million, or 9 cents a share, a year earlier.

The insurer also reported operating results, which exclude net realized investment gains and losses and other items. On that basis, Allstate said it lost $1.65 billion, or $2.52 per share, in the third quarter.

Allstate was expected to lose 68 cents per share in the period, according to a survey of 21 analysts in a Thomson First Call survey. However, because of uncertainty surrounding Katrina losses, estimates ranged from a profit of $1.59 per share to a loss of $2.85 a share.

...more...

I had heard that Allstate had not put any reinsurance on their louisiana policies. hmmmm...

[UpInArms]

85. S&P cuts Eastman Kodak deeper into junk

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T181511Z_01_WNA0599_RTRIDST_0_LEISURE-KODAK-SANDP-URGENT.XML

NEW YORK, Oct 20 (Reuters) - Standard & Poor's on Thursday downgraded Eastman Kodak Co. (EK.N: Quote, Profile, Research) deeper into junk territory, citing reduced confidence with the company's profitability and cash flow prospects.

The downgrade reflects "ongoing and rapid deterioration of its traditional consumer imaging business, the unproven profit potential of its emerging digital imaging businesses, high cash restructuring costs, and economic uncertainty," S&P said.

S&P lowered Kodak's corporate credit and secured bank loan ratings one notch to "B-plus," four levels below investment grade. The credit ratings agency also lowered Kodak's senior unsecured debt one notch to "B," its fifth highest junk rating.

...more...

[UpInArms]

17. Chinese GDP grows 9.4 percent

http://edition.cnn.com/2005/BUSINESS/10/19/china.economy.reut/

BEIJING, China (Reuters) -- China's gross domestic product in the third quarter of 2005 grew 9.4 percent from a year earlier, marking the ninth successive quarter of annual growth of 9 percent or higher, the National Bureau of Statistics has said.

Economists had expected growth of 9.3 percent.

The government is striving to maintain high growth while rebalancing the mix. It wants to promote domestic demand, especially consumption, in order to reduce China's reliance on investment and exports and stifle U.S. criticism of its swelling trade surplus.

"The nation's economy has continued to develop towards the target of macro-regulation as a good momentum of steady and rapid growth is maintained," the NBS said in a statement.

"Nevertheless, there are still problems existing in economic performance, including a weak foundation in agriculture, insufficient improvement in grain production and farmers' incomes, an oversized and unbalanced structure of fixed-asset investment, a noticeable foreign trade imbalance, and a relatively big fall in profits in some industrial companies," it said.

...more...

[UpInArms]

19. U.S. Insurers, Retailers, Realtors Mobilize to Save Tax Breaks

http://www.bloomberg.com/apps/news?pid=10000103&sid=aX1pz6diiFHE&refer=us

Oct. 20 (Bloomberg) -- Even before President George W. Bush's tax advisory panel has put its proposals on paper, business lobbying groups are fighting recommendations that may threaten their special breaks.

Within hours of the panel's Oct. 18 announcement of two proposals to rewrite current law, the National Association of Realtors protested proposed limits on mortgage interest deductions. The American Council of Life Insurers complained that plans to expand untaxed savings accounts would erode tax advantages of their products, such as annuities. And the National Retail Federation said one of the proposals would cause the price of imported goods to spike.

``The groups that would be opposed are strong enough to derail this,'' former Internal Revenue Service Commissioner Donald Alexander, now a partner with Akin, Gump, Strauss, Hauer & Feld in Washington, said of the panel's plan.

One of the two plans embraced by the tax panel would simplify the existing income tax system; the other would replace it with a modified flat tax. Both would eliminate many popular deductions, sharply reduce levies on investment income and fundamentally reorder business tax rules.

`Human Nature'

The interest groups that are mobilizing against the proposals have a successful record of defending their tax status and have powerful allies in Congress. They collectively contributed more than $74 million to lawmakers' campaigns in the 2004 election, according to public disclosure filings analyzed by the Center for Responsive Politics, a Washington-based campaign-finance research group.

...more...

[UpInArms]

31. Printing Press: Fed adds temporary reserves via 14-day RPs

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T122637Z_01_N20515612_RTRIDST_0_MARKETS-FED-OPERATIONS.XML

NEW YORK, Oct 20 (Reuters) - The Federal Reserve said on Thursday it was adding temporary reserves to the banking system through 14-day system repurchase agreements.

The benchmark federal funds rate last traded at 3.75 percent, at the Fed's target for the overnight lending rate.

Further details of the operations are available at: http://www.ny.frb.org/markets/omo/dmm/temp.cfm

See for recent Fed open market operations.

[UpInArms]

32. Treasurys briefly extend decline after jobless claims data

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.3640076273-846835575&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- An already lower 10-year Treasury note briefly extended its decline, but just as quickly pared that loss, following the release of a mixed weekly report on jobless benefit applications. Claims in the week ended Saturday fell by 35,000 to 355,000, according to a report still showing the effects of Hurricanes Katrina and Rita. "The data should add to the upward pressures on the dollar and Treasury yields if only marginally," said analysts at Action Economics. The 10-year note fell by 7/32 after the report. It was since trading down 4/32, shedding about $1.25 for each $1,000 in securities, to 98 5/32. The note was yielding ($TNX) 4.49% vs. 4.47% Wednesday.

[UpInArms]

43. Treasurys further trim decline after leading indicators data

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.4325954977-846850836&siteID=mktw&scid=0&doctype=806&

CHICAGO (MarketWatch) -- The benchmark Treasury note trimmed its decline following release of an index future U.S. economic activity that declined for the third month in a row. The data signal slower growth for the rest of the year, the Conference Board said. The note was last 2/32 lower at 98 7/32, yielding ($TNX) 4.48% vs. 4.47% Wednesday.

[UpInArms]

71. Weakened Treasurys fall more on strong Philly Fed index

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.5085049653-846866545&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

CHICAGO (MarketWatch) -- The benchmark 10-year Treasury note extended its price decline after the release of a Philadelphia-area manufacturing gauge that topped estimates with its strong rebound in October from a month earlier. The 10-year government note was last 5/32 lower at 98 4/32, yielding ($TNX) 4.49% vs. 4.47% Wednesday. The Philly Fed index rose to 17.3 from 2.2. The report's inflation components also proved bond-negative. Prices received increased to 32.6 from 8.6, while prices paid rose to 67.6 from 52.7.

[UpInArms]

58. Holy Shit! Printing Presses on Overdrive! $36 BILLION on Monday

U.S. Treasury Dept to sell $36 bln bills on Monday

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T151834Z_01_WBT004054_RTRIDST_0_ECONOMY-BILLS-URGENT.XML

WASHINGTON, Oct 20 (Reuters) - The U.S. Treasury Department said on Thursday it will sell $19 billion of three-month bills and $17 billion of six-month bills on Monday, Oct. 24.

The bills will be issued on Thursday, Oct. 27.

Proceeds from the sale will be used to refund an estimated $32.74 billion of publicly held 13- and 26-week bills maturing Oct. 27 and to raise about $3.26 billion of new cash.

The three-month bills mature on Jan. 26, while the six-month bills mature on April 27.

Treasury said $5.80 billion of the three-month bills can be excluded when bidders calculate their net long positions. The net long reporting threshold for the three-month bills is $6.65 billion and for the six-month bills it is $5.95 billion.

...more...

[UpInArms]

60. Printing Another notch higher: U.S. to sell $7 billion of 5-yr TIPS Oct.25

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T154323Z_01_WBT004052_RTRIDST_0_ECONOMY-TIPS-URGENT.XML

WASHINGTON, Oct 20 (Reuters) - The U.S. Treasury on Thursday said it will sell $7 billion of reopened 4-year 6-month 7/8 percent inflation-protected securities (TIPS) on Oct. 25.

The notes will be issued on Oct. 28.

Treasury changed the issue date from Monday Oct. 31 to address original issue discount requirements, officials said.

The bills mature April 15, 2010. Treasury said $7.10 billion of the notes can be excluded when bidders calculate their net long positions. The net long reporting threshold for the notes is $2.45 billion.

...more...

[UpInArms]

34. pre-opening blather

9:02AM: S&P futures vs fair value: -2.6. Nasdaq futures vs fair value: -3.0. Equities continue to head towards a moderately lower open. Traders await a pair of economic items - Sept. leading indicators data (consensus -0.5%) at 10:00 ET and the Oct. Philadelphia Fed Index (consensus 10.0) at noon - and may remain somewhat cautious ahead of a triple dose of Fed-speak. Officials speaking today include St. Louis' Poole at 9:45 at an economic policy conference, Atlanta's Guynn on the economic outlook at 13:30, and Richmond's Lacker on rate policy "After Greenspan" at 19:00. In addition, investors eye a heavy post-close earnings docket, which includes Google's (GOOG) Q3 report.

8:33AM: S&P futures vs fair value: -2.4. Nasdaq futures vs fair value: -2.0. The stage remains set for a flat to slightly lower start for stocks. The market's attention continues to rest upon the influx of third quarter earnings reports, but relatively disappointing Q4 and FY05 EPS guidance from eBay (EBAY) has stolen some of the spotlight. In early trading, EBAY shares have plunged 6.1%, despite the company's better than expected Q3 EPS ($0.28 vs. $0.27 consensus) announced last night. Separately, initial claims fell to 355K (consensus 365K) - reflecting a healthy drop from the prior week's 390K.

8:02AM: S&P futures vs fair value: -2.2. Nasdaq futures vs fair value: -1.5. Versus fair value, futures trade is currently flat to modestly lower as traders sift through a fresh heap of Q3 earnings reports. Thus far, about two-thirds of the morning reporters have exceeded expectations - inlcuding Coca-Cola (KO), SBC Communications (SBC), Eli Lilly (LLY), Southwest Airlines (LUV), Jet Blue (JBLU), XTO Energy (XTO), and Whirlpool (WHR). While Pfizer (PFE) makes the list, its downside FY05 guidance and withdrawn FY06 and FY07 forecasts have weighed upon early sentiment. Last night, Amgen (AMGN), E*Trade (ET), Juniper Networks (JNPR), and QLogic (QLGC) beat respective consensus estimates, but in-line FY05 guidance from Amgen has further helped keep early buying activity in check.

[UpInArms]

37. 9:32 opening in the pink

Dow 10,413.56 -0.57 (-0.01%)
Nasdaq 2,090.34 -0.90 (-0.04%)
S&P 500 1,194.18 -1.58 (-0.13%)
10-Yr Bond 4.482 +0.19 (+0.43%)

NYSE Volume 44,537,000
Nasdaq Volume 46,048,000

[UpInArms]

40. 10:03 EST Who Cares about reality? Let's buy!

Dow 10,418.28 +4.15 (+0.04%)
Nasdaq 2,090.50 -0.74 (-0.04%)
S&P 500 1,195.05 -0.71 (-0.06%)
10-Yr Bond 4.484 +0.21 (+0.47%)

NYSE Volume 314,349,000
Nasdaq Volume 271,198,000

(updating blather on edit)

10:05AM: The indices vacillate around each side of the flat line...

Seven of ten economic sectors have begun the day on positive footing, with Telecommunications' 1.1% gain leading the Materials (+0.7%), Consumer Staples (+0.5%), Technology (+0.4%), Consumer Discretionary (+0.3%), Financials (+0.3%), and Industrials (+0.1%) sectors. Energy has slumped 0.6%, pushed lower by a 1.2% pullback in the price of crude ($61.69/bbl), but it's Healthcare that has moved into the laggard's seat this morning. Off 1.3%, the sector suffers a 6.3% plunge in Pfizer (PFE 22.47 -1.50) shares and a 3.3% decline in Amgen (AMGN 75.12 -2.97). As Pfizer's guidance has spurred selling, so is the case with Amgen. Following yesterday's close, the biotech delivered Q3 EPS $0.03 ahead of expectations - as did Pfizer- but disappointed the market with an in-line FY05 outlook. Separately, leading indicators for Sept. checked in at -0.7% (consensus -0.5%).NYSE Adv/Dec 1286/1360, Nasdaq Adv/Dec 1217/1119

9:45AM: The market opened on the upside, sending each of the indices to modest early gains...

Third quarter earnings reports continue to rush in; although about two-thirds of the morning's reporters have surpassed analystys' estimates, traders' focus rests upon disappointing guidance issued by Pfizer (PFE) and eBay (EBAY), and subsequent 7.0% and 2.4% tumbles in respective shares have helped limit the market's advance in the early going. While Pfizer reported EPS $0.03 ahead of expectations, the company announced downside FY05 guidance and withdrew FY06 and FY07 forecasts. eBay, meanwhile, matched analysts' EPS estimate but announced lower than anticipated Q4 and FY05 EPS outlooks. Solid reports from SBC (SBC) and Coca-Cola (KO) may, however, help support the market. Although it is a bit early for a sustained earnings season rally, yesterday's 1.3%, 1.5%, and 1.7% respective rises in the Dow, S&P, and Nasdaq helped the market tone, and the progression of the Q3 earnings season could further attract buyers.

[UpInArms]

38. Dec Gold @ $466.60 oz at open

9:45am 10/20/05 DEC GOLD CLIMBS 80C TO $466.60/OZ IN MORNING NY TRADE

9:45am 10/20/05 DEC COPPER UP 2% AT $1.844/LB AFTER RECORD $1.858

[UpInArms]

54. Mortgage Rates on the rise

11:01am 10/20/05 FREDDIE MAC: 1-YR ARM IS HIGHEST SINCE JULY 2002

11:01am 10/20/05 FREDDIE MAC: LONG-TERM RATES UP TO HIGHEST LEVEL IN 15 MOS.

10:59am 10/20/05 FREDDIE MAC: 1-YEAR ARM AVERAGES 4.89% VS 4.85%

10:58am 10/20/05 FREDDIE MAC: 30-YEAR MORTGAGE AVERAGES 6.1% VS 6.03%

10:59am 10/20/05 FREDDIE MAC: 15-YEAR MORTGAGE AVERAGES 5.65% VS 5.62%

[UpInArms]

56. U.S. LONG-TERM MORTGAGE RATES ARE HIGHEST IN 15 MONTHS

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.4689937153-846858401&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

SAN FRANCISCO (MarketWatch) -- Freddie Mac (FRE) said that long-term rates are at the highest level in 15 months, and the one-year, Treasury-indexed adjustable rate is at its highest level since July 2002 in the week ending Thursday. The benchmark 30-year fixed-rate mortgage average rose to 6.1% from 6.03% a week ago. The mortgage agency said its weekly survey also showed a rise in the 15-year loan, to 5.65% from 5.62%, and the one-year ARM, which averaged 4.89% vs. 4.85% a week earlier. The five-year hybrid ARM also rose, to 5.59% from 5.57% a week ago. "Despite the gradual rise in mortgage rates over the last two months, housing starts were actually up in September highlighting the resiliency of the housing market," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.

[UpInArms]

73. US 30-year mortgage rates up 6th straight week

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T162757Z_01_N20327506_RTRIDST_0_ECONOMY-MORTGAGES.XML

WASHINGTON, Oct 20 (Reuters) - Average U.S. interest rates on 30-year mortgages continued a climb that began in September, reaching 6.10 percent in the week ending Oct. 20, mortgage finance company Freddie Mac said on Thursday.

The last time interest rates on 30-year mortgages were higher was during the week of July 1, 2004, when they averaged 6.21 percent. Last week's rate averaged 6.03 percent.

Freddie Mac said fifteen-year mortgages rose to an average of 5.65 percent from 5.62 percent last week, while one-year ARM mortgages averaged 4.89 percent, also up from 4.85 percent.

A year ago, 30-year mortgage rates averaged 5.69 percent, 15-year mortgages 5.07 percent and the ARM 4.02 percent.

...more...

[UpInArms]

55. 11:19 EST numbers and blather

Dow 10,394.36 -19.77 (-0.19%)
Nasdaq 2,083.73 -7.51 (-0.36%)
S&P 500 1,190.47 -5.29 (-0.44%)
10-Yr Bond 4.475 +0.12 (+0.27%)

NYSE Volume 825,841,000
Nasdaq Volume 623,544,000

11:00AM: A report that indicated natural gas inventory rose 75 bcf to 3062 bcf, well ahead of the expected 55 bcf rise, has injected a bit of steam into the market. Upon initial digestion of the better than expected build - which follows yesterday's better than anticipated energy supply report from the EIA - natural gas prices (-$0.6290 $12.9200) have plunged 4.9%. In addition, crude has fallen 3.1% and reached a session-low $60.50/bbl while gasoline futures also head south. Alongside the energy action, retailers have jumped, pushing Consumer Discretionary 0.3% higher. Conversely, the Energy's sector's decline has been exacerbated, and its 1.9% loss helps to cap overall upward efforts.NYSE Adv/Dec 1184/1734, Nasdaq Adv/Dec 1080/1548

10:30AM: With split sector standing and 1.4% declines in Energy and Healthcare, the market's majors tread below the unchanged mark...

At the same time, the Telecommunications sector (+1.6%) runs further north, fueled by an earnings-induced surge in SBC Communications (SBC 23.10 +0.69) and ensuing buying interest that has lifted each of the S&P's telecom issues. This morning, the Dow component delivered Q3 earnings of $0.41 per share, with which it beat analysts' expectations by $0.06. The report follows yesterday's upgrade by Lehman Brothers - to Overweight from Equal Weight - and has fostered a 3.1% rise that pairs with Coca-Cola (KO 42.62 +0.82) to lead the Dow. At this point, however, Pfizer's loss overshadows gains extended by SBC, KO, and 13 other constituents, leaving the Dow on negative turf. Separately, SBC's strength has helped the Tech sector (+0.1%) maintain a modest gain.NYSE Adv/Dec 1083/1698, Nasdaq Adv/Dec 1137/1324

[ozymandius]

62. just before lunchtime

11:58
Dow 10,396.52 -17.61 (-0.17%)
Nasdaq 2,083.51 -7.73 (-0.37%)
S&P 500 1,190.47 -5.29 (-0.44%)
10-Yr Bond 44.78 +0.15 (+0.34%)
NYSE Volume 1,037,393,000
Nasdaq Volume 748,683,000

11:30AM: Joining the S&P and Nasdaq, the Dow returns to the red...

Helping to limit the bluechip average's slide, though, is Coca-Cola (KO 42.64 +0.84), and, on the back of its third quarter earnings report, the Consumer Staples sector has maintained its positive stance over the course of the morning. With earnings of $0.57 per share, the Dow component surpassed analysts' estimates by $0.04, while also reporting higher than expected sales. To that end, the S&P's softdrink segment offers a 1.4% gain and has risen to the market's top-ten list. Extending further support within the Staples sector are drug retailers; most notably, CVS (CVS 26.54 +0.53) has jumped 2.0%. NYSE Adv/Dec 1206/1794, Nasdaq Adv/Dec 1131/1605

[ozymandius]

66. Credit cards quitting rate-bumping game (good news)

Credit card issuers are pulling back from the controversial practice of raising customers' interest rates because of missteps with other creditors.

Under so-called universal default policies, issuers can raise an interest rate if a card holder pays a mortgage or utility bill late, their credit score drops or they inquire about a car loan. Nearly 45% of credit card issuers had universal-default policies earlier this year, up from 39% two years ago, says advocacy group Consumer Action.

Some issuers are changing their policies. Citibank now lets customers opt out of the rate increase and use the card on its old terms until the expiration date. Chase no longer raises rates if card holders pay late on another bill but could still do so if credit scores drop.

Discover has removed the language from its card holder agreements, and American Express, after testing the policy on a small group of consumers last year, decided not to move forward.

more

[roguevalley]

70. thank you. I appreciate these posts. Armageddon is coming and

all I can do is watch.

[ozymandius]

74. I share your sentiment.

Ever since the Supreme Court annointed Bust to be our president - I feel like a witness to a four-year-long economic train wreck.

[UpInArms]

77. 1:14 EST numbers and blather

Dow 10,385.40 -28.73 (-0.28%)
Nasdaq 2,084.31 -6.93 (-0.33%)
S&P 500 1,190.77 -4.99 (-0.42%)
10-Yr Bond 4.467 +0.04 (+0.09%)

NYSE Volume 1,398,515,000
Nasdaq Volume 1,003,159,000

1:00PM: The indices have stood static over the past half hour, little affected by the latest read on regional manufacturing. The October Philadelphia Fed index checked in at 17.3, up from 2.2 in September and above the 10.0 economists had expected. New orders rebounded sharply, to 18.6 from the 0.5 decline in the prior month, as shipments rose to 19.5 and employment jumped to 17. Further evidence of a strong economy, and another strong rise in prices paid - to 67.6 - alongside a 24 point jump in prices received - to 32.6 - did not help the Treasury market today. Stirred rate-hike concerns may also be serving as a further drag on the stock market's sentiment this afternoon.NYSE Adv/Dec 1093/2022, Nasdaq Adv/Dec 1086/1767

12:30PM: Further fading, each of the major averages touch fresh session lows. Amid weakness in REITs, the Financial sector has recently headed into the red and dragged the overall market with it. Virtually all of the S&P's REIT issues are swinging lower, but Vornado Realty's (VNO 80.53 -1.22) 1.5% loss weighs heaviest. Insurers serve as an additional sore spot, pairing with REITs to offset extended strength in banks.NYSE Adv/Dec 1061/2024, Nasdaq Adv/Dec 1035/1799

[plasticsundance]

78. Why the Fed has no other Alternative but to print Money!

Before I post this informative article ... in my humble opinion ... I must ask ozymandius and UpInArms a question: How early do you guys get up? The times that you guys start posting is the time I'm still having a probe done by the proctologist aboard the alien spacecraft that abducted me?

Regardless of the answer, thanks for all the hard work. I do look forward to reading this thread each day at DU, and I learn so much. Thanks again.

:toast:

Why the Fed has no other Alternative but to print Money!

There is one condition under which deflation is a disaster and this is when total credit market debt is high as a percentage of the economy (see figure 1)

When debts are as large as there are now, deflating prices and especially deflating asset prices would wreck havoc in the economic system and lead to massive defaults and bankruptcies. I may add that, as can be seen from figure 1, between 1950 and 1980 the debt to GDP remained largely constant. But after 1980, and in particular after Mr. Greenspan became Fed chairman in 1987, debt to GDP exploded. Therefore, it is not deflation that is the problem, but the preceding debt inflation for which the Fed's expansionary monetary policies are fully responsible. So, having created a monetary and debt monster, the Fed embarked starting 2001 in a huge money printing operation in order to avoid deflation. Figure 2 shows that following year 2000, MZM as percentage of GDP exploded (see figure 2).

[UpInArms]

79. Hiya plasticsundance!

That looks more like a monumental hangover than a monetary overhang!

And now my head really hurts :crazy:

I'm not sure when Ozy starts moving around - but all I can say about me is that I have very disturbed sleep patterns. I rise anywhere from 4 to 6:30 and sleep anywhere from midnight to 1:30. Been that way for my whole life (and I am not sharing age info)

Thanks for the post :hi:

[UpInArms]

96. interesting item about the Fed Reserve

found in a CNN fluff piece on Meanspin:

http://money.cnn.com/2005/10/20/news/economy/fed_greenspan/

excerpt:

Barring a national crisis that leads the president to commandeer the Fed to fund the federal deficit, as happened during World War II -- the kind of thing even a Greenspan couldn't stop -- there's no reason to think the Fed's priorities will change.

hmmmm.... :think:

[UpInArms]

82. 2:18 EST numbers (getting redder) and blather

Dow 10,348.82 -65.31 (-0.63%)
Nasdaq 2,077.44 -13.80 (-0.66%)
S&P 500 1,185.61 -10.15 (-0.85%)
10-Yr Bond 4.463 0.00 (0.00%)

NYSE Volume 1,679,127,000
Nasdaq Volume 1,187,474,000

2:00PM: As each of the indices - and all of the sectors - move lower, the Materials sector (+0.4%) manages to maintain its positive footing and stand as the market's current leader. Supporting its stance is an A.I. DuPont (DD 39.55 +0.94) and Rohm & Haas (ROH 42.11 +1.22) pair; further, relative strength in DuPont has made it the average's front-runner and strongest challenge to wide-spread weakness. The chemical group has gained 2.0% this afternoon, rising to the market's second-best performer and erasing some of its year-to-date weakness. With respect to Rohm & Haas, the company reported Q3 EPS $0.08 ahead of expectations today, but its downside FY05 guidance catalyzed an initial slide that has since been reversed.NYSE Adv/Dec 1079/2100, Nasdaq Adv/Dec 1062/1832

[UpInArms]

83. 2:36 EST numbers (redder)

did they send in the clowns (Fed govs) instead of the fairies?

Dow 10,341.85 -72.28 (-0.69%)
Nasdaq 2,074.56 -16.68 (-0.80%)
S&P 500 1,184.36 -11.40 (-0.95%)
10-Yr Bond 4.457 -0.06 (-0.13%)

NYSE Volume 1,786,776,000
Nasdaq Volume 1,260,025,000

[MARALE]

86. I am getting motion sickness

Why is the markets up and down so dramatically the last year or so? It seems that any little thing will make the market move a great deal. Maybe it has always ben this way, but I don't remember it being so steep of changes. Any ideas from the great ones?

Even though I have a new, and more demanding job; I always make time to come here and read this post. Everyone does a great job, keep it up.:toast:

[UpInArms]

87. here are the 3:07 EST numbers and a little something

for that upset rollercoaster tummy :D

Dow 10,342.34 -71.79 (-0.69%)
Nasdaq 2,074.26 -16.98 (-0.81%)
S&P 500 1,184.56 -11.20 (-0.94%)
10-Yr Bond 4.461 -0.02 (-0.04%)

NYSE Volume 1,939,156,000
Nasdaq Volume 1,360,427,000

2:30PM: Shoving the indices further south, Energy has lost 3.7% intraday while Utilities and Healthcare - posting 2.2% and 1.8% respective losses - exacerbate the decline. The Financial sector's 0.5% loss helps to further sustain the market's downtrodden position. Over 70% of the sector's issues have sunk, and virtually all Financial bellwethers presently extend losses. American Express (AXP 47.60 -1.37) is the sorest individual spot, but, as a group, insurers are the heaviest drag. A $2.52 per-share Q3 loss announced by Allstate (ALL 53.58 -0.82) this morning - alongside slashed FY05 EPS guidance - has sent shares 1.5% lower and spurred selling within shares of its peers.NYSE Adv/Dec 987/2230, Nasdaq Adv/Dec 996/1920

and here's that special something:



Good to "see" you Marale! Come back anytime!

:hi:

[punpirate]

93. My own feeling is that...

... some of it is due to tax policy. With the short-term capital gains rates as low as they are (historically), it induces more volatility. If the short-term rates were as high as they were decades ago, people would be inclined to ride through temporary aberrations in stock prices, because they couldn't afford to go stock-hopping.

[UpInArms]

89. S&P Gives a Warning to Investors about What's Coming in 2006

S&P recommends more defensive equity posture

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38645.6326200579-846892699&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- Standard & Poor's believes cyclical, economically sensitive sectors will be challenged in 2006 due to rising interest rates, economic uncertainty and a slowing housing market. S&P therefore expects investors to focus on high-quality defensive sectors. Therefore, S&P chief investment officer Sam Stovall downgraded the information technology and consumer discretionary sectors, and upgraded the consumer staples and health care sectors. "As a result of decelerating earnings and questionable consumer spending due to higher heating costs and tapped-out home-equity lines of credit, and an uncertain investor response to option expensing requirements, S&P thinks investors will gravitate toward companies with proven track records of consistent earnings and dividend growth," Stovall said.

[UpInArms]

90. 3:19 EST puking back yesterday's gains

Dow 10,301.27 -112.86 (-1.08%)
Nasdaq 2,066.94 -24.30 (-1.16%)
S&P 500 1,179.52 -16.24 (-1.36%)
10-Yr Bond 4.459 -0.04 (-0.09%)

NYSE Volume 2,030,482,000
Nasdaq Volume 1,427,632,000

[UpInArms]

92. 3:28 EST DOW down 150+

Dow 10,260.77 -153.36 (-1.47%)
Nasdaq 2,060.16 -31.08 (-1.49%)
S&P 500 1,174.74 -21.02 (-1.76%)
10-Yr Bond 4.459 -0.04 (-0.09%)

NYSE Volume 2,129,162,000
Nasdaq Volume 1,501,135,000

I thought the market hated high oil prices? Guess they hate it when it's not sky high either :eyes:

[UpInArms]

94. 3:35 EST fairies throw clowns from trading floor - dust appears

Dow 10,298.31 -115.82 (-1.11%)
Nasdaq 2,067.55 -23.69 (-1.13%)
S&P 500 1,179.28 -16.48 (-1.38%)
10-Yr Bond 4.459 -0.04 (-0.09%)

NYSE Volume 2,208,355,000
Nasdaq Volume 1,559,884,000

3:25PM: Heading into the final half hour of trading, the market has given back nearly all of yesterday's gains that respectively left the Dow, S&P, and Nasdaq 1.3%, 1.5%, and 1.7% higher. Today's market's breadth reflects the pervasive downbeat sentiment. Decliners far outpace advancers on both exchanges - by 23-to-9 on the NYSE and by 20-to-9 on the Nasdaq. At this time yesterday, advancers had a 19-to-14 edge over the NYSE's decliners, and a maintained a 17-to-13 lead over the Nasdq's decliners. NYSE Adv/Dec 899/2332, Nasdaq Adv/Dec 922/2029

3:00PM: Since the previous comment, the market has run in place... Following the close of trading hours today, American International Group (AIG), AT&T (T), Broadcom (BRCM), California Micro (CAMD), Digitas (DTAS), Genesis Microchip (GNSS), Sandisk (SNDK), Robert Half (RFI), and Xilinx (XLNX) are amongst the plethora of companies slated to report Q3 earnings. It's Google's (GOOG) Q3 report, though, that is liable to sit centerstage. Analysts expect the company to report EPS of $1.35, reflecting 92.9% year-over-year earnings growth, on $1.46 bln in revenues. NYSE Adv/Dec 916/2318, Nasdaq Adv/Dec 949/1979

[UpInArms]

97. U.S. stocks slide some more as key levels broken

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-20T194416Z_01_N20559301_RTRIDST_0_MARKETS-STOCKS-UPDATE-10.XML

NEW YORK, Oct 20 (Reuters) - U.S. stocks sank on Thursday as selling pressure mounted late in the day after the benchmark indexes broke key technical levels.

"Once we approached key technical levels on the S&P and the Nasdaq, selling pressure accelerated, and we broke down barriers in the major indexes," said Mike Viracola, managing director for trading at Adam Harkness in Boston. Viracola said the key level for Nasdaq was 2,075.

The Dow Jones industrial average was down 120 points, or 1.15 percent, at 10,294.31. The Standard & Poor's 500 Index was down 17.14 points, or 1.43 percent, at 1,178.62. The technology-laced Nasdaq Composite Index was down 24.45 points, or 1.17 percent, at 2,066.7.

current numbers at 3:52 EST:

Dow 10,284.46 -129.67 (-1.25%)
Nasdaq 2,066.89 -24.35 (-1.16%)
S&P 500 1,178.06 -17.70 (-1.48%)
10-Yr Bond 4.459 -0.04 (-0.09%)

NYSE Volume 2,403,906,000
Nasdaq Volume 1,683,344,000

[Maeve]

99. So...we're going to end up right about at Tuesaday's close, huh?

:eyes:

:hi: y'all--had a lunch gig, so I've been gone all day. Looks like the country is being taken for a wild ride (but YOU knew that!)

[UpInArms]

100. Hey Maeve!

This market is nuts - there is more double-dealing going on within their ranks that even I (the newsjunkie) can list and catalog on a daily basis.

Hope you lunch was good and that seasick feeling that Marale has didn't get you :D

:h:

[UpInArms]

98. TRADING CURBS TRIGGERED AFTER DOW LOSES 160 PTS

3:50pm 10/20/05 <$INDU> TRADING CURBS TRIGGERED AFTER DOW LOSES 160 PTS

[UpInArms]

95. Va. Oil Trading Firm (Midway Trading) Pleads in Oil-For-Food Scandal

http://www.forbes.com/technology/feeds/ap/2005/10/20/ap2290115.html

A Virginia oil trading company pleaded guilty to grand larceny in the U.N. oil-for-food scandal and will pay a $250,000 fine, a prosecutor said Thursday.

Midway Trading of Reston, Va., one of thousands of companies connected to the oil-for-food program, took part in a scheme to pay more than $440,000 in kickbacks to Iraqi officials, Manhattan District Attorney Robert Morgenthau said.

The charges are just the latest to come out of the scandal. More charges are expected once the U.N.-backed Independent Inquiry Committee releases its final report, probably later this month.

The United Nations launched the $64 billion oil-for-food program in 1996 to help ordinary Iraqis cope with U.N. sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait. All money paid for Iraqi crude oil was supposed to go toward purchases of humanitarian goods.

<snip>

In other cases to come out of the scandal, an Iraqi-born American businessman pleaded guilty in January to being an illegal agent of Saddam's government, and in April two Houston oilmen pleaded not guilty to charges they paid millions in kickbacks to Saddam's regime.

...more...

What is it with oilmen, oil firms and Texans (sorry AnneD - no offense meant)?

[Roland99]

105. It's obvious they were framed by freedom-hating Democrats.

[UpInArms]

101. closing numbers

Dow 10,281.10 -133.03 (-1.28%)
Nasdaq 2,068.11 -23.13 (-1.11%)
S&P 500 1,177.80 -17.96 (-1.50%)
10-Yr Bond 4.459 -0.04 (-0.09%)

NYSE Volume 2,605,957,000
Nasdaq Volume 1,797,918,000

:hi:

[ozymandius]

103. blather

Fully erasing yesterday's gains, and plus some, the indices extended their fourth quarter declines. A plummeting pair of shares - Pfizer (PFE 21.93 -2.04) and eBay (EBAY 39.68 -2.33) - set the market's early tone and shoved buyers back to the sidelines. While the drug giant delivered Q3 earnings that exceeded expectations by $0.03 per share, its downside FY05 guidance and withdrawal of full-year 2006 and 2007 forecasts sent shares tumbling nearly 9%. eBay, meanwhile, had reported EPS in-line with estimates lat night, but its Q4 and FY05 outlooks sent the stock reeling. Fixated upon the duo of disappointing guidance, traders again overlooked a solid slate of third quarter reports and failed to find momentum in another round of sharp energy price pullbacks. While leadership was lackluster over the course of the session - dominated by the market's least-influential Telecommunications sector (-0.6%) - selling pressure intensified late in the session and left each of the ten sectors with losses. On account of SBC's (SBC 22.54 +0.13) upside earnings report, the Telecom sector managed to fare best today. The Dow component's rise, paired with a gain in Analog Devices (ADI 35.25 +2.07), which raised its Q4 guidance, helped limit the Tech sector's (-0.8%) slide. Ultimately, though, it could not counter across-the-board declines. Joining SBC in helping to support the blue chip average was Coca-Cola (KO 24.08 +0.28), which stood strong all day after beating Q3 estimates. Despite its contribution, the Consumer Staples sector fell 0.8%, as every issue sans Coca-Cola finished in the red. UPS (UPS 72.44 +1.61) enjoyed a respectable upside earnings-related gain that helped the Industrials sector, but more broad-based pressure left the sector 1.1% lower. A particular weak spot was Southwest Airlines (LUV 15.07 -0.51), which dropped 3.0% after the company reported 91% earnings growth and beat Q3 estimates by $0.03. Declining energy prices and an upgrade-induced rise in Home Depot (HD 39.57 +0.31) could not offset eBay's effect on the Consumer Discretionary sector (-1.2%). Disappointing earnings growth at McDonald's (MCD 32.40 -1.29) only made matters worse. Allstate's (ALL 53.02 -1.38) Q3 disappointment sent insurance issues lower, and helped push the Financials sector to a -1.0% close. Better than expected earnings from Rohm & Haas (ROH 42.10 +1.21) helped support Materials (-0.8%), but widespread weakness left the sector submerged. Further profit taking left the Utilities sector 2.6% lower today. The Pfizer effect catalyzed Healthcare's (-2.2%) session-long laggard status and Amgen's (AMGN 74.10 -3.99) guidance-related slide helped to sink the sector. Reacting to the slide in energy prices, the Energy sector plummeted 4.1% and weighed heaviest on the market. Following a better than expected inventory report from the EIA yesterday, today's report that natural gas supply rose 75 bcf to 3062 bcf, well ahead of the expected 55 bcf rise, exacerbated selling within the sector. With respect the session's economic data, last week's decline in initial claims - to 355K (consensus 365K) versus the prior week's 390K - was largely overlooked, as was Sept. leading indicator data (-0.7% vs. -0.5% consensus) and the Oct. Philadelphia Fed index (17.3 vs. 10.0 consensus). At the same time, the bond market fared better today, but prolonged attention to the flattening yield curve and stirring inflation fears continued to weigh on investors' minds and helped prevent spirited buying activity in the equity market.NYSE Adv/Dec 823/2455, Nasdaq Adv/Dec 947/2039

[ozymandius]

102. Jeebus! I step out for a few hours and..well.. just look at this mess!

Edited for closing numbers as UpInArms beat me to it. So I'm just here to say that today's trading was sponsored in part by the color RED.

[Capn Sunshine]

104. word from the bond pits

There's really very little in the way of conviction here even as the big Money Center banks put their Q4trades into overtime; it's because of all the possibilities.

While there are large derivative based trades going through on the sell side of the 10-30 spread, no one else has much in the way of a feeling. Another HUGE oilco block crossed at coincidentally the same price as the XOM the other day--59 I think-- which indicates that something in the way of coverage is happening in the futures pits, and it only caught our attention because it's commodity based a and therefore could cross into bond futures as that is the preferred hedge of oil guys globally. The magnitude of that trade indicates someone selling short somewhere with grand conviction, and that is rare in the futures pits. But despite what the FED is saying, the searched for interprtation to bond traders goes something like " 4.5% on the 10 yr is VERY significant, even though not technically, and we either bbounce off it or cross it, and I don't want to be wrong, but there's too much scary pending shit in the real world which could cause people to buy bonds, so I'm just not going there into the weekend when the US might need post hurricane shelter for the big retail guys".

Did that make sense to you? If so, you might fit in well in our bond futures department, because it really says "keep your powder dry. The FED might want to lead the market, and there's a first time for everything, but this ain't it, jasper, believe me"

So don't look for major changes in interest rates depsite what Mortgage backed securities are saying. Not YET.

I'm off to Sacramento, our floor's book is closed.

[UpInArms]

107. looks like it was another block of XOM

Last Trade:	55.20	
Trade Time:	4:01PM ET	
Change:	 1.97 (3.45%)	
Prev Close:	57.17	
Open:	57.00	
Bid:	N/A	
Ask:	N/A	
1y Target Est:	70.79	
Day's Range:	54.50 - 57.18	
52wk Range:	48.25 - 65.96	
Volume:	29,630,500	
Avg Vol (3m):	19,751,800	
Market Cap:	348.04B	
P/E (ttm):	12.00	
EPS (ttm):	4.60	
Div & Yield:	1.16 (2.10%)

Thanks Cap'n!

You da man!

[On the Road]

108. Personally, I Think the Markets are in for a Short- or Medium-Term Rise

for the following reasons:

- Seasonality: The end of October is often the low point of the year.
- Psychology: The psychology has become negative. Conventional wisdom is that the market is going down. A majority of short-term investors (not daytraders) have switched to the short side.
- Declining Oil: Even if prices stabilize or rise a little, the worst-case scenarios on which pessimistic forecasts have been made do not look likely in the near term.
- Descending Triangle: Bullish sign.
- Failure to make lower lows: Sign of the end of a downtrend.
- Increased Volatility: The daily ups and downs are striking. It means there's a lot on confusion and the market is in the process of changing it's mind.

The most important reason is that my gut tells me the market is still overvalued and still has a long way to decline. My gut is almost 100% wrong.

And there is at least a 51% chance of this being a good forecast.

on Edit:Oh, and one more thing: the index of leading economic indicators was announced today. It was very bad. But there is so much trading on inside information and rumor that by the time a number like this is made public, the action is almost over.