STOCK MARKET WATCH, Thursday October 26

[ozymandius]

Thursday October 26, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 816 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2129 DAYS
WHERE'S OSAMA BIN-LADEN? 1835 DAYS
DAYS SINCE ENRON COLLAPSE = 1796
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 6
Enron execs conveniently deceased = 3
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 25, 2006

Dow... 12,134.68 +6.80 (+0.06%)
Nasdaq... 2,356.59 +11.75 (+0.50%)
S&P 500... 1,382.22 +4.84 (+0.35%)
Gold future... 590.80 +3.20 (+0.54%)
30-Year Bond 4.90% -0.05 (-0.91%)
10-Yr Bond... 4.77% -0.05 (-1.06%)






GOLD, EURO, YEN, Loonie and Silver


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

[lapfog_1]

1. Baker should be rowing * out to the middle of the lake... n/t

[ozymandius]

2. WrapUp by Mike Hartman

HOME PRICES LOWER, ENERGY HIGHER, AND THE FED SPEAKS

Overall market volatility has been low this week with little in the way of economic news until today ahead of the statement by the Federal Reserve. Today’s market tone was set early with the release of existing home sales coming in lower than expected. The weak data put a bid in the bond market pushing yields lower, the U.S. dollar is down versus all the major currencies and stocks are having a tough time posting gains so far this session. Virtually all market participants are expecting the Fed to stand pat on rate changes, but all eyes are watching for the text of their statement to see if they are more hawkish toward inflation or more dovish to support economic growth.

The National Association of Realtors said the pace of existing home sales fell for the sixth straight month (14% below last year) and home prices nationally are lower by 2.2% from a year ago. Re-sales of single-family homes fell 1.6% and sales of condos and co-ops fell 3.2%. Purchases declined by 3.7% in the Northeast, 3.1% in the West and 2.8% in the Midwest. In the South, sales rose by 0.4%. Tomorrow the Commerce Department is expected to announce a modest decline in new home sales. The only positive data on the housing front shows the inventory of homes for sale was down 2.4% to 3.75 million units. The lower inventory is good news, but in my mind the bigger development is the increase in foreclosures. I watched a show two nights ago (“Dateline” on MSNBC as I recall) that said many real estate analysts say foreclosures could hit a million units this year. The increased foreclosures are generally blamed on trick financing with teaser starter rates that adjust to much higher payments down the road.

-cut-

On the energy front, analysts expected crude oil inventories to grow by 2.6 million barrels, but instead the inventories fell by 3.3 million barrels. Similarly, distillates were expected to fall by 1.1mb, but fell a larger 1.4mb, and gasoline inventories were expected to decline 600,000 barrels, but fell by much more with a decline of 2.8mb. In addition to the lower than expected inventories, OPEC members are now falling in line behind Saudi Arabia’s lead to enforce output cuts. Saudi Arabia and Iran have now informed key customers they will cut production in November. On Monday, crude touched a low of $58.15, and as I write the price is now 5% higher at $61.10 a barrel. It appears the bottom is in for crude and all its refined friends! Natural gas is higher by nearly 7% today at $7.60/mbtu’s. Two weeks ago nat-gas was $5.60/mbtu’s; today it is 35% higher just ahead of the heating season. Folks, inflation is here to stay!

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

[ozymandius]

3. Today's reports

8:30 AM Durable Orders Sep
Briefing Forecast 4.5%
Market Expects 2.3%
Prior 0.0%

8:30 AM Initial Claims 10/21
Briefing Forecast 310K
Market Expects 308K
Prior 299K

10:00 AM Help-Wanted Index Sep
Briefing Forecast 31
Market Expects 31
Prior 31

10:00 AM New Home Sales Sep
Briefing Forecast 1030K
Market Expects 1050K
Prior 1050K

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

[UpInArms]

15. 8:30 reports in:

8:30 AM ET 10/26/06 U.S. CONTINUING CLAIMS 4-WEEK AVG. UP 4,000 TO 2.44 MLN

8:30 AM ET 10/26/06 U.S. CONTINUING JOBLESS CLAIMS RISE 3,000 TO 2.45 MILLION

8:30 AM ET 10/26/06 U.S. INITIAL CLAIMS 4-WEEK AVG. FALLS 2,750 TO 305,250

8:30 AM ET 10/26/06 U.S. AUG. DURABLE-GOODS ORDERS REVISED TO -0.1% VS. 0.0%

8:30 AM ET 10/26/06 U.S. WEEKLY INITIAL JOBLESS CLAIMS RISE 8,000 TO 308,000

8:30 AM ET 10/26/06 U.S. SEPT. MOTOR VEHICLE ORDERS FALL 6.1%

8:30 AM ET 10/26/06 U.S. SEPT. DURABLE-GOODS ORDERS BEAT 2.9% GAIN EXPECTED

8:30 AM ET 10/26/06 U.S. SEPT. DEFENSE CAPITAL GOODS ORDERS UP 42%

8:30 AM ET 10/26/06 U.S. SEPT. DURABLE-GOODS SHIPMENTS FALL 2.8%

8:30 AM ET 10/26/06 U.S. SEPT. CORE CAPITAL EQUIPMENT ORDERS UP 1.1%

8:30 AM ET 10/26/06 U.S. SEPT. DURABLE-GOODS ORDERS EX-TRANSPORTATION UP 0.1%

8:30 AM ET 10/26/06 U.S. SEPT. DURABLE-GOODS ORDERS RISE 7.8%, MOST IN 6 YEARS

[UpInArms]

16. U.S. weekly initial jobless claims rise 8,000 to 308,000

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BA2A1A948%2DB412%2D4F24%2D9993%2D0942D1E9B307%7D&symbol=

WASHINGTON (MarketWatch) -- The number of newly laid-off workers filing claims for unemployment benefits rose by 8,000 to 308,000 in the latest week, the Labor Department said Thursday. Continuing unemployment claims rose by 3,000 to 2.45 million. The four-week average of initial claims, which smoothes out weekly events like strikes and distortions in the data, fell by 2,750 to 305,250. This marked the lowest level since the week ended Feb. 25. The four-week average of continuing claims rose by 4,000, to 2.44 million, in the week ended Oct. 14.

[AnneD]

19. Morning Marketeers,

:donut: and lurkers. Hey UIA, thanks for the stats. I wish we had a better idea of the number of those that have given up looking for a job. Do you know where we can get that number. When will these massive layoffs like Ford and Chrysler kick in. As a Nurse I see a lot of it because I deal with the uninsured and their children. I don't think this gives me a myopic view-I just get a fairly good view of uninsured families in this country.

Well, I'll be busy today and I want to take off early to vote. I will be busy canvassing neighborhoods, and phoning folks these next weeks.



Happy hunting and watch out for the bears.

[Hugin]

20. Morning AnneD!

:hangover:

Yes! Financing health care is one of the greatest domestic challenges facing the United States.

Thanks so much for your first hand perspective.

(and I've said so on every poll I can find... :D )

Congratulations on voting today! I hope your wildest political dreams come true.

[AnneD]

33. Hi Prag

:hi: always good to see new faces on the SWT. We got the freshest coffee and the hottest economic news ratcheer.

I believe in the words of the late Mayor Daley....Vote early Vote Often.
In NOLA they say....Time to let the fat hogs out, time to let the lean hogs in.
'He's tanned, rested, and ready.' Nixon in 82 (an old tee shirt I once owned)
'My vote cancels your's'. What I say to folks voting GOP.

[UpInArms]

17. Durable-goods orders soar to 6-year high on aircraft

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BB32C3482%2D125B%2D4A10%2D8793%2DF1FF9BD687AD%7D&symbol=

WASHINGTON (MarketWatch) - Demand for U.S.-made durable goods soared 7.8% in September, the biggest jump in six years, as orders for new aircraft nearly tripled, the government said Thursday. Outside transportation, however, new orders rose just 0.1%. The increase in new orders for durable goods far exceeded the 2.9% gain expected by economists. The increase was almost entirely due to a jump in orders booked by Boeing, which recorded 175 orders in September compared with 30 in August, and from demand by the Pentagon for defense capital goods. Transportation orders rose 27.6%, the biggest increase in six years. Orders for civilian aircraft zoomed 183%, while orders for motor vehicles sank 6.1%.

[Ghost Dog]

35. Durable-goods Orders At Six-year High On Big Boeing Bookings

http://news.morningstar.com/news/DJ/M10/D26/200610261208DOWJONESDJONLINE001075.html?Cat=TopDJStories

WASHINGTON (Dow Jones) -- Demand for U.S.-made durable goods soared 7.8% in September, the biggest jump in six years, as orders for new aircraft nearly tripled, the government said Thursday.

Outside transportation, however, new orders rose just 0.1%, marking the first increase in three months.

The jump in last month's new orders for big-ticket items far exceeded the 2.9% gain expected by economists surveyed by MarketWatch. It's the first gain in three months.

The increase came almost entirely from a jump in orders booked by Boeing Co. ( BA) , which recorded 175 orders in September compared with 30 in August, and from demand by the Pentagon for defense capital goods, the Commerce Department reported.

Transportation orders rose 27.6%, the biggest increase in six years. Orders for civilian aircraft zoomed 183%, the biggest increase in four years. Meanwhile, orders for motor vehicles sank 6.1%.

Defense capital goods orders rose 41.9%. Excluding defense, orders rose 6.3%, the largest gain in just over a year.

/...

[ozymandius]

4. Oil prices climb in Asian trading

SINGAPORE - Crude oil prices rose Thursday a day after jumping more than $2 a barrel in response to a report that showed U.S. inventories dropped last week.
OPEC's steps to cut production and attacks by Nigerian villagers on oil facilities also contributed to the increase.

Light, sweet crude for December delivery was up 13 cents to $61.53 a barrel in Asian electronic trading on the New York Mercantile Exchange, Thursday afternoon in Singapore. Prices at London's ICE Futures exchange also moved modestly higher. Brent crude rose 18 cents to $62.23 a barrel.

Though global oil supplies are still relatively ample and some skepticism remains about OPEC's willingness to go through with the 1.2 million barrel-a-day reduction it announced late last week, traders were betting on tightening supplies going into the winter, when fuel demand ramps up.

Heating oil futures rose nearly half a cent to $1.7435 a gallon on the Nymex, while gasoline futures dropped marginally to $1.5925 a gallon.

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

[ozymandius]

5. Shell Q3 underlying profit beats all forecasts

LONDON (Reuters) - Royal Dutch Shell beat forecasts with a 21 percent rise in underlying third-quarter profit thanks to high oil prices, but the oil major's headline earnings fell as the corresponding period last year benefited from gains on asset sales.

The results raised investor hopes that the Anglo-Dutch company has turned the corner after two tough years, and pushed its London-listed A shares up 3.3 percent to 1,848 pence by 0942 GMT, outperforming a 0.7 percent rise in the DJ Stoxx European oil and gas sector index.

The rise pushed Shell's market capitalization to $229 billion, displacing BP Plc as the world's second-largest fully publicly quoted oil company by market value.

Shell said on Thursday that third-quarter current cost of supply (CCS) net profit, which strips out changes in the value of inventories, was $6.9 billion.

http://news.yahoo.com/s/nm/20061026/bs_nm/energy_shell_dc_3

[ozymandius]

6. BP warns boom times over for oil

BP warned that the boom times for the oil industry were over yesterday as it revealed profits and production growth had stalled in the past three months.

The oil giant also reported that the impact of an explosion at its Texas refinery last year had cost the company $1.4bn (£747m) so far in lost profits - in addition to the $1.6bn it is putting aside to settle legal claims over the blast, which killed 15 workers.

Reporting quarterly profits, BP's chief executive, Lord Browne, said: "Overall the trading environment is now weaker than it has been for the last five quarters. Of particular note is the significant reduction of global gas prices in the face of significant supplies, along with weak demand.

-cut-

There has been renewed speculation this year that BP will be involved in another mega-merger deal, fueled by reports over the summer that Lord Browne had discussed a bid for rival Shell with other board members.

http://news.independent.co.uk/business/news/article1927197.ece

[Demeter]

11. Tsk! Tsk! Oil Profits Stalled in Past 3 months?

Relax! It's just a mid-term election. (The time to start worrying is after, when the windfall profit tax issue comes up, and the monopoly issue, and the other regulatory processes are brought back from the dead, a little late for Halloween)

[ozymandius]

7. European stocks higher as telecoms impress

European equity markets were higher on Thursday driven by strong earnings in the telecoms sector and higher oil and metals stocks as commodity prices rallied.

By midday, the FTSE Eurofirst 300 was up 0.4 per cent to 1,460.38, Frankfurt's Xetra Dax added 0.5 per cent to 6,296.6, the CAC 40 in Paris gained 0.6 per cent to 5,453.0 and London's FTSE 100 climbed 0.2 per cent to 6,227.5.

-cut-

Back in Europe and third-quarter earnings were again the main driver of gains. Telenor (NASDAQ:TELN - news), the Norwegian telecom operator, led the way after reporting forecast-beating earnings and announcing its agreement to sell its satellite services unit for a profit. Telenor's shares added 7.1 per cent to NKr96.70.

http://news.yahoo.com/s/ft/20061026/bs_ft/fto102620060717012378

[Ghost Dog]

28. Europe stays positive as newsflow stays strong

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39016.5238888889-883659332&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

Continental European bourses made gains on Thursday, as strong earnings news from the telecoms sector protected gains. But disappointing drug development news from London-listed pharmaceutical stocks undermined UK blue-chips and fostered losses on the FTSE Eurofirst 300, down 0.1 per cent at 1,452.8. Stronger-than-forecast third quarter earnings at France Telecom helped the CAC 40 rise 0.2 per cent to 5,433.8.Frankfurt’s Xetra Dax 30 rose 0.3 per cent to 6,284.2 drived by strength in car makers after Daimler Chrysler also posted strong earnings for the period.

[Ghost Dog]

29. London loses verve as drugs don’t work

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39016.5246296296-883659398&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

London equities fell on Thursday, ending a three session winning streak for the FTSE 100 after disappointing drug development news brought the pharmaceutical sector under the flatline. The senior index lost 29 points, or 0.5 per cent, to close at 6,184.8. Both AstraZeneca and GlaxoSmithKline reported upbeat third quarter earnings, but investors concentrated on poor drug development news from both blue-chips, pressuring their shares. Astra fell 7.5 per cent to 3298.9 with Glaxo down 4 per cent at 1471p. Royal Dutch Shell fared better after its third quarter update received a warm reception. Shares in the company rose 2.5 per cent to 1896p.

[ozymandius]

8. Tokyo stocks up 0.9% in morning trade

Strong corporate earnings and raised profit forecasts helped push the Japanese stock market higher on Thursday morning.

By midday the Nikkei 225 was 0.9 per cent higher at 16,844.33. The broader Topix rose 0.8 per cent to 1,666.49.

Honda Motor leapt 3 per cent to Y4,190 after raising its full-year forecasts because of yen weakness, as well as reporting record operating profit for the second quarter.

Shiseido, Japan's biggest cosmetics maker, advanced 2.9 per cent to Y2,345 after revising up its full-year earnings forecasts.

http://news.yahoo.com/s/ft/20061026/bs_ft/fto102520062317162365

[Ghost Dog]

27. Nikkei hits 5-month closing high, Toyota rises

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=tokyoMktRpt&storyID=2006-10-26T082400Z_01_T209702_RTRIDST_0_MARKETS-JAPAN-STOCKS-UPDATE-7-CORRECTED.XML&WTmodLoc=InvArt-C1-ArticlePage1-3

TOKYO, Oct 26 (Reuters) - The Nikkei share average booked its highest close in five months on Thursday, gaining nearly 0.7 percent as Honda Motor Co. Ltd. (7267.T: Quote, NEWS, Research) climbed after it lifted its earnings estimates and said it would pay a higher dividend.

Shares of Japan's largest and best-known companies continued to rise on expectations of solid earnings growth. Toyota Motor Co. (7203.T: Quote, NEWS, Research), the world's most profitable auto maker, set a record high for the third straight day.

Major firms Sony Corp. (6758.T: Quote, NEWS, Research), Nissan Motor Co. Ltd. (7201.T: Quote, NEWS, Research), Canon Inc. (7751.T: Quote, NEWS, Research) and Daiwa Securities Group Inc. (8601.T: Quote, NEWS, Research) were among those that reported earnings results after the close of trade.

"Right now we're seeing that there are a lot of solid results from corporate Japan," said Nagayuki Yamagishi, strategist at Mitsubishi UFJ Securities Co. Ltd. "The Nikkei appears to be gearing up to challenge the 17,000 mark. Whether that will happen this week or next I don't know ... but if the Nikkei is going to head for 17,000, right now is a good opportunity for investors," Yamagishi said.

The Nikkei <.N225> rose 0.67 percent, or 112.30 points to 16,811.60, its highest close since May 11. The broader TOPIX index <.TOPX> advanced 0.68 percent to 1,664.59.

/...

[ozymandius]

9. Big drop for area home sales

Chicago-area home sales plunged last month, though prices managed to hang in there. That disparity drew experts into a debate on whether the worst of the post-housing boom hangover has played out or is yet to come.

The sales numbers were particularly ugly: Illinois existing-home sales fell about 20 percent in September, with Chicago-area sales plummeting 26 percent from last year's record levels, according to an Illinois Association of Realtors monthly report released Wednesday.

-the kicker is at the end-

As grim as the Wednesday figures for Chicago were, they were grimmer elsewhere. Existing-home sales sank nearly 32 percent in California; Florida's dropped 34 percent, the same rate of decline as in August.

In Jacksonville, Fla., where sales were down 23 percent, Pulte Homes, a national builder, said Wednesday that it is laying off one-third of its workforce.

http://www.chicagotribune.com/business/chi-0610260153oct26,0,1634672.story?coll=chi-business-hed

[Hugin]

21. Please correct me if I'm wrong...

But, I think we're first going to see a drop in number of units sold due to the fact the sellers will hang on for their price for a period of time. The prices will then drop across the board.

It's imperative for many of these sellers to 'get their price'... Due to scary things like
Interest Only Mortgages and Home Equity Loans based on the high appraisals of a couple of
years ago.

[AnneD]

22. From our RE bust during the 80's

people held on to their asking price (which was their rock bottom price). As the economic climate worsened-folk dropped the prices, then finally walked away. If the feds start upping interest rates, fuel prices rise, and unemployment continues-folks, esp those with the exotic loans will no longer be able to tread water. If I had to place my money on this bet, I'd say we have the potential for more of a shake out before the market hit bottom. These are the early stages. Of course, this is my two cents worth based on my experiences. But as some eCONomist are fond of saying 'but, this time is different.'

[Hugin]

24. Yes, the very early stages...

I hate to be a harbinger of doom.

The problem is known and recognized... Will or can anything be done to avert this
serious economic problem?

[specimenfred1984]

25. Here in VA, incomes haven't kept up with prices

that's a simple reason in this area why prices are coming down. Greedy asshats who don't lower their price don't sell, nobody can afford $2500 a month for a tiny house.

[Gregorian]

23. Nobody's in a hurry to lose money

I'm in the process of rethinking my price. I've been hanging on for a year. I dropped it about 10% and am continuing to fish. After all, it's just fishing.

Here's little story. Maybe two. There's a place on the coast called Beaver. Five women are selling their parent's place. When I first found out about it, it wasn't on the market yet. This was five years ago. They wanted around $375k. I called them a couple of years ago, and it still wasn't on the market, and they would have taken $750k. A year ago it hit the market at 1.3 million. Last night I just checked to see if it was still there. $899k.

There's a place called Petrolia, in California. Acreage with access problems (two creeks) and a 1950 "liveable" house. One million. On the market one week, and already an offer.

It's apples and oranges. Property versus houses. Location and desirability.

The great majority of real estate is houses. And it's slow. People are lowballing offers.

But at some point, the desparate are going to start unloading. And then the wall will crumble. I don't usually say that. But we are all tied together to a degree. It's hard to speculate. But ther e are some basic truths to the whole mess. One is that prices are nuts. I doubt that is going to change since it's tied to population. People need housing.

[Hugin]

26. Thanks for the anecdotal examples...

Yes, there is a difference between the 'intrinsic value' of a property and it's 'conditional value'.


Anecdotes are sometimes the only way to get a picture of what is going on.

[AnneD]

32. Although I am not familiar with ....

the examples you give, one factor seem to be location, location, location. Those homes in areas where there is a vibrant economy will retain more their value and will sell. But areas that are hard pressed-like all those automotive 'company' towns will fold up if they can't get replacement business in there(and I mean good paying jobs).

[kineneb]

34. rural areas

are already feeling the hits... (like us, Lake Co.,CA)
-a local title company had 30 employees last year, they are now down to 10...
-lots of places for sale, no buyers...

other observations:
-our area is dependant on seasonal service jobs and agricultural work... no industry here..
-folks who were buying and then commuting to Santa Rosa are no longer looking, due to increase in gas prices...
-county will probably become retirement location, due to lack of jobs... can't see any other future for it...

[ozymandius]

10. Wal-Mart Adds 12 States to Drug Plan

LITTLE ROCK, Ark. — Wal-Mart Stores Inc., the world's biggest retailer, said Thursday it is extending its $4 generic prescription drug plan to another 12 states, bringing to total to 27 states.

The move brings 1,008 more stores under the program, under which Wal-Mart charges $4 for a one-month supply of 314 different prescriptions. That number includes 143 drugs in a variety of dosages and solid or liquid forms.

-cut-

States added Thursday were: Alabama, Georgia, Iowa, Kansas, Maryland, Michigan, Mississippi, Missouri, New Hampshire, Ohio, South Dakota and Virginia.

http://www.chron.com/disp/story.mpl/ap/fn/4289037.html

[ozymandius]

12. Ford Will Double Parts Buying in China to Cut Costs (Update6)

Oct. 26 (Bloomberg) -- Ford Motor Co., reeling from its biggest loss in 14 years, will almost double purchasing of China-made parts this year to cut production costs.

Ford will buy between $2.5 billion and $3 billion in auto parts in China, said William Ford Jr., the carmaker's chairman, speaking to reporters in Beijing. That compares with $1.6 billion to $1.7 billion bought last year from China. The parts will be exported to assembly plants in other Asian countries, the U.S. and Europe.

-cut-

Ford needs cheaper components from China, where an average manufacturing job pays about 10 percent of an equivalent union job in the U.S., to meet its goal of cutting $6 billion in annual costs by 2010. The Dearborn, Michigan-based carmaker reported a $5.8 billion third-quarter loss as U.S. sales slumped.

-cut-

Rising Competition

Rising competition from China will add to pressure on U.S. parts makers. The U.S. operations of Delphi Corp., the biggest U.S. parts maker, filed for Chapter 11 bankruptcy protection last year. Visteon Corp. the second-largest parts maker cut its earnings forecast last month on shrinking domestic sales.

http://www.bloomberg.com/apps/news?pid=20601103&sid=ahlXuBbmpqwg&refer=news

[UpInArms]

13. daily dollar watch

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

Last trade 86.16 Change -0.26 (-0.30%)

US Dollar Tanks on Weaker Data and Disappointing Fed

http://www.dailyfx.com/story/dailyfx_financial_markets_headlines/US_Dollar_Tanks_on_Weaker_1161815308373.html

The combination of a weaker existing home sales report, higher oil prices and disappointments from the Federal Reserve has sent the US dollar tumbling against the majors. Existing home sales fell for the sixth month in a row while oil prices jumped on higher inventories. The Federal Reserve left interest rates unchanged at 5.25 percent for the third meeting in a row and failed to deliver to the market the hawkish comments that it was looking for.

As of 6:20pm EST, the EUR/USD is trading at 1.2610, USD/JPY is trading at 118.92 and the GBP/USD is trading at 1.8780.

The actual interest rate decision was fully priced into the market and not what traders were sitting on the edges of their seat waiting for. Instead, everyone was focused on the FOMC statement and wanted to see the Fed put their concerns about core price inflation on paper. Unfortunately the statement did not deliver what the market was looking for as it remained virtually unchanged expect for two things.

The Fed added the line "Going forward the economy seems likely to expand at a moderate pace." and deleted the reference to commodity prices contributing to the high level of resource utilization. Aside from that, they did not change their stance on inflation. The lack of more hawkish comments has disappointed traders as they send the US dollar and yields lower, resurrecting the possibility of a rate cut early next year. However, even though the comments on inflation did not change much, we want to point out that the statement is still slightly more positive than the last, thanks to the more optimistic take on growth. The take away is - Do not expect the Fed to change rates again any time soon and the knee jerk reaction is more a reflection of reversals on trades by speculators who were looking for more from the Fed. For the time being, 1.25 and 120 will still hold in the EUR/USD and USD/JPY and we expect more dollar bulls to begin to move to the sidelines.

...more...

FOMC Instant Insight - Fed Fails to Deliver

http://www.dailyfx.com/story/special_report/special_reports/FOMC_Instant_Insight___Fed_1161800616064.html

For the third meeting in a row, the Federal Reserve left interest rates unchanged at 5.25 percent. This decision was fully priced into the market and not what traders were sitting on the edges of their seat waiting for. Instead, everyone was focused on the FOMC statement and wanted to see the Fed put their concerns about core price inflation on paper. Unfortunately the statement did not deliver what the market was looking for as it remained virtually unchanged expect for two things.
The Fed added the line "Going forward the economy seems likely to expand at a moderate pace." and deleted the reference to commodity prices contributing to the high level of resource utilization. Aside from that, they did not change their stance on inflation. The lack of more hawkish comments has disappointed traders as they send the US dollar and yields lower, resurrecting the possibility of a rate cut early next year. However, even though the comments on inflation did not change much, we want to point out that the statement is still slightly more positive than the last, thanks to the more optimistic take on growth. The take away is - Do not expect the Fed to change rates again any time soon and the knee jerk reaction is more a reflection of reversals on trades by speculators who were looking for more from the Fed. For the time being, 1.25 and 120 will still hold in the EUR/USD and USD/JPY and we expect more dollar bulls to begin to move to the sidelines.

...more...

[Ghost Dog]

30. Greenspan says dollar now sharing stage with euro

http://news.yahoo.com/s/nm/20061026/bs_nm/economy_greenspan_dollar_dc

Alan Greenspan said on Thursday that both private investors and central banks were shifting away from the U.S. dollar and toward the euro.

"We're beginning to see some move from the dollar to the euro, both from the private sector ... but also from monetary authorities and central banks," Greenspan told a conference sponsored by the Commercial Finance Association.

His comments pushed the dollar down, a sign that Greenspan, who retired from the U.S. central bank in January, still holds some sway in financial markets.

As he had done repeatedly when he led the central bank, Greenspan said it was imperative for the United States to resist protectionist pressures that could make an unwinding of the large U.S. current account trade gap economically painful.

"We'll get to the point at some point that willingness to finance it will slow, and if you can't finance it, it won't happen," Greenspan said of the broad trade measure.

/...

[UpInArms]

14. Exxon Mobil's quarterly net rises nearly 6%; sales at $99.6 billion

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B78A3FA02%2D6A16%2D410A%2D84EF%2D7A180D7026DF%7D&siteid=mktw&dateid=39016%2E343498912%2D883640520

NEW YORK (MarketWatch) -- Exxon Mobil Corp. (XOM) Thursday reported third-quarter earnings of $10.49 billion, or $1.77 per share, up from a year-ago profit of $9.92 billion, or $1.58 per share. Excluding items in the year-ago period, the Dow component earned $8.3 billion, or $1.32 a share. Revenue slipped in the latest three months to $99.59 billion from $100.72 billion in the same period a year earlier. The average estimate of analysts polled by Thomson First Call was for a profit of $1.59 a share in the September period. The Irving, Texas-based Exxon attributed the higher earnings to the impact of its continuing share purchase program, higher crude oil and natural gas realizations and improved marketing and chemical margins. The stock closed Wednesday at $71.01, up 1.6%.

[texpatriot2004]

18. K & R nm

[Ghost Dog]

31. China orders 150 Airbus aircraft, to set up plant in deal bonanza with France

http://www.afp.com/english/news/stories/061026080837.au3oyo5j.html

BEIJING (AFP) - Airbus has scored a Chinese order of 150 A320 aircraft and finalized an agreement to set up a plant in China as part of a deal bonanza unleashed by French President Jacques Chirac's visit to Beijing.

The Airbus A320 assembly plant, to be located in the north Chinese port city of Tianjin not far from Beijing, will complete its first aircraft in 2009 and will subsequently manufacture four a month, the aircraft maker said.

"It's a means for us to develop a long-term vision with the Chinese," said Louis Gallois, the chief executive of the European aerospace giant. "It's clear that building the planes in China will give the Chinese an incentive to buy more of our aircraft," he said.

....

In another deal signed Thursday, Alstom SA of France inked a contract worth 1.2 billion euros (1.5 billion dollars) for the delivery of 500 freight locomotives to China, according to the agreement seen by an AFP reporter.

/...

[ozymandius]

36. witching hour update

3:17
Dow 12,146.69 Up 12.01 (0.10%)
Nasdaq 2,374.26 Up 17.67 (0.75%)
S&P 500 1,387.21 Up 4.99 (0.36%)
10-Yr Bond 4.7210% Down 0.0520
NYSE Volume 2,259,143,000
Nasdaq Volume 1,934,503,000

3:00 pm : Buyers remain in control of the action as sentiment continues to improve heading into the final hour of trading. According to market internals, market breadth on both the NYSE and Nasdaq has gradually strengthened every half hour throughout the afternoon. Unlike most of the recent trading sessions, however, growth stocks and small cap companies typically dependent on borrowing costs, are turning in better performances than large-cap names. With bond yields falling across the curve, the Nasdaq, S&P MidCap 400 and Russell 2000 are today's best performing indexes, climbing 0.9%, 0.8% and 1.1%, respectively.DJ30 +26.42 NASDAQ +21.47 SP500 +6.47 NASDAQ Dec/Adv/Vol 1050/1954/1.79 bln NYSE Dec/Adv/Vol 1108/2135/1.26 bln