STOCK MARKET WATCH, Tuesday December 5

[ozymandius]

Tuesday December 5, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 776 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2169 DAYS
WHERE'S OSAMA BIN-LADEN? 1875 DAYS
DAYS SINCE ENRON COLLAPSE = 1836
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 7
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 December 4, 2006

Dow... 12,283.85 +89.72 (+0.74%)
Nasdaq... 2,448.39 +35.18 (+1.46%)
S&P 500... 1,409.12 +12.41 (+0.89%)
Gold future... 650.90 +0.30 (+0.05%)
30-Year Bond 4.55% +0.01 (+0.15%)
10-Yr Bond... 4.43% +0.01 (+0.18%)






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

[ozymandius]

1. WrapUp by Rob Kirby

HIGHWAY ROBBERY OR TRICKS AT THE TROUGH?

Way back on Sept. 25 – in this very space – we were “early to the party” with a piece titled Running On Empty where we examined the effect of Goldman Sachs recalibrating their vaunted Commodity Index to have a lower weighting.

We pointed out how this thinly veiled attempt at partisan financial engineering was well timed with the run-up to the mid-term elections. In the month since the election, here’s a quick summary of what’s occurred in the energy complex:

*since falling from a high of 78.00 and subsequently bottoming at approximately 55.00 per barrel, crude oil has rebounded quite sharply in the weeks following the election to 63.00 per barrel at the time of writing.

*the wholesale price of gasoline which found a “bottom” at 1.46 per gallon just before the election has now recovered to 1.69.

*even natural gas, which saw its price plunge to the 4 dollar range before recovering to this morning’s 8.26.

If any lesson is to be gained from any of this, one of the most pertinent and poignant is that it magnifies the short comings of Central Planning. On that note, we should all be aware that history reminds us that one of the most distinguishing hallmarks of a Central Planned Economy is “bottlenecks” and chronic shortages of base commodities; much like the developing and ongoing shortages that are manifesting themselves in the base metals copper, aluminum, nickel, zinc and lead.

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

[ozymandius]

2. Today's Reports

8:30 AM Productivity-Rev. Q3
Briefing Forecast 0.6%
Market Expects 0.5%
Prior 0.0%

10:00 AM Factory Orders Oct
Briefing Forecast -4.2%
Market Expects -4.0%
Prior 2.1%

10:00 AM ISM Services Nov
Briefing Forecast 55.0
Market Expects 55.5
Prior 57.1

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

[UpInArms]

6. Q3 Productivity Report:

editing to add a revised number:

U.S. Q3 unit labor costs revised to 2.3% vs. 3.8% - 8:34 AM ET, Dec 05, 2006 - 1 minute ago

U.S. Q3 nonfinancial unit labor costs fall 2.7% - 8:30 AM ET, Dec 05, 2006 - 58 seconds ago

U.S. Q3 nonfinancial productivity up 5.6% - 8:30 AM ET, Dec 05, 2006 - 58 seconds ago

U.S. unit labor costs up 2.9% year-on-year - 8:30 AM ET, Dec 05, 2006 - 58 seconds ago

U.S. productivity up 1.4% year-on-year - 8:30 AM ET, Dec 05, 2006 - 58 seconds ago

U.S. Q2 unit labor costs revised to -2.4% vs. 5.4% - 8:30 AM ET, Dec 05, 2006 - 58 seconds ago

U.S. Q3 unit labor costs revised to 2.3% vs. 3.6% - 8:30 AM ET, Dec 05, 2006 - 58 seconds ago

U.S. Q3 productivity revised to 0.2% vs. 0.0% - 8:30 AM ET, Dec 05, 2006 - 58 seconds ago

[Ghost Dog]

9. Labor cost growth lower than expected

http://abcnews.go.com/Business/wireStory?id=2701554

By Alister Bull

Dec 5, 2006 — WASHINGTON (Reuters) - U.S. worker productivity rose by a weaker-than-expected 0.2 percent in the third quarter, but unit labor costs grew less than initially thought in a sign of moderating inflation pressure, government data showed on Tuesday.

The data gave a brief lift to U.S. government bond prices and the dollar weakened, as dealers bet the data would ease the central bank's inflation concerns and make rate cuts next year more likely.

"The bad news is that productivity growth is smaller than expected, but the good news is that unit labor costs were revised lower than expected," said Christopher Low, chief economist at FTN Financial in New York.

"It's important that the Fed is well aware that the economy is slowing, but they need to know that the slowdown is taking pressure off inflation. Hopefully this is what they will take from this report," he said.

/...

[AnneD]

13. Morning Marketeers....

:donut: and lurkers. I really should be offering you guys a :toast: because I am late today. I got a kick out of the spin these eCONomists are offering. Thanks GhostDog.

I loved the quote "The bad news is that productivity growth is smaller than expected, but the good news is that unit labor costs were revised lower than expected," said Christopher Low, chief economist at FTN Financial in New York.

Frankly I see neither good news or bad news. I see it as proof that we are sinking into 3rd world status. We are fast becoming slaves-they have been stealing our labour. And when they steal your labour, what incentive have you to do better. We have been riding the productivity wave that the computer has created and now that is slowing down. Frankly, we have not been seeing any benefit from this. So now we making less good but hey, it doesn't cost much. Where is the economic benefit in that. Now add to that the exportation of our jobs overseas and you have a recipe for disaster. If we don't work, the government can't raise taxes. Oh, I guess they haven't carried their ridiculous train of thought that far yet.

Happy hunting and watch out for the bears.

[Ghost Dog]

7. Factory Orders Fall More Than Expected In October

http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20061205\ACQRTT200612051045RTTRADERUSEQUITY_0736.htm&selected=9999&selecteddisplaysymbol=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked&lang=&link=&headlinereturnpage=http://www.international.nasd

(RTTNews) - Tuesday morning, the Department of Commerce released its report on factory orders in the month of October, showing that new orders for manufactured goods fell more than economists had been expecting.

The report showed that factory orders fell 4.7 percent in October after a downwardly revised 1.7 percent in September. Economists had expected orders to fall 4.0 percent compared to the 2.1 percent increase originally reported for the previous month.

The Commerce Department noted that the drop in orders in October marked the largest decrease since July of 2000.

The drop in factory orders was due in large part to a steep decline in orders for manufactured durable goods, which fell 8.2 percent in October after rising 8.7 percent in September. The drop in durable goods orders was reported at 8.3 percent last week.

A modest decline in orders for manufactured non-durable goods also contributed to the decline in factory orders. The report showed that orders for non-durable goods fell 0.3 percent in October.

The report also showed that shipments of manufactured goods edged up 0.1 percent in October, while inventories rose 0.4 percent. Subsequently, the inventories-to-shipments ratio came in at 1.23, unchanged from September.

[Ghost Dog]

8. US stocks rise; stronger-than-expected ISM data

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=usMktRpt&storyID=2006-12-05T151117Z_01_N05282481_RTRIDST_0_MARKETS-STOCKS-UPDATE-6-URGENT.XML

NEW YORK, Dec 5 (Reuters) - U.S. stocks rose on Tuesday after stronger-than-expected data on the services sector boosted optimism about U.S. economic growth and profits.

Indexes were little changed before the report.

The Institute for Supply Management's services index rose to 58.9 in November from 57.1 in October. The median forecast of Wall Street economists was for a decline to 56.0.

/..

[ozymandius]

3. Oil prices rise on weather, OPEC worries

LONDON - Oil prices edged above $63 a barrel Tuesday as wintry temperatures spread across the United States and traders anticipated further production cuts by OPEC nations.

In the last week, prices have broken out of their two-month range of $57-62 a barrel.

On Tuesday, light sweet crude for January delivery rose 65 cents to $63.09 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.

January Brent crude at London's ICE Futures exchange was up 40 cents at $63.85 a barrel.

Energy analyst Victor Shum said he expected the market to strengthen further as demand increased during the Northern Hemisphere winter. He predicted that $60 a barrel was the new price floor.

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

[ozymandius]

4. Have a great day at the Casino folks!

:donut: :donut: :donut:

Gotta run again. My new job seems to like me so they've called me in early again.

Thank you for minding the store.

Ozy :hi:

[UpInArms]

5. daily dollar watch

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

Last trade 82.45 Change -0.14 (-0.17%)

Dollar Stalls Ahead of Services Sector ISM

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/Dollar_Stalls_Ahead_of_Services_1165275231526.html

US Dollar
With no major economic data released today, profit taking and overall short covering was the main driver of the markets. The US dollar staged a modest rally against the Euro and British pound, but an earlier rally against the Japanese Yen and commodity currencies were unsustainable. The market has become very short dollars with the Commitment of Traders data indicating that short positions jumped by 14.6 billion, which is the largest rise that we have seen in a decade. The only piece of data that was released today was pending home sales, which reported a larger drop than the market was expecting. The housing market is really beginning to buckle and the economy is feeling its effects. Fed officials have remained relatively optimistic throughout and this is the message that they leave us with as we enter into the traditional “quiet period” before the December 12 FOMC meeting. It will be a busy week however as we look ahead to the service sector ISM report tomorrow and non-farm payrolls on Friday. The market may be holding out for the non-farm payrolls release before punishing the dollar once again. We will get a few “leading indicators” for payrolls starting tomorrow with the Challenger layoff report. We will also be keeping a close eye on the ADP employment survey as well as the Monster Employment index. With the housing market and manufacturing sector potentially going down the tubes, the labor market is the only part of the economy that is still offering some reason for optimism. In the last Federal Reserve Beige Book, most districts reported that there was a still sign of tightness in the labor market which leaves hope that NFP could print above 100,000. Before that however, we have service sector ISM. If we see slower growth in both the service and manufacturing sector, then the economy may really be in trouble.

...more...

BOJ - Determined to Hike

http://www.dailyfx.com/story/strategy_pieces/global_central_bank_comments/BOJ___Determined_to_Hike_1165319314689.html

BOJ – Determined to Hike

Despite a spate of dismal economic releases lately, comments by Mr. Mizuno put the potential for a hike this month back on the table:

Atsushi Mizuno, Bank ofJapan Board Member

“A rise in rates is possible even if some indicators are weak…the Bank of Japan is in the early stages of policy normalization…weak consumption won’t force the Bank to change the outlook.” – December 5, 2006

Toshihiko Fukui, Bank of Japan Governor

“If the economy and prices develop in line with our medium-term outlook, we will maintain low interest rates and gradually make adjustments to interest rates. We will proceed with rate hikes slowly, which is not to hurt economic expansion but to support sustained growth. At every board meeting, we discuss economic and inflation developments and other various issues. We will continue checking data against our outlook.” – November 28, 2006

Toshiro Muto, Bank of Japan Deputy Governor

“At this point of time, the question tends to be whether it (the rate hike) is going to be in December or not. But we have not specified any timing, including December…It's completely open…We need to make a decision carefully, but once we make up our mind we will act decisively.” – November 30, 2006

Tadao Noda, Bank of Japan Board Member

“If economic and price developments move along our (semi-annual) outlook report, I think we will adjust interest rates slowly by closely monitoring the developments.” – November 30, 2006

Koji Omi, Japanese Finance Minister

“Buoyant performance in the corporate sector should lead to steady improvements in income conditions. I believe, therefore, consumption will strengthen and that Japan will continue its solid recovery led by private demand...Japan is now on a sustainable recovery track.” – November 29, 2006

...more...

[Ghost Dog]

11. Dollar Rallies After Release Of ISM Services Index

http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20061205\ACQRTT200612051058RTTRADERUSEQUITY_0753.htm&selected=9999&selecteddisplaysymbol=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked&lang=&link=&headlinereturnpage=http://www.international.nasd

(RTTNews) - The dollar had a mixed reaction to economic news during Tuesday morning trading in New York. The release of revised productivity data prompted a mild decline in the dollar, but information on factory orders and the ISM services index sparked a rally later in the day.

Against the euro, the dollar dropped to a level of 1.3359 shortly after the release of the productivity report. With this, the dollar approached a 20-month low of 1.3361 set late last week. The greenback quickly came off this mark. The recovery further helped at 10 am Eastern Time, when factor orders data and the ISM report came out. The dollar rallied to level of 1.3290 - moving back to the low end of recent trading range.

The dollar's mid-morning rally took it to a level of 1.9677 against the pound. This took the greenback below a recent trading range and to its highest level in the past couple days. Last Friday, the dollar touched a level of 1.9843 - a new multi-year low against the pound.

The dollar declined against the yen through much of the early morning hours in New York. This came as comments from a Bank of Japan official inspired a general rally in the Japanese currency. The greenback hit a mark of 114.46 shortly after the release of the U.S. productivity report - its lowest level in 4 months. The post-ISM rally in the dollar allowed the U.S. currency to regain a good portion of its early losses versus the yen.

/..

[Egnever]

12. This rally was short lived it seems

I am no market guru but it certainly appears to me the powers that be are doing everything they can to try to prop the dollar up but are fighting a losing battle. The past two mornings exactly the same thing happened early morning rallies followed by afternoon reality. If i didn't know better I would swear there is early morning market manipulation going on.

I think reality was reflected in a post above that said....

The market has become very short dollars with the Commitment of Traders data indicating that short positions jumped by 14.6 billion, which is the largest rise that we have seen in a decade

The happy face BS is great for the tourists but the locals clearly know whats up.

[Ghost Dog]

10. Wall Street Rises on Inflation Relief

http://money.iwon.com/jsp/nw/nwdt_rt_top.jsp?cat=TOPBIZ&src=601&feed=ap§ion=news&news_id=ap-d8lqp7i03&date=20061205&alias=/alias/money/cm/nw

NEW YORK (AP) — Stocks rose Tuesday after revised data showed wages and benefits increased at a much slower pace in the third quarter than had been estimated and an index of activity in the service sector came in above expectations.

The Labor Department report came as good news because concerns about inflation have eroded hopes that the Federal Reserve will start lowering interest rates next year. The central bank has said inflation remains its primary concern.

The Institute for Supply Management, which polls purchasing and supply executives, found activity in the nation's services sector rose at a faster rate in November. The reading of 58.9 was above the 57.1 seen in October.

In the first hour of trading, the Dow Jones industrial average rose 43.10, or 0.35 percent, to 12,326.95.

Broader stock indicators also rose. The Standard & Poor's 500 index was up 4.47, or 0.32 percent, at 1,413.59, and the Nasdaq composite index was up 9.17, or 0.37 percent, at 2,457.56.

Bonds, which had shown little movement, slipped after release of the ISM figure. The yield on the benchmark 10-year Treasury note rose to 4.46 percent from 4.43 percent from late Monday. The dollar was up against other major currencies, while gold prices rose.

Light, sweet crude was up 48 cents at $62.92 a barrel on the New York Mercantile Exchange.

Investors examined the Labor Department report, which found costs of wages and benefits per unit of output increased at the annual rate of 2.3 percent in the third quarter, a smaller increase than the 3.8 percent rate of increase that the agency reported a month ago. Also, growth in worker productivity slowed to an annual rate of 0.2 percent, though the increase was still better than an earlier estimate that said it was unchanged.

Wall Street, already aware of weakness in manufacturing, appeared to mostly look past a Commerce Department report that found orders to U.S. factories fell 4.7 percent in October, the third decline in as many months and the largest pullback in six years. Orders for durable goods dropped 8.2 percent, a slight improvement from the 8.3 percent decline reported last week.

/...

[AnneD]

14. Consumers seem to be waiting for holiday bargains

NEW YORK — Consumers seem to be delaying their holiday buying this year more than last year, after jamming malls and stores on the day after Thanksgiving, a report by the International Council of Shopping Centers said today.

The ICSC-UBS Weekly weekly chain store index, which tracks 75 major retailers, fell 2.6 percent for the week ended Saturday, compared to the previous week. The index is based on same-store sales or sales at stores opened at least a year. Same-store sales are the industry's standard for measuring a retailer's strength. The index rose 3.1 percent compared to the year-ago period.

"Through this past Sunday, consumers shopped less and completed less of their total expected holiday spending than even last year," said Michael P. Niemira, chief economist, in a statement.

According to an ICSC holiday survey, 25 percent of households have completed only 50 percent or more of their total holiday shopping thus far, which is well below the 32 percent from the same point last year and even two years ago.

Niemira said the results potentially suggest a strong late wave of holiday buying, particularly with one extra shopping day between Thanksgiving and Christmas this year. With Christmas falling on a Monday, analysts expect the Saturday before the holiday to be the busiest shopping day.



http://www.chron.com/disp/story.mpl/business/4380542.html

Get out there and spend, spend, spend.:eyes: I won 2 door prizes-so I have 2 more nice gifts to give and I am still under the $200 limit. The Church is happy with my gifting and some more little kids will be happy this year. My family is happy with their cards and I won't forget my 6yo adopted niece, even though we are spoiling her. Brother and SIL were foster parents to her-she was an abused child. I figure you can't spoil her with enough love right now. She is our joy. We are happily under spending this year.

Say, was there ever a Christmas that was bad. I remember when I was a kid that we actually had years when retailers didn't do so well at Christmas. We need a few bad Christmases sober some of the WS folks up.

[AnneD]

15. Mexican cuisine chicken chain plans major expansion push for eastern part of the U.S.

<Snip>

Loyal Southern California customers of restaurant chain El Pollo Loco might well respond, "Who cares? Pass the salsa."

But for the Irvine, Calif., company — now embarking on an ambitious nationwide expansion from its core market — how East Coast diners answer the question may prove crucial to its success.

"Our research shows that the Northeast is more oriented toward sandwiches, burgers and bagels and is less hospitable for burritos and other Hispanic food," said Darren Tristano, a restaurant industry analyst with Technomic in Chicago. Chicken, however, "is universally consumed and has little deviation from region to region."

El Pollo Loco — "the Crazy Chicken" in Spanish — derives 85 percent of its sales from Southern California. Its fusion of flame-grilled, marinated chicken and Mexican fast food has worked well in an environment in which the lines between mainstream and ethnic food are blurred. It has locations in San Antonio, El Paso and the Rio Grande Valley but none in Houston. However, a spokeswoman for El Pollo Loco said the company is considering the Houston area.

http://www.chron.com/disp/story.mpl/business/4379331.html

I just wanted to bring this to your attention as an on the ground reporter. Being so close to the border, we have a lot of crossovers starting to come in (businesses from Mexico). We have Campenara's (fast food chicken) here in Houston which there always seems to be a line for (I tried it and didn't care too much for it) and when I was in El Paso, I would eat at El Pollo Loco-which I loved. I will go out of my way to go to one here in Houston and I think they will be well recieved. Check in to it and see what you think.

[ozymandius]

16. at long last... the close

Dow 12,331.60 Up 47.75 (0.39%)
Nasdaq 2,452.38 Up 3.99 (0.16%)
S&P 500 1,414.76 Up 5.64 (0.40%)
10-Yr Bond 4.442% Up 0.009
NYSE Volume 2,755,702,000
Nasdaq Volume 2,076,204,000

4:20 pm : While paling in comparison to Monday's impressive rally, more evidence that the U.S. economy is on pace for a soft landing provided a floor of modest buying support from the opening bell to the close of trading.

Albeit not a major economic report, today's ISM services data attracted more attention than usual since the ISM manufacturing index turned in a sub-50 reading last Friday for the first time in more than three years. So, when the Institute of Supply Management at 10:00 ET said its services index in November unexpectedly rose to 58.9 -- the highest level since May -- stocks spiked to their best levels of the morning.

Another economic release that seldom has a significant impact on the market but helped provide a floor of support for stocks Tuesday was the revision to Q3 productivity. With Fed Chairman Bernanke saying last week there is a risk that rising wages could feed inflation as businesses pass on higher costs to customers, unit labor costs rising just 2.3% (consensus 3.2%) from a prior read of 3.8% removed some of that concern. As a reminder, the Fed reconvenes one week from today. This morning's "incoming" data lent more support for policy makers to remain on hold.

Also helping to keep the month of December's reputation intact as the best month of the year for the S&P 500 was solid industry leadership across the board. Of the 10 sectors trading higher, Consumer Discretionary paced the way. Comcast Corp. (CMCSA 41.92 +1.09) hit a new 52-week and was among the sector's most influential movers (+2.6%) after saying last night it expects to post solid Q4 earnings. Dow component and suggested holding in the Briefing.com Active Portfolio, Walt Disney (DIS 34.15 +0.71), was another bright spot. The stock surged 2.2% to a new multi-year high following "very bullish" CFO commentary about growth prospects in 2007.

Homebuilders provided additional sector support after Toll Brothers' (TOL 32.86 +0.95) hinted that a floor is forming in some housing markets. Restaurants also attracted buyers, getting a lift following an analyst upgrade on Starbucks (SBUX 36.81 +1.06) and after J.P. Morgan affirmed McDonald's (MCD 42.81 +0.31), another suggested holding in the Briefing.com Active Portfolio, as its top large-cap pick.

The Consumer Staples sector ranked second on the day in terms of performance. Coca-Cola (KO 47.97 +1.14) was the day's best performing Dow component (+2.4%) after Merrill Lynch raised its stock price target on the beverage giant to $51 from $48. Aside from strength in Beverages, the Food Retail group got a boost after Kroger (KR 23.44 +1.11) raised its earnings growth guidance for fiscal 2006 to 8-10% from 6-8%.

Even though consolidation throughout Treasuries lifted borrowing costs across the yield curve, the rate-sensitive Financials sector garnered enough strength from some key components to extend its year-to-date gain to more than 13%. Aside from continued momentum in brokers and banks, among the most notable individual winners was an insurance giant. Prudential Financial (PRU 84.24 +2.00) hit a new 52-week high after issuing an encouraging outlook for 2007, which plays into our Overweight rating on the sector. BTK +0.1% DJ30 +47.75 DJTA +1.0% DJUA +0.3% NASDAQ +3.99 NQ100 +0.3% R2K +0.2% SOX +0.8% SP400 +0.2% SP500 +5.64 XOI +0.8% NASDAQ Dec/Adv/Vol 1490/1607/1.97 bln NYSE Dec/Adv/Vol 1222/2031/1.43 bln