STOCK MARKET WATCH, Tuesday December 19

[ozymandius]

Tuesday December 19, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 762 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2183 DAYS
WHERE'S OSAMA BIN-LADEN? 1889 DAYS
DAYS SINCE ENRON COLLAPSE = 1850
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 18, 2006

Dow... 12,441.27 -4.25 (-0.03%)
Nasdaq... 2,435.57 -21.63 (-0.88%)
S&P 500... 1,422.48 -4.61 (-0.32%)
Gold future... 617.90 -1.20 (-0.19%)
30-Year Bond 4.71% -0.01 (-0.15%)
10-Yr Bond... 4.59% -0.01 (-0.22%)






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

SANTA CLAUSE IS COMING TO TOWN

Tis the season to be jolly! With the near ‘vertical lift’ we’ve all had the good fortune to witness in the broader markets over the past 5 months – you’ll have to excuse me if I’m caught up in the belief that Santa Clause – may already have been and gone.

-cut-

For those of you who have ever heard of “a Santa Clause Rally” in the stock market – it’s a phenomena generally associated with “lift” to stock indices between Christmas and New Years. According to Investopedia - a Santa Clause Rally is defined as,

A surge in the price of stocks that often occurs in the week between Christmas and New Year's. There are numerous explanations for this phenomenon, including tax considerations, happiness around Wall Street, people investing their Christmas bonuses and the fact that the pessimists are usually on vacation this week.

-cut-

After gorging on the excess of “vertically UP markets” for the past 5 months, we will no doubt be treated to a healthy dose of the January Effect – which Investorwords.com describes as the,

“Tendency of the stock market to rise between December 31 and the end of the first week in January. The January Effect occurs because many investors choose to sell some of their stock right before the end of the year in order to claim a capital loss for tax purposes. Once the tax calendar rolls over to a new year on January 1st these same investors quickly reinvest their money in the market, causing stock prices to rise. Although the January Effect has been observed numerous times throughout history, it is difficult for investors to profit from it since the market as a whole expects it to happen and therefore adjusts its prices accordingly.”

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

[Ghost Dog]

35. Gold Cartel: This Must Stop!

http://www.financialsense.com/fsu/editorials/kirby/2006/1218.html
by Rob Kirby
KirbyAnalytics.com
December 18, 2006

Folks who still have the capacity to independently read, write and articulate themselves need to gather their wits and express their condemnation at what’s become of our financial markets – the “so called” heart beat of our Free Market Capitalist System.

As Mr. James Turk reveals in a piece he penned this past weekend – Friday’s late afternoon “massacre” of the gold and silver price on the COMEX exchange bears the unmistakable signature of a GOLD CARTEL,

“the unholy alliance between a few of the big bullion trading banks, several central banks with large gold holdings and the US government. This reprehensible group seeks to manage and completely control the gold price to their advantage, regardless of the disruption that they cause to the free-market.”

For those of you who might be scratching your head wondering what I’m speaking of, here’s a picture of exactly what the esteemed Mr. Turk is referring to < the slaughter in the silver market was even more pronounced >:

Turk goes on to point out,

“Each of the cartel members has a different objective. The US government aims to make the dollar look worthy of being the world’s reserve currency, which it hopes to do by beating up on gold, which was the world’s global currency until it was supplanted by the dollar.”

He then eruditely explains the significance / timeliness of this “ambush” on the price of precious metal;

“Because London closes at 12:00 noon New York time, trading during the 1½ hours to the 1:30pm New York close is notoriously thin, which means it is a difficult time to liquidate large positions. The gold cartel knows this, so the late Friday sell-off depicted above is not the first time one has happened.”

If there is any doubt in your mind as to the intentions of the sellers – ask yourself what possible motivation could ANYONE possibly have to precipitously hammer the price of a valuable commodity DOWN at a time when the market is its thinnest ? You see folks, in the absence of MARKET MOVING NEWS – there is NO reason why ANY profit maximizing entity would undertake to sell their goods at less than the going market rate – unless their motives are OTHER THAN POFIT MAXIMIZATION .

And the last time I checked, Price Rigging is still illegal under the auspices of the Sherman Antitrust Act in the United States.

/...

[ozymandius]

2. Today's Reports

8:30 AM Housing Starts Nov
Briefing Forecast 1550K
Market Expects 1550K
Prior 1486K

8:30 AM Building Permits Nov
Briefing Forecast 1540K
Market Expects 1535K
Prior 1553K

8:30 AM PPI Nov
Briefing Forecast 1.2%
Market Expects 0.5%
Prior -1.6%

8:30 AM Core PPI Nov
Briefing Forecast 0.2%
Market Expects 0.2%
Prior -0.9%

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

[Ghost Dog]

28. Unexpected Reports

Dec 19 8:30 AM Housing Starts Nov Actual 1588K Briefing 1550K Expected 1550K Prior 1488K Revised from 1486K
Dec 19 8:30 AM Building Permits Nov Actual 1506K Briefing 1540K Expected 1535K Prior 1553K -
Dec 19 8:30 AM PPI Nov Actual 2.0% Briefing 1.2% Expected 0.5% Prior -1.6% -
Dec 19 8:30 AM Core PPI Nov Actual 1.3% Briefing 0.2% Expected 0.2% Prior -0.9%

[Ghost Dog]

29. Producer Prices Soar, Housing Starts Rebound

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3YzLb.IM.Kw&refer=worldwide

Dec. 19 (Bloomberg) -- Prices paid to U.S. producers jumped by the most since 1974 and a year-long housing slump showed further signs of bottoming out, strengthening the Federal Reserve's case for keeping interest rates steady.

The producer price index climbed 2 percent in November from a month earlier, led by higher costs of energy and light trucks, the Labor Department said today in Washington. Housing starts rose at an annual rate of 1.588 million last month, more than forecast and 6.7 percent higher than in October, the Commerce Department said. Building permits declined.

Six months of slowing economic growth haven't defeated inflation, the wholesale price report indicates. Fed Chairman Ben S. Bernanke has predicted a pickup in the expansion, suggesting that policy makers are reluctant to reduce rates in coming months.

/...

[Ghost Dog]

30. Economic Report Provides Reminder on Inflation

http://www.nytimes.com/2006/12/19/business/19cnd-econ.html?hp&ex=1166590800&en=ee047a89dcd3c274&ei=5094&partner=homepage

Wholesale prices shot upward in November, the Labor Department reported today, offering a stark reminder that inflation remains a threat to the economy.

The producer price index, which measures what businesses charge one another for everything from iron ore and diesel fuel to cases of soda pop, was 2 percent higher in November than in October, seasonally adjusted. The index had not risen by that much in a single month in more than 32 years, since the energy and stagflation crises of the mid-1970s.

Even with the volatile prices of food and fuel removed, the “core” index rose by 1.3 percent for the month, the most since 1980.

The figures reinforced the message coming from the Federal Reserve that inflation has not been vanquished, and would seem to lengthen the odds against any move soon by the Fed to begin reducing interest rates, which some investors had hoped for as early as the spring of next year.

Separately, the Commerce Department issued a report on housing construction this morning that contained some mixed signals. On the one hand, the number of building permits authorized last month fell again, for the tenth straight month, a reminder of just how fragile the housing market remains. Permits declined by 3 percent for the month, seasonally adjusted, and were 31.3 percent lower than a year ago.

But in the same reports, the number of homes actually begun by builders rose 6.7 percent in November, seasonally adjusted.

Economists were quick to say that a November rebound in the housing-starts figure was likely simply because October’s figures had shown the steepest decline in six years, and that he new figures did not necessarily signal a turn in the broader downward trend.

/...

[ozymandius]

3. Oil prices down, but above $62 a barrel

LONDON - Oil prices retreated from highs reached last week due to balmy weather in the U.S., but stayed above $62 a barrel Monday as blasts tore through two oil-company facilities in southern Nigeria.

Prices had risen steadily last week on renewed supply concerns as U.S. inventories fell and after the Organization of Petroleum Exporting Countries decided to cut output in February.

But mild weather in the continental U.S. and forecasts calling for more of it through the remainder of December weighed heavily on heating oil and natural gas futures, dragging crude-oil futures lower, too.

-cut-

Two separate private security contractors, speaking on condition of anonymity citing prohibitions on speaking to reporters, said a blast hit an Agip residential compound in Port Harcourt and Shell oil reported an explosion at company facilities in the city where many foreign oil workers live.

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

[ozymandius]

4. Trade deficit hits high on oil prices

WASHINGTON - Pushed up by soaring oil prices, America's trade deficit surged to a record high in the summer, but analysts predicted a slowly improving imbalance in the months ahead.

The current account trade deficit increased 3.9 percent to an all-time high of $225.6 billion in the July-September quarter, the Commerce Department reported Monday.

That third-quarter deficit was equal to 6.8 percent of the total economy, up from 6.6 percent of gross domestic product in the second quarter.

The current account is the broadest measure of trade because it tracks not only the flow of goods and services across borders but also investment flows. It represents the amount of money that must be borrowed from foreigners to make up the difference between imports and exports.

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

[ozymandius]

5. U.S. retail gas prices rise slightly

CAMARILLO, Calif. - The price of gas inched up just over 2 cents a gallon around the nation in the past two weeks.

The national average for self-serve regular was $2.29 a gallon, industry analyst Trilby Lundberg said Sunday.

The average for mid-grade was $2.40, while premium was $2.50 a gallon, according to Lundberg's latest survey of 7,000 gas stations across the country.

The price is about 8 cents a gallon higher than the same period last year.

http://news.yahoo.com/s/ap/20061218/ap_on_bi_ge/gas_prices_1

[Roland99]

15. Slightly? Oil dropped $1 but gas went up $0.15 last night.

[nitpicker]

16. Even the US government admitted energy prices rose

From Reuters:

http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyID=2006-12-19T133227Z_01_N18193996_RTRUKOC_0_US-USA-ECONOMY-PRICES.xml

WASHINGTON (Reuters) - U.S. producer prices jumped a bigger-than-expected 2 percent in November, the largest gain in more than three decades, on a spike in energy prices, a government report showed on Tuesday.

Core prices also leaped 1.3 percent, the largest increase since a matching rise in July 1980, the Labor Department said.

Analysts polled by Reuters were expecting producer prices to rise 0.5 percent and core prices - excluding volatile food and energy prices - to grow 0.2 percent.

The rise in overall producer prices was the largest since a matching 2 percent in November 1974. That gain is likely to cause anxiety inflationary pressures are not fully contained and may seep into retail prices.

Energy prices were up 6.1 percent in November, reversing two months of declines. Gasoline prices rose 17.9 percent, the biggest rise since June 2000.

(snip)

Excluding cars and light trucks, producer rises rose 1.4 percent, a Labor Department official said.

Over a twelve month period, core producer prices were up 1.8 percent, the biggest increase in more than a year. Overall producer prices were up 0.9 percent from November a year ago.

[Roland99]

20. But...but...but....they just told us inflation was flat last month!

[Psephos]

34. PPI was -1.6% in October

(PPI = Producer Price Index) I didn't notice any posts about the "massive" PPI drop in October.

November may have been a corrective, or it may be a harbinger of more increases in core prices. It's going to take several more months minimum to know. Anyone who says different is a charlatan.

Tracking inflation is like tracking blood pressure or stock prices. You need a number of measurements taken over regular intervals. A quarterly reading is far more instructive than a daily reading.

Peace.

[DemReadingDU]

17. $0.25 up in SW Ohio

from $2.14 to $2.39

Yikes!

[ozymandius]

6. US deficit heading towards record

The US current account deficit has kept widening, signalling that the world's largest economy is still having to foot a massive bill for energy imports.

The deficit was $225.6bn in the three months to the end of September, up from a revised $217.1bn in the previous quarter, the Commerce Department said.

That pushed the total for the first nine months of the year to $655.9bn, well on course for an annual record.

The deficit's size has raised concerns about the state of the US economy.

http://news.bbc.co.uk/2/hi/business/6190545.stm

[ozymandius]

7. Oil stocks push European equities lower

European bourses slid lower on Tuesday as heavily-weighted oil stocks fell after mild US weather forced a drop in crude prices, while profits were taken in banking stocks after the markets good run.

By midday, the FTSE Eurofirst 300 was down 0.6 per cent to 1,479.35, Frankfurt's Xetra Dax fell 0.6 per cent to 6,556.19, the CAC 40 in Paris shed 0.8 per cent to 5,486.09 and London's FTSE 100 slipped 0.6 per cent to 6,211.3.

-cut-

Norsk Hydro (NYSE:NHY - news) and Statoil (NYSE:STO - news) were both lower as investors took profits after the previous session's announcement that the two companies were to merge their oil and gas production operations. Norsk, which gained more than 20 per cent on Monday, fell 0.3 per cent to NKr188. Statoil, which relinquished early gains on Monday to end lower, fell another 2.5 per cent to NKr165.75.

Other stocks in the sector were lower after crude prices dropped to around $62 a barrel overnight in response to forecasts of milder US winter weather. France's Total (NYSE:TOT - news)fell 1.1 per cent to EU54.40, Spain's Repsol YPF (NYSE:REP - news)shed 1 per cent to EU26.85 and Britain's BP lost 0.3 per cent to 574p.

http://news.yahoo.com/s/ft/20061219/bs_ft/fto121920060720188710

[Ghost Dog]

21. European govt bonds lower after German Ifo index jumps to 16-yr high

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=2fed4b3b-c9fd-4187-9639-67f193b51e29

LONDON (AFX) - European government bonds were lower after a key survey showed German business confidence rose to its highest level in 16 years, suggesting that the euro zone economy may be healthier than previously thought.

The headline Ifo index surged to 108.7 in December from 106.8 in November, easily beating analysts' expectations for only a very small gain to 107.0 and reaching its highest level since December 1990.

"At 108.7 the index does not point to a slowdown next year as many observers expect and it is looking increasingly likely that the German economy will weather the VAT hike in the first quarter of 2007," said Zaki Kada at Thomson IFR Markets.

The strong rise in the index came despite a stronger euro, signs of a slowdown in the US, higher borrowing costs and the upcoming increase in VAT, which appear to have been offset by a stronger labour market and solid domestic demand and investment, he said.

It now looks as though the German economy will suffer a "mere temporary slowdown" in the first quarter, with a "strong rebound" thereafter, allowing the European Central Bank to continue raising interest rates.

"This necessitates the need to hike the refinance rate in March next year, followed by at least another hike," Kada said.

The news caused the benchmark German Bund future to drop to a low of 107.02, its weakest level since late October.

/...

[Ghost Dog]

26. Euro zone external trade surplus reaches 2.4 bn euros

http://english.peopledaily.com.cn/200612/19/eng20061219_333757.html

The euro zone's trade balance with the rest of the world climbed to a 2.4-billion-euro (1 euro equals 1.31 U.S. dollars) surplus in the year to October 2006, according to an estimate by Eurostat, the statistical service of the European Union (EU), on Monday.

...

EU's trade with its major partners grew in the first nine months. The most notable increases were for exports to Russia (23 percent), China (22 percent), Canada (16 percent) and Turkey (15 percent). The biggest increases for imports were from Russia (32 percent), Norway (29 percent), China (20 percent) and India (19 percent).

The EU's trade surplus with the United States increased but decreased with Switzerland. The EU's trade deficit grew strongly with countries including Russia and Norway, and slightly with Japan.

Of all EU member states, Germany had the largest surplus of 115.5 billion euros, followed by the Netherlands (26.4 billion), Ireland (25.2 billion) and Sweden (13.0 billion).

Britain registered the largest deficit of 96.9 billion euros, followed by Spain, France, Greece and Italy.

/...

[Ghost Dog]

27. Euro zone on broad-based, self-sustaining recovery: report

http://english.peopledaily.com.cn/200612/19/eng20061219_333758.html

The euro zone economy grew 0.5 percent in the third quarter and 2.7 percent year-on-year, confirming the recovery is "broad-based and sustainable," said a European Commission quarterly report published Monday.

The growth rate in the third quarter was slightly lower than in the first half of the year but the deceleration should not mask the fact that all domestic components continued to expand at a robust pace, said the report.

Domestic demand is the mainstay of expansion and the labor market continues to improve with unemployment at its lowest level since 2001, said the report.

...

The euro zone is well placed to face a somewhat less favorable international environment caused by the U.S. economic slowdown, the report said.

/...

[Ghost Dog]

31. European stocks end down on Thai rout, PPI scare

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=c43c43fc-1c5d-490f-9be5-3f1a20793daf

LONDON, Dec 19 (Reuters) - European shares fell on Tuesday as a combination of a spike in U.S. producer prices, a plunge in Thai stocks and patchy Wall Street earnings prompted investors to reduce exposure to riskier assets.

Shares in drugmaker AstraZeneca <AZN.L> led declines, sliding 4.6 percent after the European patent office revoked the patent for Nexium, increasing the risk of generic competition for the top-selling heartburn and antiulcerant pill.

The FTSEurofirst 300 Index <.FTEU3> unofficially closed down 0.6 percent at 1,479 points, a second straight day of losses after racking up a 10-day winning streak, but comfortably off its lows.

Losses in Europe followed falls in Asia after Thai stocks suffered their biggest crisis since Asia's 1997 financial meltdown as foreign investors took fright at drastic measures to rein in the baht. The Thai government later pulled an abrupt U-turn, announcing equity investments would be excluded from the restrictions.

/..

[Ghost Dog]

32. Bourses hit by weak oil stocks

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39070.4921759259-886070092&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

European equity markets were driven lower on Tuesday by resource stocks as oil and metal prices fell on commodity exchanges. Losses for oil companies were led by Statoil as investors mulled over details of the Norwegian company’s takeover of the oil and gas operations of domestic peer Norsk Hydro. “Based on our estimates of the value of the businesses to be retained by Hydro, we put the premium paid by Statoil at around 22 per cent,” said Gordon Gray at JPMorgan. He felt however, that the deal still made sense for Statoil. “This deal gives it a big uplift in terms of scale and free float. It should also generate material synergy benefits, although these have not yet been quantified.” Statoil shares fell 3.1 per cent to NKr164.75, while Norsk Hydro lost 0.7 per cent to NKr187.25.

...

France’s Total fell 0.9 per cent to €54.50, while Spain’s Repsol YPF fell to €27.13 and Royal Dutch Shell lost 0.3 per cent to €18.17.

The FTSE Eurofirst 300 was down 0.6 per cent at 1,478.98 in closing exchanges while the CAC 40 ended 0.8 per cent lower at 5,484.76 and the Xetra Dax lost 0.7 per cent to 6,553.51.

/..

[Ghost Dog]

33. FTSE lower as investors take profits from year-end rally

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39070.4947222222-886070355&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

London stocks fell on Tuesday as investors took profits from a year-end rally that took the FTSE 100 to a six-year high on Friday. The heavily-weighted mining sector bore the brunt of the selling as investors looked to lock in recent gains. Vedanta Resources fell 2 per cent to £11.99, Kazakhmys lost 2.7 per cent to £11.40 and BHP Billiton was 1.4 per cent softer at 928.5p. The trend was exacerbated by lower metals prices on commodities exchanges.

...

The FTSE benchmark index closed down 43.5 points, or 0.7 per cent, to 6,203.9 while the mid-cap FTSE 250 lost 32.4 points, 0.3 per cent, to 11,055.3.

/..

[ozymandius]

8. Tokyo stocks retreat on profit-taking

A lacklustre start to Wall Street's week clipped trading in Tokyo, providing investors with an excuse to lock-in gains made over the past six days.

The bull-run that on Monday brought the Nikkei 225 stock average close to the 17,000-point mark ground to a halt on Tuesday morning of light, nervous trading. The Nikkei slid 0.04 per cent to end the session at 16,954.83, while the broader Topix index fell 0.19 per cent to 1,662.23.

Shares in Nikko Cordial, the brokerage accused by regulators of overstating its earnings, were overwhelmed by "sell" orders as investors tried unsuccessfully to flee the stock.

With the company now at risk of being de-listed from the Tokyo Stock Exchange, Japanese institutions became forced sellers of Nikko Cordial. Brokers said that by the lunchtime close there were combined orders to sell 40m shares matched by "buy" offers for just 1.8m shares. Dealers said the shares are unlikely to trade for the rest of Tuesday and Wednesday.

http://news.yahoo.com/s/ft/20061219/bs_ft/fto121920060119548672

[Ghost Dog]

18. Asian stocks punished as Thai junta spooks investors with capital controls

http://asia.news.yahoo.com/061219/afp/061219101754eco.html

HONG KONG (AFP) - Asian stocks were broadly lower, with investors spooked by the worst ever losses in Bangkok where the military government imposed capital controls reminiscent of the 1997 Asian financial crisis.

The controls, aimed at curbing a massive appreciation in the local currency, stunned the region Tuesday, prompting heavy stock sales in Thailand and undermining sentiment elsewhere.

The Thai baht has been a standout unit in the region after rising to a nine-year high against the greenback, putting pressure on the key exporters and prompting complaints by powerful union and business lobby groups.

The junta, however, may have overstepped the mark by seeking to rein in the baht with the Thai benchmark index plunging 16.50 percent after the Stock Exchange of Thailand (SET) reopened following a trading suspension.

In late trade the composite index had nosedived 120.52 points to 610.03, off a low of 587.92. It was the biggest one day fall in the 31-year history of the exchange.

Among Thailand's closest neighbours, Kuala Lumpur was down 1.91 percent in afternoon trade, Jakarta slumped 3.44 percent, Singapore was off 1.75 percent while Mumbai shed 3.00 percent as Hong Kong closed down 1.19 percent.

Under new rules announced by the Bank of Thailand (BoT) late Monday, 30 percent of all foreign capital inflows above 20,000 dollars will be held by banks for 12 months in a bid to curb a sharp appreciation of the baht.

This means for every 100,000 dollars invested in stocks, for example, the banks will hold back 30,000 dollars. No interest will be paid on that money and it would be lost if the investment is pulled out of the country within one year.

/...

[Ghost Dog]

36. Thailand revokes, repeat, revokes capital controls on equities

http://www.ft.com/cms/s/5b5606ca-8f7a-11db-9ba3-0000779e2340.html

Thailand was forced on Tuesday to reverse plans to impose a 10 per cent withholding tax on short-term foreign equity investment, after the imposition of draconian capital controls sent the stock market plunging 15 per cent, and wiped around Bt773bn ($22bn) from the market’s capitalisation.

The dramatic about-face came at about 8pm local time, after Pridiyathorn Devakula, the finance minister, held crisis talks with central bank and stock market officials on the massive, and apparently unanticipated, equity sell-off, the largest one-day fall in the market since the Asian financial crisis of 1997.

On television, an obviously rattled Mr Pridiyathorn – who had expressed strong support for the central bank’s restrictions throughout the day – declared that the withholding tax would not be applied to money brought into Thailand for equity investment.

However, he said the central bank withholding tax will remain on capital inflows used for the short-term purchase of debt, which the central bank believes is the primary asset held by the currency speculators blamed for the rapid appreciation of the Thai baht.

While one analyst said the spectre of the Thai authorities “panicking and flailing” raised serious questions about Thailand’s long-term policy credibility, others nevertheless predicted a “hard bounce” in the battered equity market on Wednesday, as bargain-hunters scoop up now relatively cheap Thai stocks.

/hmmm...

[Ghost Dog]

19. JGBs up, Fukui stirs doubts about early rate rise

http://asia.news.yahoo.com/061219/3/2um0l.html

TOKYO, Dec 19 (Reuters) - Japanese government bonds extended gains after Bank of Japan Governor Toshihiko Fukui noted some weakness in consumption and consumer prices on Tuesday, stirring doubts among traders about the prospects for an early rate rise.

Fukui, speaking after the central bank kept rates unchanged at 0.25 percent following a two-day policy meeting, said data on consumption and consumer prices had been somewhat weak since the BOJ issued its outlook report in October.

"He is showing a stance of paying consideration to consumption and the consumer price index," said Takeo Okuhara, bond strategist for Daiwa Institute of Research Ltd.

"Since these two are typical examples of weak data, I think that this effectively means that the chances of the BOJ holding off from a rate rise by the end of the current fiscal year are becoming very high," Okuhara said.

/...

[Ghost Dog]

41. Bank of Japan: Walking on eggshells

http://economist.com/finance/displaystory.cfm?story_id=8459480
Dec 19th 2006 | TOKYO
From The Economist print edition
Although the recovery is still fragile, Japan should brace itself for interest-rate rises

TOSHIHIKO FUKUI, the wily governor of the Bank of Japan (BoJ), would dearly like to raise interest rates. But he decided on December 19th that holding off was the wise thing to do. Under Mr Fukui's stewardship, the BoJ has regained much of its lost credibility—thanks to the no-nonsense way it has purged a decade's-worth of dud loans from the banking system and created the conditions for the economy's continuing, albeit wobbly, recovery. In the process, the central bank has earned respect in political circles. And that has translated into less government meddling.

But with the new government of Shinzo Abe, the prime minister, hoping the fragile rebound will continue at least until next summer's upper-house election, the BoJ is treading cautiously. Mr Abe's office says that no pressure was put on Mr Fukui to hold rates when he was called in last week for a friendly chat. But it was made subtly clear that were the bank to slam on the brakes, then it would feel the wrath of the ruling Liberal Democratic Party. No one in political and financial circles will ever let the BoJ forget how it raised the key rate in 2000 from zero to 0.25%—only to lower it again six months later when the increase made deflation even worse.

The central bank is also sensitive to criticism that this summer it prematurely announced the end of Japan's debilitating era of deflation. After six years of essentially free money, the BoJ sneaked in a quick interest-rate rise—from zero to 0.25%—in July, hoping that this would not stop inflation inching higher. In fact, the core consumer-price index has drifted between zero and 0.1%. In Japan the core CPI includes energy prices but not those of food. After stripping out energy, inflation was actually negative in the past few months.

That has not stopped the central bank from making plans to raise its key unsecured overnight call rate to 0.5%. It is concerned about the amount companies have been pouring into capital investment. The rebound in commercial-property prices in Tokyo and other large cities has driven capital spending to new heights. Thanks to the rising value of their properties, against which they can secure loans, smaller firms now find it easier to borrow for investment—as their bigger brethren do. As a result, capital investment has gone through the roof. And although GDP growth for 2005 has lately been revised down (from 2.6% to 1.9%), it is thanks only to exports and capital investment that the economy has continued to expand since the recovery got under way in 2002.

...

Some people argue that private consumption is actually far stronger than the official figures suggest. The data are notoriously unreliable and are invariably adjusted months later. For what it is worth, the Cabinet Office's consumer-confidence survey rose in November for the second straight month. One way or another, the BoJ should have a clearer idea about how much people have been spending—and whether to risk raising its key borrowing rate—from late January onwards. But one thing is clear: Mr Fukui will eventually raise rates in the Year of the Boar—and not just once but probably several times. And that is something Mr Abe's government will have to get used to.

/...

[ozymandius]

9. Delta Air Lines Rejects US Airways Hostile Merger Bid (Update2)

Dec. 19 (Bloomberg) -- Delta Air Lines Inc. rejected a hostile $8.38 billion merger proposal from US Airways Group Inc. and filed its own plan to emerge from bankruptcy as an independent company with a value of as much as $12 billion.

Delta's board said its plan will create a greater return for creditors. The US Airways offer is unlikely to receive antitrust approval, is based on flawed economic assumptions and would give Delta the largest debt load in the industry, Atlanta- based Delta said in a statement today.

Delta's five-year business plan was filed today with U.S. Bankruptcy Court in New York, 15 months after the airline sought Chapter 11 protection. The carrier said it will emerge from court supervision in the first half of next year after cutting labor costs, grounding planes and expanding more-profitable international routes. It forecast a profit in 2007.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aul3BO7muZpA&refer=home

[ozymandius]

10. Stock Futures Slip; Tech Shares in Focus

LONDON (AP) -- U.S. stock futures slipped Tuesday as the market looked set to extend the previous session's decline, with Morgan Stanley's earnings and data on producer prices to come, and Oracle in focus after reporting new software licenses below expectations.

Dow Jones futures were recently down 12 points, S&P 500 futures dipped 2.8 points and Nasdaq futures fell 8.2 points.

U.S. stocks closed lower Monday as investors took profits on recent gains, especially in the technology sector, though an upgrade for Citigroup and further mergers and acquisition news put a floor on losses. The Dow Jones Industrial Average slipped 4 points to 12,441 and the Nasdaq Composite dropped 21 points to 2,435.

Technology stocks were set to remain in focus after Oracle Corp. late Monday matched Wall Street earnings estimates, but reported new software-license sales - a key indicator of future growth - below expectations, sending shared down 3 percent in after-hours trading.

http://biz.yahoo.com/ap/061219/wall_street.html?.v=2

[ozymandius]

11. Good morning everyone.

:donut: :donut: :donut:
Time for me to go to work. Kudos to Ghost Dog for doing the heavy lifting while others are away.

Have a great day!

Ozy :hi:

[UpInArms]

14. 'morning and 'bye, Ozy and all

and my thanks also go to Ghost Dog!

Hopefully there will be a lull in my morning time soon and I can join in a bit more.

:hi:

[Ghost Dog]

37. Many thanks, but note that tomorrow I return to the Spanish/African islands

from where, due to the poor quality of internet connection, I will be able to glean/relay somewhat less economic information (though I'll still be keeping an eye on things, while working on some more ecological projects...).

[UpInArms]

12. daily dollar watch

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

Last trade 83.61 Change -0.39 (-0.46%)

Dollar Slides After Current Account Deficit Hits a Record High

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/Dollar_Slides_After_Current_Account_1166480412245.html

US Dollar - After having rallied for most of last week, the US dollar started its final week before the market swings into full holiday mode on a softer footing. The combination of a record high current account deficit and a drop in the NAHB housing market index tempted traders to take profit on long dollar positions even though the data was not entirely dollar negative. The current account deficit ballooned to -$225.6 billion from a downwardly revised -$217.1 billion, which was slightly more than the market expected and represents 6.7 percent of GDP. However after last week’s surprise drop in the trade deficit and rise in net foreign purchases of US securities, the significance of the current account deficit’s rise is eroded. Furthermore, the details of the current account number also reveal that foreign central banks picked up their purchases of US Treasuries last quarter. The deterioration actually came from a large rise in commodity prices and drop in the balance of income, which is expected to be offset by income growth in the coming quarters. As for the NAHB homebuilders’ index, even though the sentiment measure dropped from 33 to 32 in the month of November, expectations for future sales rose to 48 from 45. Therefore even though today’s data was weak on a headline level, the details had a more optimistic take on things. Looking ahead, we could see a bit more dollar bearishness in the next 24 hours as producer prices and housing market data are released. A rebound is expected in PPI after a sharp drop in October, but after the flat consumer price reading last week, the rebound could be smaller than the market is currently anticipating. However for the time being, consumer spending is still holding strong as indicated by last week’s retail sales number. This suggests that we are still in soft landing mode which makes it unlikely that we will see fresh yearly highs in the EUR/USD before the year’s end.

...more...

Dollar Loses Big

http://www.dailyfx.com/story/dailyfx_reports/daily_technicals/Dollar_Loses_Big_1166531283172.html

EURUSD – As we said yesterday regarding EURUSD, “the pair could bottom out near 1.3052 – the decline from 1.3292 would equal the 1.3367-1.3126 decline at 1.3052 (a classic a-b-c correction).” This is precisely what the pair has done, as price bounced from yesterday’s 1.3051 low at the supporting trendline connecting the 10/24 and 11/21 lows. Momentum could carry EURUSD back towards the 12/4 high of 1.3367 should price be able to close above immediate resistance at the 23.6% fibo of 1.2482 – 1.3368 at 1.3159. However, a break below the noted supporting trendline and the psychologically important 1.3000 level could lead to more significant declines to the 61.8% fibo at 1.2820.

<snip>

USDJPY – The USDJPY continues to rally but is nearing resistance at a trendline connecting the 10/13 and 10/24 highs, with the line currently sitting at 118.36 and falling about 4 points per day. Should price break higher, the pair could target the 10/13 high at 119.87. However, daily oscillators are starting to ease back and could point to a slowdown in momentum. A turn lower could take aim on the 12/13 low at 116.64.

<snip>

USDCAD – Loonie is at a standstill at channel resistance at the current juncture, where price has held for nearly 4 days. Daily oscillators near or at overbought levels along with divergent short term oscillators give scope to further weakness / consolidation. Initial support is at the 12/8 high at 1.1516 while the next major level of resistance is not until 1.1771.

...more...

[Ghost Dog]

23. Strong Ifo boost euro, dovish BOJ hurts yen

http://today.reuters.com/news/articleinvesting.aspx?type=hotStocksNews&storyID=2006-12-19T111414Z_01_N18467023_RTRUKOC_0_US-MARKETS-FOREX.xml

LONDON (Reuters) - The euro approached a recent record high against the yen and rose versus the dollar on Tuesday after a buoyant German Ifo sentiment survey boosted the case for more euro zone interest rate hikes in 2007.

The euro's gains versus the yen were accentuated by growing doubts over whether Japanese rates will rise in January.

The Bank of Japan left rates on hold as expected but BOJ governor Toshihiko Fukui said domestic consumption and consumer prices had softened.

The December Ifo index of corporate sentiment came in stronger than expected to hit its highest since comparable data began in 1991, suggesting that companies in the euro zone's biggest economy are doing well despite the strong euro exchange rate.

"The Ifo certainly has boosted the euro. It reaffirms the positive growth outlook for Germany and the euro zone going in to 2007... (and) suggests that the European Central Bank will continue to hike rates," said Mitul Kotecha, head of global foreign exchange research at Calyon.

/...

[Ghost Dog]

24. Swiss franc falls to new 6-1/2-year low vs euro

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061219:MTFH89707_2006-12-19_08-57-11_L1890163&type=comktNews&rpc=44

ZURICH, Dec 19 (Reuters) - The Swiss franc fell to a fresh 6-1/2-year low versus the euro on Tuesday as a cautious growth outlook from the Swiss government added to views that the Swiss National Bank would not tighten more aggressively.

By 0845 GMT, the franc was down 0.1 percent versus the euro at 1.6033 per euro <EURCHF=>, close to a low of 1.6043 marked earlier in the session.

Against the dollar the franc was 0.1 percent higher at 1.2211 per dollar <CHF=>

/...

[UpInArms]

13. Global takeover frenzy fuelled by debt: analysts

http://news.yahoo.com/s/afp/20061219/bs_afp/britaininvestmenteconomysectorfinancetakeover

LONDON (AFP) - Frenetic global takeover activity this year has been driven partly by an over-reliance on debt and this could cause problems if economic growth slows or interest rates rise, analysts say.

The total value of takeovers across the world in 2006 stood at 3.427 trillion dollars (2.619 trillion euros) on December 10, according to Canadian financial information provider Thomson Financial.

That was higher than during the height of the dotcom Internet bubble in 2001.

In 2006, an increasing number of mergers and acquisitions (M and As) have been financed largely by debt, in particular via the increasingly popular method known as a leveraged buy-out (LBO).

LBOs are usually based on a relatively small amount of actual capital or cash, with high levels of borrowing, and are often orchestrated by investment funds.

<snip>

"Many struggling companies will not be able to continue refinancing their way out of trouble as has been the trend of recent years" owing to higher interest rates, he added.

...more...

[RamboLiberal]

22. Inflation roars back with 2 percent wholesale price jump

US inflation made a surprise comeback in November with a surprising 2.0 percent rise in wholesale prices, the biggest monthly jump in 30 years, the government has reported.

The Labor Department's producer price index (PPI) was far ahead of Wall Street expectations of a 0.5 percent rise and showed strong increases in a wide range of goods.

The core index, which excludes volatile food and energy prices, was up 1.3 percent -- the largest increase in more than 25 years -- against expectations of a 0.2 percent rise.

The surprise jump in prices challenges expectations from economists and the Federal Reserve that inflation is under control.

But some analysts said the increase may be a one-month quirk.

http://www.breitbart.com/news/2006/12/19/061219150056.i0vmpzp9.html

[Ghost Dog]

25. Gulf Arab '07 bond sales may surge to $40 bln-HSBC

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061219:MTFH91922_2006-12-19_10-41-43_L19884156&type=comktNews&rpc=44

DUBAI, Dec 19 (Reuters) - Gulf Arab governments and companies may sell as much as $40 billion of bonds next year, 60 percent more than in 2006, to help finance projects and lending as the oil-based economies expand, HSBC Holdings (HSBA.L: Quote, Profile , Research) (0005.HK: Quote, Profile , Research) said.

Gulf Arab banks will lead demand by number as they seek to diversify their sources of funding to include Asian and European investors, and match more closely the maturity of their lending, Simon Putt, HSBC's director for debt capital markets in Dubai told reporters on Tuesday.

"The market is going like a train," Putt said. "It's an attractive pricing environment for borrowers."

Gulf Arab bond sales, including debt that complies with an Islamic ban on the receipt of interest, have surged to $25 billion this year, compared with $10 billion in 2005 and $5 billion in 2004, generating more revenue for arranging banks such as HSBC, Putt said, declining to give details.

Sales in the United Arab Emirates, the second-largest Arab economy, accounted for about half the total. Sales next year could range between $30 billion and $40 billion, Putt said.

/...

[Roland99]

38. Auditing overseers propose new streamlined rules

Auditing overseers propose new streamlined rules
Accounting board says the new standard will save money and still protect investors
http://www.marketwatch.com/News/Story/us-auditing-overseers-propose-new/story.aspx?guid=%7B6BECFB30%2DDF41%2D4674%2DA66E%2DD4F6C8734917%7D&dist=RNPullDown

By unanimous vote, the Public Company Accounting Oversight Board floated a new rule that would allow auditors to focus on the portions of corporate books that pose the highest risk of fraud or error.

...

In addition to directing the auditor to check the most important internal financial controls, the new standard would remove a requirement that auditors evaluate management's procedures for checking those controls.

The new standard would also direct auditors to tailor audits to a small company's situation. Like the SEC's proposal, the accounting board's proposed rule would scale audits to a company's size. It wouldn't, however, write new audit rules based on a company's size.

...

A recent study by a committee headed by a former economic adviser to President Bush said laws like the Sarbanes-Oxley Act were contributing to a decline in U.S. competitiveness, as foreign companies sought out other markets on which to list in order to avoid the law's stiff audit requirements.

[Danascot]

39. The “mother of all butt kissings”

http://www.kitco.com/ind/schiff/dec152006.html


The last thing that Paulson and Bernanke want is for the world to recognize the financial precipice upon which the U.S. economy now teeters, and China’s unique ability to push it over the edge.

It is absurd to imagine that they would actually demand that China revalue its currency. Think about what such a request actually implies. It means that Americans would pay higher prices for the goods they buy and higher interest rates on the money they borrow. Does anyone really believe that American politicians are in China to demand higher prices and higher interest rates for American consumers? Since such a combination would surely produce a sever case of stagflation, does anyone really believe that Greenspan and Bernanke went to China to demand that they push the U.S. economy into recession?

It is far more likely that they are there to persuade the Chinese to maintain the current currency peg so that Americans can continue to enjoy the artificially high standard of living that the massive subsidy provides. No doubt they will likely try to convince the Chinese that doing so is in their interest as well, though I am not sure just how much longer that dog will continue to hunt.

Once Chinese officials grasp the concept that the only thing standing between their citizens and much higher standards of living is the currency peg, they will abandon it completely. The result will be abundance in China and scarcity in the U.S. China will then be awash in credit and consumer goods while America will be devoid of both and awash in paper dollars.

Think about today’s unchanged reading on November CPI, or Wednesday’s 1% gain in November retail sales. What would happen to the CPI and retail sales if both prices and interest rates surged? The biggest factor boosting retail sales was the 6.5% gain in consumer electronics. Does anyone want to guess where most of that stuff was made, or how it was paid for? How many big screen TVs could Americans “afford” to buy on credit if both prices and interest rates went up by 25% or more? As usual, the media interpreted the recent retail sales figures as evidence of a strengthening U.S. economy. Nothing could be further from the truth. Such sales merely reflect the strength of the economies that produced the goods in the first place, not the economy of the nation that went deeper into debt to consume them.

Ironically, during the very week that Paulson and Bernanke were trying to convince the Chinese to keep buying dollars, Alan Greenspan was making a good case why the rest of us should sell. The former Fed chairman, adding his voice to that of his predecessor Paul Volcker, predicted that the dollar’s recent slide would continue for years to come and cautioned that it would be foolish for anyone to keep all of their money in just one currency.

From my perspective it would be foolish for anyone to keep any money in U.S. dollars. If the Chinese come to their senses and pull all that American wool out of their eyes, then look out below.

[Ghost Dog]

43. America and China: Big guns, small prizes

http://economist.com/world/asia/displaystory.cfm?story_id=8450185
No great breakthroughs at an infant dialogue. But at least there were no tantrums

THEY may not have liked all of the message, but China's leaders must have been gratified by the calibre of the messengers. Led by Hank Paulson, the treasury secretary (above centre), nearly half of George Bush's cabinet trekked to Beijing to pay tribute to China's rising economic might. On December 15th they ended two days of meetings with Chinese leaders, the first instalment of what is to be a regular, twice-yearly, “strategic economic dialogue”, announced in September.

...

Neither side had much to say that had not been said many times before. But they may have laid the groundwork for a more mature handling of their many quarrels. The most explosive remains China's steadily growing trade surplus with America. Chinese imports of American goods continue to grow vigorously, but the volume in the other direction is growing ever faster. In the first ten months of this year, China achieved a surplus of $190 billion. In both the administration and the Congress sharp voices have accused China of supporting its export surge by keeping the value of the yuan artificially low.

There is a bipartisan push behind a scheme to slap penalties on Chinese goods if it is not allowed to strengthen. The make-up of the incoming Senate makes such actions more possible as early as January, when Congress returns and year-end trade figures are announced.

China's response is that exchange rates are not the sole cause of the imbalance. China also likes to point out that foreign companies, including American ones, produce and profit from much of what China exports. And it suggests that America look at its own role, namely its love of cheap consumer goods and a national savings rate that hovers at or below zero.

/...

[Ghost Dog]

40. Germany to Determine if Hedge Funds Pose a "Systemic Risk"

http://www.hedgeco.net/news/12/2006/germany-to-determine-if-hedge-funds-are-systematic-risk.html

HedgeCo.Net (New York) - Germany's Deputy Finance Minister Thomas Mirow held a briefing with reporters on Germany's upcoming presidency of the Group of Eight in 2007, the G8 are the top 8 major industrialized countries, and Mirow plans to examine next year whether hedge funds pose systemic risks.

Mirow said hedge funds were "insufficiently transparent" and the industry had already seen one big hedge fund fail although with few market repercussions. He said industrial nations would try and coordinate efforts to reduce risks posed from hedge funds by promoting more transparency but not necessarily through regulations.

...

"What we would like to know is are there systemic risks, yes or no, and if so, what could we do to deal with it in a reasonable manner," he said.
Mirow's comment came as the U.S. Securities and Exchange Commission prepared to vote on a proposal on Wednesday to raise the (lower) limit investors can invest in hedge funds to $2.5 million from $1 million set in 1982.

The SEC's proposed rule, if adopted, would shut the door on a lot of the just-barely wealthy who have been piling into hedge funds lately, although one market analyst said it would likely not affect larger funds with big clients.

/..

[Ghost Dog]

42. Latin America's economies: A good year

http://economist.com/world/la/displaystory.cfm?story_id=8453221

FOR many Latin Americans, this will be the best Christmas holiday in a while. According to an estimate by the UN Economic Commission for Latin America, the region's economy will have grown by 5.3% in 2006. Not only is that higher than earlier forecasts. It is the third year of reasonable growth, meaning that income per head has risen by 11.7% since 2003.

Latin America is accustomed to giddy boom-bust cycles. What makes recent growth more unusual is that it coincides with a current-account surplus (see chart) and low and falling inflation (down on average from 6.1% in 2005 to 4.8% this year). That holds out hope that it will be more sustainable.

Most numbers are moving in the right direction. For the region as a whole, unemployment is edging down, real wages are increasing, foreign debt has fallen, the public finances are close to balance and investment and consumption are rising.

/...

[Ghost Dog]

44. 14:15 - Bulls struggling with (split) resolve

Dow 12,455.21 Up 13.94 (0.11%)
Nasdaq 2,426.01 Down 9.56 (0.39%)
S&P 500 1,423.98 Up 1.50 (0.11%)
10-Yr Bond 4.5870% 0.0000
NYSE Volume 1,805,835,000
Nasdaq Volume 1,371,204,000

2:00 pm : The major averages are now trading in split fashion as buyers show their resolve within the last 30 minutes. Oil prices extending their reach to the upside (+1.8%) now have the Energy sector up 1.6% on the session. Aside from Energy's leadership helping the Dow and S&P 500 inch into positive territory, investors are also embracing some commentary from Dallas Fed President Fisher. With the market more preoccupied with the pace of economic growth than inflation of late, Fisher saying he's optimistic that the economy will grow faster than "the gloomy forecasts making all the headlines lately," has been the driving factor behind the recent turnaround in sentiment. DJ30 +2.57 NASDAQ -12.41 SP500 +0.05 NASDAQ Dec/Adv/Vol 1919/1083/1.27 bln NYSE Dec/Adv/Vol 1855/1375/928 mln

1:30 pm : Even though Energy is holding onto most of its intraday advance (+1.1%), recent recovery efforts have been short-lived. Health Care recently turning negative, after the FDA proposes new warnings on over-the-counter painkillers about liver and stomach risks, removes some notable leadership. Broad-based weakness in the S&P 500's two most influential sectors -- Financials and Technology -- is also preventing the bulls from maintaining much of a presence. DJ30 -25.55 NASDAQ -19.12 SP500 -3.72 NASDAQ Dec/Adv/Vol 1942/1018/1.16 bln NYSE Dec/Adv/Vol 1840/1345/842 mln

1:00 pm : The market improves its stance since the last update, showing some good resilience this time around from a renewed wave of buying in oil futures. Crude for January delivery is now up 0.8% at fresh session highs near $62.70/bbl; but subsequent leadership from the profit engine that is Energy (+1.1%), led by a 1.3% surge in Dow component Exxon Mobil (XOM 76.46 +0.95), is somewhat helping to offset the commodity's inflationary characteristics. Refiners (+1.9%), Explorers (+1.2%), Drillers (+1.1%), and Oil & Gas Equipment (+1.0%) are now among the day's best performing S&P industry groups.DJ30 -16.98 NASDAQ -16.34 SP500 -2.78 XOI +1.2% NASDAQ Dec/Adv/Vol 1961/1011/1.08 bln NYSE Dec/Adv/Vol 1859/1317/774 mln

12:30 pm : No real change in sentiment as traders make their way through the New York lunch hour. Profit taking throughout the Technology sector continues to weigh on all three major averages.

...

12:00 pm : After having a three-day winning streak snapped a day earlier, sellers half way through today's session are trying to finish what they started.

With the Dow closing out last week at another record high, coupled with the S&P 500 and Nasdaq posting respective Q4 gains of 6.5% and 7.8% so far, producer prices surging the most in decades, mixed news on the corporate front and higher oil prices are questioning the sustainability of the five-month rally in stocks.

Before the bell, the Labor Dept. showed that the closely-watched core PPI rose a much higher than anticipated 1.3% (consensus 0.2%), the most since July 1980, serving as reminder that some inflation risks remain. With total PPI checking in with a surprising 2.0% increase, due largely to a 6.1% rise in energy prices, a rebound in crude oil futures is also acting as an overhang and another excuse to take some money off the table.

Of the six sectors trading lower, Technology is pacing the way. Oracle Corp (ORCL 17.16 -0.75) has been the biggest drag on tech after posting the slowest sales growth for applications in four quarters.

The absence of leadership from Consumer Discretionary is also weighing on sentiment.

...

11:30 am : After briefly inching above the flat line, the S&P 500 has almost as quickly slipped back into the red. Oil prices turning positive within the last 15 minutes is helping Energy provide some notable leadership as the morning’s best performing sector. However, the sector's 0.8% is being more than offset by oil’s potential to sustain inflation pressures, especially with investors getting wind earlier of the largest jump (+2.0%) in wholesale inflation since 1974. Crude for January delivery, which expires today, is now up 0.4% at $62.45/bbl. DJ30 -26.98 NASDAQ -16.72 SP500 -3.08 NASDAQ Dec/Adv/Vol 1709/1138/690 mln NYSE Dec/Adv/Vol 1598/1440/492 mln

11:00 am : Slowly but surely the underlying bullish tone responsible for lifting stocks virtually unabated over the last five months continues to rear its head. The blue-chip indices are now down only 0.1%, with half of the Dow 30 now posting gains. Honeywell (HON 43.82 +0.60) leads the way with a 1.4% surge while Exxon Mobil (XOM 75.83 +0.32) bouncing back from yesterday's 2.3% sell-off, even in the face of falling oil prices, is also lending some notable support. DJ30 -5.25 NASDAQ -10.77 SP500 -0.69 NASDAQ Dec/Adv/Vol 1773/1019/532 mln NYSE Dec/Adv/Vol 1774/1202/380 mln

10:30 am : Equities are still in negative territory but continue to pare their losses. Energy and Materials have been the latest sectors to join Health Care to the upside; but the Tech nearly halving its intraday 1.0% pullback within the last 30 minutes is contributing to the bulk of improvement on all three major indices. A recent turnaround in rate-sensitive bank stocks, now that the knee-jerk response in Treasuries to this morning's economic data has been largely given back, is also worth noting as the Financials sector inches closer to unchanged. Morgan Stanley's (MS 83.40 +3.03) 3.8% surge to multi-year highs, however, remains the biggest source of support for the influential sector. The investment bank posted record Q4 results and set plans to spin off its Discover unit. DJ30 -13.34 NASDAQ -12.88 SP500 -1.99 NASDAQ Dec/Adv/Vol 1788/896/376 mln NYSE Dec/Adv/Vol 1957/922/220 mln

10:00 am : The indices are off their opening lows but continue to sport losses across the board. Health Care recently inching to the upside offers some support, but its paltry 0.10% advance as the only sector in positive territory isn't exactly providing the bulls with enough confidence to get widespread buying efforts back on track. A 1.0% decline in the influential Tech sector continues to act as the biggest overhang while a sell-off in retail (RLX -1.4%) removes some notable leadership from the Consumer Discretionary sector. C

...

09:40 am : Stocks pick up where they left off a day earlier, as follow-through selling pressure takes a toll on the indices right out of the gate. With the Dow closing out last week at another record high, and the S&P 500 and Nasdaq garnering the bulk of their respective 14% and 10.4% year-to-date performances in Q4, with gains of 6.5% and 7.8% so far, some disappointments on the economic and earnings fronts are fueling this morning's consolidation efforts. Oracle Corp (ORCL 16.97 -0.94) merely matching Wall Street forecasts and license revenue guidance failing to live up to the market's high expectations is adding to the sense that tech stocks are overbought on a short-term basis. The stock is down 5%. A discouraging PPI report serving as a reminder that some inflation risks remain is also weighing on early sentiment. Earlier, the Labor Dept. showed that total PPI rose a surprising 2.0%, due largely to 6.1% rise in energy prices, while the more closely-watched core PPI rose a much higher than anticipated 1.3%, the most since July 1980. DJ30 -41.41 NASDAQ -25.32 SP500 -7.19 NASDAQ Vol 82 mln NYSE Vol 50 mln

[Roland99]

45. Hmm...there's been nothing resembling a correction since mid-summer