STOCK MARKET WATCH, Thursday May 24

[ozymandius]

Source: DU

Thursday May 24, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 606 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2332 DAYS
WHERE'S OSAMA BIN-LADEN? 2044 DAYS
DAYS SINCE ENRON COLLAPSE = 2005
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 9
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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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 May 23, 2007

Dow... 13,525.65 -14.30 (-0.11%)
Nasdaq... 2,577.05 -10.97 (-0.42%)
S&P 500... 1,522.28 -1.84 (-0.12%)
Gold future... 662.60 +2.70 (+0.41%)
30-Year Bond 5.01% +0.03 (+0.62%)
10-Yr Bond... 4.86% +0.03 (+0.58%)






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

---

Read more: DU

[ozymandius]

1. Yikes! I was very close to being offline today.

I just spent the past hour with AT&T tech support. My connection was reset - resulting in a permission error. I am looking forward to having fewer of these problems.

[UpInArms]

5. g'morning, Ozy!

Glad that you got connected - we miss you when you're not here :D

:hi:

[ozymandius]

9. Good morning UIA.

:donut: :donut: :donut:

It's always a pleasure to be here. There's one stark reality of living with internet-based connectivity: without the internet I might as well be living in a cave and dressing in a bouquet of leaves.

[AnneD]

18. Morning Marketeers.....

:donut:and lurkers. Ozy, now that is living green. Since I know how to work hide and fur, I might be a bit more stylish shall we say. Today is the last day of school and it is a half day at that-so I have to short post today until we turn the wee ones back to their parents. This is one of those days that I love at school. Kids are so excited, the 5th graders will be going on to new adventures, and everyone looks foreword to a break and a chance to revitalize. I guess the truth is I never grew up-I love the academic schedule so much. Fits in with life. I love that large chuck of free time to learn, explore, tackle projects, or travel.



Happy hunting and watch out for the bears.

[DemReadingDU]

29. We go nuts without the Internet

A few weeks ago, our neighborhood had lots of lightening. Unfortunately, it struck near our house. And it was LOUD! It took out the cable TV and Internet, also the circuit board on the furnace and microwave. My computer was ok but had to use dial-up for a few days until the cable was repaired.

It's hard to remember how we ever got news before the Internets and The Google!

:)

[Ghost Dog]

16. Never trust the media.

Seek out alternatives. :hi:

[ozymandius]

2. Today's Market WrapUp

Will the Winning Streak End?
BY PAUL NOLTE

Joltin’ Joe, one of the greatest streaks in baseball of all-time was to hit safely in 56 consecutive games. A record that has been approached over the past 10 years, but many have fallen well short. The stock market celebrates 56 days from the market bottom with yesterday’s close with a rise of over 10% for the Dow and an S&P 500 that closed within a hair of a new record high. It seems that every time the opening bell is rung, the market advances, much as every game DiMaggio played – he would get a hit. So is this record “untouchable” – as is the Yankee Clipper’s? Obviously time will tell, however we may be in the middle portion of a run in stocks that mirrors that of the late 1990’s, when the OTC market was on a tear. There are some glaring differences and some similarities that we will review over the next few paragraphs that may point to further gains in the markets in the weeks ahead, but that it will – at some point (like any hitting streak) come to an end. Unlike Joe, the markets may not go on another hitting streak once this one is done!

Valuation levels are at their lowest levels in 10 years, according to the Wall Street Journal and any investment broadcast. And it is true; however, the valuation levels beyond the 10 year horizon put today’s valuation levels at the top end of historical ranges. Essentially we went from an expensive market in 1997 to a crazy expensive market, and today we have made it back to just plain expensive. There has been much written about valuations, using operating earnings, trailing or expected and which way is best. We use a trailing 12 month “all in” earnings, which point to a market with a P/E ratio over 18x AND margins on those earnings are at or near record highs. IF the market multiple were to get to a more “normal” or even the median ratio of the past 100 years, the markets would be selling for 30% less than they are today. If we anticipate returns of 10-15% over the next year, we are looking at a 2 to 1 loss potential for each percent return we might get – better offerings are in the mundane bond market.

-cut-

But the economy is doing poorly – why hasn’t the market reflected the higher energy prices and slowing economic growth? There has been a large disconnect between the financial markets – buoyed by the money flows and merger activity and the “real” economy, hurt by slowing real estate and higher energy/food prices. The common belief is that the markets will eventually reflect the poor economy and begin going down. However, we believe that the markets will actually continue their rise until “something financial” disturbs the markets enough to react. A whiff of “something financial” was seen late in February as China began to try to slow their economic growth by raising rates – putting into jeopardy the merry-go-round of money flowing from our shores to China to Japan and back here. What made the decline deadly was not the fact that it happened, but how the various asset classes reacted. Over the past couple of years, we have noted the correlation between assets classes no longer follows their historical relationships. Look at nearly any asset class you care to name and how has it performed over the past 3-5 years. Since May of 2004, the CRB index is up over 10%, Gold is up over 50% and REITs have compounded at better than 10%. This relationship is at odds with historical norms. So when the markets unraveled, all these asset classes (bond yields actually rose from the end of February to end of March) took it on the chin. The danger in the markets are not that the economy slows – it already is (and many argue already in recession), but the risks are that the hiding place will be short-term money – so the great sucking sound investors are likely to hear will be the liquidation of investments ACROSS asset classes.

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

[UpInArms]

3. dollar watch

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

Last trade 82.310 Change +0.011 (+0.01%)

Dollar: Dow Struggles to Stay Positive, What Does this Mean for the Dollar?

http://www.dailyfx.com/story/bio1/Dollar__Dow_Struggles_to_Stay_1179956356619.html

Another record intraday high in US stocks today means another day of solid gains for carry trades. The strong correlation between the two instruments explains why the dollar continues to rise against the Japanese Yen but has weakened against other major currencies. The relationship between the Dow and carry trades goes both ways so we caution that the stock market’s inability to hold its highs over the past few days could spell trouble for not only US stocks, but also carry trades in the days or weeks ahead. Today, the Dow was up as much as 70 points before reversing intraday gains to end the day down 14 points. Carry trades have retraced as well, but having rallied significantly throughout the European and US trading sessions, the moves lower were not significant enough to send those pairs into negative territory. However should the stock market finally buckle by selling off 100 points or more then carry traders should seriously watch out. What could trigger a more significant move lower in the Dow? Perhaps tomorrow’s durable goods and new home sales reports. The weak dollar has continued to fuel demand for Boeing aircrafts, but orders for big ticket items excluding transportation could suffer, especially when it comes to electronics and furniture. Builder sentiment has hit decade lows which could be reflective of how new homes have been selling. Disappointments in both could lead to more dollar weakness, which has been expressed against every currency except for the Yen. However neither durable goods nor any of the housing market reports will probably change the Federal Reserve’s mind about leaving interest rates unchanged. Only a big up tick in jobless claims, falling gasoline prices or an end to the stock market rally will give them enough flexibility or reason to be proactive rather than reactive to the deteriorating conditions of the housing market.

...more...

US Durable Goods And Home Sales Look To Fuel Dollar, Equity Rallies

http://www.dailyfx.com/story/dailyfx_reports/cross_markets_data_reaction/US_Durable_Goods_And_Home_1179962273185.html

Durable Goods Orders (APR) (12:30 GMT)

Expected: 0.8%
Previous: 3.7%

New Home Sales (MoM) (APR) (14:00 GMT)

Expected: 0.2%
Previous: 2.6%

How Will The Markets React?

The US financial markets have performed well so far this week considering the lack of a fundamental impetus from the economic calendar. This dry spell will finally come to an end Thursday though when the macro winds finally pick up with April readings of durable goods and new home sales. Tomorrow, the orders indicator will have an hour and a half head start on the housing data; so it will very likely shape investor sentiment for the remainder of the day. Bookings for goods with an expected life of three or more years are expected to have grown 0.8 percent last month. If realized, that would be the third consecutive monthly increase – a statistic that has not been recorded since June of 2005. However, the outlook itself is questionable since the Commerce Department’s indicator is notoriously volatile. This is a particularly valuable trait for those seeking volatility since surprises are commonplace. What’s more, fundamentalists will be even more invested in the release this time around as traders and analysts sort through all of the top tier indicators in search of confirmation for Fed Governor Ben Bernanke’s outlook of a rebound in growth. The durables report will give a view of business investment and manufacturing activity. With this in mind, a bullish surprise may be in store if there is a correlation between the new orders component of the ISM manufacturing report. After two quarters of burning off excess inventories, the demand sub-gauge hit a 14 month high in April. After the markets participants fully absorb the durable goods number, they will have to change gears and take in the New Home Sales report. This report is also expected to record a marginal increase. However, even a 0.2 percent increase would be impressive given the rise in default rates and the tightening of credit standards that Governor Bernanke said would weigh on the market through 2008.

...more...

[mojavekid]

20. Daily Pfennig 5/23/07: Putting the Soapbox to Work Today!

http://www.kitcocasey.com/displayArticle.php?id=1400

Another yawner of a day in the currencies... The euro tried to put together a run after the ZEW Business Confidence printed at 24 (vs. 16 in April), but it was much like the kid at the ball park trying to get the fans to start the wave. A few people stand up, and then it fizzes out. That was the euro's day yesterday.

I have a difficult time thinking that currency desks have already shut down for the Memorial Day weekend... But it certainly looks as though that's the case... This has been as exciting as watching paint dry... Or counting flowers on the wall...

Speaking of Germany's ZEW Business Confidence report... There was one other piece of the report that I left out of yesterday's Pfennig... Want more confirmation that the German economy is strong and pulling the Eurozone economy out of the woods? How about the jump in current conditions to a new all-time high at 88.0? WOW! This really underlines the very positive growth theme in Germany right now.

And no one group loves to see this more than the European Central Bank (ECB)... They keep harping on inflation pressures when inflation has dipped below their target of 2%... Now, the ECB can hold their collective heads up and be proud of how they have guided the Eurozone economy to this point, while providing price stability... Not that shameful mess that the Fed created in the U.S., that's for sure!

The Bank of England (BOE) printed the minutes from their last meeting, when they disappointed me with only a 25 BPS rate hike. The report confirms that the rate vote was unanimous. This report has helped pound sterling to gain some lost ground vs. the dollar, as traders feel confident that the BOE will come right back in June with another rate hike.

I fully expect, in my opinion, the pound sterling to get back to the lofty "2" level and beyond... But it will take strong growth reports and another BOE rate hike to do the heavy lifting.

more...

[mojavekid]

21. Jim Willie: Don't Cry For The USDollar

http://www.kitco.com/ind/Willie/may232007.html


Don't Cry For The USDollar

By Jim Willie CB
May 23 2007 4:05PM

www.GoldenJackass.com



The Bretton Woods II principal propaganda plank has been buried, with no fanfare, no eulogy on a moronic indefensible myth chapter. Asia no longer supplies credit to the United States debt monster. That mantle has been accepted by a combination of the Persian Gulf oil producers and the counterfeit press, each showing strain. The transition is truly deadly. Increasingly feisty, if not hostile, sheiks in the hotbed of the Middle East have become the last remaining pillar of USDollar support. If any prominent economist thirty years ago had taken the podium at a professional conference or political assembly and put forth a plan for the USEconomy to rest upon two pillars of credit supply, one being a printing press, that person would be condemned as a charlatan, a quack, a lunatic, a bird brain, an incompetent counselor hellbent on destroying the financial structure of the land where the beacon of freedom used to shine. Well, that is exactly what has happened, except this time, the process of flooding the system with phony fiat false money is hailed as a boon to investors, a solution to home foreclosures, and a source of tremendous profit for US corporations.

We have come full circle from responsible competent economic counsel dating back to the 1960 decade to a guided path to truly cataclysmic Orwellian financial structures. We see the rancid bitter fruit of a USDollar suffering from debt constipation and economic sclerosis, whose supporting tree lacks the proper manufacturing branch burdened by increasing weight of baby boomer retirees. As the United States gradually becomes isolated on the geopolitical stage, for whatever reason, whether an unfortunate damaging twist of fate or inept aggressive leadership or a compromised Congress, the USGovt and US populace find themselves dependent upon what can be described as the ‘Weimar Engine’ in a highly precarious manner. The ongoing credit and debt explosion keeps the system running, keeps the rivers of money moving, while leaving the door open for fraud and granted gravy gathering by powerful insiders. Von Mises warned that at an end stage, an acceleration of money and debt will be necessary in order to sustain even flat growth. We are there now, here and now today. The Gross Domestic Product for 1Q2007 will be officially announced as almost flat, probably under 1% growth. Accept that number if you accept a 3% to 4% price inflation. Not here, not me, no way, no how!

THE USDOLLAR BOUNCE

Do not get excited about this USDollar bounce. It is feeble. It will be short-lived. Sure, a very short-term bullish stochastix crossover occurred, which was inevitable after the April important breakdown. Profit taking has been in progress. Let’s see if in a few weeks we learn that China has blunted this little bounce. The downtrend which began in November 2005 with a 92 high was followed by a long enduring breakdown which has not ended. The falling 20-week and falling 50-week moving averages testify to a powerful down trend which will not end until the critical support at 80 is tested repeatedly. Resistance will be seen at the 83 mark (20wMA), the 83.6 mark (trendline), and the 84.3 mark (50wMA). The DX index price is wrestling with the Nov2006 old support, now resistance.


more...

[Ghost Dog]

38. Don't cry for me Argentina

Don't cry for me Argentina
It won't be easy, you'll think it strange
When I try to explain how I feel
That I still need your love after all that I've done
You won't believe me
All you will see is a girl you once knew
Although she's dressed up to the nines
At sixes and sevens with you

I had to let it happen, I had to change
Couldn't stay all my life down at heel
Looking out of the window, staying out of the sun
So I chose freedom
Running around, trying everything new
But nothing impressed me at all
I never expected it to

Don't cry for me Argentina
The truth is I never left you
All through my wild days
My mad existence
I kept my promise
Don't keep your distance

And as for fortune, and as for fame
I never invited them in
Though it seems to the world they were all I desired
They are illusions
They're not the solutions they promised to be
The answer was here all the time
I love you and hope you love me

Don't cry for me Argentina

Don't cry for me Argentina
The truth is I never left you
All through my wild days
My mad existence
I kept my promise
Don't keep your distance

Have I said too much?
There's nothing more I can think of to say to you
But all you have to do is look at me
To know that every word is true

Don't cry for me Argentina

Music: Andrew Lloyd Webber.

[mojavekid]

23. Why the U.S. Dollar Will Rally

http://www.kitco.com/ind/saville/may222007.html

The argument put forward by most US$ bears can be summarised as follows: Due to the large US current account deficit the dollar is destined to move much lower and, in fact, would already have plummeted to new multi-decade lows if not for the support provided over the past two years by favourable interest rate differentials. But the dollar's interest rate advantage is set to evaporate over the coming months as the Fed cuts rates in reaction to the housing-led US economic downturn while the ECB continues to push rates upward in reaction to Europe's strengthening economy. As a result, a major US$ breakdown is imminent.

Our view, however, differs from this conventional bearish wisdom. In particular, in commentaries over the years -- most recently in the 11th April 2007 Interim Update -- we've explained why a large current account deficit is not, in itself, a reason to be bearish on a currency.

The only aspect of the aforementioned bearish argument that rings true to us is the part about interest rates lending support to the dollar over the past two years. Note, though, that while interest rate differentials are important drivers of intermediate-term currency market trends they tend to operate with substantial time delays; so even if the dollar were to immediately lose its interest rate advantage over the euro this would probably not cause USD/EUR to move lower over the next 6 months. In any case, almost regardless of what happens in the housing market there is little chance of the Fed cutting the overnight target rate with gold hovering around $700/ounce and the global stock market rally in full swing. Actually, if gold moves up to test its May-2006 peak in the near future while cyclical assets such as equities and industrial commodities remain strong then the Fed's next move will most likely be a rate HIKE.

Those who are expecting the US$ to move much lower relative to the euro are, we think, making two logical errors (in this discussion we'll focus on the US$ relative to the euro because the euro is the other senior currency and because USD/EUR comprises almost 60% of the Dollar Index). As mentioned above and as discussed numerous times in the past, the first is to assume that a large current account deficit will necessarily translate into currency weakness. The second is to assume that the euro is somehow a harder/sounder currency than the dollar.

In our opinion, the euro is the ultimate fiat currency in the worst possible way. Whereas the dollar started out as a genuinely hard currency (a US dollar was originally a measure of gold) and evolved into a shadow of its former self over many generations, the euro has never been anything more than a political concoction (it began life as a shadow). Whereas the dollar was literally as good as gold at one point in the distant past, the euro has never been backed by anything more tangible than confidence*.

more...

[Ghost Dog]

39. Very serious, multinationa,l beyond european, now. CONFIDENCE, I dare to opine.

¿What else would you, these days, base a currency upon?

: (relative) STABILITY.

[ozymandius]

4. Today's Reports

8:30 AM Durable Orders Apr
Briefing Forecast 0.7%
Market Expects 0.9%
Prior 4.3%

8:30 AM Initial Claims 05/19
Briefing Forecast 315K
Market Expects 305K
Prior 293K

10:00 AM New Home Sales Apr
Briefing Forecast 850K
Market Expects 860K
Prior 858K

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

[UpInArms]

8. 8:30 reports in: Initial Claims at 311,000

09. U.S. continuing jobless claims up 58,000 to 2.53 mln
8:30 AM ET, May 24, 2007 - 5 minutes ago

10. U.S. 4-week avg. claims at lowest level since Feb. 2006
8:30 AM ET, May 24, 2007 - 5 minutes ago

11. U.S. April transportation orders fall 1.3%
8:30 AM ET, May 24, 2007 - 5 minutes ago

12. U.S. 4-week avg. jobless claims down 3,500 to 302,750
8:30 AM ET, May 24, 2007 - 5 minutes ago

13. U.S. April durable goods shipments up 1.9%
8:30 AM ET, May 24, 2007 - 5 minutes ago

14. U.S. weekly jobless claims rise for first time in six weeks
8:30 AM ET, May 24, 2007 - 5 minutes ago

15. U.S. March durable-goods orders revised up to 5.0% vs. 4.3%
8:30 AM ET, May 24, 2007 - 5 minutes ago

16. U.S. weekly jobless claims up 15,000 to 311,000
8:30 AM ET, May 24, 2007 - 5 minutes ago

17. U.S. April core capital equipment orders up 1.2%
8:30 AM ET, May 24, 2007 - 5 minutes ago

18. U.S. April durable orders ex-transportation up 1.5%
8:30 AM ET, May 24, 2007 - 5 minutes ago

19. U.S. April durable-goods orders up 0.6% vs. 0% expected
8:30 AM ET, May 24, 2007 - 5 minutes ago

[UpInArms]

27. New Homes Sales Report:

28. Median new-home price down 10.9% y-o-y, most in 37 years
10:07 AM ET, May 24, 2007 - 2 hours ago

29. U.S. new-home sales down 10.6% y-o-y
10:00 AM ET, May 24, 2007 - 2 hours ago

30. U.S. April median home sale price down 10.9% y-o-y
10:00 AM ET, May 24, 2007 - 2 hours ago

31. U.S. new-home inventory 6.5-months supply
10:00 AM ET, May 24, 2007 - 2 hours ago

32. U.S. April new-home inventory falls 1.5% to 538,000
10:00 AM ET, May 24, 2007 - 2 hours ago

33. U.S. March new-home sales revised lower to 844,000
10:00 AM ET, May 24, 2007 - 2 hours ago

34. U.S. new-home sales highest since December
10:00 AM ET, May 24, 2007 - 2 hours ago

35. April new-home sales up 16% to 981,000 vs. 865,000 expected
10:00 AM ET, May 24, 2007 - 2 hours ago

(this month's numbers will probably suffer a huge revision next month)

[ozymandius]

6. Oil prices steady in Asian trading

SINGAPORE - Oil prices were steady in Asian trading Thursday after a U.S. government report showed gasoline stocks rose nearly twice as much as expected last week.

The U.S. Energy Information Administration reported Wednesday that gasoline stocks grew 1.5 million barrels last week to 196.7 million barrels. Analysts had forecast a rise of about 800,000 barrels. Crude oil supplies rose 2 million barrels to 344.2 million barrels, just above the upper end of the average for this time of year. Analysts had predicted a fall of 200,000 barrels.

Distillate inventories, which include heating oil and diesel fuel, edged up 500,000 barrels to 120.3 million barrels, falling short of analysts' estimate of a rise of 900,000 barrels. Distillate stocks remain just below the upper end of the average for this time of year.

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

[mojavekid]

37. TDR: THE LOWER DEPTHS OF THE OIL CRISIS

http://www.financialsense.com/editorials/daily/2007/0522a.html

USA TODAY tells us that another historic event happened last week. For the first time in more than a quarter of a century, Americans are cutting back on their driving.

We don't know the cause of this big trend reversal. The pundits are blaming high gas prices. Apparently, prices at the pumps are also hitting records - up to $3.18 per gallon on average.

If drivers really are cutting back because of the price of gasoline, it suggests that the consumer is weakening. A poll of consumer confidence says that the poor consumer's spirits have fallen to an 8-month low. And the housing problem seems in no hurry to go away. "Gloom settles over housing market," announces a weekend headline.

It appears that the world is in the grip of two major and contradictory trends. At the top, money has never been easier to get…nor have rich people ever been more eager to get rid of it. Money changes hands so fast…and in such volume…the markets and bankers are having trouble keeping up with it. Institutional investors have so much money they don't know what to do with it.

Meanwhile, down in the Lower Depths…the poor lumpen can't even afford to drive to the store to rent a movie. They're not earning any more money…while their costs continue to rise. Every year, we get a notice that a college has raised its tuition. Our insurance and health care costs seem to go up annually. Every time we fill up our tank…or eat in a restaurant…we get a nasty shock. True, the cost of fuel and food is higher in Europe than in America, but the trends go in the same direction. Thanks to our Dear Readers we have enough income to keep up with these expenses; but we wonder how most people are able to do it. Maybe this latest news on U.S. driving habits tells us something…that they can't.

end..

[ozymandius]

7. Toll Brothers' earnings tumble

HORSHAM, Pa. - Luxury homebuilder Toll Brothers Inc. said Thursday its fiscal second-quarter profit fell sharply, as the company took hefty charges to write down property values amid continued weakness in the housing market.

For the three months ended April 30, net income dropped to $36.7 million, or 22 cents per share, from $174.9 million, or $1.06 per share, a year ago. The latest quarter includes writedowns of $72.9 million, or 44 cents per share, compared with just $7.3 million, or 4 cents per share in the prior-year period.

-cut-

Second-quarter net signed contracts fell 25 percent to $1.17 billion from $1.56 billion a year earlier. The company signed 2,031 contracts — before cancellations — in the latest period, a 14 percent decline year-over-year. The period's cancellation rate of 18.9 percent was lower than the first-quarter's 29.8 percent rate, and 36.9 percent rate in the 2006 fourth quarter, but still was well above Toll's historical average of about 7 percent.

http://news.yahoo.com/s/ap/20070524/ap_on_bi_ge/earns_toll_brothers

This information would present Secretary Paulsen with the unique opportunity to eat some yummy crow.

[AnneD]

19. Ketchup....

makes anything taste better. But I would go sparingly cause I have a feeling he will be eating even more crow before it is over.

[WhiteTara]

25. Stocks surge on record home sales data

Just a different point of view? :shrug:

NEW YORK - Wall Street powered higher Thursday after the government's new homes data in April soared to its biggest increase in 14 years, allaying investor concerns that the housing market will tip the economy into a recession.

Investors were enthusiastic after the Commerce Department reported sales of single-family homes increased 16.2 percent last month, after falling slightly in March. With first-quarter earnings reports mostly over, Wall Street now hangs on economic data to give direction on both the economy and stocks.

The Dow Jones industrials surged 74.68, or 0.55 percent, 13,604.80 soon after the housing numbers came out.
http://news.yahoo.com/s/ap/20070524/ap_on_bi_st_ma_re/wall_street

[Hugin]

26. Too bad about all those out there with 'Home Equity Loans'...

The 11.1% decline in median home prices has made them house poor.

[ozymandius]

33. Mortgage rates move sharply higher

NEW YORK (CNNMoney.com) -- Mortgage rates jumped this week on upbeat consumer sentiment and speculation that the Federal Reserve would not cut interest rates anytime soon, Freddie Mac said Thursday.

The average rate on 30-year fixed-rate loans climbed to 6.37 percent for the week ending May 24, up from 6.21 the previous week, the mortgage finance firm said. Last year at this time, 30-year mortgage rates averaged 6.62 percent.

-cut-

The rate on 15-year loans averaged 6.06 percent, up from 5.92 the previous week, Freddie Mac (down $0.82 to $67.07, Charts, Fortune 500) said. A year ago, the 15-year rate averaged 6.23 percent.

http://money.cnn.com/2007/05/24/real_estate/mortgage_rates/index.htm?postversion=2007052411

[ozymandius]

35. Breaking: housing prices collapse

from Kos diarist Jerome a Paris:

This is not quite the headline in today's WSJ, but a quick look at the numbers buried in the article show some stunning trends:

New Home Sales Soared 16% As Prices Declined in April

WASHINGTON -- New-home sales soared in April, an unexpected surge marking the biggest climb in 14 years, according to a report that showed declining inventories and signaled hope for the long-suffering housing sector.

This title and lede probably deserve a prize for "most misleading journalism"...

The typical cycle in a house bubble is that transactions first freeze as buyers become unwilling or unable to pay the high market prices. Sellers first refuse to change their requirements, and, as the market slows down, will rather wait than lower their price. Thus the number of transactions will go down before the prices. It is only when people start being forced to sell that prices actually go down, as they need to bring down prices to actually sell. Then transaction numbers will pick up as prices accelerate their downward move. Then transactions will slow down again as prices reach their bottom, with few buyers and few sellers (only those forced to that did not do it previously). As the market regains its footing, both prices and number of transactions will finally start increasing again.

What is uncertain is what kind of an impact the housing slump will have on the economy. There are two ways it could be nasty:

* the wealth effect: people no longer can withdraw equity from their houses to pay for spending. Thus consumptions drops;
* the jobs effect: with so many jobs of the jobs created lately being in construction - and the financing of real estate - in recent years, it is likely that a number of them will disappear, and thus push up unemployment rates.

Both of these will further depress the housing market, and may put a number of people in dire financial straits, especially if they have one of the more exotic loans that were offered in the past 3 years.

Bur hey, the number of transactions increased! all is well!

[UpInArms]

10. Financial Services Firm Settles With S.E.C.

http://www.nytimes.com/2007/05/24/business/24settle.html?ex=1337659200&en=d8cd9b1c19bd08b5&ei=5088&partner=rssnyt&emc=rss

WASHINGTON, May 23 (AP) — The Bisys Group, a financial services provider, agreed Wednesday to pay $25 million in restitution to settle federal regulators’ accusations that it had violated financial reporting rules in a way that inflated earnings by $180 million over three years.

The Securities and Exchange Commission announced the settlement with Bisys, which was consistent with a tentative agreement that the company and the agency’s enforcement staff negotiated in November.

Bisys agreed to pay $25 million in restitution and interest. The money will go to investors deemed to have been harmed by what the S.E.C. said was improper accounting from July 2000 to December 2003, especially related to the insurance services division of Bisys.

...more...

[Ghost Dog]

11. Asian Stocks End Three-Day Advance on Greenspan's China Warning

http://www.bloomberg.com/apps/news?pid=20601080&sid=aI4vfkerUB3A&refer=asia
By Chen Shiyin

May 24 (Bloomberg) -- Asian stocks fell for the first time in four days after former Federal Reserve Chairman Alan Greenspan warned that Chinese equities face a ``dramatic contraction.''

BHP Billiton Ltd. and Taiwan Semiconductor Manufacturing Co. led declines on concern a slump in Chinese shares would spread to other markets. China's benchmark CSI 300 Index slid as much as 1.8 percent from a record after opening higher.

China ``is another one of these classic hot and speculative markets that will end in tears,'' said Hugh Young, who oversees $35 billion as managing director at Aberdeen Asset Management Asia Ltd. in Singapore. ``It's hard to be bullish about anything at the moment because everything has done so well.''

BHP Billiton Ltd., the world's largest mining company, and rival Rio Tinto Group also retreated after a fall in metal prices.

The Morgan Stanley Capital International Asia-Pacific Index lost 0.3 percent to 149.54 at 2:26 p.m. in Tokyo, halting a three-day, 1.8 percent advance. The measure fell 7 percent in the four days after Chinese shares tumbled on Feb. 27 by the most in 10 years, sparking a global rout that wiped out about $3.3 trillion of stock-market value.

Japan's Nikkei 225 Stock Average added 0.1 percent to 17,717.90, after earlier dropping as much as 0.6 percent. Trading companies including Itochu Corp. and Marubeni Co. gained after Mizuho Securities Co. lifted its ratings on Japan's five largest trading houses.

Benchmarks fell elsewhere in the region, except in New Zealand, Pakistan and the Philippines. Markets in Hong Kong and South Korea are closed for holidays today.

`Grossly Overvalued'

U.S. stocks retreated yesterday for the first time in four days, sending the Standard & Poor's 500 Index 0.1 percent lower. Speaking to a conference in Madrid by satellite, Greenspan said the rally in Chinese shares ``is clearly unsustainable.''

/...

[Ghost Dog]

14. Nikkei ends flat, Sony down but Japan Tobacco up

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070524:MTFH83579_2007-05-24_06-11-15_T7589&type=comktNews&rpc=44
Thu May 24, 2007 2:11am ET19
(Updates to close)

TOKYO, May 24 (Reuters) - The Nikkei average ended flat on Thursday as investors sold recent gainers such as Sony Corp. (6758.T: Quote, NEWS , Research) on concern about a sell-off in Chinese stocks, but rises in Japan Tobacco Inc. (2914.T: Quote, NEWS , Research) after a Merrill Lynch upgrade and a rebound of auto stocks curbed the losses.

Bank shares, which have had a strong run in the past few sessions, held firm with Mitsubishi UFJ Financial Group Inc. (8306.T: Quote, NEWS , Research) ending unchanged despite its weak earnings outlook.

Investors held back after Alan Greenspan, the former chairman of the U.S. Federal Reserve, warned of a "dramatic contraction" in Chinese stocks, making investors nervous that other markets -- including Japan -- would be affected.

The Nikkei <.N225> inched down 0.05 percent, or 8.15 points, at 17,696.97. The broad TOPIX index <.TOPX> lost 0.11 percent to 1,738.11.

[Ghost Dog]

15. Japan Export Growth Slows; Shipments to U.S. Fall

(Update4)
http://www.bloomberg.com/apps/news?pid=20601080&sid=aWozrA3pm_2U&refer=asia
By Lily Nonomiya

May 24 (Bloomberg) -- Japan's exports to the U.S. fell for the first time in two years as the world's largest economy slowed. Shipments to Asia and Europe grew.

Exports rose 8.3 percent in April from a year earlier, cooling from 10.3 percent in March, the Ministry of Finance said today in Tokyo. Shipments to the U.S. dropped 4.8 percent, the steepest decline since May 2004.

The slump reflects the slowest growth in four years in the U.S., the destination of a fifth of Japanese exports, led by cars. Shipments to all other regions rose, with those to Asia climbing at the fastest pace in three months, driven by China.

``Japan's trade is being supported by demand from Europe and China,'' said Noriaki Haseyama, an economist at Dai-Ichi Life Research in Tokyo. ``U.S. consumer spending is weakening, especially in car sales, and we need to monitor how much impact that will have on the global economy.''

The yen traded at 121.49 per U.S. dollar at 3:37 p.m. in Tokyo from 121.60 before the report. The yield on Japan's 10- year bond rose 1.5 basis points to 1.695 percent.

Auto shipments fell 7.5 percent, the biggest decline since April 2004 when they slid 15.1 percent. Autos represent about 10 percent of Japan's overall shipments to the U.S.

Toyota Motor Corp., the world's largest carmaker by market value, expects sales growth in North America, its largest market, to slow to 1.6 percent this fiscal year from 15 percent. The company is building factories in Canada, Russia and China to make up for weak demand in the U.S.

U.S. Slowdown

Honda Motor Co., Japan's second-largest automaker, is increasing market share in China to help offset weaker demand in the U.S. Honda said last week its sales in China increased 27 percent in April.

``The U.S. slowdown is already affecting exports and that's making companies more cautious,'' said Takeshi Minami, an economist at Norinchukin Research Institute in Tokyo. ``Should U.S. demand stall further and affect other parts of Asia, that will hurt export demand.''

Concern about declining demand in the U.S. has already made itself felt in Japan. Machinery orders fell 4.5 percent in March and companies said they expect orders to plunge 11.8 percent this quarter.

``Japanese companies are expected to remain hesitant about expanding investment until they see more solid signs of an economic recovery in the U.S,'' said Azusa Kato, an economist at BNP Paribas Securities Japan Ltd. in Tokyo.

The U.S. economy expanded an annualized 1.3 percent in the first quarter, the slowest pace since 2003.

/...

[ozymandius]

12. back in awhile

Gotta get my son to school.

Ozy :hi:

[UpInArms]

13. Greenspan Remarks Deflate Market Mood

http://www.nytimes.com/2007/05/24/business/24stox.html?ex=1337659200&en=9548c54ee7858a47&ei=5088&partner=rssnyt&emc=rss

Stocks wilted yesterday as comments from Alan Greenspan, the former Federal Reserve chairman, and worries about coming economic data deflated a rally fed by takeover activity.

The Dow Jones industrial average briefly rose above 13,600 for the first time, after fresh deal-related developments that included a possible bidding battle for the aluminum producer Alcan. But the excitement waned after Mr. Greenspan expressed concern about an eventual sharp decline in China’s stock market, which has recently been hitting record highs.

<snip>

“He still carries a lot of clout,” said Steven DeSanctis, small-cap strategist with Prudential Equity Group.

The Dow fell 14.30 points, to 13,525.65, after climbing to an intraday trading record of 13,609.76.

...more...



Yeah, a 14 point drop - that's some "clout"! :D

[Ghost Dog]

17. I think I'll just watch you guys try to cope with it, today.

http://www.guardian.co.uk/commentisfree/story/0,,2086737,00.html

[hatrack]

22. Bubonic plague confirmed - Dow soars. Nuclear devices explode - Dow soars.

"Cat rescued from tree - Dow surges 100 points"

http://www.itulip.com/forums/showthread.php?t=1341

[Roland99]

41. I liked the link to The CPI is a Lie

http://www.nowandfutures.com/cpi_lie.html

[ozymandius]

24. snapshot with blather

10:47
Dow 13,554.33 Up 28.68 (0.21%)
Nasdaq 2,572.10 Down 4.95 (0.19%)
S&P 500 1,521.20 Down 1.08 (0.07%)
10-Yr Bond 4.89% Up 0.031
NYSE Volume 853,282,000
Nasdaq Volume 569,110,000

10:30 am : Stocks spike to session highs as today's last piece of economic news eases concerns about the severity of the problems in the housing market. At the top of the hour, new home sales in April surged a surprisingly large 16%, the most in 14 years, to 981K (consensus 860K). Median prices fell 10.9% year/year while the inventory of unsold homes fell by 1.5% to 538K. That leaves a 6.5-month supply versus an 8.1-month supply in March.

Homebuilding (+2.7%), which was under some pressure early on after Toll Brothers (TOL 31.00 +1.23) said it wasn't comfortable updating its full-year EPS outlook, now ranks as today's second best performing S&P industry group. It is also worth noting that homebuilders, one of the most heavily shorted areas, still ranks among this year's biggest disappointments (-11%); but continued short-covering activity has lifted the group 14% from its mid-April low. The PHLX Housing Sector Index (HGX) is up 2.4%.DJ30 +78.58 NASDAQ +3.74 SP500 +4.21 NASDAQ Dec/Adv/Vol 1112/1548/390 mln NYSE Dec/Adv/Vol 1068/1818/240 mln

[UpInArms]

28. PIEHOLE ALERT:

09. Bush reiterates confidence in Attorney General Gonzales
11:30 AM ET, May 24, 2007 - 58 minutes ago

11. Bush says frustrated with China ban on U.S. beef imports
11:18 AM ET, May 24, 2007 - 1 hour ago

12. Bush: Yuan appreciation part of addressing China trade gap
11:17 AM ET, May 24, 2007 - 1 hour ago

13. Bush: U.S. trade gap with China must be addressed
11:16 AM ET, May 24, 2007 - 1 hour ago

18. Bush: More heavy fighting ahead in Iraq
11:06 AM ET, May 24, 2007 - 1 hour ago

[TrogL]

30. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc




Currency Comparison: http://members.shaw.ca/trogl/looniewatch.html

Detailed analysis: http://quotes.ino.com/exchanges/?r=CME_CD

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.H06&v=s

Historical values http://www.x-rates.com/d/USD/CAD/data30.html

2007-04-23 Monday, April 23 0.890869 USD
2007-04-24 Tuesday, April 24 0.890631 USD
2007-04-25 Wednesday, April 25 0.897183 USD
2007-04-26 Thursday, April 26 0.892698 USD
2007-04-27 Friday, April 27 0.8967 USD
2007-04-30 Monday, April 30 0.903506 USD
2007-05-01 Tuesday, May 1 0.901876 USD
2007-05-02 Wednesday, May 2 0.901957 USD
2007-05-03 Thursday, May 3 0.903424 USD
2007-05-04 Friday, May 4 0.903424 USD
2007-05-07 Monday, May 7 0.907112 USD
2007-05-08 Tuesday, May 8 0.905141 USD
2007-05-09 Wednesday, May 9 0.903914 USD
2007-05-10 Thursday, May 10 0.903098 USD
2007-05-11 Friday, May 11 0.897989 USD
2007-05-14 Monday, May 14 0.903587 USD
2007-05-15 Tuesday, May 15 0.911079 USD
2007-05-16 Wednesday, May 16 0.906783 USD
2007-05-17 Thursday, May 17 0.911079 USD
2007-05-18 Friday, May 18 0.918864 USD
2007-05-21 Monday, May 21 0.921319 USD
2007-05-22 Tuesday, May 22 0.921319 USD
2007-05-23 Wednesday, May 23 0.924556 USD


Current values

Last trade 0.9234 Change -0.0009 (-0.10%)
Previous Close 0.9248 Open 0.9262
Low 0.9227 High 0.9044


Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)

The June Canadian Dollar was steady to slightly higher overnight as it extends this week's rally above last May's high crossing at .9200. Stochastics and the RSI are overbought, diverging but are neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends the rally off February's low, weekly resistance crossing at .9312 is the next upside target. Closes below the 20-day moving average crossing at .9091 would confirm that a top has been posted. Overnight action sets the stage for a steady to slightly higher opening in early-day session trading.


Analysis

Looks like the loonie hit a new record about 4 hours ago, but it's been sliding a bit since then.

[ozymandius]

31. markets do synchronized swimming in red

1:31
Dow 13,503.95 Down 21.70 (0.16%)
Nasdaq 2,551.09 Down 25.96 (1.01%)
S&P 500 1,514.07 Down 8.21 (0.54%)
10-Yr Bond 4.863% Up 0.004
NYSE Volume 1,667,929,000
Nasdaq Volume 1,444,530,000

1:00 pm : Stocks have taken a turn for the worse over the last 30 minutes. Exacerbating the market's recent struggles have been the Dow and S&P 500's inability to find support above key technical levels of 13,500 and 1515, respectively. From a leadership standpoint, the Energy sector now logging a 1.1% intraday decline and languishing near session lows further removes what limited leadership the sector has offered of late to at least keep market losses minimal.

Crude for July delivery is now down 1.7% near $64.60/bbl, which bodes well for consumers but now brings into question the earnings prospects of Drillers (-2.3%) and Oil & Gas Equipment (-1.7%) stocks. Both are now among today's worst performing S&P industry groups. DJ30 -46.41 NASDAQ -33.94 SP500 -10.55 XOI -1.0% NASDAQ Dec/Adv/Vol 2269/676/1.29 bln NYSE Dec/Adv/Vol 2493/668/890 mln

12:30 pm : The major averages kick off the afternoon session retracing their morning lows. Weakness throughout the influential Tech sector continues to be the thorn in the market's side, especially for the Nasdaq.

Renewed enthusiasm for growth stocks of late did help the Russell 2000 and S&P 400 MidCap Index close at historic highs this week; but all three of the aforementioned indices selling off noticeably, compared to only modest declines on the Dow and S&P 500, suggest large caps are still more attractively-priced.DJ30 -20.63 NASDAQ -28.42 R2K -1.2% SP400 -1.1% SP500 -7.24 NASDAQ Dec/Adv/Vol 2150/764/1.15 bln NYSE Dec/Adv/Vol 2328/789/780 mln

[ozymandius]

32. Nasdaq leads selloff

NEW YORK (CNNMoney.com) -- The Nasdaq led a broader stock decline Thursday afternoon as investors bet that the strong morning economic news means the Federal Reserve is less likely to cut interest rates by the end of the year.

A number of profit warnings in technology weighed on techs, while cautious comments from former Fed chief Alan Greenspan on Wednesday continued to reverberate.

-cut-

The tech-fueled Nasdaq composite (down 30.95 to 2,546.10, Charts) lost 1.2 percent, after having ended the previous session not far from a six-year high.

The Russell 2000 (down 11.09 to 825.45, Charts) small-cap index slumped 1.5 percent after briefly surpassing its all-time closing high on an intraday level. New home prices plunge, sales soar

Stocks rose in the morning after mostly upbeat readings on durable goods orders and new home sales. But the tone turned negative as the focus turned to what stronger economic news might mean for rate cut hopes.

http://money.cnn.com/2007/05/24/markets/markets_0130/index.htm?postversion=2007052413

[ozymandius]

34. Traders must be paying attention to the sunshine I've been spreading.

1:39
Dow 13,484.12 Down 41.53 (0.31%)
Nasdaq 2,545.71 Down 31.34 (1.22%)
S&P 500 1,512.86 Down 9.42 (0.62%)
10-Yr Bond 4.867% Up 0.008
NYSE Volume 1,710,035,000
Nasdaq Volume 1,486,928,000

1:30 pm : The major averages are bouncing off their worst levels of the afternoon, but renewed buying efforts aren't amounting to much as sellers remain in complete control of today's action. Health Care and Consumer Staples, which are now relatively flat on the day, are among the most noticeable improvements. That's understandable, though, since their defensive characteristics play into our Overweight rating on both sectors.

However, the rate-sensitive Utilities sector (-1.9%), despite their defensive qualities, continues to get hammered. Rising bond yields are making dividend-paying stocks less attractive. The sector's downturn isn't all that surprising, though, since it still ranks among this year's best performers (+12.4%). DJ30 -18.51 NASDAQ -24.84 SP500 -7.30 NASDAQ Dec/Adv/Vol 2239/722/1.41 bln NYSE Dec/Adv/Vol 2488/721/970 mln

1:00 pm : Stocks have taken a turn for the worse over the last 30 minutes. Exacerbating the market's recent struggles have been the Dow and S&P 500's inability to find support above key technical levels of 13,500 and 1515, respectively. From a leadership standpoint, the Energy sector now logging a 1.1% intraday decline and languishing near session lows further removes what limited leadership the sector has offered of late to at least keep market losses minimal.

Crude for July delivery is now down 1.7% near $64.60/bbl, which bodes well for consumers but now brings into question the earnings prospects of Drillers (-2.3%) and Oil & Gas Equipment (-1.7%) stocks. Both are now among today's worst performing S&P industry groups. DJ30 -46.41 NASDAQ -33.94 SP500 -10.55 XOI -1.0% NASDAQ Dec/Adv/Vol 2269/676/1.29 bln NYSE Dec/Adv/Vol 2493/668/890 mln

[AnneD]

36. Is...

SPF 50 the highest they make? What with the ozone too, we need something more heavy duty.

[ozymandius]

40. And the winner is... The House

(house always wins, ya know)
Dow 13,441.13 Down 84.52 (0.62%)
Nasdaq 2,537.92 Down 39.13 (1.52%)
S&P 500 1,507.51 Down 14.77 (0.97%)
10-Yr Bond 4.857% Down 0.002
NYSE Volume 3,441,031,000
Nasdaq Volume 2,431,098,000

4:20 pm : After showing some fatigue all week, new evidence that diminished the prospect of a Fed rate cut anytime soon pulled the rug out from under equities Thursday.

Before the bell, April durable orders checked in with their third straight increase and the March figure was upwardly revised to 5.0%. Core capital equipment, often considered a barometer of business investment trends, posted a healthy 1.2% rise, further suggesting that the underlying trend in orders might be rebounding after a soft period.

Also out at 8:30 ET were weekly jobless claims. They rose for the first time in six weeks, increasing to 311,000, but were still at a very low level to suggest tight labor conditions.

Still mixed, the indices wavered as investors waited for the day's last piece of economic news to set a more definitive tone to trading. At 10:00 ET, new home sales in April surged a surprisingly strong 16%. That was the largest increase in 14 years.

Also comforting, especially to homebuilders, was the supply of unsold homes. It fell to a 6.5-month supply from an 8.1-month supply in March as median prices plunged the most since 1970.

While the data initially eased concerns about the severity of the problems in the new home market, lifting the major averages to session highs, the day's reports also reined in the hopes of those expecting a rate cut soon.

The housing report was a net positive for stocks, as it lessened the downside risks; but a market seemingly ripe for a pullback viewed the questionably "bad" news with respect to the interest rate scenario as an excuse to take some money off the table ahead of the holiday weekend.

All 10 economic sectors lost ground, with Utilities getting hit the hardest. Energy was another disappointment, as the absence of its leadership offset a 2.3% plunge in oil prices. Weakness throughout Technology, though, was the biggest thorn in the market's side today.

Network Appliance (NTAP 31.64 -6.42) warning that Q1 results will miss analysts' forecasts gave tech investors an excuse to reconsider the sector's growth prospects. The stock tumbled 17% and was the worst performer on the Nasdaq 100. DJ30 -84.28 NASDAQ -39.13 SP500 -14.64 NASDAQ Dec/Adv/Vol 2346/699/2.15 bln NYSE Dec/Adv/Vol 2722/559/1.57 bln