STOCK MARKET WATCH, Tuesday June 26

[ozymandius]

Source: DU

Tuesday June 26, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 575 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2363 DAYS
WHERE'S OSAMA BIN-LADEN? 2075 DAYS
DAYS SINCE ENRON COLLAPSE = 2036
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
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 June 25, 2007

Dow... 13,352.05 -8.21 (-0.06%)
Nasdaq... 2,577.08 -11.88 (-0.46%)
S&P 500... 1,497.74 -4.82 (-0.32%)
Gold future... 654.70 -2.30 (-0.35%)
30-Year Bond 5.20% -0.06 (-1.18%)
10-Yr Bond... 5.08% -0.06 (-1.17%)






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. Today's Market WrapUp

Stay Off the Rollercoaster
BY TONY ALLISON

Rollercoasters are fun, heart-pounding and immediately gratifying. That’s great for a day at an amusement park, but not great investment behavior. Riding the investment rollercoaster, with frequent jumps on and off, may satisfy one’s need for stimulation, but it’s a lousy way to create wealth.

If your moods are dependent upon the daily CNBC tickers, or the pundit-du-jour’s opinion, then you are living the life of an investment manic depressive. Your outlook swings from too low to too high, depending on that day’s (or week’s) results. Worst of all, the inevitable highs and lows of the market will often lead the Rollercoaster Investor to jump off when times are tough and bargains abound (too stressful!), or jump on board just as the good times are peaking (everyone’s getting rich except me!) To one degree or another, millions of Americans are Rollercoaster Investors, swayed by the momentum-trading hedge funds or the daily news cycle. In the following paragraphs, I offer some tips on how to avoid life on the rollercoaster, and prepare for the changes coming down the road.

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

lots more... more change than you can shake a stick at.

[ozymandius]

2. MORTGAGE MELTDOWN!

by Martin D. Weiss, Ph.D.
Editor, Safe Money Report & MoneyandMarkets.com

For many months, Mike Larson has been warning you about a meltdown in America's vast new market for home mortgages.

Now that meltdown is here.

He told you home sales and prices would fall, and they did.

He told you that American homeowners would default on their mortgage payments in record numbers, and they have.

He warned this would shake Wall Street to its core. Now it is.

-cut-

This is Not the Only Bear Stearns Hedge Fund in Danger!
Bear Is Not the Only Big Wall Street Firm Involved!
And Wall Street Is Not the Only Place This Is Happening!

http://www.financialsense.com/editorials/weiss/2007/0625.html

The rhetorical presentation is a bit hysterical. But there are some fine points.

[ozymandius]

3. Today's Reports

10:00 AM Consumer Confidence Jun
Briefing Forecast 105.5
Market Expects 106.0
Prior 108.0

10:00 AM New Home Sales May
Briefing Forecast 900K
Market Expects 925K
Prior 981K

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

[UpInArms]

23. 10:00 reports: ruh-roh

02. U.S. May new home inventories down 1.1% to 536,000
10:00 AM ET, Jun 26, 2007 - 13 minutes ago

03. U.S. May new home sale price down 0.9% yr-on-yr
10:00 AM ET, Jun 26, 2007 - 13 minutes ago

04. U.S. April new homes revised to 930,000 vs 981,000
10:00 AM ET, Jun 26, 2007 - 13 minutes ago

05. U.S. May new home sales below consensus 930,000
10:00 AM ET, Jun 26, 2007 - 13 minutes ago

06. U.S. May new home sales down 1.6% to 915,000 units
10:00 AM ET, Jun 26, 2007 - 13 minutes ago

07. U.S. June present situation index 127.9 vs. 136.1
10:00 AM ET, Jun 26, 2007 - 13 minutes ago

08. U.S. June consumer expectations index 87.9 vs. 90.1
10:00 AM ET, Jun 26, 2007 - 13 minutes ago

09. U.S. consumer confidence lowest in 10 months
10:00 AM ET, Jun 26, 2007 - 13 minutes ago

10. U.S. June consumer confidence index falls to 103.9 vs. 108.5
10:00 AM ET, Jun 26, 2007 - 13 minutes ago

[Roland99]

30. May's new-homes sales off 1.6%

May's new-homes sales off 1.6%
Downward revisions to past three months
http://www.marketwatch.com/news/story/new-home-sales-off-16/story.aspx?guid=%7B96E15AE9%2DCB46%2D485E%2DBEDB%2DB95DC4DF72AE%7D

U.S. new home sales fell 1.6% in May to a seasonally adjusted annual rate of 915,000 units, the Commerce Department said Tuesday.

Adding to the sense of weakness in the report, the sales pace in February, March and April was revised lower by a total of 84,000 units.

Economists had been expecting a decline to an annualized rate of about 930,000 new homes for May. Read Economic
Calendar.

April's sales pace was revised to 930,000 units from the 981,000 units initially reported, a 12.5% rise from March's downwardly revised 827,000 annual pace. This is still the largest sales increase since September 1993.

[Roland99]

31. Home prices fall at fastest rate in 16 years

Home prices fall at fastest rate in 16 years
S&P/Case-Shiller index shows prices down annualized 2.7%
http://www.marketwatch.com/news/story/home-prices-fall-fastest-rate/story.aspx?guid=%7B21D542FC%2DAC5F%2D4828%2D8B9C%2D276D04C8AC1D%7D

WASHINGTON (MarketWatch) -- Home prices in 10 major U.S. cities dropped at the fastest pace in 16 years during the 12 months ending in April, according to Standard & Poor's Case-Shiller home price index released Tuesday.

Home prices in the 10 cities fell 2.7% on a year-over-year basis, the largest decline since September 1991. Meanwhile, prices in 20 cities dropped a record 2.1% year over year.

...

Price appreciation has slowed for 17 consecutive months. Nationally, prices have doubled since 2000.

Fourteen of the 20 cities showed falling prices in the past year, led by Detroit (down 9.3%), San Diego (down 6.7%) and Washington (down 5.7%). Seattle had the largest price gains over the past year at 9.6%, while prices are up 7% in Charlotte, N.C., and 6.4% in Portland, Ore.

[mojavekid]

44. NWF Daily News: Realtors attend worship service to pray for better market

http://www.nwfdailynews.com/article/6725

DESTIN — More than 300 people with a keen interest in the Emerald Coast’s real estate market gathered Wednesday at Destiny Worship Center to ask for God’s blessing.

The Real Estate Prayer Luncheon was organized in hopes of breathing life and positive thinking into the area’s slumping housing market.

It was the first of what the organizers — co-owner of Crye Leike Coastal Realty Wanda Duke, former Destin City Councilman Mel Ponder and Destiny Worship Center Pastor Steve Vaggalis — hope will become a regular, uplifting event.

“The heartbeat of today’s economic community is on the backs of the real estate community,” Ponder told the crowd.

snip...

“We need to think positively and get everyone on the same page,” Duke said. “Positive things that come out of your mouth will end with positive results. If we lose hope, we lose everything.”

A little more...

- I could not pass this one up!

[TrogL]

49. Oh, you've GOT to be fscking kidding

If my realtor was a member I'd immediately start screaming and running the opposite direction. If my house was already listed, I'd have the listing moved to a sane realtor.

I'd love to get ahold of their client list a do a mass mailing, telling people that their realtor thinks God and God alone controls the real estate market. Problem is, half of them would believe it's a good thing.

Oh, well. Stupidity got us (not me :bounce:) into this mess. Stupidity can get us out of it.

[AnneD]

50. "Prayer....

the last refuge of a scoundrel". Lisa Simpson

I couldn't resist either.

[ozymandius]

52. Jeebus would be insulted!

And that other prophet too...

There's the plan: hope. These people are nuts.

[AnneD]

56. I pray often...

but it never occurred to pray for the housing market....my faith is so passe I guess. I guess I am just quaint;)

[AnneD]

33. Morning Marketeers.....

:donut: and lurkers. Wonder if these are the same folks that were thinking their house had gone up in value last week. All the signs have been pointing to this for a while now. I am not a negative nattering neigh bob, but I haven't seen good news in the housing market for some time (except those low interest rates). I have seen plenty of danger signs though in the form of ARM's, refi's, inventory, increased foreclosure, and sluggish sales. But this portends something far more serious-a horrible economy for the average American worker. The home is the very last thing that a consumer defaults on. It is the American dream. We are headed into hard times indeed. :(

Well, I have an appointment with a broker today. It is time for my biannual re-balance and review. I think I will insist on total index funds this time (which may mean a new company). I have done very well but I suspect my pocket is being picked. This is the extra that will cover the gap between the pension and inflation as I age. I have never lost sight of the fact that I am blessed to have my pension-many American workers don't have that luxury.

I put a large bit in emerging foreign markets almost 5 years ago (at my insistence-not my broker BTW), but I know their hand is in my wallet. I have gained enough confidence (always a dangerous time)that I think I will start a small account to play with-something I won't be upset if I totally lose. It will just be a fun account and a learning tool. I have found I generally do well-and I certainly have done better than most brokers that have advised me. Yes you can loose your shirt and more-but I don't get into the crazier risker strategies. I believe in the first rule of the market-you can be bullish or bearish-but never piggish. I will first trade paper for a while before I plunk down the real money.

Happy hunting and watch out for the bears.

[ozymandius]

4. Oil prices retreat in Europe trading

VIENNA, Austria - Oil prices fell below $69 a barrel Tuesday amid expectations that U.S. fuel inventory data will again show a rise in crude and gasoline stocks.

-cut-

Light, sweet crude for August delivery fell 44 cents to $68.74 a barrel on the New York Mercantile Exchange by midday in Europe. Brent crude for August delivery fell 23 cents to $70.99 a barrel on the ICE Futures exchange in London.

U.S. stockpiles of gasoline are expected to have risen 1.1 million barrels in the week ended June 22, according to 10 analysts surveyed by Dow Jones Newswires ahead of the U.S. Department of Energy's petroleum supply report on Wednesday.

-cut-

Despite the expected increases in supplies and refinery rates, there are lingering concerns the refining industry will not be able to produce enough gasoline to meet U.S. summer driving demand, which peaks between the July 4 holiday and Labor Day in early September.

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

[ozymandius]

5. Study: 'BRICs' overtake U.S. in energy

UNITED NATIONS - The main challengers to U.S. economic power — Brazil, Russia, India and China — have overtaken the United States in dominating the global energy industry, according to a new study by Goldman Sachs.

The rising power of the four countries — the new economic tigers nicknamed the BRICs — is already evident in the metals and mining sector and is starting to be felt in insurance and consumer-related industries, said Anthony Ling, a managing director at the investment bank.

-cut-

At the end of the first Gulf War in 1991, 55 percent of the 20 largest companies in the energy industry by market capitalization were American, and 45 percent were European, according to the Goldman Sachs Group Inc. study.

But in 2007, 35 percent of the 20 largest energy companies are from BRIC countries, about 35 percent are European, and about 30 percent are American, the study said.

http://news.yahoo.com/s/ap/20070626/ap_on_bi_ge/un_economic_tigers

[Nimrod2005]

8. Isn't this why historically wars were always fought over resources...nt

[ozymandius]

19. Wars have been fought for many things.

No matter what the headline reason for any war - there is always an economic side.

[Roland99]

7. Meanwhile, gas up $0.11/gal last night.

$3 is the new $2.

[SpiralHawk]

10. "Smirk, smirk, smirk." - Corrupt Cabal of republicon oil cronies

eom

[AnneD]

41. Wonder if this will bring the price down.....

Conoco Phillips wants piece of exploration action in India


Reuters

KUALA LUMPUR — Conoco Phillips, the number three US oil and gas firm, was seeking a foothold in India’s rejuvenated exploration sector as it focused its Asian growth on the upstream, its chief said yesterday.

India is the missing piece of Conoco’s upstream puzzle in Asia, a region whose fast-growing demand has made it a target for downstream refinery and retail investment by bigger peers Exxon, Mobil and Chevron.

“We would like to be in the upstream in India. We have been studying India for the past two years,” CE Jim Mulva said in an interview in the Malaysian capital.

Conoco was in talks with Indian companies, Mulva said, adding that the upstream sector in the country is very competitive.

A host of natural gas discoveries offshore in India by companies such as Reliance Industries have spurred renewed interest in exploration and production in the country, although only a few oil majors have entered the sector so far.

http://www.businessday.co.za/articles/companies.aspx?ID=BD4A489460

Guess you won't see this in the local paper. Something to chew on.

[ozymandius]

6. Goldman-issued subprime bonds lead downgrades: Citi

NEW YORK (Reuters) - Goldman Sachs Group Inc. (NYSE:GS - news) subprime mortgage bonds issued last year are being downgraded by rating companies at the fastest rate of any issuer, according to Citigroup Inc. research dated June 22.

Portions of Goldman's GSAMP-issued bonds, which include subprime loans from a variety of lenders, have been downgraded a combined 69 times by Standard & Poor's and Moody's Investors Service in the year through June 15, analysts at Citigroup Global Markets said in a weekly note. Sixty of the downgrades refer to classes from 2006 bonds.

Downgrades are accelerating on mortgage bonds backed by loans to the riskiest borrowers amid a surge in delinquencies and foreclosures. Lenders loosened underwriting standards in the years through 2006, creating loans whose poor quality became apparent as the U.S. housing slump began.

"At this point we believe that the fundamentals are going to be getting worse for quite some time -- another year to two you're going to keep seeing a steady march of this," Karen Weaver, Deutsche Bank AG's global head of securitization research, said on a conference call on Monday.

http://news.yahoo.com/s/nm/20070625/bs_nm/goldmansachs_subprime_downgrades_dc

[UpInArms]

9. dollar watch

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

Last trade 82.299 Change -0.057 (-0.07%)

Dollar Likely to Gain Near Term Before Resuming Decline

http://www.dailyfx.com/story/dailyfx_reports/daily_technicals/Dollar_Likely_to_Gain_Near_1182858816956.html

Commentary: The push through 1.3437 signals that wave iii, of a 5 wave rally that began at 1.3261, is underway. An objective is 1.3656, the 161.8% extension of 1.3261-1.3437/1.3371. Watch the 1.3550 area for resistance as well. The 6/5 high is 1.3552 and the 100% extension is at 1.3547. A break above 1.3472 would be a strong indication that a ‘3rd of a 3rd’ is underway (these are often the strongest moves).

Strategy: Bullish, against 1.3371, targeting 1.3656

Commentary: The pullback that we have warned of is underway right now and there is potential for a drop to the channel support line, drawn off of the 4/19 and 6/8 lows, near 122.00/15. The longer term bull trend is bullish above 120.76 but coming under 120.76 (as well as channel support near 122.00) would indicate additional bearish potential.

Strategy: Look for bullish opportunity close to 122.00/15 channel support, stop and reverse just below 120.76

Commentary: We are still looking for a bigger pullback, to channel support near 1.9885/9900. It is unclear whether or not the decline from 2.0005 is a larger 4th wave or an a-b-c correction as part of a larger 2nd wave. Either way, we are expecting a decline near term before a rally to a new high.

Strategy: Bearish now, against 2.0005, limit and reverse at 1.9900

Commentary: As mentioned here yesterday, “the decline from 1.2424 looks more like a 3rd wave than a wave c, thus we are abandoning the bullish stance.” Near term, it looks like a 4th wave correction is unfolding. There is potential for a spike through 1.2309 before a decline in a small 5th wave towards 1.2225. Resistance on a spike through 1.2309 is the 38.2% of 1.2424-1.2258 at 1.2321.

Strategy: None

Commentary: There is no change to our outlook for the USDCAD. “Price is approaching potential channel resistance, which is just below 1.0800. We are looking for this correction to continue towards channel resistance before a 5th wave decline brings the USDCAD below 1.0548.”

Strategy: None

...more...

Will Dollar Direction Be Dictated By This Week's Data ?

http://www.dailyfx.com/story/bio1/Will_Dollar_Direction_Be_Dictated_1182805352427.html

Relatively mixed on the day, the US dollar was neither stronger nor weaker against the majors as conflicting sentiment helped to keep the greenback in neutrality. On one end of the spectrum, dollar strength was obtained on flight to risk aversion following statements by Chinese officials of further monetary tightening in the country. With liquidity still a concern on carry trades, softness in currencies like the Euro and pound helped to boost dollar enthusiasm, albeit temporarily, throughout the day. Treasury markets seemed to confirm overall speculation in risk aversion as US 10-year benchmark bond yields continued to pare back in the New York session, falling another 5 basis points to 5.07 percent. However, comparatively bucking the good vibes for the US single currency were less than exemplary results from the economy’s only suggestive report on Monday. According to the most recent housing data, it seems that housing supply is growing against a lack in consumer demand and not higher levels of production. Granted, the notion is already widespread, but today’s existing home sales report lends confirmation to the fact that current state of affairs compares to the worst housing recession in almost 16 years. Ultimately, this is cause for worry as repercussions are sure to follow in softer weaker retail figures (which have already been witnessed) in the world’s largest economy. Subsequently, thinner consumer demand will more than not produce a dovish solution by the Federal Reserve, set to meet this week. Exacerbating dollar negative tones throughout the week is a bevy of bearish results in this week’s schedule of events. As it stands, with consensus estimates to the downside, the dollar may need more than bond yield speculation and equity index good vibes to turn things around.

...more...

[mojavekid]

24. Daily Pfennig 6/26/07: Housing Continues to Slow...

http://www.kitcocasey.com/displayArticle.php?id=1462

Good day... The first day of what will be a very busy week saw the housing data come in as expected. Existing Home Sales dropped .3% during the month of May, to 5.99M, the lowest level since June 2003. Inventory of homes for sale rose 5% to 4.43M, which is 8.9 months of supply - the highest level since June 1992. More importantly, prices dropped another 2.1% year on year, which doesn't bode well for homeowners who need to refinance. The data released today will be more bad news for the housing markets. New Home Sales are expected to be down 6% after last month's surprising 16.2% gain. As Chuck pointed out in May, last month's data was just a one-hit wonder, and now the markets can move back into the realistic assumption that the housing slump will last into next year.

The Fed policy makers continue to be more sanguine on the outlook for housing and the economy. Fed Chairman Ben S. Bernanke said earlier this month that restrictions on the availability of mortgage credit will slow housing demand. At the same time, he and other officials have said the slump hasn’t spilled over into other parts of the economy. Tell that to Bear Stearns or its investors! As recent losses at the big investments houses prove, the housing slump is going to have very far-reaching tentacles. Housing has supported our economy during the go-go days of the last 10 years, so the downturn is going to have widespread consequences.

snip...

The big news out of London yesterday was Tony Blair's hand-over of leadership of the Labor Party to Gordon Brown. Tomorrow both men will make separate visits to Queen Elizabeth II, Mr. Blair to quit as prime minister and Mr. Brown to take over. The currency markets are comfortable with the appointment of Mr. Brown, who was the Chancellor of the Exchequer and oversaw years of economic growth in England. The pound sterling rose through the $2.00 mark for the first time since May 2 yesterday, and is expected to hold above this level throughout the trading day.

more...

[Ghost Dog]

36. Japan minister's comments lift yen broadly

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070626:MTFH89182_2007-06-26_15-06-12_N26356033&type=comktNews&rpc=44

NEW YORK, June 26 (Reuters) - The yen rose for a second day on Tuesday, rebounding from recent multiyear lows against the dollar and euro, after Japan's finance minister cautioned about the weakness of the country's currency.

Koji Omi said at a news conference that it was important to be aware of the risks of making one-way currency bets, echoing warnings from Group of Seven warnings. For details, see .

Foreign exchange officials from South Korea and New Zealand also said they were worried about the harm caused by the yen's weakness, compounding concerns about carry trades, in which funds are borrowed in a low-yielding currency such as the yen to invest in higher-yielding currencies.

A lower-than-expected reading for U.S. consumer confidence and a larger-than-expected decline in U.S. new home sales had little impact on foreign exchange markets with investors looking to a two-day policy meeting of the Federal Reserve which concludes on Thursday.

"There seems to be chatter in the market that the (Japanese) minister of finance may have slightly altered his message to the market," said Ron Simpson, director of currency research at Action Economics in Tampa, Florida. "There have been several rounds of verbal intervention in the last few days."

In mid morning New York trade, the dollar was down 0.5 percent at 123.11 <JPY=>. It was the best day for the yen against the dollar since mid-April.

The euro was down almost 0.5 percent against the yen at 165.66 <EURJPY=>, well off a record high hit last week.

/...

[Ghost Dog]

40. Yen Rises as Omi Emphasizes Risks of Betting Against Currency

http://www.bloomberg.com/apps/news?pid=20601080&sid=aV6RNAWFtVcU&refer=asia

June 26 (Bloomberg) -- The yen gained the most in more than two months versus the dollar after Japan's Finance Minister Koji Omi said investors are taking risks in one-way bets against the currency.

Japan's yen rose versus all 16 of the most-active currencies tracked by Bloomberg after Omi told reporters in Tokyo that ``disorderly moves of foreign exchange rates are undesirable.'' The remarks were aimed at discouraging investors who borrow yen to buy higher-yielding assets in carry trades. The currency was higher versus the dollar after U.S. reports showed consumer confidence and new-home sales declined.

``This is certainly the sign of some early verbal intervention,'' said Greg Salvaggio, vice president of capital markets at currency-trading company Tempus Consulting in Washington. ``Some investors are a bit concerned about the over- extension of the yen.''

Against the dollar, the Japanese currency climbed as much as 0.7 percent to 122.81, before trading at 123.07 at 10:37 a.m. in New York, from 123.67 yesterday. It reached a 4 1/2-year low of 124.13 on June 22. The yen rose to 165.66 per euro from 166.49 yesterday and a record low 166.94 on June 22. It earlier rose as high as 165.10.

Currencies including the Philippine peso, Indonesia's rupiah and South Korea's won dropped versus the dollar on speculation investors will reduce their risk in emerging markets. Russia's ruble rose the most in more than four months on speculation the central bank will revalue the currency.

Watanabe Stepping Down

The yen was also buoyed after a Finance Ministry official, speaking on condition of anonymity, said Hiroshi Watanabe, Japan's top currency official, will step down as vice finance minister for international affairs.

Watanabe was appointed on June 2, 2004, and unlike his predecessors, he never stepped into the currency market to sell or buy yen during his tenure.

``In light of what appears to be the first signs of a sustained campaign of verbal intervention from the Ministry of Finance in support of the yen, this change looks potentially meaningful,'' Neil Mellor, a currency strategist at Bank of New York in London, said.

/...

[UpInArms]

11. Investors React to New Worries Over State of Hedge Funds

http://www.nytimes.com/2007/06/26/business/26stox.html?ex=1340510400&en=097017a718d91ca8&ei=5088&partner=rssnyt&emc=rss

Financial shares tumbled yesterday on concern that losses tied to subprime mortgages would deepen, extending the stock market’s worst weekly decline since March.

Bear Stearns, the second-biggest United States underwriter of mortgage bonds, slid to its lowest level in nine months after a Merrill Lynch analyst said it might have to salvage another hedge fund.

Mounting speculation that hedge fund losses were greater than forecast erased a rally that lifted the Dow Jones industrial average 129 points.

“People are concerned that there’s some great big unknowable out there,” said Brian Barish, president of Cambiar Investors, based in Denver. “There’s nothing the financial markets dislike more than uncertainty. That’s why the market is jittery.”

The Standard & Poor’s 500-stock index fell 4.82 points, or 0.32 percent, to 1,497.74. The Dow Jones industrial average dropped 8.21 points, or 0.06 percent, to 13,352.05. The Nasdaq composite index declined 11.88 points, or 0.46 percent, to 2,577.08. The Russell 2000 index, a benchmark for smaller companies, fell 7.29 points, or 0.9 percent, to 827.46.

...more...

[OrangeCountyDemocrat]

29. UNKNOWABLE?????

From the article:

“People are concerned that there’s some great big unknowable out there,” said Brian Barish, president of Cambiar Investors, based in Denver. “There’s nothing the financial markets dislike more than uncertainty. That’s why the market is jittery.”

Perhaps it's UNKNOWABLE to a frickin' MORON, or someone intent on SPINNING & Cheerleading, but plenty of people around here KNOW what's going on, and have some pretty good KNOWLEDGE of what might happen next.

Perhaps if these "economists" actually did their job, instead of picking their noses and wondering about some great, big Unknown, they might be able to predict this sort of obvious slide ahead of time.

[AnneD]

42. I'm sure....

they can get the facts from the Rupert Murdoch owned WS Journal:eyes:

Our theme song for today is the ever popular 'Ain't No Holler Back Girl'

[ozymandius]

53. Again - hope is the damned plan when they know fully well that

it's certainly not as crippled as this whole market is going to be when reality sets in. So they've started worrying about some "great big unknowable". The gestalt of this thread, full of far-reaching insight into the mechanics of the everyday financial world, would be enough to inform these Greenspan minions about that "unknowable" thingy.

[UpInArms]

12. Hancock Case Is Settled for $21.3 Million for secretly diverting client funds

http://www.nytimes.com/2007/06/26/business/26hancock.html?ex=1340510400&en=8eb9e7ec86b70552&ei=5088&partner=rssnyt&emc=rss

The Manulife Financial Corporation will pay $21.3 million to settle claims that its John Hancock investment units secretly diverted client funds to pay for marketing, the Securities and Exchange Commission said yesterday.

John Hancock did not disclose internal arrangements that steered $14.8 million to 55 brokerage firms that promoted the company’s mutual funds and other products from 2001 to 2004, the S.E.C. said, adding that the company “had a duty to disclose to the retail mutual funds this use of fund assets.”

Regulators have been investigating secret marketing arrangements since a crackdown on mutual fund abuses started in 2003. Manulife, based in Toronto and Canada’s biggest insurer, agreed to pay $19.3 million into investment portfolios affected by the payments, plus $2 million in fines, the commission said.

...more...

[UpInArms]

13. Ex-Chief of Cendant Denied Bid for Release

http://www.nytimes.com/2007/06/26/business/26cendant.html?ex=1340510400&en=23c540ddeea22cbf&ei=5088&partner=rssnyt&emc=rss

A federal appeals court has denied a request by the former Cendant chairman, Walter A. Forbes, to be released pending an appeal of his conviction in a case over one of corporate America’s biggest accounting scandals.

The United States Court of Appeals for the Second Circuit also denied Mr. Forbes’s requests for an order to keep certain financial information in district court confidential, according to information posted on the court docket on Friday.

A lawyer for Mr. Forbes could not be reached for comment.

In April, Judge Alan H. Nevas in Connecticut ordered Mr. Forbes to report to prison on July 16 to begin serving his sentence.

He was sentenced in January to 12 years, 7 months in prison and ordered to pay $3.3 billion for his role in the scandal.

...more...

background:

Forbes gets 151 months for Cendant fraud

BRIDGEPORT, Conn. — A federal judge sentenced Walter Forbes, the former chairman of Cendant, to 12½ years in prison Wednesday, bringing an end to a criminal inquiry that began almost a decade ago. With the jail term, Forbes becomes the latest member of a rogues' gallery of former CEOs packed off to prison in recent years for presiding over accounting debacles.

In addition to handing him a prison term of 151 months, U.S. District Judge Alan Nevas ordered Forbes to pay $3.275 billion in restitution, an amount roughly equal to what shareholders received in a settlement with Cendant and auditor Ernst & Young in 1999.

<snip>

From 1976 to 1997, Forbes was chief executive of Comp-U-Card International (CUC), a shopping club that allowed consumers to purchase goods directly from manufacturers.

The company grew each year through acquisitions, a practice that allowed Forbes to manipulate earnings, prosecutors alleged. In 1997, Forbes merged his company with HFS, a travel services firm, to form Cendant.

In early 1998, accountants from HFS noticed problems with CUC's merger reserves. The disclosure of CUC's earnings problems in April 1998 caused Cendant's stock price to plummet, wiping out $14 billion in market capitalization in one day.

In 2004, prosecutors put Forbes and Shelton, his top lieutenant, on trial in Hartford, Conn., charging they fabricated $252 million in non-existent earnings. Shelton was convicted, but the jury deadlocked on Forbes. A year later, another jury also deadlocked on the matter.

...more...

hmmmmm.... mergers and acquisitions allowed them to manipulation earnings.... hmmmm :think:

[UpInArms]

14. Bear Stearns Funds' Woes Didn't Deter a Stock Offer

http://www.nytimes.com/2007/06/26/business/26bond.html?ex=1340510400&en=179789919aebdeff&ei=5088&partner=rssnyt&emc=rss

Early in May, as Bear Stearns executives scrambled to meet redemption requests from clients in two troubled hedge funds, a money management company affiliated with the Wall Street firm filed its intention to sell $100 million worth of shares to public investors.

Among the assets of the management company, Everquest Financial, were $550 million of debt securities purchased from the same Bear Stearns hedge funds that six weeks later would be the subject of a very public unraveling.

Everquest Financial’s initial public offering statement on May 9 disclosed that substantially all the assets in its $700 million portfolio had been bought from the Bear Stearns High-Grade Structured Credit Enhanced Strategies Fund and the High-Grade Structured Credit Strategies Enhanced Leveraged Fund.

The filing did not disclose that those funds had suffered heavy losses in March and April as assets held in them, many backed by subprime mortgages, plummeted in value. Bear Stearns hedge funds also held a $400 million stake in Everquest.

<snip>

An analyst at Portales Partners, Charles Peabody, said in a note to clients last week that Everquest appeared to be an investment vehicle used in part “as a way for Bear Stearns to offload some of its own mortgage exposure.”

...more...

(edited for that weird goo in the title line that happens when there are 'quote' markes)

[Roland99]

15. sure is starting to get sticky in there, isn't it?

[ozymandius]

18. "sticky"? Did you mean "stinky"?

because something is starting to smell with this whole leveraged mortgage bidness

[Roland99]

28. maybe a little of both!

[ozymandius]

16. pre-open numbers and blather

09:00 am : S&P futures vs fair value: +5.1. Nasdaq futures vs fair value: +7.3. The stage remains set for stocks to make another attempt to bounce back from last week's sizable declines. With yesterday marking another Monday in which there was no notable M&A activity, some deal making this morning is also offering reassurance among buyers.

Holland's Basell has agreed to acquire Huntsman (HUN) for $9.6 bln, including debt. Spain's Iberdola is paying $4.5 bln for Energy East (EAS) for $4.5 bln while Roche last night launched a hostile $3.0 bln bid for Ventana Medical Systems (VMSI). That was a 44% premium to its closing price a day earlier. Technology is also likely to offer some notable leadership today following upbeat analyst commentary on bellwethers Google (GOOG) and Apple (AAPL).

08:30 am : S&P futures vs fair value: +5.7. Nasdaq futures vs fair value: +8.2. S&P 500 and Nasdaq 100 futures are off their best levels but still trade well above fair value, indicating a higher open for equities. Aside from temporary relief regarding subprime woes, the market is also exhibiting a better bias ahead of more economic data that is likely to, at worst, keep the Fed and its tightening bias sidelined for the time being.

Yesterday's troubling report on Existing Home Sales should place added emphasis on this morning's New Home Sales data while investors at 10:00 ET will also digest an update on Consumer Confidence.

[ozymandius]

17. Markets are ready to take your money.

9:35
Dow 13,379.03 Up 26.98 (0.20%)
Nasdaq 2,587.53 Up 10.45 (0.41%)
S&P 500 1,502.22 Up 4.48 (0.30%)
10-Yr Bond 5.078% 0.00
NYSE Volume 112,601,000
Nasdaq Volume 69,959,000

[ozymandius]

20. flying high at 9:40

Dow 13,404.72 Up 52.67 (0.39%)
Nasdaq 2,590.41 Up 13.33 (0.52%)
S&P 500 1,504.00 Up 6.26 (0.42%)
10-Yr Bond 5.076% Down 0.002
NYSE Volume 160,846,000
Nasdaq Volume 104,702,000

[ozymandius]

21. Stocks rise ahead of new home sales data

NEW YORK - Wall Street rose moderately in early trading Tuesday ahead of a report expected to show that new home sales fell in May from the previous month.

In addition, the Conference Board will issue its June consumer confidence index, and investors are expecting the report to indicate a decline.

http://news.yahoo.com/s/ap/20070626/ap_on_bi_st_ma_re/wall_street

[ozymandius]

22. Lennar Earnings Drop; Gives Weak Guidance

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

Lennar Corp., the largest U.S. homebuilder, reported a loss for the fiscal second quarter as the housing slowdown discouraged buyers and prompted price reductions.

The net loss amounted to $244.2 million, or $1.55 a share, in the three months ended May 31, compared with a profit of $324.7 million, or $2, a year earlier, Miami-based Lennar said today in a statement. Revenue tumbled to $2.88 billion from $4.58 billion.

Rising defaults among subprime borrowers and mortgage rates near an 11-month high are hampering sales for homebuilders even as they cut prices. The slump in housing has moved into its second year as prospective buyers hold off purchasing in anticipation prices will continue to fall.

``As we look to our third quarter and the remainder of 2007, we continue to see weak, and perhaps deteriorating, market conditions,'' Chief Executive Officer Stuart Miller said in the statement. ``We currently expect to be in a loss position in our third quarter.''

Not much to add to this, is there? The housing market is clearly in a recession at this point. And with a massive inventory build-up, rising interest rates and tightening credit standards, the decline will continue for some time.

http://bonddad.blogspot.com/2007/06/lennar-earnings-drop-gives-weak.html

[ozymandius]

25. momentum draining

10:25
Dow 13,372.86 Up 20.81 (0.16%)
Nasdaq 2,579.15 Up 2.07 (0.08%)
S&P 500 1,499.63 Up 1.89 (0.13%)
10-Yr Bond 5.082% Up 0.004
NYSE Volume 477,381,000
Nasdaq Volume 367,814,000

10:00 am : Equities are still on the offensive as nine of 10 economic sectors remain positive. However, the morning's best performer -- Utilities (+1.2%), which holds a trivial 3.7% weighting on the S&P 500, offers little conviction on the part of buyers. In similar fashion to early action Monday, Health Care (+0.6%) and Telecom (+0.6%) turning in the next best performances further underscores a more risk averse market looking for defensive-oriented stocks.

The Financial sector is rebounding somewhat; but its modest 0.4% advance has yet to erase yesterday's 0.6% pullback and barely makes a dent in the 1.6% drop on Friday. Energy (-0.1%) is currently the only area of weakness; but it's holding up rather well in the face of a 1.2% decline in oil prices to $68.40/bbl.DJ30 +42.96 NASDAQ +10.44 SP500 +5.17 NASDAQ Dec/Adv/Vol 732/1711/124 mln NYSE Dec/Adv/Vol 596/1651/54 mln

09:40 am : As futures trade presaged, stocks open on an upbeat note as investors try to get back in buying mode following last week's sell-off. The absence of any surprises on the subprime front is helping to clear the way for buyers spooked a day earlier. A resurgence in M&A activity, another pullback in interest rates, and falling oil prices are also contributing to the market's positive bias.

Early market gains, though, are modest in scope as investors await the release of two economic reports. New Home Sales and Consumer Confidence will hit the wires in about 20 minutes. DJ30 +34.87 NASDAQ +10.48 SP500 +4.83 NASDAQ Vol 92 mln NYSE Vol 46 mln

[mojavekid]

26. Prudent Squirrel: Yen Carry Alert - Gold and Financial Markets

http://www.kitco.com/ind/Laird/jun262007.html

For the past several weeks, I have been telling subscribers of my concern about the Yen again being at a low level. This present level has led to upsurges in the Yen, as traders unwind Yen carry trades. World stock markets and gold have sold off when this happens, as in late February of this year. The Yen hit a 5 year low days ago.

Japanese Finance Minister Omi stated Monday that people should not be making ‘one way bets on the Yen’ – the same terminology that the ECB used just before the Yen strengthened a great deal in late February, and led to world stock crashes. The BIS also stated this week that the present low level of the Yen is ‘anomalous’.

"Over the weekend, the Bank for International Settlements warned in its annual report about the risks of carry trades and said there was "clearly something anomalous" about the yen's weakness...A drop in Japanese shares also kept the market on edge for any potential rush out of risky positions such as carry trades."

Reuters

US markets

Gold is languishing. There are concerns about the US banking situation after huge losses in two Bear Stearns hedge funds that made billion dollar bets on US subprime mortgages. The Dow has reacted quite negatively to revelations on the Bear Stearns hedge fund mess Friday, and now Monday. I believe gold has been anticipating this kind of trouble for weeks, due to rising interest rates. Gold has also been concerned about the prospect of another Yen carry trade stock market sell off.

Chinese markets

With the Chinese stock markets looking shaky, the last thing world stocks need is pressure on the Yen carry trade to unwind again, as it did late February, and the Yen strengthened 6% in roughly a week, causing waves of world stock sell offs. The US Dow had one horrible 500 point drop during that episode, but appeared to shake off the weeks long Asian selling then. That helped to quiet the situation.

It is always possible the Asians markets will rally again, but the prospect of new Yen carry unwinding is quite high right now.

more...

[Ghost Dog]

34. China to Inspect Banks' Loans to Restrict `Hot Money'

http://www.bloomberg.com/apps/news?pid=20601080&sid=aL2lrSOXH4ng&refer=asia

June 26 (Bloomberg) -- China's currency regulator plans to start a nationwide inspection of banks' foreign loans to curb illegal inflows that have helped to inflate the country's surging stock and property markets.

Banks should check that their books comply with laws on short-term foreign debt, the State Administration of Foreign Exchange said on its Web site today. The regulator said it's already punished 19 local and 10 foreign banks for breaking currency rules in a probe that started last year.

The inspection highlights concern that ``hot money'' is pushing up asset prices, driving growth in China's $1.2 trillion of foreign-exchange reserves and undermining efforts to cool the economy. A crackdown on investments with borrowed money and a tripling of the tax on share trades failed to halt a 92 percent advance in the benchmark stock index this year.

``The government is suspicious that speculative funds have been a reason for the rapid increase in the nation's foreign- exchange reserves,'' said Sun Mingchun, a Hong Kong-based economist with Lehman Brothers Inc. ``Such inspections can help stem hot money inflows`` and ``serve as a warning to speculators.''

The CSI 300 Index rose 1.3 percent today, gaining for the first time in three days. The index has almost tripled in the past year and trades at 44 times earnings, the most expensive in the Asia-Pacific region.

Central bank Governor Zhou Xiaochuan, who oversees the currency regulator, said June 23 that he's ``closely watching'' the stock market and is concerned about a possible bubble.

Disguised Funds

The nationwide inspection will start ``soon,'' the regulator said in today's statement. It didn't name any of the banks that broke the rules or specify penalties.

Some banks failed to check the authenticity of client transactions and broke other regulations, resulting in inflows of speculative funds disguised as trade and investment, the statement said. Some funds ``even entered the domestic real estate and stock markets, having a certain impact'' on government efforts to cool the economy, it said.

...

China's foreign-exchange reserves, the world's largest, jumped 37 percent from a year earlier in March. The increase in reserves has flooded China's financial system with cash, making it harder for the central bank to slow lending and investment.

/...

[Ghost Dog]

37. China shares slide over 3 percent on policy fears

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070626:MTFH74383_2007-06-26_02-13-17_SHA290161&type=comktNews&rpc=44
Mon Jun 25, 2007 10:13pm ET

SHANGHAI, June 26 (Reuters) - China's main stock index plunged more than 3 percent for a third straight day on Tuesday because of concern about government policies to cool the economy and the market.

The Shanghai Composite Index sank 3.12 percent to a low of 3,818.853 points in the first half hour of trade. It tumbled 6.83 percent on Friday and Monday.

Investors expect an interest rate hike in coming weeks because of rising inflation, while authorities are encouraging a slew of big companies to conduct initial public offers in an apparent attempt to dampen the market by increasing share supply.

Heavily weighted financial stocks, which had been relatively strong on Monday, led the market down on Tuesday. China Life Insurance dropped 3.44 percent to 43.00 yuan. ($1 = 7.62 yuan).

:shrug:

[Ghost Dog]

35. Nikkei average ends flat as yen hurts exporters

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070626:MTFH79648_2007-06-26_08-22-25_T268571&type=comktNews&rpc=44

TOKYO, June 26 (Reuters) - The Nikkei average trod water in slow trade on Tuesday, as Tokyo Electron Ltd. (8035.T: Quote, NEWS , Research) and other exporters were hit by a slight rise in the yen, while property firms such as Sumitomo Realty & Development Co. Ltd. (8830.T: Quote, NEWS , Research) recouped recent losses.

...

The Nikkei <.N225> ended down 0.12 percent or 21.37 points at 18,066.11. The broader TOPIX index <.TOPX> rose 0.06 percent to 1,765.87.

The Tokyo exchange saw its slowest day of trading in a month, with just 1.76 billion shares changing hands on the first section.

Declining shares outnumbered advancers 834 to 748.

/...

[ozymandius]

27. Gotta leave for awhile.

Maybe for the rest of the trading day. Have fun watching fur fly.

Ozy :hi:

[Roland99]

32. 10:50am - Looking for direction on a rudderless ship

DJIA 13,365.46 +13.41 +0.10%
Nasdaq 2,579.97 +2.89 +0.11%
S&P 500 1,498.30 +0.56 +0.04%
Dow Util 492.42 +3.93 +0.80%
NYSE 9,817.17 +9.99 +0.10%
AMEX 2,337.43 +30.39 +1.32%
Russell 2000 826.77 -0.69 -0.08%
Semcond 493.41 -3.76 -0.76%
Gold future 649.50 -5.20 -0.79%
30-Year Bond 5.20% +0.01 +0.10%
10-Year Bond 5.08% +0.00 +0.08%

[Ghost Dog]

38. London stays lower as BAE and insurers fall

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B003c504f%2Da37e%2D43df%2D814f%2Dc290f14041ee%7D

BAE Systems dragged on London equities lower on Tuesday as the US Department of Justice launched of a formal investigation into the defence company. News of the investigation into BAE’s business practices, including its links to Saudi Arabia, sent shares in the company 7.8 per cent lower to 403.6p - wiping out gains from last week, when BAE’s acquisition of US defence contractor Armor Holdings was approved by the US. The FTSE closed 100 was 29 points weaker at 6,559.3 while the FTSE 250 fell 35.1 points to 11,537.1. Insurance stocks featured heavily on the list of losing shares as severe floods in northern and central England looked set to result in large payouts. Aviva lost 2.1 per cent to 751.4p and Prudential fell 2 per cent to 719p.

[Ghost Dog]

39. European banks lead equity markets lower

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B59a688b0%2Da94a%2D407e%2Dbabe%2D7a40fdf572c0%7D

European equity markets fell sharply on Tuesday, with financial stocks heading the losses, as concerns over the state of the US subprime mortgage market hit banking stocks. the FTSE Eurofirst 300 was down 0.6 per cent to 1,587.7 in closing trade, while Frankfurt’s Xetra Dax fell 0.8 per cent to 7,860.5, the CAC 40 in Paris lost 0.8 per cent to 5,953.4 and London’s FTSE 100 shed 0.4 per cent to 6,559.3. A report by the UK’s Lombard Street Research group suggested that the US banking system could face a credit crunch over losses on risky debt. ”Banks’ capital is about to be decimated, which will require calling in a swathe of loans. This is going to aggravate the US hard landing,” the report added. Fears that some European banks could be exposed to subprime risks have hit the sector in recent sessions, following news of the near collapse of two funds associated with Bear Stearns.

[AnneD]

43. Who knew....

the cold and flu season would start this early:evilgrin: Hey GD. How are you doing. Thanks for all the oversaes info. Our press totally skips most of it. Totally egocentric.

[Ghost Dog]

51. Hiya AnneD. Getting the house in order, here on the island;

Cultivating the soil.

(I try not to criticise the US in general - particular policies/personalities are a different kettle of fish - here in this forum, as you know ;-) ) :hi: - I recommend to take great care if you're deciding to play around at this time...

[AnneD]

55. Ghost Dog....

No criticism ever taken, just different ideas. Nothing wrong with a breath of fresh air or lively conversation. :toast:

I think we will still have a way before we hit bottom of this economy. But when we do have a crisis-there will be opportunity in the midst of that crisis-for those that are prepared. I too am cultivating the soil.

One of the bad things about the crash in the 80's was that even though I saw it coming and had some great ideas, I did not have the ways and means to take advantage of it. I never forgot that lesson. This time, I see so much of the same things yet I am in different and better circumstances. If opportunities happen-I intend to be in a position to take full advantage. And even if the opportunity does not present itself, I will be in that better position.

[mojavekid]

45. Danville Register: Many in U.S. Don't Have Bank Accounts

http://hosted.ap.org/dynamic/stories/B/BANKLESS_IN_AMERICA?SITE=VADAR

WASHINGTON (AP) -- Grandma stuffing money under the mattress isn't the only one living outside the banking system.

As many as 28 million people in the United States are forgoing traditional financial institutions because of mistrust, cultural and language barriers or a belief that by the time all the bills are paid there will be nothing left for an account.

snip...

The bankless are estimated to earn hundreds of billions of dollars a year in income. Seeing a business opportunity, banks are trying to draw in these potential customers. So, too, are check-cashing businesses and retailers, including Wal-Mart.

snip...

A Consumer Federation of America survey of check-cashing outlets, found that on average it cost $24.45 to cash a $1,002 Social Security check last year. A blue-collar worker pays an average $19.66 every week to cash a $478.41 handwritten paper check.

more....

[loudsue]

46. Man. My mutual funds are getting hammered.

And I went medium to conservative, all the way. OUCH!!

:kick::kick::kick: & Rec

[specimenfred1984]

47. Sorry to hear that; here's a way to mimick funds

Pick 20 stocks from different sectors with each stock having to potential to gain 15% to 20% a year. It's much easier said than done but that way you control where you money is going.

[mojavekid]

48. Fleckenstein: Wall Street bets its chips on fantasy

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/WallStreetBetsItsChipsOnFantasy.aspx

Let's begin with a perfect example of what passes for knowledge and information on Wall Street: A dead fish from Morgan Stanley (MS, news, msgs) recently penned a "research" report that's right up there with specimens from the dot-com days, when folks were talking about valuing eyeballs.

Despite his acknowledgment -- "It's difficult to quantify the exact (semiconductor) equipment exposure, given the complexity of the wafer allocation and technological mix at the foundries where most of the iPhone chips are being manufactured" -- he proceeded to recommend a handful of equipment stocks as "plays" on Apple's new iPhone.

Specifically, he said, "Applied Materials (AMAT, news, msgs), ASML Holding (ASML, news, msgs) and Lam Research (LRCX, news, msgs) are best exposed to iPhone semiconductor content on a relative basis."

Beyond that caveat, he failed to address the size and scope of the iPhone: Maybe 1 million units will be produced this quarter, and Apple says it will sell around 10 million in the next 18 months. In that time, there will probably be sales of 1.5 billion cell phones and 400 million personal computers. So it's laughable to think that the addition of a puny 10 million iPhones will move the needle at any foundry anywhere -- but again, those details don't make it into Wall Street's version of "analysis."

more...

[ozymandius]

54. closing up shop

Dow 13,337.66 Down 14.39 (0.11%)
Nasdaq 2,574.16 Down 2.92 (0.11%)
S&P 500 1,492.89 Down 4.85 (0.32%)
10-Yr Bond 5.101% Up 0.023
NYSE Volume 3,398,534,000
Nasdaq Volume 2,135,683,000

4:20 pm : For a second straight session stocks failed to hold on to modest intraday gains after a sizable sell-off last week. Not even a handful of encouraging developments tied to the lingering subprime situation were enough to give the market a sustained boost.

Reports that Bear Stearns (BSC 139.60 +0.50) may put up only half ($1.6 bln) of what was indicated last week to rescue one of its troubled funds, and Lehman Brothers (LEH 74.26 -0.79) saying BSC's original $3.2 bln loan will not "materially impact" the brokerage's earnings were the initial catalysts setting the stage for a respectable rebound.

Then, around 12:00 ET, the U.S. House Financial Panel Chair said BSC's hedge fund problems won't lead to "financial meltdown" and Merrill Lynch (MER 84.51 +0.53) said that Bear's problems are overblown.

Nonetheless, the recent shift in market sentiment viewed the latest attempt by the market to bounce back as another selling opportunity.

Pimco's Bill Gross saying late in the day that subprime problems are spreading to other areas didn't help matters since his remarks coincided with further deterioration in market internals that eventually left stocks struggling to regain any upward momentum.

On the economic front, New Home Sales fell 1.6% in May; but downward revisions to the prior three months' figures further suggested that it's still too early to declare a bottom in housing.

Even though monthly confidence data don't say much about the economic outlook or correlate well with short-term consumer spending, the June report falling to a 10-month low merely underscored the sentiment shift that has occurred this month.

A 2.0% drop in oil prices to $67.80/bbl offered some intraday relief; but a subsequent pullback in the Energy sector to the tune of 1.5% acted as an offset. Materials turned in the day's second worst performance (-1.2%) among the nine sectors losing ground.

The only sector finishing higher was Health Care, yet its 0.7% advance further underscored a more risk averse market looking for defensive-oriented stocks. DJ30 -14.39 DJTA -0.9% DJUA -0.1% NASDAQ -2.92 NQ100 -0.2% R2K -0.2% SOX -0.3% SP400 -0.3% SP500 -4.85 XOI -1.6% NASDAQ Dec/Adv/Vol 1653/1390/2.04 bln NYSE Dec/Adv/Vol 2077/1194/1.64 bln