STOCK MARKET WATCH, Monday July 9

[ozymandius]

Source: DU

Monday July 9, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 563 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2376 DAYS
WHERE'S OSAMA BIN-LADEN? 2088 DAYS
DAYS SINCE ENRON COLLAPSE = 2049
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

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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 July 6, 2007

Dow... 13,611.68 +45.84 (+0.34%)
Nasdaq... 2,666.51 +9.86 (+0.37%)
S&P 500... 1,530.44 +5.04 (+0.33%)
Gold future... 654.80 +4.20 (+0.64%)
30-Year Bond 5.28% +0.05 (+0.86%)
10-Yr Bond... 5.20% +0.05 (+0.99%)






GOLD, EURO, YEN, Loonie and Silver

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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

The Dow -- Holding On but Overdone
BY TIM W. WOOD

Since the inception of the Dow Jones Industrial Average in 1896, there has been a long-term ebb and flow in the stock market known by many as the 4-year cycle. There have been 27 such completed 4-year cycles with an average duration of 47.04 months. I have identified specific common elements and markers that have occurred at all previous 4-year cycle tops and bottoms. Given that none of these common elements or markers have been seen since the 2002 4-year cycle low, the evidence continues to suggest that the market has not made a 4-year cycle top or bottom since the 2002 low. This in turn means that we are now seeing one of the longest 4-year cycles in stock market history. In the past, even the longest 4-year cycle advances ultimately ended with a decline into a low that was sufficient enough to trigger the same markers of all other 4-year cycle tops and bottoms.

I’m totally aware of the fact that few believe the 4-year cycle is still relevant and that many others believe that the 4-year cycle low occurred either in June 2006 or in March 2007.

-yes indeedy

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

[ozymandius]

2. Today's Report

3:00 PM Consumer Credit May
Briefing Forecast $7.0B
Market Expects $6.0B
Prior $2.6B

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

[ozymandius]

3. Oil retreats after recent surge

LONDON - Oil prices dropped Monday as traders took profits from crude futures that rose $1 a barrel on Friday.

-cut-

Light, sweet crude for August delivery lost 40 cents to $72.40 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.

The contract Friday gained $1 to settle at $72.81 a barrel — the front-month contract's highest settlement since Aug. 15, 2006.

-cut-

Market participants have also focused on a surprisingly small increase in refinery utilization in Thursday's inventory report from the U.S. Energy Department's Energy Information Administration. While utilization rose to 90 percent, it's below the 94 percent to 95 percent most think is necessary to meet peak summer driving demand.

Analysts have worried for months that the refining industry isn't producing enough gas to meet demand. Those concerns have been exacerbated by an unusually high number of refinery outages this year.

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

[ozymandius]

4. IEA sees oil supply crunch looming

LONDON (Reuters) - World oil demand will rise faster than expected to 2012 while production lags, leading to a supply crunch, the International Energy Agency said on Monday.

In its Medium-Term Oil Market Report, the adviser to 26 industrialized countries said demand will rise by an average 2.2 percent a year between 2007 and 2012, up from a previous medium-term forecast of 2 percent.

The outlook, which updates an IEA forecast last issued in February, coincides with a jump in oil prices to more than $75 a barrel, closing in on a record high near $79, on concerns of a tightening market.

-cut-

Ten OPEC members began cutting production last year to stem a drop in prices. The IEA in its Monthly Oil Market Report has for the past four months urged OPEC to open the taps to avoid over-tightening the market.

PLATEAU OIL

The IEA trimmed its forecast for supply from non-OPEC producers by 800,000 bpd in 2011, partly because of project delays, and touched on the thorny subject that oil supplies are nearing a peak.

http://news.yahoo.com/s/nm/20070709/bs_nm/iea_energy_dc_2

[UpInArms]

5. dollar watch

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

Last trade 81.398 Change -0.042 (-0.05%)

Dollar - No Help From Data

http://www.dailyfx.com/story/strategy_pieces/trade_or_fade/Dollar___No_Help_From_1183960706236.html

With the exception of US Pending home sales, the economic news for the week was almost uniformly good but the greenback can’t win for trying. Both ISM surveys beat their estimates, as did the NFP’s which not only saw better numbers for the current month but material upward revisions for the months prior. Yet despite all that the dollar lost another 60 basis point against the euro and now stands within a few pips of all time lows. To add insult to injury the news from across the ocean wasn’t even bullish as ECB chose to hold off on any further rate hikes until September.

Still, in spite of dollars woes, the greenback appears to be nearing some sort of a near term bottom. As we noted on Friday, “From a long term perspective however, the key level of employment growth appears to be centered at 100K monthly jobs. While that is hardly a blistering pace of economic expansion, that level will prevent any talk of Fed easing for the rest of the year and therefore should serve as somewhat of a support for the greenback. Only if the job picture begins to materially deteriorate into the latter half of this year by consistently slipping below the 100K figure will the pressure on US monetary officials to ease begin to truly escalate.” With NFP’s printing comfortably above the 100K number US short term rates should hold steady and at the very least produce a modicum of support given the dollar’s 125 basis point positive spread to the euro.

Next week the calendar is relatively light with only Trade Balance and Retail Sales as any events of note. Given the greenbacks recent weakness the Trade Balance could surprise to the upside as US exporters perform better. The Retail Sales print however is likely to be the key. Last week’s news that auto sales have collapsed to near post-Katrina lows suggest that the US consumer is tapped out. If Thursday’s number confirms that notion by surprising to the downside the greenback could slip lower as any expectations for a rebound in US growth will be postponed. -BS



...more...

[mojavekid]

9. Marketwatch: Gold futures rise, supported by soft dollar

http://www.marketwatch.com/news/story/gold-futures-rise-picking-up/story.aspx?guid=%7B3BDAA041%2DFC67%2D4F67%2DA7C9%2DE74A2367E715%7D&siteid=yhoof

NEW YORK (MarketWatch) -- Gold futures rose early Monday, picking up where they left off last week as traders played off softness in the dollar.
Gold for August delivery gained $8.70 to stand at $663.50 an ounce on the New York Mercantile Exchange. Other metals prices also gained ground.
"Market participants found a softer dollar once again conducive to being on the long side," said Jon Nadler, analyst at Kitco Bullion Dealers, in a morning note.
The benchmark gold contract closed up $4.20 an ounce on Friday, yielding a modest weekly gain. Read more.
Last week's choppiness underscores how gold's "still struggling to find traction, particularly with the market entering the summer months," said James Moore, analyst at TheBullionDesk.com, in a morning note.
Gold will likely spend more time trading in its current range between the 200- and 100-day moving averages, Moore added. He pegged these levels at $644.20 and $664.15 an ounce.
On the currency markets, the dollar "generally has a softer bias after being unable to sustain upticks ahead of the weekend despite firm jobs data and a backing-up in U.S. yields," said Marc Chandler, foreign-exchange strategist at Brown Brothers Harriman, in a morning note.

more...

[TrogL]

14. That's gonna set the Gold Bugs off

Of course, that doesn't take much.

[mojavekid]

18. Puru Saxena: Cash is Trash

http://www.dailyreckoning.co.uk/article/inflationcausesmajorworldcurrenciestoloseupto75inpurchasingpower0325.html

Cash is trash! Today, currencies continue to perform their function as a medium of exchange, but they certainly aren't a genuine store of value; or a guardian of purchasing power. Thanks to the ongoing unprecedented money supply and credit growth (inflation) on a global scale, currencies have stopped fulfilling this crucial function; thereby robbing the masses of their hard-earned savings.

The major world currencies have lost between 25% and 75% of their purchasing power through inflation since 1980! For this system to work however, this solitary bear-market in "money" must remain concealed from the public for the fear that the masses may stop accepting these currencies as a medium of exchange. In order to proliferate this fraud, the officials keep up with the "inflation-fighting" propaganda through their totally bogus and meaningless "inflation" figures that are constantly spewed out by the media.

snip...

At the beginning of this decade, if I had told you that seven years later crude oil would be trading above $60 per barrel, gold would be close to $700 per ounce, food prices would be at multi-year highs and the Dow Jones would be trading around 13,500, you would have pronounced me crazy! However, this is exactly what has happened, and there is nothing in the works to suggest that this major trend is about to change in the near future.

In other words, I anticipate that barring short or medium-term corrections, asset-prices will continue to trend higher in nominal terms UNLESS the central-banks change their expansionary monetary policies and decide to rapidly raise interest-rates. In all likelihood, this scenario may not unfold for a few more years and until such time, investors should be able to protect their savings through the returns generated from the capital markets.

snip...

There can be no disputing the fact that the global expansion is now five years old and well advertised, accordingly the "low-hanging fruit" may not come by so easily. Furthermore, I envisage that in the future, investors will have to become more selective when making decisions and deploying their capital. For maximum success and safety, I would urge you to invest your capital during pullbacks whilst avoiding overstretched markets. Despite all the talk of "doom and gloom", this strategy should continue to deliver reasonable returns in the period ahead.

more...

[mojavekid]

13. Daily Pfennig 7/9/07: Back to Interest Rate Expectations...

http://www.kitcocasey.com/displayArticle.php?id=1482

Good day... The dollar benefited from positive payroll data on Friday, only to lose ground later in the day. We have a fairly light week of data here in the U.S., so I would expect the markets to be fairly stable. The markets continue to be in a "vacation" mode as trading is light and volatility will be somewhat subdued. We will get interest rate decisions from both Canada and China this week so these currencies could see additional strength as both may announce rate increases. And officials from the 13 nations that share the euro will be meeting in Brussels today, so we should be prepared for the obligatory "sound bites" which sometimes move the markets.

On Friday, the jobs data in the U.S. showed employers added 132,000 workers last month and wages grew. This fits nicely with the Federal Reserve's prediction of a strengthening economy. The increase in employment followed a 190,000 gain in May that was larger than previously reported. The unemployment rate held steady at 4.5%, close to a six-year low. The dollar had gained vs. most of the currencies prior to this report, and held its gains after the numbers were announced. But later in the day, the dollar traded back off as interest rate expectations pushed money away from the dollar and back into the currencies where rates are expected to increase.

As I reported last week, interest rate differentials have returned to be the top story in the currency markets. I guess you can't blame investors for moving toward currencies whose economies are so good, the central banks have to raise rates to cool them off. The key factor to consider is why these central banks are raising rates. If prudent central banks are raising rates to keep inflation away from their economies, rate increases will benefit the currencies. But if the central banks are playing "catch up" and their actions are being forced by high inflation, rate increases will not ultimately benefit their countries.

more...

[mojavekid]

19. Peter Schiff: Will Japan Destroy the yen to save the dollar?

http://www.kitco.com/ind/Schiff/jul092007.html

As the Japanese government continues holding short-term interest rates near zero while printing yen like it is going out of style, getting out of the yen has now replaced pachinko as the national pastime for rank and file Japanese. With housewives and cab drivers debating the best techniques to exchange their yen savings for higher yielding non-yen assets, the Japanese monetary authorities are facing the prospect of the complete destruction of their own currency, subjecting their citizens to the horrors of hyperinflation.

For years, the storied efficiency of the Japanese economy has kept its citizens from understanding just how much purchasing power they were losing to inflation. As the extremely productive Japanese economy worked to lower consumer prices, the inflationary monetary policy of the BOJ reversed those declines, robbing Japanese consumers of the benefits of falling prices. This loss represents a massive subsidy to American consumers.

However, inflation is about to get so out of control in Japan that prices will soon rise despite the natural forces that would otherwise have lowered them. As rising prices become impossible to ignore, perhaps the Japanese will borrow a page from the U.S. playbook and recalculate their CPI to hide the grim reality. However, with the carry trade kicking into high gear, such propaganda efforts will likely not succeed.

more...

[ozymandius]

6. Stock futures point higher

NEW YORK - Stock futures rose modestly Monday as investors, keeping an eye on high bond yields and oil prices, awaited earnings data and the result of the Chicago Board of Trade shareholder vote.

CBOT Holdings Inc. shareholders are scheduled to vote Monday on the Chicago Mercantile Exchange Holdings Inc.'s offer to buy the rival exchange. Analysts said Friday final approval looked secure barring a last-minute boost in IntercontinentalExchange Inc.'s bid, and according to the Wall Street Journal, ICE has decided against increasing its offer.

Takeover activity has given the stock market a big lift in recent months.

Later Monday, after the market closes, aluminum company and Dow component Alcoa Inc. is expected to report a second-quarter profit of 83 cents a share.

In the meantime, investors will keep monitoring bond yields, which have risen since early June and fueled worries about high rates crimping dealmaking. Last Friday, bond prices weakened, driving up the 10-year Treasury note's yield to 5.18 percent. In early trading Monday, the 10-year yield was unchanged at 5.18 percent.

http://news.yahoo.com/s/ap/20070709/ap_on_bi_st_ma_re/wall_street

[ozymandius]

7. This takeover activity reminds me of the 80s in a creepy way.

I remember the rocketing averages of the Dow during a time when hostile leveraged takeovers and mergers were so commonplace. Then there's the mad money jumble: hedge funds have replaced junk bonds in a high stakes double-blind investment game.

This sounds like a perverse rhyme that we first heard twenty years ago.

[RawMaterials]

8. The one Qoute I love from american psycho

Patrick Bateman: Ask me a question.
Daisy: What do you do?
Patrick Bateman: I'm into... well murders and executions mostly.
Daisy: Do you like it?
Patrick Bateman: It depends. Why?
Daisy: Because most guys I know who work with mergers and acquisitions really don't like it.

[ozymandius]

10. lunchtime check-in

12:04
Dow 13,641.92 Up 30.24 (0.22%)
Nasdaq 2,667.92 Up 1.41 (0.05%)
S&P 500 1,530.36 Down 0.08 (0.01%)
10-Yr Bond 5.159% Down 0.036
NYSE Volume 1,136,367,000
Nasdaq Volume 800,719,000

11:30 am : Not much has changed since the last update as the indices continue to vacillate around the unchanged mark. Split sector leadership remains the most noticeable explanation behind the lack of conviction on either the bullish or bearish side of the aisle. Industrials (+0.4%) is still providing a floor of support for the Dow, while the Energy sector's (+0.6%) resilience in the face of a modest pullback in oil prices is also noteworthy.

However, the only other sectors attracting buyers are Utilities and Materials; and both collectively account for only 6.8% of the total weighting on the S&P 500. The mere 0.2% slide in the heavily weighted Financial sector more than acts as an offsetting factor. DJ30 +18.68 NASDAQ -1.09 SP500 -1.30 NASDAQ Dec/Adv/Vol 1579/1302/654 mln NYSE Dec/Adv/Vol 1538/1510/406 mln

11:00 am : So much for the bulls trying to regain much in the way of enthusiasm over the last hour as early choppiness now leaves the major averages mixed. Technology (-0.2%) has failed to hold onto its recent turnaround. Notable tech laggards include HPQ -1.1%, AAPL -1.4%, ORCL -1.2%, ADBE -1.3%, ERTS -1.4%, SYMC -1.6%, BMC -1.8%, NOVL -1.6%, and LXK -6.8%.

A reversal in Financials as well, coupled with further deterioration in the Health Care (-0.5%) and Consumer Discretionary (-0.5%) sectors, is also having a notable impact. Healthcare Services (-1.9%) and General Merchandise (-1.8%) rank among today's five worst performing S&P industry groups. It is worth noting, though, that there has not been a significant change in the standings and that some consolidation on the S&P 500 and Nasdaq is understandable since both indices entered today's session on a four-day winning streak. DJ30 +11.95 NASDAQ -3.34

[mojavekid]

11. TDR: Big Trouble in Little China

http://www.dailyreckoning.com/Issues/2007/WEDR070807.html

VIEWS FROM THE FUSE: BIG TROUBLE IN LITTLE CHINA

Industry in the Far East is booming - and of course, the United States has had their hand in helping that boom: in 2006, the U.S. imported 40% of their goods from China.

One of the unfortunate side effects of mass industrialization in a country that is often ill equipped to deal with the burgeoning demand for their goods are serious environmental issues. Case in point: the quality of the water in China.

snip...

"Outside of Qingdao, pollutants from nearby liquor and leather factories have turned streams a murky gray," continues the Post. "And in Nanjing, the river that cuts through the city is full of urban trash, such as twisted metal and clothing."

Yet, China is the biggest producer of farm-raised fish and Chinese seafood imports to the United States were valued at $1.6 billion last year - a 193 percent increase from 2001, reports the Department of Agriculture.

snip...

As these problems have been coming to the surface, scrutiny of Chinese seafood at the U.S. ports that receive them has become more intense. "Back in April, 257 shipments were rejected from China, 68 of which were seafood, reports the NY Times. "Frozen eel contained pesticides, frozen channel catfish had salmonella, and frozen yellowfin steaks were filthy, the records show."

Filthy. Now there's a good, descriptive word that makes you want to hightail it to the nearest Long John Silver's.

more...

[TrogL]

12. 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.Y%24%24&v=s&w=5&t=l&a=1

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

2007-06-06 Wednesday, June 6 0.944644 USD
2007-06-07 Thursday, June 7 0.942418 USD
2007-06-08 Friday, June 8 0.941442 USD
2007-06-11 Monday, June 11 0.942152 USD
2007-06-12 Tuesday, June 12 0.940203 USD
2007-06-13 Wednesday, June 13 0.937383 USD
2007-06-14 Thursday, June 14 0.935979 USD
2007-06-15 Friday, June 15 0.936505 USD
2007-06-18 Monday, June 18 0.932836 USD
2007-06-19 Tuesday, June 19 0.940026 USD
2007-06-20 Wednesday, June 20 0.93932 USD
2007-06-21 Thursday, June 21 0.932227 USD
2007-06-22 Friday, June 22 0.93668 USD
2007-06-25 Monday, June 25 0.933532 USD
2007-06-26 Tuesday, June 26 0.935279 USD
2007-06-27 Wednesday, June 27 0.933184 USD
2007-06-28 Thursday, June 28 0.941088 USD
2007-06-29 Friday, June 29 0.94038 USD
2007-07-02 Monday, July 2 0.947598 USD
2007-07-03 Tuesday, July 3 0.94402 USD
2007-07-04 Wednesday, July 4 0.94402 USD
2007-07-05 Thursday, July 5 0.946342 USD
2007-07-06 Friday, July 6 0.954381 USD


Current values

Loonie:

Last trade 0.9552 Change +0.0008 (+0.67%)
Previous Close 0.9547 Open 0.9560
Low 0.9538 High 0.9568


Other combinations:

AS.M07 AUSTRALIAN $/CANADIAN $ Sep (NYBOT) 0.89595 -0.00535
RA.M07 EURO/AUSTRALIAN $ Sep (NYBOT) 1.5906 -0.0060
HY.M07 CANADIAN $/JAPANESE YEN Sep (NYBOT) 116.80 +0.14
GB.M07 EURO/BRITISH POUND Sep (NYBOT) 0.6783 -0.0016
EP.M07 EURO/CANADIAN $ Sep (NYBOT) 1.4275 -0.0030
EJ.M07 EURO/JAPANESE YEN Sep (NYBOT) 167.00 -0.0
EU.M07 EURO/US$ (LARGE) Sep (NYBOT) 1.36565 +0.00215


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

The September Canadian Dollar was higher overnight as it extends last Friday's close above June's high crossing at .9507. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. Multiple closes above June's high crossing at .9507 are needed to renew this year's rally and would open the door for a larger-degree rally during July. Closes below the reaction low crossing at .9313 would confirm that a top has been posted. Overnight action sets the stage for a steady to higher opening in early-day session trading.



Analysis

Looks like there's another high over the weekend. Looking against the graphs and numbers above, the loonie's gaining against everything, the ozzie and euro are in a bit a trouble, the sterling's strong and the greenback is an also-ran.

[mojavekid]

15. UK Guardian: On borrowed time: markets stare into abyss

http://observer.guardian.co.uk/business/story/0,,2121050,00.html

The bond market has seen a dramatic sell-off in recent weeks. Householders are already feeling the effects after being hit by higher mortgage costs, but that's not the half of it, writes Heather Stewart

Sunday July 8, 2007
The Observer


Bonds are meant to be safe, predictable and boring. Yet the earthquake in the debt markets which has sent bond yields shooting up over the past month will be felt around the world, from Britain's teetering housing market to the pockets of private equity barons. Cut-price borrowing has fuelled a multitude of booms; and as the price of debt rises, investors everywhere are vulnerable.
Back in the late 1980s, bond traders were the 'big swinging dicks' of Wall Street, immortalised in Michael Lewis's memoir, Liar's Poker, as boorish adrenaline junkies, trousering multi-million-dollar bonuses and inventing the cult of the 'leveraged buyout' - the debt-backed corporate takeover - simply to create fresh piles of debt for them to trade.

snip...

'I think greed is switching to fear,' says Julian Jessop, of Capital Economics. 'Even if you don't have any exposure to sub-prime, you might look at your portfolio, and think, "maybe I'm paying too much".'

more...

[mojavekid]

16. TimesOnline UK: American sub-prime mortgage ills infect UK markets

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2002886.ece

Cambridge Place, the London fund manager, was forced to close its $908 million (£450 million) listed fund yesterday as contagion from the embattled US sub-prime mortgage market continued to spread to the UK.

There were signs that jitters about the high-risk mortgage-backed securities had also moved to the blue-chip market, when Carlyle Group, the American private equity firm, said that it would scale down the float of a fund invested in AAA-rated home loans because of investor nervousness about the credit markets.

Cambridge Place, which was established in 2002 by the former Goldman Sachs bankers Martin Finegold and Robert Kramer, said that it would sell the assets of Caliber Global Investment, a London-listed fund, after suffering a net loss of $8.8 million in the first quarter of this year.

Caliber has about 60 per cent of its investments in the US, mostly in mortgage debts rated BBB or below. These are securitised tranches of mortgages given to people with impaired or nonexistent credit histories.

more...

[mojavekid]

17. Bloomberg: Why Haven't Home Construction Jobs Disappeared

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_berry&sid=azttcmXd75qk

July 9 (Bloomberg) -- Illegal immigrants may lie at the heart of one of the persistent puzzles of the U.S. labor market.

Overall payroll jobs rose by 132,000 in June, while the gains in April and May were revised to show 75,000 more jobs than reported earlier, the Labor Department said. The increase in jobs for the second quarter totaled 444,000, up modestly from the first quarter's 427,000.

The unemployment rate remained at 4.5 percent, unchanged from April and May.

The mystery is why the collapse of the bubble in the housing market hasn't been a much greater drag on payroll employment than it has.

``Something isn't right,'' said economist Ray Stone of Stone & McCarthy Research Associates. ``We think that the BLS monthly payroll estimate is overstating the pulse of labor market conditions.''

The number of housing starts and units under construction have both plunged over the past year, while residential construction employment fell a scant 3.5 percent. Last month the number of people at work on homes was unchanged from May at a little more than 3.3 million, the department said.

more...

[UpInArms]

20. closing the door and sweeping the floor - ponies for everyone!

Dow 13,649.97 up 38.29 (0.28%)
Nasdaq 2,670.02 up 3.51 (0.13%)
S&P 500 1,531.85 up 1.41 (0.09%)
10-Yr Bond 5.159% up 0.036

NYSE Volume 2,719,692,000
Nasdaq Volume 1,917,802,000

4:20 pm : Stocks closed higher Monday as investors were greeted with everything from pullbacks in bond yields and oil prices to more M&A activity, upbeat corporate news and positive analyst commentary.

Intraday, the Dow got within six points of its all-time close while the S&P 500 ended the day less than eight points away from its record finish in early June. Nonetheless, market gains were modest in scope as the sense of caution that typically precedes the start of earnings season also loomed.

Per usual, Dow component Alcoa (AA 42.36 +0.70) was slated to officially kick things off with its Q2 report after the bell. With this year's best performer among the Dow 30 with a 42% return, Alcoa hitting its best levels of the day heading into its report offered some confidence that its results will check in better than anticipated again and help set the tone for another batch of better than expected quarterly results to keep a bid in equities.

Expectations are for Q2 operating earnings growth for the S&P 500 in aggregate to increase about 5.7% over the same quarter of 2006. While it is likely that more than 60% of companies will again beat the average Wall Street forecast, resulting in another decent quarter of around 8% EPS growth, there is still an underlying sense the market is overextended. As a reminder, the S&P 500 is up about 8% for the year already and up more than 20% over the last 12 months.

Further, Lexmark (LXK 46.25 -3.15) slashing its profit outlook also left some on Wall Street wondering whether too much optimism has been priced into Technology. The sector is up nearly 6% since bottoming in early June amid expectations it will be a significant contributor to aggregate operating EPS growth on the S&P 500.

The absence of tech's leadership today, alongside declines in other heavily-weighted sectors like Financial and Health Care, also prevented a more convincing performance for the indices.

Fortunately for the bulls, strength in Energy (+1.2%) and Industrials (+0.6%) offered just enough support to extend the S&P 500's winning streak to five sessions.

After seven straight days of gains, some profit taking in oil offered investors some relief. More notable, though, was the fact that the Energy sector completely ignored crude's downturn. The decision by ConocoPhillips (COP 84.05 +3.01) late in the day to return value to shareholders by nearly quadrupling its previous share buyback plan to $15 bln gave the sector a noticeable lift.

The Industrial sector was the other bright spot. FedEx (FDX 116.17 +5.33) was mentioned in Barron's as a possible takeover target while Dow component Boeing (BA 99.90 +1.02) hit a new all-time high intraday after receiving 35 new orders for its recently debuted 787 Dreamliner. Paccar (PCAR 93.50 +4.69), Cummins (CMI 117.64 +11.15), and Terex (TEX 92.70 +8.03), though, were the sector's best performers after analyst upgrades helped vault all three to record highs. BTK -0.1% DJ30 +38.29 DJTA +0.9% DJUA +0.3% DOT +0.3% NASDAQ +3.51 R2K +0.1% SOX +1.1% SP400 +0.1% SP500 +1.41 XOI +1.2% NASDAQ Dec/Adv/Vol 1550/1499/1.83 bln NYSE Dec/Adv/Vol 1537/1718/1.24 bln

3:30 pm : Stocks are off their recent highs going into the close, but the S&P 500 and Nasdaq are still on pace to finish higher for a fifth straight session. Turning in an even better performance, though, is the Dow. The price-weighted average is up 0.4%, compared to smaller gains of 0.2% for the broader market and tech-heavy Composite. Of the 18 Dow components trading higher, Caterpillar (CAT 80.14 +1.33) is leading the charge; but Alcoa (AA 42.33 +0.67), the one blue chip garnering added attention tonight, is not far behind with a 1.6% advance.

As an aside, Alcoa has kept Materials (+0.5%) in focus, as its Q2 report after the close will help set the early tone for expectations among commodities stocks. The sector, however, has really gotten a lift within the last 30 minutes from a spike in shares of Dow Chemical (DOW 46.42 +0.60). DOW was in negative territory at the top of the hour but is now up 1.3% amid renewed rumors of a possible takeover bid. DJ30 +49.19 NASDAQ +5.06 SP500 +2.73 NASDAQ Dec/Adv/Vol 1536/1515/1.49 bln NYSE Dec/Adv/Vol 1425/1822/1.0 bln