STOCK MARKET WATCH, Thursday July 26

[ozymandius]

Source: DU

Thursday July 26, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 546/font] LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2393 DAYS
WHERE'S OSAMA BIN-LADEN? 2105 DAYS
DAYS SINCE ENRON COLLAPSE = 2066
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 25, 2007

Dow... 13,785.07 +68.12 (+0.50%)
Nasdaq... 2,648.17 +8.31 (+0.31%)
S&P 500... 1,518.09 +7.05 (+0.47%)
Gold future... 673.80 -11.00 (-1.61%)
30-Year Bond 5.03% -0.04 (-0.71%)
10-Yr Bond... 4.90% -0.04 (-0.81%)






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

Looking Below the Surface
BY MICHAEL PANZNER

Although the S&P 500 index is up 7.04% for the year, consumer-related shares have not kept pace. The consumer discretionary sector, for instance, has gained just 1.07% since the end of December, a difference of more than 600 basis points. Given the meltdowns in housing and the subprime finance sector, this is not all that surprising. However, the consumer staples sector has also lagged the broad market. It is up 4.55% for the year, a performance gap of more than one-and-a-half percentage points. Despite reassurances to the contrary, it would seem that investors are anticipating an across-the-board slowdown in consumer spending.

-chart-

Financial shares remain in the doghouse. Indeed, the sector has recently fallen beneath key support relative to the S&P 500 index, and seems poised to give back some or all of the relative performance gains seen since the stock market bubble peak back in 2000. With large institutional investors still quite overweight the sector, and recent credit market developments indicating that financing costs are poised to rise as fees from deal-making and securitization activities fall, the fundamental picture seems bearishly in synch with the negative technical pattern.

-cut-

TODAY’S MARKET

Despite much better than expected results from Amazon.com and an improved outlook from Boeing, stocks ended below the day’s best levels following a strong start amid nervousness over weak housing data and fears that financing for buyouts is drying up.

-cut-

Among the reports unsettling investors was news that Chrysler Group had abandoned plans to sell $12 billion in debt in the face of strong investor resistance and word that the banks involved in Kohlberg Kravis Roberts’ acquisition of the U.K.’s Alliance Boots failed to find buyers for $10 billion in loans.

A report from the National Association of Realtors that home resales fell by a worse-than-expected 3.8% in June seemed to buttress comments from Countrywide Financial CEO Angelo Mozilo yesterday that home prices were falling “almost like never before, with the exception of the Great Depression.”

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

[ozymandius]

2. Today's Reports

8:30 AM Durable Orders Jun
Briefing Forecast 2.5%
Market Expects 2.0%
Prior -2.4%

8:30 AM Initial Claims 07/21
Briefing Forecast 310K
Market Expects 310K
Prior 301K

10:00 AM Help-Wanted Index Jun
Briefing Forecast 27
Market Expects 27
Prior 27

10:00 AM New Home Sales Jun
Briefing Forecast 890K
Market Expects 900K
Prior 915K

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

[UpInArms]

7. 8:30 reports: Initial Claims @ 301,000

02. U.S. continuing jobless claims down 19,000 to 2.55 mln
8:30 AM ET, Jul 26, 2007 - 1 minute ago

03. U.S. 4-week avg. jobless claims down 4,000 to 308,500
8:30 AM ET, Jul 26, 2007 - 1 minute ago

04. U.S. June electronics orders down 4.6%
8:30 AM ET, Jul 26, 2007 - 1 minute ago

05. U.S. weekly claims lowest since week of May 12
8:30 AM ET, Jul 26, 2007 - 1 minute ago

06. U.S. June durable-goods inventories up 0.2%
8:30 AM ET, Jul 26, 2007 - 1 minute ago

07. U.S. weekly jobless claims down 2,000 to 301,000
8:30 AM ET, Jul 26, 2007 - 1 minute ago

08. U.S. June durable-goods shipments fall 1.1%
8:30 AM ET, Jul 26, 2007 - 1 minute ago

09. U.S. June aircraft orders up 28.7%
8:30 AM ET, Jul 26, 2007 - 1 minute ago

10. U.S. June durable-goods orders ex-transportation down 0.5%
8:30 AM ET, Jul 26, 2007 - 1 minute ago

11. U.S. June core capital-equipment orders fall 0.7%
8:30 AM ET, Jul 26, 2007 - 1 minute ago

12. U.S. June durable-goods orders up 1.4% vs. 2.5% expected
8:30 AM ET, Jul 26, 2007 - 1 minute ago

[Ghost Dog]

27. Durable goods orders below expectations

http://news.yahoo.com/s/nm/20070726/bs_nm/usa_economy_durables_dc;_ylt=A0WTcVK1rKhGjjMBDQmyBhIF

WASHINGTON (Reuters) - New orders for long-lasting U.S-made manufactured goods rose 1.4 percent in June on a big rise in orders for nondefense aircraft, a Commerce Department report on Thursday showed.

Economists in a Reuters poll taken ahead of the report were expecting durable goods orders to increase by a somewhat bigger 1.8 percent. June's increase came after a 2.3 percent decrease the prior month, a decline that had been driven by a drop in aircraft orders.

U.S. Treasury debt prices rose on Thursday, stretching to new session highs, after the weaker-than-expected data on durable goods suggested flagging business growth in the latter part of the second quarter.

The dollar fell to a two-and-a-half month low against the yen and was little changed against the euro.

"Overall, manufacturing is not in crisis but neither is it charging ahead," said Ian Sheperdson, chief U.S. economist at High Frequency Economics Ltd in Valhalla, New York.

/...

[Ghost Dog]

28. U.S. Durable-Goods Orders Excluding Transport Decline

http://www.bloomberg.com/apps/news?pid=20601087&sid=adjIe8gyv1XM&refer=worldwide

July 26 (Bloomberg) -- Orders for U.S.-made durable goods such as computers and telephone equipment unexpectedly dropped in June for a second month as consumer spending slowed.

Demand for goods meant to last several years, excluding airplanes and motor vehicles, fell 0.5 percent, after a revised 0.2 percent drop in May, the Commerce Department said today in Washington. Including transportation equipment, bookings rose 1.4 percent, led by a jump in orders for commercial aircraft.

Consumer spending -- which kept the economy alive for most of the past year -- is slowing, leading companies to order less from America's factories. Federal Reserve policy makers have said a lack of business investment is a risk for an economy already hurt by the biggest housing slump in 16 years.

``Unfortunately, the signals for this indicator do not look good,'' said Meny Grauman, an economist at Scotia Capital Inc. in Toronto. ``U.S. economic growth is increasingly reliant on business spending to push it forward.''

/...

[UpInArms]

25. June New Home Sales DOWN 6.6%

01. June home sales in West lowest in 12 years
10:00 AM ET, Jul 26, 2007 - 52 seconds ago

02. U.S. June inventories rise to 7.8 months' supply
10:00 AM ET, Jul 26, 2007 - 52 seconds ago

03. U.S. June new-home inventories unchanged at 537,000
10:00 AM ET, Jul 26, 2007 - 52 seconds ago

04. U.S. June median sales price down 2.2% to $237,900
10:00 AM ET, Jul 26, 2007 - 52 seconds ago

05. U.S. June new-home sales weaker than 890,000 expected
10:00 AM ET, Jul 26, 2007 - 52 seconds ago

06. U.S. June new-home sales fall 6.6% to 834,000 annualized
10:00 AM ET, Jul 26, 2007 - 52 seconds ago

[Ghost Dog]

26. New home sales fell 6.6 percent in June

http://news.yahoo.com/s/nm/20070726/bs_nm/usa_economy_newhomes_dc

WASHINGTON (Reuters) - Sales of new homes fell 6.6 percent in June to a lower-than-expected level and prices slumped from May, according to a government report on Thursday that pointed to ongoing weakness in the housing sector.

New single-family home sales fell to an annual rate of 834,000 from a revised rate of 893,000 in May, the Commerce Department said.

Analysts polled by Reuters were expecting June sales to fall to an 895,000 unit pace from a previously reported rate of 915,000 units in May.

In June, the median sales price of a new home fell 1.3 percent to $237,900 from $241,000 in May.

/...

[Ghost Dog]

29. U.S. New-Home Sales Decreased 6.6% to an 834,000 Pace

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

July 26 (Bloomberg) -- Purchases of new homes in the U.S. dropped more than forecast in June, signaling no end to the real- estate slump that's weakened the economy.

Sales fell 6.6 percent, the most since January, to an annual pace of 834,000 last month from a revised 893,000 rate the prior month that was less than previously estimated, the Commerce Department said today in Washington.

Builders may have to cut prices even more and sweeten incentives to turn sales around and trim bloated inventories. Rising mortgage rates and stricter rules to qualify borrowers with poor credit histories will extend the worst housing slump in 16 years and continue to slow growth.

``Soft demand for homes and an inventory glut will continue to push home prices south,'' Chris Low, chief economist at FTN Financial in New York, said before the report. ``Homebuyers and builders alike have recognized the deteriorating conditions of the housing market.''

Economists forecast new home sales would decline to a 890,000 annual pace from an originally reported 915,000 rate the prior month, according to the median estimate in a Bloomberg survey of 75 economists. Forecasts ranged from 850,000 to 925,000.

Sales of new homes were down 22 percent from the same time last year.

/...

[ozymandius]

3. Oil prices climb on supply concerns

Oil prices kept rising Thursday, nearing $77 a barrel amid worries that inventories of crude oil at a key Oklahoma terminal fell last week.

Light, sweet crude for September delivery on the New York Mercantile Exchange rose 98 cents to $76.86 a barrel in electronic trading by midday in Europe. The contract had risen $2.32 to $75.88 on Wednesday, reversing a three-day decline as traders started buying at lower prices.

September Brent crude advanced 59 cents to $76.91 a barrel on the ICE Futures exchange in London.

Prices jumped Wednesday after the U.S. Energy Department's weekly supply report showed overall increases in gasoline inventories and refinery utilization, and declines in inventories of crude oil, roughly in line with analyst expectations.

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

[UpInArms]

19. Sept Crude up $1.13 @ $77.02 bbl

09. September crude up $1.13 at $77.02 a barrel on Nymex
9:00 AM ET, Jul 26, 2007 - 38 minutes ago

[ozymandius]

4. Good morning everyone.

:donut: :donut: :donut:

I have to dash outta here after this short stay. Family flew in from California yesterday evening. I'll be able to check back before the close.

Have a grand ol' time!

Ozy :hi:

[Roland99]

5. have fun!

I have family coming in this weekend from the *other* coast!

[UpInArms]

6. dollar watch

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

Last trade 80.693 Change +0.104 (+0.13%)

US Dollar and Equities Recover but Bond Yields Continue to Sell Off : What Does this Mean?

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_and_Equities_Recover_1185398445241.html

It is earnings season and this appears to be cushioning the fall in both the US dollar and the Dow. Stocks clawed their way back into positive territory in the late US trading session after the market digested the more optimistic Federal Reserve Beige Book report. In contrast to the warnings and dour outlook given by Fed Chairman Ben Bernanke last week, the report from the 12 Fed districts provided a breath of fresh air. According to the report, economic growth continued at a modest pace for most districts. Even though consumer spending for 4 out of the 12 districts was mixed or below expectations, business spending was strong. The same could be said about the real estate market, which was weak on the retail level but more active on a commercial level. At the same time however it leaves the market confused about who to believe since Bernanke’s comments could be a more current assessment of the economic situation and a more valid warning about the troubles ahead. Existing home sales fell 3.8 percent in the month June to the weakest level in over 4 years (this is the lowest since Nov 2002). The markets took the weaker numbers in stride because the previous collapse in the US dollar, bond yields and stocks essentially priced the disappointment in. Also, the average sales price increased for the first time in a year while supply remained unchanged. It is not time to get complacent just because house prices have increased. Although possible, we think that it is highly unlikely that Bernanke will be shifting his tone at the bottom of the housing market. The increasing number of late payments reported by American Express and Countrywide Financial is hardly the behavior of a healthy economy. New home sales are due for release tomorrow along with durable goods. The weak dollar could boost orders for big ticket items but new homes sales on the other hand could suffer the same fate as existing home sales. Even though the stock market licked its wounds and the dollar rallied strongly, bond yields continued to sell-off. Interest rate markets tend to be most accurate indicator of the overall market’s assessment of data. The fact that yields are lower suggests that there may be more bad news to come.

...more...

Chinese Yuan Fixing Set For Record Against The US Dollar

http://www.dailyfx.com/story/dailyfx_reports/top_fx_market_movers/Chinese_Yuan_Fixing_Set_For_1185395254755.html

Chinese Yuan Fixing Set For Record Against The US Dollar

Surprising the market, the Chinese yuan gained to a record high since the revaluation to 7.5576 against the US dollar in the overnight. The first time below the 7.6000 figure, the yuan also gained notably against the Euro and British sterling as further speculation emerged over the possibility of a flexible exchange rate regime in the near term. Although policy makers have noted in the past that appreciation remains an option in the longer term perspective, some in the market are banking on a preemptive move as growth continues to accelerate at an alarming pace. Incidentally, comments from a top planning agency in China helped to support the gain in the yuan as officials noted prevention of an “overheating” economy as the top priority in the second half of the year. According to the National Development and Reform Commission in Beijing, the government “will apply economic and legal policy tools to cool the growth pace in the economy”.

Paulson Set For Impromptu Trip To China

US Treasury Secretary Henry Paulson announced that he will travel to China at the end of the week, hoping to further discuss matters of trade and currency policy. Although relatively expected by the market, the trip is on short notice and comes within days of a legislative draft by Congress. With several bills already pending, the US Senate Finance Committee is said to begin furthering legislation later this week, intent on turning up the heat on Chinese officials. In line with political measures in the past, US politicians continue to argue for a more flexible currency regime as it was recently revealed that China’s trade surplus once again smashed records. “This trip is part of an ongoing process to strengthen our strategic economic relationship – to address long term issues such as working with China to rebalance its growth and increase the flexibility of its currency”, Paulson said in a statement.

...more...

[Ghost Dog]

12. Surprise jump in Eurozone money supply

http://www.ft.com/cms/s/290d6278-3b5d-11dc-8002-0000779fd2ac.html

Annual growth in eurozone M3 money supply and loans to the private sector rose unexpectedly in June, European Central Bank data showed on Thursday, keeping alive the prospect of another interest rate rise in September.

M3 rose to 10.9 per cent from a downwardly revised 10.6 per cent in May – above the 10.7 per cent forecast by analysts in a Reuters poll and just short of the 24-year peak of 11.0 per cent growth recorded in March.

Loans to the private sector grew by 10.8 per cent, again faster than May’s 10.4 per cent and analysts’ expectations of a slowdown to 10.2 per cent.

The ECB holds its monthly monetary policy meeting on August 2, and it judges that rapid money and credit growth – along with shrinking economic slack, rising wages and energy prices – are among the main inflation risks facing the eurozone.

Analysts said that while past interest rate increases were slowing some components of money and credit growth, Thursday’s data would strengthen the hand of those at the ECB who want to tighten rates from their current 4.00 percent.

”This doesn’t challenge the idea that monetary policy is having an effect. But if it doesn’t challenge the idea, it still provides ammunition for hawks to say monetary policy is not restrictive,” said Luigi Speranza, eurozone economist at investment bank BNP Paribas in London.

Howard Archer, economist at consultancy Global Insight, agreed. ”Accelerating money supply and credit growth in June makes an ECB rate hike to 4.25 per cent look even more certain in September, and will fuel expectations that interest rates will reach 4.50 per cent by the end of the year.”

Eurozone inflation has been below the ECB’s 2 per cent ceiling since September, but the central bank has said it is likely to rise significantly towards the end of the year.

The ECB has persistently warned that rapid money and credit growth may cause future inflation, though M3 has risen faster than the ECB’s 4.5 per cent non-inflationary reference value since 2001 without causing a surge in consumer prices.

/...

[Ghost Dog]

15. Yen rallies as investors flee risk

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=usDollarRpt&storyID=2007-07-26T131126Z_01_N26334019_RTRIDST_0_MARKETS-FOREX-UPDATE-7.XML

NEW YORK, July 26 (Reuters) - The yen rose on Thursday, climbing to 2-1/2-month highs against the dollar, as investors spooked by growing credit markets problems fled risky assets.

A report showing lower-than-expected U.S. durable goods orders in June helped push the dollar lower against the yen.

The dollar fell to 119.53 yen <JPY=>, down 0.7 percent from Wednesday. The euro was down 0.8 percent to 164.00 yen <EURJPY=> after plumbing a 1-month low of 163.97 yen.

Turmoil in the U.S. subprime mortgage market has begun to spill over into higher credits, causing fears about liquidity and pressuring carry trades, in which investors borrow cheaply in yen to buy higher-yielding currencies.

/...

[Ghost Dog]

16. Sterling falls on signs of UK housing mkt slowing

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=ukPoundRpt&storyID=2007-07-26T114552Z_01_L26783725_RTRIDST_0_MARKETS-STERLING-MIDSESSION.XML

LONDON, July 26 (Reuters) - Sterling eased against the euro and the dollar on Thursday after a series of soft UK housing figures suggested the sector was beginning to feel the pinch of the recent Bank of England's interest rate hikes.

Nationwide's home sales survey showed UK house prices rose just 0.1 percent on the month and 9.9 percent on the year, the softest rise since April 2006. For more see .

The building society said the easing in house price inflation suggested the BoE's five interest rate hikes since August 2006 were taking their toll on the housing market.

Data from the British Bankers' Association showed mortgage approvals for house purchase fell 11 percent on the year at 75,318 against 85,006 in June.

The numbers chimed in with data from property website Rightmove on Monday which showed that house price inflation in England and Wales eased in July.

"The BBA and the nationwide numbers out earlier are indicative of a general slowing in the housing market activity," said Jeremy Stretch, strategist at Rabobank.

"The evidence is building that the lagged effects of the previous (BoE) tightenings are starting to influence housing sentiment."

By 1134 GMT, sterling was down 0.5 percent on the day at $2.0436, having hit a 26-year peak at $2.0655 on Tuesday <GBP=>. The greenback extended gains made the previous session during a broad-based technical rebound.

/...

Watch on Swiss Franc (CHF), Pound Sterling (GBP)

[Ghost Dog]

49. Yen surges as investors flee risk on credit fears

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070726:MTFH71096_2007-07-26_16-39-03_N26326897&type=comktNews&rpc=44

NEW YORK, July 26 (Reuters) - The yen surged on Thursday, climbing to a 3-month high against the dollar, as investors spooked by growing problems in credit markets fled risky assets financed by borrowing in the low-yielding Japanese currency.

An increase in market volatility and perceived credit risks forced investors to cut positions financed with the yen.

Emerging market bond yield spreads over ultra-safe U.S. Treasury bonds hit a nine-month high, while U.S. and European junk bonds also took a beating.

By midday, the dollar fell more than 1 percent to a low of 118.96 yen, according to electronic platform EBS.

The dollar's tumble below the 200-day moving average against the yen <JPY=>, a long-term chart signal, triggered a series of automatic orders to sell dollars and buy yen, dealers said.

The euro slid 1.1 percent to 163.50 yen <EURJPY=> after plumbing a 1-month low of 163.25 yen earlier in the session. Continued...

/...

[Ghost Dog]

73. Yen surges as investors shun risky trades

http://investing.reuters.co.uk/news/articleinvesting.aspx?rpc=401&type=usDollarRpt&storyID=2007-07-26T183631Z_01_N26514747_RTRIDST_0_MARKETS-FOREX-UPDATE-13.XML
Thu Jul 26, 2007 7:36 PM BST

NEW YORK, July 26 (Reuters) - The yen surged on Thursday, climbing to a three-month high against the dollar, as investors spooked by growing problems in credit markets fled risky assets financed by borrowing in the low-yielding Japanese currency.

Credit spreads widened, stocks fell sharply, and U.S. benchmark Treasury yields tumbled in a flight to quality that prompted currency traders to buy back yen that had been used to buy higher-yielding currencies like sterling in carry trades.

"It's clearly a case of the tail wagging the dog in the FX markets today," said Robert Sinche, global head of currency strategy at Bank of America in New York. "We're seeing a big rise in risk aversion and unwinding of positions in other markets, and that is hurting the carry trade."

Amid mounting fears that the U.S. housing market is deteriorating and worries that financing of corporate takeovers is becoming more difficult, the Dow Jones industrial average <.DJI> was on track for its biggest daily loss in five months.

Emerging market bond yield spreads over safe-haven U.S. Treasury bonds widened to a 13-month high, while U.S. and European junk bonds also took a beating.

The spillover to the currency market got even uglier after the dollar tumbled below its 200-day moving average against the yen <JPY=>, a long-term chart signal, triggering a wave of automatic orders to sell dollars and buy yen, dealers said.

By mid afternoon, the dollar was down 1.4 percent at 118.75 yen, on track for its biggest daily decline against the Japanese currency in around 5 months.

The euro slid 1.2 percent to 163.35 yen <EURJPY=> after plumbing a one-month low of 163.25 yen earlier in the session.

The yen's gains were most pronounced against the New Zealand dollar, which boasts the worlds highest interest rates and is a darling of Japanese investors, but was dealt a blow earlier in the day after the Reserve Bank of New Zealand said that it may have raised rates enough to cool inflation.

The kiwi fell 2.4 percent against the yen, the biggest decline since mid March, to 94.28 yen <NZDJPY=R>.

Meanwhile the euro <EUR=> rose 0.2 percent to $1.3752, around one cent below a record high hit earlier in the week.

/...

[Ghost Dog]

50. US gold futures fall sharply as investors flee risk

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070726:MTFH70742_2007-07-26_16-25-47_WEN9748&type=comktNews&rpc=44
Thu Jul 26, 2007 12:25pm ET

NEW YORK, July 26 (Reuters) - U.S. gold futures dropped 2 percent by midday on Wednesday, extending Wednesday's losses, as the precious metal was sold off with stocks as a wave of risk aversion hit financial markets across the board.

At 12:19 p.m. EDT (1619 GMT), most-active gold for August delivery <GCQ7> on the COMEX division of the New York Mercantile Exchange dropped $13.30, or 2.0 percent, to $660.50 an ounce.

[Ghost Dog]

87. (This week's The Economist): Soft currency

http://economist.com/finance/displaystory.cfm?story_id=9545488
Jul 26th 2007
From The Economist print edition
The dollar is weak against a clutch of currencies that share many of its flaws

...

What lies behind the latest bout of dollar weakness? Part of the slump is cyclical, reflecting America's weak economy. GDP growth this year is expected to be lower in America than in the euro area, Britain, Australia and Canada, according to The Economist's monthly poll of forecasters.

The origins of weak growth are a particular worry. Just as the trouble in America's housing market is a drag on the economy, the turmoil in the subprime-mortgage market weighs on the currency. Analysts at Goldman Sachs believe that lower overseas demand for corporate debt has put downward pressure on the dollar. The disquiet about mortgage credit in America, they suggest, may even have chipped away a little at the dollar's standing as a reserve currency.

High oil prices haven't helped either. Paul Robinson, a currency strategist at Barclays Capital, reckons that the dollar is the worst performing major currency during periods of rising oil prices. This might be because America uses more oil for each unit of output than other rich countries, so the higher cost of fuel hits growth—and thus the dollar—harder. American consumers are especially vulnerable, because low fuel taxes leave a thinner cushion between the cost of crude and retail prices. The spending of petrodollars also helps the dollar less than the euro, because oil-producing countries tend to import more from Europe than America.

So a steep oil price, a weak economy and an anxious credit market have all weakened the dollar. But America's growth prospects are not so poor and the subprime-mortgage market not so woeful—at least, not yet—that they can fully explain the dollar's recent sickliness.

Stephen Jen, currency economist at Morgan Stanley, suggests there might be more powerful forces driving the dollar down. A common fear is that Asia's central banks will diversify out of their large holdings of American debt. Mr Jen argues, however, that the biggest dollar diversifiers have been pension, insurance and mutual funds in America. These funds control assets worth $20.7 trillion, more than four times the size of the world's official currency reserves.

American mutual funds have gradually increased their overseas allocation of equities since 2003 from 15% to 22.5% of assets, says Mr Jen. If this portfolio shift mirrors the behaviour of all pension, insurance and mutual fund managers, it would imply an outflow from dollar assets of $1.16 trillion since 2003. That sum is not far short of China's entire hoard of official reserves.

Mr Jen argues that these capital outflows need not be a sign that asset managers are gloomy about prospects for either the dollar or the American economy. Rather they might reflect an underlying decline in provincialism, as investors gradually come to appreciate the dangers of relying excessively on home-country assets. A similar thing is happening, he says, in Japan where households are greedily buying overseas assets. If the dollar has suffered most, it is only because American institutions are the biggest pioneers of financial globalisation.

Yet wariness about the dollar may be part of the motivation to diversify. A regular survey by Merrill Lynch shows that global fund managers have been consistently negative about the dollar's prospects for the past five years. For most of that period, the same asset managers have expressed a wish to reduce the weight of American assets in their portfolios, though that urge was strongest three years ago. It is hard to disentangle diversification from desertion since each feeds on the other.

/...

[UpInArms]

8. Rolls-Royce says weak dollar, rising costs halve profits

http://news.yahoo.com/s/afp/20070726/bs_afp/britainengineering

LONDON (AFP) - Net profits by British aero engine maker Rolls-Royce fell by half in the first six months of 2007, the group said on Thursday blaming rising costs and fall of the dollar.

Net profits plunged by 50.5 percent to 306 million pounds in the six months to June 30, 2007, Rolls-Royce said in a results statement.

The result, which was equivalent to 457 million euros or 627 million dollars, compared with 619 million pounds in the same period of 2006.

Sales advanced 5.9 percent to 3.591 billion pounds.

Underlying pre-tax profits in the first half, meanwhile, increased by 17 percent to 380 million pounds, Rolls-Royce added.

"Continued investment in our product portfolio and value added services for our customers has made us a market leader and gives us the ability to grow organically," said chief executive John Rose in the statement.

"Despite the challenges of increasing raw material costs and the effects of a weakening US dollar, the group is well placed to deliver growth in underlying profit."

...more...

[Ghost Dog]

9. Asian Stocks Fall, Led by BHP, Miners; Nippon Electric Slides

http://www.bloomberg.com/apps/news?pid=20601080&sid=akHFe8UTO.cY&refer=asia

July 26 (Bloomberg) -- Asian stocks fell the most in a month after Nippon Electric Glass Co. and Advantest Corp. reported lower earnings and metals prices slumped.

BHP Billiton Ltd. completed its biggest two-day drop in almost five months, while Nippon Electric Glass plunged the most in two decades. Nomura Holdings Inc. had its best gain in five years and Hyundai Motor Co. rose to the highest since September after reporting profit that beat analyst estimates.

``Bigger mining companies are essentially proxies to the metal prices, which can be very volatile,'' said Mark Tan, who helps oversee about $3 billion in Asian equities at UOB Asset Management in Singapore. ``There's bound to be some misses, but generally, the broad trend for Asian corporate earnings is positive.''

The Morgan Stanley Capital International Asia Pacific Index slid 1.2 percent to 158.64 as of 6:04 p.m. in Tokyo, set for the biggest drop since June 27. Benchmarks in South Korea and Taiwan fell by the most in more than four months as investors judged that recent gains excessive.

The Nikkei 225 Stock Average fell 0.9 percent to 17,702.09. Key indexes in Australia, Hong Kong, Singapore and Indonesia slid after rising to records earlier this week.

``Some institutional investors are looking to pare down their overweight positions in Asia, and have just lightened a bit today,'' said Chua Soon Hock, managing director of Asia Genesis Asset Management in Singapore, which manages about $450 million.

...

[Ghost Dog]

10. Nikkei hits two-month low on poll worries

http://www.ft.com/cms/s/f61ab3c8-3b27-11dc-8f9e-0000779fd2ac.html

The Nikkei sank to a two-month low on Thursday, hit by worries about upcoming national elections Sunday.

Those concerns outweighed a string of positive quarterly earnings results, pushing the Nikkei 225 down 0.9 per cent to 17,702.09 by the close. The broader Topix sank 1 per cent to 1,737.18.

Still, some investors cheered sparkling earnings results from Wednesday afternoon, including Nintendo’s upward revision of its earning forecast for the year after a more than threefold increase in profit in the three months to June. Nintendo soared another 8.8 per cent to Y61,800. Nevertheless, some analysts fear Nintendo is now overvalued, with shares trading at about 32 times consensus estimates forward earnings for the year to March 2009.

Honda Motor advanced 0.7 per cent to Y4,420 after lifting its operating profit forecast for the year to March by 14 per cent to Y860bn.

Nomura Holdings, Japan’s biggest securities company, outdid both, leaping 6.6 per cent to Y2,260 after quadrupling quarterly net profit on strong sales of investment trusts, more than making up for US subprime mortgage losses.

But Advantest, the maker of chip-testing devices, slumped 5.2 per cent to Y4,920 after reporting a 13 per cent fall in quarterly group net profit. The company blamed sluggish orders.

/...

[Ghost Dog]

11. China shares close at new record

http://www.ft.com/cms/s/05998244-3b27-11dc-8f9e-0000779fd2ac.html

China’s stock market rose 0.52 per cent to a record high close on Thursday, boosted by strong corporate earnings for the first half of the year.

But trading turnover was moderate and the benchmark index came well off highs hit earlier in the day, as many investors remained wary of pushing prices up sharply because of concern about high valuations and government policy.

The Shanghai Composite Index ended at 4,346.458 points, exceeding its previous all-time closing high of 4,334.924, hit on May 29. During the day it rose as high as 4,371.512 points, a fresh intraday record.

Gaining stocks outnumbered losers by 727 to 141. But turnover in Shanghai A shares totalled a moderate 130.8bn yuan ($17.3bn), well below daily levels around 200bn yuan during rallies in May and June.

Thursday’s close left the index up 11 per cent over the past five trading days and up 62 per cent since the start of this year.

This year’s bull run has sparked concern among Chinese authorities that stocks might be forming an unsustainable and dangerous bubble. After May’s record high was hit, the government hiked the stock trading tax to cool speculation, causing shares to plunge.

But better-than-expected corporate profits announced in recent days have reignited the bull run.

The official China Securities Journal said the 80 listed firms which had released first-half earnings by Tuesday reported a leap in combined net profit of 82 per cent. In addition, banks have released strong preliminary estimates for earnings.

/...

[Ghost Dog]

13. Credit market troubles hit two more funds

http://www.ft.com/cms/s/f49e6a58-3b1d-11dc-8f9e-0000779fd2ac.html

Absolute Capital, an Australian hedge fund group that invests in collateralised debt obligations, has temporarily suspended redemptions for two of its funds, becoming the latest casualty of the crisis engulfing the US subprime mortgage market.

Absolute’s Yield Strategies Funds and Capital Yield Strategies Fund NZD, which together have A$200m invested, have suspended investor withdrawals until October 25 due to “the current lack of liquidity in global structured credit markets”.

The suspension comes days after Basis Capital, another Australian hedge fund group that is more seriously exposed to the subprime market, appointed Blackstone as financial adviser to two of its struggling funds.

Less than a handful of Australian hedge funds are thought to have a material exposure to the US subprime market, according to two investment consultants, although they may hold indirect investments via commitments to funds of hedge funds.

Absolute said it estimated July losses from its two funds at up to 6 per cent.

“The general lack of liquidity in the market, and in particular the CDO debt market backed by senior secured loans where we invest, led to the decision to temporarily close the funds to ensure equity for, and to protect, investors,” Absolute said.

Absolute added that the funds’ exposure to US subprime loans had been less than 5 per cent of their portfolio and employed “little leverage”.

Absolute said the temporary closure was the best defensive measure to protect the longer term interests of its investors and “to ensure equity amongst all investors as we manage any withdrawal requests”.

“Liquidity in the global structured credit market is currently very limited,” Absolute said in a statement. “We have taken this proactive step as other managers, who have larger exposures, are unwinding positions in the market at this time and we believe it would negatively impact the funds’ investors to become a seller in this market.”

/...

[Hugin]

17. "collateralized debt obligations" (CDO)

There's those words again.

I think my favorite description of them I read on Mogambo months ago... It went something like,
"Charging your Credit Card to the hilt and then selling it to your drunken Brother-in-Law."

[UpInArms]

22. Credit derivatives plummet on supply, subprime woes

http://www.reuters.com/article/bondsNews/idUSN2642755320070726

NEW YORK, July 26 (Reuters) - U.S. credit default swap spreads widened dramatically on Thursday because of worries about a heavy forward calendar of debt supply and turmoil in the subprime mortgage market, market sources said.

The investment-grade index widened about 4.5 basis points to around 61.5 basis points, while an index of high-volatility credits widened about 9 basis points to 159 basis points.

[stormymonday]

83. CDS. Another part of the pyramid ?

Practically every type of debt trade involves the purchase of a CDS as part of the potential hedge. What happens when everyone wants to cash in these insurance policies because the original trade went bad ? Methinks that would be the ultimate nightmare.

[UpInArms]

96. you describe the perfect storm, stormymonday

welcome to the SMW

:hi:

[Ghost Dog]

14. Insurers drive Europe shares lower, credit worry

http://www.democraticunderground.com/discuss/duboard.php?az=post&forum=102&topic_id=2930210&mesg_id=2930210

FRANKFURT, July 26 (Reuters) - European shares extended their losses at midday on Thursday as gains in oil majors were offset by declines in insurance stocks, such as Legal & General (LGEN.L: Quote, Profile , Research), while credit worries prevailed.

Royal Dutch Shell (RDSa.L: Quote, Profile , Research) gained 1.5 percent after second-quarter profit jumped, while Legal & General dropped 6.7 percent after posting weak first-half results and the size of a share buyback disappointed investors.

At 1137 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was down 1.5 percent at 1,548.24 points.

"The market is unsettled," said Boris Boehm, head of equity fund management at Nordinvest, adding that the signals for a correction were increasingly coming to the fore, such as subprime worries, concern about inflation and interest rates.

Credit market worries prevailed, with the iTraxx Crossover index soaring 26 basis points to 391 basis points, after sources said both Alliance Boots (AB.L: Quote, Profile , Research) and Chrysler delayed part of their LBO financing on Wednesday.

"I think we can fall further, if we get another push," Boehm said, referring to U.S. data such as weekly jobless claims, due at 1230 GMT and new home sales, due at 1400 GMT, which could trigger further declines.

Earlier markets shrugged off the Ifo survey that showed that German business morale worsened for a second straight month in July as firms took a dimmer view of the economic outlook and began to feel the impact of the strong euro.

Frankfurt's DAX <.GDAXI> reacted little to the data but was down 0.9 percent and Paris's CAC 40 <.FCHI> fell 1.2 percent.

London's FTSE 100 .FTSE fell 0.9 percent, led by Legal & General which outlined plans for a 1 billion pound ($2.1 billion) share buyback and boosted its dividend but suffered because of lower margins and disappointment the company would not be returning more capital.

The DJ Stoxx European insurance sector <.SXIP> was down 2.5 percent, with AXA (AXAF.PA: Quote, Profile , Research) falling 3.6 percent and Prudential (PRU.L: Quote, Profile , Research) down 3.9 percent.

/...

[Ghost Dog]

46. European stocks (close) at 3-mth low, caught in global slide

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070726:MTFH69596_2007-07-26_15-46-42_L26890935&type=comktNews&rpc=44

LONDON, July 26 (Reuters) - European shares fell across the board on Thursday, suffering their biggest daily drop in more than four months as a worsening environment for financing takeovers and worries about U.S. housing sparked risk aversion.

The pan-European FTSEurofirst 300 index <.FTEU3> closed 2.6 percent lower at a provisional 1,530.6, the lowest finish since April 2 and down for the third day in a row.

The FTSEurofirst 300 index has lost 6.4 percent since hitting a 6-1/2-year high of 1,635.6 on July 13, but is still up 3 percent so far this year. Volumes in the FTSEurofirst 300 index were at their highest in one month.

"What you are now seeing is crunch point reached at which credit markets start to take notice," said Max King, global investment strategist at Investec Asset Management.

"Tightening credit is like putting a brick with a piece of elastic. For a long time nothing happens and suddenly the brick moves and wallops you," he said, highlighting markets' resilience to rising interest rates in the last few months.

Banks were among the biggest drag on the index with Royal Bank of Scotland (RBS.L: Quote, Profile , Research) Credit Suisse (CSGN.VX: Quote, Profile , Research) and UBS (UBSN.VX: Quote, Profile , Research) down between 3.0 and 3.4 percent.

/...

[Ghost Dog]

47. European stocks fall on credit concerns

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7Bb0549e63%2D4be2%2D4c04%2D8ca6%2D931c9a36a3fb%7D

European stocks fell for a third day as a raft of corporate earnings data failed to provide the anticipated lift to the market. Fears that tighter credit conditions could slow the corporate buy-out boom weighed on shares while a succession of disappointing earnings statements saw several prominent fallers. The FTSE Eurofirst 300 index of leading European shares fell 2.8 per cent to 1,527.8 The Xetra Dax 30 shed 2.4 per cent to 7,508.9 while the CAC 40 lost 2.8 per cent to 5,675.1

[Ghost Dog]

48. FTSE at near 4-month low on credit woes, results

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070726:MTFH70907_2007-07-26_16-33-06_L26601542&type=comktNews&rpc=44

LONDON, July 26 (Reuters) - The FTSE 100 .FTSE of Britain's leading shares slid by the biggest one-day percentage since March 2003 on Thursday as a flurry of corporate results failed to offset losses driven by concerns over a U.S. credit crisis.

Worries that a rise in defaults on U.S. subprime mortgage loans could spiral into a broader financial crunch have stalked markets since mid-June.

The FTSE 100 ended down 203.1 points, or 3.2 percent, at 6,251.2 to their lowest

Banking and mining sectors were worst hit by the economic jitters, with HBOS (HBOS.L: Quote, Profile , Research) down 3.1 percent and Northern Rock (NRK.L: Quote, Profile , Research) falling 5.8 percent. Credit Suisse also cuts its price target on Northern Rock.

Among miners, Anglo American (AAL.L: Quote, Profile , Research) lost 6.2 percent and Rio Tinto (RIO.L: Quote, Profile , Research) shed 4.5 percent.

In the few shares that ended the session in positive territory, insurer Resolution (RSL.L: Quote, Profile , Research) added 2.5 percent to top the FTSE 100 leaderboard, after Pearl Assurance raised its interest in the company. Resolution declined comment.

...

"The fall in the markets will not end until the full effect of the subprime fallout is known," said one trader. "The FTSE has underperformed the major benchmarks recently and may well have run its course in the short term.

"However with the Bank of England meeting next month there will be nerves and caution in case there is an interest rate hike although it's unlikely," he added.

/...

[UpInArms]

18. 9:34 EST and opening deep in the red

Dow 13,670.21 down 114.86 (0.83%)
Nasdaq 2,613.52 down 34.65 (1.31%)
S&P 500 1,506.51 down 11.58 (0.76%)
10-Yr Bond 4.837% up 0.067

NYSE Volume 113,160,000
Nasdaq Volume 117,268,000


adding earlier blather on edit:

09:15 am : S&P futures vs fair value: -17.8. Nasdaq futures vs fair value: -19.0.

09:00 am : S&P futures vs fair value: -18.5. Nasdaq futures vs fair value: -19.8. After initially showing little reaction to the recent batch of economic reports, further analysis of the data appears to be contributing to the overall sense of anxiety that is taking a toll on pre-market action. Futures trade has taken a turn for the worse and retracing morning lows as growing fears that a credit crunch is developing, potentially signaling an end to the LBO buyout boom that has provided such strong support to the stock market, remains a huge overhang.

08:35 am : S&P futures vs fair value: -15.1. Nasdaq futures vs fair value: -14.0. The stage remains set for stocks to open on a downbeat note as the futures market continues to languish well below fair value. An earnings shortfall from Dow component Exxon Mobil (XOM), coupled with oil prices near their highs of the morning above $77/bbl, serve as a double negative for investors.

Meanwhile, durable orders rebounded in June, as expected, checking in up 1.4% (consensus 2.0%). However, non-defense capital goods orders excluding transportation, which provide a clearer read on business capital investment, fell 0.7% after falling 1.5% in May. Initial claims unexpectedly fell 2,000 to 301,000 (consensus 310,000), which is reflective of healthy labor conditions.

08:00 am : S&P futures vs fair value: -15.6. Nasdaq futures vs fair value: -14.5. Early indications are pointing to a sharply lower open for equities. Last night, strong results from Apple (AAPL) and Qualcomm (QCOM) contributed to a slightly upbeat tone in after-hours action. Sentiment, however, has been weakening all morning as investors still can't shake ongoing credit risk concerns and the idea that the record pace of LBO activity has hit its cyclical peak.

Beazer Homes (BZH) recently saying it didn't know when "challenging" market conditions will improve and D.R. Horton (DHI) noting tightened credit standards in the mortgage industry are contributing to the negative disposition.

06:23 am : S&P futures vs fair value: -4.5. Nasdaq futures vs fair value: +3.3.

06:22 am : FTSE...6444.20...-10.10...-0.2%. DAX...7679.12...-13.43...-0.2%.

06:22 am : Nikkei...17702.09...-156.33...-0.9%. Hang Seng...23211.69...-150.49...-0.6%.

[UpInArms]

20. ALERT: TABLE-Revisions to building permits-Commerce Dept

http://www.reuters.com/article/bondsNews/idUSN2631314320070726

July 26 (Reuters) - The Commerce Department on Tuesday
revised U.S. building permit data issued on May 16.
 The data are seasonally adjusted annual rates, in 1,000s:
 PCT CHANGE:  June  (Prev)   May   (Prev)  June7/06   (Prev)
  Permits    -7.0   -7.5     4.3     4.3     -24.8    -25.2
  RATES       June  (Prev)   May   (Prev)  June'06    (Prev)
  Permits   1,413   1,406  1,520   1,520     1,879    1,879
 PERMITS      June  (Prev)   May   (Prev)  June'06    (Prev)
  Single    1,019   1,019  1,063   1,063     1,405    1,405
  Multiple    394     387    457     457       474      474
REGIONAL BREAKDOWN
           Pct  (Prev)  Rate  (Prev)
 Northeast    6.1   3.4    156    152
 Midwest     -4.2  -4.2    228    228
 South      -10.4 -10.6    691    689
 West        -7.1  -7.4    338    337
 Actual Permits, unadjusted in 1,000s:
    June  (Prev) May   (Prev)  Jun'06  (Prev)
    132    131   144    144      184    184

[UpInArms]

21. National City profit falls 27 pct, mortgages weigh

http://www.reuters.com/article/bondsNews/idUSN2641166220070726

NEW YORK, July 26 (Reuters) - National City Corp (NCC.N: Quote, Profile, Research), a large U.S. Midwest regional bank, said on Thursday second-quarter profit fell 27 percent, hurt by rising credit losses in mortgages and home equity loans, and pressure on commercial lending.

Net income for Cleveland-based National City fell to $347 million, or 60 cents per share, from $473 million, or 77 cents, a year earlier.

Analysts on average expected profit of 62 cents per share, according to Reuters Estimates.

National City set aside $143 million for credit losses, up from $60 million a year earlier, and in the first half set aside $250 million, up from $87 million. It said the latter increase was concentrated in mortgages and home equity, reflecting the housing slump. Loans from its former First Franklin subprime unit accounted for about two-fifths of the increase, the bank said.

Net interest margin -- the gap between what National City earns on loans and pays on deposits -- fell to 3.59 percent from 3.73 percent a year earlier, and 3.69 percent in the first quarter.

"We continue to experience pressure on commercial loan spreads, which has hurt net interest margin," Peter Raskind, who was named chief executive on Monday, said in a statement.

...more...

[UpInArms]

23. AutoNation CEO says US housing to hurt auto sales

http://www.reuters.com/article/bondsNews/idUSN2642680920070726

DETROIT, July 26 (Reuters) - AutoNation Inc. (AN.N: Quote, Profile, Research) Chief Executive Mike Jackson expects weakness in the U.S. housing market to weigh on U.S. auto sales for the remainder of the year, with the deepest impact on pickup truck sales.

"We don't see light at at end of tunnel yet; we still have a lot of difficulty to work through," Jackson said in an interview.

"As best as we can tell, we see no indication it's going to get any better this year," he added.

Jackson also said sales of pickup trucks, many of which are bought by construction workers, will continue to be hurt by the weak housing market. Pickups have traditionally been the most profitable segment for automakers.

...a bit more...

[UpInArms]

24. 9:51 EST recovery in progress

Dow 13,673.79 down 111.28 (0.81%)
Nasdaq 2,620.15 down 28.02 (1.06%)
S&P 500 1,501.51 down 16.58 (1.09%)
10-Yr Bond 4.841% up 0.063

NYSE Volume 381,760,000
Nasdaq Volume 274,997,000

08. <$SPX> S&P 500 index down 20 points, or 1.3%, at 1,497
9:42 AM ET, Jul 26, 2007 - 8 minutes ago

09. <$INDU> Dow Jones Industrial Average down 140 points at 13,644
9:41 AM ET, Jul 26, 2007 - 9 minutes ago

10. Nasdaq Composite down 36 points, or 1.4%, at 2,611
9:41 AM ET, Jul 26, 2007 - 9 minutes ago

[Buttercup McToots]

30. Looking nasty @ 11:15 am

Dow down over 180...

[Neshanic]

31. Curbs activated.

[Neshanic]

32. MSNBC Comedy show. It really is crazy. Talking head anchor after

listening to litany of horrors described by one guy, asks "So it's going to get better?"

He just yells "NO! NO! It's going to get WORSE!"

[UpInArms]

33. 11:22 EST Down 200 points

Dow 13,584.45 200.62 (1.46%)
Nasdaq 2,602.43 45.74 (1.73%)
S&P 500 1,490.46 27.63 (1.82%)
10-Yr Bond 4.837% 0.067

NYSE Volume 1,496,743,000
Nasdaq Volume 1,062,299,000

11:00 am : Range-bound trading persists as the indices still struggle to build on early recovery efforts. It is worth noting that Telecom has turned the corner; but a small 0.2% advance on a defensively-oriented sector with only a 3.8% weighting on the S&P 500 hardly arms bargain hunters with enough conviction to more aggressively jump back in to a beaten down market.

Technology could be a turning point in today's action, should it claw its way into positive territory. The sector is currently down only 0.1%, finding the bulk of its support from Apple (AAPL 147.92 +10.66) which is soaring 8% to a new all-time high after handily topping expectations last night on a 73% jump in Mac sales. In fact, Computer Hardware (+2.1%) is today's best performing S&P industry group. Until tech turns the corner, though, the widespread absence of upside leadership remains an overhang. DJ30 -117.95 NASDAQ -23.79 SOX -0.8% SP500 -16.58 NASDAQ Dec/Adv/Vol 2250/556/830 mln NYSE Dec/Adv/Vol 2796/360/572 mln

[Buttercup McToots]

34. Whoa...Dow down 218 & USD= $80.42

:yoiks:

[UpInArms]

35. Beazer Homes posts quarterly loss after charges

http://www.reuters.com/article/bondsNews/idUSN2642917920070726?sp=true

NEW YORK (Reuters) - Beazer Homes USA Inc (BZH.N: Quote, Profile, Research). posted a quarterly loss on Thursday as the builder took charges for inventory and goodwill impairments and abandonment of land option contracts.

The company, which is facing a deteriorating U.S. housing market and federal investigations into lending practices, saw its shares fall to their lowest level since 2001.

For the third quarter ended June 30, Beazer posted a net loss of $123.0 million, or $3.20 per share, compared with a year-earlier profit of $102.6 million, or $2.37 per share.

The latest quarter's results included charges of $188.5 million. A substantial portion of the charges relate to the write-down of the value of operations in Northern California, Nevada and Florida, where housing demand has seen a steep decline as lending requirements tighten and the number of homes on the market have soared.

Revenue fell 37 percent to $761.0 million, as the number of homes sold during the quarter fell 36 percent to 2,666 homes.

Would-be home buyers canceled their orders at the rate of 36 percent, higher than the 29 percent in the prior quarter.

New orders for homes fell 30 percent in the quarter to 3,055.

...more...

[UpInArms]

36. MBIA second-quarter earnings fall 4 pct

http://www.reuters.com/article/bondsNews/idUSN2618838220070726

(MBI.N: Quote, Profile, Research), the world's largest bond insurer, reported on Thursday that quarterly profit fell 4 percent, hurt by net losses on financial instruments and an increase in investment management expenses.

Net income fell to $211.8 million, or $1.61 a share for the second quarter from $221.4 million, or $1.62 a share, a year earlier.

Operating profit rose to $1.57 per share from $1.50, MBIA said.

On that basis, analysts on average had forecast earnings of $1.52 a share, according to Reuters Estimates.

MBIA shares are down nearly 14 percent so far this year, depressed by concern that turmoil in markets for bonds linked to subprime mortgages would potentially spur higher payouts and investment losses.

...more...

[trogdor]

37. Nice toon!

And I want to say for the record that people don't get banninated for supporting Hillary Clinton, no matter what that slug writing in for BartCop (who dutifully printed it) says. I posted a big, slurpy endorsement at the General Discussion page yesterday, and guess what. I'm still here.

So in conclusion:

Supporting HRC: A-OK
Being an asshat while supporting HRC: Not OK.

[Roland99]

38. 12:36pm - CODE RED! CODE RED!

Dow 13,508.53 -276.54
Nasdaq 2,583.99 -64.18
S&P 500 1,482.64 -35.45
10 YR 4.79% -0.12
Oil $76.90 $1.02
Gold $676.00 $-10.50

[Roland99]

40. Dow -306 and dropping

DJIA 13,478.78 -306.29 -2.22%
Nasdaq 2,584.68 -63.49 -2.40%
S&P 500 1,481.57 -36.52 -2.41%
Dow Util 482.07 -15.82 -3.18%
NYSE 9,641.38 -288.98 -2.91%
AMEX 2,290.87 -60.06 -2.55%
Russell 2000 786.30 -26.20 -3.22%
Semcond 511.73 -12.49 -2.38%
Gold future 676.00 -10.50 -1.53%
30-Year Bond 4.94% -0.09 -1.73%
10-Year Bond 4.79% -0.12 -2.43%



-315 now.

[lovuian]

42. Super OUCH

what goes up must fall

[DemReadingDU]

54. Maybe the fairies will appear soon

to keep the market from dropping any more

[roamer65]

55. This is a job for the...

"Plunge Protection Team". Bernanke is firing up the helicopter as we speak. :sarcasm:

[specimenfred1984]

60. The PPT is exactly who is driving this market down

It's the same people who drove it up: fascist big banks and their hedge funds. There is no PPT left to prop this fraud up anymore, which is a good thing. Maybe, just maybe, actual investors will re-enter the American markets soon.

The problem is that markets require money and most has been defrauded from Americans already via a war criminal war, fraudulent health care, BS tax cuts for the elite, outsourcing of U.S. jobs and a Fed/big bank-induced housing bubble/fraud.

[UpInArms]

41. 12:45 EST down 300+

Dow 13,478.94 306.13 (2.22%)
Nasdaq 2,582.37 65.80 (2.48%)
S&P 500 1,481.57 36.52 (2.41%)
10-Yr Bond 4.794% 0.11

NYSE Volume 2,420,729,000
Nasdaq Volume 1,654,370,000

12:30 pm : The indices are extending their reach to the downside as the afternoon session kicks off looking even worse than this morning's dismal action. After slipping below the 1500 mark for the first time in about a month, the S&P 500 is now down 2.0% on the day; all 10 economic sectors are averaging a decline of over 2.0%.

The Nasdaq is turning in a similarly weak performance as the tech-heavy Composite can't seem to find any buyers outside of the short-covering activity that has exacerbated the rally in Apple (AAPL 146.92 +9.66) shares today. Faring even worse from an index standpoint, though, is the Russell 2000. It is now down 3.0% today and within less than 1 point of turning negative for the year. It has lost almost 9% in less than two weeks.DJ30 -239.31 NASDAQ -54.26 SP500 -30.95 NASDAQ Dec/Adv/Vol 2487/469/1.49 bln NYSE Dec/Adv/Vol 3024/265/1.08 bln

[Ghost Dog]

51. US-VIX spikes up amid credit worries

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070726:MTFH69080_2007-07-26_15-31-16_N26452614&type=comktNews&rpc=44
Thu Jul 26, 2007 11:31am ET

Wall Street's favorite measure of investor fear spiked up on Thursday amid concerns about deterioration in the credit markets, hitting levels not seen since the global market sell-off in late February/early March.

The Chicago Board Options Exchange Volatility Index <.VIX> shot up 14.31 percent to $20.69.

[Ghost Dog]

53. Wall Street's 'fear' meter jumps to 13-month high

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=2007-07-26T165448Z_01_N26457745_RTRIDST_0_MARKETS-STOCKS-VOLATILITY-URGENT.XML
Thu Jul 26, 2007 12:54pm ET

NEW YORK, July 26 (Reuters) - Wall Street's main gauge for measuring investor anxiety shot to its highest in more than 13 months on Thursday as global equity markets swooned on concerns about deepening problems in global credit markets.

The Chicago Board Options Exchange's volatility index, or VIX <.VIX>, surged 21 percent to 21.95, its highest since June 13, 2006.

The rise in the index indicates investors are willing to pay higher premiums for protective put options on the Standard & Poor's 500 index <.SPX>. The S&P was down 2.4 percent.

[Roland99]

39. Wells Fargo to close subprime wholesale lending business

Wells Fargo to close subprime wholesale lending business
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B5EE3F67D%2D4AEE%2D47B5%2DB45B%2D2A6D2AC6EF7D%7D&siteid=mktw

Wells Fargo Home Mortgage said Thursday it will close its nonprime wholesale lending business, which processes and funds subprime loans for third-party mortgage brokers. In 2006, the business represented 1.6% of Wells Fargo's total residential mortgage loan volume of $397.6 billion. "Wells Fargo will continue to offer nonprime loans in channels where the company has direct relationships with consumers" said Cara Heiden, Wells Fargo Home Mortgage division president, in a statement. Heiden added that "the decision to close our nonprime wholesale lending business has no effect on Wells Fargo's robust prime lending business." As part of the move, Wells Fargo will close its nonprime wholesale operations in Baton Rouge, La., and Des Moines, Iowa. In Baton Rouge, 170 positions will be affected, while in Des Moines, 67 employees will be affected. Shares of San Francisco-based Wells Fargo fell 58 cents to $33.99 in Thursday afternoon trade. End of Story

[Ghost Dog]

43. Mexican stocks slump 3 pct on U.S. economy jitters

http://www.reuters.com/article/bondsNews/idUSN2645588120070726?rpc=401&
Thu Jul 26, 2007 11:57AM EDT

MEXICO CITY, July 26 (Reuters) - Mexican stocks slumped 3 percent on Thursday, hit by rising concerns over the economy of the United States, the country's main trade partner.

The IPC index (.MXX: Quote, Profile, Research) of leading shares slumped to 30,166 points.

[Ghost Dog]

52. Toronto stock index drops 300 points

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=2007-07-26T165529Z_01_TOR001894_RTRIDST_0_MARKETS-CANADA-STOCKS-URGENT.XML
Thu Jul 26, 2007 12:55pm ET

TORONTO, July 26 (Reuters) - The Toronto Stock Exchange's main index plunged more than 300 points early on Thursday afternoon amid a global fall in equity markets and on worries that problems in the U.S. housing and lending markets could spread north.

The S&P/TSX composite index <.GSPTSE> was down 302.18 points, or 2.1 percent, at 13,803.14 with nine of the index's 10 main groups lower.

[Ghost Dog]

72. Mexican stocks tumble 5 pct on U.S. economy fears

http://www.reuters.com/article/bondsNews/idUSN2646110720070726?rpc=401&
Thu Jul 26, 2007 2:19PM EDT

MEXICO CITY, July 26 (Reuters) - Mexican stocks slumped 5.15 percent on Thursday, crushed by spiraling concerns over the economy of the United States, the country's main trade partner.

The IPC index (.MXX: Quote, Profile, Research) of leading shares slumped to 29,501 points.

[Ghost Dog]

44. Raul Castro sees economy reforms, talks with U.S.

http://africa.reuters.com/commodities/news/usnN26418447.html

CAMAGUEY, Cuba (Reuters) - Acting President Raul Castro asserted his leadership of Cuba Thursday with promises of economic improvement and an offer of talks with the United States when the Bush administration is gone.

"Raul, Raul, Raul!" some 100,000 government supporters chanted during a Revolution Day speech one year after taking over from his brother.

He said Cuba's 80-year-old leader Fidel Castro, who is recovering from life-threatening surgery and has not appeared in public for a year, was increasingly active.

But Raul Castro's one-hour speech left no doubt that he is in charge for now.

He said salaries were too low -- a major complaint by Cubans-- and the country has to produce more food to feed its people. Deep reforms of its inefficient agriculture are on their way, he said.

Communist Cuba is open to receiving more foreign investment as long as it brings capital, technology and markets, he said.

"There won't be spectacular results. Time is needed," Raul Castro, who is 76 and considered to be more pragmatic than his ideologically-driven brother, told Cubans.

"Fidel is not here, but it's the same. We have him in our hearts and Raul is doing a good job," said Dignora, a labor union official wearing a red T-shirt and waving a Cuban flag.

/...

[Ghost Dog]

45. Paulson says current corporate tax code hurts U.S. economic performance

http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=565057996653592859

WASHINGTON, July 26 (Xinhua) -- U.S. Treasury Secretary Henry Paulson said Thursday that the current corporate tax code has hurt U.S. overall economic performance.

"Our current business tax system is clearly not optimal," said Paulson in an opening statement at the U.S. Business Tax Competitiveness Conference.

"The question we must ask ourselves, then is this: for a given level of revenue, what business tax regime best maximizes job creation and economic growth and in doing so promotes higher standards of living for Americans? " he said.

The U.S. treasury chief said that when U.S. economy is in a position of strength, it is an opportune time to discuss the business tax system and its impact on workers, investment, and the U.S. ability to compete in the world marketplace.

The average U.S. combined federal-state corporate tax rate stands at 39 percent, compared to an average of 31 percent for other major industrialized countries, said Paulson.

But Treasury officials also noted that they are not planning any legislation and their immediate goal is simply to highlight the need for change and set the stage for future debates.

[Hugin]

56. and I suppose 'optimal' would be...

to pay no tax at all. :rofl:

[roamer65]

57. I believe Warren Buffett over this twit.

Buffett said his secretary pays more in taxes than he does. Paulson...ewww...yuk.:puke:

[Roland99]

58. Wow. Just.... wow.

[Roland99]

59. Ah...here's why his piehole was all agape >>>>

http://www.marketwatch.com/news/story/democratic-candidate-edwards-boost-rate/story.aspx?guid=%7BDEA5B965%2DD3BF%2D428A%2DBD2D%2DBE89A8B2F958%7D

John Edwards touting tax fairness.


The uber-rich corporatocracy can't have that.

[Roland99]

61. 2:06pm - Faeries Failing in their Flailing

Dow 13,472.84 -312.23
Nasdaq 2,582.01 -66.16
S&P 500 1,478.93 -39.16
10 YR 4.79% -0.11
Oil $75.40 $-0.48
Gold $675.10 $-11.40

[Roland99]

62. 2:18pm - Still falling!

Dow 13,423.50 -361.57
Nasdaq 2,573.34 -74.83
S&P 500 1,472.64 -45.45
10 YR 4.79% -0.12
Oil $75.33 $-0.55
Gold $675.10 $-11.40

[Neshanic]

63. CNBC spinning wildly. Consumers will save us. Really!

[supernova]

64. Are we gonna have a 500 pt day?

:wtf:

[Roland99]

67. It was down more than 400 just a moment ago. Now -386.

Biggest point loss since Feb. (but still less than 3% on the day)

[supernova]

68. Still 2.5 hours til the closing bell

This is looking ugly.

I bet this is Wall St telling * bye bye.

[Roland99]

69. 2:36pm - Jim Dandy to the Rescue! Go Jim Dandy! GO!

Dow 13,492.19 -292.88
Nasdaq 2,576.58 -71.59
S&P 500 1,473.76 -44.33
10 YR 4.78% -0.12
Oil $75.33 $-0.55
Gold $675.10 $-11.40

[aint_no_life_nowhere]

65. Quick, find a cat that can predict death

or something

[Roland99]

66. OMG!

:rofl:


I shouldn't laugh but that was funny! ;-)

[radfringe]

81. did anyone check Chertoff's gut?

or is it his liver we have to listen to for financial matters?

[OrangeCountyDemocrat]

70. I've Already Sold Two Stocks Today

I am probably going to wait for a bounce before I sell some others possibly.

Going to keep an eye on things closely.

[Roland99]

71. Can't help but wonder if there is *some* manipulation. Just jumped from -421 to -356 like *that*!

[specimenfred1984]

75. It's all manipulation, has been for 2 solid years

I've watched the S&P trade tick by tick and seen the volume/size of every trade. "Investors" don't trade 600 contracts at a time and 20,000 contracts in 2 minutes, only big, market-moving funds can do that.

To be exact, I saw this start in May of 2005. I call it "Hedge Funds Gone Wild". They've used every tool available: propaganda, BS gov't reports, huge leverage and unregulated behavior. A great example is the Amaranth fund, they controlled 70% of Natural Gas futures in early 2006. The same crap is happening all over the marketplace.

[zippy890]

76. "Hedge Funds Gone Wild", eh?

interesting

[specimenfred1984]

82. Everything goes wild when it's deregulated

I read a good one earlier "Don't tear down a fence unless you know for sure why it was put there to begin with". It was in reference to the entire "Raygun revolution" of "free markets" and deregulation.

[Hugin]

86. Good quote specimenfred1984...

Very good. :thumbsup:

[DemReadingDU]

80. hehe, Hedge Funds Gone Wild

It wouldn't surprise me that those who ran up the market, are now taking the profits and stashing them in a secret Swiss bank account. After the market slides to the bottom, we in middle America, will have lost the value in our IRAs and pensions.

:(

[Hugin]

85. Ever wonder why the rush to 'Privatized Retirement'?

Now we know... Now we know...

[A HERETIC I AM]

93. Then call up your IRA custodian tomorrow morning and move everything into Bond funds or Money Market

What makes you think you can't change your portfolio?
Stop moaning and do something about it if you feel so strongly that you are being screwed.

[DemReadingDU]

94. Actually, I did this already

Last October I got of stocks and into an indexed bond fund and a money market fund.
:)


But there are many people who don't pay attention and are going to be shocked when their accounts are worth nothing.

[A HERETIC I AM]

95. Well, i am sorry to sound callous but too damned bad for them

If you aren't paying attention then you get what you deserve. The markets are extremely efficient at taking money from stupid people and giving it to the smart.

Of course, all this silliness today is over a TWO PERCENT DROP in the Dow. Big damned deal. Tomorrow, everything is going to be cheaper. If the bears aren't done yet, it will fall some more. It will fall until the buyers see stocks as being a bargain again and it will then go up. Know what the stock market does over the long term? It goes up. The long term trend is NOT down. Never has been, never will be.

[Robbien]

97. A guy over at Moody's is saying "we could be just one hedge-fund collapse away from

a global liquidity crisis. "If there's another major hedge fund that does stumble, that could elicit a crisis of confidence and a global shock," Zandi said. The potential "is quite high," he said. He gave it a one-in-five chance.

I agree, the only game to have been watching was hedge funds and the private equity M&As. Only now that game has dried up.

[roamer65]

84. Welcome to the era of computerized trading.

Once a level is reached, zammo...the computers kick in and you get these kind of shifts in the market.

[harun]

77. I sold the most volotile one I own, I am off that pony for a while (n/t)

[Buttercup McToots]

74. Oh my....365

My gold is taking a dive again...
I'll wait this out...

[Hugin]

78. National Lampoon is down 12%!

National Lampoon, Inc. 49,600 2.05 -0.29 -12.39%

:/

[Ghost Dog]

79. Hmm. At 15:16 ET it says here (observe volumes):

Dow 13,456.99 Down 328.08 (2.38%)
Nasdaq 2,586.60 Down 61.57 (2.33%)
S&P 500 1,480.14 Down 37.95 (2.50%)
10-Yr Bond 4.7750% Down 0.1290
NYSE Volume 4,245,604,000
Nasdaq Volume 2,790,842,000

Advances & Declines
-------- NYSE NASDAQ
Advances 226 (7%) 394 (12%)
Declines 3,082 (92%) 2,704 (85%)
Unchanged 54 (2%) 79 (2%)
Up Vol* 249 (6%) 202 (8%)
Down Vol* 3,700 (94%) 2,404 (91%)
Unch. Vol* 4 (0%) 38 (1%)
New Hi's 38 61
New Lo's 713 358
*in millions

3:00 pm : More of the same for stocks as market breadth remains decidedly bearish. As reflected in the A/D line, decliners on the NYSE hold a nearly 16-to-1 edge over advancers while those on the Nasdaq hold a much smaller but still worrisome 7.5-to-1 margin. The ratio of down to up volume paints an even gloomier picture for a market that just closed at historic highs a week earlier.

The number of new 52-week lows also exceeds new highs on both the NYSE and Nasdaq. The Dow, which is posting its biggest one-day decline this year, is now trading 4.5% below last Thursday's first ever close above 14,000. The S&P 500, which also closed in record territory last week, is down 5.4% over the last five sessions. DJ30 -417.86 NASDAQ -78.39 SP500 -48.89 NASDAQ Dec/Adv/Vol 2699/358/2.35 bln NYSE Dec/Adv/Vol 3140/197/1.82 bln

2:30 pm : Sellers remain a very active bunch, punching the major averages to lower lows yet again. Of the 147 S&P industry groups, only two are trading higher. The Dow is now down more than 400 points and off nearly 3%. Of its 30 components, two are still in positive territory.

Procter & Gamble (PG 63.24 +0.26) is up, but in part due to its defensive characteristics during a day of such overwhelming uncertainty. 3M Co. (MMM 89.73 +0.11) is the only other gainer; but it's barely positive and well off the 2.6% advance the stock enjoyed early on as investors rallied around its record Q2 results and boosted full-year outlook. DJ30 -410.97 NASDAQ -82.57 SP500 -50.70 NASDAQ Dec/Adv/Vol 2663/388/2.14 bln NYSE Dec/Adv/Vol 3124/214/1.71 bln

2:00 pm : The market continues to head lower as selling remains widespread across most areas. Even oil continues to slide, leaving the September contract down 1.3% and below $75/bbl; but so too does the Energy sector (-4.3%), which more than counters crude's sell-off.

Further underscoring today's bearish tone has been a 19% surge on the VIX (CBOE Volatility Index), surging to its highest level in 13 months. Known as the "investor fear gauge," the spike higher suggests investors are actively buying put options in anticipation that too much money floating around will lead to more market declines, with things likely getting worse before they get better. DJ30 -312.92 NASDAQ -67.57 SP500 -40.16 NASDAQ Dec/Adv/Vol 2599/424/2.08 bln NYSE Dec/Adv/Vol 3089/229/1.52 bln

1:30 pm : After being up as much as 1.8% at an 11-month high of $77.24/bbl, and trading at a premium to Brent crude for the first time since February, oil prices have slipped into negative territory. Crude for September delivery is now down 0.3%near $75.60/bbl.

However, oil's downturn has not offered investors much relief at all as the Energy sector (-3.5%) subsequently retracing its worst levels of the day more than offsets the move lower in oil which still leaves it up 25% this year. ..OIX -3.3%. ..OSX -2.7%.

DJ30 -293.04 NASDAQ -62.10 SP500 -35.87 XOI -3.6% NASDAQ Dec/Adv/Vol 2540/466/1.92 bln NYSE Dec/Adv/Vol 3076/241/1.39 bln

1:00 pm : As evidenced by the floor falling out of the Financial sector, which is now down a worrisome 3.3% and removing significant leadership, it’s obvious just how disconcerting the concerns about mortgage lending and corporate borrowing have become.

Of the Dow’s 28 losing components, Citigroup (C 47.02 -2.19) and JP Morgan Chase (JPM 43.82 -1.45) are among the biggest disappointments. Meanwhile, just 90 minutes after the blue-chip index’s intraday decline hit the 200-point mark, the Dow within the last 15 minutes was down more than 300 points. DJ30 -279.63 NASDAQ -59.86 SP500 -34.66 NASDAQ Dec/Adv/Vol 2570/422/1.67 bln NYSE Dec/Adv/Vol 3060/253/1.21 bln

http://finance.yahoo.com/marketupdate/overview

[spotbird]

88. Did they stop trading?

It seems stuck at -373

[Hugin]

89. ...

It officially stops at 4:00 ET.

[RawMaterials]

90. came up to be down only 311 ;)

now i sound like and economist

[Ghost Dog]

91. Some computers a bit f... uh, frazzled, looks like. Now says here (15:59 ET and counting):

Dow 13,473.57 Down 311.50 (2.26%)
Nasdaq 2,599.34 Down 48.83 (1.84%)
S&P 500 1,482.66 Down 35.43 (2.33%)
10-Yr Bond 4.7770% Down 0.1270
NYSE Volume 1,239,499,000
Nasdaq Volume 3,393,372,000
Indices: US - World | Most Actives
Advances & Declines
-------- NYSE NASDAQ
Advances 321 (10%) 534 (17%)
Declines 2,988 (88%) 2,601 (81%)
Unchanged 68 (2%) 75 (2%)
Up Vol* 392 (43%) 392 (12%)
Down Vol* 502 (55%) 2,955 (88%)
Unch. Vol* 10 (1%) 16 (0%)
New Hi's 41 63
New Lo's 738 373
*in millions

3:30 pm : Finally, sellers are showing some signs of exhaustion and leaving the door open for bargain hunters to view today's sell-off as a buying opportunity. Treasury Secretary Paulson recently saying in an interview that subprime issues "will be largely contained" has offered some semblance of relief.

For all intents and purposes, however, declines of more than 2.0% across the major averages still leave the bears well positioned to declare victory as buyers' last ditch efforts to make any sort of impact on today's action are more reminiscent of a short squeeze than any tangible bounce. DJ30 -304.95 NASDAQ -54.78 SP500 -33.29 NASDAQ Dec/Adv/Vol 2678/383/2.80 bln NYSE Dec/Adv/Vol 3155/198/2.00 bln

http://finance.yahoo.com/marketupdate/overview

[Ghost Dog]

92. So, who can tell me what's with these briefing.con NYSE volume numbers?

NYSE Volume 1,443,570,000
Nasdaq Volume 3,464,540,000

Advances & Declines
-------- NYSE NASDAQ
Advances 320 (9%) 551 (17%)
Declines 2,987 (88%) 2,582 (80%)
Unchanged 71 (2%) 77 (2%)
Up Vol* 415 (29%) 428 (12%)
Down Vol* 1,016 (70%) 3,025 (87%)
Unch. Vol* 12 (1%) 12 (0%)
New Hi's 41 64
New Lo's 745 373
*in millions

4:20 pm : With concerns the market was already getting ahead of itself resurfacing earlier in the week, it wasn't too surprising to see another day of negative news prompt investors to take some money off the table. What was shocking, though, was the extensiveness of the bloodletting based in part on news that has been circulating for days.

The Dow was down as much as 449 points (-3.3%) before bargain hunters cautiously stepped back in to recoup about 1.0%. The S&P 500 slipped below the 1500 mark for the first time in about a month, as all 10 economic sectors averaged a decline of about 2.5%. Of the 147 S&P industry groups, 143 finished in negative territory.

Growing fears that private equity is having difficulties raising money for acquisitions they've already made was the biggest catalyst behind Thursday's thrashing. Even though conditions are a long way from a true "credit crunch," Tyco International (TYC 48.52 -0.48) and Russia's Gazprom becoming the latest victims of widening credit spreads reminded investors of the failure by DaimlerChrysler (DCX 88.91 -4.11) and Alliance Boots to find buyers for the debt to finance their buyouts. As a reminder, record takeover activity helped lift the Dow and S&P 500 to historic highs one week ago today; but Concerns the LBO buyout boom has hit its cyclical peak weighed heavily on a very influential Financial sector (-2.5%).

Late in the day, Treasury Secretary Paulson saying subprime issues "will be largely contained" offered some comfort, but only enough to pare losses in an already beaten down group of financial stocks still plagued by potential spillover from subprime woes.

Still on the mortgage front, Beazer Homes (BZH 15.56 -1.48) said it doesn't know when "challenging" conditions in housing will improve while D.R. Horton (DHI 17.16 -0.32) cited tightened credit standards in the lending industry. A larger than expected 6.6% drop in June new home sales exacerbated the severity of the problems in a housing market that is showing no evidence of a turnaround anytime soon.

Worries that tighter credit will slow the economy also sparked another sell-off in the U.S. dollar, most notably, prompting a rally in the yen to three-month highs against the greenback and renewing concerns about the ripple effect of an unwinding of the yen-carry trade.

After being up as much as 1.8% intraday at an 11-month high of $77.24/bbl, and trading at a premium to Brent crude for the first time since February, oil prices turning negative exacerbated profit taking throughout the year's best performing sector -- Energy (-3.3%) -- that was already reeling from a Q2 earnings shortfall from its most influential name -- Exxon Mobil (XOM 88.23 -4.56). Crude for September delivery fell 1.2% to $74.95/bbl. Materials (-3.4%), this year's second biggest winner, turned in a similarly dismal performance.

Further underscoring today's bearish tone was a 14% surge on the VIX (CBOE Volatility Index) to 20.72. That was the highest close in 13 months and biggest gain on the index since the S&P 500 in mid March made intraday 2007 lows on fears that subprime woes were spilling over into the broader lending industry. The spike higher suggests investors were actively buying put options in anticipation that too much money floating around will lead to more market declines, with things likely getting worse before they get better.

Market internals were also decidedly bearish and volume was heavier than usual, further dictating the conviction with which sellers continue to feel the market is overbought at current levels. On the NYSE, where trading curbs were triggered just after 11:00 ET as the Dow challenged its 50-day moving average, decliners outpaced advancers by a nearly 11-to-1 edge over advancers while those on the Nasdaq finished with a lower but still bearish 4.7-to-1 margin. BTK -1.0% DJ30 -311.50 DJTA -2.4% DJUA -3.0% DOT -1.6% NASDAQ -48.83 NQ100 -1.2% R2K -2.6% SOX -2.2% SP400 -2.2% SP500 -35.43 XOI -3.5% NASDAQ Dec/Adv/Vol 2562/541/3.44 bln NYSE Dec/Adv/Vol 3071/290/2.50 bln

--> see eg. above posts #33: 11:22ET NYSE Volume 1,496,743,000; #79: 15:16ET NYSE Volume 4,245,604,000

[ozymandius]

98. Jeebus! I missed the fireworks!

Dow 13,473.57 Down 311.50 (2.26%)
Nasdaq 2,599.34 Down 48.83 (1.84%)
S&P 500 1,482.66 Down 35.43 (2.33%)
10-Yr Bond 4.777% Down 0.127
NYSE Volume 1,558,753,000
Nasdaq Volume 3,521,920,000

4:20 pm : With concerns the market was already getting ahead of itself resurfacing earlier in the week, it wasn't too surprising to see another day of negative news prompt investors to take some money off the table. What was shocking, though, was the extensiveness of the bloodletting based in part on news that has been circulating for days.

The Dow was down as much as 449 points (-3.3%) before bargain hunters cautiously stepped back in to recoup about 1.0%. The S&P 500 slipped below the 1500 mark for the first time in about a month, as all 10 economic sectors averaged a decline of about 2.5%. Of the 147 S&P industry groups, 143 finished in negative territory.

Growing fears that private equity is having difficulties raising money for acquisitions they've already made was the biggest catalyst behind Thursday's thrashing. Even though conditions are a long way from a true "credit crunch," Tyco International (TYC 48.52 -0.48) and Russia's Gazprom becoming the latest victims of widening credit spreads reminded investors of the failure by DaimlerChrysler (DCX 88.91 -4.11) and Alliance Boots to find buyers for the debt to finance their buyouts. As a reminder, record takeover activity helped lift the Dow and S&P 500 to historic highs one week ago today; but Concerns the LBO buyout boom has hit its cyclical peak weighed heavily on a very influential Financial sector (-2.5%).

Late in the day, Treasury Secretary Paulson saying subprime issues "will be largely contained" offered some comfort, but only enough to pare losses in an already beaten down group of financial stocks still plagued by potential spillover from subprime woes.

Still on the mortgage front, Beazer Homes (BZH 15.56 -1.48) said it doesn't know when "challenging" conditions in housing will improve while D.R. Horton (DHI 17.16 -0.32) cited tightened credit standards in the lending industry. A larger than expected 6.6% drop in June new home sales exacerbated the severity of the problems in a housing market that is showing no evidence of a turnaround anytime soon.

Worries that tighter credit will slow the economy also sparked another sell-off in the U.S. dollar, most notably, prompting a rally in the yen to three-month highs against the greenback and renewing concerns about the ripple effect of an unwinding of the yen-carry trade.

After being up as much as 1.8% intraday at an 11-month high of $77.24/bbl, and trading at a premium to Brent crude for the first time since February, oil prices turning negative exacerbated profit taking throughout the year's best performing sector -- Energy (-3.3%) -- that was already reeling from a Q2 earnings shortfall from its most influential name -- Exxon Mobil (XOM 88.23 -4.56). Crude for September delivery fell 1.2% to $74.95/bbl. Materials (-3.4%), this year's second biggest winner, turned in a similarly dismal performance.

Further underscoring today's bearish tone was a 14% surge on the VIX (CBOE Volatility Index) to 20.72. That was the highest close in 13 months and biggest gain on the index since the S&P 500 in mid March made intraday 2007 lows on fears that subprime woes were spilling over into the broader lending industry. The spike higher suggests investors were actively buying put options in anticipation that too much money floating around will lead to more market declines, with things likely getting worse before they get better.

Market internals were also decidedly bearish and volume was heavier than usual, further dictating the conviction with which sellers continue to feel the market is overbought at current levels. On the NYSE, where trading curbs were triggered just after 11:00 ET as the Dow challenged its 50-day moving average, decliners outpaced advancers by a nearly 11-to-1 edge over advancers while those on the Nasdaq finished with a lower but still bearish 4.7-to-1 margin. BTK -1.0% DJ30 -311.50 DJTA -2.4% DJUA -3.0% DOT -1.6% NASDAQ -48.83 NQ100 -1.2% R2K -2.6% SOX -2.2% SP400 -2.2% SP500 -35.43 XOI -3.5% NASDAQ Dec/Adv/Vol 2562/541/3.44 bln NYSE Dec/Adv/Vol 3071/290/2.50 bln