STOCK MARKET WATCH, Monday 28 March

[ozymandius]

Monday March 28, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 298 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 105 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 161 DAYS
DAYS SINCE ENRON COLLAPSE = 1219
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES




AT THE CLOSING BELL ON March 24, 2005

Dow... 10,442.87 -13.15 (-0.13%)
Nasdaq... 1,991.06 +0.84 (+0.04%)
S&P 500... 1,171.42 -1.11 (-0.09%)
10-Yr Bond... 4.59% -0.02 (-0.35%)
Gold future... 424.80 -0.60 (-0.14%)





GOLD, EURO, YEN, Dollars and Loonie




PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. Wall Street May See Volatile Week

NEW YORK - With Wall Street's fears of inflation confirmed by the Federal Reserve (news - web sites), investors are now looking for proof that the economy will be strong enough to handle the increased pricing pressure and additional expected Fed interest rate increases.

On Tuesday, the Fed raised its target for the overnight bank loan rate by a quarter point to 2.75 percent, the seventh in its current cycle of increases. Trading in federal funds futures suggest that investors are betting that central bankers may follow that with a half point hike in either May or June.

That leads Wall Street to two important questions. Will consumers be able to handle higher prices now that parts of corporate America appear to finally be gaining pricing power? And will companies be able to continue expanding as the cost of raising capital rises?

The answers will start coming in the week ahead as key pieces of economic data will shed light on the strength of consumer spending and the health of the overall economy. And that could lead to a volatile week on Wall Street.

more...

http://story.news.yahoo.com/news?tmpl=story&ncid=1196&e=6&u=/ap/20050328/ap_on_bi_ge/wall_street_week_ahead&sid=95609876

[jswordy]

33. Sigh...I fear any gains made this week will be transitory and short-lived.

With oil establishing a $55 floor and the national average gasoline retail price nearing record-breaking territory after adjustment for inflation (which, BTW, is $2.30 per gallon), any upward trends will be weighed down by the fundamentals over the longer haul. Add to that renewed willingness on the part of manufacturers to increase prices of finished goods, raising the specter of gathering inflation momentum. Extreme short traders (day traders) may make significant headway by wagering on both sides of the equation, but long investors stand to gain little, in my view, from the present set of circumstances.

And these gloomy assessments come from a natural bull. I just can't see much to hook my horns into right now.

[UpInArms]

2. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 84.33 Change +0.20 (+0.24%)

http://www.dailyfx.com/index.php?option=com_content&task=view&id=471&Itemid=39

Dollar Rally Stalls at 1.2900

excerpt:

The market is now also worried about France where the referendum vote on EU constitution set for May 29th appears to be in deep trouble. In the past week 3 consecutive polls showed opponents of the measure exceeding supporters. The EU constitution must be unanimously ratified by all 25 member states if is to go in to effect. Should France reject the new constitution, Europe would suffer tremendous damage retreating from the idea of a single economic market with unified political power. The notoriously fickle the French did pass the "Maatrich" treaty in 1992 and with every French politician from right to left actively campaigning for the "yes" vote odds are good that French citizenry may yet come around. Still, doubts overhanging the outcome are likely to weigh heavy on the euro, especially if Euro-zone economic data does not show any signs of improvement and social disgruntlement grows as the vote nears.

Meanwhile, in Japan the yen continued to weaken, piercing the key 107.00 level several times during the night. The 107.00 barrier now represents critical resistance as a significant move above that level would signal a break of the major downward trend line that stretches all the way back to 2002. Japan is caught between a rock and hard place as high oil prices depress demand for its export markets abroad while at the same time increasing production costs at home. Yet if oil were to continue its retrace, especially if it fell below the psychologically important $50/bbl level, the yen is likely rise if not against the dollar then certainly against the euro. Thus, while euro traders will be transfixed by the geo-political events on the Continent, yen traders are far more likely to be focused on economic data as the week proceeds. Finally, as Friday nears the whole FX market will zero in on NFP' s due this month ironically enough on April Fool's day.

...more at link...

http://www.iht.com/articles/2005/03/27/business/dollar.html

A blend of risks makes dollar's outlook grim

Is the writing on the wall for the U.S. dollar? Researchers at one big fund manager say it is, but the markets haven't read along just yet.

Since the start of March, Bridgewater Associates, a manager of more than $100 billion of institutional and hedge fund money based in Westport, Connecticut, has been issuing warnings in its daily reports. One on March 11, titled "The Breakdown of the Dollar System," said, "As we often say, we've seen this movie many times, and we know the ending."

There is indeed a volatile blend of risks surrounding the dollar.

President George W. Bush's new budget proposal would substantially expand the government's debt burden in the next decade, potentially raising doubts about the desirability of its IOUs. Some Asian central banks have declared that they will diversify their reserves away from dollar-denominated assets. If China decouples the yuan from the dollar, it will not need as many dollar-denominated assets to keep its currency from gaining value, nor will its competitors for export markets. In recent times, long-term interest rates have stayed stubbornly low, making it difficult for American companies to attract new investment from abroad.

These ingredients may just be waiting for the right catalyst. If enough people start thinking like those at Bridgewater Associates, the dollar will lose value rapidly. There is no point in buying dollars today, after all, if everyone thinks that they will be worth less in the near future. Fundamental economic factors need not worsen any further; in currency crises, perception very quickly becomes reality.

...more...

Commodity stocks: Hedging a possible dollar fall

http://www.thehindubusinessline.com/iw/2005/03/27/stories/2005032700320600.htm

STOCKS of commodity companies conjure up an image of volatility and unreliability. For investors who have been in the business since the early 1990s commodity stocks would also invite memories of embarrassingly shocking investment decisions and huge losses.

There is, however, a strong case for commodity stocks now. They have had a great run over the past 24 months. This may be extended further if the dollar keeps depreciating against major currencies. There is thus a strong case for holding on to commodity stocks, though they have notched up handsome gains and commodity prices are at their peak now.

Dollar and commodities: Commodity prices have strengthened considerably over the past three years. There are a couple of reasons behind the firm trend in commodity prices. One, the sustained increase in demand from China. And, two, the fall in value of dollar.

A fall in the dollar value, for several reasons, has led to a sharp increase in prices of commodities, and the prices of all commodity stocks have risen in recent years.

A continued fall in dollar could spell a continuation of the firm trend in commodity prices. On the other hand, a continued fall in dollar accompanied by a weaker US economy does not augur well for other industries. There is thus a strong need to hedge a possible fall in the value of dollar, and commodities fit the bill aptly. Analyst Jim Rogers has said that the bull run in commodity prices would extend into the next decade. He has also singled out coffee and sugar futures as commodities that could flare up.

...more...

Have a Great Day Marketeers!

[UpInArms]

6. Dollar higher amid hopes for strong data this week

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38439.3654098611-833612135&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) - The dollar was lifted early Monday amid hopes that fourth-quarter gross domestic product and the March Chicago manufacturing and U.S. employment reports later this week will depict a strong economy. The dollar began moving higher last week after hawkish Federal Reserve language triggered speculation about bolder U.S. rates increases. The euro traded at $1.2892, down 0.01 percent, while the dollar stood at 106.86 yen, up 0.5 percent.

http://www.dailyfx.com/index.php?option=com_content&task=view&id=453&Itemid=39

excerpt from last week:

USDJPY

Next week is a big week for Japan with their fiscal year ending on March 31st and the always-important Tankan survey of business confidence on deck. We are also anticipating Japanese retail sales, unemployment and industrial production. Business confidence is expected to improve, but even if it does, it should not be significant enough to prompt the Bank of Japan to change its quantitative easing policy. The job market is also gradually improving, but retail sales remains weak with the recent surge in oil prices hurting consumer spending. For an economy that is struggling to recover and deal with an aging population, the higher cost for a basic input that is required for most households will only make Japan's notorious savers even thriftier. The latest import data indicates that the surge in imports was primarily a result of higher oil costs and not increased consumer demand. Rising demand is really contingent upon income growth, which has been weak at best. Therefore even though we have a plethora of Japanese economic data next week, if USDJPY manages to breach its year to date high of 106.75/80, the pair could see a further run before a meaningful reversal occurs

...more with charts and analysis...

[RawMaterials]

7. Buckle Up for the Dollar's Ride 3-27-05

IS the writing on the wall for the dollar? Researchers at one big fund manager say it is, but the markets haven't read along just yet.

Since the start of March, Bridgewater Associates, a manager of more than $100 billion of institutional and hedge fund money in Westport, Conn., has been issuing warnings in its daily reports. One on March 11, titled "The Breakdown of the Dollar System," said, "As we often say, we've seen this movie many times and we know the ending."

There is indeed a volatile blend of risks surrounding the dollar. President Bush's new budget proposal would substantially expand the government's debt burden in the next decade, potentially raising doubts about the desirability of its i.o.u.'s. Some Asian central banks have declared that they will diversify their reserves away from dollar-denominated assets. If China decouples the yuan from the dollar, it will not need as many dollar-denominated assets to keep its currency from gaining value, nor will its competitors for export markets. In recent times, long-term interest rates have stayed stubbornly low, making it difficult for American companies to attract new investment from abroad.

snip..

Bridgewater says it believes that the dollar is already beyond the point of no return. To keep the currency at its current value, private investors will have to buy more American securities as central banks desert them, said Robert P. Prince, the firm's co-chief investment officer. Before private investors will act, they need to see a higher return from American assets, relative to assets carrying similar risks abroad.

Mr. Prince said that those higher returns had begun to arrive through lower prices for assets. If an asset comes with a fixed interest payment, say 4 percent, buying it at a lower price will offer a relatively higher return. But these higher returns could cause problems for the economy. Borrowers in the competitive market for credit will have to offer higher returns, too, and interest rates may rise. "The Fed doesn't want that, because too much of a rise in interest rates will choke off the economy," Mr. Prince said.

The alternative is for the assets' prices to remain the same while the dollar loses value. That way, foreigners will be able to buy assets at a discount, yielding a higher return, but without putting too much upward pressure on American interest rates. (The implicit assumption here is that the assets' future returns will not be harmed too much by today's lower dollar.)

So, instead of allowing the economy to adjust purely through higher interest rates, perhaps causing another recession, Alan Greenspan and his colleagues at the Federal Reserve will have the luxury of allowing the dollar to do some of the heavy lifting. The numbers? Bridgewater predicts a further decline in the dollar of 30 percent, especially against Asian currencies, and a rise in American long-term rates of one-half to one full percentage point

snip..

Though action by the Fed and a clampdown on federal spending could spare the dollar's blushes, they would both be bad news for the economy. A cutback in federal spending will, at least in the short term, create slack in labor and product markets. And one of the surest forecasters of recession is a tightening of short-term credit by the Fed.

Congress and the White House have shown no sign that they are serious about controlling spending, but the Fed's policy-making committee may already be proving Professor Evans right. After the committee opted to raise short-term rates another quarter of a percentage point last week, its statement acknowledged that "pressures on inflation have picked up in recent months" and asserted its willingness to act forcefully if necessary.

Whichever way you cut it, we're in for a bumpy ride.


http://www.nytimes.com/2005/03/27/business/yourmoney/27view.html

[UpInArms]

14. Dollar rises on hopes for strong data

Traders suggest Fed will switch to half-point rate rises

NEW YORK (MarketWatch) -- The dollar picked up strength against the euro and yen Monday, as investors pinned their hopes on gross domestic product and labor reports depicting a strong domestic economy.

The dollar has trended higher since last week when hawkish Federal Reserve rhetoric sparked speculation that the central bank could embark on a course of bolder interest-rate increases.

The euro was off 0.01 percent at $1.2877, while the dollar traded at 107.09 yen, up 0.7 percent, as investors returned from the Easter holiday weekend.

No U.S. economic reports are scheduled Monday, and overseas volumes were thin as markets remained closed throughout much of Europe, Australia, New Zealand and Hong Kong.

Currency market players this week are especially eager to view the fourth-quarter gross domestic product report on Wednesday and the March unemployment figures on Friday, according to Chris Gaffney, Everbank World Markets vice president.

...more...

[UpInArms]

3. SEC subpoenas (up to 12) AIG executives

http://cbs.marketwatch.com/news/story.asp?guid=%7B2549E7B1%2DE9AC%2D488E%2DAF81%2D92A5BC6987A0%7D&siteid=mktw

NEW YORK (MarketWatch) -- The Securities and Exchange Commission has subpoenaed as many as 12 executives at American International Group as part of an ongoing investigation into the insurance giant's questionable accounting, the Wall Street Journal reported Monday.

The SEC, the Justice Department and other regulators are investigating whether AIG (AIG: news, chart, profile) improperly used certain insurance transactions to bolster its financial position.

Citing unnamed sources, the Journal report said that as many as 30 AIG executives were aware of some financial transactions now being investigated by the company. See the Journal report.

Some of the transactions under the microscope include pacts between AIG and Berkshire Hathaway (BRKA: news, chart, profile) , the insurance conglomerate controlled by Warren Buffett.

...more...

[UpInArms]

13. AIG shares fall another 2%, financial sector mixed

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38439.4031756481-833613575&siteID=mktw&scid=0&doctype=806&

NEW YORK (MarketWatch) -- The major indexes of U.S. financial stocks were mixed Monday morning, but shares of AIG (AIG) lost more ground after news over the weekend that the company may have to restate results and that 12 of the firm's executives have been subpoenaed. AIG shares traded down 2.1 percent at $54.44 early Monday. In the broader financial sector, the Amex Securities Broker/Dealer Index ($XBD) added 0.4 percent, the Philadelphia Bank Sector Index ($BKX) rose 0.6 percent to 95.85 and the S&P insurance Index (IUX) fell 0.3 percent to 295.73.

[Zynx]

18. Now it's bouncing because it penetrated below a technical level.

Around $55 there was tremendous technical support for the stock. However, this bounce will only be temporary and it will fall further I expect.

[RawMaterials]

4. Bumpy road ahead for stock investors?

NEW YORK — The road to higher interest rates may be filled with potholes for stock investors.

Last week, the Federal Reserve boosted its target for short-term rates to 2.75% from 2.5%, the seventh increase since June 30, the day the Fed launched its campaign to lift borrowing costs to more normal levels. But more upsetting to Wall Street, which is already struggling with high-priced oil, is that the Fed hinted that more increases are on the way to ward off inflation.

Rising interest rates don't necessarily rule out rising stock prices. But it's hard for investors to ignore the potentially depressive effect higher borrowing costs have on economic growth, corporate profits and consumer spending. "Stocks typically go through a rocky period when the Fed is raising rates," says John Forelli, senior vice president at Independence Investments.

snip..

Until now, stocks have held their own, even though rates have risen by 1.75 percentage points. Despite a downdraft last week sparked by the Fed policymakers' acknowledgment that they were worried about a rise in inflation, the Dow Jones industrials closed Thursday at 10,443 — virtually flat with June 30, the day the Fed began nudging rates higher. Jonathan Golub, U.S. equity strategist at J.P. Morgan funds, says investors have already priced in short-term rates between 4% and 4.5%.

Stocks may still run into resistance. In the eight instances since 1929 when the Fed has raised rates by as much as 1.75 percentage points, the Standard & Poor's 500 was down 12 months later six out of eight times, says InvesTech Research. The average performance was a loss of 7.5%.

A study by Ned Davis Research found that the Dow fared worse than its long-run average in the months following a seventh rate increase, although the Dow's underperformance tended to evaporate 12 months later.



http://www.usatoday.com/money/markets/us/2005-03-27-7th-stumble_x.htm

[UpInArms]

5. Steelcase to eliminate 600 jobs in restructuring

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38439.371297338-833612265&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (MarketWatch) -- Steelcase (SCS) said Monday it would eliminate 100 salaried jobs and 500 hourly positions as part of the consolidation of its North America operations. The company, which makes office furniture, plans to close several manufacturing facilities in the Grand Rapids, Mich., area, where it's headquartered, over the next two years. Steelcase expects to record pre-tax restructuring charges of between $25 million and $30 million from these actions over the next two years. The stock closed Thursday at $13.70, down 12 cents.

[mhr]

8. More Competition For The Unemployed - Add This To The 100,000 By GM

Unemployed 60 Months Now. All hope is gone! The experts agree.

"Overall, this level of (job) creation represents the worst job performance since the Bureau of Labor Statistics began collecting monthly jobs data in 1939 (at the end of the Great Depression)."

http://www.jobwatch.org/

"In the previous five expansionary economic cycles the average increase in employment over the first 39 months was 10.1%. In the current cycle the increase is 1.5%.

If employment had climbed by 10.1 % since November 2001, we would have added 13.2 million jobs instead of the 1.9 million actually reported. That’s a difference of 11.3 million jobs."

http://www.comstockfunds.com/screenprint.cfm?newsletterid=1165

My Conclusion: The American middle class is fast approaching demise and will need life support to survive!

[UpInArms]

28. more info

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8013612

excerpt:

"We continue to execute our strategy of implementing lean manufacturing, reducing complexity and developing a world-class global supply chain," Steelcase President and Chief Executive James Hackett said in a statement.

But that strategy may be raising concern among investors, analysts said.

"I'm a little surprised given the fact that the company has really led investors to believe that plant closings were behind them," Morningstar analyst Anthony Chukumba said.

...more...

"led investors to believe" sounds an awful lot like: LYING :eyes:

[UpInArms]

9. pre-opening blather

briefing.com

9:15 S&P futures vs fair value: +3.8. Nasdaq futures vs fair value: +6.0.

9:00 S&P futures vs fair value: +3.2. Nasdaq futures vs fair value: +5.5. Expectations remain set for a higher open for the cash market, as futures indications hold steady above fair value... Reports suggest that Boeing (BA) may raise its FY06 outlook for deliveries while AIG, GM and WMT should also be in focus after the SEC sent subpoenas to as many as 12 AIG executives, concerns about liquidity prompted a downgrade on GM and WMT forced its former vice chairman to resign
8:30 S&P futures vs fair value: +3.1. Nasdaq futures vs fair value: +6.0. Still shaping up to be a higher open for the cash market as upbeat sentiment in futures market remains intact... End of the quarter window dressing has also provided a floor of support for stocks as investors have had little in the way of earnings and no economic data to digest this morning... Walgreen (WAG), however, should be in focus after posting record Q2 results, but missing forecasts by a penny, while AmerisourceBergen (ABC) has issued earnings warnings for Q2 and FY05

8:00 S&P futures vs fair value: +3.4. Nasdaq futures vs fair value: +6.5. Futures market versus fair value suggesting a higher open for the cash market as investors digest more M&A activity amid falling oil prices... Reports suggest that seven private-equity firms will acquire Sungard Data Systems (SDS) for $10.8 bln - the largest ever leveraged buyout of a technology company... Oil prices falling farther below $55/bbl have also lent some support for equities in pre-market trading

ino.com

The June NASDAQ 100 was higher overnight due to short covering as it consolidates some of its recent losses but remains below January's low crossing at 1496.50. Stochastics and the RSI are oversold and are turning bullish signaling that a short-term low is in or is near. Closes above the 10-day moving average crossing at 1493 then broken support marked by January's low crossing at 1496.50 would signal that a short-term low has likely been posted. If June extends this winter's decline, weekly support crossing at 1433.06 is the next downside target. The June NASDAQ 100 was up 4.50 pt. at 1484.50 as of 5:57 AM ET. Overnight action sets the stage for a steady to higher opening by the NASDAQ composite index later this morning.

The June S&P 500 index was higher overnight due to short covering as it consolidates some of this month's decline. Stochastics and the RSI are oversold and are turning neutral to bullish signaling that a short-term low is in or is near. Closes above the 10-day moving crossing at 1188.05 would signal that a short-term low has been posted. The June S&P 500 Index was up 2.70 pts. at 1178.20 as of 5:59 AM ET. Overnight action sets the stage for a steady to higher opening when the day session begins later this morning.

[ozymandius]

10. Markets are open for bidness.

9:34

DJIA
10,475.53
 +32.66  
 +0.31%


Nasdaq
2,000.89
 +9.83  
 +0.49%


S&P 500
1,175.08
+3.66  
 +0.31%

Gold future
423.80
 -1.00  
 -0.24%


10-Year Bond
4.63%
 +0.04  
 +0.85%

[UpInArms]

12. morning Ozy!

ought to be an interesting day - no reports, just enthusiastic buying :eyes:

[ozymandius]

21. Good morning UIA.

I just wonder if we will have another sucker rally like Thursday. The witching hour was truly witchy.

[UpInArms]

11. 9:39 markets are open

Dow 10,486.32 +43.45 (+0.42%)
Nasdaq 2,003.46 +12.40 (+0.62%)
S&P 500 1,176.27 +4.85 (+0.41%)
10-Yr Bond 4.632 +0.41 (+0.89%)

NYSE Volume 73,031,000
Nasdaq Volume 91,874,000

[UpInArms]

15. 10:18 EST numbers and blather

Dow 10,485.28 +42.41 (+0.41%)
Nasdaq 2,000.35 +9.29 (+0.47%)
S&P 500 1,176.69 +5.27 (+0.45%)
10-Yr Bond 4.636 +0.45 (+0.98%)

NYSE Volume 302,030,000
Nasdaq Volume 314,663,000

10:00AM: Equities still on the offensive as the bulk of sector leadership remains positive... Technology has been strong across the board following the proposed $10.8 bln acquisition of SDS, with Semiconductor (+1.1%) pacing the way higher... Financial, Health Care, Industrials, Consumer Discretionary and Consumer Staples have also been influential economic sectors to the upside...

Health Care Distributors (-5.2%), however, has been weak following an earnings warning from AmerisourceBergen (ABC 54.25 -6.86) while Homebuilding (-0.2%), despite getting an early boost from an upgrade on Toll Brothers (TOL 77.84 +0.57), has been under modest pressure amid rising bond yields... NYSE Adv/Dec 1627/1030, Nasdaq Adv/Dec 1601/883

9:40AM: Stocks open an upbeat note amid news of the biggest tech buyout ever... News that seven private-equity firms - the largest consortium of its kind ever assembled - plan to announce the $10.8 bln acquisition of SunGard Data Systems (SDS 34.72 +3.17) has boosted sentiment in the early going... SDS shares surged more than 15% last Monday after indicating it was in talks to possibly sell the company; but today, shares have rallied another 10% and underpinned a positive tone for equities in the absence of any influential earnings and economic data...

[UpInArms]

20. 11:31 EST numbers and blather

Dow 10,502.72 +59.85 (+0.57%)
Nasdaq 2,002.60 +11.54 (+0.58%)
S&P 500 1,177.91 +6.49 (+0.55%)
10-Yr Bond 4.630 +0.39 (+0.85%)

NYSE Volume 604,110,000
Nasdaq Volume 581,172,000

11:00AM: Buyers remain in control of the action as a positive sentiment remains intact... Advancers on the NYSE hold a 17 to 12 advantage over decliners while advancing issues on the Nasdaq hold a 15 to 11 margin over declining issues... The ratio of up to down volumes, however, suggests an even more bullish bias at both the Big Board and the Composite... Meanwhile, the Dow and S&P continue to trade above initial resistance levels of 10475 and 1176, respectively, while the Nasdaq has run into some resistance near its 200-day moving average (2005/2008)... NYSE Adv/Dec 1759/1256, Nasdaq Adv/Dec 1588/1186

10:30AM: Little changed since the last update as the major indices hold steady in positive territory as oil prices continue to slide... Profit taking in crude oil futures ($54.20/bbl -$0.64), amid reduced worries of inadequate supplies and higher prices stifling economic growth, has extended last week's losses in the commodity and prompted bargain hunting following three straight weeks of market declines...NYSE Adv/Dec 1680/1264, Nasdaq Adv/Dec 1585/1107

[UpInArms]

23. updated blather

11:30AM: More of the same as the major averages continue to trade in relatively tight ranges... Bucking the upbeat bias, however, has been Walgreen (WAG 45.43 -0.80), which missed analysts' Q2 forecasts on lower than expected revenues... While earnings season does not officially begin until next week, with Alcoa's (AA 30.06 -0.30) Q1 release on April 6, investors have kept their eyes more focused on downside guidance as earnings warning season comes to a close...

The most notable disappointment today has been a lowered Q2 and FY05 earnings outlook from AmerisourceBergen (ABC 54.89 -6.22), and shares have been subsequently punished...NYSE Adv/Dec 1595/1479, Nasdaq Adv/Dec 1538/1308

[RawMaterials]

16. GM'S FLIP IS A FLOP

By CHRISTOPHER BYRON

March 28, 2005 -- FRANKLY, I see no rea son why it couldn't . . . go bankrupt, that is. Speaking of course of General Motors Corp., whose financial future has suddenly become the focus of horror stories that are popping up everywhere.

From the New York Auto Show come reports of visitors shaking their heads and complaining that GM's new lineup of cars stinks.

From Wall Street come reports that both the Standard & Poor's and Moody's Investors Service credit-rating agencies are preparing to lower GM's $300 billion of balance sheet debt to junk bond status. And on the floor of the New York Stock Exchange, GM's shares continue to slide, tumbling 15 percent in the last eight trading days, to a closing price of $29.30 per share last Friday.

snip...

The business can run for a long time before its balance sheet cash, which currently stands at $36 billion, will be gone. But it doesn't have to all evaporate before the buzzards start to circle.

With roughly 565 mil lion shares outstanding, GM is currently being valued at a bit more than half its balance sheet eq uity, which stands at the moment at about $28 billion. But if you take out intangibles and goodwill, you're down to equity of $22 billion.

And if you net out that $2 billion more in negative cash flow that's supposedly on the way for this year, and another $2 billion in pay ments that are owed on a bungled investment in Italy's Fiat Motor Co., you're now down to $18 billion.

And by that measure you could wind up with a stock price that's easily cut to $10 per share. And not much lower than that does it have to fall before panic breaks out, not just within the organization but among its bankers and other creditors.

What needs to be done? Here is one thing that will help — if Gee-Ricky has the guts to do it: go through the entire organization, top to bottom and around the world, and fire every single executive whose secretary has his or her own secretary. Ask no questions and accept no excuses, just fire them all.

After that, he can start worrying about paring health care benefits and selling off pieces of the company's mortgage operations and all the rest of it.

But if this man doesn't make a public point of firing a whole trainload of the lazy and venal white-collar losers who keep running this company further and further into the ground, neither he nor any subsequent CEO will be able to turn it around. Want to guess the odds on it happening?

[e-mail]


http://www.nypost.com/business/41856.htm

[mhr]

19. GM's Competition - This Company Plans To Drive GM Out Of Business

With low cost Chinese made cars. They are setting up US dealerships as we surf.

Both GM and Ford will have trouble competing. The goal is to undersell every other make per market segment by 30%.

http://www.visionaryvehicles.com/

[UpInArms]

24. GM employees sue over pension losses

http://washingtontimes.com/upi-breaking/20050328-110527-3788r.htm

Detroit, MI, Mar. 28 (UPI) -- Two former General Motors employees have filed a class-action laswsuit accusing the automaker of improperly buying sagging GM shares for retirement programs.

<snip>

GM stock has lost 42 percent of its value since December 2003 but the company continues to add GM shares to employee 401(k) pension plans.

The lawsuit accused GM Chief Executive Officer Rick Wagoner and 12 members of the investment fund committee of violating the federal Employee Income Retirement Security Act.

GM ignored several serious nonpublic red flags that should have alerted them to the fact that General Motors stock was not a wise investment, said the suit filed in U.S. District Court.

...more at link...

[UpInArms]

31. GM shares fall as UBS lowers to 'reduce' ($20 a share target)

http://cbs.marketwatch.com/news/story.asp?guid=%7B3CC4A89A%2D20E2%2D44CF%2D8C9D%2DAEF2630E0515%7D&siteid=mktw

SAN FRANCISCO (MarketWatch) -- General Motors Corp. shares dipped more than 2 percent Monday after UBS reduced its rating and cautioned that the automaker's dividend may be at risk.

The brokerage firm cut GM (GM: news, chart, profile) to "reduce" from "neutral" and also slashed its price target to $20 a share from $37.

"We believe things will get worse before they get better," UBS analyst Rob Hinchliffe said of the outlook for GM.

At last check, GM traded down 62 cents at $28.68. Earlier this month, the shares sank to its lowest level in a decade after the company reduced its outlook for the year, citing weak sales in the U.S. and tough competition from abroad. See full story.

"Though GM's woes have been brewing for some time, we feel the market is overestimating its ability to navigate an increasingly tough environment," said Hinchliffe in a note to clients.

"We see little help on the horizon: no-pent up demand, new products have little momentum. We believe things will get worse before they get better," he added.

...more...

Look out below!

[RawMaterials]

17. China plans to use state assets to fill gaping hole in pensions

BEIJING, (AFP) - China plans to use money tied up in state-owned assets to deal with a boom in retirees expected in 15 years' time, state media reported.

State assets, such as stock in large companies, will be converted into funds that can help fill China's 2.5-trillion-yuan (300-billion-dollar) pension shortfall, the China Daily said.

"If there is no sound pension system, a crisis is likely to occur when the retiring peak comes," said Cai Zhenhong, a senior official at the Ministry of Labor and Social Security (news - web sites).

In the past, the number of retirees was so small that the state could easily look after them but this is no longer possible.

While a steep rise in the number of elderly is seen in all countries that experience rapid development and rising standards of living, in China it is taking place on an unprecedented scale.

It is estimated that the number of retired people in cities will more than double to reach 100 million by 2020, according to the newspaper.

To avoid a major financial crisis, China is trying to abandon its previous "pay-as-you-go" system, where people in the workforce pay directly for the support of retirees in the expectations that later generations will do the same for them.

Instead, the government aims to establish a new system where each individual saves money for himself on a personal retirement account.

The problem is that currently the money placed in these retirement accounts is not being saved but is diverted directly for use by current retirees, or a "pay-as-you-go" system in all but name.

"We should gradually save enough in personal pension accounts and stop diversion," Cai said in the report.

One suggestion made by the policy community in Beijing is for the retirement age to be raised from the present 55 for women and 60 for men to, say, 65 for both sexes by 2030.

"It will cushion pension pressure in China," said Tao Liqun, an analyst with the Beijing-based China Research Center for Aging Science.

At the same time, a solution like that could create new problems since it would exacerbate the jobless situation, which is already dire, the newspaper said.



http://story.news.yahoo.com/news?tmpl=story&cid=1518&ncid=1518&e=5&u=/afp/20050328/bs_afp/chinaeconomypensions_050328062937

wonder if they will start to sell there holdings of US assets to pay for the pensions??

[ozymandius]

22. 11:48

Dow
10,494.00
+51.13
(+0.49%)

Nasdaq
2,000.75
+9.69
(+0.49%)

S&P 500
1,176.54
+5.12
(+0.44%)

10-Yr Bond
4.628
+0.37
(+0.81%)

NYSE Volume
656,296,000

Nasdaq Volume
623,731,000

[ozymandius]

26. Blather

11:30AM: More of the same as the major averages continue to trade in relatively tight ranges... Bucking the upbeat bias, however, has been Walgreen (WAG 45.43 -0.80), which missed analysts' Q2 forecasts on lower than expected revenues... While earnings season does not officially begin until next week, with Alcoa's (AA 30.06 -0.30) Q1 release on April 6, investors have kept their eyes more focused on downside guidance as earnings warning season comes to a close...

The most notable disappointment today has been a lowered Q2 and FY05 earnings outlook from AmerisourceBergen (ABC 54.89 -6.22), and shares have been subsequently punished...NYSE Adv/Dec 1595/1479, Nasdaq Adv/Dec 1538/1308

[UpInArms]

27. 12:20 EST numbers and blather

Dow 10,489.50 +46.63 (+0.45%)
Nasdaq 1,998.07 +7.01 (+0.35%)
S&P 500 1,175.34 +3.92 (+0.33%)
10-Yr Bond 46.30 +0.39 (+0.85%)

NYSE Volume 773,689,000
Nasdaq Volume 728,534,000

12:00PM: Market holds onto modest gains midday amid new M&A activity and falling oil prices... News that SunGard Data Systems (SDS 34.60 +3.05) will be acquired for roughly $10.8 bln by a consortium of seven private-equity firms has provided a floor of support for equities following three straight weeks of market declines...

A 1.3% decline in crude oil futures ($54.15/bbl -$0.74), amid reduced concerns of insufficient inventories and higher prices stifling economic growth, has mitigated some of the ongoing inflationary pressures and also contributed to an upbeat sentiment that has prompted buying interest across most areas... Financial has been strong after the SEC subpoenaed as many as 12 executives at AIG (56.56 +0.95) while Technology has been mixed, with gains in Semiconductor (+0.7%) offsetting modest weakness in Hardware (-0.3%)... Strength in Department Stores (+1.4%), amid a 2.2% sell off in gasoline futures, has offset weakness in Drug Retail (-1.6%), following a Q2 earnings disappointment from Walgreen (WAG 45.48 -0.75), and provided a boost to Consumer Discretionary (+0.8%)...

Health Care Distributors (-6.0%), however, has paced the way lower after AmerisourceBergen (ABC 54.25 -6.86) warned that Q2 and FY05 earnings would not meet analysts' expectations while rising bond yields have pressured Homebuilding (-0.8%)... Treasurys opened lower and have been under modest pressure all morning, as investors remain wary ahead of this week's run of economic data which includes the influential non-farm payrolls data on Friday... The benchmark 10-year note is off 8 ticks to yield 4.62%...

[UpInArms]

25. Has the S&P run out of steam?

http://cbs.marketwatch.com/news/story.asp?guid=%7B4A8E6D21%2D3401%2D4616%2D938C%2D85A455066729%7D&siteid=mktw

NEW YORK (MPTrader) -- Three weeks ago the Standard & Poor's 500 Index looked invincible, taking out its three-year high of 1217.84 set intraday on Jan. 3 and reaching a peak of 1229.06 on March 7.

But this past Thursday, ahead of the three-day holiday weekend, the index closed at 1171.42, nearly 5 percent off its earlier-month peak and at a closing low for this three-week decline. Has it run out of steam?

Mounting technical evidence suggests that the answer is yes! Not only is the up-leg from the August 2004 low of 1060.74 in jeopardy of exhaustion, but the entire major recovery rally from the October 2002 lows at 768 may be over as well. At the very least, my work argues that the market in general, and the S&P 500 in particular, are in the midst of a serious correction.

...more...

[UpInArms]

29. S&P: Soc. Sec. personal accounts more risk than reward

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7B2CD988A8-CB40-453B-AEFD-C51E62562AA9%7D&

BOSTON (MarketWatch) -- Personal Social Security accounts could bring more risk than reward to investors, and would shift more responsibility for saving for retirement to individuals, Standard & Poor's said Monday. "The key question is whether an individual account holder can build enough money in savings to retire comfortably while withstanding any inevitable investment risk," said David Blitzer, chairman of the index committee at S&P. Given the risks in the market, not all aggressive savers will retire with ease, S&P said.

[UpInArms]

30. Moody's downgrades Fannie Mae rating

http://cbs.marketwatch.com/news/story.asp?guid=%7B409296B3%2D918D%2D4CE5%2DA017%2DC9B321DBD63A%7D&siteid=mktw

NEW YORK (MarketWatch) -- Credit rater Moody's downgraded one of its ratings on troubled mortgage finance giant Fannie Mae on Monday, but the company's stock rose in early afternoon trading.

<snip>

The company may be forced to restate $11 billion worth of earnings from 2001 to mid-2004 following an accounting scandal. Fannie Mae's stock has fallen about 27 percent since this time last year, and the company's troubles have sparked congressional inquiries. Fannie Mae and its smaller rival Freddie Mac (FRE: news, chart, profile) are government-created enterprises but sell their stock and debt on financial markets.

Fannie Mae recently disclosed that it will miss its March 31 SEC deadline for filing its financial report for 2004.

...more...

[jswordy]

32. Paying down debt No. 1 planned use for tax refunds

http://money.cnn.com/2005/03/28/pf/taxes/taxes_debt/index.htm

Half of those who expect a tax refund plan to use the funds to pay down debt, a National Retail Federation survey found.

Sigh...at least they are going to pay down their debts. But it really is just another sign of pending trouble. Don't expect the traditional tax refund bounce in the economy this year.

[ozymandius]

34. 1:57 update

DJIA
10,508.41
 +65.54  
 +0.63%


Nasdaq
2,001.03
 +9.97  
 +0.50%


S&P 500
1,177.83
+6.41  
 +0.55%

Gold future
426.10
 +1.30  
 +0.31%


30-Year Bond
4.88%
 +0.04  
 +0.81%

10-Year Bond
4.63%
 +0.04  
 +0.81%

1:30PM: Stocks show little vigor, having moved little in the past hour... Treasurys, however, have recently inched to their best levels of the session, as the 10-year note is now off only 6 ticks to yield 4.61%... But cautious trade amid higher inflation expectations and ahead of an economic calendar heavy with data later in the week has kept bonds under modest pressure all day... Tomorrow, economists expect March Consumer Confidence - the only notable economic release (10:00 ET) - to check in at 103.0, after falling to 104 (from 105.1) in February...NYSE Adv/Dec 1440/1776, Nasdaq Adv/Dec 1427/1543

[RawMaterials]

35. 3:00 Market update and blather

Dow 10518.83 +75.96 (+0.73%)
Nasdaq 2000.83 +9.77 (+0.49%)
S&P 500 1178.63 +7.21 (+0.62%)
10-Yr Bond 4.632% +0.41

NYSE Volume 1,319,390,000
Nasdaq Volume 1,183,121,000



3:00PM: Renewed wave of buying interest heading into the final hour of trading lifts the blue chip indices to their best levels of the session... On the Dow, AIG (AIG 56.99 +1.38) has paced the way higher following news that the SEC sent subpoenas to as many as 12 executives regarding questionable transactions... Boeing (BA 57.99 +1.19), which said it will reach equilibrium with its rival Airbus within two years, has also surged while gains of more than 1.0% have also been seen in shares of AXP (+2.1%), DIS (+2.1%), SBC (+1.9%), HD (+1.7%), MO (+1.7%), INTC (+1.4%) and GE (+1.2%)...

General Motors (GM 28.56 -0.74) has been the only component trading noticeably lower...NYSE Adv/Dec 1516/1759, Nasdaq Adv/Dec 1457/1575

[RawMaterials]

36. Closing Numbers and blather

Dow 10485.65 +42.78 (+0.41%)
Nasdaq 1992.52 +1.46 (+0.07%)
S&P 500 1174.28 +2.86 (+0.24%)
10-Yr Bond 4.624% +0.33

NYSE Volume 1,672,857,000
Nasdaq Volume 1,475,283,000



Close: News of the biggest tech buyout ever, falling oil prices, a stronger dollar and arguably oversold conditions lifted stocks at the open and closed the market on an upbeat note in the face of deteriorating breadth figures... Underpinning a positive sentiment at the open was news that a consortium of seven private-equity firms plan to acquire SunGard Data Systems (SDS 34.36 +2.81) for roughly $10.8 bln... Led by Silver Lake Partners, the proposed largest buyout in 15 years signaled a huge buildup of cash among buyout firms, piquing the possibility that more large deals could be in the works...

Also helping investors shrug off three consecutive weeks of market declines was a 1.4% sell off in oil prices... Profit taking in crude oil futures ($54.05/bbl -$0.79) amid reduced concerns of insufficient inventories and a stronger dollar eased inflation fears and provided a floor of support for stocks... Reports of a large 8.2 earthquake, occurring on the same fault line off the coast of Indonesia as the one that caused December's deadly tsunami, renewed modest buying interest in oil futures but failed to rattle investors as the commodity still closed lower...

The dollar climbed to a 4-month high against the yen (107.22) and advanced to a six-week high against the euro (1.2891), extending last week's gains amid higher interest rates and expectations that economic reports later in the week will show an improving U.S. economy... While there was no economic data for equity investors to sift through today, bond traders were wary ahead of this week's data, as Treasurys opened lower and closed near session lows... The benchmark 10-year note finished down 9 ticks to yield 4.62%...

Unaffected by higher bond yields, due to strength in Insurance (+2.2%), Banks (+0.4%) and Brokerage (+0.3%) was Financial (+0.7%), after the SEC subpoenaed as many as 12 executives at AIG (57.02 +1.41)... Another economic sector closing higher was Consumer Discretionary (+0.6%), led by strength in Department Stores (+1.7%), amid a 1.7% sell off in gasoline futures ($157.2/gal)... Weakness in Drug Retail (-1.6%) following a Q2 earnings disappointment from Walgreen (WAG 45.11 -1.12), however, minimized gains...

Technology finished in split fashion, as late-day strength in Software (+0.2%) after Symantec (SYMC 21.35 +0.42) authorized a $3 bln share buyback expansion offset modest weakness in Semiconductor and Hardware... Telecom Services (+0.2%) climbed following a favorable FCC ruling regarding high-speed Internet service while Utility and Consumer Staples also eked out gains... Health Care Distributors (-6.6%), however, led Monday's list of laggards after AmerisourceBergen (ABC 54.03 -7.08) lowered its Q2 and FY05 earnings outlook while Biotech (-1.3%) was also weak after Phase III clinical studies showed Ligand Pharmaceuticals' (LGND 5.88 -2.35) drug Targretin to be ineffective in significantly extending the lives of lung cancer patients...

Electronic Manufacturing Services (-3.9%) closed lower after Bear Stearns downgraded Solectron (SLR 3.67 -0.59) and Sanmina-SCI (SANM 5.06 -0.21) and cut CY05 and CY06 EPS estimates for both while weakness in Steel (-2.6%) and a stronger dollar pressured the Materials sector (-0.5%)... News that Iraqi security forces surrounded Iraq's most-wanted Abu Musab al-Zarqawi arguably provided a modest boost to overall sentiment around the open; but even after the report was disregarded as a bad translation, stocks held their ground... NYSE Adv/Dec 1454/1850, Nasdaq Adv/Dec 1412/1666

3:30PM : Sellers remain a reluctant bunch going into the close as the indices still trade at improved levels... Trading lower, however, has been Biotech (-1.2%) after Phase III clinical studies showed Ligand Pharmaceuticals' (LGND 5.83 -2.40) drug Targretin to be ineffective in significantly extending the lives of lung cancer patients... Trading lower in sympathy has been competitor Biogen Idec (BIIB 38.18 -0.62) as well as biotech giants Amgen (AMGN 58.59 -0.39) and Genentech (DNA 57.22 -1.53)...NYSE Adv/Dec 1556/1720, Nasdaq Adv/Dec 1485/1573