STOCK MARKET WATCH, Wednesday 15 February

[ozymandius]

Wednesday February 15, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 1069 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1882 DAYS
WHERE'S OSAMA BIN-LADEN? 1582 DAYS
DAYS SINCE ENRON COLLAPSE = 1543
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 3
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON February 13, 2006

Dow... 11,028.39 +136.07 (+1.25%)
Nasdaq... 2,262.17 +22.36 (+1.00%)
S&P 500... 1,275.53 +12.67 (+1.00%)
30-Year Bond 4.60% +0.04 (+0.79%)
10-Yr Bond... 4.61% +0.03 (+0.68%)
Gold future... 548.90 +6.80 (+1.24%)






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. WrapUp by Ike Iossif - WEEKLY CHARTS

SUMMARY

February 3 we said, "Last week we presented you with 2 possible scenarios for the next 5-10 trading days. In comparing the actual price action to the one forecasted by our probability models, it certainly looks that scenario #1 is unfolding. However, we want to caution that it would take a daily close below 2240 by NASDAQ, and a daily close below 1258 by the SP500 for confirmation. Unless, we get confirmation, scenario #2 is still alive.

This week, all major indices were able to stay above support, while most of the indicators stabilized around their respective zero lines, and some have even turned up. Under these circumstances the odds are usually better than even in favor of a modest advance lasting between 1-3 days, followed by another decline back down to support. Therefore, for this week we will be looking for signs of modest strength early on to give way to weakness by the end of the week.

more...

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

[54anickel]

46. In Spite of What You Think...

http://www.321gold.com/editorials/orlandini/orlandini021406.html

This will certainly sound strange coming from me, especially since most of the investing world believes I am a dyed in the wool stock market Bear. So what could be so shocking as to move the world off its axis? The stock market is going higher, that's what! How's that for a kick in the pants? It is true that I was, and still am, quite bearish but that doesn't mean that this prolonged secondary reaction can't go higher. How can that be you might ask? In a word, liquidity! Massive amounts of liquidity; and not just in the United States either. Fiat money, i.e., paper money with little or no backing, is being printed in unprecedented amounts and the world is flooded with it. What do you do with it? That's an easy one to answer. You trade it in for something tangible! Things like lumber, cotton, oil, copper, gold and the like are preferable to paper money. Houses have been preferable to paper money too. Even the stock market has been preferable to paper money. We are literally floating on a sea of liquidity.

Our new Federal Reserve Chairman, "Helicopter" Ben Bernanke, is at the helm and he's in a difficult situation thanks to his predecessor. Interest rates are still low and yet the economy is slowing. To complicate the picture even more, the here-to-fore insatiable demand for U.S. dollar denominated debt is on the wane. In order to attract foreign interest in U.S. bonds (debt), denominated in dollars, our new Chairman will have to raise rates... a lot. There just aren't that many suckers out there willing to take unsecured debt from the largest debtor nation the world has ever known. I believe that Mr. Bernanke will turn the monetary spigots wide open in an effort to forestall a slowing economy and, at the same time, inflate away some of the staggering U.S. debt load. What other choice does he really have? There is absolutely no political will to actually balance budgets, cut out pork, raise taxes across the board, and reduce spending. That is understandable to a certain degree since such action would more than likely through the nation into a Depression.

Initially, some of that liquidity will find its way into the stock market and that will lead to one last leg up in this prolonged secondary reaction. Take a glance at the Weekly Chart for the DJIA below and you will see something quite similar to what has taken place in the gold chart:

Notice the long sideways movement that began back in late 2004 when we topped at 10,750. Then in early 2005 we hit 10,950 and recently made a marginally higher high at 11,080. It has done so on increased volume while allowing the market to work off an overbought condition. Also, observe how the histograms have now worked there way back to zero and both the MACD as well as the RSI have turned up. From the recent low (10,767 on a closing basis) posted on February 7th, we have now rallied back above the 50-dma and I fully expect that low to hold although I would not be surprised to see a retest before the leg up begins in earnest.

more...

[54anickel]

52. The Information is in the Divergences

http://www.hussmanfunds.com/wmc/wmc060213.htm

snip>

Because the divergences, not the raw data, contain the information, I realize that my comments and interpretation of market action can sometimes run counter to the seemingly “obvious” message of the major indices. Of course, any trend that's too obvious should be questioned by investors in the first place. But beyond that, there would be no logical way to act in advance of major movements in the indices if the only basis for action was major movements in the indices. It's the “internal” quality and divergences in market action that conveys early information –not well enough to “time” or “forecast” specific market movements, but well enough to distinguish conditions where market risk has been rewarded, on average, from conditions where it has not.

Though the general character of market action in recent weeks has not been too bad, the NYSE advance-decline line (a running tally of daily advancing issues on the NYSE minus declining issues) has appeared out-of-place in the context of other measures. To get at what's happening internally, it's instructive to compare the overall NYSE advance-decline line with the advance-decline line of the 30 stocks in the Dow Jones Industrial Average, as well as the largest 30 stocks in the S&P 500 Index. Thanks to Bill Hester for the following chart:



Notice the divergence that's been developing since last November. For the past several months, we've been seeing fairly persistent “distribution” in the largest, most highly capitalized stocks in the market, with trades in these large-cap stocks occurring on weak or subdued breadth. Evidently, the enthusiasm of investors for more speculative, smaller capitalization stocks is not reflected in the core issues that comprise the stock market.

In general, divergences like this tend to have a lead-time to them. In other words, the market usually doesn't encounter immediate trouble at the first sign of divergence. It's also possible that the divergence could resolve without incident if large capitalization stocks develop fresh, persistent strength. Still, what's clear is that investors (most likely, institutions) are becoming increasingly selective and restrained about their risk taking. Moreover, the apparently reasonable health of indices like the Dow Industrials and S&P 500 index is presently not confirmed by breadth in these indices.

more...

[ozymandius]

2. Today's Reports

Feb 15 8:30 AM NY Empire State Index Feb
Briefing Forecast 18.0
Market Expects 18.0
Prior 20.1

Feb 15 9:00 AM Net Foreign Purchases Dec
Briefing Forecast NA
Market Expects NA
Prior $89.1B

Feb 15 9:15 AM Capacity Utilization Jan
Briefing Forecast 80.7%
Market Expects 80.8%
Prior 80.7%

Feb 15 9:15 AM Industrial Production Jan
Briefing Forecast 0.2%
Market Expects 0.2%
Prior 0.6%

Feb 15 10:30 AM Crude Inventories 02/10
Briefing Forecast NA
Market Expects NA
Prior -318K

[UpInArms]

13. GACK! Check out the employment index in the Empire St. Index

8:30am 02/15/06 U.S. FEB. EMPIRE STATE PRICES PAID INDEX 52.8 VS 46.6 IN JAN

8:30am 02/15/06 U.S. FEB. EMPIRE STATE NEW ORDERS INDEX 26.5 VS 27.2 IN JAN.

8:30am 02/15/06 U.S. FEB. EMPIRE STATE EMPLOYMENT INDEX 5.2 VS 11.3 IN JAN.

8:30am 02/15/06 U.S. FEB. EMPIRE STATE INDEX ABOVE CONSENSUS 18.1

8:30am 02/15/06 U.S. FEB. EMPIRE STATE INDEX 20.3 VS 20.1 IN JAN.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BA900D5D5%2DA83E%2D476C%2D9194%2D71E0DBB08ACA%7D&siteid=mktw

WASHINGTON (MarketWatch) -- Manufacturing activity in the New York area held steady in February, the New York Federal Reserve Bank said Wednesday. The bank's Empire State Manufacturing index inched higher to 20.3 in February from 20.1 in January. The increase was unexpected. Economists were expecting the index to slip to 18.1. New orders, shipments and unfilled orders were essentially unchanged from January. The prices paid index rose again, while the employment index declined.

adding more info on edit:

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-15T132859Z_01_N15182010_RTRIDST_0_ECONOMY-NYFED-URGENT.XML

NEW YORK, Feb 15 (Reuters) - Manufacturing growth at New York State factories ticked up in February, exceeding expectations, but the number of employees dropped, the New York Federal Reserve said on Wednesday.

The N.Y. Fed's "Empire State" index showed overall conditions for manufacturers rose slightly to 20.31 from 20.12 in January, above economists' forecasts for 18.30, according to a Reuters survey.

The employment component of the index, however, fell to 5.19 in February from 11.29 in January. The average employee workweek index also declined, to 4.69 this month from 11.71 in January.

[UpInArms]

18. OUCH! U.S. Dec. capital flows decline to $56.6 billion

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B02D295EB%2D71CC%2D44C9%2D839F%2D736C51DEBEB2%7D&dateid=38763%2E3750819676%2D860747416&siteID=mktw&scid=0&categories=&doctype=806&property=symb&value=

WASHINGTON (MarketWatch) -- Capital flows into the United States fell to $56.6 billion in December after hitting a revised $91.6 billion in November, the Treasury Department said Wednesday. The decline was led by a drop in private investors' purchases of Treasury bonds and notes. Investors purchased $12.7 billion of Treasuries in December versus $50.8 billion in November. Official institutions bought $5.6 billion of Treasury bonds and notes in December, up from $3.7 billion in November. Net foreign purchases of long-term domestic securities were $74.2 billion. U.S. investors increased their purchases of foreign-issued securities in December, buying $17.6 billion in foreign bonds and equities, the Treasury said.


The estimated population of the United States is 298,532,105
so each citizen's share of this debt is $27,519.62.

The National Debt has continued to increase an average of
$2.05 billion per day since September 30, 2005

[UpInArms]

24. Industrial Output decreased .2% - Manufacturing Output increased .7%

9:15am 02/15/06 U.S. JAN. CAPACITY UTILIZATION UP 80.9% VS. 80.8% EXPECTED

9:15am 02/15/06 U.S. JAN. INDUSTRIAL PRODUCTION DN 0.2% VS. UP 0.2% EXPECTED


http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BDD0F6322%2DE370%2D4AEB%2DB52F%2DCA3DEE2D7F99%7D&dateid=38763%2E3855710417%2D860750010&siteID=mktw&scid=0&categories=&doctype=806&property=symb&value=

WASHINGTON (MarketWatch) - U.S. industrial output decreased 0.2% in January while capacity utilization soared to 80.9%, the Federal Reserve said Wednesday. A record 10.1% decrease in utility output led the decline, reflecting unseasonably warm temperatures in the month. In January, manufacturing output increased 0.7%. Economists surveyed by MarketWatch were expecting industrial production to increase 0.2%.

[UpInArms]

26. U.S. Jan. industrial output falls 0.2%

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BFBA3B845%2D326E%2D4922%2DB7A2%2D561BADA9CDC0%7D&symbol=&siteid=mktw

WASHINGTON (MarketWatch) -- U.S. industrial output fell 0.2% in January while capacity utilization soared to 80.9%, the Federal Reserve said Wednesday.
The January decline was led by a record 10.1% drop in utilities' output, reflecting unseasonably warm winter weather. It's the biggest monthly decline since the Fed began keeping records 34 years ago. Read the full report.

In January, manufacturing output increased 0.7%. Motor vehicles and parts climbed a strong 2.3%.

The increase in capacity utilization could help pressure the Federal Open Market Committee to boost rates again at its March 27-28 meeting.
Output at mines increased 1.7% in January. Mining output fell 1.8% from year-ago levels. Capacity utilization in mining rose to 87.7%, down 0.4% from January 2005.

The decrease in output in January was the opposite of the 0.2% gain expected by Wall Street economists surveyed by MarketWatch. Capacity utilization was expected to rise to 80.8%. See Economic Calendar.

...more...

[UpInArms]

34. DOE Petroleum Inventories Report:

10:33am 02/15/06 U.S. CRUDE STKS UP 4.9 MLN BRLS LAST WK: ENERGY DEPT

10:33am 02/15/06 U.S. DISTILLATE STKS UP 900,000 BRLS: ENERGY DEPT

10:33am 02/15/06 U.S. GASOLINE STKS UP 2.2 MLN BRLS: ENERGY DEPT

[UpInArms]

41. Crude supplies up over 8 million barrels last week: API

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B479F9594%2D11B5%2D455D%2D9F91%2DD553C68E83E5%7D&dateid=38763%2E4488381134%2D860765571&siteID=mktw&scid=0&doctype=806

SAN FRANCISCO (MarketWatch) -- The American Petroleum Institute said crude inventories rose 8.1 million barrels for the week ended Feb. 10 to 329 million. But it revised the previous week's total downward to 320.9 million from 321.5 million. Motor gasoline inventories were up 176,000 barrels, the API said -- less than the government's reported 2.2 million-barrel rise. Distillate stocks rose 1.1 million barrels, the API said.

[ozymandius]

3. Oil inches higher, awaits US inventory data

LONDON (Reuters) - Oil edged up toward $60 after sliding to its lowest level this year on Wednesday, as dealers anticipated a big jump in already healthy U.S. inventories.

U.S. March crude oil futures gained 30 cents to $59.87 a barrel, recovering from a low earlier in the session of $59.31. The market had tumbled $1.67 on Tuesday.

-cut-

U.S. prices have lost about 12 percent since the end of January and analysts said the spotlight has swung away from supply disruption risks and back to fundamentals, particularly with robust stock levels seen in the United States.

"The market is expecting another significant jump in U.S. stocks later today, and this focus has pushed geopolitical uncertainties off to the side, for now at least," said David Thurtell, commodities strategist at the Commonwealth Bank of Australia.

more...

[UpInArms]

44. Citgo extends discounted oil sales to Del.

http://www.myrtlebeachonline.com/mld/myrtlebeachonline/business/13871471.htm

CARACAS, Venezuela - Venezuela's Citgo Petroleum Corp. extended discounted sales of heating oil to Delaware on Tuesday, the company's latest effort to provide affordable fuel to low-income families in the United States.

Representatives of Citgo, a Houston-based subsidiary of Venezuela's state-run Petroleos de Venezuela SA, have said it plans to provide 55 million gallons of heating oil at a 40 percent discount this winter to low-income U.S. communities that Venezuelan President Hugo Chavez has accused Washington of neglecting.

Venezuela's information ministry announced in a statement on Tuesday that 1.15 million gallons would be available at the reduced rate to 5,000 low-income households in Delaware. Twenty homeless shelters will receive free heating fuel.

"The aid forms part of the social program implemented by Citgo in several American states as a result of the energy crisis in the United States," the statement said.

Citgo Chief Executive Officer Felix Rodriguez said the discounted fuel would help poor families escape high energy costs during the cold winter months.

"We have heard horror stories of families forced to heat their homes with their stoves because they have no money for heating oil," Rodriguez said in a statement. "No one should be forced to sacrifice food, shelter or medicine to stay warm."

...more...

[UpInArms]

47. March Crude @ $59.55 bbl - March NatGas @ $7.34 mln btus

11:21am 02/15/06 MARCH UNLEADED GAS UP 3.2% TO $1.429/GAL IN NY

11:21am 02/15/06 MARCH CRUDE FALLS 2C TO $59.55/BRL AFTER $60 HIGH

11:21am 02/15/06 MARCH NATURAL GAS AT $7.34/MLN BTUS, UP 22.6C, OR 3.2%

[UpInArms]

53. March Crude @ $59.30 bbl - March NatGas @ $7.09 mln btus

12:17pm 02/15/06 MARCH CRUDE FALLS 27C TO $59.30/BRL IN AFTERNOON DEALINGS

12:17pm 02/15/06 MARCH UNLEADED GAS UP 2.76C, OR 2%, AT $1.4125/GAL

12:17pm 02/15/06 MARCH NATURAL GAS FALLS 2.4C, OR 0.3%, AT $7.09/MLN BTUS

[EuroObserver]

4. Tokyo: Afternoon market falls on fickle foreigners fears

Nikkei falls on fear foreign investors pulling out
TOKYO, Feb 15 (Reuters) - The Nikkei average lost 1.56 percent on Wednesday as concern that foreigners were pulling out of Japanese equities prompted investors to cash in chip-equipment maker Advantest Corp. (6857.T: Quote, Profile, Research) and other recent gainers. The broader TOPIX index also fell, although it found support from gains in Daiwa Securities Group Inc. (8601.T: Quote, Profile, Research) and other brokerages, which rose on signs of retail investors' strong appetite for equities.

The Japanese market is no longer the top pick for global equity investors, according to a monthly Merrill Lynch survey of fund managers released on Tuesday. For the first time in more than a year, Japan did not occupy the top spot, losing out to the European equity market in the February survey. "The Merrill survey, which showed that foreigners are decreasing their overweight positions is causing a good bit of concern," said Nagayuki Yamagishi, strategist at Mitsubishi UFJ Securities. "Stocks that have up until now comparatively supported the market -- such as chip-equipment makers and some auto makers -- are weaker today. I think you can say that is because of profit-taking."

The Nikkei <.N225> finished down 252.04 points at 15,932.83, closing below the 16,000 mark for only the second time in nearly three weeks. The TOPIX index <.TOPX> ended down 0.67 percent at 1,624.28.
...

Record buying by foreign investors pushed the Nikkei to its best yearly performance in nearly two decades in 2005. "Foreigners are selling and it seems that Japanese investors are also getting rid of stocks because they are worried about selling by foreigners," said Soichiro Monji, strategist at Daiwa SB Investments. "A lot more investors are starting to see Japanese stocks as overvalued. If you look at price-earnings ratios, they look a little too expensive," he said.

According to the most recent data available from the Tokyo Stock Exchange, foreigners' net buying of Japanese equities decreased by nearly 40 percent in the week before last, compared to the previous week.
...

Trade slowed, with 1.89 billion shares changing hands on the Tokyo exchange's first section, the lowest total since Jan. 24. Decliners outnumbered gainers 979 to 607. ...more...


Tokyo stocks advance in morning after strong gains on Wall St.
(Kyodo) _ Tokyo stocks advanced Wednesday morning as investors took heart from strong gains on the U.S. stock markets, but trading was slow ahead of congressional testimony by new U.S. Federal Reserve Chairman Ben Bernanke later in the day. The 225-issue Nikkei Stock Average rose 89.31 points, or 0.55 percent, in the morning to 16,274.18. The Tokyo Stock Price Index of all First Section issues on the Tokyo Stock Exchange gained 11.85 points, or 0.72 percent, to 1,647.09.
...

Trading volume on the TSE's main section shrank to 954.98 million shares from Tuesday morning's 1,283.90 million shares. Brokers also noted that foreign investors' buying has been low-profile in recent sessions and said they may be reducing the weight of Japanese stocks in their portfolios. Sell orders placed before the opening by foreign brokerages topped buy orders for the sixth straight trading day, according to brokers. Advancing issues led declining ones 1,039 to 546, with 81 shares ending the morning unchanged.

The morning's top gaining issues were paper and pulp, brokerage, real estate and bank issues. But air transport, energy-related, and pharmaceutical stocks retreated.
...

The TSE's Second Section index gained 60.68 points, or 1.21 percent, to 5,073.02 on a volume of 51.46 million shares. In Osaka, the near-term March Nikkei 225 index futures contract advanced 120 points to 16,270. ...more...


Tokyo stocks open higher, boosted by overnight gains in U.S. stocks
(Kyodo) _ Stocks opened higher on the Tokyo Stock Exchange on Wednesday, boosted by strong gains on Wall Street overnight. In the first 15 minutes of trading, the 225-issue Nikkei Stock Average gained 65.58 points, or 0.41 percent, to 16,250.45. The broader Tokyo Stock Price Index of all First Section issues rose 9.81 points, or 0.60 percent, to 1,645.05. The Second Section also rose.

Tokyo stocks staged a firm start after U.S. stocks surged Tuesday, buoyed by strong U.S. retail sales data for January and lower oil prices. Brokerage, real estate, paper and pulp, and machinery issues were the strongest gainers in the early deals. The main declining issues were oil, mining and air transport stocks. ...more...

[EuroObserver]

6. Shares in NAND chip makers fall on demand worries

SEOUL, Feb 15 (Reuters) - Shares of top memory chip makers fell sharply on Wednesday, hit by concerns that an anticipated big order for NAND-type flash memory chips may not materialise and that output of digital music players using the chips may be cut.

A sharper-than-expected drop in prices of NAND-type flash memory has been hurting shares of top NAND makers including Samsung Electronics Co. Ltd. (005930.KS: Quote, Profile, Research), Toshiba Corp. (6502.T: Quote, Profile, Research) and Hynix Semiconductor Inc. (000660.KS: Quote, Profile, Research). Shares in south Korea's Hynix, the third-biggest NAND maker, fell over 12 percent as the firm has been particularly aggressive in shifting its production capacity to NAND from traditional computer memory chips. It marked the biggest percentage drop for Hynix shares since May 2004.

NAND flash memory chips can retain data after power is shut off and are widely used in digital cameras, music players and other electronic devices including game consoles. Makers have been ramping up NAND output betting explosive demand for consumer gadgets including Apple Computer Inc.'s (APPL.O: Quote, Profile, Research) iPod MP3 players.

"Until now it looked like there was very tight supply and demand, but now it looks like the demand is not so strong," said Lim Chang-gue, a fund manager at Samsung Investment Trust Management.
...

In another potential blow to chip makers, Goldman Sachs said in its report on Monday that Apple may slash production of its popular iPod music players by about 30 percent in the first quarter from the prior quarter.
...

Industry leader Samsung said it expected NAND prices to fall about 40 percent this year and the speed of the decline would slow from the second quarter, with demand for consumer electronics expected to revive.

...more...

[EuroObserver]

5. Europe: Soft start on banking, oilco weakness

Swiss SMI down -0.37% at 7853.11 in Zurich 09:06:40 CET
Xetra Dax 30 up 1.1 points at 5,764.50 in Frankfurt 09:12 CET
CAC 40 opens down -0.1% at 4,957.78 in Paris 09:02 CET
FTSE 100 opens up 0.2% at 5,801.4 in London 08:01 GMT
FTSE 250 up 0.2% at 9,336.1 in London 08:47 GMT


Bourses fail to follow Street higher
Europe’s bourses failed to follow Wall Street higher as Total, the French oil giant, missed expectations and the price of crude oil fell below $60.
...

The FTSE Eurofirst 300 fell 0.1 per cent lower at 1,329.60 and the CAC-40 fell 0.3 per cent to 4,946.43. The FTSE 100 was flat at 5,793.2. The FTSE Eurofirst 300 fell 0.2 per cent to 1,330.8 points, having earlier risen to a fresh 4½ year high. See more on Tuesday's Europe
...

Credit Suisse’s fourth quarter net profits were slightly weaker than forecast at SFr1.103bn. The stock fell 4.9 per cent lower at SFr74.15 on concerns over costs. BNP Paribas, the French bank, beat expectations with a 22.9 per cent rise in fourth-quarter net profit. BNP said its takeover of Italian bank BNL would give it fresh impetus. But the stock fell 2.8 per cent to €74.05. Another bank on te slide was Swedbank, down 4.7 per cent to SKr214, despite beating expectations thanks to a surprise trading gain. Net interest income fell by more than expected as low interest rates bit.

Danone, the French food maker, forecast further earnings growth as 2005 earnings per share rose 16 per cent rise, buoyed by its beverage and dairy business. The company raised its dividend per share by 26 per cent. Danone rose 1.3 per cent to €92.

Total fell 1.4 per cent to €212.10 as the French oil company which accounts for 16 per cent of the CAC-40 index missed expectations with a 16 per cent rise in fourth quarter adjusted net profit. ...more...

Bourses seen tracking Street higher
Europe’s bourses were seen starting higher on Wednesday after Wall Street closed above 11,000 following a double digit points gain, the biggest this year, and the price of crude oil below $60. Spread betters in London are calling the FTSE 100, CAC-40, and Dax indices 12 to 27 points higher, according to Reuters. ...more...

[EuroObserver]

7. Europe stocks flat as Credit Suisse drags banks down

LONDON, Feb 15 (Reuters) - European stocks were broadly flat on Wednesday as stronger resources helped offset a slide in banking stocks led by Credit Suisse (CSGN.VX: Quote, Profile, Research) and interest rate jitters ahead of Federal Reserve Chairman Ben Bernanke's debut.

French oil giant Total (TOTF.PA: Quote, Profile, Research) dropped as its earnings missed analysts' forecasts, while Britain's BAA (BAA.L: Quote, Profile, Research) jumped on hopes of a bid from Spain's Grupo Ferrovial (FER.MC: Quote, Profile, Research) and Norway's Storebrand (STB.OL: Quote, Profile, Research) rallied after its profit climbed.

"If you look at historical valuations, the market is not really expensive. The sentiment is positive overall," said Thomas Muehlberger, fund manager at Bayern Invest in Munich, adding earnings expectations overall were "far too high".

The pan-European FTSEurofirst index <.FTEU3> was down 0.03 percent at 1,330.19 by 1150 GMT. The overall mood remained quiet ahead of testimony on the U.S. economy from Bernanke who is expected to signal more interest rate rises lie ahead.

...more...

[UpInArms]

8. daily dollar watch

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

Last trade 90.54 Change +0.06 (+0.07%)

Big Day Ahead for Dollar – TIC and Bernanke

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/6739_big_day_ahead_for_dollar__tic_and.html

Stronger US economic data has helped the trade weighted dollar end the day virtually unchanged. Retail sales staged an exceptionally strong recovery, rising 2.3 percent in January after increasing a modest and downwardly revised 0.4 percent the previous month. This is the biggest rise in sales that we have seen since May 2004 and best yet, the sales excluding autos component also hit a 6 year high. The US consumer continues to buy up everything in sight, which means that regardless of whether this behavior is sustainable or not, in the immediate future, it means that we could see a nice pop in first quarter GDP. A strong rise in the figure due out on in April will help traders completely forget about the horrid number released last month. Sales have been strong thanks to record mild temperatures and lower gasoline prices. The new Fed Chairman Ben Bernanke now has some ammo under his belt when he ascends Capitol Hill tomorrow if he chooses to give some sort of validation that there could be one more rate hike in May. His much awaited semi-annual testimony to Congress on the economy and monetary policy is this week’s main event. Not only are we going to be listening carefully to his assessment of how the risks to the economy and inflation are tilted, but also to his responses during the question and answer session – expect Bernanke to be grilled. Greenspan mastered the art of tactfully answering questions while managing market expectations during his tenure, which will make it particularly interesting to see whether the usually clear speaking economist will be able to do the same under such intense pressure. Aside from Bernanke’s speech however, we should not lose sight of the fact that the net foreign security purchases, also known as the Treasury International Capital (TIC) flow report is also due for release. After rising $89.1 billion in December, purchases are expected to increase by another $76.2 billion, still more than enough to cover the trade deficit. Unless we see foreign purchases sink below $60 billion, we expect the TIC report to be a non-event. Yet, market volatility in the dollar can also come from the Empire State manufacturing survey, the industrial production report or the NAHB housing market index. So clearly, tomorrow will be quite a day and it is no coincidence that many currency pairs are also at a crossroad and looking to tomorrow’s developments for direction.

[AnneD]

16. That highlighted statement....

makes no sense at all:wtf:
I don't see overflowing baskets in Wally World. Could some of the increases be credited to inflation? I am shaking my head on that one.

[UpInArms]

9. US home loan applications fall 3rd straight week

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-15T120652Z_01_N153994_RTRIDST_0_ECONOMY-MORTGAGES-UPDATE-1.XML

NEW YORK, Feb 15 (Reuters) - U.S. mortgage applications fell for a third consecutive week as demand for loans to purchase homes dropped to its lowest level in over two years, an industry trade group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended Feb. 10 decreased to 574.1, down 7.3 percent from the previous week's 619.3.

The MBA's seasonally adjusted purchase mortgage index, which is considered a timely gauge on U.S. home sales, fell 7.9 percent to 391.7 from the previous week's 425.1, its lowest level since the week ended Dec. 26, 2003, when it hit 390.1.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.25 percent, unchanged from the previous week. The 30-year rate, however, was at its highest level since the week ended Dec. 9, 2005, when it touched 6.28 percent.

The 30-year fixed-rate mortgage, the industry benchmark, is substantially above its 2005 low of 5.47 percent in late June of 2005, but hovering below its 6.33 percent high in the week of Nov. 11, 2005.

<snip>

The group's seasonally adjusted index of refinancing applications decreased 6.5 percent to 1,636.7 compared with 1,751.0 the previous week.

...more...

[AnneD]

15. Morning Marketeers,

:donut: My my. It is shaping up to be a fun day in the market. Chopper Ben opens is mouth, market reacts. And if that weren't bad enough, this Cheney story has the press all riled up. I can't understand why some of these other stories to come out of this WH in the last 5+ hasn't riled them up in the same way, especially since they were more important. The only thing I can figure is that they are pizzed that a local paper beat them to the punch. Jack Anderson was probably one of the best day in day out investigative reporter in Washington. He NEVER went to a press conference because he felt that was the one place where there was NO news. Think this story has him chuckling from somewhere beyond.

I took this from another thread. Backs up the observation I had the other day about the builder that was doing the red tag sale. New home builders (IMHO) are not a leading indicator on the housing market or economy. I think foreclosures are. People will give up their house as a last ditch effort. The more foreclosures, the worse the economy. I have been seeing a sharp uptick in for sale signs (a first indicator of possible problems) and homes are on the market longer. I am also seeing new home builders taking to running infomercials here, and I don't think I have EVER seen that before in this market.

http://aolsvc.aol.com/realestate/indexe.adp?ref=ws

<snip>
The number of foreclosure properties increased steadily throughout 2005, which could continue in 2006. The states with the highest percent of households in foreclosure were:
1. Florida: 1.67
2. Colorado: 1.62
3. Utah: 1.50
4. Texas: 1.44
State by State Trends

Let's see, which of these states are red...hmmmm...:eyes:

Happy hunting and watch out for the bears.

[54anickel]

28. This on the heels of yesterday's warnings from KB and Toll Brothers

Things are starting to look a little shaky in the housing business - but heck nothing to worry about, those consumers are out in full force buying up all kinds of crap. Has money started falling from the skies or what?

You don't suppose a lot of those consumer purchases were made on Christmas Gift Cards, do ya? Gifts, bonuses, etc? I got a $200.00 gift card from a store back in December (bought a new mattress set) that's good for 90 days. Sure, I'd rather have the $200 taken off the price I paid for the mattress, but that's not how they were playing the game.

http://www.signonsandiego.com/news/business/20060214-1355-kbhome.html

LOS ANGELES – KB Home said the number of canceled home orders rose in the first two months of the year while net orders for new homes fell – a trend that could force the company to adjust revenue projections if it continues.

KB's warning, made in a filing with the Securities and Exchange Commission on Friday, comes on the heels of Horsham, Pa.-based homebuilder Toll Brothers Inc.'s announcement that new orders for its houses fell by 21 percent in the first quarter and home deliveries this year would be weaker than expected.

KB Home started fiscal year 2006 with a seven-month backlog of new home orders with a projected revenue value of $6.76 billion, the company said in the filing.

“Based on our backlog, we expect revenue growth for the first half of fiscal year 2006 to be consistent with the growth rates we have experienced over the last several years,” the company said.

more...

[54anickel]

50. What Fuel Bills? U.S. Consumers Still Spending

http://www.nytimes.com/2006/02/15/business/15retail.html?_r=1&oref=slogin

Shaking off a middling holiday shopping season and fears of higher heating bills, Americans spent freely in January, the government reported yesterday, providing reassurance that the economy is beginning the new year with fresh strength.

Buoyed by the unexpectedly robust spending data and a drop in oil prices, investors sent stocks higher across the board. The Standard & Poor's 500-stock index rose 1 percent, to 1,275.53, and the Dow Jones industrial average closed above the 11,000 level again, climbing 1.3 percent, to 11,028.39. Crude oil prices dipped below $60 for the first time since late December.

"The momentum going into 2006 is clearly healthy," said Anthony Chan, chief economist at J. P. Morgan's private client services group. "We will be able to withstand weaker growth for the rest of the quarter and almost not miss a heartbeat."

While many economists expect spending increases to slow for the rest of the winter, the strong consumer spending and solid job gains last month helped overcome fears that economic growth was about to stagger under the weight of rising energy costs, higher interest rates and a slowing housing market. The jump in retail sales virtually assures that economic growth, which slowed to just 1.1 percent for the final quarter of 2005, will register a much stronger showing in the first quarter of 2006.

Retail sales jumped 2.3 percent last month, recovering from a modest 0.4 gain in December, to register their biggest monthly increase since May 2004. Americans, flush with year-end bonuses, took advantage of the warmest January on record, leftover gift cards and enticing discounts to shop avidly for clothes, furniture and cars.

more...

Amazing, let's not look at the fundementals at work here. All that matters is that the next quarter "looks good on paper" compared to the last quarter which sucked. Have we really become that short sighted that we can't see the bar has been lowered yet again?

[AnneD]

65. I am sitting around saying

:wtf: I can only think it is the gift cards and bonuses. I am still bearish. Numbers still don't add up.

[UpInArms]

10. Big deficit prompts U.S. to rethink policy on trade

http://www.miami.com/mld/miamiherald/business/international/13872929.htm

WASHINGTON - The Bush administration Tuesday reiterated its concern about the record trade deficit with China and said it will refocus its policies toward the Asian nation, which will include the hiring at least a dozen new people to help ensure China's compliance with trade rules.

China must open its market to more imports, crack down on the piracy of copyrighted goods and curb subsidies to exporters in order to lower its record trade surplus with the U.S., the U.S. Trade Representative's office in Washington said in a 29-page review of trade policy toward China.

''Our bilateral trade relationship with China today lacks equity, durability and balance in the opportunities it provides,'' U.S. Trade Representative Rob Portman said in a statement before the start of a news conference. ``The time has come to readjust our trade policy with respect to China.''

<snip>

The United States logged a record $202 billion trade deficit with China last year, accounting for more than a quarter of the overall U.S. trade gap, the Commerce Department said Feb. 10.

''The enormous scope and scale of the changes that have occurred in China's trading posture and in our bilateral trade relationship pose continual challenges,'' the report said.

The Bush administration is trying to head off proposals in Congress to impose punitive tariffs or import quotas on Chinese goods, proposals the administration says would undermine the benefits of commercial engagement with China. The administration at the same time is laying out specific changes the Chinese should take to allow more U.S. exports and narrow the trade gap.

...more...

[UpInArms]

12. self-deleted

posted in wrong place

:blush:

[54anickel]

19. U.S. Considers Branding China as Currency Manipulator

http://www.bloomberg.com/apps/news?pid=10000087&sid=aB8jX7beo1zE&refer=top_world_news

Feb. 15 (Bloomberg) -- U.S. Treasury officials are sounding out investors about the potential impact of naming China as a currency manipulator, people familiar with the situation said.

Treasury Undersecretary Tim Adams, in meetings in New York and Washington this month, has asked strategists, investors and academics to assess the likely reaction of financial markets in the event the department cites China in its semiannual report on exchange rates, the people said.

By talking to Wall Street firms before the report is completed, the Treasury is trying to minimize any disruption in currency, equity and bond markets, the people said. President George W. Bush's administration is under mounting pressure from Congress to act against China, which some legislators say is keeping the yuan artificially weak to spur demand for its exports.

``If the market saw the report as an end-game move toward a trade war with China, stocks and the dollar would fall a lot,'' said David Gilmore, a partner in consultants Foreign Exchange Analytics in Essex, Connecticut.

more...

Is the Treasury walking on eggs lately? They sure seem to be running their ideas past the folks on the Street a lot these days.

[54anickel]

22. Meet the Man Who Is Bringing Asia Together

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_pesek&sid=aRHJe.VMqtFI

Feb. 15 (Bloomberg) -- The next time you think your job is impossible, think of Haruhiko Kuroda.

The soft-spoken 61-year-old runs the Asian Development Bank, which may not seem like a huge deal to investors. After all, it's not the International Monetary Fund or even the World Bank. Based in the Philippines, the ADB is known for making loans to countries like Cambodia, Mongolia and Papua New Guinea.

Less known is the ADB's key role in accelerating development and reducing poverty in China and India. When you consider that investors and executives are pinning their hopes for prosperity on those two nations, the ADB's importance comes into sharper focus.

snip>

``Countries working together can do much more than they can alone,'' Kuroda said in Tokyo last week. ``They can create more growth, solve more problems, attract more investment, jobs and opportunities and consolidate the significant gains of recent decades.''

snip>

One immediate goal is creating an Asian entity resembling the Group of Seven industrialized nations. Such a grouping of finance ministers and central bankers ``will be extremely useful and will promote regional currency and financial stability,'' Kuroda said.

After all, what has the G-7 done for Asia lately? And does the G-7 really matter anymore? You'll be excused for not realizing the group -- along with Russian policy makers -- met in Moscow on Feb. 11, an event that barely registered with markets. The reason: The G-7 holds zero sway over economies that are doing the most to influence financial trends.

more...

[UpInArms]

55. China tells U.S. to act to cut trade deficit

http://www.iht.com/articles/2006/02/15/business/yuan.php

BEIJING The United States should ease curbs on high-technology sales if it wants to reduce its trade deficit with China, rather than ratcheting up rhetoric, a senior government economist in Beijing said on Wednesday.

Reacting to renewed pressure from Washington, the economist, Chen Wenjing, urged the United States to give up its "Cold War" attitude toward China.


Using stern language, the Bush administration said on Tuesday that it would exert more pressure on China to adhere to global free trade rules.

But those comments reflected domestic U.S. politics, said Chen, vice president of the Chinese Academy of International Trade and Economic Cooperation, the Commerce Ministry's think-tank.

"It's known to all that the United States curbs exports and selectively sells only Boeing aircraft, soybeans and cotton to China, and that is also discriminatory as it doesn't apply the same policy to other countries," he told Reuters.

"The United States needs to abandon its discriminatory policy and give up its Cold War mentality by removing the restrictions on high-tech exports to China," he said, referring to a ban intended to deny technology to the Chinese military.

...more...

[Tace]

11. MOGAMBO GURU: "Welcome to fiat money hell, suckers!"

Richard Daughty, the angriest guy in economics -- World News Trust

I am, apparently, on the edge of a nervous breakdown, as nothing is making sense anymore. For instance, Total Fed Credit created by the Federal Reserve actually went down last week by $5.2 billion. This sudden lapse into monetary sanity could be a ruse, because they say that Ben Bernanke, the new chairman of the Federal Reserve, has yet to gain the "trust" of the bond market until he can "prove himself" as an inflation fighter, which means heeding the advice of the stupid Mogambo to stop this insane over-creation of money and credit by the Federal Reserve, which must lead to higher debt loads and higher prices, both of which lead to misery and suffering, and one day they lead to economic collapse, as it always has and it always will. And then for the rest of my miserable life I am going to be standing where the Federal Reserve building used to be (having been torn down by a betrayed, angry citizenry), yelling, "I told you so, you stupid morons!"

But it is the "higher prices" thing that is the killer. As a perfect example (and which also personally gripes my big Mogambo butt (BMB)), when Alan Greenspan took over the Federal Reserve in 1987, you (meaning me) could get a donut and a cup of coffee for seventy cents, plus tax, leave a nice tip, flirt coyishly with the waitress, and then angrily take back the tip when she cruelly laughed in my face, all from a single dollar bill. Imagine my cruel surprise when I find that the price of a stale donut and a cup of weak coffee has now risen to $1.87! I was halfway through screaming at the snotty little waitress about how she is robbing me blind with her stinking little fraud, when she pulled out her H-P 12C calculator. Stunned, I watched as she deftly calculated that this was 5.6% inflation per year for those 18 years, like that was going to make it okay with me or something. But which it does not, which she soon found out to her dismay.

This inflation is NOT the result of a good job of fighting inflation, and, in fact, this is proof positive that Alan Greenspan is, without a doubt, the worst central banker America -- if not the world -- has ever seen, which is saying a lot, because most countries' central banks are filled to the brim with this exact same kind of idiot. Which, of course, leads me to make the relevant point that their governments are also filled with the same kind of idiots that we have in ours, and how could I resist bringing up the point that their stupid citizens believe that governments exist to tax and spend in order to solve more and more of the problems of human failings, just like the idiot citizens in this country, but they are wrong, just like we are wrong in this country, too.

But the bond market wants an inflation-fighter? At this, The Mogambo laughs! Hahaha! What a load of crap! Hell, the bond market accepted the horrid Alan Greenspan for 18 inglorious years, and that demonic little creep exploded the monetary aggregates, created the bank financing for staggering amounts of debt, both public and private, created an impenetrable web of lies about what counts as inflation and what doesn't, devalued the dollar by half, and facilitated and financed the buildup of such monstrous amounts of derivatives that the total, global face-value of that whole glop of toxic waste is estimated to be somewhere between $350 and $450 trillion dollars! If this seems like a lot of money to you, then you are right! It IS a lot of money! It is a HELL of a lot of money, and in fact it is TEN TIMES as much as the entire GLOBAL output of goods and services of everybody on the face of the freaking planet, for an entire freaking year, which is, obviously, both: 1) about $40 trillion per year, and 2) an example of an obnoxious loudmouth (me) working himself into a fit of Mogambo outrage and anger (MOAA) about it.

more

http://worldnewstrust.org/modules/AMS/article.php?storyid=2388

[UpInArms]

14. Ex-Enron Chief Lied Often About Web Unit, Witness Says

http://www.nytimes.com/2006/02/15/business/businessspecial3/15enron.html?_r=1&oref=slogin

HOUSTON, Feb. 14 — Jeffrey K. Skilling repeatedly lied about the state of Enron's struggling broadband Internet business and stubbornly refused to lower earnings targets, even when it became abundantly clear that the business lacked customers and deals that could generate revenue, the former head of the broadband unit testified Tuesday.

Kenneth D. Rice, taking the stand on Tuesday as the second witness in the criminal trial of the former Enron executives Mr. Skilling and Kenneth L. Lay, testified that Mr. Skilling misled analysts time and again by portraying Enron's broadband unit as surviving a meltdown in the telecommunications business.

In truth, Mr. Rice said, the situation had become so dire that Enron was forced to lay off employees and drastically cut costs. When the business needed to meet earnings targets, it turned to complex financial structures like LJM, a secretive, off-the-books partnership run by the chief financial officer, Andrew S. Fastow, and other transactions that sacrificed future revenue to book current earnings, he testified.

<snip>

Mr. Skilling saw the broadband business as a way to increase Enron's profit and share price. Mr. Skilling was obsessed with Enron's stock price, and installed stock tickers everywhere, from the Enron building's elevators to the parking garage, Mr. Rice said. The day Enron's broadband strategy was announced in January 2000, the stock price rose to $65 a share, from $50.

<snip>

Mr. Rice said that he lingered in Mr. Skilling's office and told him he was concerned about broadband's ability to meet its earnings targets, which included a promised loss of $65 million for the year. Mr. Rice argued the loss could be twice as large, but Mr. Skilling insisted Mr. Rice stick to the rosier outlook. "He said we had a lot of pressure from analysts," Mr. Rice said, "and he didn't need any more bad news."

...more...

[UpInArms]

17. Malaysia Paid Abramoff $1.6M for Bush Photo-Op

Did Mahathir pay $1.6m to meet Bush?

http://www.theage.com.au/ffximage/2006/02/15/svBUSH_wideweb__470x321,0.jpg
Grip and grin: Mahathir Mohamed and George Bush share a moment in the Oval Office in May 2002.
Photo: Reuters

WHEN the Malaysian Government sought to repair its tarnished image in the US by arranging a meeting between President George Bush and controversial Prime Minister Mahathir Mohamed in 2002, it did what many other well-heeled interests in Washington did: it called on lobbyist Jack Abramoff.

It was a tall order. Dr Mahathir had been chastised by the Clinton administration for anti-Semitic statements and for jailing his political opponents. But it was important to the Malaysians, according to an Abramoff associate who attended meetings with Abramoff and the Malaysian ambassador.

According to the associate, Abramoff contacted Bush adviser Karl Rove at least four times to arrange a meeting.

Finally, this associate said, Mr Rove's office called to tell Abramoff that Dr Mahathir would be getting an official White House invitation.

In May 2002, the Malaysian leader met Mr Bush in the Oval Office and photographs were beamed around the world.

Abramoff was paid $US1.2 million ($A1.6 million) from the Malaysian Government for his services in 2001 and 2002, according to an Abramoff associate. Documents obtained by Senate investigators appear to confirm at least $US900,000 of that amount.

...more...

[UpInArms]

20. Jack Who? (echos of "Kenny Boy" Who?)

http://www.washingtonpost.com/wp-dyn/content/article/2006/02/14/AR2006021401899.html

IT'S NOT, as photos for a superlobbyist's power wall go, a terribly impressive shot: President Bush, his back to the camera, shaking the hand of Raul Garza, chief of the Kickapoo tribe of Texas. In the foreground, Karl Rove, smiling at a 2001 White House meeting to promote the president's tax cuts. And there at the back of the room, only his slightly blurry head visible, the chief's lobbyist: Jack Abramoff. Which, of course -- along with the refusal of the Bush administration to release information about what Mr. Abramoff was doing at the White House, how often he was there and with whom -- is what makes the picture a big deal.

Kim Eisler of Washingtonian magazine has reported that the disgraced lobbyist met with Mr. Bush almost a dozen times over the past five years and was invited to the president's ranch in Crawford, Tex., in 2003. According to Mr. Abramoff, who raised at least $100,000 for Mr. Bush's reelection, the president was once well acquainted enough with the lobbyist (or at least well briefed enough) to inquire about his twins. But now, as in the photo, Mr. Abramoff somehow has gone blurry in Mr. Bush's memory. The president doesn't recall meeting or posing for pictures with him.

Mr. Rove's memory is fuzzy, too, as luck would have it. His name, according to the Associated Press, was rather routinely dropped by Mr. Abramoff as his big White House contact. Mr. Abramoff's former assistant, Susan Ralston, went to the White House to work for Mr. Rove, and, the Associated Press reported yesterday, Mr. Rove's office helped set up a 2002 meeting between Mr. Bush and the prime minister of Malaysia, another Abramoff client. One Abramoff business associate reported being in the lobbyist's office when Mr. Rove's office called to confirm the meeting.

All of this recalls the question we've been asking for a few weeks now: Why doesn't the White House just release information about Mr. Abramoff's meetings and other visits there? This is a man who has pleaded guilty to trying to bribe public officials. The White House says he turned up for a "few staff level meetings" and two Hanukkah parties. Whom did he meet? About what?

...more...

[UpInArms]

38. Abramoff And Medicare

http://www.tompaine.com/articles/2006/01/24/abramoff_and_medicare.php

Thanks to John Holbo over at Crooked Timber for unearthing a gem from Jacob Hacker and Paul Pierson's new book that shows Jack Abramoff's connection to the Medicare fiasco we now have on our hands.

Holbo found this nugget in Hacker and Pierson's book, Off Center: The Republican Revolution and the Erosion of American Democracy:

When the debate over prescription drug coverage picked up in the late Clinton years, the pharmaceutical lobbying group PhRMA (Pharmaceutical Research and Manufacturers Association, pronounced "Farma") went so far as to establish a faux grassroots organization that putatively represented the elderly: “Citizens for a Better Medicare.” Despite the lofty title, Citizens for a Better Medicare had few, if any, actual citizens on its rolls Its main activity was to spend millions of PhRMA dollars on slick ad campaigns supporting an industry-friendly drug plan. When Citizens for a Better Medicare came under fire, PhRMA switched its “grassroots” efforts over to the United Seniors Association, a conservative direct-mail organization that had cut its teeth with frightening scare letters to senior citizens. The United Seniors Association board included, among other GOP political operatives, Jack Abramoff …

Holbo goes on to point out how such a "factoid" could be useful as Democrats seek to link the recent corruption scandals to the GOP's function as servant to powerful corporate interests. He's right, but to do this successfully, Democrats have to find a way to talk about corruption that helps voters understand that the GOP political machine stacks the deck against the interests of ordinary citizens. The ethics problems in Washington aren't just about "special interests," they're about "monied interests." So low-income senior citizens and their underfunded advocacy groups can't compete in the Medicare reform battle against the arm-twisting purchased by the pharmaceutical companies and delivered by the Republican Party. This bipartisan focus on trips taken and dinners consumed by individual congressmen and women obscures the sinister operation of the K Street project and poisonous influence of corporate campaign contributions. Maybe Dems should adopt "pay-to-play" as the new mantra to describe the system put in place by Republicans.

...more...

[UpInArms]

23. Bush Fundraiser Noe Indicted In Ohio Embezzlement

http://www.northcountrygazette.org/articles/021406OhioEmbezzlement.html

CLEVELAND, OHIO--Charges of public corruption among Republicans in Ohio have widened with a 53-count indictment being filed in Lucas County Common Pleas Court Monday against Thomas W. Noe, a former Republican party fundraiser and coin dealer.

As the culmination of a 10-month investigation, Noe, 51,former chairman of the Lucas County Republican Committee was charged with embezzling at least $1 million and perhaps more than $3 million from the state. He pleaded not guilty and was released after posting $500,000 bail. He has been living in Florida with his wife, Bernadette.

The indictment is the result of Noe's handling of a $50 million investment fund created by the Ohio Bureau of Worker's Compensation by buying and selling rare coins. Noe has managed the bureau's investments since 1998. Prosecutors said that he wrote himself checks for hundreds of thousands of dollars.

He has been charged with one count of racketeering, 11 counts of theft, 11 counts of money laundering, eight counts of tampering with public records and 22 counts of forgery. All charges are felonies. Prosecutors allege that Noe forged checks, tampered with records interchanged state money with his own personal accounts.

<snip>

In October, a federal grand jury returned a three count indictment against Noe for allegedly laundering $45,000 into President Bush's re-election campaign. Noe, a close personal friend of Ohio Gov. Robert Taft, had surrendered to the FBI in Miami and was released after posting $1 million bond secured by the property in the Florida Keys that is in the name of his wife.

...more...

[UpInArms]

43. White House Joked About Cheney Shooting--Before Victim's Heart Attack

http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1001996628

NEW YORK Another White House plan to deal with tragedy went awry Tuesday. Just as it had apparently settled on joining latenight comics in joking about Vice President Cheney's shooting accident, the victim, Harry Whittington suffered a heart attack when birdshot fired by Cheney migrated to his heart.

Just this morning, White House Press Secretary Scott McClellan had quipped that the burnt orange school colors of the University of Texas championship football team that was visiting the White House shouldn't be confused for hunter's safety wear.

"The orange that they're wearing is not because they're concerned that the vice president may be there," joked McClellan. "That's why I'm wearing it," he said, pointing to his tie.

The president's brother, Florida Gov. Jeb Bush, took a similar jab after slapping an orange sticker on his chest from the Florida Farm Bureau that read, "No Farmers, No Food."

"I'm a little concerned that Dick Cheney is going to walk in," the governor cracked during an appearance in Tampa Monday.

...a bit more...

[54anickel]

49. I notice all the articles in LBN on this that are pinning ALL of the blame

for a lack of transparency on Cheney. Seems Rove is steering this ship yet again because suddenly there's little mention of what the WH knew and when. Will the WH use this as an excuse to dump Darth Cheney? Seems nearly all investigative roads these days lead to his doorstep and now I see an article that says Spygate was all Cheney's idea as well. Perhaps he's gotten too hot to protect. Is Cheney willing to fall on the sword or is he being set up? :shrug:

Sure is getting interesting as the Repukes set in to eat their own.

[UpInArms]

21. Tyson to close 2 Nebraska plants - layoff 1,665 people

9:07am 02/15/06 Tyson sees Q2 charge 8c for closings - MarketWatch.com

9:06am 02/15/06 Tyson to urge affected employees to transfer to other plants - MarketWatch.com

9:04am 02/15/06 Tyson shuts Norfolk, Neb., beef-processing plant - MarketWatch.com

9:04am 02/15/06 Tyson shuts West Point, Neb., beef-slaughter plant - MarketWatch.com

9:05am 02/15/06 Tyson to cut 365 jobs at West Point, 1,300 at Norfolk - MarketWatch.com

9:03am 02/15/06 Tyson Foods to consolidate Nebraska beef operations - MarketWatch.com

and here's the lovely spinning headline:

Plant Consolidation to Improve Tyson Beef Production Efficiency

[hatrack]

25. If the economy weren't "roaring", I'd be worried about this!

Good thing that everything's A-OK in scrubbed shiny morning America!

[ozymandius]

27. markets are open for bidness

9:35
Dow 11,025.27 -3.12 (-0.03%)
Nasdaq 2,256.57 -5.60 (-0.25%)
S&P 500 1,274.24 -1.29 (-0.10%)
10-Yr Bond 45.94 -0.20 (-0.43%)
NYSE Volume 61,301,000
Nasdaq Volume 116,245,000

09:15 am : S&P futures vs fair value: -0.5. Nasdaq futures vs fair value: -4.0.

09:03 am : S&P futures vs fair value: -0.1. Nasdaq futures vs fair value: -2.0. Traders retain a wait-and-see stance ahead of Bernanke's monetary policy report. The price of crude futures contracts are on the rise (+0.7%), but are holding at $60.00 per barrel. On the corporate front, Merrill Lynch (MER) and BlackRock (BLK) confirmed their merger. Both boards have approved the plan to create one of the world's largest asset management firms, and the deal is expected to close in Q3. Today's earnings calendar features a good amount of upside results, but none should have much impact on the broader market. Contributing to the market's cautious stance is anticipation of results from Hewlett-Packard (HPQ) and Applied Materials (AMAT) after today's bell.

[UpInArms]

29. April Gold @ $545.20 oz - March Silver @ $9.265 oz

9:37am 02/15/06 APRIL GOLD FALLS $3.70 TO $545.20/OZ IN MORNING TRADING

9:37am 02/15/06 MARCH SILVER DOWN 5C AT $9.265/OZ IN NY

9:37am 02/15/06 MARCH COPPER FALLS 3.25C, OR 1.4%, TO $2.234/LB

[54anickel]

30. Why Gold Stocks Will Rise

http://www.thestreet.com/_more/markets/metals/10268399.html

I'm breathing a sigh of relief at the selloff in energy and gold stocks. In the last few weeks, enthusiasm for the two sectors had risen to such a level that I couldn't find anybody with anything bad to say about these stocks. Everyone wanted to buy. And frankly, that had me worried.

snip>

Bring On the Unconverted

But the simple truth is that stocks go up when doubting investors are converted into buyers. If everyone is a believer, there isn't a reservoir of potential buyers ready to increase demand for shares. You make more money investing in the trend when at least a sizable minority of investors doubts the trend -- or worries that it's about to come to an end -- and resists buying into the trend even while other investors are making money.

As long as the fundamental trend is intact -- and I believe it is in the energy and gold sectors -- I'm happy to see signs of skepticism. And I get positively giddy when I see a story like Commodity Bubble's Burst Is Good for Stocks from TheStreet.com.

Bring me your worriers, your doubters, your shorts with a need to cover. In today's column, I'm going to take a look at the trend ahead for gold stocks.

more...

[UpInArms]

31. "Chopper" Ben Speaks

10:00am 02/15/06 BERNANKE: PLEDGES TO FOLLOW GREENSPAN'S POLICY APPROACH

10:00am 02/15/06 BERNANKE: LOTS OF PROGRESS MADE IN REMOVING ACCOMMODATION

10:00am 02/15/06 BERNANKE SEES MODEST SOFTENING IN HOUSING, NOT SHARP DROP

10:00am 02/15/06 BERNANKE: ECONOMIC EXPANSION 'REMAINS ON TRACK'

10:00am 02/15/06 BERNANKE: UPCOMING POLICY ACTIONS DEPEND ON DATA

10:00am 02/15/06 FOMC SEES 2% CORE INFLATION IN '06, 1.75%-2% IN 2007

10:00am 02/15/06 FOMC SEES 3.5% GDP GROWTH IN 2006, 3%-3.5% IN 2007

10:00am 02/15/06 BERNANKE: OUTPUT MAY 'OVERSHOOT,' CAUSING PRICE PRESSURE

10:00am 02/15/06 BERNANKE AGREES WITH FOMC MORE RATE HIKES MAY BE NEEDED

Bernanke agrees more rate hikes may be needed

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BEF294448%2D80DA%2D4790%2D87AD%2DE419989ED6E5%7D&dateid=38763%2E4170483102%2D860757736&siteID=mktw&scid=0&doctype=806

WASHINGTON (MarketWatch) -- New Fed chief Ben Bernanke said Wednesday that more rate hikes may be needed because of the threat of higher inflation from a strong economy and higher energy prices. The message was almost identical to the Federal Open Market Committee's last policy statement. Bernanke said the Fed has come a long way in hiking rates and removing accommodation and that further rate moves will become much more dependent on the economic data. Bernanke said economic growth remained on track despite the weak fourth-quarter GDP data. Bernanke told the Congress that a sharp downturn in the housing market was a risk to the expansion, but said only a "modest softening" was expected.

[UpInArms]

33. Markets decide they "love" Chopper Ben

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B17D52E2C%2D984D%2D46E0%2D83F9%2D1309F75C0974%7D&dateid=38763%2E4366113657%2D860762602&siteID=mktw&scid=0&doctype=806

Dow reaches 4 1/2-yr. high

NEW YORK (MarketWatch) -- The Dow industrials ($INDU 11,055.29, +26.90, +0.2% ) reached the highest level seen since June 2001 on relief that new Federal Reserve Chairman Ben Bernanke was not more hawkish on interest rates in his testimony to Congress. The Dow was last up 35 points at 11,063. The Nasdaq Composite ($COMPQ 2,275.16, +12.99, +0.6% ) was up 14 points at 2,276.

[UpInArms]

36. "Chopper" Ben says to ignore yield curve inversion

10:35am 02/15/06 BERNANKE: YIELD CURVE INVERSION NOT SIGNALLING ECON. SLOWDOWN

[UpInArms]

39. Bernanke says higher U.S. rates may be needed

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-02-15T153908Z_01_N15242557_RTRIDST_0_ECONOMY-BERNANKE-UPDATE-1.XML

WASHINGTON, Feb 15 (Reuters) - Federal Reserve Chairman Ben Bernanke on Wednesday said the U.S. economy was running so close to capacity that it faced heightened risks of an outbreak in inflation that could require higher interest rates to tame.

In his first extensive remarks since taking office two weeks ago, Bernanke appeared to be making an effort to establish credentials as an inflation "hawk" by stressing the need to keep price pressures contained.

"The risk exists that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading ultimately -- in the absence of countervailing monetary policy action -- to further upward pressure on inflation," Bernanke told the U.S. House of Representatives Financial Services Committee.

The remarks pushed prices for U.S. stocks and government bonds down and boosted the value of the dollar.

Presenting the Feds semiannual policy report to Congress, Bernanke said recent economic data, including booming January retail sales, "suggests that the economic expansion remains on track" after a strong 2005.

But he warned of inflation pressures, stemming in part from high energy prices.

...more...

[UpInArms]

40. "Chopper" Ben tells consumers to continue to "bend over"

10:49am 02/15/06 BERNANKE: ENERGY PRICES LIKELY TO STAY HIGH

[UpInArms]

42. link to text of "Chopper" Ben's speech

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B51928835%2D411F%2D4F6C%2DBF36%2D4BB9D4395311%7D&symbol=&siteid=mktw

Inflation pressures increased in 2005. Steeply rising energy prices pushed up overall inflation, raised business costs, and squeezed household budgets. Nevertheless, the increase in prices for personal consumption expenditures excluding food and energy, at just below 2 percent, remained moderate, and longer-term inflation expectations appear to have been contained.

<snip>

Overall, the financial health of households appears reasonably good. Largely reflecting the growth in home mortgages, total household debt continued to expand rapidly in 2005. But the value of household assets also continued to climb strongly, driven by gains in home prices and equity shares. To some extent, sizable increases in household wealth, as well as low interest rates, have contributed in recent years to the low level of personal saving. Saving last year was probably further depressed by the rise in households' energy bills. Over the next few years, saving relative to income is likely to rise somewhat from its recent low level.

<snip>

For the most part, the financial situation of state and local governments has improved noticeably over the past couple of years. Rising personal and business incomes have buoyed tax revenues, affording some scope for increases in state and local government expenditures. At the federal level, the budget deficit narrowed appreciably in fiscal 2005. Outlays rose rapidly, but receipts climbed even more sharply as the economy expanded. However, defense expenditures, hurricane relief, and increasing entitlement costs seem likely to worsen the deficit in fiscal 2006.

[54anickel]

45. Lying sack of pooh! "receipts climbed as the economy expanded" my

A$$!!!

The climb in tax receipts was a one time boost thanks to the "Job Destruction Act" and it's HUGE tax break for multinationals to repatriot their foreign earning. Those were earning that would otherwise never see the taxing light of day! The AMT will probably off-set some of the loss of that one-time increase in receipts, but it won't be enough, and just how damn fair is the dependence on AMT to the working class anyway.

Just how bad will fiscal 2006 REALLY be, since the money for the war in Iraq is off the books, hence untouchable for cuts? He's laid out what's up for the chopping block quite nicely - Veteran benefits and proper equipment for our soldiers, hurricane relief, and SS and Medicare that he sooooo Greenspinishly labeled entitlements.

[UpInArms]

48. "Chopper" Ben doesn't want minimum wage hike

Bernanke backs tax credits over higher minimum wage

WASHINGTON, Feb 15 (Reuters) - Federal Reserve Chairman Ben Bernanke said on Wednesday that tax credits might be a better way to boost the income of working-class Americans than raising the minimum wage, which he said lowers overall employment.

"I think it (a higher minimum wage) does lower employment," Bernanke told lawmakers. "However, I note that the literature is very controversial on this subject.

"One might consider alternative ways of helping working-class Americans -- for example, the earned income tax credit which delivers money to working families without necessarily the employment effect."

In his debut semi-annual testimony to Congress as chairman of the central bank, Bernanke also said that he favored free and open international trade and believed China should be urged to respect intellectual property rights.

[UpInArms]

51. Surprise (NOT!): "Chopper" Ben says ethics rules don't apply to WUHSPH

12:11pm 02/15/06 BERNANKE:GREENSPAN RECENT SPEECHES DON'T VIOLATE ETHICS RULE

[UpInArms]

57. "Chopper" Ben is "broken window" advocate

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-15T173634Z_01_WAT004864_RTRIDST_0_ECONOMY-BERNANKE-BUDGET-URGENT.XML

"Reducing the fiscal deficit is very important -- doing so increases national savings and reduces the burden on our grandchildren," Bernanke told lawmakers.

"But I don't feel it's appropriate for me to make recommendations to Congress about their procedures," he added.

"I do hope that there will be thinking in Congress about the long-term implications of spending and tax programs, so that we'll be looking at not only the near term but the very long-term effects."

In his first semi-annual testimony to Congress as Fed chairman, Bernanke said that the United States also had a "very serious long-term fiscal problem" that needed to be addressed.

He said that the effects of reconstruction around the Gulf coast following devastating hurricanes last year is one of the reasons why 2006 economic growth might be faster than originally forecast.

"Mechanically ... rebuilding and reconstruction does add to economic activity and is one of the reasons why 2006 might be stronger than we thought."

[UpInArms]

32. 10:02 EST numbers and blather

Dow 11,011.42 -16.97 (-0.15%)
Nasdaq 2,259.95 -2.22 (-0.10%)
S&P 500 1,273.81 -1.72 (-0.13%)
10-Yr Bond 4.598 -0.16 (-0.35%)

NYSE Volume 260,310,000
Nasdaq Volume 288,058,000

09:40 am : As expected, the equity market started the session near the unchanged mark. Investors are standing in wait-and-see fashion ahead of Dr. Bernanke's monetary policy report, which is scheduled to begin at 10:20 ET. The market will attempt to assess just how hawkish he will be toward fighting inflation, and to what degree he considers continued strong economic growth a factor that will lead to inflationary pressures that require continued monetary tightening. Our view is that Bernanke is likely to present a strong anti-inflationary stance and show his mettle as a central banker. Further contributing to the market's apprehension are impending earnings reports from Hewlett-Packard (HPQ) and Applied Materials (AMAT), both slated for after the bell. Energy prices continue to be watched. Crude is currently on the rise (+0.6%), but is holding just below $60 per barrel. The EIA's 10:30 inventory report may affect energy trade. DJ30 -4.00 NASDAQ -3.68 SP500 -0.88

[Maeve]

37. Nice little jump, but faltering

Dow 11,042.56 +14.17 (+0.13%)
Nasdaq 2,272.80 +10.63 (+0.47%)
S&P 500 1,278.07 +2.54 (+0.20%)
10-Yr Bond 45.92 -0.22 (-0.48%)

10:30 am : The market is exhibiting a modestly positive bias following the release of Fed Chairman Bernanke's prepared text for the House Financial Services Committee. The text reiterates Bernanke's desire to maintain continuity with the practices employed by the Fed under Alan Greenspan. Moreover, he conceded that he concurs with the Jan. 31 directive that noted some further policy firming may be necessary, but he also acknowledged that it is clear substantial progress has been made in removing monetary policy accommodation. Nonetheless, he maintains that monetary policy actions will be increasingly dependent on incoming data. While the initial response by the market has been positive, it is too early to say if there is much conviction behind it, as he hasn't said anything to offer a clear sense of exactly when the tightening action will stop

And thanks to my other "secret admirers" for the hearts! :loveya:

[Maeve]

54. 12:27--told ya it was faltering

Dow 11,009.02 -19.37 (-0.18%)
Nasdaq 2,265.03 +2.86 (+0.13%)
S&P 500 1,273.71 -1.82 (-0.14%)
10-Yr Bond 46.20 +0.06 (+0.13%)

[ozymandius]

56. Hi Maeve. You are so right.

12:34
Dow 11,001.66 -26.73 (-0.24%)
Nasdaq 2,263.64 +1.47 (+0.06%)
S&P 500 1,272.72 -2.81 (-0.22%)
10-Yr Bond 46.24 +0.10 (+0.22%)
NYSE Volume 1,116,686,000
Nasdaq Volume 948,428,000

11:30 am : The market has returned to the unchanged mark. The realization that the duration of the Fed's rate hike campaign remains unknown tempers the market's initially positive response to the Chairman's testimony. Leadership is absent and limited to the Energy sector's 0.3% advance. Declines are also relatively modest, with Industrials experiencing some profit-taking and leading the laggards. The Treasury market similarly sits near unchanged territory as Bernanke's comments are digested. The benchmark 10-year note (00/32) is presently yielding 4.61%. DJ30 -10.96 NASDAQ +2.04 SP500 -1.52 NASDAQ Dec/Adv/Vol 1199/1613/768.8 mln NYSE Dec/Adv/Vol 1153/1880/629.4 mln

[UpInArms]

35. Treasuries cut gains on Bernanke inflation warning

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-15T151543Z_01_NYG000133_RTRIDST_0_MARKETS-BONDS-BERNANKE-URGENT.XML

NEW YORK, Feb 15 (Reuters) - U.S. Treasury debt prices erased nearly all of their early gains after new Federal Reserve Chairman Ben Bernanke warned on Wednesday of inflation risks without proper "policy action" from the central bank.

At the same time, Bernanke signaled that the Fed's campaign to raise interest rates since June 2004 is mature, saying the central bank has made "substantial progress" in removing monetary policy accommodation.

Ten-year notes <US10YT=RR> stood just 1/32 higher to yield 4.610 percent, compared with 4.612 percent on Tuesday.

Two-year notes <US2YT=RR> turned steady to yield 4.682 percent, against 4.691 percent on Tuesday.

[JNelson6563]

58. 12:46 and the magic is wearing off

Dow 10,995.66 -32.73 (-0.30%)
Nasdaq 2,261.85 -0.32 (-0.01%)
S&P 500 1,271.98 -3.55 (-0.28%)
10-Yr Bond 4.626% +0.01

Too many doses of reality to sustain a magical rally I guess. Let's just hope it doesn't get bloody. Treasuries is worrisome IMO. The 2 yr. has as higher yield than teh 30. Oy.

Julie

[UpInArms]

60. Hiya Julie!

Great minds thinking alike and all that :D

:hug:

[UpInArms]

59. 12:47 EST fickle markets decide they don't like "Chopper" Ben

Dow 10,993.41 -34.98 (-0.32%)
Nasdaq 2,261.55 -0.62 (-0.03%)
S&P 500 1,271.83 -3.70 (-0.29%)
10-Yr Bond 4.626 +0.12 (+0.26%)

NYSE Volume 1,175,945,000
Nasdaq Volume 990,329,000

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-02-15T174129Z_01_N15233481_RTRIDST_0_MARKETS-STOCKS-UPDATE-8.XML

NEW YORK, Feb 15 (Reuters) - U.S. stocks fell slightly on Wednesday as new Federal Reserve Chairman Ben Bernanke made reassuring remarks on the economy's performance, but suggested the outlook was for more interest-rate increases.

Earlier, the blue-chip Dow average hit a fresh high of 11,068.74 after Bernanke spoke.

Bernanke warned in congressional testimony that inflation would pose a risk without proper "policy action" from the Fed, which has raised rates 14 times since June 2004 -- the latest being a quarter-point hike in the fed funds rate in January.

"The bottom line is clearly the Fed has dashed the hopes of a hiatus after this January increase," said Ned Riley, chief investment officer at Riley Asset Management, in Boston.

Higher interest rates raise borrowing costs for businesses and put a damper on consumer spending.

...more...

[UpInArms]

61. 1:20 EST "Chopper" Ben shuts up - markets improve

Dow 11,032.00 +3.61 (+0.03%)
Nasdaq 2,268.61 +6.44 (+0.28%)
S&P 500 1,275.77 +0.24 (+0.02%)
10-Yr Bond 4.624 +0.10 (+0.22%)

NYSE Volume 1,315,703,000
Nasdaq Volume 1,084,034,000

1:16pm 02/15/06 BERNANKE TESTIMONY CONCLUDES

[Maeve]

62. LOL--I like your headline!

I'd be surprised if the pixies let the market take a beating on Bernanke's first time at bat...

[skids]

63. If I may presume -- today's theme song

"Love Rollercoaster" by the Ohio Players.

[AnneD]

66. Nah.....I think the theme is...

The Thrill Is Gone.....BB King. Nice, Bluesy

[Roland99]

64. Must have shot up after Ben declared: "All's well"

[ozymandius]

67. just before the close...

3:48
Dow 11,053.93 +25.54 (+0.23%)
Nasdaq 2,274.32 +12.15 (+0.54%)
S&P 500 1,279.26 +3.73 (+0.29%)
10-Yr Bond 46.06 -0.08 (-0.17%)
NYSE Volume 2,097,570,000
Nasdaq Volume 1,667,490,000

3:30 pm : Heading into the close of trade, the major averages hang on to moderate gains. Meanwhile, the Treasury market managed to stage a late-day recovery. That market had risen prior to Dr. Bernanke's testimony, but fell upon release of the text. The 10-year is up two ticks and yielding 4.60%. Like stock investors, bond traders were not surprised by the Fed Chairman's comments, and received the message that future rate hikes will be increasingly dependent upon the data. With respect to the yield curve, it remains inverted. The two-year (-01/32) presently offers 4.70%, versus the 10-year's 4.60%.DJ30 +21.61 NASDAQ +9.80 SP500 2.93 NASDAQ Dec/Adv/Vol 1267/1745/1.57 bln NYSE Dec/Adv/Vol 1326/1930/1.47 bln

[ozymandius]

68. closing numbers

Dow 11,058.97 +30.58 (+0.28%)
Nasdaq 2,276.43 +14.26 (+0.63%)
S&P 500 1,280.00 +4.47 (+0.35%)
10-Yr Bond 46.06 -0.08 (-0.17%)
NYSE Volume 2,317,462,000
Nasdaq Volume 1,783,054,000

4:20 pm : Wednesday's spotlight rested upon new Federal Reserve Chairman Ben Bernanke. His testimony before the House Financial Services Committee was widely anticipated and closely watched. Upon the market's initial digestion, the indices reflected a modestly positive bias, but then gave back gains before managing to close moderately higher. The Fed Chief's comments essentially offered nothing surprising, and the market took comfort in that. His emphasized desire to maintain continuity with the Greenspan Fed further assuaged some of the market's anxiety that had built in expectation of his address.

Ultimately, however, he didn't do anything to dispel the market's sense of uncertainty as to when the monetary tightening cycle will end. While the Chairman did note that clear substantial progress has been made in removing monetary policy accommodation, his concession that monetary policy actions will be increasingly dependent on incoming data makes it clear that he will endorse further tightening if the data warrant it. The Chairman has not changed the perception that a rate hike is coming on March 28; his concern about strong economic growth suggests that incoming data may in fact lead to two more rate hikes, and Fed funds futures suggest another rate hike following that one is more likely than not. We remain concerned that if two more rate hikes are in fact coming, the stock market will have trouble posting significant gains through mid-year. The market does not seem as troubled by that as we are.

A separate factor that affected trade today was a 3.0% drop in the price of crude. Yesterday, oil closed below $60 per barrel for the first time this year. Today, crude finished at $57.83. The catalyst was a much better than expected inventory report from the Department of Energy. Last week, crude supply increased more than four times as much as the market had expected. Gasoline supply also rose much more than estimated, and distillate inventory unexpectedly rose. The energy price action incited some selling across the Energy sector (-0.3%), but, overall, it held up relatively well. Continued pullbacks in metals fueled more profit-taking across the Materials sector (-0.3%).

The energy price declines were supportive for the broader market. In particular, retailers built off of yesterday's momentum that strong retail sales data fostered, and transportation stocks outperformed.

Driven by strength in biotechs and some broad-based buying, Healthcare (+0.7%) led the market. A moderate advance in the Financial sector (+0.4%) further helped the indices rise. Brokers hit an historic high as expectations for solid M&A activity during 2006 continue to be fulfilled. To that end, Merrill Lynch (MER 75.26 +0.10) and BlackRock (BLK 152.01 +6.05) confirmed their plans to merge today. Merrill will combine its investment management business with BlackRock's for a 49.8% stake. Both boards have approved the deal to form one of the world's largest asset management firms, which should close during Q3. The corporate front was a relatively quiet one, and took a back seat to the economic front that Bernanke dominated. With the understanding that Fed policy will be increasingly dependent on the data, the focus is likely to remain there. In particular, the market awaits January PPI on Friday and January CPI on Wednesday. DJ30 +30.58 NASDAQ +14.26 SP500 +4.47 NASDAQ Dec/Adv/Vol 1145/1877/1.79 bln NYSE Dec/Adv/Vol 1187/2068/1.73 bln