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Stocks Lower into Final Hour on Fed Rate Hike Worries
at 2006-02-06 23:45:56
BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Semiconductor longs, Medical longs and Internet longs. I took profits in some existing longs and added to my (IWM) and (QQQQ) shorts this afternoon, thus leaving the Portfolio 75% net long. The tone of the market is mildly negative as the advance/decline line is slightly lower, most sectors are declining and volume is heavy. The ECRI Weekly Leading Index fell slightly to 138.20 this week from 138.30 the prior week. This is still near last week's cycle high and up from 132.00 during the last week of May 2005. This gauge of future economic activity is still forecasting healthy U.S. growth. Measures of investor anxiety are mostly lower. I expect US stocks to trade modestly higher into the close from current levels on lower long-term rates and short-covering.
Weekly Scoreboard*
at 2006-02-06 23:45:56
Indices
S&P 500 1,264.03 -1.53%
DJIA 10,793.62 -1.04%
NASDAQ 2,262.58 -1.81%
Russell 2000 724.22 -1.09%
S&P Equity Long/Short Index 1,164.53 +1.73%
S&P Barra Growth 611.84 -1.57%
S&P Barra Value 657.78 -1.49%
Morgan Stanley Consumer 589.28 -1.62%
Morgan Stanley Cyclical 779.83 -2.37%
Morgan Stanley Technology 526.48 -3.01%
Transports 4,263.56 -1.07%
Utilities 405.37 -2.57%
S&P 500 Cum A/D Line 7,796 -7.0%
Bloomberg Crude Oil % Bulls 40.0 -31.61%
Put/Call 1.06 +35.90%
NYSE Arms 1.21 +32.97%
Volatility(VIX) 12.96 +8.27%
ISE Sentiment 159.00 -19.70%
AAII % Bulls 44.70 +45.27%
AAII % Bears 33.33 unch.
US Dollar 89.89 +.63%
CRB 345.90 -.31%
ECRI Weekly Leading Index 138.20 -.07%
Futures Spot Prices
Crude Oil 65.37 -3.64%
Unleaded Gasoline 168.17 -7.34%
Natural Gas 8.61 +.38%<
Market Week in Review
at 2006-02-06 23:45:55
S&P 500 1,264.03 -1.53%*
Click here for the Weekly Wrap by Briefing.com.
BOTTOM LINE: Overall, last week's market performance was negative as US stocks posted losses even as economic data was mostly positive, energy prices fell and long-term rates were stable. The advance/decline line fell, most sectors declined and volume was heavy on the week. Measures of investor anxiety were higher. However, the AAII % Bulls rose to 44.7% and is now back to average levels. The average 30-year mortgage rate rose to 6.23% which is still only 102 basis points above all-time lows set in June 2003. The benchmark 10-yea
Weekly Outlook
at 2006-02-06 23:45:55
Click here for The Week Ahead by Reuters
There are a few economic reports and a number of significant corporate earnings reports scheduled for release this week.
Economic reports for the week include:
Mon. - None of note
Tues. - Consumer Credit
Wed. - None of note
Thur. - Initial Jobless Claims, Wholesale Inventories
Fri. - Trade Balance, Monthly Budget Statement
Some of the more noteworthy companies that release quarterly earnings this week are
Monday Watch
at 2006-02-06 23:45:55
Weekend Headlines
Bloomberg:
- President Bush and first lady Laura Bush will attend the funeral of Coretta Scott King, the widow of civil rights leader Martin Luther King Jr., on Feb. 7 in Atlanta.
- Palestinian Authority officials may have stolen billions of dollars from public funds, Palestinian Attorney General Ahmed Al-Meghani said.
- The UN nuclear watchdog agency voted to refer Iran to the Security Council over a nuclear program other countries fear is a cover for making weapons.
- The US dollar rose for a fourth straight week against the euro and a third versus the yen as reports showing US economic growth remains robust bolstered expectations the Fed will lift rates again in March.
- President Bush said Congress should spend more money on grants for teachers and research-related tax breaks for companies as a way of helping the US compete economically with other countries.
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