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Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 2 repurchase operations last night:
- a $7.75billion, overnight repurchase with $7.75billion in T-backed collateral ; and
- a $4billion, 14-day repurchase with $4billion in T-backed collateral.
With that amount of rocket fuel in the tank, the "buying on pullbacks" hypothesis was always going to yield fruit - however the touchpaper remained unlit at 10 a.m., a the market continued to digest weaker-than-anticipated
- Productivity and Unit Labour Cost data;
- Factory Orders (although non-defence capital good ex aircraft was up 2.1%); and
- ISM Non-manufacturing data.
On the plus side, fewer new registrants for unemployment benefits, which strengthens the hypothesis (posted here yesterday) that the jobs data scheduled for Friday will surprise to the upside.
Still, when Uncle Easy and his grizzled cronies pump that much jungle juice into the market, you expect something more enervating to happen at 10 a.m.; the market continued to soften (albeit weakly) all the way to 1 p.m., and only the thin-ness of lunchtime trade enabled any traction. By 3 p.m. the market had softened after a one-hour jamjob during the 1-2 lunch break, but stayed well off its intraday lows and eventually closed at about the same level as it was at when the 10 a.m. hooter sounded.
All things considered, I should have been more forceful yesterday; I was considering (aloud) the possibility of a bias change (from "buying oversold" to "selling overbought"), but got a bit scared... buk.. buk.. buk-buk-buKERRRRK (that's a chicken noise). Still, no real harm done, and it's helped those AAPL $75 puts get back some ground.
Major US Indices
After being down as much as 46 points intraday, the Dow again managed a rise into the close, eventually losing a meagre 3.69 points (0.03%), closing out the day at 10593.1 points. Alcoa (AA, -1.15%) and Microsoft (MSFT -1.06%) were the biggest percentage losers in the Dow, while IBM (-$0.76 to $93.54), American International Group (AIG -$0.57 to $66.28) and American Express (AXP -$0.36 to $55.41) were the biggest point-contributors to the decline.
United Tech (UTX +$0.87 to $100.50), Caterpillar (CAT +$0.79 to $91.80) and Honeywell (HON +0.74 to $37.48 - a gain of 2.01%) were the biggest positive point-contributors to the Dow. Hewlett Packard (HPQ +1.69% ) and ExxonMobil (XOM +1.09%) joined Honeywell as the Dow's biggest percentage gainers.
Things were worse for the broader S&P500 which lost 3.3 points (0.28%), closing at 1189.89 points. Being market-cap-weighted is a curse sometimes, but it's a far better estimator than the Dow, whose weighting system is a token of a bygone era and is highly prone to abuse (pushing up the stocks with high prices but small market cap - like CAT and UTX - is a sure-fire way to get the Dow into the green if that's what da Boyz require).
Over at Times Square, the Nasdaq Composite shed 17.42 points (0.84%), to close at 2057.64, while larger-cap technology issues fared worse with the Nasdaq100 losing 16.86 points (1.11%), to end at 1508.24 points. That was partly due to weakness generated by Amazon's disappointing results; AMZN was off a lazy 14.64% for the session, and fuelled concern in other overpriced crap, too. Cisco was down 3.47%, eBay was off a couple of percent, and even the bullet-proof (to date) Apple was down 2.29%.
NYSE Volume was chunky, with 1.55 billion shares changing hands, while Nasdaq Volume was also strong, with 1.97 billion shares being spun on the electronic roulette wheel that is the world's only exchange to double-count more than half its turnover.
| Index | Close | Gain(Loss) | % |
| DJIA | 10593.1 | -3.69 | -0.03% |
| S&P500 | 1189.89 | -3.3 | -0.28% |
| Nasdaq Composite | 2057.64 | -17.42 | -0.84% |
| Nasdaq100 | 1508.24 | -16.86 | -1.11% |
| NYSE Volume | 1.55bn | - | - |
| Nasdaq Volume | 1.97bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 0.78%
- General Electric (GE) -$0.18 (0.5%) to $36.07;
- Citigroup (C) -$0.09 (0.18%) to $49.15;
- Wal Mart (WMT) +$0.36 (0.68%) to $53.42;
- I.B.M. (IBM) -$0.76 (0.81%) to $93.54;
- Intel (INTC) -$0.12 (0.53%) to $22.38;
- Cisco Systems (CSCO) -$0.63 (3.47%) to $17.52;
- eBay (EBAY) -$1.58 (2.01%) to $77.22;
- Fannie Mae (FNM) -$0.40 (0.62%) to $64.02; and
- Freddie Mac (FRE) +$0.30 (0.45%) to $66.35.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 1769 to 1530, for a single-day A/D reading of -239; and Nasdaq losers exceeded gainers by 1787 to 1271.
On the NYSE declining volume was greater than volume in advancing issues by 902.44 to 624.83 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 736.8 to 322.35 million shares.
193 NYSE-listed stocks rose to new 52-week highs, and 11 posted fresh 52-week lows, while on the Nasdaq there were 102 stocks that hit new 52-week highs, and 37 which fell to fresh 52-week lows.
| NYSE | Nasdaq | |
| Advancers | 1530 | 1271 |
| Decliners | 1769 | 1787 |
| Advancing Volume (m) | 624.83 | 322.35 |
| Declining Volume (m) | 902.44 | 736.8 |
| New Highs | 193 | 102 |
| New Lows | 11 | 37 |
Market Sentiment
| Index | Close | Gain(Loss) | % |
| Equity Call Volume (000) | 2115.69 | -917.94 | -30.26% |
| Equity Put Volume (000) | 1787.96 | 56.47 | 3.26% |
| CBOE Volatility Index | 11.79 | 0.13 | 1.11% |
| CBOE Nasdaq Volatility Index | 17.36 | 0.06 | 0.35% |
| Equity Put-Call Ratio | 0.85 | 0.27 | 48.06% |
| 10-day PCR | 0.64 | 0.04 | 7.43% |
| SPX-VIX Ratio | 100.92 | -1.40 | -1.38% |
Bond Market Analysis
Bonds fell along the curve (from 2-years on out), but the reaction at the long end was muted, with the yield on the benchmark 30-year Treasury bond rising just 0.7 basis points to 4.583%. The belly was where the most damage was done, with 5-year yields up 3bps and 10-year yields up 2.6bps.
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.452 | -0.03 | -1.05% |
| UST 2Y (yld) | 3.322 | 0.013 | 0.39% |
| UST 5Y (yld) | 3.752 | 0.03 | 0.81% |
| UST 10Y (yld) | 4.165 | 0.026 | 0.63% |
| UST 30Y (yld) | 4.583 | 0.007 | 0.15% |
The Banks Index dipped 0.33 points (0.32%), ending the day at 101.66; within the index,
- Mellon Financial (MEL) -$0.38 (1.28%) to $29.36;
- Wachovia (WB) -$0.56 (1.01%) to $55.00;
- US Bancorp (USB) -$0.22 (0.72%) to $30.41;
- Bank Of America (BAC) -$0.33 (0.71%) to $46.40; and
- National City Corp (NCC) -$0.25 (0.69%) to $35.88.
The Broker-dealer Index lost 1.48 points (0.99%), at 148.45; the ticket clippers lined up as follows -
- Charles Schwab (SCH) -$0.39 (3.52%) to $10.70;
- Ameritrade (AMTD) -$0.25 (2.04%) to $12.00;
- Jeffries Group (JEF) -$0.64 (1.64%) to $38.35;
- Merrill Lynch (MER) -$0.82 (1.36%) to $59.44; and
- Legg Mason (LM) -$0.96 (1.24%) to $76.68.
The Philadelphia SOX (Semiconductor) index declined 5.13 points (1.26%), ending the day at 400.7
- Broadcom (BRCM) -$0.97 (3.08%) to $30.53;
- Taiwan Semiconductors (TSM) -$0.27 (3%) to $8.73;
- Infineon Tech (IFX) -$0.21 (2.25%) to $9.11;
- ST Microelectronic (STM) -$0.37 (2.21%) to $16.41; and
- Marvell Tech Group (MRVL) -$0.67 (2.03%) to $32.37.
Gold & Silver Markets
It was last Thursday (to be precise) where I opined that $415 was a near-term shakeout target for Gold; last night the front-month COMEX contract fell to $416.20, which I think is close enough. I am still of the opinion that far too many people think Gold is a good thing...
Now it is the case that Gold is a good thing: even Alan Greenspan's limited intellect was able to grasp that before he became one of the parasites that feed on the taxpayers teat, so it must be a genuine no-brainer, became Greenspan's got not an ounce of brain between those comically-overgrown ears of his.
That's not my point at the moment though. My point is that when too many people think they've found Res Ipsa Pretiosa, you can be sure that they haven't (and even if they have, they must be convinced that the Precious lies elsewhere). It has been ever thus, and will be ever thus - otherwise we would be in a world where the majority wins, and that's just plain dumn-assed to even pretend to agree with. The majority gets either fleeced (in good times) or slaughtered (in bad times); never anything outside those two outcomes.
But I digress gain... back to Gold: Gold fell by $4.7 (1.11%) to close at $418.7 per ounce.
The Gold Bugs Index lost 4.7 points (2.31%), to 198.76
- Golden Star (GSS) -$0.26 (7.34%) to $3.28;
- Randgold Resources (GOLD) -$0.56 (4.84%) to $11.00;
- Kinross Gold (KGC) -$0.30 (4.52%) to $6.33;
- Coeur d'Alene (CDE) -$0.17 (4.52%) to $3.59; and
- Glamis Gold (GLG) -$0.47 (2.87%) to $15.90.
Silver fell by $0.1 (1.47%) to close at $6.68 per ounce. The Gold and Silver Index (XAU) lost 1.32 points (1.43%), at 91.02 points.
- Kinross Gold (KGC) -$0.30 (4.52%) to $6.33;
- Durban Rooderpoert Deep (DROOY) -$0.05 (3.85%) to $1.25;
- Goldcorp (GG) -$0.39 (2.72%) to $13.96; and
- Meridian Gold (MDG) -$0.44 (2.35%) to $18.30.
| Index | Close | Gain(Loss) | % |
| Gold | 418.7 | -4.7 | -1.11% |
| Silver | 6.68 | -0.1 | -1.47% |
| PHLX Gold and Silver Index | 91.02 | -1.32 | -1.43% |
| AMEX Gold BUGS Index | 198.76 | -4.7 | -2.31% |
Oil Market
Oil was firmer, but only slightly so, rising by $0.06 per barrel, closing at $46.65 per barrel. The market is being awfully sanguine about the stupid "Iran is the new Iraq" - by which I mean "All the bullshit we told you about Iraq no applies to Iran" - even down to the bogus Uranium from Africa story, which is now "Iran got uranium from Namibia" rather than "Iraq got uranium from Niger".
Seems that all the US "intelligence" community (particularly those working on behalf of Israel in the pentagon) knows, is that a towel-head country starting with I bought something starting with U from a darkie country starting with N... same same.
Point is, the US is already fighting an 8-division war with a 6-division army (that is, they are losing in Iraq and will continue to lose until they leave); and Bush and his Israel-Firsters are lining up Iran? Iran is three times as large, has fifty or sixty times the capacity of Iraq to put firepower on the ground, and has the much-vaunted Moskit and Yakhonts anti-shipping missiles. Are the NeoCons that stupid?
And Iran also exports about six times as much oil as Iraq did pre-invasion. What will happen to the oil price as the US numbskulls whip their population into hysteria over Iran? Go on, guess.
The Oil and Gas Index (XOI) advanced 5.47 points (0.71%), to end the session at 770.72
- Sunoco (SUN) +$2.10 (2.31%) to $93.15;
- Marathon Oil (MRO) +$0.59 (1.48%) to $40.59; and
- Amerada Hess (AHC) +$1.30 (1.45%) to $91.17.
The Oil service stocks (OSX) Index added 0.49 points (0.37%), ending the day at 132.62
- Tidewater (TDW) +$0.57 (1.42%) to $40.68;
- Weatherford International (WFT) +$0.44 (0.79%) to $56.30; and
- Nabors Industries (NBR) +$0.40 (0.78%) to $51.59.
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 280.5 | -3.5 | -1.23% |
| Crude Oil Light Sweet | 46.65 | 0.06 | 0.13% |
| Heating Oil | 1.28 | -0.02 | -1.36% |
| Natural Gas | 6.16 | -0.26 | -4.05% |
| Unleaded Gas | 1.274 | -0.02 | -1.32% |
| AMEX Oil Index | 770.72 | 5.47 | 0.71% |
| Oil Service Index | 132.62 | 0.49 | 0.37% |
Currency Markets
Gee whiz - the US dollar had better get its ass into gear (note: ass - as in donkey - not arse as in bumhole, You get your ass in gear by putting your donkey into harness).
Anyhow - the point is that the USDX is now developing a little raft of potential stale longs; although the Euro is back under 1.30, the USDX is not behaving in a technically-constructive manner despite rampant attempts at jawboning, improving interest rate differentials, and some outright intervention. I still favour a bounce into the mid-85s and possibly as high as 87 on the USDX, before another mind-bending plummet.
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 84.02 | 0.47 | 0.56% |
| Euro | 1.2972 | -0.0054 | -0.41% |
| Yen | 104.45 | 0.74 | 0.71% |
| Sterling | 1.8818 | -0.002 | -0.11% |
| Australian Dollar | 0.7708 | -0.0062 | -0.8% |
| Swiss Franc | 1.202 | 0.0084 | 0.7% |
| Canadian Dollar | 0.8053 | -0.002 | -0.25% |
Pivots (US Futures Market)
| Dow | S&P500 | Nasdaq | Bonds | |
| R2 | 10625 | 1194.83 | 1530 | 115 5/32 |
| R1 | 10603 | 1192.07 | 1520.5 | 115 |
| Pivot | 10572 | 1188.93 | 1512.5 | 114 21/32 |
| S1 | 10550 | 1186.17 | 1503 | 114 16/32 |
| S2 | 10519 | 1183.03 | 1495 | 114 5/32 |
Euro-Zone Indices
| Country | Index | Last | % | % |
| France | CAC 40 | 3928.94 | -22.78 | -0.58% |
| Germany | DAX-30 | 4281.64 | -14.67 | -0.34% |
| UK | FTSE 100 | 4908.3 | -7.9 | -0.16% |
| Italy | MIBTel | 24282 | -13 | -0.05% |
European Index Internals
| CAC-40 | DAX-30 | FTSE-100 | |
| Advancers | 14 | 8 | 47 |
| Decliners | 24 | 22 | 50 |
| Advancing Volume (m) | 24.5 | 21.5 | 850.7 |
| Declining Volume (m) | 236.2 | 74.7 | 913.7 |
Euro STOXX-50 Largest Volume
| Name | Close (€) | Change | % | Volume |
| Alcatel | 9.68 | -1.55 | -13.8% | 92407936 |
| Telefonica | 13.96 | -0.06 | -0.43% | 35229780 |
| Bosch | 9.15 | 0.01 | 0.11% | 33267672 |
| Deutsche Telekom | 16.44 | -0.02 | -0.12% | 18657192 |
| BBVA | 13.12 | 0.02 | 0.15% | 16230316 |
CAC-40 Largest Gainers
| Name | Close (€) | Change | % | Volume |
| Carrefour | 40.24 | 0.78 | 1.98% | 7796350 |
| Vinci | 110.7 | 1.3 | 1.19% | 373848 |
| Essilor International | 54.6 | 0.6 | 1.11% | 353125 |
| Sanofi-Aventis | 57.05 | 0.6 | 1.06% | 5148404 |
| Peugeot | 48.15 | 0.39 | 0.82% | 707246 |
CAC-40 Largest Decliners
| Name | Close (€) | Change | % | Volume |
| Alcatel | 9.68 | -1.55 | -13.8% | 92407936 |
| Cap Gemini | 25.59 | -0.71 | -2.7% | 1988320 |
| Publicis Groupe | 23.6 | -0.55 | -2.28% | 872176 |
| ST Microelectronics | 12.59 | -0.29 | -2.25% | 5158418 |
| AGF | 57.2 | -1.15 | -1.97% | 493996 |
FTSE Largest Gainers
| Name | Close (£) | Change | % | Volume |
| Tate & Lyle | 4.625 | 0.11 | 2.38% | 4903208 |
| Smith&Nephew | 5.465 | 0.12 | 2.15% | 22005672 |
| Intercontinental Hotels | 6.765 | 0.14 | 2.04% | 8976962 |
| Sainsbury(J) | 2.925 | 0.06 | 1.92% | 26116034 |
| Hays | 1.2625 | 0.02 | 1.81% | 28568346 |
FTSE Largest Decliners
| Name | Close (£) | Change | % | Volume |
| Rentokil Initial | 1.5375 | -0.04 | -2.54% | 13562902 |
| BHP Billiton | 6.725 | -0.15 | -2.11% | 14912435 |
| Antofagasta | 12.29 | -0.24 | -1.92% | 1507883 |
| Rio Tinto | 16.55 | -0.3 | -1.78% | 12819995 |
| Shell Transport (Reg) | 4.7175 | -0.08 | -1.72% | 166171424 |
DAX-30 Largest Gainers
| Name | Close (€) | Change | % | Volume |
| Schering | 53.48 | 1.08 | 2.06% | 1554137 |
| Henkel | 70.5 | 1.15 | 1.66% | 872801 |
| Deutsche Bank | 66.88 | 0.86 | 1.3% | 8100371 |
| Thyssen Krupp | 16.59 | 0.14 | 0.85% | 4153624 |
| Adidas Salomon | 115.54 | 0.54 | 0.47% | 267268 |
DAX-30 Largest Decliners
| Name | Close (€) | Change | % | Volume |
| Infineon Tech | 6.95 | -0.2 | -2.8% | 9197211 |
| Linde | 50.91 | -1.05 | -2.02% | 706315 |
| Siemens | 59.61 | -1.21 | -1.99% | 7729030 |
| Hypovereinsbank | 17.3 | -0.3 | -1.7% | 3856942 |
| Volkswagen | 36.41 | -0.52 | -1.41% | 3347327 |
