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Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation last night:
- a $2.25billion, overnight repurchase entirely in T-backed collateral.
Major US Indices
Carly Fiorina is no longer the CEO of Hewlett-Packard-Compaq. Yaaaaaay!!!.
Finally. The peroxided wannabe-a-man got her marching orders last night, and the entire market moved up for a few minutes after the announcement.
This hopeless trout presided over massive capital destruction after her mock-testosterone induced fervour in launching and aggressively promoting (including making veiled bribes to get institutional backing) the takeover by Compaq of Hewlett Packard.
She will doubtless get a golden parachute that will make shareholders' eyes bleed, but that's not the point. She is gone, and I am a happy camper. It shows that somewhere there are enough sensible sharehodlers on the insto register to enable such a spill.
Some stats on HPQ: under Fiorina's stewardship. HPQ shares have underperformed the S&P by 20% (that's just the last 12 months, which was the first full year); NPAT margins are a scant 4.4%, returns on assets aren't much better (4.7%). The stock has shed 16.5% in the last 12 months, despite a massive 66% institutional shareholding and 5% insider shareholding. Why institutions were so eager to hold so much HPQ, given its lamentable management and operating ratios is beyond me.
For the session, HPQ bucked the trend (after bucking Fiorina), rising 6.5% on turnover of 101 million units. That's 10x its average daily volume, and about 5% of its total share float.
HPQ's happy days aside, CSCO's revenue shortfall plus a non-cheerleading outlook from Cisco CEO John Chambers, gave tech a real headache. That's odd, considering that Chambers is the sort of Happy Happy Joy Joy guy who uses earnings announcements to make blue-sky predictions. I remember the one that first stuck in my craw (and turned me against him forever): he claimed that CSCO could grow revenues at 35% basically forever.
Well, that was tantamount to saying that CSCO would endup owning the planet. Actually, since planetary turnover doesn't grow at anything like 35%, it means he was saying the entire universe would be made of routers and switching equipment. That sort of stupid crap played well to idiots like Grubman, who we later found out was just a whore - but a moment's reflection by anyone who understood what a percentage change meant showed that Chambers was in La-la Land.
Anyhow, if Chambers is owning up to a future where the streets don't run with liquid chocolate, then there must be some hidden nasties down the pipe for CSCO (and by extension, all computer hardware, internet, and so forth). That conforms to my prejudices quite nicely...
The DJIA slid 60.52 points (0.56%), closing out the day at 10664.11 points; only 5 down components rose (HPQ among them) and 25 fell. The broader S&P500 dipped 10.31 points (0.86%), to 1191.99. Over at Times Square, the Nasdaq Composite slid 34.13 points (1.64%), to close at 2052.55, while larger-cap technology issues fared worse with the Nasdaq100 losing 25.88 points (1.69%), to end at 1506.81 points.
NYSE Volume was chunky, with 1.51 billion shares changing hands, while Nasdaq Volume was chunky, with 1.95 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).
| Index | Close | Gain(Loss) | % |
| DJIA | 10664.11 | -60.52 | -0.56% |
| S&P500 | 1191.99 | -10.31 | -0.86% |
| Nasdaq Composite | 2052.55 | -34.13 | -1.64% |
| Nasdaq100 | 1506.81 | -25.88 | -1.69% |
| NYSE Volume | 1.51bn | - | - |
| Nasdaq Volume | 1.95bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 0.58%
- General Electric (GE) -$0.34 (0.93%) to $36.09;
- Citigroup (C) -$0.30 (0.61%) to $49.18;
- Wal Mart (WMT) -$0.68 (1.28%) to $52.52;
- I.B.M. (IBM) -$1.43 (1.52%) to $92.70;
- Intel (INTC) -$0.11 (0.47%) to $23.30;
- Cisco Systems (CSCO) -$0.61 (3.34%) to $17.63;
- eBay (EBAY) +$0.46 (0.59%) to $78.99;
- Fannie Mae (FNM) +$0.98 (1.58%) to $62.84; and
- Freddie Mac (FRE) +$0.48 (0.72%) to $66.71.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 2178 to 1146, for a single-day A/D reading of -1032; and Nasdaq losers exceeded gainers by 2369 to 787
On the NYSE declining volume was greater than volume in advancing issues by 1101.2 to 385.9 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1682.2 to 269.7 million shares. That Nasdaq tilt is pretty horrifying, but you have to bear in mind that when there's a large dump in the Nasdaq100 there is also a large dump in the Nasdaq100 Tracking stock, QQQQ (formerly QQQ, but I guess 3 Qs wasn't enough).
206 NYSE-listed stocks rose to new 52-week highs, and 21 posted fresh 52-week lows, while on the Nasdaq there were 115 stocks that hit new 52-week highs, and 47 which fell to fresh 52-week lows.
| NYSE | Nasdaq | |
| Advancers | 1146 | 787 |
| Decliners | 2178 | 2369 |
| Advancing Volume (m) | 385.914144 | 269.71776 |
| Declining Volume (m) | 1101.207552 | 1682.21504 |
| New Highs | 206 | 115 |
| New Lows | 21 | 47 |
Market Sentiment
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 11.98 | 0.38 | 3.28% |
| CBOE Nasdaq Volatility Index | 18.24 | 0.64 | 3.64% |
| Equity Put-Call Ratio | 0.83 | 0.26 | 45.61% |
| 10-day PCR | 0.67 | 0.03 | 5.46% |
| SPX-VIX Ratio | 99.5 | -7.6281 | -7.12% |
Bond Market Analysis
Bonds were about unchanged at the long end, despite a huge dip intraday. I mentioned two days ago that early shorts would be in the offing above 117, and there have been two 2 pullbacks of over 1/2 a point (16/32nds, or $500 per contract) - the first a 22-tick pullback from 117 & 6/32, the second a 26-tick pullback from 117 & 4/32. However both of those pullbacks were fully recovered by the end of their respective sessions - which doesn't necessarily imply that the bond is bound still higher - but the trades were there to be had from 117.
The yield on the benchmark 30-year Treasury bond was unchanged for the session; note that the 10-year yield has a 3 handle, which means there's less than half a percentage point until the yield hits Lockheed's target of 3.5% stated several weeks ago (a 3.5% yield on the ten year, roughly translated, means that the US economy is in deep doo-doo again).
Note that the spread from Fed Funds (2.5%) to 2-year notes (3.21) is a scant 75 basis points, and five year yields are only 106 bps above Fed Funds. That is not a good sign, Pilgrims.
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.38 | -0.03 | -1.05% |
| UST 2Y (yld) | 3.21 | -0.08 | -2.43% |
| UST 5Y (yld) | 3.56 | -0.09 | -2.47% |
| UST 10Y (yld) | 3.97 | -0.04 | -1% |
| UST 30Y (yld) | 4.36 | 0 | 0% |
The Banks Index lost 0.82 points (0.8%), to end the session at 101.55; within the index,
- North Fork Bancorp (NFB) -$0.70 (2.36%) to $29.00;
- Golden West Financial (GDW) -$0.97 (1.47%) to $64.95;
- Us Bancorp (USB) -$0.42 (1.37%) to $30.20;
- Mellon Financial (MEL) -$0.41 (1.37%) to $29.53; and
- Northern Trust (NTRS) -$0.61 (1.37%) to $43.95.
The Broker-dealer Index slid 1.16 points (0.77%), at 149.38; the ticket clippers lined up as follows -
- Raymond James (RJF) -$0.71 (2.26%) to $30.65;
- Jeffries Group (JEF) -$0.76 (1.94%) to $38.49;
- E*Trade (ET) -$0.15 (1.11%) to $13.39;
- Ameritrade (AMTD) -$0.09 (0.78%) to $11.38; and
- Morgan Stanley (MWD) -$0.43 (0.73%) to $58.17.
The Philadelphia SOX (Semiconductor) index dipped 9.57 points (2.24%), closing at 417.92
- Broadcom (BRCM) -$1.20 (3.65%) to $31.67;
- Freescale Semiconductors (FSL-B) -$0.61 (3.16%) to $18.71;
- Teradyne (TER) -$0.46 (3.04%) to $14.65;
- Marvell Tech Group (MRVL) -$1.02 (2.87%) to $34.58; and
- Texas Instruments (TXN) -$0.72 (2.84%) to $24.63.
Gold & Silver Markets
Gold rose $0.70 (0.17%) to close at $414.90 per ounce. during the session it dipped as low as $411.50 an ounce (in the April contract - which is the new front month).
Gold Bugs Index added 2.91 points (1.51%), to end the session at 195.55
- Glamis Gold (GLG) +$0.93 (5.78%) to $17.03;
- Coeur d'Alene (CDE) +$0.16 (4.8%) to $3.49;
- Meridian Gold (MDG) +$0.72 (4.1%) to $18.27;
- Iamgold (IAG) +$0.25 (3.81%) to $6.82; and
- Kinross Gold (KGC) +$0.19 (3.1%) to $6.31.
Silver rose $0.06 (0.92%) to close at $6.61 per ounce. The Gold and Silver Index (XAU) gained 1.01 points (1.14%), to end the session at 89.65 points.
- Meridian Gold (MDG) +$0.72 (4.1%) to $18.27;
- Durban Rooderpoert Deep (DROOY) +$0.04 (3.17%) to $1.30;
- Kinross Gold (KGC) +$0.19 (3.1%) to $6.31; and
- Anglogold Ashanti (AU) +$0.81 (2.55%) to $32.61.
| Index | Close | Gain(Loss) | % |
| Gold | 414.9 | 0.7 | 0.17% |
| Silver | 6.61 | 0.06 | 0.92% |
| PHLX Gold and Silver Index | 89.65 | -1.44 | -1.58% |
| AMEX Gold BUGS Index | 195.55 | -2.18 | -1.1% |
Oil Market
Oil was slightly firmer, rising by $0.13 per barrel, closing at $45.55 per barrel. The bigger story in the Energy complex was the bahaviour of Heating Oil, which leapt as high as $1.2900 before softening to settle at $1.2672 - still up 1.66% for the session.
The Oil and Gas Index (XOI) dipped 1.74 points (0.22%), at 773.25
- TotalFinaElf S.A. (TOT) -$1.21 (1.11%) to $108.12;
- Royal Dutch Shell (RD) -$0.51 (0.87%) to $58.07; and
- ChevronTexaco (CVX) -$0.44 (0.78%) to $56.16.
The Oil service stocks (OSX) Index declined 0.02 points (0.02%), to end the session at 131.19
- Cooper Cameron (CAM) -$1.10 (1.93%) to $55.90;
- Halliburton (HAL) -$0.29 (0.71%) to $40.67; and
- Smith International (SII) -$0.38 (0.63%) to $59.82.
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 281 | -0.26 | -0.09% |
| Crude Oil Light Sweet | 45.55 | 0.13 | 0.29% |
| Heating Oil | 1.2672 | 0.0207 | 1.66% |
| Natural Gas | 6.175 | 0.002 | 0.03% |
| Unleaded Gas | 1.24 | 0.023 | 1.89% |
| AMEX Oil Index | 773.25 | -0.31 | -0.04% |
| Oil Service Index | 131.19 | -1.84 | -1.38% |
Currency Markets
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 85.1 | 0.08 | 0.09% |
| Euro | 1.2805 | 0.0032 | 0.25% |
| Yen | 105.66 | 0.02 | 0.02% |
| Sterling | 1.8589 | 0.0037 | 0.2% |
| Australian Dollar | 0.7705 | 0.0003 | 0.04% |
| Swiss Franc | 1.2165 | 0.006 | 0.5% |
| Canadian Dollar | 0.8001 | -0.0018 | -0.22% |
Euro-Zone Indices
| Country | Index | Last | % | % |
| France | CAC 40 | 3969.62 | -11.15 | -0.28% |
| Germany | DAX-30 | 4353.15 | -18.24 | -0.42% |
| UK | FTSE 100 | 4990.4 | -5.1 | -0.1% |
| Italy | MIBTel | 24694 | -38 | -0.15% |
European Index Internals
| CAC-40 | DAX-30 | FTSE-100 | |
| Advancers | 12 | 9 | 45 |
| Decliners | 26 | 21 | 51 |
| Advancing Volume (m) | 30.7 | 41.7 | 891.4 |
| Declining Volume (m) | 146 | 73.6 | 702.2 |
Euro STOXX-50 Largest Volume
| Name | Close (€) | Change | % | Volume |
| Bosch | 9.51 | -0.02 | -0.21% | 48985936 |
| Telefonica | 14.26 | -0.02 | -0.14% | 27982020 |
| Deutsche Telekom | 16.5 | -0.13 | -0.78% | 23128590 |
| BBVA | 13.14 | -0.04 | -0.3% | 14300168 |
| Ahold | 6.76 | -0.09 | -1.31% | 13209422 |
CAC-40 Largest Gainers
| Name | Close (€) | Change | % | Volume |
| Lagardere | 57.8 | 1.1 | 1.94% | 1025474 |
| Dexia | 17.73 | 0.2 | 1.14% | 1382737 |
| Peugeot | 49.91 | 0.51 | 1.03% | 1180504 |
| Pernod Ricard | 107.6 | 1 | 0.94% | 321942 |
| France Telecom | 24.81 | 0.08 | 0.32% | 10111511 |
CAC-40 Largest Decliners
| Name | Close (€) | Change | % | Volume |
| Arcelor | 17.61 | -0.3 | -1.68% | 4419837 |
| Thomson | 19.44 | -0.31 | -1.57% | 2010625 |
| Suez | 21.1 | -0.27 | -1.26% | 4045009 |
| Casino Guichard | 64.05 | -0.7 | -1.08% | 312487 |
| Axa | 18.9 | -0.2 | -1.05% | 7954663 |
FTSE Largest Gainers
| Name | Close (£) | Change | % | Volume |
| ITV | 1.25 | 0.03 | 2.46% | 61503552 |
| Yell Group | 4.6925 | 0.11 | 2.34% | 2561806 |
| GlaxoSmithKline | 12.32 | 0.22 | 1.82% | 37284688 |
| WPP Group | 5.92 | 0.1 | 1.63% | 13356469 |
| Friends Provident | 1.6675 | 0.03 | 1.52% | 14284214 |
FTSE Largest Decliners
| Name | Close (£) | Change | % | Volume |
| Shell Transport (Reg) | 4.7225 | -0.15 | -2.98% | 61968032 |
| Intercontinental Hotel | 6.82 | -0.15 | -2.15% | 2274669 |
| BT Group | 2.06 | -0.05 | -2.14% | 114483448 |
| Rio Tinto | 16.21 | -0.29 | -1.76% | 10374221 |
| Kingfisher | 3.02 | -0.05 | -1.71% | 19840788 |
DAX-30 Largest Gainers
| Name | Close (€) | Change | % | Volume |
| Altana | 46.25 | 1.08 | 2.39% | 859441 |
| Deutsche Boerse | 49.56 | 0.68 | 1.39% | 1097190 |
| Fresenius Medical | 64.7 | 0.7 | 1.09% | 424581 |
| Tui | 18.9 | 0.18 | 0.96% | 2229203 |
| Bayer | 25.61 | 0.22 | 0.87% | 5647015 |
DAX-30 Largest Decliners
| Name | Close (€) | Change | % | Volume |
| HypoVereinsbank | 16.74 | -0.58 | -3.35% | 9613859 |
| Schering | 53.18 | -1.3 | -2.39% | 1568157 |
| Adidas Salomon | 114.34 | -2.66 | -2.27% | 663621 |
| Henkel | 71.1 | -1.05 | -1.46% | 383739 |
| Deutsche Bank | 67.4 | -0.95 | -1.39% | 3583108 |
