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Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 2 repurchase operations.
- a $6billion, overnight repurchase with $4.09billion in T-backed collateral ; and
- a $3billion, 3-day repurchase with $1.182billion in T-backed collateral.
Major US Indices
Anyone just looking at the headline repo numbers might have expected a booster shot with some "vim", but looking at only the T-backed component, it only just exceeded the usual threshold. As I mentioned last week, it is taking progressively larger volumes of T-backed repurchases to get a decent goosing happening, so the $5 bill T-backed threshold still has to be approached with caution. The S&P tried valiantly to rally after 10 a.m., but never got more than 2 points above its 10 a.m. level... and then it just sagged like a fat lady's triceps until 2 p.m. when it bounced almost ten points in 90 minutes. Evidently the repo dough was being used as a sand anchor to slow an otherwise more powerful decline. (It didn't help that the Consumption and Spending numbers were worse than expected, or that the Core Personal Consumption Expenditure Deflator hit a 3-year high).
By the close, the DJIA had dipped 75.37 points (0.7%), closing out the day at 10766.23 points; even that outcome was only possible thanks to a 75-point intraday rally that started at 2 p.m. and lasted for 90 minutes.
Within the blue-chip index, 7 stocks rose, the biggest gainers being Alcoa (AA +1.55% to $32.12) and Hewlett Packard (HPQ +0.68% to $20.80). Losers in the Dow numbered 23 and were led by General Motors (GM -3.36% to $35.65) after a brokerage downgrade, and American International Group (AIG -2.27% to $66.80); Volume traded was tilted in favour of the losers by 351.4m shares to 76.5m.
The broader S&P500 shed 7.77 points (0.64%), closing at 1203.6. Over at Times Square, the Nasdaq Composite lost 13.68 points (0.66%), to close at 2051.72, while larger-cap technology issues fared worse with the Nasdaq100 losing 15.88 points (1.04%), to end at 1511.02 points.
NYSE Volume was chunky, with 1.8 billion shares changing hands, while Nasdaq Volume was super-chunky (over 2 bill), with 2.14 billion shares being flicked around like chips on a roulette board.
| Index | Close | Gain(Loss) | % |
| DJIA | 10766.23 | -75.37 | -0.7% |
| S&P500 | 1203.6 | -7.77 | -0.64% |
| Nasdaq Composite | 2051.72 | -13.68 | -0.66% |
| Nasdaq100 | 1511.02 | -15.88 | -1.04% |
| NYSE Volume | 1.8bn | - | - |
| Nasdaq Volume | 2.14bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 0.20%; those Citigroup $47.50 March05 puts (purchased for $45) finally got back to square. Recall from Friday's USRant that the non-participation of Citigroup in recent bounces, was an important divergence. That doesn't rule out the proposed couple of days' continuation after today's little pullback, especially since the market has to give Greenspan's ego its usual "rub'n'tug" on Wednesday. Everyone will get twitterpated thinking that Greenspan is giving them a coded heads-up on the upcoming employment report, but the rally is most definitely losing steam.
- General Electric (GE) -$0.42 (1.18%) to $35.20;
- Citigroup (C) -$0.56 (1.16%) to $47.72;
- Wal Mart (WMT) +$0.12 (0.23%) to $51.61;
- I.B.M. (IBM) -$0.22 (0.24%) to $92.58;
- Intel (INTC) -$0.10 (0.42%) to $23.99;
- Cisco Systems (CSCO) +$0.22 (1.28%) to $17.42;
- eBay (EBAY) +$0.60 (1.42%) to $42.84;
- Fannie Mae (FNM) +$0.76 (1.32%) to $58.46; and
- Freddie Mac (FRE) +$0.36 (0.58%) to $62.00.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 2033 to 1312, for a single-day A/D reading of -721; and Nasdaq losers exceeded gainers by 1836 to 1313. The 10-day moving averages of the AD line fell to 163 (NYSE) and -93 (Nasdaq).
On the NYSE declining volume was greater than volume in advancing issues by 1222.8 to 551 million shares; Nasdaq declining volume exceeded volume in advancing issues by 1304.9 to 806.2 million shares.
317 NYSE-listed stocks rose to new 52-week highs, and 36 posted fresh 52-week lows, while on the Nasdaq there were 146 stocks that hit new 52-week highs, and 60 which fell to fresh 52-week lows.
| NYSE | Nasdaq | |
| Advancers | 1312 | 1313 |
| Decliners | 2033 | 1836 |
| Advancing Volume (m) | 550.98 | 806.21 |
| Declining Volume (m) | 1222.8 | 1304.9 |
| New Highs | 317 | 146 |
| New Lows | 36 | 60 |
Market Sentiment
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 12.08 | 0.59 | 5.13% |
| CBOE Nasdaq Volatility Index | 18.07 | 0.73 | 4.21% |
| Equity Put-Call Ratio | 0.65 | -0.02 | -2.99% |
| 10-day PCR | 0.61 | 0 | 0% |
| SPX-VIX Ratio | 99.64 | -5.7924 | -5.49% |
Bond Market Analysis
Bonds fell - hard - with the falls concentrated in the belly of the curve.
The short position (from 117) in the March05 30-year bond futures passed the 200% gain signpost with ease as the contract fell a full point to 112 & 31/32. That brings the total profit (on a US$1755 outlay) to a tad over US$4000 in just over three weeks.
The yield on the benchmark 30-year Treasury bond rose another 6 basis points to 4.706%, and intraday the yield on the 5-year note broke through 4%.
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.69 | 0 | 0% |
| UST 2Y (yld) | 3.58 | 0.08 | 2.29% |
| UST 5Y (yld) | 3.995 | 0.09 | 2.41% |
| UST 10Y (yld) | 4.359 | 0.087 | 2.04% |
| UST 30Y (yld) | 4.706 | 0.064 | 1.38% |
The Banks Index declined 0.57 points (0.57%), to 99.52; within the index,
- M&T Bank Corp (MTB) -$1.19 (1.19%) to $99.01;
- Fifth Third Bancorp (FITB) -$0.53 (1.17%) to $44.77;
- Citigroup (C) -$0.56 (1.16%) to $47.72;
- JPMorganChase (JPM) -$0.42 (1.14%) to $36.55; and
- Comerica (CMA) -$0.60 (1.04%) to $57.08.
The Broker-dealer Index declined 1.27 points (0.86%), ending the day at 147.01; the ticket clippers lined up as follows -
- Morgan Stanley (MWD) -$1.19 (2.06%) to $56.47;
- Charles Schwab (SCH) -$0.22 (2.05%) to $10.50;
- E*Trade (ET) -$0.19 (1.41%) to $13.27;
- Merrill Lynch (MER) -$0.75 (1.26%) to $58.58; and
- Lehman Brothers (LEH) -$1.12 (1.21%) to $91.18.
The Philadelphia SOX (Semiconductor) index declined 6.47 points (1.46%), to end the session at 437.23
- Infineon Tech (IFX) -$0.38 (3.54%) to $10.34;
- Taiwan Semiconductors (TSM) -$0.31 (3.29%) to $9.12;
- Teradyne (TER) -$0.44 (2.77%) to $15.42;
- KLA-Tencor (KLAC) -$1.40 (2.76%) to $49.41; and
- Applied Materials (AMAT) -$0.47 (2.62%) to $17.45.
Gold & Silver Markets
Gold rose $0.60 (0.14%) to close at $436.80 per ounce. Yet again, it simply mirrored the US dollar index, and unless the USDX gets its groove on (downwards) in a serious way, Gold is going to struggle to make any headway.
The Gold Bugs Index declined 0.04 points (0.02%), to 215.32
- Golden Star (GSS) -$0.08 (2.72%) to $2.86;
- Meridian Gold (MDG) -$0.44 (2.22%) to $19.35;
- Agnico Eagle (AEM) -$0.15 (1.03%) to $14.47;
- Gold Fields (GFI) -$0.07 (0.58%) to $12.08; and
- Hecla Mining (HL) -$0.03 (0.53%) to $5.64.
Silver rose $0.06 (0.79%) to close at $7.37 per ounce. The Gold and Silver Index (XAU) gained 0.09 points (0.09%), closing at 98.97 points.
- Durban Rooderpoert Deep (DROOY) +$0.09 (9.38%) to $1.05;
- Freeport McMoran (FCX) +$0.72 (1.75%) to $41.82;
- Newmont Mining (NEM) +$0.18 (0.4%) to $45.00; and
- Placer Dome (PDG) +$0.04 (0.23%) to $17.29.
| Index | Close | Gain(Loss) | % |
| Gold | 436.8 | 0.6 | 0.14% |
| Silver | 7.371 | 0.058 | 0.79% |
| PHLX Gold and Silver Index | 98.97 | 0.09 | 0.09% |
| AMEX Gold BUGS Index | 215.32 | -0.04 | -0.02% |
Oil Market
Oil was firmer, rising by $0.26 per barrel, closing at $51.75 per barrel. The Oil and Gas Index (XOI) shed 1.7 points (0.2%), closing at 861.39
- Occidental Petroleum (OXY) -$1.09 (1.53%) to $70.27;
- ConocoPhillips (COP) -$1.43 (1.27%) to $110.89; and
- Unocal (UCL) -$0.33 (0.61%) to $54.10.
The Oil service stocks (OSX) Index slid 1.3 points (0.91%), closing at 141.44
- Global Industries (GLBL) -$0.47 (4.57%) to $9.82;
- Nabors Industries (NBR) -$1.23 (2.1%) to $57.40; and
- Halliburton (HAL) -$0.78 (1.74%) to $43.97.
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 305 | 4.77 | 1.59% |
| Crude Oil Light Sweet | 51.75 | 0.26 | 0.5% |
| Heating Oil | 1.4914 | 0.0373 | 2.57% |
| Natural Gas | 6.698 | -0.017 | -0.25% |
| Unleaded Gas | 1.2456 | -0.0089 | -0.71% |
| AMEX Oil Index | 861.39 | -1.7 | -0.2% |
| Oil Service Index | 141.44 | -1.3 | -0.91% |
Currency Markets
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 82.54 | -0.1 | -0.12% |
| Euro | 1.3222 | -0.0019 | -0.14% |
| Yen | 104.62 | -0.58 | -0.55% |
| Sterling | 1.9208 | 0.0016 | 0.08% |
| Australian Dollar | 0.7912 | 0.005 | 0.64% |
| Swiss Franc | 1.1626 | 0.0007 | 0.06% |
| Canadian Dollar | 0.8104 | 0.0032 | 0.4% |
