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Pre-market data was basically in-line with consensus expectations, and yet the market opened with a decent gap up. The GDP report showed what I refer to as 'claimed' growth, at 3.8%: I say 'claimed' because hedonics adds at least 1.2% to the 'real' level of growth claimed by the US statistical authorities.
That's 1.2% of each report's supposed 'growth' that doesn't go into anyone's bank, or into anyone's belly. No corporation makes an additional cent of profit, no worker takes home an additional cent of wages, and not a single cent of additional tax is collected ... you get the drift.
In other words, it's an Orwellian fiction - the sort that the Soviet Union used to use to try and make its Five Year Plans look successful... as economic inefficiency, corruption and cronyism were eating the system from the inside out. Now that sounds familiar.
Anyhow - the important point is that the data was in line with the 'consensus guess.; the Globex futures marekt did as you would expect (i.e., bugger all); they were already up above 1189 (basis the front-month S&P futures).
The reason for the pre-GDP-data gain? The fact that several papers were already reporting that Karl Rove would not be indicted. And sure enough, at 2 p.m. at the press conference held by Special Prosecutor Patrick Fitzgerald, Rove was not indicted... only Lewis Libby (Cheney's chief of staff) was indicted. With the 'off the hook' verdict for Bush's Brain now semi-official, the market added 8 S&P points (and almost 90 Dow points... more than half the day's overall gain) in less than an hour.
So sure... it was the GDP numbers. Believe that if you want. But when it surfaces that "Rover" has cut a deal and will drop his superiors in it when the Fitzgerald probe widens, don't be surprised if you have to find some data-related reason for every single point of today's advance being given back.
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation: a $9billion, 5-day repurchase with $0.065billion in T-backed collateral undertaken at a -13 basis point discount to the Fed Funds Rate (FFR).
Major US Indices
The Dow Jones Industrial Average advanced 172.82 points (1.69%), closing out the day at 10402.77 points (10400-ish). The index hit an intraday high of 10404.7, after opening at 10231.15 (the low of the session).
Within the blue-chip index, 29 stocks rose, the biggest gainers being Hewlett Packard (HPQ, +4.33% to $27.96) and Verizon Communications (VZ, +3.06% to $31.70), which accounted for 17 Dow points between them. Only one Dow component fell - International Business Machines (IBM, -1.08% to $81.42). Even GM managed a gain (+0.26% to $27.26), which shows you jsut how much this was a short-squeeze rather than anything else. Volume traded was tilted in favour of the gainers by 457.5m shares to 7.9m.
The broader S&P500 added 19.51 points (1.65%), closing at 1198.41. Within the index, gainers numbered 425, while 58 S&P500 stocks fell for the day. Volume was tilted 3.8:1 in favour of the winners with 1771.42 million units traded in the winners as compared with 463.26 million traded in the losers .
Over at Times Square, the Nasdaq Composite rose 26.07 points (1.26%), to close at 2089.88, while larger-cap technology issues fared worse with the Nasdaq100 adding 13.73 points (0.89%), to end at 1557.11 points. Within the tech benchmark, gainers numbered 76, while 20 Nasdaq100 stocks fell for the day. Volume was tilted 2.0:1 in favour of the winners with 586.93 million traded in the winners compared to 291.65 million in the losers .
NYSE Volume was super-chunky, with 2.42 billion shares changing hands, while Nasdaq Volume was chunky, with 1.91 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 10402.77 | 172.82 | 1.69% |
| S&P500 | 1198.41 | 19.51 | 1.65% |
| Nasdaq Composite | 2089.88 | 26.07 | 1.26% |
| Nasdaq100 | 1557.11 | 13.73 | 0.89% |
| NYSE Volume | 2.42bn | - | - |
| Nasdaq Volume | 1.91bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 1.15%; look at the Toxic Twins - Fannie and Freddie - to see why all the repurchase dough was concentrated in Agency and Motgage-backed collateral...
- General Electric (GE) +$0.47 (1.4%) to $34.05;
- Citigroup (C) +$0.49 (1.08%) to $45.90;
- Wal Mart (WMT) +$0.76 (1.7%) to $45.50;
- I.B.M. (IBM) -$0.89 (1.08%) to $81.42;
- Intel (INTC) +$0.49 (2.15%) to $23.33;
- Cisco Systems (CSCO) +$0.09 (0.53%) to $17.14;
- eBay (EBAY) +$0.59 (1.56%) to $38.43;
- Fannie Mae (FNM) +$1.18 (2.52%) to $48.04; and
- Freddie Mac (FRE) +$0.29 (0.47%) to $61.75.
Market Breadth & Internals
NYSE advancing Issues exceeded decliners by 2383 to 862 for a single-day A/D reading of 1521; Nasdaq gainers trumped losers by 2020 to 997. The 10-day moving average of the A/D line rose to -112.7 on the NYSE, while the 10dma of the Nasdaq A/D rose to -133.6.
NYSE advancing volume exceeded volume in decliners by 2022.9 to 380.3 million shares; Nasdaq advancing volume was greater than volume in decliners by 1235.4 to 654.6 million shares.
53 NYSE-listed stocks rose to new 52-week highs, and 153 posted fresh 52-week lows, while on the Nasdaq there were 53 stocks that hit new 52-week highs, and 112 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 2383 | 2020 |
| Decliners | 862 | 997 |
| Advancing Volume (m) | 2022.87 | 1235.35 |
| Declining Volume (m) | 380.29 | 654.64 |
| New Highs | 53 | 53 |
| New Lows | 153 | 112 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 14.25 | -1.88 | -11.66% |
| CBOE Nasdaq Volatility Index | 17.52 | -0.26 | -1.46% |
| Equity Put-Call Ratio | 0.65 | -0.3 | -31.58% |
| 10-day PCR | 0.68 | 0 | 0% |
| SPX-VIX Ratio | 84.1 | 11.01 | 15.07% |
Bond Market Analysis
Bonds fell at the long end, with the yield on the benchmark 30-year Treasury bond rising 0.4 bps to 4.774%.
The middle of the yield curve was broadly lower: five year yields rose to 4.45%, and ten-year yields rose to 4.567%.
Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 8.0 bps wider at 16.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 57.0 bps for 10-year AAA, and 77.5 bps for 20-years.
Credit spreads (spreads between corporate bonds of the same maturity profile but different creditworthiness) were broadly tighter with the AAA-A spread on 20-years 5.0 bps tighter at 42.0 basis points and the 10-year AAA-A spread 2.0 bps tighter at 5.0 bps.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 3.825 | 0.033 | 0.87% |
| UST 2Y (yld) | 4.37 | 0.04 | 0.92% |
| UST 5Y (yld) | 4.45 | 0.02 | 0.45% |
| UST 10Y (yld) | 4.567 | 0.009 | 0.2% |
| UST 30Y (yld) | 4.774 | 0.004 | 0.08% |
The Banks Index rose 1.8 points (1.85%), to end the session at 99.24; within the index,
- Comerica (CMA) +$1.94 (3.48%) to $57.74;
- Fifth Third Bancorp (FITB) +$1.29 (3.29%) to $40.46;
- Washington Mutual (WM) +$1.08 (2.86%) to $38.90;
- Suntrust Banks (STI) +$1.93 (2.72%) to $72.80; and
- Wachovia (WB) +$1.19 (2.43%) to $50.09.
The Broker-dealer Index added 3.48 points (1.98%), ending the day at 179.4; the ticket clippers lined up as follows -
- Jeffries Group (JEF) +$1.58 (4.01%) to $41.03;
- Ameritrade (AMTD) +$0.57 (2.86%) to $20.50;
- Lehman Brothers (LEH) +$3.25 (2.83%) to $118.05;
- Merrill Lynch (MER) +$1.76 (2.81%) to $64.36; and
- Bear Stearns (BSC) +$2.70 (2.63%) to $105.50.
The Philadelphia SOX (Semiconductor) index declined 2.77 points (0.65%), closing at 424.87
- Maxim Integrated (MXIM) -$4.36 (11.19%) to $34.60;
- KLA-Tencor (KLAC) -$1.72 (3.64%) to $45.52;
- Linear Technology (LLTC) -$0.98 (2.85%) to $33.44;
- Applied Materials (AMAT) -$0.35 (2.09%) to $16.36; and
- Teradyne (TER) -$0.16 (1.18%) to $13.40.
Gold & Silver Markets
Gold fell by $0.80 (0.17%) to close at $474.8 per ounce.
The Gold Bugs Index advanced 2.21 points (1%), at 224.2
- Iamgold (IAG) +$0.35 (5.28%) to $6.98;
- Freeport McMoran (FCX) +$1.54 (3.22%) to $49.36;
- Eldorado Gold (EGO) +$0.09 (3.07%) to $3.02;
- Glamis Gold (GLG) +$0.53 (2.61%) to $20.85; and
- Harmony Gold (HMY) +$0.21 (2.02%) to $10.59.
Silver fell by $0.02 (0.26%) to close at $7.82 per ounce. The Gold and Silver Index (XAU) gained 1.25 points (1.18%), to 106.8 points.
- Barrick Gold (ABX) +$0.88 (3.34%) to $27.20;
- Freeport McMoran (FCX) +$1.54 (3.22%) to $49.36;
- Placer Dome (PDG) +$0.35 (2.17%) to $16.51; and
- Harmony Gold (HMY) +$0.21 (2.02%) to $10.59.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 474.80 | -0.80 | -0.17% |
| Silver | 7.82 | -0.02 | -0.26% |
| PHLX Gold and Silver Index | 106.8 | 1.25 | 1.18% |
| AMEX Gold BUGS Index | 224.2 | 2.21 | 1% |
Oil Market
Oil was firmer, rising by $0.13 per barrel, closing at $61.22 per barrel - although again it tried to dip below $60 (but stopped well short - the low was $60.55).
The Oil and Gas Index (XOI) added 23.84 points (2.52%), at 968.98
- Marathon Oil (MRO) +$2.66 (4.64%) to $59.94;
- Amerada Hess (AHC) +$4.60 (3.89%) to $122.91; and
- ConocoPhillips (COP) +$2.36 (3.88%) to $63.26.
The Oil service stocks (OSX) Index advanced 4.5 points (2.79%), closing at 165.94
- National Oilwells/Varco (NOV) +$2.81 (4.77%) to $61.77;
- Halliburton (HAL) +$2.53 (4.59%) to $57.63; and
- Rowan Companies (RDC) +$1.21 (3.83%) to $32.82.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 330.68 | -2.33 | -0.7% |
| Crude Oil Light Sweet | 61.22 | 0.13 | 0.21% |
| Heating Oil | 1.8969 | 0 | -0.23% |
| Natural Gas | 13.055 | -0.63 | -4.6% |
| Unleaded Gas | 1.6656 | 0.04 | 2.33% |
| AMEX Oil Index | 968.98 | 23.84 | 2.52% |
| Oil Service Index | 165.94 | 4.5 | 2.79% |
Currency Markets
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 89.59 | 0.46 | 0.52% |
| Euro | 1.207 | -0.0067 | -0.55% |
| Yen | 115.685 | 0.19 | 0.16% |
| Sterling | 1.7734 | -0.0096 | -0.54% |
| Australian Dollar | 0.7492 | -0.0078 | -1.03% |
| Swiss Franc | 1.2802 | 0.0063 | 0.49% |
| Canadian Dollar | 0.8495 | -0.0034 | -0.4% |
