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Monday, December 05, 2005

USRant: A Monday Decline?...

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Economic data: not a lot of it - the Institute of Supply Management survey related to non-Manufacturingwas released, and was slightly weaker than the consensus guess (58.5 versus consensus of 59). No great shakes there.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation - a $11.75billion, overnight repurchase entirely in T-backed collateral undertaken at a 2.7 basis point premium to the Fed Funds Rate (FFR). So despite a huge wodge of cash sloshing into the bank accounts of da Boyz, there was no discount to FFR - and therefore no 'free ride'  to enable them to free the arms and play cross-bat shots.

Major US Indices

The Dow Jones Industrial Average slid 42.5 points (0.39%), closing out the day at 10835.01 points. The index set its intraday high of 10876.95 (10875-ish) at the open, and fell as low as 10810.67 during the session; the low was hit just before 2 p.m., on a re-test of the earlier low (at 10811.4) which was set after about an hour and a half of trading. 

Within the blue-chip index, 9 stocks rose, the biggest gainers being Hewlett Packard (HPQ, +1.92% to $29.79) and General Electric (GE, +0.76% to $35.77), which accounted for 5 Dow points between them. Losers in the Dow numbered 20 and were led by Intel (INTC, -1.93% to $26.90) and Wal Mart (WMT, -1.73% to $47.14), with these two stocks contributing -11 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 214.2m shares to 136.4m.

The broader S&P500 dipped 2.99 points (0.24%), to end the session at 1262.09. Within the index, gainers numbered 150, while 328 S&P500 stocks fell for the day. Volume was tilted just under 2:1 in favour of the losers with 1303.25 million units traded in the losers as compared with 668.26 million traded in the winners .

Over at Times Square, the Nasdaq Composite dipped 15.73 points (0.69%), to close at 2257.64, while larger-cap technology issues fared worse with the Nasdaq100 losing 14.33 points (0.84%), to end at 1694.77 points. Within the tech benchmark, gainers numbered 24, while 73 Nasdaq100 stocks fell for the day. Volume was tilted 2.3:1 in favour of the losers with 508.66 million traded in the losers compared to 222.54 million in the winners .

NYSE Volume was super-chunky, with 2.28 billion shares changing hands, while Nasdaq Volume was barely chunky, with 1.7 billion shares traded.

Major Market Statistics
Dow Jones Industrial Average10835.01-42.5-0.39%
Nasdaq Composite2257.64-15.73-0.69%
NYSE Volume2.28bn--
Nasdaq Volume1.7bn--


My 9-stock "bellwethers" group fell by an average of 0.41%

  • General Electric (GE) +$0.27 (0.76%) to $35.77;
  • Citigroup (C) +$0.08 (0.16%) to $48.85;
  • Wal Mart (WMT) -$0.83 (1.73%) to $47.14;
  • I.B.M. (IBM) -$0.22 (0.25%) to $88.43;
  • Intel (INTC) -$0.53 (1.93%) to $26.90;
  • Cisco Systems (CSCO) -$0.14 (0.79%) to $17.50;
  • eBay (EBAY) +$0.01 (0.02%) to $45.20;
  • Fannie Mae (FNM) -$0.33 (0.69%) to $47.66; and
  • Freddie Mac (FRE) +$0.48 (0.76%) to $63.38.

Market Breadth & Internals

NYSE declining Issues beat out advancers by 1947 to 1343, for a single-day A/D reading of -604; and Nasdaq losers exceeded gainers by 1883 to 1153. The 10-day moving average of the A/D line fell to 27.6 on the NYSE, while the 10dma of the Nasdaq A/D fell to -66.0.

On the NYSE declining volume was greater than volume in advancing issues by 1336.7 to 926.6 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1105.1 to 577.6 million shares.

151 NYSE-listed stocks rose to new 52-week highs, and 78 posted fresh 52-week lows, while on the Nasdaq there were 168 stocks that hit new 52-week highs, and 36 which fell to fresh 52-week lows.

Market Breadth Statistics

Advancing Volume (m)926.56577.6
Declining Volume (m)1336.681105.07
New Highs151168
New Lows7836

Market Sentiment Statistics
CBOE Volatility Index11.60.595.36%
CBOE Nasdaq Volatility Index14.60.684.89%
Equity Put-Call Ratio0.760.022.7%
10-day PCR0.5800%
SPX-VIX Ratio108.8-6.1-5.31%

Bond Market Analysis

Bonds fell at the long end, with the yield on the benchmark 30-year Treasury bond rising 4.6 bps to 4.763%.

The middle of the yield curve was broadly lower: five year yields rose to 4.492%, 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 1.0 bps wider at 14.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 65.0 bps for 10-year AAA, and 93.0 bps for 20-years.

Treasury Yields
UST 13wk (yld)3.910.0180.46%
UST 2Y (yld)4.4100%
UST 5Y (yld)4.4920.0461.03%
UST 10Y (yld)4.5670.0481.06%
UST 30Y (yld)4.7630.0460.98%

The Banks Index declined 0.04 points (0.04%), closing at 104.43; within the index,

  • Northern Trust (NTRS) -$0.66 (1.23%) to $52.82;
  • Regions Financial (RF) -$0.39 (1.14%) to $33.88;
  • Bank Of NY (BK) -$0.26 (0.79%) to $32.61;
  • PNC Financial Services (PNC) -$0.49 (0.76%) to $64.02; and
  • Fifth Third Bancorp (FITB) -$0.29 (0.72%) to $40.00.

The Broker-dealer Index added 1.23 points (0.63%), at 197.35; the ticket clippers lined up as follows -

  • Ameritrade (AMTD) +$0.57 (2.39%) to $24.43;
  • Goldman Sachs (GS) +$1.97 (1.5%) to $133.05;
  • Raymond James (RJF) +$0.49 (1.31%) to $38.00;
  • Lehman Brothers (LEH) +$1.51 (1.19%) to $128.77; and
  • Bear Stearns (BSC) +$1.01 (0.9%) to $113.68.

The Philadelphia SOX (Semiconductor) index dipped 7.92 points (1.57%), to 497.67

  • Altera (ALTR) -$0.80 (4.19%) to $18.30;
  • Xilinx (XLNX) -$0.90 (3.29%) to $26.46;
  • Texas Instruments (TXN) -$0.90 (2.64%) to $33.21;
  • Advanced Micro Devices (AMD) -$0.68 (2.43%) to $27.27; and
  • KLA-Tencor (KLAC) -$1.18 (2.18%) to $52.91.

Gold & Silver Markets

Gold rose $5.60 (1.1%) to close at $512.60 per ounce. Note that the front-mopnth contract has rolled over - to February06 for Gold, and March06 for Silver. That's why there appears to be a discontinuity between Friday's Gold numbers and today's. Suffice it to say, the important technical level (509-ish) that has stood for 20-odd years, has still not fallen unambiguously; spot Gold traded above $509, but only just. It will need to hold above $509.50 for at least one full session to qualify as a genuine break of that level.

The Gold Bugs Index added 0.94 points (0.38%), ending the day at 248.98

  • Meridian Gold (MDG) +$0.60 (3.13%) to $19.78;
  • Agnico Eagle (AEM) +$0.38 (2.48%) to $15.73;
  • Eldorado Gold (EGO) +$0.08 (1.94%) to $4.21;
  • Freeport McMoran (FCX) +$0.74 (1.38%) to $54.44; and
  • Iamgold (IAG) +$0.06 (0.79%) to $7.67.

Silver rose $0.09 (1.02%) to close at $8.74 per ounce. Again, the front-month rolled over. 

The Gold and Silver Index (XAU) gained 0.2 points (0.17%), ending the day at 116.43 points.

  • Meridian Gold (MDG) +$0.60 (3.13%) to $19.78;
  • Agnico Eagle (AEM) +$0.38 (2.48%) to $15.73;
  • Durban Rooderpoert Deep (DROOY) +$0.03 (2.31%) to $1.33; and
  • Freeport McMoran (FCX) +$0.74 (1.38%) to $54.44.
Precious Metals and Indices
PHLX Gold and Silver Index116.430.20.17%
AMEX Gold BUGS Index248.980.940.38%

Oil Market

Oil was firmer, rising by $0.59 per barrel, closing at $59.91 per barrel and trading well above $60 intra-session. The rest of the Energy complex was mixed: Heating Oil followed Crude up - HO was reacting to the first snowfalls in the NorthEast (I've said it dozens of times - the market is not "forward-looking"... it looks sideways, at best).

The CL (Crude) market is reacting to recent murmurings about how OPEC ought to think about trying to aim at a $50 received price for oil (remember, the OPEC basket is 'sourer' than WTI Light Sweet - and as such the average OPEC price is a lot lower than the WTI price).  I don't blame OPEC for moving their price band (remember when it was suppsoed to be $28?) Well, they are now aware that they are getting paid in a currency which has significant structural problems, and is likely to crack - and crack hard - before too long.

The fact that the Iranians are about to kick-start their Euro-based oil bourse is also having an effect - primarily through early positioning in short USD positions (the only people who are actually building longUSD positions at the moment are non-reportables... in other words, the 'Dumb Money At Work' sign is out).

And of course the fact that Iran is about to start Euro-pricing of oil is in no way related to the sabre-rattling by the US in Iran's direction. Just as Iraq's move to euro-pricing had nothing to do with the illegal US invasion of that country.

The Oil and Gas Index (XOI) gained 9.5 points (0.94%), to end the session at 1016.45

  • Occidental Petroleum (OXY) +$1.38 (1.68%) to $83.34;
  • Marathon Oil (MRO) +$0.92 (1.51%) to $61.71; and
  • Sunoco (SUN) +$0.93 (1.12%) to $83.75.

The Oil service stocks (OSX) Index lost 0.25 points (0.14%), at 183.31

  • Cooper Cameron (CAM) -$1.15 (1.39%) to $81.66;
  • Global Industries (GLBL) -$0.13 (1.02%) to $12.58; and
  • Halliburton (HAL) -$0.63 (0.96%) to $65.20.
Energy Complex
Reuters CRB340.921.230.36%
Crude Oil Light Sweet59.910.590.99%
Heating Oil1.78960.020.99%
Natural Gas13.66-0.27-1.95%
Unleaded Gas1.5898-0.02-1.33%
AMEX Oil Index1016.459.50.94%
Oil Service Index183.31-0.25-0.14%

Currency Markets

USD Exchange Rates
US Dollar Index91.53-0.4-0.44%
Australian Dollar0.75130.00270.36%
Swiss Franc1.3074-0.0103-0.78%
Canadian Dollar0.86420.00330.38%