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Today it was like the old days with the 'bin Laden has been captured' rumours that used to emerge whenever there was trouble in the CME S&P pits. The rumour would be promulgated and at the same time there would be a push in the S&P pits... the results were always fun to watch.
Three times during the day there was 'chatter' to the effect that the Bush administration would use TARP (Taxpayer Anal Reaming Project) funds to bail out three firms who can't sell cars at a profit.
The first such rumour was before the open, and helped the futures market - which had been down over 300 in the Dow futures - to rally such that the market opened down 200. The second happened at about 2:30 p.m. NY time as the Dow had failed a second attempt to break above breakeven for the day - that resulted in a 200-point surge in the Dow in less than half an hour.
The third was five minutes before the close - driving the Dow futures up 100 points in four minutes. that is the only thing that enabled the Dow to close above the zero line; the Dow only lost 6 points (0.07%) for the week. The S&P500 gained 3.7 points (0.42%) and the Nasdaq100 added 2.5% for the week.
So now the US financial markets are rewarding - nay, cheering - any move by the US government to force taxpayers to pay for the failures of GM, Ford and Chrysler. The 'Big Three' can't get consumers to hand over money voluntarily, they will get government to force taxpayers to hand over the money. The beauty of that - for the 'Big Three' is that they don't have to hand over a single car.
Today at 5 p.m. (9 a.m. Strayan time) there is a meeting of GMAC bondholders, where GMAC is going to try and pull some financial chicanery in order to pretend that some of its bonds are actually 'capital'; what it is trying to do is re-negotiate $38 billion of debt into $30 billion of debt and $8 billion of preferred stock... then it can pretend that it's net capital position is sufficient for it to be granted bank status. This was supposedly required in order to get TARP money.
Bear in mind what I said earlier this week - that the 'Big Three' would get their money, and that the announcement would be made formally on the weekend. If the announcement is made this weekend, sell the opening orgasm on Monday.
And let's not forget - this was a day when the world learned that the SEC is yet another 'asleep at the switch' regulator.
This issue with Bernard Madoff shows that government-funded oversight is an absolute waste of money: all they do is move in once the fraud or malfeasance is already detected.
Government enforcement agencies are not preventative - they are remedial: they fail to prevent things, then the y come in and throw their weight around after the fact. Remediation of wrongs is what first-world countries have courts for.
The problem with government regulation is much the same problem as that observed with the (increasingly paramilitary) 'police' forces - they prevent bugger-all and protect bugger-all: they respond to miscreancy in a highly inefficient, arbitrary and costly manner. Ask the de Menezesfamily about government attempts at prevention. If there was any real justice in the world, the de Menezes family would avail themselves of some 'eye for eye-plus' action - if it was my family there would be no safe haven anywhere on earth for the shooters, nor for those who cleared them to use deadly force, nor for the politicians who set the system in place.
Moving right along... amongst the things that the SEC failed to see until it was too late: Enron, WorldCom, Fannie/Freddie/Citi/Merrill/Lehman/Bear... and now a Ponzi scheme so big that it dwarfs any similar scheme in history, except for those run by governments. I've mentioned before that there is some doubt as to whether Ponzi's scheme actually was fraudulent (as I understand it, he never failed to pay a single creditor... he was shut down by a complaint from the US Postal Service), so perhaps we ought to refer to such things as "Madoff Schemes" from now on.
Anyway... when it comes to for prevention of misdeeds, government agencies are about as useful as a one-legged midget in a bum-kicking contest.
What I am trying to say here is that the SEC is a bunch of overpaid ineffectual asshats with the same ability to pre-empt problem as those assclowns at Moody's, Fitch and Standard&Poors.
If a $50 billion fund can skate under the SEC's radar for ten years, how on earth can anybody continue to have faith in the US market system?
Economic News
Economic data continued to be poor - the Producer Price Index fell 2.2% for the month (the core PPI rose 0.1%) - both numbers were pretty much in line with expectations.
Retail Sales declined 1.8% - the market had expected a 2% fall.
Consumer sentiment rose from a 28-year low - the UMich Consumer Sentiment index rose to 59.1 from 55.3. Expectations had been for a rise to 56 or thereabouts.
Headline Indices
The Dow Jones Industrial Average index (DJI) rose 64.59 points (0.75%) to 8629.68 points. The index high for the day was 8679.94, while the low was 8347.81. Dow futures got as low as 8190, so low to high was a tad less than 500 points.
Total volume traded in the 30 components of the index was 1.08bn shares. Advancers outpaced decliners by 2.3 to one, with 21 advancers to 9 decliners. Advancing volume exceeded declining volume by 808.34m to 270.22m shares The biggest gainers (percentage-wise) were -
- Intel (INTC) +0.74 (5.3%) to $14.75 on volume of 69.72m shares;
- AIG (AIG) +0.07 (4%) to $1.8 on volume of 38.5m shares;
- United Technologies (UTX) +1.74 (3.7%) to $48.82 on volume of 9.96m shares;
- Hewlett-Packard (HPQ) +1.19 (3.4%) to $35.97 on volume of 17.57m shares; and
- JPMorganChase (JPM) +1 (3.3%) to $30.94 on volume of 59.39m shares.
The S&P500 index (SPX) rose 6.14 points (0.7%) to 879.73 points. Total volume traded in the 500 components of the index was 4.15bn shares. Advancers outpaced decliners by 2.2 to one, with 332 advancers to 150 decliners. Advancing volume exceeded declining volume by 2.89bn to 1.19bn shares. The biggest gainers (percentage-wise) were -
- ProLogis (PLD) +2.38 (42.5%) to $7.98 on volume of 26.43m shares;
- General Growth Properties (GGP) +0.36 (25%) to $1.8 on volume of 22.74m shares;
- CB Richard Ellis Group (CBG) +0.71 (21.1%) to $4.08 on volume of 9.06m shares;
- Equity Residential (EQR) +4.22 (15.4%) to $31.65 on volume of 10m shares; and
- Host Hotels & Resorts (HST) +0.93 (14.7%) to $7.25 on volume of 19.03m shares.
The Nasdaq Composite advanced +32.84 points (2.18%) to 1540.72 points and the Nasdaq100 added +26.19 points (2.22%) to 1206.65 points..
The Nasdaq100 index (NDX) added 26.19 points (2.22%) to 1206.65 points. Total volume traded in the 100 components of the index was 862.41m shares. Advancers outpaced decliners by 3.9 to one, with 77 advancers to 20 decliners. Advancing volume exceeded declining volume by 601.19m to 252.87m shares. The biggest gainers (percentage-wise) were -
- Lam Research (LRCX) +2.15 (10.3%) to $23.02 on volume of 3.56m shares;
- Amylin Pharmaceuticals (AMLN) +0.95 (9.5%) to $11 on volume of 4.97m shares;
- Broadcom (BRCM) +1.19 (7.2%) to $17.79 on volume of 15.34m shares;
- KLA-Tencor (KLAC) +1.3 (6.5%) to $21.2 on volume of 4.86m shares; and
- Ryanair Holdings plc (RYAAY) +1.71 (6.3%) to $28.7 on volume of 1.95m shares.
Volatility
The CBOE Volatility Index declined 1.5 points (2.69%) to 54.28 points and the CBOE Nasdaq100 Volatility Index dipped 0.15 points (0.29%) to 51.91 points..
Breadth and Internals
A total of 3893 issues traded today on the NYSE; today's total volume was 6.39bn shares. A total of 2278 stocks posted gains for the day, and volume in advancing issues totalled 4.18bn shares. Exerting downwards pressure on the index were 1518 losers, which accounted for a total declining volume of 1.78bn shares. 9 stocks made new 1-year highs on the NYSE, while 149 shares plumbed new 52-week depths.
On the Nasdaq 2976 tickers traded today; total Nasdaq volume was 1.87bn shares. A total of 1941 stocks posted gains for the day, with aggregate volume of 1.35bn shares changing hands in the day's winners. The red zone of the Nasdaq exchange comprised 902 losers, and total declining volume was 0.49bn shares. 2 Nasdaq-listed stocks hit new 52-week highs, while 118 shares dipped to new 1-year lows.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 8629.68 | +64.59 | 0.75% |
| S&P500 Index | 879.73 | +6.14 | 0.7% |
| Nasdaq Composite | 1540.72 | +32.84 | 2.18% |
| Nasdaq100 | 1206.65 | +26.19 | 2.22% |
| CBOE Volatility Index | 54.28 | -1.50 | -2.69% |
| CBOE Nasdaq100 Volatility Index | 51.91 | -0.15 | -0.29% |
Dow Darlings
- Intel (INTC) +0.74 (5.3%) to $14.75 on volume of 69.7m units
- United Technologies (UTX) +1.74 (3.7%) to $48.82 on volume of 10m units
- Hewlett-Packard (HPQ) +1.19 (3.4%) to $35.97 on volume of 17.6m units
- JPMorganChase (JPM) +1.00 (3.3%) to $30.94 on volume of 59.5m units
- Du Pont (DD) +0.67 (2.6%) to $26.61 on volume of 8.6m units
Dow Duds:
- General Motors (GM) -0.18 (4.4%) to $3.94 on volume of 90.6m units
- Boeing (BA) -1.07 (2.7%) to $39.2 on volume of 10.3m units
- Johnson & Johnson (JNJ) -1 (1.7%) to $57.25 on volume of 14.7m units
- Disney Corp (DIS) -0.21 (0.9%) to $22.61 on volume of 15m units
- Chevron (CVX) -0.46 (0.6%) to $79 on volume of 17.7m units
Most Traded Dow stocks:
- Citigroup (C) +0.13 (1.7%) to $7.70 on volume of 148.4m units
- Bank Of America (BAC) +0.02 (0.1%) to $14.93 on volume of 119.1m units
- General Motors (GM) --0.18 (4.4%) to $3.94 on volume of 90.6m units
- Microsoft (MSFT) --0.09 (0.5%) to $19.36 on volume of 78.1m units
- General Electric (GE) +0.06 (0.4%) to $17.11 on volume of 72m units
Precious Metals
Precious metals futures were static - they were higher than in yesterday's USRant, but down relative to yesterday's settlement prices.
| Precious Metals Futures | |||
| Index | Close | Gain(Loss) | % |
| Gold | 821.2 | -5.4 | -0.65 |
| Silver | 10.25 | -0.175 | -1.68 |
| Palladium | 175 | -9.2 | -4.99 |
| Platinum | 823.5 | -22 | -2.6 |
The Gold Bugs index (XAU) added 2.77 points (2.63%) to 108.24 points. Total volume traded in the 16 components of the index was 123.85m shares. Advancers outpaced decliners by 15 to one, with 15 advancers to 1 decliner. Advancing volume exceeded declining volume by 104.56m to 19.3m shares The biggest gainers (percentage-wise) were -
- Agnico Eagle Mines (AEM) +2.58 (7.1%) to $38.98 on volume of 5.12m shares;
- Coeur d'Alene (CDE) +0.04 (6.3%) to $0.67 on volume of 11.27m shares;
- Silver Stand Resources (SSRI) +0.66 (6.2%) to $11.27 on volume of 0.83m shares;
- Pan-American Silver (PAAS) +0.66 (5%) to $13.77 on volume of 1.1m shares; and
- Royal Gold (RGLD) +1.77 (4.8%) to $38.83 on volume of 0.48m shares.
Energy Complex
Energy futures were mixed - Crude recovered well from a dramatic early slide to the mid-$43 level -
| Energy Futures | |||
| Commodity | Close | Gain(Loss) | % |
| Crude Oil | 46.67 | -1.31 | -2.73 |
| Heating Oil | 1.4985 | -0.0081 | -0.54 |
| Natural Gas | 5.518 | -0.08 | -1.43 |
| Gasoline RBOB | 1.0833 | 0.0047 | 0.44 |
| Ethanol | 1.546 | 0.028 | 1.84 |
The Oil Services index (OSX) declined -0.9 points (0.73%) to 122.49 points. Total volume traded in the 15 components of the index was 104.04m shares. Decliners outpaced gainers by 1.1 to one, with 8 decliners to 7 advancers. Declining volume was greater than advancing volume by 54.98m to 49.06m shares. The main decliners (in percentage terms) were -
- Weatherford International (WFT) -0.35 (3.3%) to $10.14 on volume of 14.78m shares;
- Schlumberger (SLB) -1.25 (3%) to $41.1 on volume of 11.94m shares;
- Transocean Inc (RIG) -1.36 (2.3%) to $56.75 on volume of 9.24m shares;
- Tidewater (TDW) -0.66 (1.7%) to $37.54 on volume of 1.16m shares; and
- Noble Corp (NE) -0.41 (1.6%) to $24.87 on volume of 6.06m shares.
Currency Futures
Currency futures performed as follows -
| Currency Futures | |||
| Index | Close | Gain(Loss) | % |
| U.S. Dollar Index | 83.625 | -0.265 | -0.35 |
| Euro FX | 1.334 | 0.0058 | 0.44 |
| Swiss Franc | 0.8521 | 0.0062 | 0.73 |
| Australian Dollar | 0.6569 | -0.0094 | -1.41 |
| Canadian Dollar | 0.8047 | -0.0058 | -0.72 |
| Japanese Yen | 1.1004 | 0.0081 | 0.74 |
| New Zealand Dollar | 0.5405 | -0.004 | -0.73 |
Bellwethers
The nine-stock group that makes up the Rant bellwethers advanced on average by 3.1%. The fallout occurred as follows:
- General Electric (GE) +0.06 (0.35%) to $17.11 on volume of 71.99m units.
- Citigroup (C) +0.13 (1.72%) to $7.70 on volume of 148.39m units.
- Wal-Mart (WMT) -0.16 (0.29%) to $54.63 on volume of 23.61m units.
- IBM (IBM) +1.62 (2.01%) to $82.20 on volume of 10.4m units.
- Intel (INTC) +0.74 (5.28%) to $14.75 on volume of 69.75m units.
- Cisco Systems (CSCO) +0.08 (0.47%) to $16.99 on volume of 46.97m units.
- Google (GOOG) +15.54 (5.18%) to $315.76 on volume of 5.71m units.
- Fannie Mae (FNM) +0.03 (4.48%) to $0.70 on volume of 22.88m units.
- Freddie Mac (FRE) +0.06 (8.82%) to $0.74 on volume of 10.45m units.
Other Indices of Interest...
The Banks index (BKX) advanced 0.64 points (1.5%) to 43.19 points. Total volume traded in the 24 components of the index was 571.25m shares. Advancers outpaced decliners by 3.6 to one, with 18 advancers to 5 decliners. Advancing volume exceeded declining volume by 533.79m to 37.46m shares The biggest gainers (percentage-wise) were -
- National City (NCC) +0.14 (8.1%) to $1.86 on volume of 44.35m shares;
- Regions Financial (RF) +0.56 (6.7%) to $8.86 on volume of 8.03m shares;
- PNC Financial (PNC) +2.51 (5.4%) to $49.16 on volume of 5.24m shares;
- Wachovia (WB) +0.27 (5.4%) to $5.29 on volume of 38.61m shares; and
- US Bancorp (USB) +0.99 (4%) to $25.84 on volume of 16.37m shares.
The Semiconductor index (SOX) gained 9.57 points (4.71%) to 212.94 points. Total volume traded in the 18 components of the index was 234.43m shares. Advancers outpaced decliners by 17 to one, with 17 advancers to 1 decliners. Advancing volume exceeded declining volume by 232.51m to 1.92m shares The biggest gainers (percentage-wise) were -
- Micron Technology (MU) +0.22 (11.9%) to $2.07 on volume of 15.94m shares;
- Broadcom (BRCM) +1.19 (7.2%) to $17.79 on volume of 15.34m shares;
- KLA-Tencor Cp (KLAC) +1.3 (6.5%) to $21.2 on volume of 4.86m shares;
- Marvell Technology (MRVL) +0.38 (6.1%) to $6.57 on volume of 16.56m shares; and
- Taiwan Semiconductor (TSM) +0.44 (6%) to $7.74 on volume of 22.78m shares.
The ChildKiller ("Defence") index (DFX) advanced 5.23 points (2.15%) to 247.94 points. Total volume traded in the 17 components of the index was 111.61m shares. Advancers outpaced decliners by 2.2 to one, with 11 advancers to 5 decliners. Advancing volume exceeded declining volume by 94.8m to 16.81m shares The biggest gainers (percentage-wise) were -
- Esterline Tech (ESL) +4.61 (14.4%) to $36.61 on volume of 0.72m shares;
- Gencorp (GY) +0.2 (6.9%) to $3.11 on volume of 0.22m shares;
- Embraer Empresa (ERJ) +0.91 (5.7%) to $17 on volume of 1.32m shares;
- United Technologies (UTX) +1.74 (3.7%) to $48.82 on volume of 9.96m shares; and
- Lockheed Martin (LMT) +1.6 (2.1%) to $77.8 on volume of 2.78m shares.
