Tuesday, February 07, 2006

Stocks Finish Lower as Commodity Stock Mania Subsides

Indices
S&P 500 1,254.78 -.81%
DJIA 10,749.76 -.45%
NASDAQ 2,244.96 -.61%
Russell 2000 717.18 -1.47%
S&P Barra Growth 596.39 -.84%
S&P Barra Value 654.57 -.78%
Morgan Stanley Consumer 588.76 +.04%
Morgan Stanley Cyclical 774.58 -1.13%
Morgan Stanley Technology 525.89 -.17%
Transports 4,229.62 -1.42%
Utilities 404.50 -.76%
Put/Call .94 +11.90%
NYSE Arms 1.41 +47.08%
Volatility(VIX) 13.59 +4.22%
ISE Sentiment 153.00 -6.13%
US Dollar 90.22 -.08%
CRB 336.43 -1.99%

Futures Spot Prices
Crude Oil 63.03 -.08%
Unleaded Gasoline 159.20 -.13%
Natural Gas 7.92 +.89%
Heating Oil 168.90 -.17%
Gold 552.20 -.50%
Base Metals 172.96 -2.13%
Copper 227.05 -.33%
10-year US Treasury Yield 4.56% +.49%

Leading Sectors
Semis +.11%
Broadcasting unch.
HMOs -.04%

Lagging Sectors
Steel -4.87%
Oil Service -6.10%
Gold & Silver -7.08%

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In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on (PFGC), (WAG), (X), (OXY) and (CSCO).
- Reiterated Underperform on (BMC).

Afternoon/Evening Headlines
Bloomberg:
- ABC’s Super Bowl broadcast drew the highest national ratings since 2000 as the Pittsburgh Steelers won a record-tying fifth NFL championship.
- President Bush honored Coretta Scott King as “God’s servant,” saying at the funeral for the widow of slain civil rights leader Martin Luther King Jr. that she was an example of strength and dignity who continued her husband’s service in the cause of civil rights.
- Billionaire investor Carl Icahn proposed breaking Time Warner(TWX) into four pieces to increase the value of the world’s largest media company by as much as $45 billion.
- Cisco Systems(CSCO) said second-quarter net income fell on stock-option expenses. The shares rose 4.5% after profit margins beat analyst estimates.
- US public concern over Iran and the threat it poses to US security has risen over the past few month, according to a recent Pew Research Center poll. The poll also found that the public supports wiretapping terror suspects without court approval by a margin of 54% to 43%.
- Crude oil plunged more than $2 a barrel in NY to a four-week low on expectations that an Energy Dept. report tomorrow will show US inventories of oil and gas jumped last week. Gold also declined, falling the most in dollar terms in 13 years.

CNBC:
- The Retail Industry Leaders Association has filed suit over a Maryland law that required retailers to set aside 8% of payroll for worker health-care costs.
BOTTOM LINE: The Portfolio finished slightly lower today as losses in my Medical longs, Internet longs and Retail longs. I did not trade in the final hour, thus leaving the Portfolio 50% net long. The tone of the market was negative today as the advance/decline line finished substantially lower, almost every sector declined and volume was heavy. Measures of investor anxiety were higher into the close. Overall, it was a good day for the bears as the major averages finished lower on good volume and poor breadth. However, considering the 5-6% plunges in most commodity stocks, today's losses in the major averages were relatively mild. Moreover, semis finished slightly higher on the day. The NYSE Arms finished at an above-average 1.46, which is a positive. I plan to remain nimble over the coming days as I perceive a leadership change is in the offing.

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