STOCK MARKET WATCH, Tuesday 20 December

DOW 11,000 BEFORE YEAR END?

Whether or not we make it (DOW 11,000 that is) – in layman’s language - will ultimately come down to whether or not there are more ‘buyers’ than ‘sellers’ of equities between now and year’s end. From a technical perspective, however, Tim W. Wood speaks of Non-Confirmations.

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But 11,000 seems like such a nice, big “Round Number,” doesn’t it? Well, according to Deron Wagner’s (of Morpheus Trading Group), Wagner Daily,

Total volume in both exchanges surged higher last Friday, adding another "distribution day" for both the S&P and Nasdaq. Total volume in the NYSE was 28% higher, while volume in the Nasdaq increased substantially by 33% over the previous day's level. To be fair, part of the increase in volume was likely attributed to the quarterly "quadruple witching" of options expiration on Friday. Nevertheless, the losses on higher volume caused the broad market to register its fifth day of institutional selling within the past four weeks. A healthy market can typically absorb two or three "distribution days" within a four-week period, but a fifth day of distribution within that time period is definitely an important warning sign to the bulls. Remember that volume tells us what is really happening "under the hood" of the markets. Daily analysis of the relationship between price and volume is also important because volume typically leads price, thereby giving us an early advantage at spotting potential trend reversals in the broad market. Without even looking at any charts, the recent pattern of "distribution days" alone should give the bulls cause for a pause.

What About A Santa Clause Rally?

If the technicians can’t promise us DOW 11,000 for Christmas, I got to thinking about the average “Joe” trader on the good ole NYSE – perhaps they would oblige? It was after combing through some back dated articles of RealMoney by TheStreet.com that I was ‘saddened to’ learn that,

Traders: Don't Believe in Santa Claus.

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http://www.financialsense.com/Market/wrapup.htm

January White Sale and post holiday discounts? :evilgrin:

:donut: I haven't been this angry since the Saturday Night Massacre during the Nixon administration. What we have here is now a dick-tatership. If it weren't for the fact that most of the National Guard is in Iraq, I would be worried about declaring martial law. Silly you think...Remember after 9/11. I wouldn't put it past these power mad putzs to create another terrorist attack and declare martial law. I don't think I am being too paranoid. I never thought they would go as far as they have.

If Congress does not investigate and prosecute THIS impeachable offense, all IS lost. We have done the unforgivable and traded security for liberty. And as Franklin said-we will deserve neither.

My hubby, myself, and our friends will surely be on the first round up list due to our antiwar activities and mingling with musicians from the middle east (read Moslems). I had been putting out a few feelers out anyway. It will take a while to close things out. I had kicked around the idea of watching the 06 and 08 election cycle but I am now very serious about my expatriation plans should things not change.

I will be doing some needed activities (renewing my passport, balancing my portfolio, etc) and will be posting sporadically as I can.

Happy hunting, watch out for the bear and low flying reindeer. Merry Christmas, Happy Hannnuka, and a Joyous Kwanzaa to you all. :pals:

these are indeed scary times - I do fear that if our Congress does not take a drastically proactive step toward impeachment all may truly be lost. :(

My time is short today for the SMW - so others will need to take up the slack.

:pals:

UIA, have a safe and productive day. :pals:

SINGAPORE (Reuters) - Oil prices rebounded slightly on Tuesday after four consecutive days of sharp losses, with traders looking ahead to an expected draw in weekly U.S. crude inventories.

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U.S. crude stocks probably fell 1.3 million barrels last week due to lower imports and higher refinery runs, a Reuters poll of nine analysts forecast, the first draw in three weeks.

"Even if there is a stock draw, unless it is substantially and unexpectedly high, I would not expect prices to go up above $60 as the near-term market is still heavily weighed down by high inventory levels and the warmer weather," said Tony Nunan, a manager with Mitsubishi Corp's risk management business.

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&cap=An%20oil%20barge%20in%20Boston%20Harbor.%20Reuters%20Photo

LONDON, Dec 20 (Reuters) - Oil prices rose on Tuesday after gunmen attacked an pipeline in Nigeria, a major supplier of crude to the United States, killing eight people and causing a major spill.

U.S. January light crude rose 36 cents to $57.70 a barrel by 1552 GMT, rebounding from a loss of more than $4 since Wednesday. London Brent gained 18 cents to $56.29 a barrel.

Unidentified gunmen attacked a pipeline operated by Royal Dutch Shell in Nigeria's remote southern delta, causing a major oil spill and fire, the company said.

Shell said it closed two oilfields and shut-in 170,000 barrels per day of production to help curb the fire.

Also pushing the market higher were expectations for a drawdown in U.S. crude inventories last week.
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8:30 AM Building Permits for Nov
Briefing Forecast 2090K
Market Expects 2092K
Prior 2103K

8:30 AM Core PPI for Nov
Briefing Forecast 0.2%
Market Expects 0.2%
Prior -0.3%

8:30 AM Housing Starts for Nov
Briefing Forecast 2030K
Market Expects 2020K
Prior 2014K

8:30 AM PPI for Nov
Briefing Forecast -0.5%
Market Expects -0.5%
Prior 0.7%

8:30am 12/20/05 U.S. NOV PPI ENERGY PRICES DOWN 4.0%

8:30am 12/20/05 U.S. CORE PPI UP 1.7% IN PAST 12 MONTHS

8:30am 12/20/05 U.S. PPI UP 4.4% IN PAST 12 MONTHS

8:30am 12/20/05 U.S. NOV. PPI DECLINE LARGEST SINCE APRIL 2003

8:30am 12/20/05 U.S. NOV. CORE PPI UP 0.1%, VS. RISE 0.2% EXPECTED

8:30am 12/20/05 U.S. NOV. PPI DOWN 0.7% VS. FALL 0.3% EXPECTED

U.S. Nov. PPI down 0.7%, core PPI up 0.1%

http://www.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38706.354314375-855044482&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (MarketWatch) - U.S. prices of raw materials and other producers' inputs fell 0.7% in November, the Labor Department reported Tuesday. This is the largest monthly decline since April 2003. Excluding food and energy costs, the core PPI rose 0.1%. Economists were expecting the PPI to fall 0.3% and the core rate to rise 0.2%. Over the past year, the PPI has risen 4.4% and the core rate is up 1.7%. Further back in the production cycle, crude goods prices fell 1.2% in November but were still up 21% year-on-year. Intermediate goods prices decreased 1.2%, but were up 8.4% over the past 12 months.

Sheesh. Why don't I just overdraw my checking account and mark it up as a gain with the extra stuff I'd buy?

8:45am 12/20/05 U.S. NOV. HOUSING STARTS RISE 5.3% TO 2.123 MLN UNITS

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-12-20T133030Z_01_N19262794_RTRIDST_0_ECONOMY-HOUSING-URGENT.XML

WASHINGTON, Dec 20 (Reuters) - U.S. housing starts rose 5.3 percent in November as groundbreaking on both single-family and multifamily units climbed, the Commerce Department reported on Tuesday.

November housing starts increased to a 2.123 million unit annual rate, faster than the 2.017 million unit annual rate expected by Wall Street economists, who had anticipated rising mortgage rates would cool activity. October starts were revised up to a 2.017 million unit annual pace from the originally reported 2.014 million unit rate.

Single-family housing starts rose 4.8 percent to a 1.808 million unit annual rate while starts on multifamily units jumped 7.9 percent to a 315,000 unit pace.

Permits for future groundbreaking, an indicator of builders' confidence, rose 2.5 percent in November to a 2.155 million unit pace. Economists had expected permits to fall to a 2.093 million unit pace from October's revised 2.103 million unit pace.

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Starts climbed throughout most of the country, except the U.S. South, which reported a 1.3 percent decline in groundbreaking. Starts rose 12.3 percent in the Midwest, 11.5 percent in the West and 11 percent in the Northeast.

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http://quotes.ino.com/chart/?s=NYBOT_DX

Last trade 90.17 Change +0.08 (+0.09%)

Dollar Strengthens Against Euro and Yen

http://www.dailyfx.com/story/dailyfx_reports/daily_brief/5634_dollar_strengthens_against_euro_and.html

The USD/JPY rallied to 116.80 in Asian trade buoyed by demand from real money accounts such as Japanese importers as well as a growing realization by the specs that the pair may have made a double bottom near the 116 area. Although Japanese authorities are making strong attempts at instilling fiscal discipline by passing a federal budget under 80 trillion yen for the first time in 8 years, the USD/JPY shrugged off the positive yen news.

Instead the pair was far more affected by the report that Convenience store sales printed a disappointing -4.0% decline on year over year basis indicating that persistent deflation remains embedded in the Japanese economy. Because Convenience stores are the primary means of retail in Japan, tonight’s news may be a significant signal regarding the true state of consumer demand in Japan. If deflationary pressures still remain in the Japanese system then market’s assumption about the end of the carry trade may be much too premature and USD/JPY could see more upside ahead.

In Europe the news was depressingly familiar with Italian Industrial Orders and Sales missing the mark. Orders contracted -1.1% versus expectations of a gain 1.2% while Sales dropped -0.6% against consensus estimate of a 0.6% gain. Perhaps the best that can be said about the data is that it is highly outdated coming as it does from the October period. However, if other EU members aside from Germany do not pick up the pace of economic growth, the euro will not be able to generate any momentum off its own fundamentals and will simply trade off dollar sentiment, providing little confidence to spec accounts looking to place term bets into 2006.

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We would have made him CEO.

http://www.cfo.com/article.cfm/5327062/c_5327347?f=home_todayinfinance

Overshadowed by all the worries about underfunded corporate pension plans, there's another category of implicit promises that are even less adequately funded, according to Standard & Poor's.

Other post employment benefits (OPEB) mostly entail medical costs paid to retired workers. According to S&P, these benefits may be contractual or implied, and they usually require retiree contributions in the form of monthly premiums and direct co-payments for services and products rendered.

For the S&P 500, the ratings agency reported, the underfunded OPEB liability totals $292 billion, compared with $150 billion for those companies' underfunded pensions.

"The state of OPEB is extremely unsettling," wrote S&P analyst Howard Silverblatt, in a press release. Unlike pensions, which are regulated, there exists no legal requirement to create a trust entity to fund current or future OPEB costs, S&P pointed out. The ratings agency also observed that tax treatments and credits set up specifically to encourage pension funding do not exist for OPEB costs. S&P further noted that 88 percent of pension obligations are set aside in trusts, compared with only 22 percent for OPEB obligations.

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http://www.nypost.com/business/59126.htm

December 20, 2005 -- Centrix Capital Management, a $700 million Colorado-based hedge fund, is limiting customer withdrawals from its main portfolio.
Centrix took the unusual step to keep institutional investors from fleeing the fund after it was hit with hundreds of millions of dollars in client redemptions.

Ordinarily, hedge funds just sell positions to raise money to pay their clients back. Centrix, however, packages sub-prime auto loans for its investors. Because those loans are private and held to maturity, there's no market in which to trade them to more willing buyers.

Centrix has gone from about $700 million in assets to $442 million, according to Hedgefund.net.

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He described the sudden rush for the doors as "a result of two of our larger investors needing to raise cash at once, for their own reasons." :eyes: Yea, right!

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One potential investor in Centrix said he was scared away from the fund because it hadn't posted its October or November performance numbers yet.

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What, all of a sudden they woke up and realized what they'd dumped lots and lots of money into?

:eyes:

http://money.cnn.com/2005/12/20/news/fortune500/walmart.reut/index.htm

NEW YORK (Reuters) - Wal-Mart Stores Inc. Tuesday said the U.S. Attorney's Office in Los Angeles has informed the retailer that it is the target of a criminal probe involving the transportation of material deemed "hazardous waste" in allegedly improper vehicles.

In a filing with the Securities and Exchange Commission, the world's biggest retailer said it is being investigated for violating the Resource Conservation and Recovery Act.

According to the Wal-Mart, the government is investigating whether it improperly used its own trucks to transport material deemed hazardous to centralized facilities, rather than using certified hazardous waste carriers to transport that material directly to designated disposal sites.

The company previously disclosed that it had received a grand jury subpoena in the matter, looking at, among other things, the transportation of material from California to Nevada.

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What hazmat would Wal-Mart have? Expired, broken cleaning and automotive supplies? :shrug:

http://www.bloomberg.com/apps/news?pid=10000103&sid=ag4xpcXNnpMQ&refer=us

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The criminal investigation involves whether the company is properly transporting and disposing of returned merchandise from California stores, Wal-Mart said in a U.S. Securities and Exchange Commission filing yesterday.

Wal-Mart said its practice has been to consolidate certain goods at return centers and then dispose them by transporting the materials to a certified waste disposal facility. Under federal law, companies must transport materials that may be considered hazardous waste directly from stores to a certified waste disposal facility using licensed carriers, according to the filing.

The U.S. Attorney contends use of company trucks to transport the merchandise from stores to the return centers may violate the Resource Conservation and Recovery Act, Wal-Mart said. The company is cooperating with the investigation. Wal-Mart spokeswoman Sarah Clark said the company is reviewing its transportation methods.

``There are thousands of potential items in a store that could fit that category'' (of hazardous waste), including damaged aerosol hair spray cans, broken bottles of fingernail polish and opened shampoo bottles, Clark said.

Challenging Practice

The government is challenging Wal-Mart's practice of transporting the materials from its stores to its Las Vegas returns center, not the methods of disposal, Clark said.

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Dow 10,845.49 +8.96 (+0.08%)
Nasdaq 2,224.54 +1.80 (+0.08%)
S&P 500 1,260.82 +0.90 (+0.07%)
10-Yr Bond 4.462 +0.20 (+0.45%)

NYSE Volume 782,122,000
Nasdaq Volume 712,955,000

11:30AM: Little changed since the last update as the major indices still vacillate in roughly the same ranges. As an aside, while today might turn out to be a lighter than normal trading day due primarily to New York City's first transit strike in 25 years, it may be worth noting that total volume on the NYSE is uncharacteristically exceeding that on the Nasdaq. Pfizer has again been the most actively traded blue chip while GM, which has already surpassed its average daily volume (13.8 mln), is a close second.NYSE Adv/Dec 1422/1594, Nasdaq Adv/Dec 1183/1648

11:00AM: Market rebounds somewhat but not nearly enough to make a significant change in the standings. Providing the biggest sources of support have been turnarounds in semiconductor, led by a 2.4% rebound in Advanced Micro Devices (AMD 28.79 +0.67), and homebuilders. It appears an early sell-on-the news reaction to surprisingly strong housing data has subsided somewhat. Earlier, the Commerce Dept. showed that Nov. housing starts rose 5.3% to 2.123 mln units (consensus 2.02 mln) and Nov. building permits rose 2.5% to 2.155 mln units (consensus 2.092 mln).SOX +0.6, NYSE Adv/Dec 1349/1628, Nasdaq Adv/Dec 1079/1679

10:30AM: Market continues to weaken as selling pressure pushes the Dow into negative territory. A 5.0% drubbing to new 18-year lows in General Motors (GM 19.98 -1.07), which could lose its coveted No. 1 position (by total volume) to Toyota in 2006, has weighed most heavily on blue chips. A reversal in American International Group (AIG 65.71 -0.11), which is in negotiations to acquire roughly $3.4 bln worth of Tokyo real estate, and consolidation in Pfizer (PFE 23.99 -0.33) following yesterday's nearly 8.0% surge, have also weighed on the price-weighted index.NYSE Adv/Dec 1324/1559

http://www.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid={0FCF6FD7-51DB-4707-BF79-BDA998BB3F64}&dist=bnb

SAN FRANCISCO (MarketWatch) -- General Motors (GM) shares fell 5.8% to $19.81 in early trading Tuesday, touching intraday levels not seen since 1987 according to historical data from Thomson First Call. Bankruptcy fears and the threat of a strike at Delphi (DPHIQ) , its biggest supplier, continue to dog the stock. Separately, shares of Ford (F) shed 1.3% to $8.12 a day after Fitch cut the automaker's credit rating to junk.

http://www.chicagotribune.com/business/chi-0512200204dec20,1,7941010.story?coll=chi-business-hed

U.S. auto sales for General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group fell more than 15 percent in early December, according to a study released Monday.

Overall, U.S. industry retail sales declined 14 percent through Dec. 11 from a year earlier, according to the Power Information Network, a unit of J.D. Power and Associates of Westlake Village, Calif.

Retail sales for GM, the biggest U.S. automaker, fell 17 percent. Ford's sales dropped 25 percent, and Chrysler's were down 19 percent.

The largest Asian automakers also posted declines.

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After all, workers in America are so disposable....

What the hell do they expect when they've taken everybody's jobs overseas? Where are our "consumer" dollars supposed to come from?

:kick::kick::kick:

http://www.hussmanfunds.com/wmc/wmc051219.htm

With the S&P 500 at 19 times peak earnings – a level which has rarely delivered satisfactory long-term returns – investors are looking for a “story” to support continued bullishness. After all, the holiday seasonality argument is a bit long in the tooth.

So attention has turned to the prospect that the Fed has finished, or is just about to finish, its tightening cycle. Isn't that alone a great reason for bullishness here?

Well, not so fast. As it happens, there have been 13 tightening cycles since 1950 where the Fed has raised rates at least twice. In the six month period following the last hike of the cycle, the S&P 500 has delivered annualized total returns averaging 2.47% over the following 6 months, 5.06% over the following year, and 8.55% over the following 18 months. All figures are on a monthly closing basis.

In other words, the market's return has actually been sub-par for a reasonably long period following the final hike of a rate tightening cycle. Now, if we look ahead to the first cut of a new easing cycle, things are definitely more interesting. Historically, the Fed tends to start new easing cycles well into established bear markets, and not surprisingly, the subsequent returns have been quite good on average. Following the first cut of a new easing cycle, the S&P 500 has delivered annualized total returns averaging 23.01% over the following 6 months, 21.18% over the following 12 months, and 22.12% over the following 18 months.

Well then, all we've got to do is wait for the first sign of slight concern. Surely Bernanke will give the market a little jolt by easing rates a bit, don't you think? Then we've got it made. And if we know now that we'll have it made then, why not just stay bullish?

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http://www.lewrockwell.com/orig6/douglas4.html

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This vast explosion of American Caesarism will probably lead to terrible defeats for the U.S. Empire and extreme "Reforms" at home. The Central Plan of Cheney, Wolfowitz, et al., was for the U.S. to win easy victories, use the wealth from those in the oil states (gained by taxing the Big Oil imperial corporations and by currency powers of the dollar and the purchase of U.S. equities and securities and political pay-offs by the Opec Monopolists now captive of the U.S. military) to build the Empire into The Global American Empire. They had forgotten the great dangers to this strategy of the guerilla armies that would oppose it, or, more likely, they were now totally blinded by hubris and believed they could do anything and everything. They also completely failed to realize how extreme the world reaction against this blatant imperialism would be and how totally the intelligent Americans would see through the vast cloud of Wilsonian propaganda and come to loathe the perpetrators of these Big Lies.

The American Global Empire was intended to solve the growing Great Financial and Economic Crisis of the U.S., the so-called "overstretch." The massive growth of the guerilla movements and armies in the Muslim World and the growing defeat by them in Afghanistan and Iraq are now vastly exacerbating the Great Financial and Economic Crisis. The U.S. Empire was already in grave peril because of the stagnating effects of a century of rapid growth of centralization, bureaucratization, debt, credit risk, suffocation of creativity and efficiency, decline of growth and all the effects of these. Now the failing Caesarist Plan is vastly accelerating the growth of all of those problems.

All of these major dimensions of America's Great Global Crisis are now interdependent with each other, each amplifying the others. The Great Global Crisis is thus growing very rapidly now.

It is conceivable that the U.S. will suffer some minor crash and pull back from all of these disastrous policies and stabilize its Empire at a lower position of global power. I doubt it can be done. The problems are so interdependent and extreme now that it seems pretty clear that the System is totally corrupt – "rotten" – at the top, very much like the Soviet System by the 1980's. Small crises and crashes are likely to accelerate into a Great Crash that can only be dealt with by getting out of The System in some way.

I used to think we could limp along from one bubble to another for decades. We have been doing that since the 1980's, but I now expect the Great Reckoning, the Great Crash, is getting quite near. There are many possible triggers out there waiting to be pulled, from a cut-off of oil supplies in the Persian Gulf to dirty bomb attacks on our cities to a Real Estate Crash precipitating a general Financial Crash to...

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http://www.321gold.com/editorials/laborde/laborde122005.html

Business compelled my wife, Puddy, and I to travel to Atlanta this past week. Since it is under my 600 mile no fly zone we drove there. I refuse to fly and deal with the airport gestapo unless it is over 600+ miles. The stress and elevated blood pressure is simply not worth it. While traveling east on I-20 we noticed a few FEMA trailers but as soon as we passed Jackson we saw a non stop parade for hours. We could not drive more than a few miles without seeing another group of 2 or 3 trailers headed for the Gulf Coast. In just 4 or 5 hours we must have seen more than a hundred trailers pulled by trucks with FEMA stickers on the tow vehicles. The press reports that FEMA is placing 400 trailers a day into service.

All these trailers made us think about the long term consequences of potentially misallocated capital. How long were people going to live in these trailers? Will they remain the property of FEMA? If so, will FEMA pay for the maintenance? While riding I also happened to read an article about an RV park in Mansfield, LA that was charging FEMA $450/month/trailer for ground rent on 12 trailers. While I suppose they were including water, sewage and electricity it seemed a little high but then FEMA is renting every space they can so I guess they are having trouble negotiating the best rate. Just looking at the trailers I would suppose they are paying about $15,000/each (probably more). If they are paying for the upkeep, transportation and ground rent it could add up to a tidy sum pretty quick. How long do you suppose the average person will occupy these trailers? I would guess perhaps two years maybe? What happens then? If the trailers remain the property of FEMA they will then have to transport them to a storage area and pay rent to keep them there until they are needed again. Will they be usable after they are lived in for a couple of years and then stored unattended for a couple more? Probably not. The bill on each of these temporary trailers could easily wind up costing $30,000 or more.

When we were traveling in Costa Rica a few years ago our guide told us that the poor could apply for a once in a lifetime grant of $1,500 to buy building materials to build their own home. He had to own a small lot and he had to build the home himself. The person now was a homeowner who cared for his home and added onto it if his fortunes improved later. It was a one time expense for the government with no long tail.

What could we do in this country along those same lines to really help displaced citizens instead of putting them in temporary solutions until government housing can be built for them (another very poor option). Perhaps the government could loan displaced persons $30,000 interest free for 30 years? For less than $85/month plus utilities they could become homeowners. Even if they were very modest homes such as a one bedroom A-frame homes where the parents slept in the den and the children slept upstairs in the loft they would be solid homes that would last. Architecture students could compete to design small square footage homes that were energy efficient and inexpensive to build. Murphy beds could make a comeback. Local building codes could be relaxed to allow the homeowners to do some of the work themselves.

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http://dahrjamailiraq.com/weblog/archives/informational_posting/000337.php

The Bush Administration uses double barrel propaganda today, with Mr. Bush using a prime time television address to say things like "My fellow citizens: Not only can we win the war in Iraq - we are winning the war in Iraq," and responding to negative news by saying "It does not mean that we are losing." Meanwhile, Mr. Cheney, while on a heavily guarded tour of the "Green Zone" and other locales in Iraq said today, "I think the vast majority of them think of us as liberators."

While the Bush Administration portrayed Thursday's Iraqi elections as a resounding success, Iraqi political parties are complaining of violations ranging from dead men voting to murder in the streets as accusations begin to fly from all political corners of rampand fraud and violence bringing the results of the vote under suspicion.

And if you want a sampling of Iraqis who Cheney spoke of, the following is another powerful dispatch from independent Iraqi journalist Sabah Ali. -DJ

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http://money.cnn.com/2005/12/20/markets/diamond_bribery/index.htm

NEW YORK (CNNMoney.com) - A scandal has rocked the $64 billion global diamond business and tarnished the credibility of one the industry's biggest players, according to a news report Tuesday

The Gemological Institute of America, which grades diamonds for independent dealers and big retailers, fired four employees and shuffled top management after an internal investigation of its policies, the Wall Street Journal said.

The institute's internal probe started after a jewelry dealer who was also the former head of retail operations at luxury jeweler Harry Winston claimed that the institute and two diamond dealers conspired to inflate the grade of two diamonds that he sold to members of the Saudi royal family.

The diamonds, which were sold for $15 million, were taken to an independent appraiser and found to have a lower grade that made them worth much less, the paper said.

The dealer alleged that lab workers took bribes to inflate the quality of diamonds in grading reports, according to the news report, which cited people familiar with the situation.

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Dow 10,806.43 -30.10 (-0.28%)
Nasdaq 2,221.60 -1.14 (-0.05%)
S&P 500 1,259.32 -0.60 (-0.05%)
10-yr Bond 4.466% +0.02
30-yr Bond 4.658% +0.02
NYSE Volume 1,597,564,000
Nasdaq Volume 1,432,446,000

3:00PM: Blue chips continue to deteriorate heading into the final hour of trading as many investors continue to question whether or not a Santa Claus rally will come to fruition of it already reared its head in the month of November, when the three major indices averaged a 4.1% gain. Either way, small caps continue to run, as the Russell 2000 extends its year-to-date 3.6% advance, closing the gap between the S&P 500 and its 3.9% gain. Russell 2000 +0.5, NYSE Adv/Dec 1793/1457, Nasdaq Adv/Dec 1558/1464

2:30PM: Split industry leadership continues to dictate late-day action as the Nasdaq continues to outpace, albeit modestly, its blue chip counterparts. While General Motors (GM 20.21 -0.84) remains the biggest drag on the Dow, reversals in IBM (IBM 82.53 -0.23) and Procter & Gamble (PG 58.51 -0.04) have contributed to the price-weighted index's recent inability to stay in positive territory. NYSE Adv/Dec 1692/1535, Nasdaq Adv/Dec 1511/1486

2:00PM: Equities continue to run in place just above the flat line with few catalysts to send them noticeably higher. While Energy continues to provide the bulk of upside leadership, the 1.2% surge in oil prices largely responsible for the sector's rebound has perhaps underpinned a sense of nervousness that crude will test the $60/bbl level before hitting the $50-53/bbl mark forecasted by Boone Pickens. It is worth noting that since the Jan. contract expires today, some short-covering could be behind oil's recovery.XOI +0.9, NYSE Adv/Dec 1803/1408, Nasdaq Adv/Dec 1530/1454

lawsuits; law - what law; the US don't need no stinkin' laws - look at Bush!)

http://edition.cnn.com/2005/US/12/20/nyc.transit/

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The Metropolitan Transportation Authority and city have responded by taking the union -- and its more than 30,000 members -- to court with contempt proceedings.

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The strike defies a court injunction last week as well as the Taylor Law, which forbids public employees from walking off the job. The law imposes a fine of two days' pay for each day of an illegal strike.

On Tuesday, the city filed additional injunction orders against the union, seeking damages of $1 million for the first day of the strike, doubling every day thereafter. It is also seeking $5 million in damages to compensate the city for the money it already has spent preparing for the strike.

The city also sought $25,000 fines for individual union members, doubling each day as well.

New York Mayor Michael Bloomberg called the strike "illegal and morally reprehensible" and said the union faces severe consequences.

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I'm sorry for any New Yorkers hurt by this strike, but I think it is time for a worker revolt. Would be nice to see some solidarity all around the US, but that's not about to happen. Hell, they don't even have the backing of the International arm of their union. These are very sad times for US labor.

Dow 10,805.55 -30.98 (-0.29%)
Nasdaq 2,222.42 -0.32 (-0.01%)
S&P 500 1,259.62 -0.30 (-0.02%)
10-Yr Bond 44.66 +0.24 (+0.54%)
NYSE Volume 1,991,656,000
Nasdaq Volume 1,736,258,000

Stocks fell for the fourth straight day, extending the broader market's longest losing streak since October, as investors were concerned that ongoing strength in the housing market would spur further Fed tightening. Even though a smaller than expected 0.1% rise in core-PPI indicated that higher energy prices have not led to broad inflationary pressures, better than expected housing starts and building permits stole the spotlight. Nov. housing starts checked in above the 2.0 mln annual rate for a seventh straight month while strong permits suggested that builders still expect starts to stay at a strong rate in the months ahead -- one of Fed Chairman Greenspan's largest concerns. The 10-yr note closed down 5 ticks to yield 4.46%. With regard to industry leadership, seven of ten economic sectors closed in negative territory. Telecom Services turned in the day's worst performance following reports that ex-Qwest Communications (Q 5.65 -0.12) CEO Joseph Nacchio was indicted and confirmation that Sprint Nextel (S 24.47 -0.17), a suggested holding in Briefing.com's portfolio for active investors, will buy the remaining 68% of Nextel Partners (NXTP 27.84 +1.52) for about $6.5 bln. Consumer Staples was another weak spot, as consolidation efforts weighed on Altria (MO 76.06 -0.52), which a new 52-week high Dec. 15th, and Wal-Mart (WMT 48.60 -0.36) lost ground amid reports that it is under investigation for the transportation of hazardous waste. Despite a rebound in HMOs that extended the group's year-to-date gain to 42%, which plays into our Market Weight rating on Health Care, profit-taking in Pfizer (PFE 24.00 -0.32) -- yesterday's best performing blue chip -- weighed on the sector. Continued weakness in Consumer Discretionary lent further support for Briefing.com's Underweight rating on the sector. Weighing most heavily on the sector was General Motors (GM 19.85 -1.20), which hit an 18-year low amid reports that the auto maker could lose its coveted No. 1 position (by total volume) to Toyota in 2006 and is recalling nearly 426,000 vans. Despite Target (TGT 54.03 +1.23) saying Dec. comps growth of 4-5% remains on track, a 0.9% rebound in oil prices to $57.85/bbl and perhaps worries that New York City's first transit strike in 25 years could have a major negative impact on holiday shopping placed some added pressure on select retailers. Technology also lost ground as chip stocks, which struggled to offset weakness in hardware and networking, failed to hold onto the bulk of their gains. Energy, which was off nearly 4.0% over the last three sessions, however, gained ground. Financial also traded higher, benefiting from a stronger than expected Q4 report from Morgan Stanley (MWD 57.71 +1.04), one of our favored picks in the brokerage space. Nonetheless, their leadership was not enough to snap the market's four-day losing streak. DJTA -0.1, DJUA +0.3, DOT -0.3, Russell 2000 +0.1, SOX +0.5, S&P Midcap 400 +0.3, XOI +0.7, NYSE Adv/Dec 1618/1668, Nasdaq Adv/Dec 1347/1689