STOCK MARKET WATCH, Friday July 27

Source: DU

Friday July 27, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 545/font] LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2394 DAYS
WHERE'S OSAMA BIN-LADEN? 2106 DAYS
DAYS SINCE ENRON COLLAPSE = 2067
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

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AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON July 26, 2007

Dow... 13,473.57 -311.50 (-2.26%)
Nasdaq... 2,599.34 -48.83 (-1.84%)
S&P 500... 1,482.66 -35.43 (-2.33%)
Gold future... 675.10 -11.40 (-1.69%)
30-Year Bond 4.95% -0.08 (-1.59%)
10-Yr Bond... 4.78% -0.13 (-2.59%)






GOLD, EURO, YEN, Loonie and Silver

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PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact actionpost@legitgov.org

For information on protests and other actions Citizens For Legitimate Government

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more Radical Fringe here


Read more: DU

8:30 AM GDP-Adv. Q2
Briefing Forecast 3.5%
Market Expects 3.2%
Prior 0.7%

8:30 AM Chain Deflator-Adv. Q2
Briefing Forecast 3.6%
Market Expects 3.4%
Prior 4.2%

10:00 AM Mich Sentiment-Rev. Jul
Briefing Forecast 92.4
Market Expects 91.5
Prior 92.4

http://biz.yahoo.com/c/e.html

12. U.S. Q2 core PCE price index lowest since Q2 '03
8:30 AM ET, Jul 27, 2007 - 31 minutes ago

13. U.S. Q2 core PCE price index up 1.4% annualized
8:30 AM ET, Jul 27, 2007 - 31 minutes ago

14. U.S. GDP up 1.8% in past year
8:30 AM ET, Jul 27, 2007 - 31 minutes ago

15. U.S. Q2 consumer spending up 1.3% vs 3.7% in Q1
8:30 AM ET, Jul 27, 2007 - 31 minutes ago

16. U.S. Q1 GDP up revised 0.6% vs 0.7% prev est
8:30 AM ET, Jul 27, 2007 - 31 minutes ago

17. U.S. Q2 GDP strongest since Q1 2006
8:30 AM ET, Jul 27, 2007 - 31 minutes ago

18. U.S. Q2 GDP up 3.4% annualized vs 3.6% expected
8:30 AM ET, Jul 27, 2007 - 31 minutes ago

hattip to Joanne98 for her DU thread

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x1450803

http://www.businessweek.com/magazine/content/07_25/b403...

JUNE 18, 2007

COVER STORY
By Michael Mandel

The Real Cost Of Offshoring

U.S. data show that moving jobs overseas hasn't hurt the economy. Here's why those stats are wrong

Whenever critics of globalization complain about the loss of American jobs to low-cost countries such as China and India, supporters point to the powerful performance of the U.S. economy. And with good reason. Despite the latest slow quarter, official statistics show that America's economic output has grown at a solid 3.3% annual rate since 2003, a period when imports from low-cost countries have soared. Similarly, domestic manufacturing output has expanded at a decent pace. On the face of it, offshoring doesn't seem to be having much of an effect at all.

But new evidence suggests that shifting production overseas has inflicted worse damage on the U.S. economy than the numbers show. BusinessWeek has learned of a gaping flaw in the way statistics treat offshoring, with serious economic and political implications. Top government statisticians now acknowledge that the problem exists, and say it could prove to be significant.

The short explanation is that the growth of domestic manufacturing has been substantially overstated in recent years. That means productivity gains and overall economic growth have been overstated as well. And that raises questions about U.S. competitiveness and "helps explain why wage growth for most American workers has been weak," says Susan N. Houseman, an economist at the W.E. Upjohn Institute for Employment Research who identifies the distorting effects of offshoring in a soon-to-be-published paper.

FLY IN THE OINTMENT
The underlying problem is located in an obscure statistic: the import price data published monthly by the Bureau of Labor Statistics (BLS). Because of it, many of the cost cuts and product innovations being made overseas by global companies and foreign suppliers aren't being counted properly. And that spells trouble because, surprisingly, the government uses the erroneous import price data directly and indirectly as part of its calculation for many other major economic statistics, including productivity, the output of the manufacturing sector, and real gross domestic product (GDP), which is supposed to be the inflation-adjusted value of all the goods and services produced inside the U.S. (For a detailed explanation of how import price data are calculated and why the methodology is suspect, see page 34.)

The result? BusinessWeek's analysis of the import price data reveals offshoring to low-cost countries is in fact creating "phantom GDP"--reported gains in GDP that don't correspond to any actual domestic production. The only question is the magnitude of the disconnect. "There's something real here, but we don't know how much," says J. Steven Landefeld, director of the Bureau of Economic Analysis (BEA), which puts together the GDP figures. Adds Matthew J. Slaughter, an economist at the Amos Tuck School of Business at Dartmouth College who until last February was on President George W. Bush's Council of Economic Advisers: "There are potentially big implications. I worry about how pervasive this is."

...more...

01. U.S. July consumer sentiment 90.4 vs. 85.3 June
10:01 AM ET, Jul 27, 2007 - 4 minutes ago

Oil prices rose Friday, reversing some losses from the previous session when crude fell nearly $1 a barrel on worries a slowing U.S. economy would cut petroleum consumption.

Light, sweet crude for September delivery rose 60 cents to $75.55 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.

The contract had dropped 93 cents to settle at $74.95 a barrel Thursday as global stock troubles deepened. Street suffered one of its worst losses of 2007 amid worries about the U.S. mortgage and corporate lending markets, and the Dow Jones industrials closed down more than 310 points.

Some analysts said the market was concerned that the plunge could hurt oil demand.

The jitters were evident Thursday when crude futures on the New York Mercantile Exchange hit a new 11-month intraday high of $77.24 a barrel — spurred on by U.S. government data released Wednesday showing a drop in U.S. crude oil inventories — before plunging in the middle of the day, aided by the stock market slide.

http://news.yahoo.com/s/ap/oil_prices

Filled up last evening at $2.79/gal

NEW YORK - U.S. stocks headed toward a flat open on Friday as fatigued investors looked toward government economic data on gross domestic product for any kind of inspiration to rally back from the second-biggest market drop this year.

Wall Street shuddered Thursday amid worries over the U.S. mortgage and corporate lending markets, sending the Dow Jones industrials down by as much as 450 points before it closed with a deficit of 311. Investors globally took flight from equities, shifting cash into safer investments in Treasurys.

Most Asian markets skidded early Friday in reaction to the market plunge, while European markets — which were open during part of the big U.S. drop — were narrowly mixed. Japan's Nikkei stock average fell 2.36 percent, while the Shanghai composite dropped 1.10 percent. Britain's FTSE 100 rose 0.10 percent, Germany's DAX index dropped 0.54 percent, and France's CAC-40 fell 0.02 percent.

U.S. investors will look to data on second-quarter GDP, which is due out at 8:30 a.m. EDT. Economists are expecting GDP growth around a 3.6 percent annualized rate, compared with a weak 0.7 percent growth rate in the first three months of the year.

http://news.yahoo.com/s/ap/20070727/ap_on_bi_st_ma_re/wall_street

July 26 (Bloomberg) -- Ford Motor Co., the second-biggest U.S. automaker, surprised investors with its first quarterly profit in two years, helped by the sale of Aston Martin and reduced spending on pensions and warranties.

Ford earned $750 million, or 31 cents a share, compared with a loss of $317 million, or 17 cents, a year earlier. When the gain for Aston Martin and costs for job cuts are excluded, the profit was $258 million, or 13 cents, versus the average estimate of a 37-cent loss in a Bloomberg survey of 13 analysts.

``Everything looks better; no one region carried the company,'' said Dan Poole, who helps manage $31 billion, including Ford shares, at National City Bank in Cleveland. ``There's a lot of positive news here for investors.''

The profit is the first under Chief Executive Officer Alan Mulally, 61. Mulally, hired last year from Boeing Co., is selling European luxury brands while closing 16 of 41 North American plants by 2012 in response to shrinking U.S. market share.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajFD0eQg6j6o&refer=home

Hmm... I wonder if the so-called savings from the job cuts were included?

Job cuts...reduced spending on pensions... (singing) Happy days are here again...

Family is in town until Sunday. I'll check back today is there's time.

Ozy :hi:

:donut: and lurkers. Once again I leave you kids alone for the day yesterday, and look what happened. No ponies for you guys:rofl-

I feel ok for the moment. My 403B is moderate (cash at 4% interest, indexed funds, ant the risky stuff is in emerging overseas markets. My shiny new Roth is collecting cash and moderately aggressive in good sectors at the moment so a down turn doesn't bother me too much because I see these sectors growing. The nice thing is this site has been watching this storm develop for a while. It is a bit like predicting a hurricane. You can see the colour and quality of the surf change, the sunrises and sunsets change in colour, and the winds pick up-but you never know when and where it will strike. Having gone through them before, I can say that you should always be alert to your investments. I worried 6 months ago and again when I opened my Roth-so I was ok and will be fine today. Never take your eye off that ball, and sadly most Americans do.

Now, I caught the midnight showing of the new Simpsons movie. I highly recommend that if you have ever watched the Simpsons-do take this one in, esp. this weekend. I laughed so hard-and so did my daughter. Sad to say-we spent many a quality family time watching (and discussing) the Simpsons. We have been warped I think. It will be a great antidote to a bad week in the market. First movie I have seen in a while that the audience broke out into an applause when it ended. There are so many jokes, I could see it again and still miss some.

Thanks to all those that contribute to this thread with their valuable info.

Happy hunting and watch out for the bears.

wonder if this will be an infinite loop thing and the DOW drops even more big time in response to the Asian market drop?

http://www.thehimalayantimes.com/fullstory.asp?filename=aBXaza0sfqzpa5a8a8a9va.axamal&folder=aBDasaian729&Name=Business&sImageFileName=&dtSiteDate=20070727
The Guardian
London, July 26:

The International Monetary Fund said booms in China, India and Russia would allow the global economy to shrug off the impact of the crisis in the American housing market and post faster-than-expected growth this year.
Updating its spring forecast, the Washington-based fund said it expected the world economy to expand by 5.2 per cent in both 2007 and 2008, a 0.3 point increase in both years.
This will be a continuation of the strongest period of growth across the globe since the late 1960s and early 1970s.
In contrast to the western-dominated global economy of four decades ago, the fund said the two former communist countries of Russia and China, together with the world’s second most populous nation, India, would be responsible for driving up more than half of the 5.2 per cent of the global growth this year.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aZXwZjQGDMY0&refer=asia

July 27 (Bloomberg) -- Asian stocks fell the most in four months, extending a rout in global equities, as investors shun riskier assets because of a worsening U.S. housing recession.

``You've got an economic impact from lower housing prices and housing demand,'' said Simon Doyle, a strategist at Schroder Investment Management Australia Ltd. in Sydney, which manages the equivalent of $11.4 billion. ``If the U.S. is under question, there might be a broader contagion.''

Toyota Motor Co., the world's largest automaker by market value, fell to an eight-week low, while Samsung Electronics Co., Asia's largest maker of mobile phones and chips, dropped for a fifth day. BHP Billiton Ltd. declined by the most in three months, following slides in metals and crude oil prices.

All of the region's markets declined, apart from Sri Lanka, with the Nikkei 225 Stock Average falling 2.4 percent to 17,270.45. South Korea's Kospi, which closed above 2,000 for the first time on July 25, dropped 3.4 percent, poised for its biggest loss since June 2006.

The Morgan Stanley Capital International Asia Pacific Index slipped 2.3 percent to 155.54 as of 2 p.m. in Tokyo, its biggest decline since March 14. The measure, which has climbed 11 percent so far this year and touched a record on July 24, is set for a 3.2 percent slump this week, the most since the period ended March 2.

Losses were aggravated after Fujitsu Ltd. posted its first loss in 10 quarters and Taiwan Semiconductor Manufacturing Co. reported its third consecutive profit decline.

...

Toyota, which got more than a third of its sales last year from North America, slid 1.5 percent to 7,270 yen, the lowest since May 30. Samsung plunged 2.7 percent to 609,000 won, adding to a four-day, 5.3 percent loss. James Hardie Industries NV, the biggest supplier of home siding in the U.S., slumped 4.4 percent to A$7.74 in Australia.

...

HSBC Holdings Plc, the world's third-biggest lender, slid 1.5 percent to HK$141.10. Profit growth probably slowed to 7 percent in the first half from 15 percent a year earlier amid the slump in the U.S. housing market, according to the median analyst estimate in a Bloomberg survey.

Canon Inc., the biggest digital-camera maker, tumbled 5.5 percent to 6,520 yen, the largest slide since October 2003. Nintendo Co., the maker of the best-selling Wii game console, lost 5.5 percent to 58,400 yen, retreating from a record.

``If you believe that water flows uphill and fish have wings, then Asian stocks can keep rallying and ignore the expanding housing and credit problems spreading out from the U.S.,'' said Chua Soon Hock, managing director of Asia Genesis Management in Singapore, which manages about $450 million.

Metals, Oil

BHP, the world's biggest mining company, declined 2.6 percent to A$36.32, the most since April 27. Rio Tinto Group, the third largest, lost 3.8 percent to A$90.36. Nippon Mining Holdings Inc., Japan's biggest copper smelter, fell 3.8 percent to 1,184 yen.

A measure of six metals traded on the London Metal Exchange, including copper and nickel, lost 0.9 percent yesterday, extending a three-day, 4.7 percent drop. The four-day decline is the longest since the period ended June 8. Copper slid 0.2 percent, nickel declined 0.6 percent and zinc fell 3.8 percent.

Meanwhile, crude oil for September delivery yesterday dropped 1.2 percent to $74.95 a barrel on the New York Mercantile Exchange, retreating from an 11-month high. Futures were recently at $75.37.

PetroChina Co., the nation's No. 1 explorer, fell 2 percent to HK$11.90. Inpex Holdings Inc., Japan's largest, slumped 3.2 percent to 1.21 million yen. Woodside Petroleum Ltd., Australia's No. 2 oil producer after BHP, fell 2 percent to A$43.54.

Fujitsu, Taiwan Semi

Fujitsu, Japan's second-biggest maker of personal computers, tumbled 5.8 percent to 792 yen. The company reported a net loss of 14.8 billion yen ($124 million) for the last three months, as lower prices ended nine straight quarters of profit.

Taiwan Semiconductor, the world's No. 1 custom-chip maker, slumped 5.4 percent to NT$64.50. Second-quarter net income fell 25 percent from a year earlier to NT$25.5 billion ($777 million), after slowing sales at mobile-phone producers forced customers to cut orders, the company said yesterday.

...

Chartered Semiconductor Manufacturing Ltd., the third- biggest, lost 2.4 percent to S$1.22 in Singapore. The company said its second-quarter net loss was $24.7 million, bigger than either the company or analysts predicted. Citigroup lowered its recommendation on the shares to ``sell.''

DBS Group Holdings Ltd., Southeast Asia's biggest bank, lost 3.1 percent to S$22. Second-quarter profit unexpectedly fell 7 percent from a year earlier to S$560 million ($370 million), after a charge for its investment in Thailand's TMB Bank Pcl offset growth in net interest income. Analysts surveyed by Bloomberg News predicted net income of S$626 million.

``The global investment environment has gotten riskier,'' said Nicole Sze, a Singapore-based analyst at Bank Julius Baer & Co., which manages $350 billion worldwide. The disappointing earnings ``certainly don't help sentiment.''

/...

TOKYO, July 27 (Reuters) - Japan's Nikkei average dropped 2.36 percent to its lowest in nearly three months on Friday on a plunge in the U.S. market and a stronger yen, while this Sunday's parliamentary election kept the market in check.

...

The Nikkei <.N225> was down 418.28 points at 17,283.81, the lowest close since May 1. The broader TOPIX index <.TOPX> shed 2.16 percent to 1,699.71.

/...

http://www.ft.com/cms/s/c118a9cc-3bd7-11dc-8002-0000779fd2ac.html

Japanese retail sales declined 0.4 per cent in June from a year earlier, government data showed on Friday, falling short of economists’ median forecast for a 0.6 per cent increase.

Compared with May, retail sales were down 0.8 per cent on a seasonally adjusted basis, the Ministry of Economy, Trade and Industry said.

The main cause of the decline in retail sales was a fall in sales in the auto industry, down 7.4 per cent from a year earlier and the sharpest decline in that sector for five years.

Japanese domestic car sales have been declining for 15 months.

Consumer prices fell 0.1 per cent in June, a widely expected reading that is unlikely to discourage the Bank of Japan from raising interest rates next month.

http://www.vnanet.vn/Home/EN/tabid/119/itemid/206226/Default.aspx

Beijing (VNA) - China's economy is in danger of overheating and officials at all levels must implement the central government's policies to combat the problem.

The Political Bureau of the Communist Party of China (CPC) made the call after central government inspection teams found some local governments ignoring the State Council's decision to save energy and cut greenhouse gas emissions, and are still investing heavily in high resource-consuming sectors.

"All the local governments, especially leading officials, should implement the central government's measures to the letter," the Political Bureau said at a meeting, chaired by President Hu Jintao.

President Hu emphasised the importance of seeing the ever-changing domestic and international economic environment in the right perspective, and called for continual efforts to tackle issues such as excessive liquidity and overcapacity.

The Chinese President also called for the increase of agricultural production, especially grain output, and the development of agricultural infrastructure.

/..

http://www.washingtonpost.com/wp-dyn/content/article/2007/07/26/AR2007072600716.html?nav=rss_business

WASHINGTON -- Treasury Secretary Henry Paulson received support from top executives and economists for his stance Thursday that America's system for taxing businesses must be overhauled to make the U.S. more competitive with other countries.

...

"There is a strong consensus that our business tax system is far from optimal and is undermining the competitiveness of American workers," Paulson said.

He pledged that Treasury would develop specific follow-up steps in coming months to make improvements although neither he nor Treasury's top tax policy officials suggested what those proposed changes might be.

Greenspan, who participated in the conference, was more direct. He said the country needed to lower corporate tax rates, which are now higher than those of many other industrial countries, and one way to do that would be to broaden the tax base by eliminating some current business deductions.

That was the approach taken in 1986, during the Reagan administration, in the last major overhaul of the U.S. tax system.

"I think we ought to try to resurrect the principles of the 1986 tax act," Greenspan said. "We have essentially almost fully unwound all of the benefits of that. So I think we have to do two things, one go back to broadening the base and lowering the rates and then figuring out a political way to keep it there."

Treasury produced a report for the conference that showed the U.S. corporate tax rate is now 39 percent when state levies are included. That is the second highest among major countries, topped only by a 40 percent rate in Japan. The average for other industrial countries is 31 percent.

The Treasury study showed the federal corporate rate could be cut from 35 percent to 27 percent with the same amount of revenue collected if a number of corporate tax breaks were eliminated, thereby broadening the tax base.

However, such a move would likely trigger a firestorm of protest as various groups sought to protect popular tax breaks such as the research and development credit.

Paulson said the current system "includes ad-hoc policies and preferences that result in a narrow tax base and create distortions that divert capital from its most efficient use." He said the U.S. tax code was riddled with complex, targeted provisions that hurt the country's overall economic performance.

/...

Assholes of Evil Institute.

You know they're in over their heads. :crazy:

11. Paulson: Strong economy a comfort as credit market adjusts
11:00 AM ET, Jul 27, 2007 - 1 hour ago

18. Paulson says strong dollar in U.S. interest
10:16 AM ET, Jul 27, 2007 - 2 hours ago

20. Paulson: U.S. economy transitioning to sustainable growth
10:14 AM ET, Jul 27, 2007 - 2 hours ago

Not only that. They also have to drive the same car for more than one year. They sometimes pinch pennies by cooking at home. Twice per year, on average, Goldman Sachs executives must float one credit card payment to keep the electricity from getting turned off. The Goldman Sachs cafeteria always offers mustard sandwiches (because mustard suppresses hunger pangs).

These folks need our help.

:sarcasm: - in case you hadn't guessed

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

Last trade 80.902 Change +0.456 (+0.57%)

Dollar Finds Bid Ahead of GDP

http://www.dailyfx.com/story/bio2/Dollar_Finds_Bid_Ahead_of1185539559903.html

The EURUSD was pressured throughout the night as further carry trade unwinds in EURJPY triggered stops first at 1.3675 and then at the 1.3650 level in the pair. EZ economic news was generally supportive with GFK consumer confidence rising to an eight month high and CPI data out of Germany generally firmer, but the market ignored the data with the dollar rallying on a bit of flight to safety dynamic and speculation of a strong rebound in GDP. We are skeptical the GDP will hit the lofty 3.4% expectations given the softness in Durable goods, persistent weakness in housing and in our opinion market’s overestimation of the positive contribution of exports. While US manufacturers have clearly benefited from lower dollar, much of the positive impact in the trade Balance is likely to have been offset by the cost of higher imported oil.

Nevertheless, the EURUSD may be pressured for the rest of the day as the greenback rally appears to be driven by technical factors as many speculative trades from equities to commodities to the carry trade are unwound and those assets are parked in dollars for the time being.

Yen has been the key beneficiary of the this move to risk aversion gaining more than 200 points since yesterday. However, the unit lost some momentum in late Asia trade as USDJPY once again traded above 119.00 figure. Despite the power of the carry trade unwind, the yen is unable to gather even a modicum of support from the fundamentals. Overnight Japanese data was horrid with Retail Trade slipping to -0.4% and CPI continuing to contract. Japanese retail traders have been one of the staunchest sellers of their own currency and they stepped in to buy the dips in USDJPY tonight helping to stabilize the fall.

The other funding currency in the carry trade, the Swiss franc saw very positive data after the release of the KOF index of leading economic indicators printed at 2.13 – it best reading since August of 2006. The market however did not react to the news as most traders remain dubious that the strong economic data out of Switzerland will push the SNB to hike rates by 50bp in September given the muted inflation pressures in the Swiss economy.

...more...

Dollar Collapses, Fed Fund Futures Show 90% Chance of Rate Cut by Year End

http://www.dailyfx.com/story/bio1/Dollar_Collapses__Fed_Fund_Futures_1185485282500.html

The problems in the US housing market are worsening and anyone who is long stocks, carry trades or the US dollar is feeling the pain. Next to the 3.2 percent decline in the Dow back in February, this is the largest one day point loss since the beginning of the year. Unlike the previous corrections that we had in June, there were plenty of clues that this one could be a lot worse. In yesterday’s Daily Fundamentals we talked about how even though the stock market recovered, yields were lower, which suggests that there may be more bad news to come. On Tuesday, we warned that risk aversion is returning, which meant that the sell-off in the yen crosses may be closer to liquidation than the profit taking that we have seen in the past. We were watching the Chicago Board Options Exchange Volatility Index or the VIX. At the time it was nearing February levels and today, it hit a new 13 month high. High VIX readings represent a rise in risk aversion and typically coincides with a sharp sell-off in US stocks. We can also tell that risk aversion has returned because credit spreads have widened significantly. The latest wave of panic selling has been caused by the combination of weak US economic data and news that Wells Fargo, the nation’s second largest home lender and fifth largest bank will stop making sub prime loans through third party brokers. We are clearly seeing the problems in the housing market extend beyond subprime. New home sales dropped 6.6 percent in the month of June while rising inventories drove the median price down 2.2 percent. Durable goods sales also fell short of expectation as defense spending slowed. The labor market may even be affected with newspaper help-wanted ads dipping to a 49 year low last month. The fact that jobless claims remains at healthy levels indicates that companies are not firing, but at the same time, it does not mean that they are hiring. In light of all of this weak data, Fed fund futures are now pricing in a 90 percent chance of a rate cut by the end of the year; this represents a sharp jump from the 44 percent chance reported yesterday. Given all of the disappointments reported today, there is a decent chance that tomorrow’s second quarter GDP growth figure will miss expectations. Even though the stock market has rebounded, yields are still sharply lower which suggests that dollar weakness may not be over.

Dow Plummets 300 Points, Carry Trade Liquidation Continues

Rising risk aversion has caused a wave of carry trade liquidation. None of the Yen crosses were spared in the second worst day for carry traders this year. The biggest losers were NZD/JPY and AUD/JPY, which dropped 400 and 340 points respectively. Carry trades only work in a market that is willing to take on risk. With evidence that things could get worse before they get better in the US, it may be wise for carry traders to stand aside for the time being. Some economists are once again calling for a recession. Market expectations have shifted dramatically which makes it a far more unstable environment than a few months ago. Tonight’s Japanese data is not likely to matter at this point because the problems are far more severe than the risk of a rate hike by Japan. Consumer prices and retail sales are due for release. Inflation is expected to remain nonexistent while retail sales are predicted to rebound. A rebound in the Yen crosses will however be contingent upon whether we see any follow through selling in the US stock market.

Commodity Currencies Suffer as High Yielders Go Out of Favor

As victims of carry trade liquidation, the Australian, New Zealand and Canadian dollars also sold off aggressively today. Unsurprisingly, the biggest mover was the New Zealand dollar which suffered greatly from last night’s dovish comments by Reserve Bank of New Zealand Governor Bollard. The trade balance is due for release tonight. The strong kiwi is expected to turn the surplus into a deficit, which could exacerbate the currency’s weakness. The New Zealand dollar should also begin to under perform its Australian counterpart as the recent inflation data from Australia has the market pricing in another rate hike this year. A turn is in place for all three currency pairs. We continue to expect more weakness in the Canadian dollar, particularly against the Japanese Yen.

...more...

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=2007-07-27T054340Z_01_T240865_RTRIDST_0_MARKETS-FOREX-UPDATE-2.XML
Fri Jul 27, 2007 1:43am ET
By Rika Otsuka

TOKYO, July 27 (Reuters) - The yen hit a three-month high against the dollar and a six-week high versus the euro on Friday as a sell-off in credit and stock markets forced investors to cut back on risky carry trades.

But the yen quickly gave up gains, with the high-yielding Australian and New Zealand dollars rising sharply as Japanese investors took the yen's rally as an opportunity to buy foreign currencies and assets.

"Players such as importers, institutional investors and brokerage houses were selling the yen en masse, and there were some investment trust launches as well," said Akira Kato, senior manager for Bank of Tokyo-Mitsubishi UFJ. "It's not just in dollar/yen but also Aussie/yen, euro/yen, and sterling/yen. There's been yen-selling on all the cross/yen pairs that were hit the hardest yesterday," Kato said.

The dollar hit a fresh three-month low against the yen at 118.02 yen <JPY=> on electronic trading platform EBS in early Asian trade before recovering to around 118.95 yen.

Traders also booked profits on the yen's initial surge, which came after U.S. equities fell sharply on Thursday, as a big widening in credit spreads stoked fears that problems in the subprime mortgage market may lead to a severe credit crunch.

Traders said more sell-offs in global equity and credit markets would likely spark more unwinding of yen carry trades.

"The situation is no longer like, you are OK as long as you are selling the yen," said Shuichi Kanehira, senior vice president in the forex division at Mizuho Corporate Bank. Continued...

/...

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070727:MTFH82375_2007-07-27_05-02-58_SHA269418&type=comktNews&rpc=44

SHANGHAI, July 27 (Reuters) - China's yuan <CNY=CFXS> rose slightly against the dollar on Friday, showing little response to mounting pressure from the United States to let the Chinese currency appreciate more quickly.

The U.S. Senate Finance Committee voted on Thursday to give the U.S. Treasury Department new tools to pressure countries with "fundamentally misaligned currencies".

The legislation, if enacted, would allow U.S. companies to seek anti-dumping duties on goods from any country that maintains a misaligned exchange rate after being formally cited by the United States.

The yuan showed scant reaction to the news, trading at 7.5626 to the dollar at 0458 GMT, up modestly from Thursday's close at 7.5655.

"I don't think this news will have any real effect on the market, at least in the short term, as it won't go into effect for a while," said a trader at a major international bank.

"Plus, a bill like this is not a major surprise as the U.S. has recently been putting more pressure on China to let its currency appreciate."

He continues to believe the yuan will rise to around 7.55 to the dollar by the end of July and will appreciate by 5 percent for this year.

/...

05. U.S. economy 'performing well,' White House says after GDP
9:39 AM ET, Jul 27, 2007 - 7 minutes ago

but that money isn't trickling down very well now is it?

Dow 13,416.83 down 56.74 (0.42%)
Nasdaq 2,582.46 down 16.88 (0.65%)
S&P 500 1,472.73 down 9.93 (0.67%)
10-Yr Bond 4.812% down 0.035

NYSE Volume 253,414,000
Nasdaq Volume 186,041,000

He posted them in this thread...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=2931480&mesg_id=2931494


The videos are very helpful in understanding what is going on in the financial world.

Dow 13,483.98 up 10.41 (0.08%)
Nasdaq 2,604.56 up 5.22 (0.20%)
S&P 500 1,483.97 up 1.31 (0.09%)
10-Yr Bond 4.802% down 0.025

NYSE Volume 855,951,000
Nasdaq Volume 586,325,000

10:00 am : Equities are still on the defensive, but barely, as a renewed wave of buying interest lifts the indices well off their recent lows. Turnarounds in the Financial and Technology sectors have been the most notable areas of improvement and are offering much needed sources of support if stocks are going to recover any of yesterday's sizable losses.

Albeit much less influential, Telecom and Materials have also turned the corner; but their modest gains so far have not been enough to counter losses in the S&P 500's remaining six sectors. DJ30 -4.46 NASDAQ -2.05 SP500 -0.84 NASDAQ Dec/Adv/Vol 1167/442/120 mln NYSE Dec/Adv/Vol 1721/803/78 mln

09:40 am : After initially shaping up to be a sharply lower open, some encouraging economic and earnings data opened the indices slightly to the upside; but buyers are now struggling to find their footing. The early positive disposition was largely built on news that the economy grew at the fastest pace in more than a year last quarter and that the GDP deflator, a key inflation gauge, was up at just a 2.7% annual rate.

Concerns that tightening credit standards will substantially slow the record pace of M&A activity, subsequently weakening a huge area of support for stocks over the last year, and potentially curtail overall economic growth, are still acting as an overhang and have since pushed stocks back into the red. DJ30 -23.65 NASDAQ -6.19 SP500 -3.82 NASDAQ Vol 88 mln NYSE Vol 38 mln

The bulls are having problems holding on.

I think things could get quite ugly today, especially if there aren't enough buyers out there on a Friday afternoon.

Coming up on 11 AM EST, Dow is now Down 70, and picking up steam it appears.

11:00 am : So much for the market's latest attempt to recoup even the smallest of Thursday's widespread thumping as a renewed wave of selling interest pushes the indices toward fresh session lows. All 10 sectors are trading in negative territory, paced again by another round of profit taking in Energy (-1.0%).

More troubling is the fact that not even oil prices trading near their best levels of the morning and Chevron (CVX 87.65 +0.19) handily beating expectations earlier have been able to offer any buying support in this year's best performing sector. Crude for September delivery is now up 1.5% near $76.10/bbl following reassuring news about economic growth. DJ30 -66.28 NASDAQ -13.57 SP500 -8.81 XOI -1.8% NASDAQ Dec/Adv/Vol 1573/1226/708 mln NYSE Dec/Adv/Vol 1374/1711/450 mln
http://finance.yahoo.com/marketupdate/overview

The word of the week is volatile--ups & downs, wild swings...your best market buy may be Tums or Dramamine (that's humor, not actual advice!)

This economy is like an aircraft in a stall and instead of doing the correct thing to bring it
out of the stall and get the nose down. The current 'money wizards' at the White House insist
on pulling back on the yoke.

The only way out of this mess is via someone somewhere taking losses. Of course the Big Players
and Speculators of the recent Real Estate balloon are trying to shed their risk onto the smaller
investors. It's a deadlock... Nobody is willing to take any kind of small loss now and by doing
so they may be making it inevitable that everyone loses everything later.

I read someone post yesterday that the market always goes up... I had to laugh. No, it doesn't.

They are only (partially) correct in the long term, sometimes the very long term. The Nasdaq still hasn't gotten back up where it was in 2000.

And I have no question who is going to take the losses...it won't be the folks who got Dubya's big tax breaks!

While we're discussing "getting the nose down"... Raising taxes are traditionally the way it's
accomplished. But, it'll never happen while Dubya is at the wheel. Except maybe to tax the
nonexistent middle-class.

What irritated me more than the "always up" claim is that they were implying that if you're
not making money you must be stupid... No, I'd say most of us aren't privy to some of the
insider information and other corruption which is rampant these days. So, if you're not
making money it may be you're being deliberately misinformed. But, what do I know? :shrug:

And a lot of those talking are all talk or playing with Daddy's money. Them what gots, gets.

Because i am not only {partially} correct. Unless you are 9 years old. Then you are correct.

Unless they dramatically realign how the Dow is calculated, someday it will be twice what it is now. 20 years ago today, 3 months before the October '87 crash the Dow was at 2500. You think this pullback is going to last forever?

Okay, "the market", specifically the Dow, goes up over a twenty year period (the definition usually given for "the long term"). Individual stocks don't and the Dow today is not the same as it was 20 years ago (different componants). Which makes the mantra "the market always goes up" a useless truism. It encouraged people to make foolish mistakes and trust financial advisors who made fortunes off them while the investors' retirement funds tanked.

In the years I have been following/contributing to this thread, most of the posters who quote that mantra have done so with a touch of both "don't worry, be happy" cheerleading and "if you aren't rich it's your own damn fault" sneering. That classifies them as idjits in my book. If you don't fall into that category, fine.

It doesn't? Really? Is that why $10,000 invested in General Electric stock 30 years ago today would be worth at least $345,424, NOT including reinvesting dividends?

Here is exactly what i said yesterday:



Show me how this is an inaccurate statement. The LONG TERM TREND is not down. As far as the comment of Maeve regarding the NASDAQ and how it has yet to reach the high of 2000, let me remind that poster that it was driven high on pure, unadulterated speculation. People were bidding up stocks that had no earnings and of the many that did, their earnings were often meager with the P/E's as high as 125 and even higher. And the NASDAQ is NOT the big board.

I am wondering if you might elaborate on this statement;


How do you figure? Exactly by what mechanism is this attempt to "shed their risk" taking place?

http://stockcharts.com/charts/historical/djia1960.html

It could happen again, PROVE ME AND HISTORY WRONG.

I had a U.S. growth fund, put money in it in 2000. It went up gangbusters until 9/11/01, and then it lost over 60%. Today it still hasn't come back to the price that I bought into it. I finally got tired of waiting for it to recover, and moved the money from it to an indexed bond fund last October.

http://stockcharts.com/charts/historical/djia1900.html

Looks like a long term, general upward trend to me.

Perspective is everything, no?

Did somebody steal mommy's or daddy's ID for a couple days?

I did not say that markets are never flat and i did not say there were never recessions, corrections or down markets. You are trying to make an issue out of my intentionally broad statement by showing me a period i lived through as if i was somehow ignorant of the various economic climates during my lifetime.
Is it the case that not one single company that is publicly traded during those years posted a profit or had earnings? Is it the case that 1966 through 1983 was a recession? Is it your contention that NO ONE made money in the stock market for those 17 years?

Yeah, i get your point and i concede the Dow was mostly flat for a 17 year period. I CAN read a chart. Can you read a post?

How old are you? Is the 1984 reference in your user name your birth year? Are you insinuating by your reference to my parents and an ID that i am somehow not a regular on this message board?

Wait a sec....let me see if i can measure how much i give a fuck. Nope. No i cant.

;-) (Extinct, now).

Long-term: huh. Major ecological change (and lotsa hard rain) is gonna fall, man.

You have kids?

People post informative posts here, read and learn.

to your private conversation. Again, my apologies. It is clear to me now the error of my statement from Thursdays thread and my taking issue on Fridays thread of those that suggested my comment made them laugh or that i was an "idjit". I have come to realize, I clearly am.

There is now no doubt in my mind that you and the others who have responded to my posts outclass me in spades regarding economics and market history. I am so terribly sorry i had the temerity to think i could offer an opposing point of view on a daily thread so obviously geared to supporting the concept that we are all screwed.

Thanks for setting me straight. I promise to keep my fingers still and "read and learn" from your "informative posts" and your superior grasp of investing and the markets.

Very sincerely,

A HERETIC I AM
Idjit.
Beaten to a pulp by your remarkable grasp of the situation.

My best to your mommy and daddy.

What if I can't wait 20 years for it to rebound. What if I need my money now to live on?

What inflation index do you weight by? This guy just settles for the official CPI:



http://homepage.mac.com/ttsmyf/

(from this perspective it looks like all the wealth got sucked into the dow during the dotcom boom.
Either that or there's a major fraud afoot with the CPI.)

...other people who know the value of a dollar aren't so meek as to use that tame an inflation index.

It went up gangbusters until 9/11/01, and then it lost over 60%. Today it still hasn't come back to the price that I bought into it. I finally got tired of waiting for it to recover, and moved the money from it to an indexed bond fund last October.

First, when a company goes bankrupts it's taken off the DJIA or the S&P or NASDAQ or whatever. Poof! it's gone. And if I understand correctly, another company is picked to take it's place. So, real investments by real,little people & real losses by same aren't really reflected.

Second, to have bought $10 grand in GE & GE alone I would have had to been damned smart or damned lucky. Odds are that I bought a bunch of different stocks. And odds are those other companies might have gone bankrupt. Now, having lost a bunch I have to sell my GE stock to live on.

Google "stock market always goes up myth" & you'll get a million hits.

Shows you are well aware that GE is the only company from the original DJIA to remain on the list. A historical comparison of today's DJIA to that of a century ago is meaningless, because the components are regularly updated to reflect the dominant companies of the time. It is a comparison of apples and oranges. But you already knew that.

As far as shedding risk, we all know exactly how this will turn out. You can look at the investment bank crisis of the early 80's, or the S&L bailout of the late 80's, or the currency speculation meltdowns of the late 90's to see that large financial institutions almost always find a way to stick the taxpayers with their major losses. Naturally, smaller investors who can't pay off the politicians get shafted in these settlement processes.

Source: Associated Press

Former Qwest boss ordered to pay $52M

By SANDY SHORE, AP Business Writer
3 minutes ago

DENVER - A federal judge ordered former Qwest Communications
chief executive Joe Nacchio, convicted of insider trading, to
forfeit $52 million in assets he gained in illegal stock sales.

The order on Friday came at the start of a sentencing hearing for
Nacchio, convicted in April of making $52 million in stock sales
at a time when he knew Qwest faced financial risk but didn't tell
investors.

U.S. District Judge Edward Nottingham could sentence Nacchio to
a maximum of seven years, three months in prison and impose a
$19 million fine. Nottingham also was to decide whether to allow
Nacchio to remain free on bond pending an appeal.

-snip-

http://news.yahoo.com/s/ap/20070727/ap_on_bi_ge/qwest_nacchio_sentencing

Dow 13,307.91 165.66 (1.23%)
Nasdaq 2,563.21 36.13 (1.39%)
S&P 500 1,464.12 18.54 (1.25%)
10-Yr Bond 4.751% 0.026

NYSE Volume 2,124,356,000
Nasdaq Volume 1,387,504,000

12:30 pm : No real change in the proceedings as the afternoon session gets underway. The bears are still in full control of the action as all 10 economic sectors sport hefty losses. Not unusual, the market's latest dip did create a buying opportunity; but only for a few minutes as sellers almost as quickly jumped back in to sideline the handful of bargain hunters trying to place their bets of a bounce.

The major averages are on pace to record their worst weekly performance since early March. DJ30 -125.79 NASDAQ -22.90 SP500 -15.15 NASDAQ Dec/Adv/Vol 2101/838/1.27 bln NYSE Dec/Adv/Vol 2251/959/926 mln

12:00 pm : Stocks are taking a turn for the worse midday, extending their losses to session lows as underlying credit concerns leave valuations vulnerable across the board.

Adding to the market's recent struggles have been the Dow, S&P 500 and Nasdaq's inability to find support above key technical levels of 13400, 1470 and 2580, respectively.

With worries about a possible credit crunch already weighing heavily on investor psyche, reports that Cadbury Schweppes plc (CSG 49.15 +0.71) delayed the potential $15 bln sale of its drink division due to "extreme volatility" in debt markets has exacerbated the worst of those fears and fostered a more risk-averse mindset.

The Commerce Dept showing that the economy grew at the fastest pace in more than a year last quarter and that the GDP deflator, a key inflation gauge, was up at just a 2.7% annual rate, initially gave the bulls something to hang their hat on. However, the backward-looking data was not indicative of a strong trend going forward since the overall pickup in GDP growth was due to a swing in a number of categories outside of consumer spending, which did not pick up.

The growing concerns of tightening credit standards, which would curtail economic growth and substantially slow the record pace of M&A activity that has been so critically supportive for stocks for so long, are also discounting the early enthusiasm provided by today's GDP report.

Subprime concerns have also resurfaced after Citigroup (C 47.15 -0.66) estimated Fannie Mae (FNM 58.32 -1.07) and Freddie Mac (FRE 59.47 -1.13) may have $4.7 bln in unrealized losses tied to subprime mortgages.

Throw in oil prices climbing back to 11-month highs above $76/bbl and the Energy sector (-2.5%) completely failing to take notice, and pacing another move to the downside, and the reluctance to jump back into a beaten-down market today becomes readily apparent. BTK -1.4% DJ30 -122.60 DJTA -1.2% DJUA -0.9% DOT -0.8% NASDAQ -22.92 NQ100 -0.7% R2K -0.9% SOX -1.0% SP400 -0.9% SP500 -15.10 XOI -3.0% NASDAQ Dec/Adv/Vol 1957/944/1.14 bln NYSE Dec/Adv/Vol 1984/1197/758 mln

11:30 am : Stocks are bouncing off their recent lows but hardly enough to make a significant improvement in the standings. Losses remain widespread as the bulk of industry leadership remains negative. About the best thing the bulls have going for themselves at this point is the fact that Financials (-0.2%) is sporting the smallest decline among the 10 sectors losing ground.

The extensiveness of the market's recent pullback was likely attributed to the triggering of a sell program since the major indices plunged in synch with each other and logged roughly the same percentage pullbacks (-0.5%). DJ30 -58.82 NASDAQ -9.50 SP500 -6.46 NASDAQ Dec/Adv/Vol 1772/1099/934 mln NYSE Dec/Adv/Vol 1961/1174/630 mln

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B8c215d43%2D4716%2D4706%2Db48c%2Da8ef608143d4%7D

European stocks were volatile on Friday as fears of a credit squeeze continued to influence investors, although news of strong second quarter GDP growth in the US provided a measure of hope. The FTSE Eurofirst 300 index see-sawed either side of the flatline during the day before ending 0.5 per cent weaker at 1,478.6. The Xetra Dax 30 was down 0.8 per cent at 7,451.7 while the CAC 40 in Paris lost 0.6 per cent to 5,643.9.

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7Bda33fbb3%2D3b04%2D4dd6%2Dbe55%2Da00c920ea38d%7D

London’s FTSE 100 slipped further amid persistent volatility on Friday, after the best US growth results in over a year failed to provide a sustained lift on global equity markets. The UK’s benchmark index closed at 6,215.2, a decline of 0.6 per cent on the day but up from an intraday low of 6,192.3 caused by lingering fears of a potential medium term credit crisis.

/...

2:53
Dow 13,422.36 Down 51.21 (0.38%)
Nasdaq 2,592.39 Down 6.95 (0.27%)
S&P 500 1,479.23 Down 3.43 (0.23%)
10-Yr Bond 4.777% 0.00
NYSE Volume 3,375,768,000
Nasdaq Volume 2,095,869,000

2:30 pm : Evidently the bears aren't willing to throw in the towel just yet as their craving to keep questioning valuations is alive and well. The Energy sector (-1.4%) has plunged 1.0% since the last update, despite oil prices holding steady near session highs going into the close of trading on the NYMEX, and is again pacing the day's weakness.

The Materials sector is turning in a similarly dismal performance while a 1.1% decline in the more heavily weighted Health Care sector is also stalling the market's renewed enthusiasm. DJ30 -132.09 NASDAQ -24.38 SP500 -12.78 NASDAQ Dec/Adv/Vol 1973/1044/1.88 bln NYSE Dec/Adv/Vol 2033/1236/1.43 bln

3:17
Dow 13,399.28 Down 74.29 (0.55%)
Nasdaq 2,586.16 Down 13.18 (0.51%)
S&P 500 1,476.14 Down 6.52 (0.44%)
10-Yr Bond 4.79% Up 0.013
NYSE Volume 3,610,596,000
Nasdaq Volume 2,239,448,000

3:00 pm : Chopping trading now has the indices retracing their afternoon highs. All three major averages have seen their recent declines more than halved more than halved, spearheaded by a turnaround in the most heavily weighted of all S&P 500 sectors -- Financials (+0.3%).

Specialized Financials (+2.6%) now ranks as the day's best performing S&P industry group amid reports that CME Group (CME 565.46 +27.96) broke multiple volume records yesterday. Investment Banks (+1.3%) is also among today's limited list of winners. The Industrial sector, led by a rally in railroad stocks, has also clawed its way back into positive territory to provide some influential leadership. DJ30 -62.22 NASDAQ -10.61 SP500 -5.26 NASDAQ Dec/Adv/Vol 1994/1052/2.10 bln NYSE Dec/Adv/Vol 2135/1151/1.60 bln

or is it fairies

I figure that the faeries have made their presence felt. Nonetheless I suspect that their efforts have been nulled by monetary weight on the selling side.

3:44
Dow 13,362.37 Down 111.20 (0.83%)
Nasdaq 2,580.49 Down 18.85 (0.73%)
S&P 500 1,470.71 Down 11.95 (0.81%)
10-Yr Bond 4.788% Up 0.011
NYSE Volume 3,931,367,000
Nasdaq Volume 2,428,583,000

3:30 pm : After a handful of valiant efforts on the part of buyers, it looks as though the indices will close lower for the third time in four sessions. Nine of 10 sectors are losing ground and Financials, the only sector left standing in the green today, is clinging to the smallest of gains.

While its resilience in the face of continued credit concerns is noteworthy, it's not overly surprising to see a 4.4% drubbing in the sector this week alone invite some bargain hunting opportunities. The sell-off in Financials is largely why the S&P 500 (-3.8%) outpaces the Dow (-3.2%) and Nasdaq (-3.7%) to the downside over the last five sessions. Financials is down 8.2% for the year and joined only by Consumer Discretionary among S&P 500 sectors in negative territory. DJ30 -69.45 NASDAQ -12.43 SP500 -6.51 NASDAQ Dec/Adv/Vol 1960/1091/2.22 bln NYSE Dec/Adv/Vol 1942/1357/1.74 bln

3:49
Dow 13,326.60 Down 146.97 (1.09%)
Nasdaq 2,572.39 Down 26.95 (1.04%)
S&P 500 1,466.67 Down 15.99 (1.08%)
10-Yr Bond 4.788% Up 0.011
NYSE Volume 4,040,028,000
Nasdaq Volume 2,497,713,000

Fifty points gone from the Dow in ten minutes.

4:20 pm : For a second straight day the market sold off as mixed economic data and growing concerns about a possible credit crunch continued to foster a more risk-averse mindset among investors. The Dow, S&P 500, and Nasdaq tumbled more than 1.5% on average.

After plunging 2.1% on average Thursday, a healthier than expected reading on Q2 GDP initially helped lure enough bargain hunters from the sidelines to inch the indices higher right out of the gate. At 8:30 ET, the Commerce Dept showed that the economy grew at the fastest pace in more than a year (+3.4%) last quarter and that the GDP deflator, a key inflation gauge, was up at just a 2.7% annual rate.

However, further analysis of the data suggested that such impressive economic growth was temporary since consumer spending grew at only a 1.3% pace, down from a 3.7% rate in Q1. The growing concerns of tightening credit standards, which may curtail economic growth and substantially slow the record pace of M&A activity that has been so critically supportive for the stock market for so long, also discounted the early enthusiasm provided by the GDP report.

With fears that private equity is having difficulties raising money for acquisitions already weighing heavily on investor psyche, reports that Cadbury Schweppes plc (CSG 48.74 +0.30) became the first company to delay a deal because of "extreme volatility" in debt markets exacerbated the worst of those concerns.

Adding insult to injury was yet another subprime mention. It was reported that Citigroup (C 46.97 -0.84) analysts estimate Fannie Mae (FNM 59.39 -1.21) and Freddie Mac (FRE 57.68 -1.71) may have $4.7 bln in unrealized losses tied to subprime mortgages.

Oil prices climbed back to 11-month highs and closed above $77/bbl. While oil's continue climb by itself is worrisome, the Energy sector (-1.6%) completely failing to take notice and pacing another move to the downside further underscored the nervousness of owning equities going into the weekend.

Technology (-1.4%) and Health Care turning in the next worst performances also removed some of the influential leadership that prevented any chance of a reflexive bounce.

About the only relatively positive takeaway was the resilience on the part of Financials sector sported the smallest decline among the 10 sectors losing ground. DJ30 -208.10 NASDAQ -37.10 SP500 -23.71 NASDAQ Dec/Adv/Vol 2192/883/2.30 bln NYSE Dec/Adv/Vol 2305/1010/2.15 bln