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 Post subject: April 6th Monday 2009
PostPosted: Mon Apr 06, 2009 9:25 pm 
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Joined: Sat Jan 10, 2009 2:06 pm
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Location: Canada
Today's trades that were posted in real-time in #FuturesTrades chat room via my IRC user name NihabaAshi. You can review each trade from entry to exit along with commentary and an occasional trading tip because its all archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=20&t=159

My Trading Performance: +21.00 Emini ES points

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Stocks Stumble After Sprint
Wall Street steps back on weakness in bank and tech shares as investors plead exhaustion after a four-week run.
By Alexandra Twin, CNNMoney.com senior writer
Last Updated: April 6, 2009: 5:59 PM ET

NEW YORK (CNNMoney.com) -- Stocks slipped Monday, retreating after a four-week run, on a bearish analyst note about the bank sector and a breakdown in merger talks between IBM and Sun Microsystems.

The Dow Jones industrial average (INDU) lost 42 points, or 0.5%. The S&P 500 (SPX) index dipped 7 points, or 0.8%. The Nasdaq composite (COMP) fell 15 points, or 0.9%.

Declines were steeper through the early afternoon, but stocks managed to cut losses late in the session.

The IBM-Sun breakdown dragged on techs Monday. But the weakness in financials was a bigger driver of the selloff after a prominent banking analyst downgraded the sector.

"If you haven't been following the bank stocks closely, you may have been lulled into a false sense of security," said Kim Caughey, senior equity analyst at Fort Pitt Capital Group. "This is reminding people that the banks still have a long way to go."

However, she said a modest pullback after a four-week run for the broad market was reasonable.

Stocks managed gains Friday, despite a brutal March jobs report, bringing the recent advance to four straight weeks.

Since hitting 12-year lows, stocks have been on a tear, with the Dow gaining 21% over four weeks. That was the blue-chip indicator's best four-week run since May 1933, when it gained 31%.

Stocks have been advancing on hopes that the economy and financial sector are closer to stabilizing thanks to some recent reports and the various government initiatives to staunch the slowdown.

This week, the focus turns to earnings, with Alcoa (AA, Fortune 500) due to begin the reporting period after the close Tuesday. Alcoa is expected to have lost 57 cents per share, according to analysts surveyed by Thomson Reuters. Alcoa earned 44 cents per share a year ago.

Also Tuesday, the consumer credit report from the Federal Reserve is due out at around 2:00 p.m. ET. Borrowing costs are expected to have fallen by 1.5% in February, according to a Briefing.com survey. Costs showed a surprise jump of 1.8% in January.

Deal in danger: IBM (IBM, Fortune 500)'s attempts to buy Sun Microsystems (JAVA, Fortune 500) fell apart Sunday after Sun rejected IBM's $7 billion offer, according to reports. Sun reportedly thought the asking price was too low. Analysts say the server maker is more likely to suffer the consequences of a failed deal than IBM.

Sun shares fell 22.7% and IBM shares fell less than 1%.

Banks: A variety of financial shares fell after an analyst said that the default rate on bank loans will exceed amounts seen during the Great Depression. Mike Mayo, of Calyon Securities, rated the overall banking sector "underperform" and initiated coverage on 11 major banks with either "underperform" or "sell" ratings.

Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500) were among the companies initiated with "underperform" ratings.

Fifth Third Bancorp (FITB, Fortune 500) and US Bancorp (USB, Fortune 500) were among the companies initiated with "sell" ratings.

The KBW Bank (BKX) index slipped 3.8%.

Autos: Ford Motor (F, Fortune 500) cut its automotive debt by 38%, or $9.9 billion, Reuters reported, helping it strengthen its balance sheet amid a broad industry downturn. Ford shares gained 16%.

Ford has held up better than rivals General Motors (GM, Fortune 500) and Chrysler, which have both flirted with bankruptcy even as they have accepted billions in emergency federal aid. Chrysler is privately held.

Other movers: MGM Mirage (MGM, Fortune 500) rallied 19% on reports that its looking to sell two of its non-Las Vegas properties to raise cash. The casino company is looking to sell its MGM Grand Detroit and Beau Rivage in Mississippi in a deal that could be worth about $2 billion.

Market breadth was negative. On the New York Stock Exchange, losers beat winners nearly two to one on volume of 1.30 billion shares. On the Nasdaq, decliners topped advancers two to one on volume of 2.05 billion shares.

Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 2.90% from 2.89% Friday. Treasury prices and yields move in opposite directions.

Lending rates mostly dropped. The 3-month Libor rate held steady at 1.16%, unchanged from Friday, according to Bloomberg.com. The overnight Libor rate inched higher to 0.28% from 0.27% Friday. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian markets rallied and European markets fell.

In currency trading, the dollar gained versus the euro and the yen.

U.S. light crude oil for May delivery fell $1.46 to settle at $51.05 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $24.50 to settle at $872.80 an ounce.

Yahoo! Finance

4:30 pm : The major indices spent the entire session in the red, but some afternoon buying helped pull stocks up from their lows. Early weakness was underpinned by the financial sector, but the afternoon ascent was generally broad-based.

Stocks were led lower by financials in the early going. Financials (-2.9%) were put under pressure when a reputable analyst from Calyon Securities gave a pessimistic analysis of the banking industry by stating that banks' loan losses relative to their total loans should increase to levels that exceed those of the Great Depression.

Adding to consternation, Treasury Secretary Geithner indicated in a weekend interview that the government would consider removing management at financial companies if the government were to offer exceptional assistance to keep those companies operating. The comments indicate the government's increased willingness to exert its influence within the private sector.

Technology stocks (-1.1%) bore weakness. Cisco (CSCO 17.53, -0.63) was a primary laggard among tech names; according to Reuters, its shares were downgraded by analysts at Goldman Sachs.

Shares of Sun Microsystems (JAVA 6.56, -1.93) logged one of their worst performances on record by shedding more than one-fifth of their market cap this session. The stock fell under heavy pressure after The Wall Street Journal reported Sun Microsystems merger talks with IBM (IBM 101.56, -0.66) could be coming undone.

Commodities were also victim of a concerted selling effort. May crude futures contracts finished pit trading with oil priced 4.9% lower at $49.95 per barrel, just above their session low.

Gold prices were under pressure for the third consecutive session. Pit trading concluded with gold priced 2.7% lower at $872.80 per ounce.

Despite the absence of positive catalysts in afternoon trading, stocks were able to pare their losses. The stock market had been down as much as 2.3%, but was able to more than cut that loss in half. As stocks ascended from session lows, health care stocks (+0.6%) and industrials stocks (+0.7%) were able to move into positive ground and post the session's only gains.

News flow is expected to be slow again Tuesday, though things will likely pick up after tomorrow's close, which is when Alcoa (AA 7.91, -0.26) unofficially kicks off earnings season. DJ30 -41.74 NASDAQ -15.16 NQ100 -0.2% R2K -1.9% SP400 -1.2% SP500 -7.02 NASDAQ Adv/Vol/Dec 812/2.05 bln/1866 NYSE Adv/Vol/Dec 923/1.30 bln/2098

3:30 pm : May crude oil futures opened lower at the beginning of the pit trade and were never able to break out of negative territory. The May contracts finished 4.9% lower at $49.95 per barrel, just above their session low of $49.81 per barrel.

May natural gas contracts also traded down at the beginning of the pit trade and were never able to trade up to the unchanged level. May natural gas contracts closed down 2.7% at $3.70 per contract, fractionally higher than their session low of $3.66 per contract.

Much like the energy commodities, precious metals traded lower on the session.

June gold futures contracts fell for the third consecutive pit session to close at $872.80 per ounce, down 2.7%. Gold futures are now more than $130 below their highs reached in February.

May silver futures contracts traded down 5.0% for the session to close at $12.11 per ounce.DJ30 -88.73 NASDAQ -25.73 SP500 -11.81 NASDAQ Adv/Vol/Dec 702/1.6 bln/1980 NYSE Adv/Vol/Dec 759/914 mln/2250

3:00 pm : Weakness has been persistent this session, but trade has become a bit more choppy as participants head into the final hour of action.

Selling pressure has picked up against Treasuries. The benchmark 10-year Note actually traded in positive territory earlier this session, partly bolstered by broad-based weakness in stocks, but it has since turned lower to trade in the red. The 10-year Note was recently quoted 13 ticks lower, which lifts its yield to 2.93%, marking its highest yield in more than two weeks.DJ30 -91.68 NASDAQ -25.83 SP500 -12.85 NASDAQ Adv/Vol/Dec 683/1.45 bln/1986 NYSE Adv/Vol/Dec 696/824 mln/2299

2:30 pm : With weakness considerable and broad-based, losses this session range from the financial sector's 4.0% decline to the consumer staples sector's 0.5% downturn.

However, the health care sector is back in positive territory to trade with a modest 0.1% gain. The sector had been up 1.5% at its session high, but retreated into negative territory as the session's early selling effort picked up momentum. As was the case in the early going, health care is the only major sector within the S&P 500 to trade higher. DJ30 -97.25 NASDAQ -27.94 SP500 -13.02 NASDAQ Adv/Vol/Dec 688/1.30 bln/1996 NYSE Adv/Vol/Dec 706/737 mln/2277

1:55 pm : The major indices continue to climb from session lows, though they reman well into negative territory.

Although the recovery effort has seen broad-based participation, telecom (-1.0%) and consumer staples (-0.4%) have had notable buying interest.DJ30 -110.55 NASDAQ -28.88 SP500 -14.07 NASDAQ Adv/Vol/Dec 652/1.17 bln/1990 NYSE Adv/Vol/Dec 675/662 mln/2288

1:30 pm : Losses remain considerable, but the stock market has managed pull up from its worst levels of the session; stocks had traded with a loss of 2.3% at their session low.

However, small-cap and mid-cap stocks continue to show even greater losses. The Russell 2000 Small-Cap Index is off by 3.1%, while the S&P 400 Mid-Cap Index is down 2.6%.DJ30 -131.82 NASDAQ -33.89 SP500 -16.60 NASDAQ Adv/Vol/Dec 637/1.05 bln/1984 NYSE Adv/Vol/Dec 633/617 mln/2319

1:00 pm : Led lower by weakness in financials, stocks have spent the entire session trading with losses.

Financials (-3.8%) began to show weakness in premarket trading as a reputable analyst from Calyon Securities offered up a pessimistic analysis of the banking industry. The analysis contends that loan losses relative to total loans should increase to levels that exceeded those of the Great Depression. With that, diversified banks are down 5.7%.

Technology stocks (-2.4%) are also trading with considerable weakness. Shares of Cisco (CSCO 17.34, -0.82) are weighing on the group after being downgraded by analysts at Goldman Sachs, according to Reuters.

Shares of Sun Microsystems (JAVA 6.50, -1.99) are showing some of the most weakness within the tech sector, though. The stock is putting together one of its worst single-session performances on record after The Wall Street Journal reported the company's merger talks with IBM (IBM 100.66, -1.56) could be unraveling.

Overall, this session's selling effort could be seen as profit taking since stocks logged gains in each of the past four sessions. The move to take money off the table is further supported by the notion that another ugly earnings season unofficially begins with Alcoa's (AA 7.70, -0.47) quarterly report after tomorrow's closing bell.DJ30 -120.11 NASDAQ -31.51 SP500 -14.93 NASDAQ Adv/Vol/Dec 624/988 mln/1974 NYSE Adv/Vol/Dec 637/568 mln/2307

12:30 pm : The major indices are descending to fresh session lows. All 10 major sectors in the S&P 500 are now in the red.

Financials remain the session's worst performing sector. The group has been battling stiff selling pressure since the start of the session, and is now down 4.2%.

Much of the attack on financials follows ongoing pessimsm about the fundamentals of the banking system and major banks. However, highly regarded securities analyst Richard Bove separated Bank of America (BAC 7.39, -0.21) from its peers by giving the company's stock a Buy rating. Though Bove's rating hasn't kept the stock from trading with a loss, shares of BAC are holding up better than other diversified financial services companies (-4.2%) and diversified banks (-6.7%).DJ30 -149.82 NASDAQ -39.81 SP500 -19.06 NASDAQ Adv/Vol/Dec 585/881 mln/1987 NYSE Adv/Vol/Dec 562/510 mln/2374

12:00 pm : Oil prices are now down 4.1% to $50.35 per barrel as they trade just above their session lows. The drop in oil prices, combined with a generally negative bias in the stock market, is dragging energy stocks to a 2.6% loss.

Weakness among energy stocks is considerable as all 39 companies within the S&P 500's energy sector are trading with losses. Integrated oil companies (-2.2%), like Exxon Mobil (XOM 69.45, -0.99) and Chevron (CVX 68.83, -1.65), are having the most negative influence on the sector, but oil and gas drillers (-5.8%), like Rowan Companies (RDC 12.89, -0.80), are showing the steepest percentage losses.DJ30 -141.77 NASDAQ -38.05 SP500 -17.87 NASDAQ Adv/Vol/Dec 579/790 mln/1963 NYSE Adv/Vol/Dec 564/460 mln/2358

11:30 am : Automakers General Motors (GM 2.26, +0.16) and Ford (F 3.74, +0.49) are making strong gains this session. A report from Reuters indicated a Swedish court extended the period of creditor protection for Saab, which is a unit of General Motors. Meanwhile, General Motors chief executive Fritz Henderson indicated in a weekend interview with NBC that even though the company is working to avoid bankruptcy, bankruptcy may be the best alternative.

As for Ford, the company announced that $3.4 billion principal amount of debt security Notes were tendered and accepted for purchase.

Airline stocks are also climbing higher as the AMEX Airline Index advances 2.2%. US Airways (LCC 3.15, +0.18), Continental (CAL 11.26, +0.99), and Delta (DAL 6.89, +0.25) are all gaining even though there are no immediate news stories underpinning their strength. DJ30 -105.30 NASDAQ -33.76 SP500 -13.75 NASDAQ Adv/Vol/Dec 604/698 mln/1899 NYSE Adv/Vol/Dec 594/408 mln/2302

11:00 am : Weakness remains widespread as stocks continue to trade in the red. Declining issues in the S&P 500 outnumber advancers by roughly 5-to-1.

There are some select pockets of strength, however. In particular, shares of casinos and gaming resorts are racking up solid gains. MGM Mirage (MGM 6.28, +1.63), Las Vegas Sands (LVS 5.16, +0.68), and Wynn Resorts (WYNN 31.67, +2.02) are leading the way after reports indicate MGM may be considering the sale of casinos in Detroit and in the Gulf of Mexico, while separate reports suggest MGM's Las Vegas City Center may be attracting investors. DJ30 -98.45 NASDAQ -32.61 SP500 -12.08 NASDAQ Adv/Vol/Dec 599/576 mln/1841 NYSE Adv/Vol/Dec 587/335 mln/2254

10:30 am : The major equity markets momentarily pared losses, but have since fallen back toward lows seen earlier in the session. Commodities contracts are also showing general weakness.

According to May futures, oil prices are currently down 2.5% to $51.20 per barrel as crude prices gyrate through negative territory.

Meanwhile, natural gas is being priced 1.3% lower at $3.75 per contract.

Gold is seeing particularly stiff selling pressure. Gold was recently quoted at $869.00 per ounce, down 3.0%. Gold prices are now down some 13% from their February high of $1,004.90 per ounce.

Silver is also contending with a concerted selling effort. Futures contracts for silver are pricing the metal 4.3% lower at $12.19 per ounce.

The Baltic Dry Index shed 1.3% amid weakness in each of its subindices. Panamax was the group's worst performer, dropping 3.6%.DJ30 -89.29 NASDAQ -32.40 SP500 -12.90 NASDAQ Adv/Vol/Dec 601/432 mln/1785 NYSE Adv/Vol/Dec 628/253 mln/2165

10:00 am : Stocks have extended initial losses to trade markedly lower. Weakness is broad-based.

Only health care (+1.3%) is trading higher. Its strength this session comes in stark contrast to recent sessions; health care lagged the broader market for much of last week. While the S&P 500 made a weekly gain of 3.3% last week, health care slid 1.9% during the same time span.

Health care's losses last week came amid a congressional decision to overhaul health care regulations, which has been seen as detrimental to many of the sector's services companies, facilities companies, and managed providers. Those groups are bouncing back this session, though. Health care services are up 2.4%; health care facilities are up 3.6%, and; managed health care is up 5.0%.

Early movers: Trading down: JAVA -23.1%, AXA -11.3%, RTP -11.3%, IIIN -10.2%. Trading up: SUMT +43.3%, LGCY +34.6%, SAY +19.7%, DNDN +14%, MGM +13.8%DJ30 -65.79 NASDAQ -27.13 SP500 -10.13 NASDAQ Adv/Vol/Dec 573/286 mln/1726 NYSE Adv/Vol/Dec 584/173 mln/2150

09:30 am : After logging gains in each of the past four sessions, which resulted in a 7% advance, stocks have started Monday's trading with a sizable loss. The pullback comes amid weakness in financial stocks, which are already down 2.9% just moments after the opening bell.

The decidedly negative bias toward financials follows a pessimistic analysis of the banking industry by a reputable analyst from Calyon Securities. Diversified banks are down 6%.

Technology stocks (-1.7%) are also being hit with selling pressure after The Wall Street Journal reported that merger talks between IBM (IBM 101.00, -1.22) and Sun Microsystems (JAVA 6.50, -1.99) could becoming undone, which would threaten IBM's $7 billion takeover offer. Sun Microsystems reportedly rejected IBM's formal offer and put an end to the pair's exclusivity agreement.DJ30 -64.60 NASDAQ -20.84 SP500 -9.10 NASDAQ Adv/Vol/Dec 554/50 mln/1433 NYSE Adv/Vol/Dec 236/42 mln/1059

09:00 am : S&P futures vs fair value: -8.60. Nasdaq futures vs fair value: -18.80. News flow remains slow. Stock futures continue to trend lower, suggesting a downward start for the major indices. Oil prices are also showing weakness ahead of pit trading; crude futures contracts were recently pricing oil 2.6% lower at $51.15 per barrel.

08:35 am : S&P futures vs fair value: -7.70. Nasdaq futures vs fair value: -16.30. European indices have turned lower after initial signs of strength. France's CAC is down a modest 0.1% due to relative strength in financial outfits Societe Generale and BNP Paribas. However, fellow financial company AXA (AXA) is trading lower; its shares were downgraded by analysts at JPMorgan. Germany's DAX is also down 0.1% as its stock listings trade in mixed fashion; half of the DAX's 30 listings are trading with gains. Meanwhile, Britain's FTSE is trading 0.5% lower, despite strength in global financial giant HSBC (HBC). HSBC successfully raised $18.5 billion in capital through a share rights issue, according to The Wall Street Journal. In Asia, the MSCI Asia-Pacific Index closed 0.4% higher and Japan's Nikkei closed with a 1.2% gain. Exporters gained on a weaker yen, helping Toyota (TM) and Mitsubishi Motors. Reuters.com reports the Japanese government plans to unveil a new economic stimulus package worth more than 2% of GDP on Friday. In Hong Kong, the Hang Seng advanced 3.1%, with HSBC (HBC) outperforming. Mainland China's Shanghai Composite was closed for holiday.

08:00 am : S&P futures vs fair value: -3.90. Nasdaq futures vs fair value: -8.50. There are no earnings or economic reports due this morning, making for an overall slow-news morning. However, The Wall Street Journal reports that federal bank regulators plan to meet early this week to analyze the results from the bank stress tests they administered. During the past weekend, Treasury Secretary Geithner indicated in an interview that the government would consider removing management at financial companies if the government were to offer exceptional assistance to keep those companies operating. Shares of major diversified banks and financial services companies are trading moderately lower ahead of the opening bell, as are stock futures for the broader market.

06:39 am : S&P futures vs fair value: +4.20. Nasdaq futures vs fair value: +4.30.

06:39 am : Nikkei...8857.93...+108.10...+1.20%. Hang Seng...14998.04...+452.40...+3.10%.

06:39 am : FTSE...4062.29...+32.60...+0.80%. DAX...4429.06...+44.10...+1.00%.


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