Economic Data Sinks Market, But That’s Only Part Of The Story…

Stocks were lower on disappointing economic data
and higher crude oil.
Nonfarm payrolls
in May rose 78,000, far less than the 185K expected. It is the smallest gain
since August 2003 and fueled speculation that the Fed may be close to ending its
rate hikes. There were no revisions for April.

Unemployment
was 5.1%, slightly lower than consensus. Earnings rose 0.2%.
The 10-year note was at its lowest level since March 2004 before rallying today
by over 2%.
The ISM Index for May came in at 58.5, less than
expected.

It was a relatively flat week for the indices, For the third straight week, the
Nasdaq has outperformed the Dow and S&P. Year to date, the Dow is off 2.9% and
the Nasdaq is off 4.8%.

Commodities were strong this week, with oil up 6.2% and copper up 7.3%. 
Copper made a 16-year high as global inventories fell to the lowest
levels since May 1988 and demand continues to outpace production. Copper prices
have risen 25% this year–7.3% this week alone and up 10 straight days.
Construction is the biggest user of copper (40%), with the
Copper Development Association estimating the average U.S. home contains 400
pounds. Copper is also moving on the expectation that interest rate increases in
the U.S. may be over. Chile is the world’s #1 producer at 25%.

L-3
(
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will buy Titan
(
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for $2 billion cash
($23.10/share).

Schlumberger
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was upgraded to buy at Citigroup Smith Barney.

Apple
(
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is lower as the iPod battery settlement could cost
$100 million; also rumors are that the company is overstocked on iPods. The
company is giving $50 vouchers and extended service warranties to customers of
older defective units. There is also an overheating problem with Powerbook
batteries and some speculation that iPod demand may be slowing.

Italian Welfare Minister Roberto Maroni said the country should consider
dropping the euro. He said
the euro
“has proved inadequate in the face of the economic slowdown, the loss of
competitiveness and the job crisis,” and blamed

ECB President Trichet.

Fed Governor Gramlich said he didn’t know what was happening with
long-term rates.

It was a busy week for NYSE seat sales, with 6, all going for around
$2.3 million.

This quarter, 18 IPOs have come to market, worth $2.4 billion. This compares
with 39 deals at $9.9 billion in Q1. Of the 57 IPOs this year, 27 are trading
below their offering price.

Looking to next week, on Monday and Thursday, look for Greenspan to
speak, and Intel gives its mid-quarter update.

Strong sectors were:  Healthcare
Providers

(
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+1.20%   Gold
(
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+0.91%    Oil Services
(
$OSX.X |
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+0.81%    

      

Weak sectors were:   
Biotech

(
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-2.14%    Computer
Hardware

(
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-1.92%     Software
(
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-1.53%

Dow -87.34 10,466.15
Nasdaq -26.07 2071.73
S&P 500 -7.82 1196.47

The dollar was +0.28 at
88.06

Crude Oil was +1.45 at
55.08

Gold was +0.50 at 422.50

ce=”Arial” size=”2″ face=”Arial”>Volume was 1.286 billion on the NYSE and
1.653 billion on the Nasdaq.

Market breadth was negative.

NYSE Issues
Advancing 1535 Up Vol 562
Declining 1723 Down Vol 859
1.14 1.07
Nasdaq
Advancing 1123 Up Vol 340
Declining 1884 Down Vol 1190
1.77 3.52

Stocks in the News

UBS and JP Morgan raised estimates on Intel
(
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.

Applied Materials
(
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said they see approval for a factory in
China.

Cognos
(
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warned for Q1.

Take Two Interactive
(
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beat by 0.01.

WalMart
(
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hosts a shareholder meeting today.

Merrill Lynch cut estimates on JP Morgan
(
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.

bebe
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raised its dividend and announced a 3:2 split.

LTX Corp.
(
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missed by a penny and guided higher.

CIBC upped Wynn’s
(
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to an outperform and raised its price
target to $71.

Deutsche cut Abercrombie & Fitch to a ‘hold.’

Brice Wightman

 

 

 

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