Four Things To Focus On Next Week

The Dow fell to a 6-week low on Friday. 
The S&P 500 fell 1.9% for the week. May durable goods orders rose 5.5%, much higher than
expected. Ex-transportation, it fell -0.2%. New home sales for May rose 2.1% to
1.298 million units, more than expected.

The Dow fell 2.8% for the week, the worst performance
since mid-April. Transports fell 5%. Are high commodity prices starting to hurt
earnings?  Fedex, Del Monte, Family Dollar and
Covenant Transports all mentioned higher prices this week in their guidance.

A second U.S. case of Mad Cow disease was confirmed.
The cow did not enter the food chain according to the USDA.

Citigroup
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Mason’s
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Guidant
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telling them not to implant certain devices. Some of its defibrillator devices
are subject to failure–and said the FDA may classify it as a recall. The
company is in a deal with Johnson & Johnson
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Cephalon
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for the development and rights to Vivitrex, a monthly shot for alcoholism. The
drug has been shown to cut heavy drinking from 19 days a month to 1.5 to 2.5
days per month. Vivitrex releases a drug daily that reduces the pleasurable
effects of drinking.

IBM will add 14,000 jobs in India this year, while cutting 13,000 jobs
in Europe and the U.S.

Richard Branson may build a refinery. The U.K. billionaire said his
Virgin Group Ltd. will decide in a few months–after a study–whether to build a
refinery. Says Branson: “I‘ve been considering building an
oil refinery because there’s an enormous shortage of oil-refinery capacity and,
as an airline owner, the more oil-refinery capacity that can be created,
hopefully we can drive prices down.”

Next week, look for earnings from Nike
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(1.27 estimate) and Walgreen
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for Apollo Group and on Wednesday, RIMM and Oracle.

The FOMC meets next week. Economists are looking for a quarter point
rise–to 3.25%–and no major change in the policy statement. Specifically, the
words “accommodative” and “measured pace” are expected to remain intact. It is
also quarter end and half-year end.

Strong sectors were:   Brokers
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+1.70%   Gold
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Biotech  
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+0.40%  

Weak sectors were:   Airlines  
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-3.03%     Semis
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Computer Hardware
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-1.87%     

NitroMed
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failure in Black patients.

Corinthian Colleges
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Alcoa
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stock is trading at multi-year lows.

Micron
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profit.

Morgan Stanley cut the steel sector to cautious and US Steel
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Steel Dynamics
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