Not dropping 100 points is good. It would have been nice if we had a different leader than the energy sector, which was up 1.3% for the day. But the fact that the industrials refused to fall off, even as oil spiked up over 3% in a single day, indicates clearly that either this is the most amazing economy in the history of the planet or that people are just idiots - one or the other, we’ll find out soon!
We tested 13,450 not once but three times during the day, and tested 13,500 just once before running all the way up to 13,474 right at 3 o’clock sharp. Meanwhile, the S&P punched through 1,515 on its second attempt of the day after making sure the 1,510 mark would hold.
There will be no help from Marvell Technology Group (MRVL) tomorrow, which had a so-so semi earnings report that was below expectation, but really not too bad. Autodesk Inc. (ADSK) and Intuit Inc. (INTU) gave great reports, which would ordinarily boost the Nasdaq, but with tomorrow being expiration day I’m not counting on anything in particular.
They may seem like minor moves, but we added a red box to the Dow, the Transports, the Sox and the Russell - that’s about our worst day since the 10th, when the Dow dropped 147 points on the day. Both the SOX (-6) and the Russell (-3) are lower now than they were on that day…
Oil shot up $2.31 for the day and I won’t even get into the fact that there are still 138M barrels scheduled to be delivered to a facility that can only handle 40M barrels. I also won't get into the fact that the longer contracts gained less than $1, making it cheaper to buy oil next year than it is this year. I’m not going to bother, because I am far too disgusted by what has been uncovered at the Judiciary hearings on "Oil Prices and Market Failure" that are going on this week.
Bart Stupak [MI] stated:
For years Big Oil has told us that the cost of a gallon of gas was directly related to the price of crude on the world market. However, in April of this year, a barrel of crude oil was $63. Last year, a barrel of crude was $70. Despite the fact that crude is $7 a barrel cheaper than last year, gas prices are almost 50 cents higher per gallon. Clearly, there’s more at play than simply the price of crude oil.
That would seem like a simple concept, right?
What was really shocking, though, was the testimony of CT AG Richard Blumenthal, who described a meeting he had with US Attorney General Alberto Gonzales requesting a federal investigation into the oil industry:
As I was driving here from the airport I thought back to a meeting that I had with the United States Attorney General less than a year ago, involving a number of my colleagues from all around the country, both Republican and Democrat Attorneys General, who met with him and the chairman of the FTC with the single purpose of persuading them to begin a federal investigation. And unfortunately, our plea went unheeded then — there has been no effective federal investigation.
We pleaded with Attorney General Gonzales and FTC Chairman Majoras, Platt, [sic] to begin an investigation of the oil industry, and we offered our partnership in that work. All 50 Attorneys General have hands full investigating monopolistic abuses on the part of the oil industry, but we lack the authority, and expertise, and resources of the federal government. And so we invited, we beseeched the federal government to join us in that investigation and so far they have declined to do so.
Like I said, disgusted!
While it’s easy to blame the reappearance of $65 oil for holding down the markets, why should the SOX care? The stuff is made out of sand! So I’m going to blame Google (GOOG), which didn’t go up today and threw a damper on the party. I'll also blame Bush, who chose to spend his last press conference with Tony Blair (who is resigning in disgrace over his backing of the war) talking about how great the war is.
Blair did, not surprisingly, make a fine closing statement, though:
And we took a decision that we thought was very difficult. I thought then, and I think now, it was the right decision. History will make a judgment at a particular time. But one thing I know is that what we represent coming here today, speaking in the Rose Garden to you people and getting your questions and being under your pressure, that is a finer and better way of life than either a brutal, secular dictatorship or religious extremism. It’s a better way of life and it’s the way of life, actually, people, anytime they are given the choice, choose to have. And what we should be about, our two nations, is giving as many people in the world as possible that choice and being proud of it.