Thursday: Stocks Continue To Slide

by: Between the Hedges

From Between the Hedges:

Stocks Finish Lower on Worries Over Future Growth

S&P 500 1,261.81 -.67%
DJIA 11,128.29 -.69%
NASDAQ 2,180.32 -.70%
Russell 2000 718.47 -1.02%
Wilshire 5000 12,726.68 -.70%
S&P Barra Growth 585.53 -.58%
S&P Barra Value 674.34 -.76%
Morgan Stanley Consumer 602.41 -.24%
Morgan Stanley Cyclical 831.01 -.63%
Morgan Stanley Technology 501.08 -.93%
Transports 4,627.33 -.93%
Utilities 393.25 +.16%
Put/Call 1.19 -19.05%
NYSE Arms 1.70 -9.99%
Volatility(VIX) 16.99 +4.49%
ISE Sentiment 108.00 -7.69%
US Dollar 84.52 -.39%
CRB 348.65 -.21%

Futures Spot Prices
Crude Oil 69.63 +.26%
Unleaded Gasoline 202.20 +.34%
Natural Gas 6.01 +.30%
Heating Oil 195.95 +.42%
Gold 679.20 -.25%
Base Metals 236.16 -.71%
Copper 368.50 -.70%
10-year US Treasury Yield 5.05% -1.76%

Leading Sectors
Airlines +.97%
Disk Drives +.96%
Computer Hardware +.45%

Lagging Sectors
Coal -1.60%
Biotech -1.78%
Oil Service -2.67%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Smith Barney:
- Reiterated Buy on PLCE.

Afternoon/Evening Headlines
- Prospects for “The Da Vinci Code” opening weekend dropped today after negative reviews labeled the religious thriller “clueless” and “long-winded.”
- Merck(NYSE:MRK) told US advisers today its vaccine against a sexually transmitted virus that causes cervical cancer should be given to children as well as adults.
- Fed Governor Donald Kohn, a 36-year central bank veteran, will be picked by President Bush to be the board’s new vice chairman, a White House official said.
- The New Jersey State Senate approved a $250 million borrowing plan to create three stem-cell research centers, moving one step forward in the race against California to find funding and scientists for the controversial science.
- Dell Inc.(NASDAQ:DELL) will use Advanced Micro Devices’(NASDAQ:AMD) chips in some servers, ending its exclusive use of Intel Corp.’s(NASDAQ:INTC) products after 22 years.
- Dell(DELL) also said first-quarter profit fell 18% and it will cut $3 billion in costs this year.
- Brazil canceled part of its weekly bond auction and Cablemas SA, Mexican cable company, postponed an IPO, a sign a global rout in stocks and bonds is reducing Latin America’s access to capital markets.

BOTTOM LINE: The tone of the market was negative today as the advance/decline line finished lower, almost every sector fell and volume was above average. Measures of investor anxiety were mixed into the close. Overall, today's market performance was bearish. It appears that investors are spooked by the recent declines in commodities and rally in bonds. Future economic data may further pressure stocks as investors interpret strong data to mean more rate hikes and weak data to mean an economic slowdown is on the way. However, a Fed pause is increasing in probability. I expect any string of negative economic data or a continuation of the recent commodity decline will result in an end to the string of recent rate hikes. I continue to believe the major averages are very close to a tradable bottom.

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