Market Swing Wildly after Fed Announce


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Daily Market Commentary for January 30, 2008 from Millennium-Traders.Com

At the closing bell on the Stock Exchange, here is how the major indices ended the session on the U.S. Markets:

DOW (Dow Jones Industrial Average) loss of 40.89 points on the day to end the session at 12,439.41

NYSE (New York Stock Exchange) loss of 34.15 points to end the session at 9,011.87

NASDAQ loss of 9.06 points for a close at 2,349.00

S&P 500 loss of 6.92 points for a close at 1,355.38

RUSSELL 2000 loss of 9.54 points to close at 695.56

FTSE Global Equity Index Series (GEIS) gain of 0.15 points to close at 241.58

FTSE RAFI 1000 gain of 57.58 points to close at 5,660.33

BEL 20 loss of 1.35 points to close at 3,767.06

CAC 40 loss of 67.88 points to close at $4,873.57

FTSE100 loss of 47.9 points to close at 5,837.30

NIKKEI 225 loss of 133.9 points to close at 13,345.00

On the NYSE today, advancers came in at 1,331; decliners totaled 1,834; unchanged came in at 92; new highs came in at 31 and new lows came in at 31. Momentum stocks traded by active Day Traders on the NYSE today: CME Group Incorporated (CME) shed 18.75 points with a high on the day of $618.65, a low of $593.98 for a closing price at $598.25; iShares FTSE/Xinhua China 25 Index (FXI) shed 6.95 points with a high on the day of $150.38, a low of $141.81 for a closing price at $142.35; Baker Hughes Incorporated (BHI) shed 6.17 points with a high on the day of $69.60, a low of $66.78 for a closing price at $67.27; Mosaic Corporation (MOS) shed 3.55 points with a high on the day of $94.73, a low of $87.61 for a closing price at $88.95; InterContinental Exchange, Incorporated (ICE) shed 3.53 points with a high on the day of $145.00, a low of $137.03 for a closing price at $138.36; Petroleo Brasileiro (PBR) gained 0.72 points with a high on the day of $114.24, a low of $107.05 for a closing price at $109.25; Schlumberger Limited (SLB) shed 2.94 points with a high on the day of $79.12, a low of $75.55 for a closing price at $75.75; Tupperware Brands Corporation (TUP) gained 5.19 points with a high on the day of $36.99, a low of $32.55 for a closing price at $34.55; Dover Corporation (DOV) gained 2.66 points with a high on the day of $42.20, a low of $39.20 for a closing price at $41.06; PepsiAmericas Incorporated (PAS) shed 5.63 points with a high on the day of $27.73, a low of $23.00 for a closing price at $23.25; Goldman Sachs Group Incorporated (GS) gained 2.50 points with a high on the day of $205.97, a low of $193.40 for a closing price at $198.55; Under Armour, Incorporated (UA) gained 1.20 points with a high on the day of $39.61, a low of $36.73 for a closing price at $37.59; Canon Incorporated (CAJ) shed 2.78 points with a high on the day of $43.17, a low of $41.19 for a closing price at $42.19; Alliance Data Systems Corporation (ADS) shed 0.30 points with a high on the day of $44.48, a low of $40.60 for a closing price at $42.70; MEMC Electronic Materials Incorporated (WFR) shed 3.33 points with a high on the day of $75.32, a low of $71.17 for a closing price at $71.53; New Oriental Education & Technology Group (EDU) shed 2.89 points with a high on the day of $54.54, a low of $50.68 for a closing price at $52.25; Uniao de Bancos Brasileiros S.A. (Unibanco) (UBB) shed 2.25 points with a high on the day of $135.35, a low of $125.48 for a closing price at $129.00; NVR Incorporated (NVR) shed 27.65 points with a high on the day of $633.50, a low of $600.05 for a closing price at $600.00; Fluor Corporation (FLR) shed 4.23 points with a high on the day of $123.80, a low of $118.69 for a closing price at $119.91; Potash Corp. of Saskatchewan, Incorporated (POT) shed 4.67 points with a high on the day of $142.95, a low of $135.60 for a closing price at $136.25; VMware, Incorporated (VMW) gained 1.03 points with a high on the day of $57.17, a low of $53.57 for a closing price at $55.90; Mastercard Incorporated (MA) shed 2.46 points with a high on the day of $197.71, a low of $188.00 for a closing price at $189.00; Inverness Medical Innovations Incorporated (IMA) shed 4.30 points with a high on the day of $47.85, a low of $43.75 for a closing price at $43.80; Companhia Siderurgica Nacional (SID) gained 1.83 points with a high on the day of $95.80, a low of $89.33 for a closing price at $92.88; Transocean, Incorporated (RIG) shed 3.21 points with a high on the day of $127.00, a low of $123.09 for a closing price at $123.27.

On the NASDAQ today, advanced totaled 1,313; decliners totaled 1,710; unchanged came in at 109; new highs came in at 20 and new lows came in at 119. Momentum stocks traded by active Day Traders on the NASDAQ today: Incorporated (BIDU) shed 11.32 points with a high on the day of $272.99, a low of $253.83 for a closing price at $259.39; Cymer Incorporated (CYMI) shed 6.88 points with a high on the day of $29.35, a low of $26.55 for a closing price at $27.00; Healthways Incorporated (HWAY) shed 10.52 points with a high on the day of $56.99, a low of $53.35 for a closing price at $55.85; Apple Incorporated (AAPL) gained 0.64 points with a high on the day of $135.45, a low of $130.00 for a closing price at $132.18; First Solar Incorporated (FSLR) shed 7.55 points with a high on the day of $191.39, a low of $180.59 for a closing price at $184.35; Mercadolibre, Incorporated (MELI) shed 5.9059points with a high on the day of $41.00, a low of $35.96 for a closing price at $36.11; Google Incorporated (GOOG) shed 2.25 points with a high on the day of $560.43, a low of $543.51 for a closing price at $548.27; International Limited (CTRP) shed 3.48 points with a high on the day of $46.37, a low of $42.25 for a closing price at $42.82; SunPower Corporation (SPWR) shed 4.30 points with a high on the day of $74.55, a low of $69.05 for a closing price at $70.30; Sears Holdings Corporation (SHLD) gained 1.11 points with a high on the day of $109.00, a low of $102.71 for a closing price at $105.07; AMAG Pharmaceuticals, Incorporated (AMAG) shed 5.64 points with a high on the day of $58.47, a low of $43.59 for a closing price at $50.02; Conceptus, Incorporated (CPTS) gained 0.79 points with a high on the day of $17.79, a low of $15.04 for a closing price at $16.04; SiRF Technology Holdings Incorporated (SIRF) shed 1.47 points with a high on the day of $15.86, a low of $14.50 for a closing price at $14.58; Garmin Limited (GRMN) gained 0.13 points with a high on the day of $71.35, a low of $68.03 for a closing price at $70.34.

Fed cuts Fed Funds Rate 0.50 Basis Points to 3.0%, sees Downside Risks. FOMC Voted 9-1 for Fed Funds Rate Cut. Additional comments from FOMC: Inflation Should Moderate, will Monitor Closely; Credit Has Tightened for Businesses, Households; Financial Markets Remain Under Considerable Stress; Recent Information Shows Deepening Housing Contraction, Soft Labor Markets; Will Act In Timely Manner As Needed To Address Econ Risks; Rate Cut Should Promote Moderate Growth, Risks Remain; Fisher Dissented, Preferred no Change in Rates.

ADP Sees January U.S. Private Sector Jobs increase by 130,000 and ADP January U.S. Private Sector Jobs Expected to increase by 43,000.

U.S. GDP rose at rate of 0.6% in fourth quarter compared consensus of an increase by 1.2%; Real Final Sales rose 1.9% in fourth quarter; PCE Price Index rose at rate of 3.9% in fourth quarter; Chain-Weighted Price Index rose at rate of 2.6% in fourth quarter; Domestic Purchases Price Index rose at rate of 3.8% in fourth quarter.

Secretary Paulson’s Remarks on the Economy Before the Real Estate Roundtable Washington, D.C. – Good afternoon. Thank you, Chris, and thanks to the Real Estate Roundtable for inviting me. As you know, we have a lot on our economic plate right now. I will give you my perspective and then look forward to hearing your thoughts.

U.S. Economy and Fiscal Growth Package
The U.S. economy is undergoing a significant housing correction. That, combined with high energy prices and capital market turmoil caused economic growth to slow rather markedly at the end of 2007, as reflected in the GDP numbers released this morning. I am confident our economy will continue to grow, although not as rapidly as we have seen in recent years. The U.S. economy is diverse and resilient, and our long-term fundamentals are healthy. Yet, the risks are clearly to the downside and President Bush knows that economic security is of the utmost importance to the American people. We have been tracking economic signals closely for some time now, and are actively engaged with policymakers around the world as we monitor global markets. In recent weeks, the potential benefits of quick action to support our economy became clear, and the potential costs of doing nothing too great. So, the President asked me to work with Congress to develop a fiscal growth package to minimize the impact on the real economy as we weather this housing correction. At the outset, the President suggested a few principles to use as a foundation for discussion --- that a fiscal growth plan must be enacted quickly; it must be robust, temporary and broad-based, and must get money into our economy quickly. We found common ground with the Congress in those principles, and began intense discussions. In eight days the Administration and Democratic and Republican House leadership reached agreement. Yesterday, in additional evidence of bipartisan cooperation and commitment, the House passed a bill based on this agreement. For Washington, this is action at the speed of light, and I am optimistic the next few weeks will be equally productive. The House bill is a balanced, bipartisan compromise that will provide immediate relief for American families and incentives for businesses to invest and hire. If enacted swiftly, the House bill is expected to help create more than half a million jobs by the end of 2008. We know from experience that both immediate tax relief for income tax payers and incentives for businesses to invest and hire are effective in creating growth and jobs in the short-term. Speaker Pelosi and Minority Leader Boehner have shown discipline and leadership, and the House has set a high standard. Certainly, House members from both sides of the aisle wanted additional provisions added to the bill. But both Leaders kept this effort limited and focused in order to reach agreement. Strong leadership in the House has provided decisive steps towards quick action to boost the economy. The task now moves to the Senate. Senators, like their House colleagues, know time is of the essence. I think they also understand that a simple package can move quickly, while a complex package can upset the current balance. If the process bogs down, the American people will lose patience and we will also lose the momentum that's absolutely needed for quick action and quick results. House leaders carefully crafted a balanced agreement. They recognized that a simple plan offered the most expedient and effective path. I am confident Senate leaders will see the wisdom of this approach, and I don't believe the Senate has any interest in derailing the cooperation and speed with which Washington has acted so far. If we keep moving along this fast-track, and within a few weeks Congress sends the President a bill he can sign, rebate payments would start in May. But until the President signs a bill into law and checks are in the mail, I won't say that this short-term effort is complete. And of course we will continue to press for economic policies which are in our country's long-term best interest --- a pro-growth tax system, entitlement reform and a balanced budget. We are addressing a short-term economic need, and the Administration remains committed to vigorous debate with the Congress over the need for longer-term, structural reforms.

Housing Markets
While a swift, simple and substantive fiscal growth package will provide a boost and add to job creation this year, it is not intended or expected to slow down the housing correction. After years of unsustainable home price appreciation, this is a necessary correction. On Monday, the Commerce Department reported that over the 12 months of 2007, new homes sales dropped 41 percent and new home prices declined by 10.4 percent. Other measures also show roughly flat or falling home prices over the last year. The Administration's focus has been --- and in addition to this fiscal growth plan will continue to be --- aggressive action to try to minimize the impact of the housing downturn on homeowners and the real economy by preventing avoidable foreclosures. Last fall, we encouraged the creation of the HOPE NOW alliance, a coalition representing over 90 percent of the subprime servicing market and non-profit mortgage counseling organizations, trade associations and investors. This industry-wide effort employs multiple tools to reach and help struggling homeowners, including streamlining subprime borrowers into refinancings and loan modifications to avoid a market failure. And they are doing so without asking American taxpayers to pay the bill. There are promising developments. According to HOPE NOW, the industry assisted 370,000 homeowners in the second half of 2007, and mortgage servicers modified subprime loans during the fourth quarter at a rate three times faster than in the third quarter. In its first two months, HOPE NOW sent over 480,000 letters to at-risk borrowers who had not reached out for help previously. Servicers estimate that, as a result of the first wave of letters approximately 16 percent, or 77,000 homeowners, have called their servicer or a non-profit counselor to see if foreclosure can be avoided. We will receive regular progress reports in the coming months. As we learn more, we will look for additional measures to reach more borrowers and prevent as many avoidable foreclosures as possible. The Administration has also, through FHA Secure, expanded affordable mortgage options. Working with Congress, we have increased funding for mortgage counselors who assist struggling homeowners. We have also temporarily eliminated taxes on forgiven mortgage debt. But more action is needed in the housing sector, action that is as important as a short-term fiscal growth plan. We have urged Congress to move quickly to finalize its work on the FHA modernization bill --- that will provide financing for about 250,000 borrowers. Congress should also allow states to issue tax-exempt bonds to raise funds for innovative refinancing programs. And it is vitally important that Congress pass GSE reform legislation to enhance regulatory oversight for Fannie Mae and Freddie Mac. The House leaders decided to include a temporary increase in the GSEs' conforming loan limits in the economic growth bill. This could be helpful to jumbo mortgage borrowers; however, higher limits are inconsistent with the GSEs' affordable housing mission. Under the House bill, these higher limits expire at the end of this year, and this should not be an excuse for postponing much-needed reform. The House has already passed GSE reform legislation and Senate Banking Chairman Dodd has assured me that he will take legislation up soon. We will continue to press Congress for this reform and stronger GSE regulatory oversight.

Capital Markets
Predictably, our capital markets are being impacted as we weather the housing correction and uncertainty in the housing sector. Investors' concerns about credit have increased dramatically, and market liquidity has been, in turn, similarly impacted. The plentiful flow of liquidity that fueled the boom in borrowing and leverage across asset classes --- from home mortgages to leveraged buyouts --- has been reduced, with significant consequences. Short-term funding markets were stressed and inter-bank funding spreads rose to unprecedented levels. Mortgage origination and other asset securitization dropped markedly, adding to the challenges in the housing sector. Given the interconnectedness of our capital markets, other stresses emerged as financial institutions grappled with valuing assets and balance sheets came under pressure. These developments led to significant actions by major central banks and tremendous financial sector strains. Since August, financial institutions have written off over $153 billion of assets. Numerous issuers and structures have been downgraded and over $136 billion in off-balance sheet assets have been consolidated. During the past nine weeks, we have also seen some encouraging signs. US financial institutions have raised over $95 billion in new capital. The housing Government Sponsored Entities (GSEs), Freddie Mac and Fannie Mae, have raised equity. A number of our financial institutions have strengthened balance sheets by raising capital from a variety of U.S. and foreign sources. Our markets are still working through these strains, and certainly your industry has been impacted as well. These events underscore the need for strong market discipline, prudent regulatory policies, and robust risk management. While this transition period is difficult, and will take more time, it is appropriate and reflects a healthy return to fundamentals. I have great confidence in our markets. They have recovered from similar stressful periods in the past, and they will again. As we work to better understand the causes of the distress in the housing and mortgage markets and the capital market turmoil, some lessons are very clear. For instance, an abundant supply of easy credit and a decline in lending standards were major contributors. Complex and opaque financial instruments and structures, such as the use of conduits and SIVs contributed, as did investor practices and rating agency issues. Through the President's Working Group on Financial Markets, we are reviewing the underlying policy issues. Our reviews' focus on issues ranging from enhancing risk management, including liquidity and counterparty credit risk, to market infrastructure, to reporting and disclosure, to ratings and investor practices. Working through the current stress is our first concern, getting the long-term policy right is just as important. We also need to streamline and modernize the patchwork regulatory structure that oversees the mortgage process, provide consumers with clear, understandable mortgage disclosure and bring a higher level of integrity to the mortgage origination process.

I am optimistic that Congress will pass a growth package quickly enough to have a real impact on our economy, to help individuals and families, and to increase business investment now when it is most needed. Our economy is resilient, as are the American people. We will work through this period and share a future of continued opportunity and prosperity.

Remarks by Treasury Under Secretary for International Affairs David H. McCormick at the Council on Foreign Relations: U.S. - China Economic Engagement: The Road to Faster, Deeper Reform New York – Thank you Paul for that warm introduction, and thanks to all of you for coming this morning. I am grateful to the Council on Foreign Relations for bringing us together to discuss an issue of great long-term importance: U.S.-China economic relations. Indeed, maintaining a mutually beneficial, open, and politically sustainable economic relationship with China is one of the United States' most pressing challenges and greatest opportunities in the realm of international economic policy. The challenge is great because the stakes are high for the United States, for China, and for the global economy. For the United States, China is the world's fastest growing major market for our goods and services. Since China's accession to the World Trade Organization in 2001, U.S. exports to China have grown five times faster than our exports to the rest of the world. At the same time, China's prosperity depends on the United States. Last year, American consumers and companies purchased one-fifth of China's exports. Even as China diversifies its export markets, American demand continues to shape China's economy. Investment flows between our two countries are also expanding rapidly. Between just 2002 and 2006, U.S. foreign direct investment (FDI) in China grew from roughly $10 to $22 billion while in 2007 alone, Chinese direct and portfolio investment in the United States totaled nearly $10 billion. As a consequence of this growth, the U.S.-China economic relationship has been forced to mature very quickly. With the increasing volume of trade and investment, it was inevitable that we would experience a range of frictions as we do in our economic relationships with other major trading partners. These frictions include growing concerns about trade imbalances, product safety, the Chinese government's large holdings of foreign exchange reserves, and China's foreign exchange policies. While not surprising, these frictions have nevertheless caused some in the United States to question the benefits of maintaining an open and expansive economic relationship with China. The Bush Administration's answer to this defining question is unwavering: We are committed to strengthening our economic relationship with China and opening its markets to create new opportunities for American firms and American workers. In this effort, we are making full use of the policy tools at our disposal, and we have developed new approaches, most notably the Strategic Economic Dialogue (SED) launched by Presidents Bush and Hu in 2006. In spite of the continuing frustrations and inevitable tensions in our economic relations with China, this Administration is taking a thoughtful and effective approach to accelerating reform and promoting U.S. interests. Would we like more rapid, deeper reform? Of course. But we are making steady progress and bringing clear benefits to America's workers, businesses, and consumers.

China's Growth Challenge
China's growth over the past three decades has been nothing short of miraculous. It has transformed itself from a poor, mostly agrarian, and almost closed economy into the world's third most important trading nation. In the process, China has benefited from economic growth averaging nearly 10 percent per year that has lifted hundreds of millions of Chinese citizens out of poverty. The growth model that produced this enormous success has also been highly resource-intensive, and driven by heavy investment in industrial production and exports rather than growth in domestic household consumption. We see evidence that this model is no longer sustainable in China's increasingly wasteful investment, rising inequality, a large and growing current account surplus, and accelerating environmental degradation. We also see evidence of this in weak growth in Chinese employment and in household income growth that lags well behind the rise in GDP. China's imbalances at home are mirrored by the imbalances China continues to generate abroad. High national saving and its counterpart, weak consumer demand provide the structural basis for large Chinese trade and current account surpluses that make China's economic growth increasingly dependent upon foreign demand, sometimes creating friction between China and its trading partners. This is not simply an American critique of China's economy. China's most senior leaders tell us they are committed to addressing the imbalances between growth in rural and urban areas, between the coastal and interior regions, between reliance on domestic and foreign demand to drive growth, between rich and poor households, and between economic development and environmental protection. They are coming to realize, as we do, that their success in addressing these challenges would have enormous benefits for China and the United States.

Commodities Markets: The trend was higher across the board today for the Energy Sector: Light crude moved higher today by $0.11 to close at $91.75 a barrel; Heating Oil moved higher today by $0.01 to close at $2.54 a gallon; Natural Gas moved higher today by $0.10 to close at $8.05 per million BTU and Unleaded Gas closed with no change at $2.33 a gallon.

Metals Markets: ended the session lower across the board today: Gold moved lower today by $4.50 to close at $926.30 a Troy ounce; Silver moved lower today by $0.04 to close at $16.76 per Troy ounce; Platinum moved sharply lower today by $34.50 to close at $1,687.40 per Troy ounce and Copper moved lower by $0.07 today to close at $3.23 per pound.

On the Livestock and Meat Markets: the trend was mostly higher across the board today: Lean Hogs ended the day higher by $0.48 to close at $66.10; Pork Bellies ended the day higher by $2.18 to close at $93.03; Live Cattle ended the day lower by $0.23 at $94.53 and Feeder Cattle ended the day higher by $0.85 at $105.10.

Other Commodities: Corn ended the day lower today by $2.50 at $498.50 and Soybeans moved nicely higher today by $10.75 to end the session at $1,275.75.

Bonds: were mostly lower across the board today: 2 year bond moved higher by 4/32 to close at 99 25/32; 5 year bond moved lower by 3 15/32 to close at 99 28/32 today; 10 year bond moved lower by 8/32 to close at 104 12/32 and the 30 year bond moved lower by 20/32 to close at 109 23/32 on the day.

The e-mini Dow ended the session today at 12,582 with a gain of 111 points on the trading session. The total Dow Exchange Volume for the day came in at 143,916 which are comprised of Electronic, Open Auction and Cash Exchange. Traders should review workshops available at the CBOT (Chicago Board of Trade) Educational in-person seminars schedules available on CBOT (Chicago Board of Trade) website.

The end of day results for the CBOT (Chicago Board of Trade) which is comprised of the total Exchange Volume for Futures and Options (EVFO) including Electronic, Open Auction and Cash Exchange ended the day at 3,806,374; Open Interest for Futures moved higher by 12,394 points to close at 10,429,913; the Open Interest for Options moved higher by 159,427 points to close at 8,931,322 and the Cleared Only closed lower by 98 points to close at 21,822 for a total Open Interest on the day of 19,383,057 for a total Change on the day with a gain of 171,723 points.

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