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Market Commentary for May 22, 2007


Moving closer toward the Memorial Day holiday, trading action continues to be generally muted. The major indices were taunted by the Bulls and the Bears today with the end of the trading session mixed, at the end of the trading day. At the closing bell, here is how the major indices ended the session: the DOW (Dow Jones Industrial Average) moved lower by 2.93 points to end the session at 13,539.95; the NYSE (New York Stock Exchange) gained 3.50 points to end at 9,900.96; the NASDAQ posted a gain of 9.23 points today for a close at 2,588.02; the S&P 500 moved lower by 0.98 points to end at 1,524.12 and the RUSSELL 2000 moved higher by 6.27 points to close at 839.92. The FTSE All-World Index ex-US (top Large/Mid Cap aggregate from over 2,700 stocks from the FTSE Global Equity Index Series (GEIS) which covers 90% of the worlds investable market capitalization) moved lower by 0.02 to close at 259.82 and the FTSE RAFI 1000 moved higher by 0.58 to close at 6,405.79.

President of the Federal Reserve Bank of Richmond Jeffrey Lacker commented today: Worried Inflation Expectations Will Rise; Economy Can Handle Higher Gas Prices; Not Clear If Housing Demand Bottomed; Strong Liquidity Lowered Market Rates; Core U.S. inflation is still too high and holding interest rates steady for a prolonged period may not be enough to get it down; “The current funds rate has us on track, What it needs to do later this year is a tougher question. So, if you ask me if holding this funds rate constant for the next two years (is) going to get us there, my guess is not.”; "Core inflation has been fluctuating between 2 and 2-1/2 percent for two years since April 2004. From 1996 until 2003, core inflation went between 1 and 2 percent. We need to get back to containing core inflation between 1 and 2 percent."; “Core inflation strips out volatile food and energy prices to yield a more reliable measure underlying price pressures." and “The fact that inflation expectations seem to have risen as inflation has risen and seem to be lodged around 2 percent, gives me a lot of concern."

FOMC Board Member, President of the Federal Reserve Bank of Chicago Michael H. Moskow commented late yesterday: would like to see inflation rates move toward 1.5%; sees growth improving, inflation coming down; 'would be a surprise' if growth doesn't pick up and housing should stabilize but unclear when.

Richmond Fed released following data today: May Manufacturing Index fell by 10 versus drop by 11 in April; May Manufacturing Shipments Index fell by 7 versus drop by 11 in April 15; May Services Revenues Index came in at 7 versus April reading at 5 and May Retail Revenues Index came in at 0 versus April drop by 1.

U.S. Treasury Secretary Henry Paulson commented today: housing correction largely over, contained; dialogue best way to achieve progress with China and encouraged by global economy, sees `strong' growth.

Economic data released for the day:

ICSC-UBS Store Sales: Weekly measure of comparable store sales at major retail chains which is related to the general merchandise portion of retail sales, as reported by the International Council of Shopping Centers. This date accounts for approximately 10% of total retail sales. ICSC-UBS Chain Store Sales reported today were down by 1.5% for week of May 19th.

Redbook: General merchandise portion of retail sales covering only approximately 10% of total retail sales, this data is a weekly measure of sales at department stores, chain stores and discounters. U.S. Retail Sales rose by 2.2% for first two weeks of May versus April.

State Street Investor Confidence Index: A measure of confidence created by looking at actual levels of risk in investment portfolios. Released for May 2007 today, State Street Investor Confidence Index came in at 91.2.

Commodities Markets

The trend was lower across the board today for the Energy Sector: Light crude moved lower by $1.30 today to close at $64.97 a barrel; Heating Oil moved lower by $0.04 today to close at $1.91 a gallon; Natural Gas moved lower by $0.11 at $7.98 million BTU and Unleaded Gas moved lower by $0.10 to close at $2.31 a gallon.

Metals Market ended the session lower across the board today: Gold moved lower by $3.90 to close at $659.90 an ounce; Silver moved lower by $0.14 to close at $12.99 an ounce; Platinum moved sharply lower today by $21.00 to close at $1,298.70 an ounce and Copper ended the day lower by $0.10 today to end at $3.30 per pound.

On the Livestock and Meat Markets, the trend was mostly lower across the board again today: Lean Hogs closed lower by 0.83 to close at 73.50; Pork Bellies ended the day lower by 1.48 to close at 101.73; Live Cattle moved lower by 0.83 to end the day at 92.58 and Feeder Cattle ended the day with no change to close at 113.70.

Other Commodities: Corn moved lower today for a loss of 11.00 points to end at 369.25 and Soybeans moved lower today for a loss of 7.25 points to end at 793.25.

The e-mini Dow ended the session lower by 12 points to close at 13,556. The total Dow Exchange Volume for the day came in at 117,422 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.

Bonds were lower across the board today: 2 year bond closed lower by 2/32 at 99 12/32; 5 year bond closed lower by 7/32 at 98 7/32; 10 year bond closed lower by 11/32 at 97 13/32 and the 30 year bond closed lower by 20/32 at 96 20/32.

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 3,442,125; Open Interest for Futures moved higher by 40,016 points to close at 10,450,091; the Open Interest for Options moved higher by 92,350 points to close at 8,043,781 and the Open Interest for OTC closed with no change again today at 4,939 for a total Open Interest of 18,498,811 for a total gain on the day by 132,366.

On the NYSE today, advancers came in at 1,733; decliners totaled 1,503; unchanged came in at 139; new highs came in at 423 and new lows came in at 28, same as yesterday. Gainers and losers for the day on the NYSE: Chicago Mercantile Exchange Holdings (CME) rose higher by 7.16 points to close on the Big Board at $522.16; MGM Mirage (MGM) rallied higher on the Big Board today for a whopping gain of 17.03 points to move higher by 27.05% for a closing price on the trading day of $79.98; IntercontinentalExchange Incorporated (ICE) moved higher by 5.32 points to close at $151.40; Texas Instruments Incorporated (TXI) posted a gain on the trading day of 3.68 points to end the session at $85.84 and Las Vegas Sands Corporation (LVS) posted a gain of 4.28 points to end the day at $80.19.

On the NASDAQ today, advanced totaled 1,932 decliners totaled 1,121; unchanged came in at 141, new highs came in at 248 and new lows came in at 63. Gainers and losers for the day on the NASDAQ: American Science & Engineering (ASEI) moved higher on the trading session by 4.52 points to close at $52.50; United Natural Foods Incorporated (UNFI) shed 10.60% to move lower by 3.24 points to close at $27.34; Monster Worldwide Incorporated (MNST) gave up 2.53 points on the trading day to end the session at $47.25; Research In Motion Limited (RIMM) climbed higher on the trading day by 7.20 points to end at $159.20; Google Incorporated (GOOG) bolted higher by 5.26 points to end the session at $475.86 and Wynn Resorts Limited (WYNN) posted a favorable gain of 6.96 points for a close at $101.15.

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