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Market Commentary for May 23, 2007


The market trading action was held in control by the Bulls today but, into the last hours or the trading day, the Bears took over the trading direction to move a majority of the major indices into the red zone. At the closing bell, here is how the major indices ended the session: the DOW (Dow Jones Industrial Average) moved lower by 14.30 points to end the session at 13,525.65; the NYSE (New York Stock Exchange) gained 12.70 points to end at 9,913.66; the NASDAQ posted a loss of 10.97 points today for a close at 2,577.05; the S&P 500 moved lower by 1.84 points to end at 1,522.28 and the RUSSELL 2000 moved lower by 3.38 points to close at 836.54. 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 higher by 0.52 to close at 260.55 and the FTSE RAFI 1000 moved lower by 8.79 to close at 6,397.00.

Federal Reserve Chairman Ben S. Bernanke commented Tuesday at an event recognizing two recipients of a race-relations award bestowed by Princeton University: Strong U.S. Educational system is 'Critical'a strong U.S. educational system is a key driver of the nation’s; prosperity he is persuaded that a strong educational system, one that promotes lifetime learning and skill development is a critical factor in our nation's prosperity and "The economic importance of education will only increase as technology advances and as the global economy becomes increasingly integrated and complex," Bernanke added.

President of the Federal Reserve Bank of Richmond Jeffrey Lacker commented late yesterday: business investment fundamentals still positive; consumer spending to 'remain healthy'; current Fed policy likely lowering inflation; current funds rate should achieve Fed goal; Fed communications, action could lower inflation; Fed Is responsible for inflation expectations; Fed must influence inflation expectations; housing bottoming, but still under pressure; inflation likely heading to 2% Core PCE Price Index; inflation outlook tied to price expectations; is 'comfortable' with current level of Funds Rate; lower productivity 'minor risk' to inflation; main Fed contribution is low, stable inflation; market knows Fed won't tolerate inflation; no real moderating trend yet in inflation; no trade off between growth and inflation; only Fed can allow commodities to drive inflation; room for Fed to clarify Fed Policy objectives and sub-prime trouble not likely to hurt broader economy.

Treasury Secretary Henry M. Paulson, Jr. commented today: U.S. and China agree China must rebalance economic growth; U.S. and China dialogue showing `tangible results'; U.S. and China reach deals in financial services, aviation; U.S. and China agree to cooperate on energy, environment; Yuan is symbol of China's Overall economic reform and wider Yuan trading band is a `positive signal'.

Word on U.S. and China today: U.S. and China to strengthen intellectual property rights enforcement; China to allow foreign insurance firms to expand products and China to allow 13 new routes for U.S. Airlines over 5 years.

Economic data released for the day:

MBA Purchase Applications: Compilation from the Mortgage Bankers’ Association of various mortgage loan indexes. This data is the leading indicator for single-family home sales as well as, housing construction. Purchase Index came in at 438.1.

EIA Petroleum Status Report: EIA (Energy Information Administration) provides weekly petroleum inventories in the United States whether they are produced here or abroad. Prices for petroleum products are determined by the level of inventories. Department of Energy reported Petroleum Inventories today: U.S. Crude Oil Stockpiles rose by 2 Million Barrels in the week compared to expectations of a drop by 200,000 Barrels; U.S. Gasoline Stockpiles rose by 1.5 Million Barrels in the week compared to expectations of an increase by 800,000 Barrels and U.S. Refineries ran at 91.1% capacity compared to expectations of 0.6 Pt. at 90.1% capacity,

Commodities Markets

The trend was mostly higher across the board today for the Energy Sector: Light crude moved higher by $0.26 today to close at $65.51 a barrel; Heating Oil had no change to close at $1.91 a gallon; Natural Gas moved lower by $0.04 at $7.94 million BTU and Unleaded Gas closed with no change at $2.31 a gallon.

Metals Market ended the session mostly higher across the board today: Gold moved higher by $2.70 to close at $662.60 an ounce; Silver moved higher by $0.12 to close at $13.11 an ounce; Platinum moved higher today by $8.30 to close at $1,307.00 an ounce and Copper ended the day with no change at $3.30 per pound.

On the Livestock and Meat Markets, the trend was mixed across the board today: Lean Hogs closed with no change to close at 73.50; Pork Bellies ended the day higher by 0.20 to close at 101.93; Live Cattle moved lower by 0.33 to end the day at 92.25 and Feeder Cattle ended the lower by 0.98 to close at 112.73.

Other Commodities: Corn moved higher today for a gain of 1.25 points to end at 370.50 and Soybeans moved higher today for a rebound of 7.25 points to end at 800.50.

The e-mini Dow ended the session lower by 1 point to close at 13,560. The total Dow Exchange Volume for the day came in at 116,310 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 mostly lower across the board today: 2 year bond closed with no change at 99 12/32; 5 year bond closed lower by 2/32 at 98 25/32; 10 year bond closed lower by 6/32 at 97 7/32 and the 30 year bond closed lower by 11/32 at 96 2/32.

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 4,259,334; Open Interest for Futures moved higher by 94,950 points to close at 10,545,041; the Open Interest for Options moved higher by 29,486 points to close at 8,073,267 and the Open Interest for OTC moved lower by 40 points to close at 4,939 for a total Open Interest of 18,623,207 for a total gain on the day by 124,396.

On the NYSE today, advancers came in at 1,324; decliners totaled 1,907; unchanged came in at 129; new highs came in at 306 and new lows came in at 20. Gainers and losers for the day on the NYSE: Minerals Technologies Incorporated (MTX) fell by 3.57 points for a closing price of $64.28; The Stride Rite Corporation (SRR) moved nicely higher by 30.81% to tack on 4.76 points to end the day at $20.21; CSS Industries Incorporated (CSS) fell sharply by 14.81% to shed 6.21 points to end the day at $35.72; Bristow Group Incorporated (BRS) moved higher on the Big Board with a gain of 3.83 points to close at $47.28; Alcan Incorporated (AL) climbed higher for a gain on the day of 4.48 points to end the day at $85.51; Payless Shoesource Incorporated (PSS) moved higher on the trading session for a gain of 11.00% to tack on a gain of 3.51 points to close at $35.41 and Men’s Wearhouse Incorporated (MW) posted a gain on the trading day by 10.36% to move higher by 4.72 points for a closing price of $50.26.

On the NASDAQ today, advanced totaled 1,267 decliners totaled 1,750; unchanged came in at 163, new highs came in at 166 and new lows came in at 34. Gainers and losers for the day on the NASDAQ: Buffalo Wild Wings (BWLD) plowed higher on the trading day for a gain of 3.29 points to close at $88.32; Cypress Bioscience Incorporated (CYPB) rallied higher by a whopping 94.08% to gain 7.95 points for a closing price of $16.40; Baidu.com Incorporated (BIDU) shed 4.24 points for a closing price at $130.90 and Intuitive Surgical Incorporated (ISRG) posted a gain on the trading day of 3.50 points on the session to end the day at $137.09.

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