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Market Commentary for July 19, 2007


The DOW set a new, all time historic closing high over 14,000 today. The Bulls assisted in the push into higher territory today with the major indices moving nicely higher on earnings and overall economic outlook. At the closing bell, here is how the major indices ended the session: the DOW (Dow Jones Industrial Average) posted a gain of 82.19 points to end the session at 14,000.41; the NYSE (New York Stock Exchange) posted a gain of 45.73 points to end at 10,194.01; the NASDAQ posted a gain of 20.55 points for a close at 2,720.04; the S&P 500 moved gain by 6.91 points to end at 1,553.08 and the RUSSELL 2000 moved higher by 5.94 points to close at 851.85. 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 2.43 points to close at 269.91 and the FTSE RAFI 1000 posted a gain of 27.19 points to close at 6,499.76.

Comments from President of the Federal Reserve, Ben S. Bernanke Testimony before U.S. Senate Panel today: `Relatively optimistic' on Basel II deal prospects; China economy too oriented toward exports; don't have a 'magic' non-inflationary jobless rate; economy functioning well outside of housing; expects housing demand to stabilize soon; Fed moving as fast as 'responsibly' can on sub-prime; frustrated at slow pace of Yuan appreciation; GSE portfolios should be tied to a public purpose; haven't seen big effect from housing on consumption; high energy prices 'very painful'; no sign of Japanese Forex manipulation; repeats inflation the 'predominant' policy concern; still 'pretty substantial overhang' of unsold homes; sub-prime-related credit losses between $50-$100 Billion; U.S. needs 'diversified energy portfolio'; will be significant financial losses from sub-prime and Yen 'quite low,' but market determined.

Comments from President of the Federal Reserve Bank of Chicago, Michael H. Moskow: Core Inflation best for guiding rate policy; derivatives have helped act as shock absorbers; economy outside housing on 'solid footing'; expects housing market adjustment to be gradual; expects inflation to moderate, growth to continue; Fed will need to watch inflation for extended time; 'possible' markets may be under pricing risk; 'financial volatility has not been abolished'; flags recent 'positive' inflation developments; globalization has mixed impact on U.S. inflation; housing remains risk to economic outlook; inflation expectations are contained; lower Fed growth forecast only 'slight' change; markets have weathered recent turmoil well; markets still see low risk environment; monetary policy outlook dependant on new economic data; policy-makers must monitor financial markets closely; price stability is essential for economy and wants to see sustained Core PCE between 1%-2%.

International Monetary Fund Chief Economist, Rodrigo de Rato commented today: The Global Economy is booming; Economic upturn gathering steam in Europe; food price hikes raising global fears of inflation; inflation expectations remain controlled except In UK and U.S. Sub-prime Mortgage woes `compartmentalized`.

Economic Data:

Jobless Claims: A weekly compilation of new unemployment claims to show the number of individuals who filed for unemployment insurance for the first time. The condition of the labor market is determined by an increase of the number of claims which suggests a deteriorating labor market. Data released today: U.S. Jobless Claims fell by 8K to 301K in week of July 14th as compared to survey of an increase by 2K; U.S. Continuing Claims for week of July 7th rose by 20K to 2,571,000 and U.S. Jobless Claims for week of July 7th was revised to 309K from 308K

Leading Indicators: Ten economic indicators are compiled by the Conference Board that should lead overall economic activity. In the past 30 years the data has been revised many times especially when it has not done a good job of predicting turning points in the economy. U.S. Conference Board Leading Indicators released today: June Leading Index fell by 0.3%; June Coincident Index rose by 0.2% and June Lagging Index rose by 0.5%.

EIA Natural Gas Report: Weekly information provided by the EIA (Energy Information Administration) on natural gas stock piles in underground storage in the United States and three regions of the country. Prices for natural gas products are determined by the level of inventories. EIA Natural Gas Report as released today: Weekly change of 65 Bcf.

Philadelphia Fed Survey: Philadelphia Federal Reserve district releases general conditions index from the business outlook survey which is a diffusion index of manufacturing conditions in the district. Philadelphia Fed Survey released today: Philadelphia Fed July New Orders came in at 11.3 versus June reading of 18.3; Philadelphia Fed July Employment came in at 4.1 versus June reading of 5.6; Philadelphia Fed July Price Received came in at 8.8 versus June reading of 5.1; Philadelphia Fed July Price Paid came in at 28.1 versus June reading of 29.7; Philadelphia Fed July New Orders came in at 11.3 versus Jun reading of 18.3; Philadelphia Fed July Business Index came in at 9.2 versus June reading of 18.0 and Philadelphia Fed July Business Index was expected to come in at 11.8.

FOMC Minutes: Inflation remains predominant risk; still tight labor markets 'a puzzle' given slower growth; housing still a risk; no housing spillover yet; growth to rise close to potential in coming quarters; inflation to 'edge lower' over next 2 years; inflation expectations must be steady to lower core; core inflation could be lower on 'transitory' factors and risks to growth 'more balanced' since Spring.

Commodities Markets

The trend was mostly higher across the board today for the Energy Sector: Light crude moved higher by $0.87 today to close at $75.92 a barrel; Heating Oil ended the session higher by $0.01 at $2.14 a gallon; Natural Gas moved higher today by $0.17 today to close at $6.79 per million BTU and Unleaded Gas moved closed at $2.19 a gallon.

Metals Market ended the session higher across the board again today: Gold moved higher today for a gain of $4.40 to close at $678.10 an ounce; Silver closed higher today by $0.09 at $13.38 an ounce; Platinum moved higher today for gain of $1.30 to close at $1,338.50 an ounce and Copper closed the day higher by $0.10 at $3.66 per pound.

On the Livestock and Meat Markets, the trend was mostly lower across the board today: Lean Hogs ended the day lower by 0.35 to close at 72.40; Pork Bellies ended the day lower by 1.05 points to close at 87.25; Live Cattle moved lower by 0.83 to close at 96.45 and Feeder Cattle ended the day higher by 0.05 at 115.45.

Other Commodities: Corn moved lower today with a loss of 6.25 points for a close at 336.25 and Soybeans continued to rebound today to post gain of 5.50 points to end the session at 882.00.

The e-mini Dow ended the session today at 14,055 with a gain of 52 points on the trading session. The total Dow Exchange Volume for the day came in at 209,910 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 higher across the board today: 2 year bond closed with no change at 100 1/32; 5 year bond closed higher by 1/32 at 99 25/32; 10 year bond closed higher by 2/32 at 95 31/32 and the 30 year bond closed higher by 6/32 at 94 15/32.

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 4,838,942. Open Interest for Futures moved higher by 53,533 points to close at 9,994,453; the Open Interest for Options moved higher by 98,190 points to close at 9,123,964 and the Open Interest for OTC closed with no change at 6,585 for a total Open Interest of 19,125,002 for a total gain on the day by 151,723 points.

On the NYSE today, advancers came in at 1,712; decliners totaled 1,094; unchanged came in at 118; new highs came in at 245 and new lows came in at 155. Gainers and losers for the day on the NYSE: Genco Shipping & Trading Limited (GNK) rallied higher on the trading day to pick up 19.65% for a gain of 10.10 points on the session for a final trading price of $61.50; Textron Incorporated (TXT) bolted higher on the session for a gain on the day of 6.77 points to end the day at $122.20; Valmont Industries Incorporated (VMI) shot higher on the session with a gain of 13.04% to tack on 9.79 points for an end of trading day price of $84.86; Labor Ready Incorporated (LRW) bolted higher with a gain of 21.09% to tack on 4.84 points for an end of day price of $27.79 and Vulcan Materials Company (VMC) fell sharply by 6.19 points on the day for a closing price of $106.23.

On the NASDAQ today, advanced totaled 1,820; decliners totaled 1,179; unchanged came in at 155, new highs came in at 192 and new lows came in at 159. Gainers and losers for the day on the NASDAQ: Clearwire Corporation (CLWR) rallied higher on the trading session for a whopping gain of 31.84% to tack on 7.89 points with a high of $35.41, a low of $28.74 for a final trading price of $32.67; Baidu.com Incorporated (BIDU) gave up 8.40 points on the session with a high of $205.09, a low of $193.14 for a final trading price at $191.50; Williams Scotsman International (WLSC) roared higher on the trading day for a gain of 4.71 points to tack on 20.17% to close the session at $28.07 and Avici Systems Incorporated (AVCI) ripped higher on the trading session for a sharp gain of 42.26% to gain 3.55 points with a final trading price of $11.97.

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