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Market Commentary for September 06, 2007

We saw the markets whip from the green to red back to green zone, during the trading session. Trading activity was quite volatile today creating a difficult trading atmosphere for day traders as well as investors. Overall, the closing bell created a sign of relief for investors with the major indices closing positive, in the hands of the Bulls.

At the closing bell, here is how the major indices ended the session: the DOW (Dow Jones Industrial Average) posted a gain of 57.88 points on the day to end the session at 13,363.35; the NYSE (New York Stock Exchange) posted a gain of 54.38 points to end the session at 9,637.55; the NASDAQ posted a minor gain of 8.37 points for a close at 2,614.32; the S&P 500 moved higher with a gain of 6.26 points to end at 1,478.55 and the RUSSELL 2000 moved higher by 2.46 points to close at 792.92. 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 world’s investable market capitalization) posted a gain of 1.40 points to close at 255.54 and the FTSE RAFI 1000 posted a gain of 25.13 points to close at 6,104.93.

Federal Reserve Bank of Atlanta President Dennis Lockhart commented today: August economic readings not conclusive; can't tell inflation impact of market turmoil; data are backward-looking, need current info; drop in household wealth may hit spending; Fed must focus on long-term mission; Fed will take action needed as things change; housing downturn will last longer; market turmoil is retreat from risky practices; no clear housing spillover to broader economy; sees greater uncertainty in economic outlook; sees progress, but not victory, on inflation; too early to see if economy is hurting and will do what's necessary for liquidity.

President of Federal Reserve Bank of Dallas, Richard W. Fisher commented today: what Fed says important as actual policy move; inflationary forces 'increasingly well behaved'; Fed job is to keep inflation contained and 'listening very carefully" to business conditions.

Member of the Federal Reserve Board of Governors, Randall S. Kroszner commented today: bank crises hit economy harder than other shocks; deeper markets have more negative impact in crises; Fed aims to promote transparency on securities; housing slump fairly sharp; could weaken more; Fed monitoring financial markets 'closely'; financial stress has spread outside mortgage markets; health of U.S. banking system 'quite good'; investors must assess risks of securities; investors need to do own 'due diligence'; investors shouldn't just rely on ratings; remarks 'reinforce' Bernanke's, Jackson Hole speech and transparency could be better on Securities.

President of the Federal Reserve Bank of St. Louis, William Poole commented today: business cycle matters more to jobs growth than trade; can't be slave to market expect, but important; correct Fed policy response not yet clear; Central Banks have responsibility to limit downside; don't doubt much downside potential in market woes; don't think markets going to push Fed into any decision; economy seems to be operating near full employment; good thing if policy side effect helps markets; impact of financial market moves on broad economy less clear; little evidence trade destroys jobs in U.S.; markets should focus on data, not what Fed speakers say; must balance rate cut s/t benefit versus l/t impact; need to rely on anecdotal info more heavily than usual; no question of financial market impact on housing market; policy-makers must maintain commitment to free trade; problem with rating agencies is securities issuers pay; prolonged market turmoil would impact real economy; rate cuts tend to stimulate wider economy; recent earnings figures also positive; recent slower job creation reflects slower workforce gain; shouldn't assume econ about to nose-dive; take market policy expectations very seriously; U.S. job growth seems to be lagging GDP and U.S. Labor market strong, though 2007 numbers not as robust.

Mortgage Bankers Association data released today: total loans past due 5.12% in second quarter versus 4.84% in first quarter; at least 19% of sub-prime ARM’s delinquent in 18 states; total sub-prime ARM’s past due in second quarter 16.95% versus 15.75% first quarter and total prime loans past due in second quarter 2.73% versus 2.58% in first quarter.

European Central Bank President Jean-Claude Trichet commented today: 2007 GDP revision due in part to higher risk premium; additional info needed before conclusions drawn; additional longer-term refinance op launched shortly; appropriate Euro Money Market Steering important; appropriate monitoring of economy evolution necessary; collateral allowed today seems "comfortable"; did not discuss marginal rate move; downside risks to medium-term growth; Euro Zone consumption should strengthen further; Euro-System refinance operation large versus U.S.; Euro Zone first quarter growth was in line with potential; full confidence in BOJ policy decisions; global economic activity expected to be robust; in close contact with other Central Banks; inflation to rise above 2.0% year-end; liquidity operations separate from monetary policy stance; main ingredient lacking currently is confidence; market volatility, risk reappraisal lift uncertainty; money, credit growth vigorous; need for more transparency across the board; not comparing CPI, economic risks for rate verdicts; notes he did not pronounce "strong vigilance"; oil, agriculture and taxes pose upside CPI risks; policy still on accommodative side; political interference could backfire; prefers voluntary transparency benchmarks; private sector perceptions strongly affect money growth; rate decision today was unanimous; real economy will behave properly is baseline view; real GDP is growing at sustained rates; recent Macro economic data confirm strong fundamentals; reprimands attempted political influence on ECB; respond wisely, quickly to money market moves; responsible for CPI and money market functions; risk focus is always on price stability; same conclusions drawn after Asian crisis; short-term measures can't hamper long-term goals; short-term rate rises have influenced developments; spoke to Fed president 5 times in recent period; term markets hampered by absence of confidence; too early to draw definitive lessons from market; transparency is of the essence for markets; upward risks to price stability over medium term; uncertainty means need to gather new data and very careful monitoring of monetary developments.

Economic Data:

ECB Announcement: European Central Bank Governing Council decides on monetary policy. ECB Staff Projects 2007 Growth of 2.2% to 2.8%; ECB Staff Projects 2008 Growth of 1.8% to 2.8%; ECB Staff Projections of 2007 Growth Slightly Lower; ECB Staff Projects 2007 Annual Inflation of 1.9% to 2.1%; ECB Staff Projects 2008 Annual Inflation of 1.% to 2.5% and ECB Staff Projects 2008 Annual Inflation of 1.5% to 2.5%. ECB refinance operations modest compared to typical volumes; ECB to "very closely" monitor price risks; ECB to act in a "firm and timely manner" and ECB to pay great attention to money markets.

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. Week of August 25th U.S. Continuing Claims rose by 25K to 2,598,000 and U.S. Jobless Claims fell by 19K to 318K for week of September 1st compared to survey of a drop by 4K.

Productivity and Costs: A measure of labor efficiency in producing the economy’s goods and services. Labor costs are determined by unit costs of producing each unit of output. Productivity and Costs are indicators of future inflationary trends. U.S. second quarter Unit Labor Costs Consensus rose by 1.5%; U.S. second quarter Unit Labor Costs were revised to an increase by 1.4% from an increase by 2.1%; U.S. second quarter Non-Farm Productivity Consensus rose by 2.4% and U.S. second quarter Non-Farm Productivity was revised to an increase by 2.6% from an increase by 1.8%.

ISM Non-Manufacturing Survey: Compiled from approximately 400 non-manufacturing firms from 60 sectors across the United States. Included in the survey are retail trade, construction, agriculture, mining, transportation, wholesale trade and communications by the Institute of Supply Management. U.S. ISM August Non- Manufacturing New Orders Index came in at 57.0 versus July reading at 52.8; U.S. ISM August Non- Manufacturing Prices Index came in at 58.6 versus July reading at 61.3; U.S. ISM August Non- Manufacturing Employment Index came in at 47.9 versus July reading at 51.7; U.S. ISM August Non- Manufacturing Business Index came in at 55.8 versus July reading at 55.8; U.S. ISM August Non- Manufacturing Business Index came in at 5.8 and U.S. ISM August Non- Manufacturing Business Index was expected to come in at 55.0.

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 today: U.S. Gasoline Stockpiles fell by 1.5 Million Barrels in the week compared to expectation of a drop by 1.1 Million Barrels and U.S. Refineries ran at a capacity of 92.1%, seen rising by 0.2 Pts at 90.5%.

Commodities Markets

The trend was mixed across the board today for the Energy Sector: Light crude moved higher today by $0.57 to close at $76.30 a barrel; Heating Oil ended the session higher by $0.04 today at $2.14 a gallon; Natural Gas moved lower today by $0.16 to close at $5.65 per million BTU and Unleaded Gas closed lower by $0.01 at $1.93 a gallon.

Metals Market ended the session higher across the board today: Gold moved sharply higher today by $13.90 to close at $704.60 an ounce; Silver moved higher by $0.18 to close at $12.53 per ounce; Platinum moved sharply higher today by $15.90 to close at $1,288.90 an ounce and Copper closed higher by $0.04 again today at $3.30 per pound.

On the Livestock and Meat Markets, the trend was mixed across the board today: Lean Hogs ended the day higher by 0.10 to close at 66.00; Pork Bellies ended the day lower by 0.48 at 88.30; Live Cattle moved lower by 0.25 to close at 96.80 and Feeder Cattle ended the day higher by 0.25 at 119.15.

Other Commodities: Corn moved sharply lower again on the day with a loss of 6.50 at 339.25 and Soybeans moved lower today for a hefty loss of 10.50 points to end the session at 892.50.

The e-mini Dow ended the session today at 13,369 with a gain of 26 points on the trading session. The total Dow Exchange Volume for the day came in at 181,520 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 mixed across the board today: 2 year bond closed higher by 2/32 at 99 27/32; 5 year bond closed higher by 5/32 at 99 19/32; 10 year bond moved lower by 11/32 today to close at 101 29/32 and the 30 year bond moved lower by 14/32 to close at 103 6/32 for the day.

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 4,493,183; Open Interest for Futures moved lower by 56,136 points to close at 9,025,381; the Open Interest for Options moved higher by 129,834 points to close at 7,190,643 and the Cleared Only closed higher by 60 points at 8,344 for a total Open Interest on the day of 16,224,368 with a total Change on the day of a gain of 73,758 points.

On the NYSE today, advancers came in at 1,995; decliners totaled 1,211; unchanged came in at 99; new highs came in at 47 and new lows came in at 39. Gainers and losers for the day as well as active day trading stocks on the NYSE: Rio Tinto plc (RTP) roared higher on the trading session to post a gain of 15.71 points with a high on the trading day of $305.00, a low of $296.43 for a final trading price on the day at $301.52; J. Crew Group Incorporated (JCG) moved lower on the session with a loss of 4.35 points with a high of $46.15, a low of $43.76 to close the trading day at $45.35; Agnico-Eagle Mines Limited (AEM) moved higher on the day for a gain of 4.07 points to close the trading session at $48.23; VMware Incorporated (VMW) posted a gain on the session of 5.44 points with a high on the day of $70.10, a low of $64.09 for a final trading day price at $69.65; Terra Nitrogen Company L.P. (TNH) provided active trading on the day with a high of $122.25, a low of $112.55 with a loss of 3.09 points to close the session at $114.02 and Compania Mina Buenaventura S.A. (BVN) posted a favorable gain on the trading day of 4.55 points to rise by 11.79% with a high on the day of $43.31, a low of $38.58 with a final trading price on the session of $43.13.

On the NASDAQ today, advanced totaled 1,681; decliners totaled 1,305; unchanged came in at 131; new highs came in at 63 and new lows came in at 41. Gainers and losers for the day as well as, active day trading stocks on the NASDAQ: Alabama National BanCorporation (ALAB) made a royal move higher by a shopping 45.14% with a gain of 23.98 points for a closing price on the trading session of $77.10; Cardica Incorporated (CRDC) posted a favorable fain on the trading session by 40.27% to move higher by 3.22 points with a high of $12.04, a low of $8.82 to close the session at $11.24; Hooker Furniture Corporation (HOFT) moved higher amidst light trading volume to post a gain of 18.13% with a move higher by 3.16 points to close the day at $20.59 and Synchronoss Technologies Incorporated (SNCR) moved sharply lower on the session to post a loss of 3.49 points with a high on the day of $36.89, a low of $32.27 to end the trading day at $32.58.

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