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Market Commentary for June 06, 2007

The Bears controlled the market action again today holding the major indices in the red zone, even into the close. At the closing bell, here is how the major indices ended the session: the DOW
(Dow Jones Industrial Average) moved lower with a triple digit loss of 129.79 points to end the session at 13,465.67; the NYSE (New York Stock Exchange) posted a triple digit loss of 106.46 points to end at 9,898.01 the NASDAQ posted a loss of 24.05 points today for a close at 2,587.18; the S&P 500 moved lower by 13.57 points to end at 1,517.38 and the RUSSELL 2000 moved lower by 7.04 points to close at 841.21 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 2.84 to close at 260.31 and the FTSE RAFI 1000 moved lower by 58.28 to close at 6,369.72.

Jeffrey M. Lacker, President of the Federal Reserve Bank of Richmond commented today: sub-par U.S. Growth in first quarter but, back to trend end 2007; no significant moderating yet in inflation trend; won't get sub-2% Core PCE without expectations shift; sees 'encouraging' signs of investment rebound; doesn't see broad spillover from sub-prime woes; better disclosure key in addressing sub-prime woes; amount of capital inflows into U.S. 'breathtaking'; Fed should be held accountable for overall inflation; big difference between 1.5% & 2% inflation over time; payroll growth has held up 'quite well'; cautious about emphasizing productivity data too much and doesn't fully understand recent productivity slowdown.

Federal Reserve Board Member Thomas M. Hoenig, President of the Federal Reserve Bank of Kansas City commented today: economy to strengthen into rest of year; inflation likely to 'decelerate"; economy has been growing below potential; Fed is watching inflation 'very carefully'; housing has been 'important factor' in slowing economy; "housing is still a drag on the economy"; economy likely to move toward 3% GDP by year end; housing weakness could blunt consumer sector; not a lot of excess capacity in U.S. economy; current rate policy should lower inflation; hard to predict future of rate policy; monetary policy is modestly restrictive of growth; U.S. trade gap unsustainable, wants gradual correction; sub-prime impact on overall economy likely modest and current productivity slowdown not likely to last.

Federal Reserve Board Member Sandra Pianalto, President of the Federal Reserve Bank of Cleveland commented today: fiscal imbalances may pose inflationary risk; Central Banks can't ignore energy price shocks;inflation expectations appear well-anchored and can't afford complacency on CPI expectations.

The President of the European Central Bank, Jean-Claude Trichet commented today: Euro-Zone potential growth view unchanged; Fed judgment vindicated by economy; no division in ECB council on monetary pillar;changes in rates affecting housing loans; upward risks to price stability over medium term; policy on accommodative side; money, credit growth is "vigorous"; liquidity ample by all plausible measures; data shows growth continues into second quarter; domestic demand to maintain quite strong momentum; 2007 CPI likely 1.8% to 2.2% versus 1.5% to 2.1% March estimate; 2008 CPI likely 1.4% to 2.6% versus 1.4% to 2.6% March estimate; capacity utilization increasing in Euro-Zone; underlying rate of monetary expansion still strong; house price growth come down, but at high levels; China moves quite well absorbed so far; nothing new in ECB financial market message; hedge funds called on to work out benchmarks; hedge funds need own internal risk mgmt systems; no consensus for new hedge fund regulations; repeats U.S. has said strong Dollar in own interest; repeats China FX message shared by G8 members; gross capital formation great engine for growth and should prepare for reappreciation of risks.

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.

Reported by the MBA: U.S. MBA Market Index falls by 1.7% to 625.3 from 636.4; U.S. MBA Purchase Index rises 1.5% to 433.6 from 427 and U.S. MBA Refinancing Index falls 6.3% to 1757.1 from 1874.6.

Challenger Job-Cut Report: Corporate layoffs comprised in a monthly, not seasonally adjusted report which indicates a trend in the labor market. As reported today: U.S. May Job cuts came in at 71,115, higher by 0.6% from April Job cuts.

ECB Announcement: European Central Bank Governing Council decides on monetary policy. As reported by the ECB, rates were increased by 25 basis points to a level of 4.0%.

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. Released today: U.S. first quarter Unit Labor Costs Consensus rose by 1.5%; U.S. first quarter Unit Labor Costs was revised to an increase by 1.8% from an increase by 0.6%; U.S. first quarter Non-Farm Productivity Consensus rose by 1.0% and U.S. first quarter Non-Farm Productivity was revised to an increase by 1.0% from an increase by 1.7%.

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 released petroleum inventories today: U.S. Crude Oil Stockpiles rose by 100,000 Barrels in the week compared to expectations of an increase by 120,000 Barrels;U.S. Gasoline Stockpiles rose by 3.5M Barrels in the week compared to expectations of an increase by 1.5 Million Barrels and U.S. Refineries Ran at capacity of 89.6% compared to expectations of 0.6 Pt. at 91.7%.

Commodities Markets

The trend was mostly higher across the board today for the Energy Sector: Light crude moved higher by $0.35 today to close at $65.96 a barrel; Heating Oil moved higher by $0.01 to close at $1.97 a gallon; Natural Gas moved higher by $0.02 to close at $8.08 million BTU and Unleaded Gas moved lower by $0.02 to close at $2.19 a gallon.

Metals Market ended the session mostly lower across the board again today: Gold moved lower by $0.50 to close at $674.60 an ounce; Silver closed lower by $0.10 at $13.72 an ounce; Platinum moved higher today by $1.30 to close at $1,300.10 an ounce and Copper moved lower today by $0.04 to end at $3.40 per pound.

On the Livestock and Meat Markets, the trend was lower across the board today: Lean Hogs ended the day lower by 1.25 to close at 74.25; Pork Bellies ended the day lower by 2.68 to close 95.30; Live Cattle moved lower by 1.30 to close at 89.73 and Feeder Cattle ended the lower by 1.10 to close at 109.78.

Other Commodities: Corn moved ended the day lower by 1.50 to close at 381.25 and Soybeans moved lower by 6.00 points to end the day at 822.25.

The e-mini Dow ended the session lower again today by a whopping 149 points to close at 13,466. The total Dow Exchange Volume for the day came in at 169,393 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 higher across the board today: 2 year bond closed higher by 3/32 at 99 27/32; 5 year bond closed higher by 5/32 at 99 6/32; 10 year bond closed higher by 6/32 at 96 11/32 and the 30 year bond closed higher by 2/32 at 94 29/32.

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 4,533,373; Open Interest for Futures moved higher by 5,288 points to close at 9,980,165; the Open Interest for Options moved higher by 199,656 points to close at 7,083,843 and the Open Interest for OTC moved lower by 240 points to close at 4,849 for a total Open Interest of 17,068,857 for a total gain on the day by 204,707.

On the NYSE today, advancers came in at 636; decliners totaled 2,576; unchanged came in at 117; new highs came in at 72 and new lows came in at 47. Gainers and losers for the day on the NYSE: Rio Tinto plc (RTP) fell sharply on the Big Board today to shed 9.64 points on the trading day for a closing price at $281.75; iShares S&P Latin America 40 Index (ILF) moved sharply lower by 6.09 points to close the session at $209.21; Cummins Incorporated (CMI) moved lower today after yesterdays gains to shed 5.47 points to close the day at $95.45; Johnson Controls Incorporated (JCI) posted a favorable gain on the trading day by 4.31 points to end the trading session at $112.76 and Intercontinental Exchange Incorporated (ICE) bolted higher today by 4.23 points to close the session at $152.99.

On the NASDAQ today, advanced totaled 960 decliners totaled 2,906723; unchanged came in at 134; new highs came in at 62 and new lows came in at 5258 Gainers and losers for the day on the NASDAQ: Panera Bread Company (PNRA) plummeted on the trading day for a loss of 13.04% to shed 7.60 points to close the trading day at $50.03; Macrovision Corporation (MVSN) climbed higher on the session by 1.86 points to close the day at $30.21; Foster Wheeler Limited (FWLT) moved lower on the trading day by 2.09 points for an end of day price of $105.17 and Research In Motion Limited (RIMM) shed 3.49 points for an end of day closing price of $164.78.

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