Thursday Wrap-Up

That wasn't so bad was it?

Not dropping 100 points is good.  It would have been nice if we had a differenct leader than the energy sector, which was up 1.3% for the day but the fact that the industrials refused to fall off, even as oil spiked up over 3% in a single day indicates clearly that either this is the most amazing economy in the history of the planet or that people are just idiots – one or the other, we'll find out soon!

We tested 13,450 not once but 3 times during the day and tested 13,500 just once before running all the way up to 13,474 right at 3 o'clock sharp while the S&P punched through 1,515 on its second attempt of the day after making sure the 1,510 mark would hold.  The Nasdaq, unfortunately, made no attempt to break out of anything, even with another strong showing from Apple, dragged down by yet another poor showing by the SOX.

There will be no help from MRVL tomorrow, who had a so-so semi earnings report that were below expectation but really not too bad.  ADSK and INTU gave great reports which would ordinarily boost the Nasdaq but with tomorrow being expiration day I'm not counting on anything in particular. 

They may seem lile minor moves but we added a red box to the Dow, the Transports, the Sox and the Russell – that's about our worst day since the 10th, when the Dow dropped 147 points on the day.  Both the SOX (-6) and the Russell (-3) are lower now than they were on that day…

Oil shot up $2.31 for the day and I won't even get into the fact that there are still 138M barrels scheduled to be delivered to a facility that can only handle 40M barrels or that the longer contracts gained less than $1 making it cheaper to buy oil next year than it is this year.  I'm not going to bother because I am far too disgusted by what has been uncovered at the Judiciary hearings on "Oil Prices and Market Failure" that are going on this week.

Bart Stupak (MI) stated: "For years Big Oil has told us that the cost of a gallon of gas was directly related to the price of crude on the world market. However, in April of this year, a barrel of crude oil was $63. Last year, a barrel of crude was $70. Despite the fact that crude is $7 a barrel cheaper than last year, gas prices are almost 50 cents higher per gallon. Clearly there’s more at play than simply the price of crude oil.”  That would seem like a simple concept, right?

What was really shocking though was the testimony of CT AG Richard Blumenthal who described a meeting he had with US Attorney General Alberto Gonzales requesting a federal investigation into the oil industry: "As I was driving here from the airport I thought back to a meeting that I had with the United States Attorney General less than a year ago, involving a number of my colleagues from all around the country, both Republican and Democrat Attorneys General, who met with him and the chairman of the FTC with the single purpose of persuading them to begin a federal investigation. And unfortunately, our plea went unheeded then — there has been no effective federal investigation.

“We pleaded with Attorney General Gonzales and FTC Chairman Majoras, Platt, [sic] to begin an investigation of the oil industry, and we offered our partnership in that work. All 50 Attorneys General have hands full investigating monopolistic abuses on the part of the oil industry, but we lack the authority, and expertise, and resources of the federal government. And so we invited, we beseeched the federal government to join us in that investigation and so far they have declined to do so. "  Like I said, disgusted!

While it's easy to blame the reappearance of $65 oil for holding down the markets, why should the SOX care?  The stuff is made out of sand!  So I'm going to blame Google, who didn't go up today and threw a damper on the party as well as Bush, who for some reason chose to spend his last press conference with Tony Blair (who is resigning in disgrace over his backing of the war) talking about how great the war is.  My favorite quote from the conference came from Bush's new script which we've all heard a bunch of times now but it never gets old.  When asked about his lack of popularity the President said: "This may not interest you, but I'll tell you anyway — I read three histories on George Washington last year. It's interesting to me that they're still analyzing the presidency of our first President. And my attitude is, if they're still analyzing 1, 43 doesn't need to worry about it. (Laughter.) I'm not going to be around to see the final history written on my administration."  Ah yes, in 240 years, this will all seem brilliant!

Blair had some good advice for the new British Prime minister: "In any part of Europe today, if you want to get the easiest round of applause, get up and attack America, you can get a round of applause if you attack the President." To which Bush added: "Standing ovation."  Now to you, this may seem like an asinine thing for the Presdent to make light of, but Karl Rove has assured him that our great-great-great-great-great-great-great-great-great-great-great-great grandchildren will find him both witty AND charming!

Blair did, not surprisingly, make a fine closing statement though: "And we took a decision that we thought was very difficult. I thought then, and I think now, it was the right decision. History will make a judgment at a particular time. But one thing I know is that what we represent coming here today, speaking in the Rose Garden to you people and getting your questions and being under your pressure, that is a finer and better way of life than either a brutal, secular dictatorship or religious extremism. It's a better way of life and it's the way of life, actually, people, anytime they are given the choice, choose to have. And what we should be about, our two nations, is giving as many people in the world as possible that choice and being proud of it."