Sarhan In The Media: (Market Watch) US Stocks Tumble As Investors Flee To Safety; DJIA Off 242

June 29, 2010, 2:36 p.m. EDT
By Donna Kardos
NEW YORK (MarketWatch) — U.S. stocks tumbled Tuesday as a drop in U.S. consumer confidence added to mounting worries of how a slowdown in China and debt problems in Europe may affect global growth.
Investors fled to safety assets, sending the dollar, gold and Treasurys higher. The rise in Treasurys sent the yield on the 10-year note below 3%, to its lowest level in more than a year. Bond yields move inversely to prices.
The Dow Jones Industrial Average was below 10000, sinking 242 points, or 2.4%, to 9896 in recent trading. All of the measure’s 30 components were in the red. Among its hardest-hit, Boeing dropped 5.4%, Alcoa slid 5.1% and American Express fell 4.5%.
The Standard & Poor’s 500 index fell 2.7% to 1045, its lowest intraday level since May 25. The index was also on track to finish below its lowest close of 2010 of 1050.47 on June 7. All of the measure’s sectors were negative, led by declines in the industrials, technology and financial sectors. Consumer-staples and health-care stocks, which are considered safety sector, posted the smallest declines.
The Nasdaq Composite slid 3.2% to 2150, stung by a 4.1% drop in Apple, a 3.6% slide in Microsoft and a 5.7% decline in
The selloff came as a sharp drop in U.S. consumer confidence added to the market’s worries after the Conference Board sharply revised lower its April leading economic indicator for China, raising fears that a key driver of the global economy could slow.
This was a one-two smack for the market and you really just have a huge rush away from risk,” said Adam Sarhan, chief executive of Sarhan Capital. “It’s a concern of whether this global economic recovery will continue or if it will be derailed due to a slowdown in China or the ongoing European debt crisis.
Also weighing, investors are fretting over how European banks will fare after the end of the European Central Bank’s 12-month liquidity facility on Thursday.
The question is whether these banks in Europe can withstand these massive repayments,” Sarhan said.
The euro was recently trading at $1.2199, down from $1.2274 late Monday in New York. The U.S. Dollar Index, which tracks the U.S. currency against a basket of six others, jumped 0.5%.
Investors said there was renewed concern that China’s demand for materials and commodities could sink if its economy cools. Crude-oil prices tumbled more than 3% on Tuesday, falling below $76 a barrel.
New data on the U.S. housing market did little to encourage investors. The S&P/Case-Shiller home-prices indexes improved slightly in April over the previous month, mostly thanks to the demand for homes ahead of the expiration of the federal tax credit.
The latest readings come on the heels of disappointing data last week on home-sales activity, including both new and existing units. Traders are particularly interested in the housing market as a harbinger of possible recovery or struggle in the U.S. economy, since the sector’s meltdown was a key catalyst in causing the recent recession.
Among stocks in focus, Micron Technology lost 12%. The chip maker late Monday reported stronger-than-forecast earnings and sales but also projected flat shipments in a key segment.
American depositary shares of Baidu fell 7.1% as Google said it would change the way it operates in China as it seeks to renew a license. Google fell 2.8%.
Barnes & Noble’s fiscal fourth-quarter loss widened despite stronger-than-expected sales, as the world’s biggest brick-and-mortar bookseller gave a weak outlook. Shares skidded 15%.
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Sarhan's Latest Media Quote: Reuters More flexible yuan mildly bullish for commodities

(Reuters) – China’s move to make its yuan currency more flexible should be mildly bullish for many commodities, boosting China’s purchasing power and possibly increasing its imports of copper, iron ore and chicken.
Although China made clear on Saturday that a one-off step change in the rate similar to 2005 wasn’t in the cards, analysts expect the yuan to slowly rise, adding to its nearly 20 percent gain since its last revaluation in 2005.
“Should be a positive, as it was in prior years,” said Fred Demler, head of commodities for MF Global.
China’s huge appetite for raw materials has been one of the main drivers of commodity prices in recent years. China is the world’s second largest consumer of oil, using one in every 10 barrels produced. China is also the top consumer of iron ore, copper and aluminum.
When China raised its exchange rate in 2005, by 2.1 percent, commodities rallied for more than a year after the revaluation, although not solely because of Beijing’s move.
Copper prices steadily climbed and eventually more than doubled to what was then a record high of $8,790 a metric tone in 2006.
The Reuters-Jefferies CRB index .CRB of 19 commodities rallied 10 percent in the six weeks after China ended its decade-long peg in July 2005. Crude oil rose more than 20 percent, or $12 a barrel, in that period.
Because China will not institute a rapid change in the yuan’s value as it did in 2005, any commodities rally is likely to be more muted and affected by whether signs of economic recovery around the globe continue.
“I think we will see an initial pop (in crude prices) but I think it is going to be a short lived,” said Phil Flynn, an analyst with PFGBest Research in Chicago. Crude prices could initially move up to $83 a barrel from Friday’s close of $77 on the news before easing lower again, he added.
In what was seen as a largely political move to deflect criticism of its fixed exchange rate ahead of the G20 meeting next week, the central bank indicated it was ready to break a 23-month-old dollar peg that has come under intense criticism from the United States and other countries.
Even a small rise in the yuan could shave billions off the cost while raising the volume of China’s commodity purchases.
Last year, China spent $89 billion on oil imports, $50 billion on iron ore and $29 billion on copper. A 3 percent increase in the yuan could save Beijing $5 billion on just those materials.
“China’s economy is experiencing explosive growth and Beijing has taken several key measures in recent years to curb that robust growth.
“Allowing the yuan to be more flexible is simply another calculated measure to achieving that goal,” said Adam Sarhan, founder and chief executive of New York’s Sarhan Capital.
In addition to stronger demand for crude oil and metals, China may import more U.S. meat and livestock feed — assuming trade disputes over pork and chicken can be resolved.
Following the July 2005 revaluation of the yuan, U.S. pork exports to China rose 14 percent in the third quarter of 2005 from a year earlier and 23 percent in the fourth quarter, according to U.S. Agriculture Department data.
Chicken exports rose 75 percent in the third quarter of 2005 versus 2003 and 84 percent in the fourth quarter. Chicken exports to China were unusually low in 2004.
“In the longer term, this will be supportive to U.S. exports, including meat and poultry,” said Jim Robb, an economist at Livestock Marketing Information Center. “But we have these short-term issues so it’s not an immediate boost.”
(Additional reporting by Bob Burgdorfer and Christine Stebbins in Chicago, Matt Robinson and Barani Krishnan in New York; editing by Jonathan Leff and Todd Eastham)
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Sarhan's Latest Media Quote: Reuters-US copper ends down, hits 1-week low on econ woes:

NEW YORK June 18 (Reuters) – U.S. copper futures ended down for a third straight session on Friday, as concerns about the global economy cast more doubt on demand prospects, dragging the industrial metal down to its lowest price in a week.
* Copper for July delivery HGN0 dipped 2.15 cents to settle at $2.8840 per lb on the New York Mercantile Exchange’s COMEX division.
 * Range extended down from $2.9290 to $2.8445, its lowest level since June 10.
 * COMEX estimated copper futures volume at 38,938 lots by 1 p.m. EDT (1700 GMT). Final volume on Thursday hit 47,770 lots.
 * Open interest up 1,317 lots to 138,094 contracts open as of June 17.
 * “Copper pressured by growing caution about global economic growth” – Adam Sarhan, chief executive of Sarhan Capital.
 * U.S. data Thursday showed jobless claims rose unexpectedly last week as manufacturing, construction and education sectors shed workers, while factory activity growth plunge in the U.S. Mid-Atlantic region in June. [ID:nN17254724]
 * Copper under additional pressure from slower demand expectation in top-consumer China, after an official said growth was expected to slow in the second half of this year and double-digit growth for the full year seemed unlikely.
 * Copper losses buck near three-week high in euro versus U.S. dollar Friday. Euro headed for its biggest weekly gain in
more than a year. [USD/]
 * London Metal Exchange copper stocks <0#LME-STOCKS> down 2,750 tonnes at 457,425 tonnes on Friday, their lowest level
since early December 2009.
 * Shanghai copper stocks fell 3,388 tonnes to 135,944 tonnes this week, down for a sixth consecutive week to their
lowest since February.
 * COMEX copper inventories <COMEX/WHSTAT> flat at 101,925 short tons as of Thursday.
 * LME copper for three-months delivery CMCU3 ended at $6,435 per tonne from Thursday’s close at $6,446 per tonne.
(Reporting by Chris Kelly; Editing by David Gregorio)
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Dow Jones Newswire Quote: US Stocks Trade Below 200-Day Averages, In Line For Correction

US Stocks Trade Below 200-Day Averages, In Line For Correction
By Donna Kardos
NEW YORK (MarketWatch) — U.S. stocks tumbled Thursday as investors’ fears over euro-zone debt grew, pushing key market measures below their 200-day moving averages and on pace for technical corrections. The broad retreat came on mounting worries over Europe’s will to address its debt woes as unions went on strike in Greece and investors fretted that new trading regulations in Germany could spread. In the U.S., stocks linked to commodities and smaller companies bore the brunt of the selling.
“Fear is elevating at this point,” said Adam Sarhan, chief executive of Sarhan Capital. “A lot of people are concerned, if the European Union stepped up and gave $1 trillion, and it wasn’t enough, how much is?”
The Dow Jones Industrial Average was down 258 points, or 2.5%, to 10184, in recent trading, while the Standard & Poor’s 500 index dropped 31 points, or 2.8%, to 1085. The selling intensified after the measures broke below their 200-day moving averages, at 10258 and 1102, respectively. “The fact that they broke below them today after finding support there two weeks ago after the ‘flash crash’ suggests the bears are getting stronger,” Sarhan said.
In addition, 1100 was a key psychological level for the S&P 500, and traders said the drop below it fueled more selling.  The S&P 500 was also on pace to post a correction of 10% from its 2010 high last month, along with the Nasdaq Composite, which was recently down 73 points, or 3.2%, at 2225. If the S&P 500 remains below 1096 through the close, and the Nasdaq is still below 2278 by the end of the session, the measures will be down more than 10% from their 52-week closing highs reached in late April.
The industrial, energy and materials sectors were getting hit the hardest Thursday, in what Sarhan described as a broad move “away from the pro-growth story.” The Dow’s leading decliners included Alcoa, which dropped 2.8%, Caterpillar, which fell 2.5%, and Boeing, which slid 4.4%. Reflecting the market’s heightened unease, the CBOE Market Volatility Index jumped to its highest point since April 2009, gaining 24% to reach an intraday high above 43.
Thursday’s U.S. economic data only added to the worries about the economy. In a troubling sign for the labor market, the Labor Department said Thursday that initial claims for jobless benefits rose by 25,000 to 471,000 in the week ended May 15. Economists had predicted claims would fall by 4,000. In addition, the Conference Board’s index of leading economic indicators fell in April for the first time since March 2009. “Now we’re starting to see a little bit of a change in the tenor of these economic figures,” Sarhan said. “If the U.S. is going to begin to slow down after such a strong rally, and Europe is slowing down, that begs the question who’s going to help us?
The euro fell to $1.2347 from $1.2391 late Wednesday and the cost of insuring European corporate bonds against default rose sharply following comments by Jean-Claude Juncker, chairman of the Eurogroup forum of euro-zone finance ministers. He played down speculation that the authorities would intervene to arrest the euro’s decline, saying he doesn’t believe there is any need for immediate action. Rumors of possible intervention had prompted the euro to bounce off four-year lows Wednesday.
The euro was also weighed down by uncertainty over whether other euro-zone countries would follow Germany’s ban on naked short sales of certain investments. The European Commission, the European Union’s executive arm, suggested Germany acted peremptorily on an issue that would be discussed by all EU finance ministers on Friday.
Markets are also awaiting a crucial vote Friday in the German parliament over its contribution to the European Union/International Monetary Fund rescue package. The U.S. Dollar Index, reflecting the U.S. currency against a basket of six others, rose 0.1%. Treasurys also advanced, pushing the yield on the 10-year note down to 3.24%. Crude-oil futures fell, as did gold futures. 
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US Stocks Fluctuate Between Small Gains and Losses

April 15, 2010, 11:58 a.m. EDT
By Donna Kardos
NEW YORK (MarketWatch) — U.S. stocks fluctuated between slight gains and losses Thursday as the industrial sector was boosted by improving manufacturing conditions, but an unexpected jump in weekly jobless claims and an expected monetary policy tightening in China weighed. The Dow Jones Industrial Average recently was down 10 points, or 0.1%, to 11114, in recent trading.
Hewlett-Packard was among the measure’s worst performers with a drop of 0.7%. German and Russian authorities are investigating whether Hewlett-Packard executives paid millions of dollars in bribes to win a contract in Russia, according to a Wall Street Journal report citing people familiar with the matter. Wal-Mart also weighed with a drop of 0.8% after the chief executive of its U.K.-based supermarket chain Asda set out plans for a big expansion of its stores, but said the company is cautious about the economic outlook.
However, Intel jumped 2.4%, extending the stock’s gains after the chip giant posted strong first-quarter earnings Tuesday afternoon. Caterpillar was also strong, up 1.4%, boosted by a strong round of manufacturing data for the New York and mid-Atlantic areas.
The Nasdaq Composite gained 0.2%. The Standard & Poor’s 500-stock index slipped 1%, with the consumer staples sector leading its declines. But the industrial sector climbed, led by United Parcel Service. The shipping giant said its first-quarter adjusted earnings jumped a better-than-expected 37%, as the company improved operating margins across all three segments and noted improvement in its international package and supply chain businesses. UPS jumped 5.9%.
Also boosting industrials, New York manufacturers saw business conditions improve in April, according to the Federal Reserve Bank of New York’s Empire Manufacturing Survey released Thursday. The report also showed further gains in the labor markets this month and expectations remained bright. Meanwhile, mid-Atlantic manufacturers posted better-than-expected improvement this month, paced by new orders, according to a report released Thursday by the Federal Reserve Bank of Philadelphia.
It shows that the economy from the basic level, from the ground up from manufacturers, is improving,” said Adam Sarhan, chief executive of Sarhan Capital. “The fact that we have stronger-than-expected numbers on the manufacturing front bodes well for the economic recovery, especially if inflation is tame.
Other economic data released Thursday was less encouraging. The Labor Department said in its weekly report that initial claims for jobless benefits rose 24,000 to 484,000 in the week ended April 10, marking the second-straight week of increases in initial claims. Economists surveyed by Dow Jones Newswires had expected a drop of 15,000.
Meanwhile, China’s government released data showing its economy expanded 11.9% from a year earlier in the first quarter of 2010, a strong result that highlighted the increasing risks of overheating. The growth was faster than the 11.5% median forecast of economists surveyed by Dow Jones Newswires, and increased expectations for China’s central bank to undergo tightening measures.
“Obviously China is going to have to tighten policy because it cannot run at an 11.9% GDP pace for very long,” said David Chalupnik, head of equities at First American Funds. “That’s taken as a negative for the market.”
The dollar strengthened against the euro as Greece lowered expectations on the amount it hopes to raise from a global dollar bond at the end of this month and may even drop the plan altogether, two government officials said Thursday, raising the specter of a European Union and International Monetary Fund bailout.
The dollar weakened against the yen although the U.S. Dollar Index, which tracks the U.S. currency against a basket of six currencies, climbed 0.4%. Treasurys advanced, pushing the 10-year note to a yield of 3.84%. Crude-oil futures edged down while gold futures edged up, reversing earlier declines.
Still to come, the April housing index will be released at 1 p.m. EDT.