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Market Wrap
(Briefing):

A trouncing in Treasurys, coupled with higher oil prices and few upside catalysts, underpinned a bearish sentiment for stocks from start to finish... Everything from increased economic expansion and possible inflationary pressures, as commodity prices again hit record levels, to strong German economic data and early concerns regarding lowered foreign participation in bond auction contributed to the bond's sell off... Volatile trading in crude oil prices, amid better than expected weekly inventories data, pushed the commodity to its all-time high of $55.65/bbl intra-day and added to the negative tone initiated by bond yields surging to 7-month highs... Crude oil supplies rose a stronger than expected 3.2 mln barrels (consensus +1.8 mln) and distillates fell for the seventh consecutive week, to a less than anticipated 800K barrels (consensus -1.8 mln), while gasoline inventories fell 200K versus an expected decline of 125K... Even though the April futures contract closed up just $0.18 at $54.77/bbl, the damage had already been done as the benchmark 10-year note closed down 27 ticks to yield 4.50% and market breadth continued to deteriorate into the close of trading... Meanwhile, Energy, which was strong most of the day as oil prices surged, paced the way to the downside following President Bush's comments highlighting alternative energy sources and energy conservation... Interest-rate sensitive groups like Homebuilding (-2.2%), Utility (-1.9%) and Financial (-1.3%) got hammered while weakness in Airlines dragged Transportation lower and Health Care, Consumer Staples and Consumer Discretionary were also influential sectors closing lower... Technology closed mixed, as solid gains in networking (+1.2%) were not enough to offset weakness in Semiconductor, Software and Hardware... The latter finished lower as Apple Computer (AAPL 39.35 -1.18) extended it's weakness amid increased competitive threats while gains in shares of Cisco Systems (CSCO 18.53 +0.41), following upbeat industry comments at the Deutsche Bank Conference, lifted communications equipment... Semiconductor was strong throughout most of the session following an increased Q4 sales outlook from Xilinx (XLNX 31.27 -0.19) but sold off ahead of mid-quarter updates from chip makers like ALTR and INTC... Eking out a modest gain, however, was the Materials sector, led by weakness in the greenback, subsequent strength in gold and gains related to M&A activity in chemicals and mining... Crompton Corp (CK 15.30 +1.84) announced plans to acquire Great Lakes Chemical Corp (GLK 33.65 +6.47) in an all-stock deal valued at $1.8 bln that would create the country's 3rd largest specialty chemicals company while Canadian metals company Noranda (NRD 19.05 -0.20), a day after mining giant BHP Billiton's $7.3 bln bid for WMC Resources, agreed to acquire the 40% of Falconbridge Ltd. it doesn't already own in a stock-swap deal for roughly $2.5 bln... The dollar lost ground against the yen (103.96), after Japan saw leading indicators reach the best level since August, and the euro (1.3387), amid possible rate hikes in Europe... Separately, the Fed's Beige Book cited a moderate pace of economic growth, a flat (but mixed) read on consumer prices, expansion in manufacturing activity and steady to stronger consumer spending... But as a lagging indicator, it provided little surprises to recently reported economic data and was somewhat ignored by equities traders... Bonds, however, notwithstanding a modest intra-day rebound following a decent 5-year note auction, weakened as the Fed's comments hit the wires and signaled ongoing expansion and modestly higher wage pressure, pushing the 10-year yield to a session high of 4.514%...NYSE Adv/Dec 722/2640...NASDAQ Adv/Dec 1017/2087.

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Trade system guidelines (edited):
Only available to Newsletter Subscribers.

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Today's Picks - March 10, 2005

1.   BEBE - bebe Stores

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-10		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 32.99

2.   LMT - Lockheed Martin

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-10		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 60.54

3.   LTD - Limited Brands

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-10		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 24.99

4.   SNDA - Shanda Interactive

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-10		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 30.97

5.   PXD - Pioneer Natural Res

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-10		Short	Below 15 min low	Cover 1/2 once risk covered	Above HOD at time of setup
	* Please Note: If the stock gaps up at the open do not enter the trade unless it trades below 42.30

6.   D - Dominion Resources

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-10		Short	Below 15 min low	Cover 1/2 once risk covered	Above HOD at time of setup
	* Please Note: If the stock gaps up at the open do not enter the trade unless it trades below 74.00

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EOD = End of day.
LOD = Low of day.
PDC = Previous Day's Close.
S/R = Support/Resistance.
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