4:15PM Market close lower but ignores record trade deficit.

-Trade Deficit - $68.5 billion, 5.3% higher than Dec 2005
-DOW – down 33.46 Nasdaq – down 17.75 S&P – down 6.24
- Oil lost 43 cents and gold rose $2.70 to $547
- Yield on 10-year bond fell to 4.73%
- Brazil lost 2.62% after losing 2.83% yesterday but South Africa and India recovered
- Russia down 2.52% and Turkey down 3.53%

Early rise in the market did not last long and stocks closed lower at the close. Tech stocks declined for the third day in a row on the weakness in Internet stocks, chip stocks and computer and other hardware makers. Trade deficit scaled another high on persistent and growing deficits with China, Middle East and Canada. The rise in January deficit to $68.5 billion, up 5.3% from December, higher than the estimates of $66.4 billion did not have any impact on the market. The market remained optimistic in the morning trading despite the initial claims for the unemployment for the week ending March 4th rose to 303,000, above 300,000 for the first time in seven week. Neither data had impact on the stock prices.

On the interest rate front what happened in Japan mattered to the traders today the most. Overnight Japan eased the fund flows to the economy but kept interest rates at zero percent level gave a strong boost to the stock market locally and in the region and in Europe. Bond yields did not change here in the U.S. and 10-year yield fell to 4.73% and on 30-year bond fell to 4.72%. Emerging markets closed mixed around the world as interest rates concerns did not flare up today. Markets in Brazil and Mexico closed lower 2.62% and 0.48% respectively. South Africa and India closed up 1.5% and 0.6% while Russian index closed down 2.52%.

On-again off-again discussion between General Motors and UAW took an optimistic turn for shareholders. Expectations on the labor cost reduction and lowering pension and wage benefits and resolution related to Delphi drove GM stock as high as 6% before settling to 4% at close. Google, Apple Computer and AMD were among the three notable decliners in the tech stocks. These stocks lost 3.07%, 2.63% and 2.37% respectively. Home builders, capital goods, casino, Mexican and Brazilian ADRs and specialty retailers lost ground. Chico’s lost 4%, Wynn Resorts lost 2.6%, Lennar lost 2.3% and Caterpillar lost 1.4% at close. Yesterday’s super-stock NYSE Group lost 4.88% after rising 24.5% in its first day of trading.


3:00PM Oil and metals rise.
Violence in Nigeria was on the minds of oil traders as oil rose 45 cents $60.47 cents per barrel. Gasoline rose 7 cents to $1.7201 per barrel and heating oil rose 3 cents to $1.72 per barrel. The inventory report on natural gas today did not have impact on the natural gas prices as they close 5 cents lower to $6.601 mBTU. Gold, copper and silver rose in the metals market as metals of all varieties enjoyed a mild up-tick. Gold closed up $2.70 per ounce to $547 and silver rose 12.5 cents and closed at $9.97. Copper managed to rise 3.2 cents to $2.1955 per pound. China has introduced 10% tax on copper products and copper alloys exports. Copper market has sold-off in the recent past but managed to stabilize in the last three days of trading, however traders remain cautious.


12:30AM European markets gained ground.
European stocks gained ground Thursday to post solid gains at close. Stocks were boosted by higher start on Wall Street, deal talk, and upbeat earning reports from insurance and retail companies, such as Royal & Sun Alliance and Carrefour. Pharmaceutical stocks recorded a strong performance, led by drug maker Elan, up 15%. The German DAX 30 climbed 1%, the French CAC 40 advanced 0.7%, and London FTSE 100 rose 0.7%.

European gold prices gained ground Thursday, rebounding from recent decline. In London gold rose to $547.30 bid per troy ounce, up from $542.10. In Zurich the precious metal advanced to $546.10 from $542.50. In Hong Kong gold fell $3.80 to $546.80. Silver closed at $9.93, up from $9.90. The U.S. dollar traded mixed against other major currencies. The euro traded at $1.1910, down from $1.1919. The dollar bought 117.57 yen, down from 117.88. The British pound was quoted at $1.7370, down from $1.7373.

11:30AM Markets became nervous ahead of job creation report.
Stocks traded higher Thursday morning on improved confidence in global economy, following the Bank of Japan decision on monetary policy. Investors sent stocks higher as they got rid of some of their fears about inflation and rising interest rates. However, averages moved sideways at mid-day as markets became nervous ahead of a job creation report due out Friday. In midday trading, the Dow Jones industrial average rose 22.81, or 0.21%. The Standard & Poor's 500 index added 2.13, or 0.17%, and the Nasdaq composite index gained 2.84, or 0.13%. In the bond market, prices fell as the yields on long-term Treasuries began to outpace shorter-term notes. The yield on the 10-year Treasury note rose to 4.75% from 4.73% late Wednesday.

JDS Uniphase (JDSU: chart) hit a new high, jumping above a recent trading range. GlaxoSmithKline (GSK: chart) reached a fresh peak after it was upgraded by Deutsche Bank. Ecolab (ECL: chart) also broke to a new high as Morgan Stanley raised its rating on the stock to overweight. Movie Gallery (MOVI: chart) extended its 52-week low, falling on a warning of a possible cash crunch at the firm. Affymetrix (AFFX: chart) fell to a new low as well.


10:30AM U.S. Stocks traded in the positive with advancers outpacing decliners
A shift to a normal monetary policy by the Bank of Japan boosted confidence in global economy and helped U.S. averages move to the upside. The new policy, focused more on Japan's economic growth than rising prices, cheered U.S. investors, bringing them some relief from worries about the Fed Reserve interest-rates hikes and inflation. The Dow Jones industrial average rose 32.34, or 0.29%. The Standard & Poor's 500 index added 3.84, or 0.3%, and the Nasdaq composite index gained 10.08, or 0.44%. In the bond market, prices fell as the yields on long-term Treasuries began to outpace shorter-term notes. The yield on the 10-year Treasury note rose to 4.75% from 4.73% late Wednesday.

General Motors Corp added $1.28, or 6.3%, to $21.70 on news that the company and bankrupt auto parts maker Delphi Corp. are close to a cost-cutting labor agreement. Google Inc. said it will pay up to $90 million to settle a lawsuit that claimed the company overcharged advertising customers for Internet sales. Google rose $3.61 to $357.49. NYSE Group Inc. jumped $4.18, or 5.2% to $84.18 in its second day of trading on the New York Stock Exchange, adding to its 25% gain. Sharper Image (SHRP: chart) was one of the most conspicuous gainers in the early going, rising nearly 19%. KMG America (KMA: chart) was among the worst performers with a decline of 21% on quarterly results.


9:45AM Stocks opened higher.
Stock market averages slightly advanced at opening due to easing inflation concerns and news that the Bank of Japan decided to return to a more normal monetary policy, abandoning the ultra-easy policy. The Nasdaq was up more than 0.5%, while the gains in the Dow and S&P 500 were each up about 0.3%. Investors’ attention will be also directed to bond yields to see whether parts of the yield curve stay normalized, after the yield on the 10-year note edged past the yield on the 2-year note. In economic news, the Commerce Department reported that January trade deficit jumped by 5.3% to an all-time high of $68.5 billion, exceeding analysts'' expectations. Meanwhile, the Labor Department said that unemployment claims rose by 8,000 last week to a seasonally adjusted 303,000 in contrast to expectations of a decline.

The gold sector was a notable gainer in the early going, rebounding from a 2-month low. The computer hardware sector moved to the upside to gain 1.1%. The semiconductor space rose about 1%. General Motors (GM: chart) rose 5% as the company and the bankrupt auto parts maker Delphi Corp. neared a deal with the United Auto Workers union for cutting costs. Drug testing company SFBC Intl (SFCC: chart) fired a middle manager and delayed Q4 earnings and outlook. The stock jumped 22%. Retailer Coldwater Creek (CWTR: chart) advanced 15% on better-than-expected quarterly results. Software maker Wind River (WIND: chart) dropped 20% on disappointing Q4 results. Electronics manufacturer Orbit International (ORBT: chart) fell nearly 20 on quarterly data. Parlux Fragrances (PARL: chart) declined 11%.


The Department of Labor reported that trade deficit reached an all-time high.
The department of Labor released its report on the U.S. trade deficit in the month of January on Thursday, showing that the deficit widened more than expected in January to reach a new all-time high. The report showed that the trade deficit widened to $68.5 billion in January from a downwardly revised $65.1 billion in December. Economists had expected a trade deficit of $66.5 billion compared to the $65.7 billion shortfall originally reported for December. The wider trade deficit came as an increase in imports outpaced an increase in exports. The report said imports rose 3.6 percent to $182.9 billion while exports rose 2.5 percent to $114.4 billion.