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US stock market daily report (July 18, 2011, Monday)

Contributed by Millennium Traders

By Millennium Traders

Markets opened to the downside and held in the red zone, into early afternoon trading. Dow Industrial Averages was in negative territory by triple digits, down over 155 points by early afternoon. Debt ceiling concerns continue to weigh heavily on Wall Street. Across the board sectors felt the wrath of worries associated with the debt crisis in Europe as well.

Precious metals were on the move today. The price of Gold for August delivery soared to a fresh new all time high, surpassing $1600 an ounce as investors turn to the traditional safe haven investment. Silver was climbing as well with silver for September delivery climbing to $40.49 an ounce - its highest level seen since early May.

Bank of America (NYSE: BAC) moved to a fresh 52 week low today. Ahead of earnings scheduled for Tuesday, investors remain squeamish as to the potential loss BofA could reveal. Over the past year, Chief Executive Brian Moynihan has been trying to clean up the bank’s home-mortgage mess, booking roughly $30 billion in loan write-downs and settlements. Additionally, analysts are weighing the possibility that BofA may have to raise more capital in order to comply with new global standards to be phased in over several years, starting in 2013. Among the 30 stocks on the Dow Jones Industrial Average, BofA is the second worst performer, over the past 12 months. On June 29th, BofA reported they will lose between $8.6 to $9.1 billion for Q2. The loss includes charges to BofA to pay $8.5 billion to settle Countrywide mortgage claims, the cost to set aside $5.5 billion for future exposure to mortgage-related losses, and $6.4 billion in other mortgage charges.

Comments from Federal Reserve Chairman Bernanke: Regulators weighing costs and benefits of Dodd-Frank Rules; Regulators working together to implement Dodd -Frank.

Comments from president and chief executive officer of the Federal Reserve Bank of Atlanta Dennis P. Lockhart: Sees stronger economy in 2012; Must deal with fiscal austerity at some point; Must raise debt ceiling; Sees accommodative policy for at least 2-3 more meetings; Would have very high bar on more stimulus; 'Wait and see' mode on more stimulus; Economy growing, but very slowly.

Comments from Treasury Secretary Timothy F. Geithner: Europe needs to act more forcefully to contain debt crisis; Not going to rush banking sector rule-making; Blocking consumer agency nomination would weaken oversight; If U.S. defaults, it would be catastrophic; No other options to give debt talks more time beyond August 2 deadline; Still working very hard on biggest, largest budget deal; Lawmakers have definitively taken default off the table; There will be a debt ceiling deal.

Pharmaceutical Product (NasdaqGS: PPDI) shares moved to new 52 week high, with a gain of 11% by mid-day, after word is out that the company is up for sale.

MGIC Investment (NYSE: MTG) shares were lower by 26% mid day after company posted a loss for Q2 as loan defaults increased.

WebMD Health (NasdaqGS: WBMD) shares plummeted by 30% into mid-day trading after reporting they cut their 2011 outlook.

News Corporation (NasdaqGS: NWS) shares fell 5% as Britain’s prime minister extended the country’s parliamentary session to let lawmakers debate the phone-hacking scandal at the media company’s News of the World newspaper.

Economic data released today:

TIC [Treasury International Capital] Net Long-Term Transactions: China Net Buyer of U.S. Treasury Securities in May; Foreigners Net Buyers $9.26B of U.S. Equities in May; Foreigners Net Buyers $5.63B of U.S. Corp Bonds in May; Foreigners Net Sellers $8.26B of U.S. Agency Debt in May; Foreigners Net Buyers $37.95B U.S. Treasury Notes, Bonds in May; Net Foreign Capital Outflow $67.5B in May; Net LT Securities Purchases $23.6B in May; Net Foreign LT Securities Purchases $8.0B in May.

NAHB Housing Market Index: U.S. NAHB July Housing Index 15 vs. 13 in June.