U.S. stocks rallied in the final hour of trading, erasing earlier losses and leaving benchmark indexes little changed as energy stocks surged. Calpine Corp. wiped out a 35 percent decline after Standard & Poor's affirmed the company's credit rating. Procter & Gamble Co. rose after saying forecast earnings will top expectations.

Bush: Senate supports compromise
Agreement on stimulus still out of reach
President Bush, attempting to circumvent top Democrats, said Wednesday there are enough votes in the narrowly divided Senate to pass a proposed White House compromise on an economic stimulus package. The White House on Tuesday proposed a compromise measure that would scale back the administration's earlier calls for personal and corporate income tax cuts and would boost spending for unemployment and health benefits.

Closing Summary

Index	Last	Change	% Change
Dow Jones Industrial Avg.	9894.8	6.4	+0.06%
S&P 500	1137.07	0.31	+0.03%
Nasdaq Comp	2011.3	9.4	+.47%
Russell 2000 Index	475.31	0.54	+0.11%

Andersen CEO admits Enron miscues
Shedding light on what happened behind the scenes in the Enron debacle, the company's auditor on Wednesday acknowledged lapses in its oversight but it said it had warned the energy giant about "possible illegal acts" in its unusual use of limited partnerships.

In testimony prepared for the House Financial Services Committee, CEO Joseph Berardino of Arthur Andersen said Enron failed to tell auditors of an agreement with a financial institution that would have altered the accounting treatment for its largest partnership, known as Chewco. Disclosure would have forced Enron to consolidate Chewco's financial statements into the company, Berardino said.

Treasurys advance for third day
Stock market weakness for much of the day fueled a U.S. Treasury rally for a third straight session Wednesday, the day after the Federal Reserve delivered a much-anticipated 11th interest-rate cut but left the door open to another rate cut if necessary in coming months.

At last check, a 2-year note was up 2/32 at 100 4/32 to yield 2.93 percent or a drop of 3 basis points. A 5-year note rose 4/32 at 96 20/32 to yield 4.25 percent or a drop of 5 basis points. The benchmark 10-year Treasury note was up 16/32 at 100 4/32 to yield 4.98 percent or a loss of 7 basis points, while the 30-year government bond climbed 1 point and 4/32 at 98 24/32 to yield 5.46 percent or a drop of 8 basis points.

- Today's Earnings Reports
ADBE, CIEN, ORCL, COST

- YHOO, HOTJ Shares of HotJobs surged 60 percent in after-hours trading action after Yahoo late Wednesday made a competing $436 million bid for the online recruiting company, which is in a pending deal with TMP Worldwide. After the close, the online media company said it's offering $10.50 for each HotJobs share, a 62 percent premium above Wednesday's closing price.

- UTX Dow component United Technologies said it is on track to boost earnings by 7% this year and to beat estimates for 2002 by 17 cents a share.

- AMAT Announces reduction in work force, citing economic downturn. Applied Materials Inc. AMAT will cut its global work force by 10%, or about 1,700 positions, because of the continuing downturn in the semiconductor industry. Applied Materials expects to post an unspecified restructuring charge in the first fiscal quarter ending Jan 27.

- WILD SWINGS
Today was an interesting day. We had some wild swings starting with a nice morning rally, which failed miserably at about an hour into the session. The market then sold off rather sharply, moving from about 1683 down to 1631, about 50 NDX points, or about a 3% drop before stabilizing right at important support from the gap we had last week and the prior high made on November 27.

The S&P did a similar move and held right at a very important point that held six times in the last 30 days. So I’m not surprised that the market bounced off those levels.

What was surprising was the ferocity of the move. The Nasdaq 100 jumped very rapidly in the last hour from 1637 to a close of around 1666, or about a 30-point straight-up move. And the S&P moved from about 1127 to 1137.

So we had some wild swings but the market net-net on the day was very close to unchanged. The S&P was only up 30 cents, the Dow up 6, the Nasdaq 100 up about 8 as well as the Composite about 9. So it was a very narrowly mixed at the end of the day.

What the market did was bounce off support and then snap back to resistance near the declining tops lines, but we have not broken through that and unless there’s a follow-through tomorrow we’re still in jeopardy of going lower. Tomorrow may be the key to the market for the next few days or perhaps the next couple weeks, depending on the direction it takes. (Source: The Technical Trader (www.thetechtrader.com)

Market Stats

Market	NYSE	Nasdaq
Total Volume	1416.92m	1859.31m
Up Volume	627.21m	1,008.32m
Down Volume	764.06m	828.53m
Advancers	1520	1855
Decliners	1625	1744
New Highs	39	82
New Lows	60	43

- SNPS Short Candidate: Synopsys develops, markets, and supports a wide range of IC design products that are used by designers of advanced Integrated Circuits (ICs). The company is named in litigation to prevent its merger with IKOS Systems. (Being sued is often a good trend killer).

TECHNICALS
-- A failure to reach the prior high (lower high).
-- Rounding top.
-- Stochastic sell signal.
-- Candlestick Volume Momentum lower high and it's rolling over.
-- While the trendline has not quite broken yet, it sure looks like it's about to die.
-- The stock broke down below the August highs, killing those as support levels.
-- The 10-day moving average (10-dma) looks like it wants to cross below the 20-dma (that's a dead cross and should bode bearish.)

SELL SHORT: SNPS on a break of the 20-dma near $54.25 on Thursday. TARGET: The stock should slide to $52.75 on a break of the 20ma, and could easily see the "give-back" carry the stock into the low $40s. Stop loss is at either the 10-dma, or the recent high ($59).

The stock rallied from $36 to $59 from September to November. So far it has given back 20% of that rally; I would be lookin for a Fibonacci retracement of 38-62% of its September-November gain, if there is a break of the 20-dma breaks. Look for the stock to head down to the $45 to $50 area.

- NVDA NVIDIA CORP trading buy (Long)
Technical Viewpoint: From a low of $40.35 on Oct 30, 2001 prices rallied, reaching a high of $51.38 on Nov 12, 2001. A decline saw prices pull back, reaching a low of $47.80 on Nov 21, 2001. Another rally saw prices penetrate resistance, closing 12/12/01 at $64.67. Technicals: MACD-Histogram gave a buy alert on Oct 15, 2001 when the Histogram crossed to the upside. Support remains at $59.00; Resistance is at current levels. Point & Figure: Reversed to the upside on Dec 11, 2001. A P&F downside reversal takes place at $61.00. Summary: Technical indicators have turned bullish. Buy NVDA @ $64.75; Use a protective stop of $61.88. Price Objective is $89.00. Risk/Reward: $2.88 VS. $24.25. Risk Reward Ratio: 8:1

- ADLAC continues to look strong in a mixed market; Our price objective remains $32 short term. We contuinue to be encouraged by both the price action and insider buys.

Things That Warrant Attention On The Charts
VIX, Put/Call Ratio, Bullish Percentage

-- The VIX, the CBOE's Market Volatility Index, is trading at a depressed level last seen in the summer, when investors seemed not to have a care in the world. The lower the VIX, the greater the complacency on the part of investors. In the 23-to-26 range, the volatility index, which uses the Standard & Poor's 100 as its guide, represents one huge stock-market Valium.

-- The Chicago Board Options Exchange's put-call ratios -- otherwise known as a sentiment indicator -- shows the number of investors betting on rising options contracts (calls) is overwhelming the number of those betting on falls (puts). Technicians generally expect trouble when popular support for stocks gets downright giddy, as it is now.

-- According to this week's poll from Consensus Inc., the percentage of those who consider themselves bullish is 58 percent. "This is the highest reading that this poll has seen since late May, when the percentage peaked at 66 percent," said Christopher Johnson, senior quantitative analyst at Schaeffer's Investment Research. "Our QQQ open interest put/call ratio is beginning to show signs that it may be rolling slightly above 0.91. This is important as it represents the same level at which the indicator rolled over in May, which signaled weakness in the market." The QQQs represent the Nasdaq 100 Index, and are up 45 percent from their Sept. 21 low. (Source: CBS)

"I often talk of 'trading to win,' as opposed to 'trading not to lose,' and that's not to be confused with pulling back the reins and doing less until you regain your edge. It remains quite tricky out there. Pick your spots, stay tight and stay in the game"
--Todd Harrison

Countdown to E-day The Euro

While most Americans are anxiously counting the days until Christmas vacation, I think it is safe to say that many -- if not most -- Europeans are anxiously counting the days until New Years Day. On January 1, 2002, 300 million Europeans will begin using a new currency: the Euro.

On New Years Day, "E-Day," the citizens of 12 European countries -- Austria, Belgium, Finland, France, Ireland, Italy, Germany, Greece, Luxembourg, the Netherlands, Portugal, and Spain -- will start using the the "euro" as thier sole currency.

You can find EVERYTHING you could possibly want to know about the euro, head straight to the press kits, here.

The press kits page has links to several files that explain national changeover scenarios, euro coin and bill design, and euro distribution plans in language that any can understand.

If you want to see what the new euro notes and coins look like, take a look at the print campaign and what the euro looks like.

The first is a collection of images from the print campaign on the euro banknotes and coins, and the latter is a collection of Web pages that provides in-depth information about features of the individual euro banknotes and coins.

Currency Conversion

Beginning on New Years Day, there will be a two month transition period where national currencies like the franc, drachma, and lira can still be used, but by 1 March 2002 euro banknotes and coins will become the *ONLY* currency accepted in the 12 countries of the euro area (Austria, Belgium, Finland, France, Ireland, Italy, Germany, Greece, Luxembourg, the Netherlands, Portugal, and Spain.)

Deutsche marks will cease to be legal tender on 1 January, Dutch guilders on 28 January, Irish pounds on 9 February, French francs on 17 February, and the eight remaining national currencies will cease to be legal tender on 28 February.

What if you have a pocketful of guilders, escudos, and marks after 1 March? Unlike old military scrip that became worthless the moment new money was minted, old national currencies will *NOT* lose their value. You just won't be able to purchase anything with them. You can, however, exchange old national currencies for new euro well after the 1 March deadline. In fact, the 12 national central banks of the euro area will exchange national banknotes for euro free of charge for a minimum of ten years, and national coins for a minimum of two years (and some really cool national central banks of the euro area will continue to exchange national banknotes and coins well beyond this time.)

By the way, the conversion rate for the euro for each participating currency is irrevocably fixed and is the only rate to be used for conversion either way between the euro and the national currency unit or for conversion between the national currency units.

This is nothing new, though. These rates were fixed two years ago. You can see the fixed conversion rates here.

More Euro News: As New Years Day draws near, expect to see lots of news about the euro changeover. A good place to turn for euro news culled from numerous media outlets is Yahoo's "Euro and the European Monetary Union" Full Coverage page at European Monetary Union. This page also shows the exchange rate for the euro to the US dollar, Japanese yen, and British pound. Yes, the British pound. While Ireland is changing its currency to the euro, Britain is *NOT*. The pound sterling remains the currency of Britain and will remain the currency of Britain for the foreseeable future. You can follow the debate here . (Source: Tourbus.com)

To Some, Talk of Tech Bubble Gets Overblown
by Rebecca Byrne

http://www.thestreet.com/markets/rebeccabyrne/10004847.html EXCERPT: Technology valuations are expanding again, but not everyone thinks dire comparison to bubble psychology is warranted. Because price-to-earnings ratios often rise during periods of depressed earnings, some analysts argue, the recent jump might be justified.

When profits pick up, they say, P/E ratios should fall. But 2002 estimates are extremely shaky right now, and even if companies do show growth year over-year, per-share earnings levels will remain very sluggish.

"You shouldn't pay a peak or even an average multiple at the peak of the earnings cycle because it's not sustainable," said Chuck Hill, research director at Thomson Financial/First Call. "Obviously you pay more a little more for stocks during the trough because depressed earnings aren't representative of a company's true earnings power."

--Barry Ritholtz
December 13, 2001

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