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While the market lost steam after lunch, solar energy stocks held onto their gains. Clean energy ETFs blasted off thanks to double-digit percentage gains in China Sunergy, () Solarfun Power, () Suntech Power, () Trina Solar, () Yingli Green Energy. ()

First Trust Nasdaq Clean Edge U.S. Liquid Series () led the pack. It gained 0.94, or 4%, to 24.54. It has risen 22% from its 52-week low of 20.11. But it’s 27% below its high. It broke above the 50-day average, but not above the 200-day average. That means it has more work to do to prove its strength after such a steep correction.

Top Performers

First Trust outpaced all other green ETFs last year with a 65% return. But it also dropped the most year to date, 26%. Aside from solar energy, it includes companies engaged in making biofuels, batteries and chips. Last year’s monster stock First Solar, () weighted 9%, heads the 53-stock portfolio. First Solar rocketed 795% in 2007. It shed 7% year to date.

PowerShares WilderHill Clean Energy, () the largest by assets, also gained 4%. Like First Trust, its 50-day average has crossed below the 200-day. Last year’s No. 2 performer blasted 60% in 2007. It plunged 25% year to date, but has vaulted 13% off its bottom.

Market Vectors Global Alternative Energy, () launched 11 months ago, surged 1.24 to 49.89. It has crossed above both the short-term and long-term moving averages, so it looks more bullish than the first two. It spiked 49% last year. It corrected 17% year to date.

Prospects And Risks

Anthony Welch’s firm, Sarasota Capital Strategies, has owned PowerShares WilderHill Clean Energy since it launched in March 2005.

“Clean energy isn’t going away, and it has a place in most portfolios,” said Welch. “I would caution, however, that this is a smaller cap sector and can produce wild swings in price.”

But Welch prefers PowerShares Global Clean Energy () now because of its international exposure. The portfolio weights U.S companies at 28%, Germany 16.9%, Spain 10.4%, China 7.2%, France 7.5% and Denmark 6.6%. It also includes names from Japan, Australia, Brazil and Ireland. The ETF returned 26% last year. But it lost 17% year to date. It sports the highest Relative Strength Rating, 78, in its category.

Clean energy is not only volatile, but also tied to swings in oil. When oil prices fall so does the interest in alternative energy. Since peaking at $110.35 March 17, crude oil eased to $104.83, as of Wednesday.

“The entire alternative energy industry is a creation of government intervention rather than meeting a market demand,” said Marvin Appel of Appel Asset Management. “Their fortunes will depend on politics more than anything else for years to come, especially since energy prices appear to have peaked for now.”

Have you ever been cautiously bullish on a stock, but found premiums too expensive to consider an outright purchase? Or perhaps, maybe you know there’s still very real downside gap risk involved due to potential problems caused by either management or market forces and therefore consider a Long Call purchase too rich on that basis? Worse yet, both conditions exist, but you still find yourself compelled to search for the right type of strategy. If that’s the case and without getting into the particulars over whether contrarian positioning is appropriate or not; traders might look to the Bull Call or Put Vertical as a solution.

These days of course traders need look no further than most financial stocks if they’re interested in positioning for the proverbial bottom. Stocks like Citigroup () and Merrill Lynch () and possibly less known companies such as MGIC Investments (), Landamerica Financial Group () or nameless others with credit-related risks have been hitting multi-year lows. Additionally, with very sour sentiment and fresh risks / losses popping up virtually every day; the group as a whole fits the mold of the classic contrarian play.

Stocks like the fore-mentioned can pose a couple of problems though, for any would-be bulls. First, for limited risk strategists the implieds or premiums to purchase a Long Call are through the roof. That makes bets on positions much more difficult to justify on a theoretical, as well as a real world basis. In fact, should the trader be so lucky as to find the stock moving in the right direction, if it occurs as the bearish story line drops out of favor, premiums could drop rapidly and counter all but the most extremely bullish outcomes in the stock.

For instance, in the case of Merrill “Lynched”, checking the board late in the session, premiums exploded higher for a second straight session. As this action relates to the November Calls, the implieds have jumped by 70% from 40% I.V. to roughly 70% I.V. With two trading weeks left that type of “juice” becomes very costly if the timing is just slightly off and / or barring a counter and helpful catalyst as time decay becomes a very real concern.

With MER between Strikes currently, purchasing the OTM November 60’s costs 2.15 using the mid-market price. With shares at 57.28, Theta of 0.11 a day and growing larger, hopefully traders see the odds as being stacked up against this type of position in of itself. Secondly, there’s always the risk the story doesn’t get better and someone like your chosen “Anchor Banker” finds itself sailing further down river. And if it occurs on a gap, those dreamy Calls will be punishing on the trading account to say the least.

At the same time and without making a recommendation as to the appropriateness of this style of investing, more effective positioning can be made possible with the Bull Vertical using either Calls or Puts. Again, using Merrill for illustrative purposes, if a trader instead focuses on a Vertical spread, an all-around stronger position, which takes some of the “hopeful and wishful” thinking out of the equation, can be constructed. For instance, for a slightly higher debit of 2.55, the Nov 55 / 60 virtually eliminates the fore-mentioned Theta risk at current levels. Additionally, the downside risk is actually reduced under all, but the most severe price moves, since that spread owns the lower Strike. Sure, the Bull Vertical will reduce the contrarian’s potential upside, but speaking practically while enjoying the theoretical possibilities; that’s a good problem to have over the long haul versus the potential alternative.

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Shares of Burnaby, B.C.-based Extreme CCTV Inc. rose more than 26 per cent in Friday morning trading on the TSX after the company struck a deal to be acquired by Robert Bosch GmbH of Germany.

Extreme shares were up $1.02 at $4.92. Extreme CCTV 3-month TSX chart

Stuttgart-based Bosch is offering $5 a share for the Canadian company, putting a value of $93 million on the deal. The offer includes a 30 per cent premium over Extreme’s 30-day average price.

Senior managers at Extreme who control about 40 per cent of the company’s outstanding common stock have agreed to tender to the Bosch offer.

Extreme makes infrared illuminators and video surveillance equipment. The company had sales of $27 million last year. Extreme will become part of Bosch’s security systems division.

“[Extreme’s] innovative technologies will expand our product portfolio and strengthen our presence in Canada, the U.S. and the U.K.,” said Uwe Glock, the president of the Bosch security systems division.

Earnings misses took a bite out of the market’s rebound of the past few days.

The NYSE composite was up 0.4%, the Nasdaq composite down 0.2% at 12:54 p.m. EST. The S&P 500 clung to a 0.2% gain, while the Dow climbed 0.8%.

Small caps slipped, with the S&P 600 dropping 0.1%. A strong jump in transportation sector durable goods orders gave the sector a boost, with the Dow Transports showing a 1.5% gain. NYSE volume eased, but was still up 7%. Trading was 12% higher on the Nasdaq. Advancing issues led decliners by 3-to-2 on the NYSE and by a narrow margin on the Nasdaq.

The Electrical-Parts Distributor group posted the best gain by midday, hoisted higher by Anixter International’s () gap-up gain of 11.08 to 69.38. The 19% jump followed a Q4 earnings and sales report that topped expectations. The company reaffirmed its ‘08 profit guidance. Anixter has slumped since a steep run-up to highs in July. Tuesday’s move punched the stock above its 50-day moving average to just below its 200-day line. The two averages inverted — generally a bad sign for stocks — early in December.

The cement-aggregates producers and specialty steel makers also were among the day’s best industries, each adding 3.6%. All eleven stocks in the construction materials group logged gains, led by aggregates heavyweight Martin Marietta Materials (), which rose 3.68 to 115.13.

Bankrate () gapped up, gaining 3.51 to 51.51 on powerful volume. The mortgage-shopping Web site has gained through the past five sessions. The stock has been consolidating since hitting highs in May 2006.

Mining equipment maker Bucyrus International () kept raking in gains, rising 1.71 to 87.01. The Wisconsin-based company has climbed through six of the past seven sessions and is set to test resistance at its 50-day moving average.

U.S. Steel () weighed heavy on the downside, turning in a 9.24 loss to 100.83 on heavy volume. The steel-making icon, citing charges related to layoffs and acquisitions, reported an 88% plunge in Q4 earnings. The stock has slumped since hitting highs in June.

11:15 a.m. Update: Stocks Mixed Amid Rate-Cut Expectations, Earnings, Economic Data

By ALAN R. ELLIOTT

Stocks evened out to near the midpoint of the morning session, leaving indexes mixed in higher volume.

The NYSE composite was up 0.3%, the Nasdaq down 0.3% at 10:55 a.m. EST. The Nasdaq’s computer and industrial indexes provided the heaviest drag, while its transport index rose 1.7%. The S&P 500 held a 0.2% gain; the Dow was 0.3% higher. Volume swelled 13% on the NYSE, 11% on the Nasdaq.

Overseas, Asian markets generally traded higher. China’s exchanges turned in mild gains for the day. Tokyo’s Nikkei 225 leapt 3% higher, sparked by Japan’s largest shipping company, Nippon Yusen.

Most European exchanges also gained, with London’s FTSE 100 ending up 0.9% and France’s CAC-40 posting a 1.3% rise.

The dollar reversed out of an early rally vs. the yen and euro, slipping as currency traders positioned themselves ahead of the Fed’s expected rate cut. Bond prices also fell, driving the 10-year bond yield to 3.66%, up from 3.59% late Monday. That market shows signs of less panic-driven flight to safety. The auction yesterday of two-year T-notes was not too well received, with a noted lack of interest from foreign central banks.

The Consumer Confidence Index came in above expectations but was still 3% below December’s levels and at its lowest levels since the post-Katrina slide in 2005. The Conference Board said the weak housing market, tighter credit, higher oil prices and economic gloom all contributed, although inflation expectations did ease slightly.

DryShips () gained 3.34 to 62.63 in heavy volume. The dry-bulk shipper tumbled out of a steep uptrend in November. It is now well below its 10- and 40- week moving averages, and 52% below its Oct. 29 high.

Another in that field, Excel Maritime (), fell 2.38 to 30.62 after announcing it would buy smaller rival Quintana Maritime () for about $2.45 billion. Shares of Quintana gapped up, gaining 4.38 to 21.27.

Uggs boot maker Deckers Outdoor () rose 3.94 to 122.32. The move extended the stock’s rebound from its 200-day moving average.

Smith International () tanked 7.15 to 54.89 in huge volume after missing Q4 earnings and sales views. The stock, which had been trying to climb out of an 11-week base through December, is now 29% off its Jan. 3 high.

10:15 a.m. Update: Stocks Mixed As Early Gains Fade

By ALAN R. ELLIOTT AND VINCENT MAO

The major stock indexes, which opened higher Tuesday, have turned mixed.

At 9:53 a.m. EST, the NYSE composite and S&P 500 each rose 0.2%. The Dow added 0.1%. Meanwhile, the Nasdaq slipped into negative territory with a 0.1% loss.

Volume was tracking higher on both exchanges in the early going.

In economic news, the S&P/Case-Shiller 20-city home price index fell 2.1% in November. On a year-over-year basis, the index tumbled a record 7.7%.

Chattem () gained 7.43, or 11%, to 75.34 in brisk trading. The maker of over-the-counter drugs, cosmetics and dietary supplements said Q4 earnings excluding items more than tripled to 81 cents a share, easily topping views of 65 cents. It pegged full-year 2008 profit between $3.79 and 3.99 vs. a $3.83 consensus.

The solar energy group was not having a great morning, though Phoenix-based First Solar () did bump up 7.17 to 184.17. It was the 13-month-old stock’s fifth gain in seven sessions and continued a rebound from its 200-day moving average. First Solar is 35% below its Dec. 26 high.

On the downside, Dolby Laboratories () dropped 2.10, or 5%, to 42.44 in fast trade. The audio technologies firm reports fiscal Q1 results on Jan. 31. Analysts see profit rising 19% to 32 cents a share on sales of $134.7 million.

OptionsXpress () slipped 1.26 to 28.46. The online broker reported Q4 EPS above consensus but missed sales expectations. Shares rebounded from their 40-week line over the past two weeks but remain below their 10-week moving average. The stock has been consolidating since Dec. 28.

9:15 a.m. Update: Durables Give Futures A Lift

By VINCENT MAO

Futures signaled a slightly higher open Tuesday ahead of the start of the Fed’s two-day meeting.

Nasdaq futures climbed 10 points vs. fair value, S&P 500 futures rose 8 points, and Dow futures gained 30 points.

The Federal Open Market Committee begins deliberating on interest rates today. Its decision is due Wednesday, usually at around 2:15 p.m. EST.

Orders for durable goods surged 5.2% in December, thanks to strong demand for aircraft, communications gear and defense goods. That was the biggest in five months and well ahead of expectations of 1.5%. Excluding transportation, demand rose 2.6%. Futures extended gains after the news.

The dollar rallied against the euro and the yen.

Consumer confidence for January will be out at 10 a.m. EST. Economists expect a dip to 87 from 88.6 in December.

3M () slipped 1% in pre-market trading. The diversified manufacturer reported Q4 earnings of $1.19 a share excluding items, up 8% from a year ago and 2 cents ahead of views. Sales climbed 7.3% to $6.21 billion, also above views. 3M expects 2008 earnings to come in at least 10% above its 2007 income of $4.98 a share.

Shares of EMC () dropped 8% in the pre-open as traders focused on a sales miss by VMware (), which is majority-owned by EMC.

EMC, a maker of data storage products, delivered a fourth-quarter profit of 24 cents a share, up 26% from a year earlier and above views. Sales climbed 19% to $3.83 billion, also ahead of estimates. EMC guided full-year sales and earnings above consensus. Shares of VMware plunged 25%.

Countrywide Financial () jumped 6% in the pre-market despite posting a Q4 loss of 79 cents a share, compared with a profit of $1.01 a share in the year-ago quarter. Analysts had expected a 30-cent shortfall. Due to troubling housing market conditions, the mortgage lender set aside $924 million. Countrywide also booked an impairment charge of $831 million tied to mortgage-related securities.

Earlier this month, Bank of America () said it would buy the lender for $4 billion.

Wal-Mart () is doing its part to stimulate the economy. The world’s largest retailer will cut prices by 10% to 30% on thousands of items this week. Shares edged higher in the pre-market.

Yahoo () gained 1% in the pre-open. The Internet search firm reports earnings after the close. Analysts expect 11 cents a share, down 42% from a year earlier.

BY REUTERS

Posted 1/4/2007

Copper prices fell to a new nine-month low on Thursday as investors sold on expectations of a supply glut this year, while gold slid to a one-week low on a firmer dollar, analysts said.

Crude Oil fell to below $57 a barrel, their lowest since last November on concerns about a rise in U.S. stocks data. Prices are down by nearly $4 since Wednesday.

Copper for three-month delivery on the London Metal Exchange hit $5,625 a ton, the lowest since April 5. Used in the building, power and auto industries, copper has lost about 35% since touching a record high of $8,800 in May and more than 10% over the past three days.

Concerns about the economic and housing market slowdown in the United States and forecasts of a surplus this year have combined to undermine investor confidence in the metal. Many speculators, including hedge funds, over the last few months have sold copper short a bet on falling prices. That selling accelerated this week, but analysts and traders think a bounce is inevitable, possibly on Friday.

Spot gold touched a session low of $624.20 an ounce as the dollar firmed, prompting investors to retreat, but analysts say long-term price prospects are positive.

It was last quoted at $626.45/627.20 from $627.70/628.70 late in New York on Wednesday, when it lost more than $12.

A rising dollar makes gold more expensive for holders of other currencies. However, expectations of a falling dollar over coming months will boost sentiment towards precious metals.

Analysts also say news that a European central bank bought gold last month might be the beginning of a new trend capable of pushing gold back to May’s 26-year high of $730.

But for now much depends on Friday’s U.S. jobs data, which will determine the direction of the dollar and gold.

Crude oil was down $2.70 at $55.59 a barrel after data showed a large rise in U.S. fuel stocks following unusually mild weather in the world’s biggest energy consumer.

Barclays added that it remained positive on prospects for corn prices because of robust demand from China and from ethanol manufacturers in the United States.

Refined sugar futures eased on speculative selling linked to weakness in oil prices and a stronger dollar. The London benchmark March hit a three-month low of $332 a tonne after losing $10 on Wednesday.