U.S. MARKET AVERAGES

It was cautious news on the economic front that weakened the market. Slowing sales of existing-homes, weakening business activities and declining consumer confidence all contributed to weakness in the broader averages. Comments from Google CFO knocked-off 13% of stock at one point.

Housing stocks have been in decline since December of 2005 and today they came under pressure again. Toll Bros. (TOL: chart) has declined close to 50% in the last six months from its peak of $58, Beazer Homes (BZH: chart) stock has declined 20% in less than 2 months and stocks of D.R. Horton (DHI: chart) and Lennar (LEN: chart) have lost 10% in a month. The Philadelphia Housing Sector Index dropped 1.5%.

Investors were dismayed with less-than-expected rise in GDP growth rate for the fourth quarter 2005. The revised data suggested that the economy grew at 1.6% than 1.1% as estimated in the preliminary report. Softness in the government spending, little build up in inventory and small rise in export led manufacturing activity related to defense and transportation sector kept the economic growth in check. Market forecasters are looking for the economy to expand at a rate of 4% or higher in the first quarter.

For the year 2005 real economic growth was registered at 3.5% and in 2004 real GDP increased at 4.2%.

Cautious comments on core rate of company growth from the CFO of Google Inc. led stock to decline at one point at low as 13% before recovering to a loss of 7.1%. Google (GOOG: chart) stock has been under pressure in the last one month. Stock reached its high of $475 in the last week of December 2005 and since then has corrected to $338 on Feb 14, 2006.

Two other surveys on business activities and consumer confidence suggested slow down in the business related activities and consumer seem to lose confidence as the near-term outlook for the economy is not clear.


MOVERS AND SHAKERS

Apollo Group (APOL: chart) projected Q2 net income of 43-44 cents a share and revenue of $570 million, below analyst forecasts of earnings of 54 cents a share and revenue of $586 million. The company, due to report earnings on March 23, didn''t provide outlook commentary. The stock fell 12%.

Dycom Industries (DY: chart), provider of specialty contracting services, reported Q2 net income drop of 10 cents a share compared with 15 cents in the year-earlier period. Revenue rose to $244.1 million from $224.5 million. Company’s quarterly results beat expectations of earnings of 8 cents a share on revenue of $213 million. The stock dropped 11%.

BJ Services (BJS: chart), oil-services provider, was cut to neutral from buy at Merrill Lynch. The broker cited a continued drop in natural-gas prices and blamed the company''s conservative strategy which caused it to lose market share to smaller and more aggressive rivals. The stock lost 5.2%.

Dynamic Materials (BOOM: chart), metalworking company, reported a 50% rise in Q4 earnings. The company posted profit of $3.5 million, or 28 cents a share, up from $2.3 million, or 20 cents a share a year ago. Sales climbed 16% to $23.2 million. The company said it will increase its capex budget to $4.5 million in 2006, up about 50% from 2005, to expand production capacity at both of its divisions. Company’s shares rose 10%.

Marvel Entertainment (MVL: chart) was upgraded at J.P. Morgan to overweight from neutral, which said share buybacks and a strong movie slate in 2007 should enable the company to perform better than its rivals. The broker expects the stock to outperform due to the release of """"Spider-Man 3,"""" """"Fantastic Four 2"""" and """"Ghost Rider."""" The stock gained 5%.

ECONOMIC NEWS

The National Association of Realtors released its report on existing home sales in the month of January on Tuesday, showing that sales came in below economist estimates while home prices continued to appreciate at double-digit rates.

The report showed that existing home sales fell 2.8 percent to a seasonally adjust annual rate of 6.56 million units in January from an upwardly revised rate of 6.75 million units in December.

Economists had been expecting existing home sales to come in at a 6.75 million unit rate compared to the 6.60 million unit rate originally reported for December.

The report also showed that the national median existing home price rose 11.6 percent to $211,000 in January from $189,000 in the same month last year.

Additionally, total housing inventory levels rose 2.4 percent to 2.91 million existing homes available for sale at the end of January, representing a 5.3 month supply at the current sales pace.