Market Leaders Continue to Falter

Morning News of Note:

• XOM: Oil Firms Want SEC To Loosen Reserves Rules Thanks to record profits, oil companies are finding it easy to fatten up their bank accounts. But they're having a tougher time convincing skeptics how much oil and natural gas they have in the ground, which is the measure that Wall Street uses to gauge the companies' future profitability. Big Oil's proposed solution to this dilemma? Change how reserves are measured. (Full Story) WSJ
• GOOG MSFT: Pressuring Microsoft, PC Makers Team Up With Its Software Rivals Dell Is in Talks With Google To Use Search Services; Winning Loyalty at Set-Up 'A Magic Time for End Users' It takes only about five minutes to set up a new personal computer by clicking through a series of introductory screens. In that time, however, many consumers choose software and services they will often use for the life of their machine. Historically, Microsoft Corp. held great sway over this "first-boot sequence" as well as other software preinstalled in the factory. (Full Story) WSJ
• TOL: Toll Brothers-TOL reports Q1 revenue of approximately $1.33B. Consensus estimates are for $1.35B. TOL lowers its 2006 deliveries to 9,200-9,900 from 9,500-10,200
• Mad Money Summary: Jim Cramer opened his show discussing Areva, a French company which mines and processes uranium and builds nuclear plants. He then moved on and discussed Texas Roadhouse (TXRH), a regional-to-national food chain, which currently operates in about 34 states. The chain, which is promoted by Willie Nelson, is expanding both geographically and numerically. He said he prefers Texas Roadhouse over Chipotle Mexican Grill (CMG), which he says trades at a multiple greater than Google (GOOG) or Broadcom (BRCM). Cramer's stock pick of the week was Alcan (AL), an aluminum company, because "aluminum will be the metal of 2006." He picked Alcan the night ahead of its earnings release, which is today. In the Lightning Round, Cramer was bullish on AAPL, JCI, NDAQ, NSC, CRDN, STX, PEC, TRN, RACK, SSL, ENER, HW, PCAR, SNY, NBR, STN, VISG and MOT, and was bearish on HET, PFCB, WEN, BBC, WFMI, QDEL, INTC and ARII

Market Comments: Despite all of the worries about Iran and oil supplies, crude prices are down more than a buck this morning, and the energy (stock) complex is trading down across the board. Buying opportunity coming?

As for the market leaders, those stocks continue to decline (see GOOG, ISRG, STP, UARM, etc.). The broker/dealer index is the only sector in the green. In addition to energy, housing stocks are down also after TOL reported disappointing results.

The SPX has broken below last week's lows, and is closing in on erasing all of this year's gains (1248). The volatility indexes are slightly higher, and the put/call is 0.93.

long XOM