Financial Watch

Oil prices dropped for the third straight day in New York on Thursday, amid continuing worries about the stability of the eurozone and a stunning sell-off in the US financial markets.

Crude futures had nudged higher earlier in the day but headed south as the euro dropped under 1.27 dollars, reaching the lowest level since March 2009.

New York’s main contract, light sweet crude for delivery in June, closed down 2.86 dollars to 77.11 dollars a barrel. Over the last three trading sessions, it has fallen 10.5 percent.

Stocks fell Tuesday on Wall Street as Greece’s debt problems and China’s economy again have investors concerned about economic growth.

Upbeat earnings and outlooks from the industrial giants DuPont, 3M and Ford have helped to moderate the losses. Strong first-quarter earnings have sent stocks higher in recent weeks.

In early trading, the Dow Jones industrial average was down 11.18, or 0.1 percent, at 11,193.85. The Standard & Poor’s 500-stock index was down 0.4 percent and the Nasdaq composite index was off 0.3 percent.

Financial shares dragged the stock market lower Friday as investors worried that the government’s mortgage-related fraud charges against Goldman Sachs & Co. could mean intensified scrutiny for the industry.

The Securities and Exchange Commission accused the Wall Street powerhouse of failing to disclose conflicts of interest in selling certain mortgage investments that led to steep losses for clients. Goldman Sachs denied the allegations.

The federal agency also said it was looking into a wide range of practices related to the subprime mortgage crisis, prompting fears that the investigation could broaden.

The stock market may be sitting near 18-month highs, and volatility has declined sharply, but that doesn’t mean investors aren’t worried about a downturn in the market.

Volatility has declined to a 22-month low, making it cheap for investors to bet on or hedge against a big drop in the market by buying S&P index put options as a hedge.

The Chicago Board Options Exchange Volatility Index, Wall Street’s favourite yardstick of investor sentiment, fell to a low of 16.21 on Tuesday, near levels not seen since May 2008, just prior to the steepest part of market sell-off.

Investors eager to put their money to work in the stock market sent shares of two technology companies and a bank soaring on their first day of trading.

Chip maker MaxLinear and broadband equipment provider Calix are set to benefit as technology spending increases. Regional bank First Interstate BancSystem is profitable. All were priced right, analysts say.

Each company posted double-digit gains on its first day of trading, despite a down day for the overall market. It is the IPO market’s best day since the financial crisis began.

Last year Financial Watch put togethers its first ever list of recommended stocks to invest in during 2006. In looking at last years mixed performance we have fundamentally overhauled our method of picking stocks to help our readers outperform the market. Last year we focused on developing a broad portfolio that offered attractive fundamentals for the year ahead. Our picks netted a 13% return excluding dividends which was roughly in line with the S&P 500. In overhauling of evaluation methods, Financial Watch is taking a stronger look at sectors facing favorable fundamentals for the year ahead and additionally we are focusing more on companies experiencing rapid growth. Our 2007 portfolio offers riskier picks than Financial Watch put forth last year. It is our expectation this will lead to our picks outperforming the indices in the coming year.