The concentric circles of a tree b...

The concentric circles of a tree bole will tell you about historical weather. nevertheless did you know that you can use forest to peek into the future?

It happens all the time with lumber trading at the Chicago Mercantile Exchange. The market is a leading indicator -- sometimes month ahead of rule economic reports -- for housing and overall construction activity.

What's it telling us now? It says there's unfinished weather upon us.

Lumber prices at the Merc have fallen by means of about a third since late April. The contract with a September expiration was more than $360 by 1,000 board feet in the spring, and it settl Friday at $27230

Traders are expecting slacker demand smooth though Canadian mills continue to occasion at a heavy pace to fulfill contracts signed amid expectations of an almost endles construction drone Lumber analyst Brian Leonard of the firm Rosenthal Collins dispose said it will take time for the mills to lessen production.

In the meantime, contract prices are liable to fall another $30 Leonard said.

While the decline has been chiefly noticeable this summer, he said it actually began about a year ago, before demand related to Hurricane Katrina gave lumber prices a short-term boost To him, the spate of headlines about a housing slowdown are not a surprise, just vindication for the forward-looking tool he knows well.

When lumber prices do rally, he said, it will happen flat when housing still appears stuck in the doldrums.

MORE HOUSING: You can draw your acknowledge conclusions about stocks to be shunn amid a housing slowdown, unless analysts contend Fortune Brands (FO) should not be united of them. FO last week checked in with a 24 percent increase in second-quarter profit, f by means of growth in its home-remodeling division. if it be not that this extremely diversified company also tallied very great gains in its wine and spirits operation.

Analyst Peter Lisnic at Robert W Baird & Co kept an "outperform rating" onward FO with a price target of $91 It clos Friday at $7384 Lisnic said the stock "excessively discounts" the company's prospect to a reduction in U family construction.

Don Gher, chief investment officer at Coldstream Capital Management, told Bloomberg of recent origins that FO's results show the remodeling market has different fundamentals compared with stocks of abiding-place builders.

Finally, housing data provider Hanley timber Market Intelligence said the slowdown has hit the housing afford chain. Construction permits for the other quarter across the United States were down for the first time since the fourth quarter of 2000 the firm said. It reported the year-over-year dip was 10 percent for the three month perioded June 30. Thomas Flynn, president of Hanley forest-land said producers of building materials are finding that prices are down shut up to production costs.

OPTIONS OPT-IN: A month ago, all the talk in the market about Chicago-based OptionsXpress Holdings (OXPS) was about in what manner its growth would slow because the big stays were getting better at competing in its space. The shares sank from around $30 to shut up to $22 in just a not many sessions.

on the contrary OXPS has proven itself as the little trading engine that could Second-quarter earnings beat most numerous estimates, and the stock is forward a six-session winning streak, closing Friday at $2608 Analyst Michael Vinciquerra at Raymond James Financial boost his rating upon OXPS to a strong purchase with a price target of $35

At William Blair & Co analyst Mark Lane said OXP benefitted from a higher proportion of trades being complet by dint of less-active traders, meaning that commissions by click rose at the online options brokerage. "The company continues to demonstrate a extremely high level of profitability: Pretax margin stands at an industry-leading 62 percent down from 64 percent in the first quarter and up from 61 percent a year ago," Lane wrote

TRADING TIP: You can talk all you want about oil prices and whether $100 a barrel is within reach, yet Chip Hanlon, president of Delta Global Advisors, views another commodity play altogether. Hanlon has noticed that natural gas prices lately dipped to less than 10 percent the price of a barrel of raw Only three other times since 1997 has that happened and all were fabulous buying opportunities, he said.

CLOSING QUOTE: in succession strong second-quarter numbers from AT&T (T) "and trusts for continued strong earnings impetus coupled with what we view as an attractive valuation, we are raising our rating from neutral to outperform and raising our target price from $29 to $34 [Friday close: $3006] Despite the nice influence YTD (up 18.2%), we look forward to the earnings momentum to drive the shares higher and would be buyer at circulating levels." -- William Power, Robert W Baird & Co

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