Monday, August 14, 2006

Stocks Finish Modestly Higher after Oil Falls

Indices
S&P 500 1,268.21 +.12%
DJIA 11,097.87 +.09%
NASDAQ 2,069.04 +.55%
Russell 2000 681.73 +.40%
Wilshire 5000 12,649.79 +.12%
S&P Barra Growth 586.49 +.19%
S&P Barra Value 680.04 +.05%
Morgan Stanley Consumer 621.45 +.24%
Morgan Stanley Cyclical 773.48 +.20%
Morgan Stanley Technology 469.17 +.99%
Transports 4,161.99 +.49%
Utilities 434.69 +.40%
Put/Call .80 -13.04%
NYSE Arms 1.07 -8.24%
Volatility(VIX) 14.26 -.28%
ISE Sentiment 112.00 +4.67%
US Dollar 85.61 +.14%
CRB 338.82 -1.66%

Futures Spot Prices
Crude Oil 73.19 -1.56%
Unleaded Gasoline 198.50 -3.84%
Natural Gas 6.92 -4.80%
Heating Oil 201.00 -1.50%
Gold 636.70 -.41%
Base Metals 225.15 +.13%
Copper 349.30 -.20%
10-year US Treasury Yield 4.99% +.61%

Leading Sectors
Airlines +1.63%
Networking +1.19%
Semis +1.11%

Lagging Sectors
Energy -1.84%
Coal -2.11%
Oil Service -2.24%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Bank of America:
- Rated (AL) and (X) Buy.

Afternoon/Evening Headlines
Bloomberg:
- Crude oil is likely to fall substantially because investments in the commodity by hedge funds and pension managers have pushed prices too high, said Ben Dell, an analyst at Sanford C. Bernstein.
- Two Michigan birds found to be infected with avian influenza don’t have the lethal form that is spreading elsewhere in the world, US officials said.
- Agilent Technologies(A), the world’s largest maker of scientific-testing equipment, said third-quarter profit more than doubled to $227 million as sales increased.
- US Treasury 10-year note yields rose to a more than two-week high on speculation government inflation data the next two days will boost the odds that the Fed will resume raising interest rates.
- Billionaire investor Icahn bought stakes in Take-Two Interactive(TTWO) and Symantec(SYMC) in the second quarter.

BOTTOM LINE: The Portfolio finished higher today on gains in my Semi longs, Computer longs and Commodity shorts. I did not trade in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was modestly positive today as the advance/decline line finished slightly higher, sector performance was mostly positive and volume was below average. Measures of investor anxiety were lower into the close. Overall, today's market performance was neutral as the major averages and breadth finished higher, but well off session highs. Despite the bounce in oil prices from session lows, most energy-related stocks finished down around 2%. As well, ethanol-related shares such as (ADM), (PEIX), (ANDE) and (MGPI) continued their recent plunge despite oil above $70/bbl. The U.S. dollar continues to strengthen despite last week's Fed pause and more calls for its imminent demise. I want to see the market’s reaction to upcoming inflation data before further shifting market exposure.

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