Tuesday, September 05, 2006

Stocks Finish Near Session Highs on Another Fall in Energy Prices and Less Pessimism

Indices
S&P 1,313.25 +.17%
DJIA 11,469.28 +.04%
NASDAQ 2,205.70 +.57%
Russell 2000 727.50 +.82%
Wilshire 5000 13,150.60 +.25%
S&P Barra Growth 609.57 +.11%
S&P Barra Value 701.63 +.23%
Morgan Stanley Consumer 645.46 -.15%
Morgan Stanley Cyclical 816.44 +.78%
Morgan Stanley Technology 513.12 +.71%
Transports 4,305.78 -.11%
Utilities 438.12 -.74%
Put/Call .97 -3.0%
NYSE Arms .82 +21.52%
Volatility(VIX) 12.63 +5.60%
ISE Sentiment 69.0 unch.
US Dollar 85.0 +.38%
CRB 327.08 +.51%

Futures Spot Prices
Crude Oil 68.70 -.71%
Unleaded Gasoline 166.25 -4.15%
Natural Gas 6.02 +2.52%
Heating Oil 194.20 -1.29%
Gold 646.90 unch.
Base Metals 235.07 +2.45%
Copper 362.40 -.01%
10-year US Treasury Yield 4.78% +1.21%

Leading Sectors
Gold & Silver +2.92%
Steel +2.53%
Oil Service +2.27%

Lagging Sectors
Broadcasting -.93%
Disk Drives -1.24%
HMOs -1.30%

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
Citigroup:
- Rated (MRVL) Buy, target $29.

Banc of America:
- Upgraded (AFL) to Buy, target $50.
- Upgraded (HIG) to Buy, target $97.
- Downgraded (AMP) to Sell, target $41.
- Downgraded (NFS) to Sell, target $45.

Afternoon/Evening Headlines
Bloomberg:
- Gasoline futures fell to their lowest price in almost six months as the peak-demand driving season came to a close with US inventories of the motor fuel above normal levels.
- Ford Motor(F) unexpectedly named Boeing(BA) executive Alan Mullaly to replace CEO Bill Ford, great-grandson of the struggling automaker’s founder.
- Merrill Lynch(MER), an also-ran in the growing market for mortgage securities, agreed to buy National City’s home-loan unit for $1.3 billion.
- Viacom(VIA) Chairman Sumner Redstone ousted Tom Freston as CEO after the media company’s stock dropped 10% following a split with CBS Corp.

Dow Jones:
- European economic growth will slow in 2007, according to a document prepared for a meeting of the region’s finance ministers.

BOTTOM LINE: The Portfolio finished higher today on gains in my Semi longs, Computer longs, Medical longs, Internet longs and Retail longs. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was positive today as the advance/decline line finished higher, most sectors rose and volume was about average. Measures of investor anxiety were mostly higher into the close. Overall, today's market performance was bullish. I suspect a test of the S&P's cycle highs is coming very soon which will likely lead to a short period of consolidation before a more substantial push higher occurs during the fourth quarter. Unleaded gas futures fell another 4.3% today and have plunged about 30% in a month. This is a significant positive. Today’s announcement of a huge oil find in the Gulf of Mexico is a substantial psychological negative for the many oil bulls that believe the world is imminently running out of oil.

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