Tuesday, November 28, 2006

Stocks Finish Near Session Highs on Surge After Positive Bernanke Comments

Indices
S&P 500 1,386.72 +.35%
DJIA 12,136.45 +.12%
NASDAQ 2,412.61 +.28%
Russell 2000 774.82 +.35%
Wilshire 5000 13,913.86 +.32%
S&P Barra Growth 644.89 +.46%
S&P Barra Value 739.51 +.24%
Morgan Stanley Consumer 670.41 +.48%
Morgan Stanley Cyclical 872.26 -.29%
Morgan Stanley Technology 570.61 +.55%
Transports 4,753.62 -.74%
Utilities 449.33 +.56%
Put/Call .93 -27.34%
NYSE Arms 1.06 -39.66%
Volatility(VIX) 11.62 -5.53%
ISE Sentiment 135.0 +13.45%
US Dollar 83.12 -.46%
CRB 314.97 +.63%

Futures Spot Prices
Crude Oil 60.90 +.96%
Unleaded Gasoline 161.40 +1.27%
Natural Gas 8.31 +4.0%
Heating Oil 172.75 +1.31%
Gold 645.80 +.33%
Base Metals 241.22 -.84%
Copper 317.0 unch.
10-year US Treasury Yield 4.50% -.61%

Leading Sectors
Energy +1.84%
Internet +1.23%
HMOs +1.12%

Lagging Sectors
Steel -.48%
Wireless -.50%
Oil Tankers -3.65%

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
- None of note

Afternoon/Evening Headlines
Bloomberg:
- Shares of Apple Computer(AAPL) rose to a record after analysts said faster Macintosh computers and low-priced iPod players will spur holiday sales, and that a new music phone may buoy revenue next year.
- Shares of Louisiana-Pacific Corp.(LPX), a US producer of wood panels and boards, soared the most in seven months on speculation the company may be a takeover target.
- Bank of America(BAC), whose shares have climbed 18% this year, surpassed Citigroup(C) for the first time to become the biggest US bank by market value.
- Wheeling-Pittsburgh(WPSC), a US steel producer, said its financial results for the fourth quarter will miss forecasts because of prices and shipments were less than expected.
- Copper prices declined in NY as US inventories climbed. Supplies have risen 400% from this year’s low of 6,756 tons on July 28.

CNBC:
- Dollar General Corp.(DG) may be a target of leveraged-buyout firms Bain Capital LLC and Cerberus Capital Management.

Reuters:
- Time Warner Inc.(TWX) plans to offer a service next year to allow consumers to download films online and copy them onto DVDs, citing CEO Parsons.

BOTTOM LINE: The Portfolio finished higher today on gains in my Medical longs, Retail longs, Telecom longs and Computer longs. I covered my (EEM), (IWM) and (QQQQ) hedges in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was modestly positive today as the advance/decline line finished slightly higher, sector performance was mixed and volume was above average. Measures of investor anxiety were lower into the close. Today's overall market action was bullish. Many market-leading stocks finished the day with nice gains. With short interest just off all-time highs, I suspect today's late surge was mainly the result of short-covering after the bears were unable to gain downside traction this morning, despite potential catalysts. Most bears continue to view every dip as the beginning of a major sell-off and remain stunningly complacent giving what has transpired since mid-year, in my opinion. The Association of American Railroads reported recently that intermodel volume of 250,512 trailers (RAILTOTL Index on Bloomberg) or containers rose 2% in the week ended November 18 vs. last year. Moreover, this is only down 3% from all-time highs set in late September of this year. As well, the Baltic Dry Index (BDIY Index on Bloomberg) has been trending higher for months. Finally, while truck tonnage (TRUKINDX Index on Bloomberg) has been falling modestly of late, it is mostly the result of record high rail use.

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