Thursday, December 14, 2006

DJIA Makes Another All-Time High on Economic Optimism, a Stronger US Dollar, Positive Earnings Reports and Short-Covering

S&P 500 1,425.49 +.87%
DJIA 12,416.76 +.81%
NASDAQ 2,453.85 +.88%
Russell 2000 794.21 +.69%
Wilshire 5000 14,303.77 +.81%
S&P Barra Growth 659.14 +.93%
S&P Barra Value 764.47 +.81%
Morgan Stanley Consumer 691.91 +.46%
Morgan Stanley Cyclical 894.00 +1.11%
Morgan Stanley Technology 575.75 +1.03%
Transports 4,729.68 +1.54%
Utilities 461.63 +.21%
Put/Call .65 -26.97%
NYSE Arms .52 -40.02%
Volatility(VIX) 9.97 -2.06%
ISE Sentiment 139.0 +5.30%
US Dollar 83.68 +.44%
CRB 314.40 +.91%

Futures Spot Prices
Crude Oil 62.52 +1.87%
Reformulated Gasoline 167.0 +2.95%
Natural Gas 7.51 -2.01%
Heating Oil 177.60 +2.54%
Gold 629.80 -.41%
Base Metals 245.60 +1.67%
Copper 306.20 +.96%
10-year US Treasury Yield 4.59% +.30%

Leading Sectors
Networking +1.94%
Semis +1.86%
Retail +1.72%

Lagging Sectors
Hospitals -.12%
Coal -.20%
Airlines -.93%

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
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
- Rated (COH) Buy, target $50.

Afternoon/Evening Headlines
- US stocks resumed their fourth-quarter rally, pushing the DJIA to a record, after companies reported profits that beat analysts’ estimates and the number of claims for jobless benefits fell.
- Ford Motor(F) announced an executive reorganization that includes centralizing product development as new CEO Mulally reshapes the second-largest US automaker.
- The New Jersey Assembly passed a Democratic proposal to allow same-sex civil unions, a measure gay people have said fails to grant them rights equal to married heterosexual couples.
- Adobe Systems(ADBE) said fourth-quarter profit rose 16% on higher sales of its Acrobat PDF software and products from its acquisitions of Macromedia.
- The US dollar surged to a three-week high against the yen after a government report showed a drop in US workers filing first-time jobless claims in the past week.
- Manufacturing growth in NY state fell less than forecast this month as orders picked up, the Federal Bank of NY said in an early release of the figures.
- The NYMEX(NMX) will expand its floor-trading hours beginning in February, the exchange said.
- Agco Corp.(AG), the second-largest US maker of farm equipment, plans to eliminate two-thirds of its brands to shore up profit and will sell more fuel-efficient tractors.

- Breast cancer rates in the US dropped 7.2% in 2003 after many women stopped taking hormone pills, citing a new analysis of federal stats.

BOTTOM LINE: The Portfolio finished higher today on gains in my Internet longs, Retail longs, Semi longs and Telecom 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, almost every sector rose and volume was slightly above average. Measures of investor anxiety were mostly lower into the close. Today's overall market action was bullish. Cyclicals were especially strong as the "recession is imminent" cries are rapidly fading. The U.S. dollar strengthened throughout the day, which could begin taking its toll on commodities. "High-school drop-out" copper looks especially vulnerable near-term as Comex inventories continue to surge. The 10-year yield remained stable throughout the day. I suspect today's action is leading to another serious bout of performance anxiety by the near-record shorts and underinvested bulls. I expect stocks to build on today's gains into year-end.

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