Wednesday, March 14, 2007

Stocks Finish at Session Highs After Large Intraday Reversal

S&P 500 1,387.17 +.67%
DJIA 12,133.40 +.48%
NASDAQ 2,371.74 +.90%
Russell 2000 775.68 +.85%
Wilshire 5000 13,992.14 +.61%
Russell 1000 Growth 548.33 +.65%
Russell 1000 Value 798.15 +.57%
Morgan Stanley Consumer 684.61 +.25%
Morgan Stanley Cyclical 929.71 +.45%
Morgan Stanley Technology 553.44 +1.09%
Transports 4,716.03 -.22%
Utilities 476.60 +.58%
MSCI Emerging Markets 110.02 -.69%

Total Put/Call 1.64 +17.14%
NYSE Arms .68 -75.81%
Volatility(VIX) 17.27 -4.74%
ISE Sentiment 100.00 +5.26%

Futures Spot Prices
Crude Oil 58.25 +.55%
Reformulated Gasoline 191.95 -.64%
Natural Gas 7.09 +2.95%
Heating Oil 170.68 +.98%
Gold 645.60 -.59%
Base Metals 239.82 -1.12%
Copper 285.20 +.97%

10-year US Treasury Yield 4.53% +4 basis points
US Dollar 83.64 -.08%
CRB Index 304.06 -.15%

Leading Sectors
Homebuilders +1.94%
Steel +1.92%
Networking +1.67%

Lagging Sectors
HMOs -.32%
Airlines -.70%
Retail -.89%

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
AG Edwards:
- Rated (MEDX) and (STEC) Buy.

AG Edwards:
- Rated (RCRC) Buy, target $48.

Afternoon/Evening Headlines
- US banks and homebuilders carried stocks to their second gain this week after Lehman Brothers(LEH) said bad home loans won’t curtail earnings.
- Lehman Brothers(LEH), the second-biggest US underwriter of mortgage-backed bonds, said risks posed by rising home-loan delinquencies are “well contained” and will have little effect on the firm’s earnings.
- Mexico’s President Felipe Calderon won a pledge from President Bush to push for a US immigration bill after a meeting that Calderon said may signal a new stage in the two countries’ relations.
- The US Senate began debate on legislation that calls for US troops to withdraw from Iraq.
- Hedge funds must ensure independent oversight of their investment valuations to prevent managers inflating the returns that determine their pay, regulators said, opening a new line of scrutiny on the funds.
- The Carlyle Group announced the private equity firm, along with a group of investors, is to invest $240 million in Companhia Nacional de Acucar e Alcool. CNAA is a joint venture between sugar and ethanol producer Santa Elisa and Global Foods Holdings.
- Quadrangle Group LLC, a private-equity firm focused on communications and media investments, is eyeing acquisitions of phone and cable-operating companies, co-founder Steven Rattner said.

- The IMF predicts global growth will slow to 4.9% this year from 5.3% last year, citing draft forecasts due for publication next month.

Nikkei English News:
- Japan is expected to report Friday that the nation’s index of coincident economic indicators fell in January to 45%, the first drop in 10 months below 50%. A reading above 50% indicates economic expansion, while a figure below 50 indicates contraction.

BOTTOM LINE: The Portfolio finished higher today on gains in my Computer longs, Internet longs, Semi longs, Biotech longs and Telecom longs. I did not trade in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was positive today as the advance/decline line finished higher, almost every sector rose and volume was above average. Measures of investor anxiety were elevated once again into the close. Today's overall market action was very bullish as the major averages reversed early losses sharply on heavy volume. Many market leading stocks finished near session highs. Tech stocks did especially well today. Even at the lows, many tech leaders were just barely down and some were even higher. The fact that the Broker/Dealer Index finished 1.34% higher, near session highs is also a big positive. Oil is only $0.23 higher despite the reversal in stocks. Some believe that when refiners come back online it will result in more demand for oil and thus, higher prices. I see the opposite as gasoline has been propping up oil and U.S. oil inventories are still at multiyear highs. As more gasoline is produced and inventories surge, I expect even more downward pressure on oil. Nikkei futures are indicating a flat open in Japan. I would like to see emerging markets stabilize tonight before shifting market exposure further.

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