Monday, March 19, 2007

Stocks Finish Higher on Buyout Activity, Falling Energy Prices

Indices
S&P 500 1,402.06 +1.09%
DJIA 12,226.17 +.96%
NASDAQ 2,394.41 +.92%
Russell 2000 787.05 +1.06%
Wilshire 5000 14,152.57 +1.10%
Russell 1000 Growth 554.12 +1.02%
Russell 1000 Value 807.46 +1.16%
Morgan Stanley Consumer 690.09 +.67%
Morgan Stanley Cyclical 947.57 +1.36%
Morgan Stanley Technology 554.70 +.35%
Transports 4,794.61 +.27%
Utilities 484.40 +1.22%
MSCI Emerging Markets 112.36 +1.35%

Sentiment/Internals
Total Put/Call .81 -33.61%
NYSE Arms .55 -58.05%
Volatility(VIX) 14.59 -13.10%
ISE Sentiment 131.0 +36.46%

Futures Spot Prices
Crude Oil 56.75 -.63%
Reformulated Gasoline 195.95 +2.75%
Natural Gas 7.09 +2.95%
Heating Oil 169.30 +.25%
Gold 654.0 +.02%
Base Metals 251.93 +1.70%
Copper 320.50 +.46%

Economy
10-year US Treasury Yield 4.57% +2 basis points
US Dollar 83.37 +.22%
CRB Index 304.58 +.05%

Leading Sectors
Oil Service +2.78%
Airlines +1.70%
I-Banks +1.65%

Lagging Sectors
Alternative Energy -.46%
Semis -.60%
Oil Tankers -.76%

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
Piper Jaffray:
- Rated (MEND), (BSMD), (NXTM), (ELOS) and (BCR) Outperform.
- Rated (SRDX) Underperform.

AG Edwards:
- Rated (C) Buy.

Morgan Stanley:
- Raised (JNPR) to Overweight.

Afternoon/Evening Headlines
Bloomberg:
- Natural gas futures fell to the lowest price in two months as forecast for milder weather signaled reduced consumption of the heating fuel with inventories near record highs as we enter the spring.
- The Chicago Merc(CME) can afford to bid about 15% more than a rival for the Chicago Board of Trade(BOT) to secure its planned merger, according to Bank of America.
- US prices for ethylene, a key ingredient in plastics and synthetic fibers, are poised to fall each year through 2011 as production from new factories outpaces demand growth, Merrill Lynch said.

Absolute Return:
- Amaranth LLC was the largest of at least 83 US hedge funds to shut down last year, according to a survey by HedgeFund Intelligence.

Red Herring:
- Spring Nextel(S) and Clearwire Corp.(CLWR) may combine high-speed wireless networks to give their new technology a chance to succeed, citing analysts.

BOTTOM LINE: The Portfolio finished higher today on gains in my Computer longs, Internet longs, Retail longs, Biotech longs and Medical 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 about average. Measures of investor anxiety were mixed into the close. Today's overall market action was bullish. Margin debt hit another record in February, however this number is meaningless without knowing how much of this increase was related to short-selling and negative correlation securities. Gasoline crack spreads are now at levels seen during Katrina and last year's euphoric top in oil prices. It will be interesting if members of Congress threaten investigations as they did the last time spreads hit current levels. Given the fact that housing activity very likely worsened last month due to one of the coldest Februarys in U.S. history and subprime fears exploding, I will closely monitor the market's reaction to key housing data this week. The market’s reaction to today’s NAHB Housing Market Index report was muted. Considering the massive hedges on US stocks that have been put in place over the last several weeks, I would expect to see some significant short-covering into any meaningful weakness.

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