Monday, March 26, 2007

Stocks Rally into Close, Recoup Morning Losses

Indices
S&P 500 1,437.50 +.10%
DJIA 12,469.07 -.10%
NASDAQ 2,455.63 +.27%
Russell 2000 808.94 -.07%
Wilshire 5000 14,508.75 +.06%
Russell 1000 Growth 565.87 +.07%
Russell 1000 Value 830.65 +.06%
Morgan Stanley Consumer 709.06 +.17%
Morgan Stanley Cyclical 966.84 +.17%
Morgan Stanley Technology 564.77 +.72%
Transports 4,909.15 -1.29%
Utilities 502.81 +.65%
MSCI Emerging Markets 116.39 -.22%

Sentiment/Internals
Total Put/Call .99 +10.0%
NYSE Arms .96 +6.93%
Volatility(VIX) 13.16 +1.62%
ISE Sentiment 154.0 +36.28%

Futures Spot Prices
Crude Oil 62.97 +1.11%
Reformulated Gasoline 206.88 +3.53%
Natural Gas 7.27 +.14%
Heating Oil 177.30 +3.62%
Gold 664.50 +1.10%
Base Metals 246.83 -.35%
Copper 314.15 +2.36%

Economy
10-year US Treasury Yield 4.60% -1 basis point
US Dollar 83.07 -.25%
CRB Index 312.27 +.43%

Leading Sectors
Internet +2.4%
Networking +1.24%
Computer Hardware +1.0%

Lagging Sectors
Coal -1.50%
Biotech -1.53%
Airlines -1.76%

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
CSFB:
- Rated (NCMI) Outperform.

Stifel:
- Upgraded (TIF) to Buy, target $54.

Afternoon/Evening Headlines
Bloomberg:
- Target Corp.(TGT), the second-largest US discount chain, said sales at stores open at least a year will rise as much as 13% in March. The last time Target posted a gain of 11% or greater was November 2001. Same-store sales at about 80 retailers tracked by the Intl. Council of Shopping Centers in New York last month gained 2.5% after the coldest February since 1979. Most retailers will report final March results on April 12.
- Women who take aspirin in low or moderate doses reduce their risk of dying from any cause, particularly heart disease, a study concluded.
- Corn prices in Chicago fell to a 10-week low on speculation drier weather starting in the US Midwest in April will allow farmers to plant the crop quickly, leading to a bigger harvest.
- Petroleo Brasileiro SA(PBR), Brazil’s state-controlled oil company, and Eni SpA, Europe’s fourth-largest oil company, may cooperate on ethanol projects in Africa, Italian Prime Minister Romano Prodi said.
- Fraser Armstrong says he’s discovered a renewable resource that’s all around us: microscopic organisms that create electricity from hydrogen in the air. Armstrong, a professor of chemistry at England’s Oxford University, unveiled a device at the American Chemistry Society’s spring meeting in Chicago today that harnesses the electricity produced by microbes when they consume hydrogen particles.
- US automakers’ CEOs urged President Bush to back incentives to bring ethanol and biodiesel to more pumps as the companies boost output of so-called flex-fuel vehicles. Half the vehicles made by GM(GM), Ford Motor(F) and DaimlerChrysler(DCX) could be able to run on biodiesel or E85, a blend of 85% ethanol and 15% gasoline, within 5 years, the CEOs said.
- Drugs are just as good as the medical devices called stents in helping patients with heart disease live longer and avoid heart attacks, a study found.

Barron’s:
- Shares of Telanetix Inc.(TNXI) rose as much as 44% after analyst Joe Noel of Dutton Assoc. said in Barron’s that the Internet-based video-conferencing company could become a takeover target.

BOTTOM LINE: The Portfolio finished higher today on gains in my Medical longs, Computer longs, Internet longs and Semi longs. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was modestly negative today as the advance/decline line finished slightly lower, sector performance was mixed and volume was above average. Measures of investor anxiety were slightly above-average into the close. Today's overall market action was bullish as the major averages and breadth recouped much of this morning's weakness. Considering there was little in the way of an upside catalyst, today's rebound was even more impressive. As well, the 10-year yield only finished 1 basis point lower despite today's new home sales report. It is interesting to note that corn trades very weak technically, falling another 3% today despite all the talk over the potential for a shortage related to increasing ethanol production. I suspect corn has at the very least made a meaningful intermediate-term top. Oil is about .67 higher today, which isn't too bad considering the Iranian situation has yet to improve. Internet stocks were today's best performing group, rising over 2%. I suspect Google (GOOG) is about to bust back above its 50-day moving average. Google is still my largest long position, however Apple (AAPL) is a close second due to recent appreciation. I expect tomorrow's consumer confidence report to come in below estimates due to the huge spike in anxiety surrounding the early March stock decline. Recent market gains will affect the April reading in a positive way. This will likely lead to some more early morning market weakness tomorrow.

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