Stocks Finished Mixed as DJIA Hits Another Record, Led by Technology Shares

Indices
S&P 500 1,480.42 -.03%
DJIA 12,953.94 +.27%
NASDAQ 2,524.54 +.03%
Russell 2000 826.36 -.14%
Wilshire 5000 14,927.78 -.05%
Russell 1000 Growth 584.84 +.12%
Russell 1000 Value 851.68 -.24%
Morgan Stanley Consumer 734.76 +.17%
Morgan Stanley Cyclical 997.76 unch.
Morgan Stanley Technology 587.29 +.89%
Transports 5,133.60 -.55%
Utilities 526.56 +.51%
MSCI Emerging Markets 122.65 -.04%

Sentiment/Internals
Total Put/Call 1.19 +30.77%
NYSE Arms .84 -25.91 -23.92%
Volatility(VIX) 13.12 +.61%
ISE Sentiment 145.0 +9.02%

Futures Spot Prices
Crude Oil 64.61 -1.94%
Reformulated Gasoline 221.14 +.94%
Natural Gas 7.58 +.29%
Heating Oil 184.69 -2.50%
Gold 688.0 -.89%
Base Metals 277.40 +2.04%
Copper 357.0 -2.07%

Economy
10-year US Treasury Yield 4.62% -2 basis points
US Dollar 81.50 -.29%
CRB Index 310.84 -1.15%

Leading Sectors
Semis +2.57%
Disk Drives +1.24%
Networking +1.19%

Lagging Sectors
Gold -1.40%
I-Banks -1.41%
Steel -1.54%

Evening Review
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Afternoon Recommendations
- None of note

Afternoon/Evening Headlines
Bloomberg:
- The DJIA hit another all-time high today, boosted by the tech sector, after Texas Instruments(TXN) boosted guidance and IBM(IBM) announced a stock buyback.
- New Century Financial(NEWC) won court permission to auction most of its loan-making division to help lure a buyer.
- Harold McGraw, CEO of McGraw Cos.(MHP), says US subprime mortgage market problems are overblown.
- Exxon Mobil(XOM) drilled more than seven miles to a subsea oil field at its $17 billion Sakhalin-1 project off Russia’s Pacific coast, the longest well ever bored.
- Oil fell $1.31/bbl. today as investment funds cut speculation on production disruptions related to the Nigerian election.
- Amazon.com, the world’s biggest online retailer, said profit doubled, exceeding analysts’ estimates, after the company increased sales of electronic and slowed spending on technology. The shares are surging 9% after-hours.
- CH Robinson Worldwide(CHRW), a logistics provider, reported first-quarter net income of $72.9 million, or .42/share. The stock is jumping 5.6% after-hours.
- Sun Microsystems(SUNW) posted a second straight quarterly profit after updating products and cutting jobs. Sales fell short of analysts’ estimates, sending the shares 5.5% lower after-hours.

BOTTOM LINE: The Portfolio finished slightly higher today on gains in my Computer longs, Semi longs and Commodity shorts. I didn’t trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was mildly negative today as the advance/decline line finished mildly lower, sector performance was mixed and volume was heavy. Measures of investor anxiety were above average into the close. Today's overall market action was slightly bullish. Considering today's news and recent gains, I would have expected to see mild losses in the averages. It is hard to generate much in the way of downside traction though with the Semis (+2.6%) breaking out of an eight-month trading range on volume. Moreover, the MS Tech Index(+.9%) is very close to breaking out of its recent trading range. The CRB Index, after a brief surge above its 200-day moving-average is now back below it and poised to take out the 50-day, notwithstanding recent U.S. Dollar weakness. Last week, I pointed out that the gap between crude oil large traders and commercials was the largest since the euphoric top in oil set last year at $78/bbl. even as pundits, analysts and traders continued to talk of $100/bbl. oil and $4/gallon gas. I even heard one analyst this week talking about $250/bbl. oil. However, the gap between the two grew even wider this week. Commercials, the smart money historically, have only been more short oil one other time in the last three years. As well, the Saudi Tadawul is down 17% in the last month and looks poised to test the low it set in January. The Tadawul has crashed 62.1% from its high set in February of last year. These are big red flags for oil bulls that are currently being ignored as almost everyone, including market bulls and bears, believes oil has to rise into the summer. Finally, bearish sentiment towards the U.S. Dollar is near levels normally associated with tradable bottoms, which could also provide a headwind for oil. I suspect we could see some early morning weakness tomorrow in stocks on a likely weaker-than-expected New Home Sales report. However, I continue to believe any pullbacks will remain relatively mild and short as too many investors are still leaning the wrong way or are underinvested.