Stocks Finish Higher on Fall in Energy Prices, More Economic Optimism and Buyout Speculation

Indices
S&P 500 1,518.11 +.16%
DJIA 13,521.34 +.10%
NASDAQ 2,572.06 +.58%
Russell 2000 837.53 +.92%
Wilshire 5000 15,286.36 +.28%
Russell 1000 Growth 597.80 +.33%
Russell 1000 Value 874.88 +.15%
Morgan Stanley Consumer 744.76 +.11%
Morgan Stanley Cyclical 1,062.67 +.23%
Morgan Stanley Technology 610.87 +.40%
Transports 5,206.63 +1.15%
Utilities 515.86 +.63%
MSCI Emerging Markets 125.38 -.13%

Sentiment/Internals
Total Put/Call .93 -8.82%
NYSE Arms 1.20 +46.53%
Volatility(VIX) 13.53 +1.42%
ISE Sentiment 128.0 +9.4%

Futures Spot Prices
Crude Oil 63.37 -2.81%
Reformulated Gasoline 230.50 -4.11%
Natural Gas 7.59 -.64%
Heating Oil 187.80 -3.15%
Gold 663.20 +.27%
Base Metals 263.80 +.99%
Copper 330.0 -.62%

Economy
10-year US Treasury Yield 4.88% +3 basis points
US Dollar 82.31 -.02%
CRB Index 307.47 -1.80%

Leading Sectors
REITs +3.54%
Networking +3.12%
Internet +2.14%

Lagging Sectors
Gold -.42%
Oil Service -.73%
Energy -.76%

Evening Review
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Economic Calendar
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PM Market Call
After-hours Movers
After-hours Stock Quote
In Play

Afternoon Recommendations
Bank of America:
- Rated (RNR) Buy.

Piper Jaffray:
- Rated (JMBA) Outperform.

Afternoon/Evening Headlines
Bloomberg:
- The private-equity boom will continue in the next few years as near-record-low borrowing costs keep buyouts affordable, KKR co-founder Henry Kravis said.
- Shares of Coldwater Creek(CWTR), the Idaho-based women’s clothing retailer, soared as much as 15% after-hours as first-quarter profit unexpectedly rose.
- Cotton futures declined 2.2% in NY on speculation the US may miss government export forecasts on cooling demand from China.
- Coffee had its biggest decline in six weeks, falling 2%, on expectations that favorable weather will aid crops in Brazil, the world’s largest producer.
- Corn fell 3% to a two-week low in Chicago and soybeans dropped 1.9% after rains boosted moisture levels in fields east of the Mississippi River, increasing yield potential for the two biggest US crops.
- Gasoline futures in NY plunged 4.4%, the most in seven months, on estimates that gasoline supplies rose for the fourth consecutive week, which curtailed investment fund speculation on the commodity.
- Robert Zoellick, the former US trade representative and an executive at Goldman Sachs Group(GS), will be nominated by President Bush to replace Paul Wolfowitz as head of the World Bank, a senior administration official said.
- Broadcom(BRCM) won a $19.6 million verdict after a California jury ruled rival Qualcomm(QCOM) intentionally infringed three patents for mobile-phone technology.
- Nationwide gasoline prices at the pump fell $.01/gallon, breaking a string of increases, to $3.21/gallon, a government report said.

BOTTOM LINE: The Portfolio finished higher today on gains in my Internet longs, I-Banking longs and Energy-related shorts. 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, sector performance was mostly positive and volume was below average. Measures of investor anxiety were about average into the close. Today's overall market action was mildly bullish. Small-caps and mid-caps outperformed throughout the day. The U.S. dollar recouped morning losses, finishing unchanged. The 10-year yield was up 3 basis points on the home price data and better-than-expected consumer confidence reading. Gasoline futures are near session lows, falling 4.4%. This is significant. It appears to me the gasoline crack spread is finally breaking down, as well. The iShares FTSE/Xinhua China 25 (FXI) finished off session lows, falling 1.2% on news of increased trading fees for investors in China. Google (GOOG) finished off session highs, rising $3.59, but it has broken out of its recent downtrend. I suspect another attack on $500 is imminent and I expect it to hold this time.