Stocks Finish Slightly Lower on Profit Taking and Higher Energy Prices

Indices
S&P 500 1,512.75 -.09%
DJIA 13,476.72 -.08%
NASDAQ 2,539.38 -.32%
Russell 2000 815.64 -.56%
Wilshire 5000 15,186.72 -.11%
Russell 1000 Growth 593.33 -.15%
Russell 1000 Value 873.28 -.03%
Morgan Stanley Consumer 741.16 -.37%
Morgan Stanley Cyclical 1,060.54 +.20%
Morgan Stanley Technology 604.22 -.61%
Transports 5,222.38 +.14%
Utilities 529.95 -.67%
MSCI Emerging Markets 125.88 -.20%

Sentiment/Internals
Total Put/Call .80 -21.57%
NYSE Arms .71 +6.96%
Volatility(VIX) 13.51 +.07%
ISE Sentiment 137.0 +31.73%

Futures Spot Prices
Crude Oil 65.01 +3.92%
Reformulated Gasoline 243.70 +4.28%
Natural Gas 8.08 +2.52%
Heating Oil 193.70 +3.75%
Gold 657.60 -.59%
Base Metals 266.57 -2.87%
Copper 330.05 -3.56%

Economy
10-year US Treasury Yield 4.75% +4 basis points
US Dollar 82.31 +.21%
CRB Index 313.15 +.98%

Leading Sectors
Oil Service +2.29%
Road & Rail +1.67%
Homebuilders +1.07%

Lagging Sectors
Semis -.71%
Biotech -1.16%
REITs -1.85%

Evening Review
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Afternoon Recommendations
Morgan Keegan:
- Rated (UNP), (NSC), (KSU) and (BNI) Outperform.

Bank of America:
- Rated (HWAY) Buy, target $50.

Afternoon/Evening Headlines
Bloomberg:
- US Treasury two-year note yields climbed to the highest since February as evidence of a strengthening economy reduced speculation the Fed will cut rates.
- Nordstrom Inc.(JWN) said profit rose 19% on increased sales of women’s clothes and handbags. The company boosted its annual earnings forecast and the stock is rising $.79 to $53.95 in after-hours trading.
- Department stores JC Penney(JCP), Kohl’s(KSS) and Nordstrom(JWN) reported first-quarter profits that exceeded analysts’ estimates and raised their full-year earnings forecasts.
- Intuit Inc.(INTU) said third-quarter net income climbed 23% on increased sales of the company QuickBooks product for small businesses. The shares are surging 10% in after-hours trading.
- Marvell Tech(MRVL) lowered its 2Q revenue estimate to $645 million from $680.17 million. However, the stock is rising $.36 to $17.36 on the report.

Reuters:
- BP Plc(BP) will idle the fluid catalytic cracking unit at its refinery in Texas City, Texas, for “repairs." The “routine repairs” will take 11 days. The plant is capable of processing 460,000 barrels of oil a day.

BOTTOM LINE: The Portfolio finished slightly higher today on gains in my Computer longs and Retail longs. I did not 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 lower, sector performance was mixed and volume was above average. Measures of investor anxiety were around average into the close. Today's overall market action was mildly bearish. Considering recent gains and today's jump in oil and move higher in long rates, today's action wasn't too bad. I think it would take a move in the 10-year yield above 5% and a move above $70 per barrel to meaningfully impact equities in a negative fashion. I don't expect either. While breadth was negative today, I had an unusual number of stocks that I monitor moving higher on decent volume. Very few stocks fell on volume today. Gold fell another $3 per ounce on U.S. dollar strength and is very close to breaking it intermediate-term uptrend. Especially noteworthy today were gains in retailers, airlines and homebuilders, considering oil and Bernanke's housing comments. I suspect that, after a modestly weaker market open, we will finish the week on a positive note.