DJIA Closes at Another Record High, Boosted by Gains in Tech and Financial Shares

Indices
S&P 500 1,549.37 -.01%
DJIA 13,971.55 +.15%
NASDAQ 2,712.29 +.55%
Russell 2000 849.89 +.17%
Wilshire 5000 15,609.43 unch.
Russell 1000 Growth 617.90 +.11%
Russell 1000 Value 879.11 -.14%
Morgan Stanley Consumer 739.16 -.43%
Morgan Stanley Cyclical 1,126.52 +.13%
Morgan Stanley Technology 653.39 +.64%
Transports 5,397.89 +.36%
Utilities 507.01 -.08%
MSCI Emerging Markets 141.37 unch.

Sentiment/Internals
Total Put/Call .93 +12.05%
NYSE Arms .90 +26.82%
Volatility(VIX) 15.59 +2.90%
ISE Sentiment 169.0 -6.63%

Futures Spot Prices
Crude Oil 74.06 -.12%
Reformulated Gasoline 210.10 -1.19%
Natural Gas 6.34 -.56%
Heating Oil 204.0 -.76%
Gold 665.30 -.15%
Base Metals 258.84 255.39 -.73%
Copper 353.65 -.72%

Economy
10-year US Treasury Yield 5.06% +2 basis points
US Dollar 80.54 +.02%
CRB Index 318.59 -.64%

Leading Sectors
Semis +4.15%
Disk Drives +1.55%
Software +1.33%

Lagging Sectors
Alternative Energy -1.04%
Homebuilders -1.25%
Coal -2.47%

Evening Review
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In Play

Afternoon Recommendations
- None of note

Afternoon/Evening Headlines
Bloomberg:
- Intel Corp.(INTC), the world’s largest computer-chip maker, said second-quarter earnings rose 44% on its first sales increase in six periods. The stock fell 3.7% in after-hours trading.
- Senate Majority Leader Harry Reid said lawmakers won’t take up legislation this year that would increase taxes on managers of hedge funds, buyout firms and real-estate partnerships, but may consider it in 2008.
- Yahoo!(YHOO) said second-quarter profit fell 2.3% as Google Inc.(GOOG) extended its lead in Internet search queries and new rivals took sales in display advertising. The stock fell 3.5% in extended trading.
- 3Com(COMS) has been approached by Silver Lake and Bain Capital over the last couple of months as a potential acquisition candidate. The stock is rising 3.2% after-hours.
- Gasoline futures fell to their lowest level in almost three months before a US Energy Dept. report tomorrow that may show another increase in US inventories.
- Soybeans plunged to a two-week low in Chicago, heading for the biggest two-day drop in two years, as rains in the Midwest improved prospects for the US crop.

BOTTOM LINE: The Portfolio finished slightly higher today on gains in my Semi longs, Retail longs, Medical 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 mildly positive today as the advance/decline line finished slightly higher, sector performance was mixed and volume was above average. Measures of investor anxiety were above average into the close. Today's overall market action was mildly bullish. The major flaw in the bear case has been housing's overall impact on U.S. stocks. If it were not for housing's still substantial, but diminishing, drag on the U.S. economy, we would likely be facing multiple Fed rate hikes and rising prospects for a hard landing. Instead, U.S. growth is poised to rise around trend levels through year-end, after a weak first quarter, with diminishing inflation concerns and falling prospects for a hard landing. Tech and financial stocks were especially strong today. Numerous semi equipment stocks soared. This is a significant move as cyclical tech is gaining upside traction to join growth tech in substantial market outperformance. The MS Tech Index is now up 15.5% for the year and poised to move much higher over the intermediate term. Until now, the individual has almost completely shunned U.S. stocks. Today's TIC flow data showed a substantial increase in interest from foreign investors for U.S. stocks. As I have said many times before, keeping all investors, especially the US public, excessively pessimistic on U.S. stocks has been one of the bears' main weapons. I continue to believe that the “herd” will eventually turn more optimistic on U.S. stocks which will result in another substantial move higher in the major averages as rising demand and shrinking supply makes for a lethally bullish combination.