Stocks Surging into Final Hour on Lower Energy Prices, Less Pessimism, Rate Cut Speculation

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Computer longs, Medical longs, Semi longs and Retail longs. I have not traded today, thus leaving the Portfolio 100% net long. The overall tone of the market is positive today as the advance/decline line is slightly higher, most sectors are rising and volume is below average. My intraday gauge of investor angst is still above average. Lowe's (LOW) reported better-than-expected second-quarter results but cut forward guidance. The fact that the stock is jumping 6.6%, the most in five years, despite the guidance cut may provide evidence of improved investor psychology that Jim Cramer. Road and rail shares are today's top performing group after Warren Buffett added 1.4 million shares to his position in Burlington Northern Santa Fe (BNI), which may also say something about his view on the economy. Financials and homebuilders are weaker but still aren't giving back much of last week's sharp gains from the lows. Bloomberg is reporting that Google's (GOOG) share of U.S. Internet searches rose to 55.2% in July vs. 46.2% a year earlier. Yahoo!'s (YHOO) share fell to 23.5% from 29.8%. I see no signs that Yahoo! will be able to reverse this trend of market-share loss to Google. I still view Google's stock as cheap relative to the market, and especially its competition. The company should grow at a relatively high rate for much longer than most investors expect. As well, multiple expansion is likely as investors reward those market-leading companies that can grow earnings at a relatively high rate even if global growth slows to more average rates from booming levels. Google remains my longest equity long position. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, less pessimism, rate cut speculation, lower energy prices, overseas gains and bargain hunting.