Stocks Higher into Final Hour, Led by Reversal in Financials and Strength in Tech

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Computer longs, Semi longs and Medical longs. I have not traded today, thus leaving the Portfolio 75% net long. The overall tone of the market is mildly negative today as the advance/decline line is slightly lower, most sectors are gaining and volume is about average. In tech today, Intel (INTC) boosted guidance on strong global demand, Philips (PHG) raised margin targets on cost-cutting, Advanced Micro Devices (AMD) rolled out Barcelona, and Apple (AAPL) sold its millionth iPhone. As well, IDC said the portable navigation device market will double this year. In the financial arena, the three-month libor rate is ticking down 2 basis points, the first decline in three weeks. Jefferies upgraded Thornburg (TMA) to hold and billionaire currency trader Joseph Lewis took a 7% stake in Bear Stearns (BSC). Goldman Sachs(GS), a source of angst during the August pullback, is breaking higher from its recent trading range. Finally, the Fed's Lockhart said the jobs data are very important and concerns over a dollar selloff are way overdone. The 10-year yield is falling another 5 basis points, which I still view as more a function of the end of the inflation trade rather than a sign of an impending recession. The IMF actually boosted its forecast for global growth this year to 5.3% from 5.2%. Most investors I know believe that a U.S. recession is unavoidable. Those who don't buy the recession argument, however, believe that as soon as the Fed cuts, it's back to trend or above-trend growth. I, on the other hand, suspect we are in for a period of modestly below-trend growth over the intermediate term regardless of what the Fed does. I still think an imminent recession is highly unlikely. I expect US stocks to trade mixed-to-higher into the close from current levels on more Fed rate cut speculation, short-covering and bargain-hunting.