Stocks Finish Mixed on Healthy Below-Average Volume Consolidation

Indices
S&P 500 1,546.63 -.03%
DJIA 14,047.31 -.29%
NASDAQ 2,747.11 +.22%
Russell 2000 831.97 +.88%
Wilshire 5000 15,542.83 +.09%
Russell 1000 Growth 625.94 -.03%
Russell 1000 Value 863.69 +.08%
Morgan Stanley Consumer 751.55 +.16%
Morgan Stanley Cyclical 1,076.86 -.05%
Morgan Stanley Technology 676.42 -.09%
Transports 4,922.85 +.28%
Utilities 508.06 -.15%
MSCI Emerging Markets 154.84 +1.37%

Sentiment/Internals
Total Put/Call .98 +15.29%
NYSE Arms 1.07 +44.84%
Volatility(VIX) 18.49 +3.64%
ISE Sentiment 154.0 +14.07%

Futures Spot Prices
Crude Oil 80.26 +.02%
Reformulated Gasoline 198.62 +.25%
Natural Gas 7.40 +5.04%
Heating Oil 216.47 -.73%
Gold 738.0 -2.12%
Base Metals 250.35 +.55%
Copper 371.80 +.72%

Economy
10-year US Treasury Yield 4.52% -2 basis points
US Dollar 78.30 +.51%
CRB Index 328.62 -1.11%

Leading Sectors
Airlines +3.04%
Homebuilders +2.70%
Retail +1.98%

Lagging Sectors
Defense -1.02%
Energy -1.15%
Gold -3.60%

Evening Review
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Stock Quote
In Play

Afternoon Recommendations
CSFB:
- Rated (DVAX), (DYAX), (SVNT) and (PARD) Outperform.

Bank of America:
- Rated (WCC) Buy, target $55.
- Rated (MSM) Buy, target $55.
- Rated (TEL) Buy, target $42.

Morgan Stanley:
- Rated (AMD) Underweight, target $11.
- Rated (INTC) Underweight, target $22.
- Rated (NVDA) Underweight, target $32.

Piper Jaffray:
- Rated (WNS) Outperform, target $25.

Afternoon/Evening Headlines
Bloomberg:
- Investors should buy financial company bonds and leveraged loans to profit over the next three months as the worst credit-market rout in almost a decade recedes and yields fall, according to Bank of America Corp.(BAC).
- Gold fell the most since August after the dollar rebounded from the lowest ever against the euro, reducing the appeal of the precious metal as an alternative investment.
- Meritage Homes(MTH), M/I Homes(MHO)Ryland Group(RYL) led shares of homebuilders higher for a second day on speculation the industry slump deepened by the subprime mortgage crisis is overdone.
- Micro Technology(MU) reported a third straight quarterly loss after its manufacturing costs rose and an industry glut forced down prices. The stock fell 2.8% in extended trading.
- Google Inc.(GOOG) shares may surpass $600 for the first time as investors bet the world’s most popular Internet search engine will capture more sales from companies shifting advertising spending to the Web.
- General Motors(GM) and Honda Motor posted September US sales gains from new models, while declining demand for trucks dragged down Ford Motor(F) and Toyota Motor.

BOTTOM LINE: The Portfolio finished higher today on gains in my Computer longs and Medical longs. 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, most sectors rose and volume was slightly below average. Measures of investor anxiety were above average into the close. Today's overall market action was mildly bullish. The Russell 2000 outperformed, rising 0.88% for the day. While the Russell 2000 is still lagging the S&P 500 year-to-date, rising 6.8%, this is solely a function of small-cap value underperformance. The Russell 2000 Growth Index is now 12.7% higher year-to-date, while the Russell 2000 Value Index is 0.6% higher. All market-cap sizes of “growth” stocks have been substantially outperforming “value” stocks for over a year. This is mainly the result of what is going on in the U.S. housing market and more recently the global credit markets. In my opinion, the drag and many of the problems associated with U.S. housing are unlikely to end anytime soon -- even with further Fed rate cuts. The global economy will prevent the U.S. from heading into recession, but modestly-below-trend growth of 2% to 2.5% is likely over the intermediate term as a result. Moreover, inflation, and thus long-term interest rates, is likely to remain below trend as the excesses of housing and credit are worked off. Inflation and GDP mildly below trend provide the best macro backdrop for investing in true growth stocks and should continue to result in P/E-multiple expansion for the first time in many years, in my opinion. Inflows into growth-oriented funds have been basically nonexistent during this entire bull market. I expect that to change in a big way over the coming months, which should further boost the shares. Longer term, the global secular economic boom is likely to experience significant turbulence over the coming years, which should further boost growth stock outperformance. In summary, growth should continue to outperform value for the foreseeable future.