Stocks Surge, Finishing at Session Highs, on Falling Energy Prices and Less Economic Pessimism

Indices
S&P 500 1,485.01 +1.52%
DJIA 13,444.96 +1.48%
NASDAQ 2,666.36 +1.78%
Russell 2000 765.64 +1.81%
Wilshire 5000 14,904.91 +1.48%
Russell 1000 Growth 617.43 +1.47%
Russell 1000 Value 806.26 +1.44%
Morgan Stanley Consumer 752.17 +.60%
Morgan Stanley Cyclical 992.30 +1.54%
Morgan Stanley Technology 626.04 +2.27%
Transports 4,684.37 +1.41%
Utilities 550.13 +1.44%
MSCI Emerging Markets 157.56 +2.42%

Sentiment/Internals
Total Put/Call .87 -17.14%
NYSE Arms .72 -42.20%
Volatility(VIX) 22.53 -5.30%
ISE Sentiment 127.0 +16.51%

Futures Spot Prices
Crude Oil $87.35 -1.10%
Reformulated Gasoline 221.60 -1.59%
Natural Gas 7.19 +.55%
Heating Oil 248.64 -1.01%
Gold 801.30%
Base Metals 214.11 +.48%
Copper 304.0 +.66%

Economy
10-year US Treasury Yield 3.93% +4 basis points
US Dollar 76.48 +1.04%
CRB Index 339.51 -.17%

Leading Sectors
Disk Drives +3.77%
Software +3.43%
Homebuilders +3.33%

Lagging Sectors
Gold -.15%
Restaurants -.34%
Airlines -1.30%

Evening Review
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In Play

Afternoon Recommendations
Deutsche Bank:

- Rated (PMTC) Buy, target $24.
- Rated (ADSK) Buy, target $55.

Goldman Sachs:
- Buy (DNA) on weakness.

Afternoon/Evening Headlines
Bloomberg:
- US stocks rose the most in a week after signs of increased productivity and a closely watched private report on employment suggested the economy will avoid a recession.
- The US dollar may extend its gains against the euro, yen and pound as signs of resilience in the US labor market and manufacturing allayed concern the US economy will head into a recession.
- Duncan of MBA Calls Mortgage Applications ‘Positive’: Video.
- Crude oil fell $1.00/bbl., closing at a six-week low in NY, after an EIA report showed that US fuel stockpiles rose significantly and the US dollar surged.
- Gold fell $6.80/oz. as the dollar rose against the euro, reducing the appeal of the precious metal as an alternative investment.
- Gamestop(GME) will replace Dow Jones in the S&P 500, S&P said. BE Aerospace(BEAV) will replace Gamestop in the S&P Midcap 400.
- DSW Inc.(DSW), the Columbus, Ohio-based footwear retailer, rose 4.2% after posting third-quarter net income that beat analysts’ estimates and refined full-year sales and profit forecasts.
- Oracle(ORCL) rose the most in more than a year on the Nasdaq after a Lehman Brothers analyst predicted that demand for the company’s products would remain “solid.”

Washingtonpost.com:
- Video recording on cellphones is set to reach high definition(HD) quality in a few years’ time, an executive at the world’s top cellphone maker Nokia(NOK) said.

BOTTOM LINE: The Portfolio finished higher today on gains in my Internet longs, Computer longs, Biotech longs, Medical longs and Semi 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, almost every sector rose and volume was above average. Measures of investor anxiety were slightly above average into the close. Today's overall market action was very bullish. Despite negative news on (MBI) and (DNA), the broad market was able to close at session highs, led by a late surge in financial shares. Market leading growth stocks were especially strong today. The DJIA is now 10.3% higher and the Nasdaq 11.2% higher year-to-date, notwithstanding all the recession and bear market talk that is a constant in the current “US negativity bubble.” Large-cap growth remains this year’s best-performing style, rising 12.7% for the year. While we will likely see some more near-term turbulence related to Friday's jobs report and next week's Fed meeting, I still think stocks have meaningful upside potential from current levels through year-end and over the intermediate-term. Tech stocks outperformed today, rising 2.3%, and I continue to expect these shares to remain market leaders going forward.