Stocks Slightly Higher into Final Hour on Falling Energy Prices, Less Eurozone Debt Angst, Fund Inflows, Buyout Speculation

Broad Market Tone:

• Advance/Decline Line: Slightly Higher
  
• Sector Performance: Mixed
  
• Volume: Below Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 18.48 +3.18%
  
• ISE Sentiment Index 152.0 +39.45%
  
• Total Put/Call .79 -5.95%
  
• NYSE Arms 1.07 +3.48%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 94.76 +.02%
  
• European Financial Sector CDS Index 98.25 -.41%
  
• Western Europe Sovereign Debt CDS Index 168.58 bps -.40%
  
• Emerging Market CDS Index 209.54 +.40%
  
• 2-Year Swap Spread 20.0 +1 bp
  
• TED Spread 23.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .08% unch.
  
• Yield Curve 268.0 -2 bps
  
• China Import Iron Ore Spot $167.40/Metric Tonne +.60%
  
• Citi US Economic Surprise Index +50.30 -3.9 points
  
• 10-Year TIPS Spread 2.46% +1 bp
  

Overseas Futures:

• Nikkei Futures: Indicating -78 open in Japan
• DAX Futures: Indicating +15 open in Germany

Portfolio:

• Slightly Higher: On gains in my Tech and Medical longs
  
• Disclosed Trades: None
  
• Market Exposure: 100% Net Long

BOTTOM LINE: Today's overall market action is slightly bullish as the S&P 500 consolidates recent gains on low volume, despite Mideast unrest, emerging market inflation worries, more hawkish Fed commentary and Japan concerns. On the positive side, Tobacco, HMO, Telecom, Networking, Oil Service and Alt Energy shares are especially strong, rising 1.0%+. (IYR) has traded well throughout the day again. The Transports are trading well for the 3rd consecutive day and are back near their highs for the year. Oil is falling -1.5%, gold is down -.6% and the UBS-Bloomberg Ag Spot Index is falling -1.58%. The Saudi sovereign cds is falling -1.23% to 123.69 bps, the Spain sovereign cds is falling -6.2% to 212.78 bps, the Italy sovereign cds is down -3.6% to 152.75 bps and the Belgium sovereign cds is declining -2.09% to 142.45 bps. On the negative side, Gaming, Oil Tanker and Coal shares are under meaningful pressure, falling more than 1.0%. Copper is falling -1.46%. US price for a gallon of gas is +.02/gallon today to $3.58/gallon. It is up .46/gallon in 41 days. The Portugal sovereign cds is rising +2.74% to 561.55 bps. The bears remain unable to gain any traction again this afternoon despite potential catalysts. Today's overall action appears to me to be a healthy consolidation of recent gains. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, lower energy prices, less eurozone debt angst and buyout speculation.