Market Week in Review

S&P 500 756.55 +10.71%*

Click here for the Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices
S&P 500 756.55 +10.71%
DJIA 7,223.98 +9.0%
NASDAQ 1,431.50 +10.64%
Russell 2000 393.09 +11.98%
Wilshire 5000 7,616.92 +10.82%
Russell 1000 Growth 326.03 +8.92%
Russell 1000 Value 380.22 +12.94%
Morgan Stanley Consumer 468.56 +8.41%
Morgan Stanley Cyclical 332.74 +16.35%
Morgan Stanley Technology 342.20 +11.27%
Transports 2,419.89 +10.25%
Utilities 303.91 +2.36%
MSCI Emerging Markets 23.18 +9.88%

Sentiment/Internals
NYSE Cumulative A/D Line 9,843 +53.87%
Bloomberg New Highs-Lows Index -436 +77.89%
Bloomberg Crude Oil % Bulls 43.0 -14.0%
CFTC Oil Large Speculative Longs 197,055 -8.05%
Total Put/Call .72 -18.18%
OEX Put/Call .89 -21.93%
ISE Sentiment 168.0 +55.56%
NYSE Arms 1.07 +59.70%
Volatility(VIX) 42.36 -14.13%
G7 Currency Volatility (VXY) 16.83 -1.12%
Smart Money Flow Index 6,995.34 +3.93%
AAII % Bulls 27.64 +46.09%
AAII % Bears 54.47 -22.48%

Futures Spot Prices
Crude Oil 46.25 +.57%
Reformulated Gasoline 135.29 +1.26%
Natural Gas 3.93 +.36%
Heating Oil 119.72 -2.17%
Gold 930.10 -1.0%
Base Metals 112.76 +.55%
Copper 166.0 -1.39%
Agriculture 283.46 +2.17%

Economy
10-year US Treasury Yield 2.89% +2 basis points
10-year TIPS Spread 1.05% +20 basis points
TED Spread 1.13 +3 basis points
N. Amer. Investment Grade Credit Default Swap Index 242.63 -2.14%
Emerging Markets Credit Default Swap Index 784.05 -8.73%
Citi US Economic Surprise Index -20.70 +56.78%
Fed Fund Futures imply 92.0% chance of no change, 8.0% chance of 25 basis point cut on 3/18
Iraqi 2028 Govt Bonds 48.50 +5.76%
4-Wk MA of Jobless Claims 650,000 +1.0%
Average 30-year Mortgage Rate 5.03% -12 basis points
Weekly Mortgage Applications 723,400 +11.34%
Weekly Retail Sales -1.40%
Nationwide Gas $1.92/gallon -.02/gallon
US Heating Demand Next 7 Days 25.0% below normal
ECRI Weekly Leading Economic Index 104.90 -.29%
US Dollar Index 87.43 -1.22%
Baltic Dry Index 2,201 -1.08%
CRB Index 211.08 +.71%

Best Performing Style
Small-cap Value +12.99%

Worst Performing Style
Large-cap Growth +8.92%

Leading Sectors
Banks +37.43%
I-Banks +25.54%
Disk Drives +23.03%
Homebuilders +22.47%
REITs +21.27%

Lagging Sectors
Restaurants +6.47%
Defense +4.07%
Foods +3.31%
Utilities +2.36%
Gold +2.03%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Finish at Session Highs, Boosted by Healthcare, Medical, Airline, Gaming, Hospital and I-Banking Shares

Evening Review
Market Summary
Top 20 Biz Stories
Today’s Movers
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Futures
S&P 500 Gallery View
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Real-Time Stock Bid/Ask
After-hours Stock Quote
After-hours Stock Chart
In Play

Stocks Slightly Higher into Final Hour on Healthy Consolidation of Recent Gains

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Technology longs, Medical longs, Biotech longs and Retail longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is mildly positive as the advance/decline line is slightly higher, sector performance is mixed and volume is about average. Investor anxiety is about average. Today’s overall market action is bullish. The VIX is rising 3.4% and is very high at 42.31. The ISE Sentiment Index is slightly above average at 163.0 and the total put/call is below average at .70. Finally, the NYSE Arms has been running around average most of the day, hitting 2.17 at its intraday peak, and is currently .82. The Euro Financial Sector Credit Default Swap Index is falling .35% today to 192.0 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is falling .79% to 242.63 basis points. This index is still below its Dec. 5^th record high of 285.99. The TED spread is falling .03% to 112 basis points. The TED spread is now down 351 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is rising .74% to 68.50 basis points. The Libor-OIS spread is rising .48% to 107.0 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is rising 5 basis points to 1.05%, which is down 159 basis points since July 7th. The 10-year TIPS spread bottomed at .65% in October 1998 during the Asian financial crisis and at 1.24% in October 2001 during the technology bubble-bursting meltdown. The 3-month T-Bill is yielding .19%, which is down 1 basis point today. Considering the extent of recent gains, today’s modest move higher on average volume is very healthy. If we have seen a significant market low the averages should stay in an overbought state and tread water for a bit before another significant surge higher. Healthcare-related stocks are very strong again today on buyout speculation and less fundamental pessimism. This group should continue to outperform through year-end. The US sovereign debt credit default swap is dropping 9% today to 80.0, which is down 16% in five days. This is a large positive. I suspect that Fed Chairman Bernanke’s interview on 60 Minutes this Sunday may provide a modest upside catalyst for stocks on Monday. Nikkei futures indicate an +110 open in Japan and DAX futures indicate an +33 open in Germany on Monday. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, declining credit market angst, bargain-hunting, buyout optimism, better investor psychology, less extreme economic fear and diminishing financial sector pessimism.

Today's Headlines

Bloomberg:

- The cost to protect against defaults by insurers and banks fell as the biggest weekly gain in stocks since November eased concerns that losses at the companies will reach bondholders. Credit-default swaps on New York-based Citigroup Inc., which reached a record 640 basis points last week, fell 16 basis points today to 529 basis points, according to CMA DataVision. Contracts on Charlotte, North Carolina-based Bank of America Corp. declined 15 basis points to 288 basis points, according to CMA, and swaps on Wells Fargo & Co. of San Francisco fell 11 basis points to 213 basis points. Contracts on Warren Buffett’s Berkshire Hathaway Inc., the insurer that lost its AAA ranking yesterday from Fitch Ratings Inc., declined 23 basis points to 415 basis points, according to CMA.

- The euro may weaken as the region’s economy risks deteriorating, according to UBS AG, the world’s second-biggest currency trader. “The euro-zone economy is more exposed to the growth cycle due to its manufacturing dependency and the outlook is at risk of turning for the worse, as growth-seeking flows are in short supply,” Brian Kim, a currency strategist in Stamford, Connecticut wrote today. “Early-year buying into the euro zone is probably more at risk of unwinding and we maintain a negative outlook for the currency.”

- A record plunge in Chinese exports may be great news for the U.S. Treasury. It’s simple mathematics. The U.S. economy is more than four times the size of China’s. Growth in China is wildly lopsided toward exports, many of those goods packed on ships bound for America. So, if China wants to stay afloat, it should spend less money building roads, bridges and dams and more on U.S. debt. That would give the U.S. and its consumers the access to easy credit to reignite spending, much of it on Chinese-made goods. For better or worse, though, restoring global growth is more of a U.S.-centric exercise than many in Asia and Europe might like to admit. That inconvenient fact makes it pointless for China to suddenly dump its Treasuries. It’s just not an option for the world’s third-largest economy. China would cannibalize its outlook by curtailing its U.S. debt purchases. It may have more to gain from doing the opposite.

- SPDR Gold Trust(GLD), the biggest exchange-traded fund backed by bullion, expanded to a record, overtaking Switzerland’s central bank holdings as the world’s sixth-largest stockpile. The fund now holds 1,041.53 metric tons, equal to more than five months of global mine production, data on the company’s Web site show.

- Crude oil fell after the International Energy Agency and OPEC cut their global demand forecasts because of the recession in major consuming countries. The IEA, which advises 28 developed nations on energy policy, lowered its consumption forecast by 270,000 barrels a day to 84.4 million barrels a day, in a monthly report today. OPEC also reduced its 2009 oil demand outlook, saying the global economy was in a “dreadful situation.” The group curbed its estimate by 520,000 barrels to 84.6 million barrels a day.

- President Barack Obama’s $787 billion economic stimulus plan will generate revenue of more than $100 billion for technology companies, research firm IDC said. Investments in energy technology, such a “smart-grid” programs and renewable sources, will generate $77.6 billion in sales, according to the IDC report, which is set to be released next week. A plan to digitize health records will spur $20.4 billion in spending, while government technology outlays will contribute a further $2.5 billion, IDC said. The extra spending will bolster the U.S. technology industry, which will probably expand 0.1 percent this year, said Meredith Whalen, an analyst at Framingham, Massachusetts-based IDC. The stimulus bill will have a lasting effect on the economy because of the breadth of technology spending, she said.

- The Commodity Futures Trading Commission should have acted sooner to investigate trades done to profit at the expense of the U.S. Oil Fund, the world’s largest exchange-traded fund, Commissioner Bart Chilton said. The CFTC is investigating “multiple market participants,” including the U.S. Oil Fund, which is managed by Alameda, California-based U.S. Commodity Funds LLC. The review, part of the CFTC’s national oil market probe announced last year, is focused on an increase in the price difference between March and April futures contracts on the New York Mercantile Exchange on Feb. 6.

- Exxon Mobil Corp.’s(XOM) oil discovery off the coast of Brazil may hold enough crude to rival the nearby Tupi prospect as the Western Hemisphere’s largest find in three decades. Exxon Mobil’s Azulao-1 well tapped a reservoir that could contain 8 billion barrels of recoverable oil, said Luiz Lemos, a partner at TozziniFreire Advogados, a Brazilian law firm that represents foreign energy companies with projects in the South American nation. “This is very huge,” Lemos said yesterday in a telephone interview from Rio de Janeiro. His firm’s clients include Irving, Texas-based Exxon Mobil, Norway’s StatoilHydro ASA and Devon Energy Corp. of Oklahoma City.

- SanDisk Corp.(SNDK), the biggest maker of flash-memory cards for digital cameras, rose as much as 13 percent on renewed speculation that Samsung Electronics Co. or Toshiba Corp. may make a bid. One of those companies might be planning to make a new offer for SanDisk, the EE Times reported today.

Wall Street Journal:

- Hedge funds of all sizes and strategies are expressing strong interest in the government's plan to unclog consumer-lending pipelines. Now they and other investors need to decide Friday if they will participate in the first round of borrowing through the Term Asset-Backed Securities Loan Facility, or TALF. Some of the biggest hedge funds in the business have participated in calls and meetings with other hedge-fund managers, lawyers and regulators about the program. They include Harbinger Capital Management, Highbridge Capital Management, Elliott Management Corp., Paulson & Co., Perry Capital, Citadel Investment Group, Cerberus Capital Management and D.E. Shaw Group.

- It is simply wrong for commentators to continue to focus on President Barack Obama's high levels of popularity, and to conclude that these are indicative of high levels of public confidence in the work of his administration. Indeed, a detailed look at recent survey data shows that the opposite is most likely true. The American people are coming to express increasingly significant doubts about his initiatives, and most likely support a different agenda and different policies from those that the Obama administration has advanced. Polling data show that Mr. Obama's approval rating is dropping and is below where George W. Bush was in an analogous period in 2001. Rasmussen Reports data shows that Mr. Obama's net presidential approval rating -- which is calculated by subtracting the number who strongly disapprove from the number who strongly approve -- is just six, his lowest rating to date.

CNBC.com:
- The Obama administration’s hope-and-change show hasn’t played well on Wall Street, but in the last week investors may finally be getting some of what they want and that could bring a happier ending than anyone imagined. In its opening weeks the administration’s controversial cocktail of crisis management and social reform has made investors despondent, not hopeful, and change for the stock market has usually meant another price decline. “It’s turned into a malaise,” says veteran money manager Jim Awad, managing director of Zephyr Management. “Everything is going wrong. Nothing is going right.” That is, at least until Tuesday. There is now bipartisan Congressional support for reapplying the uptick rule for short sellers of stocks, which will presumably reduce negative momentum during market declines. More importantly, Congress is now pressuring regulators to adjust, if not totally suspend, the controversial mark-to-market accounting rule, which may help the market deal with the pricing of toxic assets now held on the books of big, troubled financial institutions like AIG and Citgroup(C). Some change seems inevitable in the near future.

- President Barack Obama's top economic adviser said Friday the nation's economic crisis has led to an "excess of fear" among Americans that must be broken to reverse the downturn. National Economic Council Director Lawrence Summers said consumer spending seems to have stabilized in an encouraging sign, but he also suggested it was still too early to predict the timing of an economic turnaround.

NY Times:

- The timing may be right for a hybrid car with a suggested retail price starting under $20,000 — the first in the American market in that price range. The American Honda Motor Company is taking a big risk on the potential appeal of a more mainstream hybrid. The automaker plans to introduce the 2010 Honda Insight on March 24, with sticker prices of $19,800 to $23,100 (plus destination charges).

MacRumors.com:

- News that Apple will be hosting a media event next week about iPhone 3.0 has generated a lot of speculation about what might be coming in the new release. BoyGeniusReport claims to have heard two possible features that would certainly make many iPhone users happy. They believe that iPhone 3.0 will introduce MMS (Multimedia Messaging Service) and Tethering. MMS would finally offer iPhone users the ability to send photos by way of SMS, and tethering would allow you to share your iPhone's internet connection with your laptop computer.

USAToday.com:

- The U.S. will soon send a large contingent of federal agents to its southern border to help stem the recent violence in northern Mexico, the nation's Homeland Security chief said Thursday. "Every American has a stake in this," Homeland Security Secretary Janet Napolitano said in a phone interview with USA TODAY. "Violence on the border easily seeps into our communities. It also creates a fear in border communities that the rule of law doesn't apply anymore, and that's just unacceptable." The new initiative will mobilize more border-enforcement teams, multiply the number of intelligence analysts working on the border, and step up searches of cars going into Mexico from the USA, Napolitano said.

Reuters:
- Competition in the online fashion industry is set to intensify as store groups, hit by sliding sales in the economic downturn, try to grab a slice of one of the few strongly growing retail markets. Better online payment and delivery systems, innovative Web sites that allow consumers to try on clothes virtually and even shop together, and the rising purchasing power of the first generation to grow up with the internet mean online fashion will continue to defy the recession, analysts say.

Bear Radar

Style Underperformer:
Large-cap Growth (-.32%)

Sector Underperformers:
Coal (-3.75%), REITs (-2.64%) and Banks (-2.63%)

Stocks Falling on Unusual Volume:
PHI, LUX, USMO, SYT, XTO, COP, QGEN, DDUP, CTXS and LUX

Stocks With Unusual Put Option Activity:
1) EK 2) JAVA 3) DDUP 4) ACI 5) S