Market Week in Review

S&P 500 1,400.38 +.43%*

Click here for the Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices
S&P 500 1,400.38 +.43%
DJIA 12,638.32 +.10%
NASDAQ 2,522.66 +2.36%
Russell 2000 748.28 +2.08%
Wilshire 5000 14,193.68 +.82%
Russell 1000 Growth 596.63 +1.63%
Russell 1000 Value 752.12 -.52%
Morgan Stanley Consumer 704.58 +1.41%
Morgan Stanley Cyclical 982.14 +.09%
Morgan Stanley Technology 617.63 +3.49%
Transports 5,437.54 +3.66%
Utilities 521.65 -.57%
MSCI Emerging Markets 151.44 -.10%

Sentiment/Internals
NYSE Cumulative A/D Line 59,198 -1.07%
Bloomberg New Highs-Lows Index -117
Bloomberg Crude Oil % Bulls 30.0 -37.5%
CFTC Oil Large Speculative Longs 215,999 -11.3%
Total Put/Call .84 -13.4%
OEX Put/Call 1.22 +93.65%
ISE Sentiment n/a
NYSE Arms 1.07 +5.94%
Volatility(VIX) 17.83 -1.22%
G7 Currency Volatility (VXY) 9.96 -4.96%
Smart Money Flow Index 8,798.33 +.70%
AAII % Bulls 31.36 -32.27%
AAII % Bears 45.76 +33.57%

Futures Spot Prices
Crude Oil 127.57 -2.29%
Reformulated Gasoline 335.48 +1.24%
Natural Gas 11.77 +.03%
Heating Oil 367.80 -7.20%
Gold 890.70 -3.41%
Base Metals 236.22 -3.18%
Copper 360.40 -2.67%
Agriculture 397.75 +.74%

Economy
10-year US Treasury Yield 4.05% +21 basis points
10-year TIPS Spread 2.52% unch.
TED Spread .80 unch.
N. Amer. Investment Grade Credit Default Swap Index 101.21 -6.68%
Emerging Markets Credit Default Swap Index 207.31 -4.79%
Citi US Economic Surprise Index -9.70 +47.3%
Fed Fund Futures 2.0% chance of 25 cut, 98.0% chance of no cut on 6/25
Iraqi 2028 Govt Bonds 74.50 +.53%
4-Wk MA of Jobless Claims 370,500 -.7%
Average 30-year Mortgage Rate 6.08% +10 basis points
Weekly Mortgage Applications 593,300 -4.55%
Weekly Retail Sales +1.8%
Nationwide Gas $3.96/gallon +.05/gallon.
US Cooling Demand Next 7 Days 21.0% above normal
ECRI Weekly Leading Economic Index 132.80 -.15%
US Dollar Index 72.88 +1.36%
Baltic Dry Index 11,347 -2.58%
CRB Index 422.17 -1.54%

Best Performing Style
Small-cap Growth +2.72%

Worst Performing Style
Large-cap Value -.51%

Leading Sectors
Road & Rail +4.84%
Computer Services +4.46%
Computer Hardware +4.0%
Gaming +2.91%
Internet +2.87%

Lagging Sectors
Tobacco -1.81%
Energy -2.21%
Banks -2.34%
Oil Tankers -2.63%
Gold -5.01%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Finish Higher, Boosting by Technology, Commodity, Construction, Defense and HMO 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 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 Real-Time Stock Bid/Ask
After-hours Stock Quote
After-hours Stock Chart
In Play

Stocks Higher into Final Hour on Less Economic Pessimism, Diminishing Credit Market Angst

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Medical longs, Gaming longs, Computer longs and Software longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is mildly bullish as the advance/decline line is slightly higher, most sectors are rising and volume is below average. Investor anxiety is around average. Today’s overall market action is mildly bullish. The VIX is falling 2.2% and remains above average at 17.75. The ISE Sentiment Index is n/a and the total put/call is slightly below average at .85. Finally, the NYSE Arms has been running about average most of the day and is currently .94. Tech stocks are relatively strong again today. The MS Tech Index is now flat for the year. I expect tech stocks to continue to outperform over the intermediate-term. This year’s best performing style, Mid-cap Growth, is rising another .9% today and is now .49% higher for the year. The Citigroup US Economic Surprise Index is rising to -11.0 today, up from -100 in March. As well, the EU Index and Japanese Index are still below the US at -26.70 and -26.50, respectively. The European Financial Sector Credit Default Swap Index is falling another 3.58 basis points today to 63.12 basis points, despite weakness in financial equities. This is down from 78.0 basis points just 4 days ago. As well, the North Amer. High-Yield CDS Index is falling 12.32 basis points to 551.97 basis points, which is down from a high of 786.65 basis points on March 18th. Despite the .6% gain in crude oil today, heating oil is falling another 1.0%. The CRB RIND Index, which is a measure of price movements of 22 sensitive basic commodities that are used in the initial stages of production, has declined 5% over the last two weeks and is close to testing its 200-day moving-average. Nikkei futures indicate a +102 open in Japan and DAX futures indicate a +24 open in Germany tomorrow. I expect US stocks to trade mixed into the close from current levels as less economic pessimism and diminishing credit market angst offset profit-taking and higher energy prices.

Today's Headlines

Bloomberg:
- Yields over benchmark rates on securities backed by credit card and auto loan payments narrowed this month in a sign that demand is returning for debt tied to consumer payments, according to Merrill Lynch(MER).
- Vietnam’s dong weakened, completing a fourth weekly loss, on speculation accelerating inflation and a widening trade deficit will increase the demand for US dollars. “Demand for US dollars is very high at the moment, particularly after the inflation and trade deficit reports,” said Bui Thi Kim Oanh, who manages a Vietnam equity fund.
- Global grain stockpiles will be 1.6 percent higher than previously forecast, led by gains in wheat production, the International Grains Council said.
- Canada’s economy unexpectedly shrank in the first quarter, the first drop in almost five years, dragged down by lower automobile exports, giving the Bank of Canada more reason to cut borrowing costs again next month.
- India’s economic growth held at the weakest pace since 2005 as the highest interest rates in six years discouraged consumer spending and investment.
- The US dollar was headed for a second straight monthly gain against the yen and euro as gains in stocks signaled traders are more optimistic the economy will improve.

NY Times:
- NY Governor Paterson Focuses on Gay, Lesbian Rights.

Washington Post:
- CIA Director Michael Hayden said the terrorist network al-Qaeda is essentially defeated in Iraq and Saudi Arabia and on the run in the rest of the world. Hayden said Osama bin Laden is losing the battle for hearts and minds in the Islamic world and has lost the ability to exploit the Iraq war to win new recruits. “The ability to kill and capture key members of al-Qaeda continues, and keeps them off balance – even in their best safe haven along the Afghanistan-Pakistan border,” Hayden said. Those comments are a marked positive change from a CIA assessment from two years ago.

USA Today:
- Hurricane high-risk areas have lost residents.

Reuters:
- Oil bubble could prove threat to pension funds. Pension funds and other investors who rushed into oil through commodity indexes this year chasing big returns as other assets classes tanked could face steep losses if prices fall from record highs. A sell-off in oil could spell big losses for the pension funds, municipal funds, college funds, unions and other groups that jumped out of equities-market plays and into the indexes, but have little experience or flexibility to deal with fundamental changes in commodities. “A lot of the accounts that have moved into commodities over the last 8-12 months clearly don’t belong in this forum,” said Peter Beutel, president of Cameron Hanover. “It means that when this market turns, these people are going to get hurt badly, and there will be tons of lawsuits because they have no understanding how quickly commodities markets can turn and leave them in the dust,” he explained. Analysts said that while speculators such as hedge funds, which can be long or short markets, are frequently blamed for driving up prices, it may actually be pension and college funds investing money for average citizens that are helping cause fuel and food riots around the globe.

Financial Times:
- On Wall St: Hedge funds take ‘plain vanilla’ approach. With the average hedge fund in the $2,500bn global industry posting negative returns so far this year, investors must start to question just what they are paying for when they hand over their hefty fees to managers.

Daily Telegraph:
- Asian countries begin to burst the oil bubble. One by one, countries across Asia and the Middle East are being forced to abandon price controls on fuel and energy, bring hundreds of millions of consumers face to face with the true market cost of oil. Egypt has raised prices 40%, Indonesia by 33%, Taiwan by 20% and Sri Lanka raised diesel/petrol prices by 25%. India may follow soon. “The situation is alarming. We need to stem the rot,” said India’s energy secretary. While China has so far resisted calls for price freedom, analysts predict a change in tack after the finish of the Beijing Olympics.
- Electric cars: The next big thing.

Dagens Industri:
- Scania AB and Ericsson AB are among Swedish companies meeting the Iraqi government in Stockholm today to discuss investments and business opportunities in the country. Iraq holds great potential, and the country used to be truckmaker Scania’s biggest export market in the early 1980s, citing a Scania spokesman.

Al-Rai:
- Iraq may resume crude oil exports to Jordan at discounted prices, citing Iraqi Vice President Tariq al-Hashemi. Supplies by truck were halted in 2003 after the US-led liberation of Iraq.

Bear Radar

Style Underperformer:

Small-cap Value -.54%

Sector Underperformers:

Airlinesirlind (-1.44%), Banks (-1.0%) and Papers (-.94%)

Stocks Falling on Unusual Volume:

JCG, DB, ARGN, OVTI, MDCI, SIGM, EDU and WY

Stocks With Unusual Put Option Activity:

1) LPX 2) MRVL 3) WYE 4) JCG 5) MHK