Wednesday, December 08, 2004

Wednesday Close

S&P 500 1,182.81 +.49%
NASDAQ 2,126.11 +.54%

Leading Sectors
HMOs +2.51%
Biotech +1.86%
Disk Drives +1.73%

Lagging Sectors
Defense -.68%
Iron/Steel -1.01%
Semis -1.28%

Crude Oil 42.05 +.26%
Natural Gas 6.72 +.55%
Gold 441.00 +.52%
Base Metals 114.10 -3.29%
U.S. Dollar 81.87 +.78%
10-Yr. T-note Yield 4.12% -2.47%.
VIX 13.19 -3.51%
Put/Call .89 +21.92%
NYSE Arms 1.24 -18.42%

After-hours Movers
FNF +6.4% after announcing leveraged recapitalization plan and a special $10/share cash dividend.
XLNX -5.3% after lowering 3Q outlook.

Goldman Sachs reiterated Outperform on IR, USB and ECA.

After-hours News
U.S. stocks finished modestly higher today on optimism over a rebound in the US Dollar and falling interest rates. After the close, the California Public Employees' Retirement System is asking managers of companies and funds in which it's invested to disclose any investments they hold in Sudan, Bloomberg reported. TIAA-CREF, the largest U.S. retirement fund, said the staff of the SEC is conducting an informal inquiry into its arrangement with Ernst & Young, Bloomberg said. Gold in New York fell the most in seven months, and the prices of other metals declined, as a rebound in the dollar eroded the appeal of the commodities as an alternative to U.S. stocks and bonds, Bloomberg reported. Russia, one of Iraq's leading trading partners in the corrupt UN/Iraq Oil-for-food program, has refused to sign an agreement to cooperate with an investigation of it, Russian Deputy Ambassador Dolgov said.

BOTTOM LINE: The Portfolio finished unchanged today and I did not trade in the afternoon, thus leaving market exposure at 50% net long. The tone of the overall market improved from yesterday as the dollar rallied, interest rates plunged and commodity prices fell. Volume was lighter and the advance/decline line improved. However, most readings of investor complacency remain elevated. I continue to expect modest declines in the major indices in the near-term, setting the stage for a good year-end rally.

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