Wednesday, May 11, 2005

Stocks Close Near Session Highs on Falling Oil Prices and a Stronger US Dollar

S&P 500 1,171.11 +.42%
DJIA 10,300.25 +.19%
NASDAQ 1,971.55 +.45%
Russell 2000 595.57 +.09%
DJ Wilshire 5000 11,535.83 +.37%
S&P Barra Growth 566.27 +.53%
S&P Barra Value 600.45 +.31%
Morgan Stanley Consumer 581.70 +.50%
Morgan Stanley Cyclical 708.38 +.40%
Morgan Stanley Technology 448.11 +.71%
Transports 3,534.04 +1.01%
Utilities 366.68 +.39%
Put/Call 1.0 +17.65%
NYSE Arms .79 -62.45%
Volatility(VIX) 14.45 -3.09%
ISE Sentiment 152.00 +14.29%
US Dollar 84.89 +.52%
CRB 300.95 -.16%

Futures Spot Prices
Crude Oil 50.33 -3.34%
Unleaded Gasoline 147.30 -2.47%
Natural Gas 6.67 -.36%
Heating Oil 140.41 -3.14%
Gold 428.00 +.02%
Base Metals 123.30 -.91%
Copper 144.00 -.17%
10-year US Treasury Yield 4.19% -.09%

Leading Sectors
Disk Drives +2.42%
Networking +1.30%
Internet +1.11%

Lagging Sectors
Airlines -1.0%
HMOs -1.08%
Broadcasting -1.19%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on MO.
- Reiterated Underperform on RAI.

Afternoon/Evening Headlines
- US Defense Secretary Rumsfeld agreed to reverse most of the cuts made to Lockheed Martin’s C-130J transport program.
- A US Senate panel debating a plan to create a $140 billion trust fund to compensate asbestos-exposure victims adopted a provision to pay the sickest people during the trust’s startup period.
- The US government posted the largest April budget surplus in three years as taxpayers filed returns for 2004, when Americans benefited from the fastest economic growth in almost 6 years.
- Kuwait has drawn up formal charges against Saddam Hussein, eight aides and 293 lower-ranking officials for war crimes stemming from Iraq’s 1990 invasion.

BOTTOM LINE: The Portfolio finished substantially higher today on gains in my Internet, Wireless and Gaming longs and Entertainment shorts. I did not trade in the afternoon, thus leaving the Portfolio 100% net long. The tone of the market improved into the afternoon as the advance/decline finished near its session highs, most sectors rose and volume was average. Measures of investor anxiety were mostly lower into the close. Overall, today’s market action was modestly positive considering recent fears and the decline in energy prices. The US government reported the largest April budget surplus in three years this afternoon as Americans paid more taxes for 2004 due to the strongest economic growth since the bubble peaked in 1999. This is another positive for the US dollar. I expect stocks to build on today’s gains through week’s end.

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