Monday, May 23, 2005

Stocks Finish Higher as Inflation Fears Diminish

S&P 500 1,193.86 +.39%
DJIA 10,523.56 +.49%
NASDAQ 2,056.65 +.50%
Russell 2000 612.87 +.57%
DJ Wilshire 5000 11,777.06 +.42%
S&P Barra Growth 577.95 +.45%
S&P Barra Value 611.40 +.32%
Morgan Stanley Consumer 590.55 -.06%
Morgan Stanley Cyclical 719.49 -.11%
Morgan Stanley Technology 478.92 +.60%
Transports 3,626.51 +.15%
Utilities 363.23 -.45%
Put/Call .81 -18.18%
NYSE Arms .81 -29.71%
Volatility(VIX) 12.95 -1.45%
ISE Sentiment 172.00 +20.28%
US Dollar 86.36 -.31%
CRB 296.47 +1.09%

Futures Spot Prices
Crude Oil 49.15 +1.03%
Unleaded Gasoline 140.05 -1.31%
Natural Gas 6.42 +1.29%
Heating Oil 136.65 -.06%
Gold 416.90 unch.
Base Metals 120.29 +.59%
Copper 138.75 -.07%
10-year US Treasury Yield 4.05% -1.63%

Leading Sectors
Disk Drives +2.23%
Energy +1.55%
Homebuilders +1.47%

Lagging Sectors
Banks -.15%
Semis -.32%
Airlines -.78%

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
None of note

Afternoon/Evening Headlines
- Eastman Kodak hired Intel’s Sandra Morris to run its online photographic business as the company prepares for President Antonio Perez to take over next week by adding more managers with digital experience.
- Genentech said that almost 95% of patients treated with its experimental Lucentis drug maintained or improved their vision in a study.
- JDS Uniphase agreed to buy Acterna for $760 million in cash and stock to bolster its sales of testing and management products for communications providers.
- Shares of Maytag rose for a second day above the $14-a-share price that buyout firms led by Ripplewood Holdings LLC agreed to pay for the company, suggesting investors expect a higher bid.
- US Treasury notes surged, pushing 10-year note yields near 4% for the second time in a week, on speculation inflation will remain in check.

Wall Street Journal:
- Ray McGuire, Morgan Stanley’s co-head of mergers and acquisitions, is leaving the world’s biggest securities firm by market value to join Citigroup.
- Boeing will announce the official approval tomorrow to begin production of a freighter version of its 777-200LR jetliner.

- US officials arrested a Pennsylvania man for allegedly trying to build a bomb to sell to an affiliate of the al-Qaeda terrorist network.
- US first lady Laura Bush said Egyptian President Hosni Mubarak’s plan to hold free competitive elections is a “bold and wise” move toward democracy.

Financial Times:
- The US film industry may push for action against China at the WTO over sales of illegal DVDs.

BOTTOM LINE: The Portfolio finished substantially higher today on gains in my Internet, Computer, Wireless and Homebuilding longs. I did not trade in the afternoon, thus leaving the Portfolio 100% net long. The tone of the market weakened modestly into the afternoon as the advance/decline finished slightly higher, most sectors rose and volume was below-average. Measures of investor anxiety were lower into the close. Overall, today’s market action was slightly positive considering recent gains and a bounce in energy prices. It appears as though investors are anticipating Fed comments this week suggesting a slowing in the pace of rate hikes. This may be a bit premature. However, I do expect these types of comments closer to the June meeting.

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