Wednesday, May 18, 2005

Stocks Finish Near Session Highs as Oil Falls to Session Lows

S&P 500 1,185.56 +1.0%
DJIA 10,464.45 +1.28%
NASDAQ 2,030.65 +1.32%
Russell 2000 607.88 +2.12%
DJ Wilshire 5000 11,684.88 +1.13%
S&P Barra Growth 573.82 +.94%
S&P Barra Value 607.27 +1.06%
Morgan Stanley Consumer 589.43 +.98%
Morgan Stanley Cyclical 720.30 +2.48%
Morgan Stanley Technology 472.06 +1.47%
Transports 3,605.24 +2.51%
Utilities 362.43 +.43%
Put/Call .80 -19.19%
NYSE Arms .75 +27.59%
Volatility(VIX) 13.63 -6.45%
ISE Sentiment 113.00 -14.39%
US Dollar 85.81 -.46%
CRB 294.85 +.26%

Futures Spot Prices
Crude Oil 47.10 -.32%
Unleaded Gasoline 141.20 -.17%
Natural Gas 6.39 -.08%
Heating Oil 135.66 -.12%
Gold 421.60 -.07%
Base Metals 120.09 +.39%
Copper 137.50 -.07%
10-year US Treasury Yield 4.08% -.65%

Leading Sectors
Steel +7.79%
Airlines +5.56%
Homebuilders +.3.46%

Lagging Sectors
Insurance -.19%
Energy -.20%
Oil Service -.66%

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 AMR, CAL and IBM.

Afternoon/Evening Headlines
- The US dollar fell against the euro and yen after a measure of inflation was unexpectedly unchanged last month, damping speculation the Fed may speed the pace of interest rate hikes.
- The Commerce Department today sided with petitions from US textile companies to impose caps on four categories of Chinese clothing imports, less than a week after announcing quotas on three other products.
- Google today released a product to find files and e-mails on business computers, an effort to get its software installed on personal computers inside companies and guide more users to its Web search engine.
- Morgan Stanley must pay billionaire investor Ron Perelman $850 million in punitive damages based on his claims that the firm defrauded him as part of the 1998 sale of his controlling stake in Coleman to Sunbeam.

San Diego Union-Tribune:
- Titan Corp. CFO Sopp canceled meetings with investors over the next two weeks, triggering speculation that the company has entered takeover talks.

BOTTOM LINE: The Portfolio finished substantially higher today on gains in my Homebuilding, Networking, Wireless and Internet longs. I took profits in a steel short and a few long QQQQs in the afternoon, thus leaving the Portfolio 100% net long. The tone of the market strengthened into the afternoon as the advance/decline line finished near session highs, almost every sector rose and volume was above-average. Measures of investor anxiety were mixed into the close. Overall, today’s market action was positive considering recent gains. Oil tanker rates have declined almost 28% in a month and are near January lows. Too many ships are competing for the same cargo. I continue to believe OPEC will CUT production during the second half of the year. This will further pressure rates and should result in forward earnings estimate cuts for the tanker stocks. I remain short various stocks in this group.

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