Thursday, December 22, 2005

Stocks Finish Near Session Highs as Natural Gas Plunges and Long-term Rates Fall

S&P 500 1,268.12 +.42%
DJIA 10,889.44 +.51%
NASDAQ 2,246.49 +.66%
Russell 2000 684.08 +.64%
DJ Wilshire 5000 12,681.68 +.46%
S&P Barra Growth 606.96 +.36%
S&P Barra Value 656.77 +.49%
Morgan Stanley Consumer 601.61 +.12%
Morgan Stanley Cyclical 790.85 +.43%
Morgan Stanley Technology 532.34 +.88%
Transports 4,250.61 +1.24%
Utilities 410.88 +.65%
Put/Call .75 +5.63%
NYSE Arms .83 -5.92%
Volatility(VIX) 10.29 -4.81%
ISE Sentiment 144.00 -29.41%
US Dollar 90.77 -.19%
CRB 326.76 +.07%

Futures Spot Prices
Crude Oil 58.22 -.10%
Unleaded Gasoline 154.06 +.27%
Natural Gas 12.82 -.79%
Heating Oil 174.00 unch.
Gold 506.50 +.30%
Base Metals 152.55 +.58%
Copper 202.55 unch.
10-year US Treasury Yield 4.43% -1.27%

Leading Sectors
Gold & Silver +2.15%
Biotech +1.84%
HMOs +1.46%

Lagging Sectors
Energy -.14%
Broadcasting -.23%
Oil Tankers -.23%

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 GE.

Afternoon/Evening Headlines
- Medicare drug plans have enrolled 21 million customers so far, with 1 million getting prescription coverage for the first time.
- Natural gas futures had their biggest drop in more than two and a half years because of mild weather forecasts and a smaller-than-expected decline in stored supplies.
- The European Union threatened to fine Microsoft as much as $2.4 million a day for failing to comply with a 2004 antitrust order.
- US Treasuries rose after the Fed’s preferred measure of inflation increased less than forecast, narrowing the gap between two- and 10-year note yields to the least since the start of January 2001.
- The US and leading contributors to the UN proposed a $900 million spending limit for the organization in 2006 while talks continue on ways to overhaul its scandal-plagued management.

Wall Street Journal:
- Tommy Hilfiger is in final negotiations to be sold to private equity firm Apax Partners for more than $1.5 billion.
BOTTOM LINE: The Portfolio finished substantially higher today on gains in my Medical longs, Software longs, Semi longs and Internet longs. I added to my PWR long and OMM short, thus leaving the Portfolio 100% net long. The tone of the market was positive today as the advance/decline line finished higher, most sectors rose and volume was below average. Measures of investor anxiety were mixed into the close. Overall, today's action was pretty good for the bulls as the major averages and breadth finished near session highs with almost every sector contributing and tech outperforming. The 10-year Treasury note yield closed near session lows of 4.42%, falling 6 basis points. Moreover, natural gas fell 10.5% today from session highs. I expect US stocks to build on gains tomorrow.

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