Monday, August 28, 2006

Stocks Finish Higher as Energy Prices Continue to Fall

Indices
S&P 1,301.78 +.52%
DJIA 11,352.01 +.60%
NASDAQ 2,160.70 +.95%
Russell 2000 706.65 +1.06%
Wilshire 5000 12,994.16 +.57%
S&P Barra Growth 603.78 +.55%
S&P Barra Value 696.04 +.48%
Morgan Stanley Consumer 636.74 +.81%
Morgan Stanley Cyclical 793.15 +.63%
Morgan Stanley Technology 500.27 +1.05%
Transports 4,293.38 +1.27%
Utilities 442.03 +.63%
Put/Call .98 +20.99%
NYSE Arms .95 -17.94%
Volatility(VIX) 12.18 -1.06%
ISE Sentiment 104.00 -31.13%
US Dollar 85.23 -.18%
CRB 329.69 -1.95%

Futures Spot Prices
Crude Oil 70.45 -2.84%
Unleaded Gasoline 177.75 -6.21%
Natural Gas 6.38 -10.86%
Heating Oil 196.30 -3.29%
Gold 621.70 -.35%
Base Metals 230.58 -1.24%
Copper 345.05 unch.
10-year US Treasury Yield 4.79% +.25%

Leading Sectors
Airlines +2.68%
Restaurants +1.50%
Homebuilders +1.44%

Lagging Sectors
Energy -1.54%
Gold & Silver -1.97%
Oil Service -2.85%

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
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
- None of note

Afternoon/Evening Headlines
Bloomberg:
- The euro climbed to a record against the yen on speculation the European Central Bank will raise interest rates at a faster pace than the Bank of Japan.
- US Steel(X), the biggest US-based steelmaker, was downgraded by Prudential Equity Group amid oversupply concerns.
- Gasoline futures plunged to a five-month low and natural gas dropped 10% after Tropical Storm Ernesto took a course that will keep it away from oil producing and refining regions of the Gulf of Mexico.

BOTTOM LINE: The Portfolio finished higher today on gains in my Retail longs, Internet longs, Biotech longs and Commodity shorts. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was positive today as the advance/decline line finished higher, almost every sector rose and volume was light. Measures of investor anxiety were mixed into the close. Overall, today's market performance was bullish. Although volume was light, I view that as a positive considering the fact that most are underexposed to U.S. stocks. We are very close to the point in which significant performance anxiety will set in on many market bears and weak bulls. The S&P 500 is only 2.8% off its highs. This is the best performance of any index in the world that I follow since the global correction began. Even so, the mania for international stocks continues while demand for U.S. stocks languishes. I expect this trend to reverse as commodity prices continue to weaken, slowing the growth of many international economies.

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