Wednesday, January 31, 2007

DJIA Makes Another All-Time High on More Economic Optimism, Lower Inflation, Positive Fed Comments

Indices
S&P 500 1,438.24 +.66%
DJIA 12,621.69 +.79%
NASDAQ 2,463.93 +.62%
Russell 2000 800.34 +.30%
Wilshire 5000 14,471.77 +.64%
Russell 1000 Growth 567.64 +.80%
Russell 1000 Value 826.90 +.57%
Morgan Stanley Consumer 708.95 +.49%
Morgan Stanley Cyclical 932.40 +1.17%
Morgan Stanley Technology 565.93 +.23%
Transports 4,916.82 +2.69%
Utilities 454.54 +.21%
Put/Call .79 -14.13%
NYSE Arms .82 -13.11%
Volatility(VIX) 10.42 -4.93%
ISE Sentiment 122.0 -26.06%
US Dollar 84.60 -.46%
CRB 301.22 +.98%

Futures Spot Prices
Crude Oil 57.90 +1.63%
Reformulated Gasoline 150.09 -1.34%
Natural Gas 7.67 -.90%
Heating Oil 167.35 +1.68%
Gold 658.20 +1.23%
Base Metals 225.99 -.34%
Copper 259.25 +1.21%
10-year US Treasury Yield 4.81% -1.30%

Leading Sectors
Homebuilders +2.87%
I-Banks +1.58%
Retail +1.38%

Lagging Sectors
Alternative Energy -.21%
Insurance -.33%
Networking -1.86%

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
Oppenheimer:
- Rated (PFCB) Buy, target $53.

Afternoon/Evening Headlines
Bloomberg:
- The DJIA, Russell 2000 and S&P 400 all made new all-time highs today.
- Bank of America(BAC) CEO Ken Lewis squelched speculation his company might buy Countrywide Financial Corp.(CFC), signaling that he wants to build the bank’s mortgage business without a takeover or joint venture.
- Dell Inc.(DELL) Chairman and founder Michael Dell replaced Kevin Rollins as CEO and said fourth-quarter results will miss analysts’ estimates. The stock is rising 4.5% in after-hours.
- Starbucks Corp.(SBUX) said first-quarter profit rose 18%, meeting analysts’ estimates, as consumers spent more for holiday drinks such as peppermint mocha. The stock is rising 2% after-hours.
- Treasuries rose the most in about a month after the Federal Reserve kept borrowing costs steady, saying price increases have moderated.
- Google(GOOG) said fourth-quarter profit more than doubled as the company expanded its lead over Yahoo!(YHOO) and sold more advertising outside the US. The stock is trading down 2.4% after-hours.
- Corn and soybean prices fell, reversing earlier gains, on speculation southern US farmers will plant less cotton and more corn and soybeans under a farm bill proposal.
- The US is in “better shape” for the summer driving season this year and for the demands of supplying and distributing gasoline additives, such as ethanol, Energy Secretary Samuel Bodman said.
- Gilead Sciences(GILD), the world’s second-biggest maker of HIV drugs, had a fourth-quarter loss on acquisition costs that outweighed record sales of its medicines. The stock is surging 5% in after-hours.
- Five suspicious devices found in various locations around Boston today weren’t dangerous, WCVB-TV Channel 5 Boston said, citing Mayor Thomas Menino.

BOTTOM LINE: The Portfolio finished higher today on gains in my Retail longs, Biotech longs, Telecom longs and Medical longs. 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 above average. Measures of investor anxiety were mostly lower into the close. Today's overall market action was bullish as the major averages and breadth are finished near session highs. The 10-year yield finished at session lows, reversing 8 basis points lower from session highs. The US dollar finished near session lows on the more-dovish-than-expected FOMC policy statement. This helped boost oil $1.17. Homebuilders outperformed substantially, rising another 3.04%. The (HGX) has now rocketed 30.5% from last year's lows. I continue to believe the many bears will do another argument switcheroo, in hopes of keeping the public excessively bearish over the coming months, from the “housing collapse” to a “return of inflation.”

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