Wednesday, February 21, 2007

Stocks Finish Near Session Highs on Fed Commentary

Indices
S&P 500 1,457.63 -.14%
DJIA 12,738.41 -.38%
NASDAQ 2,518.42 +.21%
Russell 2000 827.33 +.15%
Wilshire 5000 14,723.0 -.08%
Russell 1000 Growth 576.67 -.05%
Russell 1000 Value 840.18 -.19%
Morgan Stanley Consumer 715.59 -.48%
Morgan Stanley Cyclical 971.68 +.03%
Morgan Stanley Technology 586.79 -.23%
Transports 5,178.37 +.63%
Utilities 474.89 -.50%
MSCI Emerging Markets 118.05 +.07%

Sentiment/Internals
Total Put/Call 1.13 +18.95%
NYSE Arms .92 -11.97%
Volatility(VIX) 10.20 -.39%
ISE Sentiment 124.0 -2.36%

Futures Spot Prices
Crude Oil 60.15 +2.21%
Reformulated Gasoline 170.30 +3.27%
Natural Gas 7.62 +.46%
Heating Oil 168.34 +2.33%
Gold 682.10 +3.19%
Base Metals 227.37 -1.23%
Copper 266.60 +2.54%

Economy
10-year US Treasury Yield 4.69% +1 basis point
US Dollar 84.22 +.05%
CRB Index 308.36 +1.61%

Leading Sectors
Steel +2.37%
Oil Service +1.88%
Alternative Energy +1.19%

Lagging Sectors
Retail -.39%
Utilities -.50%
Drugs -.54%

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
JPMorgan:
- Rated (ZION) Overweight. (ZION) top pick.
- Rated (MI) and (TCB) Underweight.

Afternoon/Evening Headlines
Bloomberg:
- Whole Foods Market(WFMI) said first quarter profit fell for the first time in five quarters and announced it agreed to buy rival Wild Oats(OATS) for $565 million in cash. The stock surged 5% after-hours.
- Analog Devices(ADI), a semiconductor maker used in products from mobile phones to cars, said first quarter profit increased 27% boosted by a royalty payment for use of its technology. The stock jumped 5.4% after-hours.
- The Fed’s Poole said inflation is likely to tilt down this year.

AP:
- US Senator Hillary Clinton’s unfavorable rating among New York voters has climbed 33% since her re-election victory in November, citing a statewide poll.

Australian:
- Australia will almost double its troops in Afghanistan, including commandos and more air support.

Sueddeutsche Zeitung:
- Expedia Inc.(EXPE), the world’s biggest online travel agency, aims to become the most profitable travel agency in the world

BOTTOM LINE: The Portfolio finished higher today on gains in my Biotech longs, Telecom longs and Computer longs. I added (TSCO) long and added to some existing shorts today, thus leaving the Portfolio 100% net long. The tone of the market was mixed today as the advance/decline line finished about even, sector performance was mixed and volume was above average. Measures of investor anxiety were mostly higher into the close. Today's overall market action was neutral as the major averages and breadth finished near session highs despite potential downside catalysts. The Fed's Yellen just said that "sub-prime housing delinquencies are small and they will have little impact on overall consumption." She also said Fed policy may now be well positioned to bring inflation down. The 10-year yield finished only 1 basis point higher, which helped buoy equities. My intraday gauge of investor angst was above average levels for the second day in a row. I expect stocks will build on this week’s gains by Friday.

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