DJIA Surges to Another Record on More Economic Optimism

Indices
S&P 500 1,514.14 +.86%
DJIA 13,487.53 +.77%
NASDAQ 2,547.42 +.88%
Russell 2000 820.20 +.74%
Wilshire 5000 15,203.13 +.78%
Russell 1000 Growth 594.20 +.82%
Russell 1000 Value 873.53 +.83%
Morgan Stanley Consumer 743.88 +.82%
Morgan Stanley Cyclical 1,058.40 +.22%
Morgan Stanley Technology 607.93 +1.13%
Transports 5,215.25 +1.74%
Utilities 533.54 +.69%
MSCI Emerging Markets 126.12 +1.01%

Sentiment/Internals
Total Put/Call 1.02 +10.87%
NYSE Arms .66 -21.97%
Volatility(VIX) 13.50 -3.64%
ISE Sentiment 104.0 -14.75%

Futures Spot Prices
Crude Oil 62.50 -1.06%
Reformulated Gasoline 233.62 +1.50%
Natural Gas 7.95 +1.04%
Heating Oil 186.70 -1.23%
Gold 663.10 -1.69%
Base Metals 274.45 -.57%
Copper 342.50 -3.18%

Economy
10-year US Treasury Yield 4.71% +1 basis point
US Dollar 82.20 +.54%
CRB Index 310.12 -.12%

Leading Sectors
Airlines +2.40%
Homebuilders +1.50%
Internet +1.43%

Lagging Sectors
Coal -1.01%
REITs -1.03%
Gold -1.11%

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
Bank of America:
- Rated (VCLK) Buy, target $35.

Afternoon/Evening Headlines
Bloomberg:
- Democratic presidential candidate John Edwards held more than $1 million in funds run by his former employer, NY-based Fortress Investment Group LLC, last year, according to a regulatory filing. Edwards also earned a salary of $479,512 as a senior adviser to the firm. The former US senator, who has criticized the practices of subprime mortgage lenders as predatory, said he didn’t realize that Fortress has extensive holdings in subprime portfolios.
- Copper in NY tumbled 3.3%, the most in three months, on speculation that demand may slow in China, the world’s largest consumer of the metal.
- NYSE Euronext(NYX) may buy a US futures market to compete better with rivals, two Wall Street analyst said today.
- Hewlett-Packard(HPQ), the world’s biggest personal-computer maker, said second-quarter profit fell 6.5% from a year earlier. The company forecast sales of more than $100 billion this year, a first for a technology company. The shares are .35 higher in after-hours trading.
- GM(GM) may sell its medium-duty truck business as it focuses on making a profit from building cars and light trucks.
- US Treasury bills surged, pushing the three-month security’s yield to a one-year low, amid expectations for reduced sales. Growth in US tax revenue has exceeded forecasts, reducing the Treasury’s need to borrow.
- The Senate rejected a proposal to withdraw troops from Iraq next year in a symbolic vote intended to gauge support for restriction on war funding before negotiations on the issue begins with the House. The Senate voted 67-29 against the amendment offered by Wisconsin Democrat Russell Feingold that would have required President Bush to begin a troop withdrawal within 120 days and cut off funding for operations after March 31, 2008.

Wall Street Journal:
- DaimlerChrysler AG(DCX) CEO Zetsche said automobile industry consolidation will probably continue.

BOTTOM LINE: The Portfolio finished higher today on gains in my Internet longs, Biotech longs, I-Banking and Retail longs. I covered some more of my (EEM) short and the remainder of my (IWM)/(QQQQ) hedges 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, most sectors rose and volume was above average. Measures of investor anxiety were slightly above average into the close. Today's overall market action was bullish as the major averages finished near session highs. Given the way today's action started, I am very surprised by the sharp reversal and I am sure it resulted in more traders jumping off the bull train. Tech shares outperformed today. The MS Tech Index is already back near even with the S&P 500 for the year, rising 7%. I expect tech to substantially outperform in the second half of the year. My intraday gauge of investor angst is finished slightly above average levels, despite today's gains, which is a positive. I suspect we will build on today's strength tomorrow.