Wednesday, December 19, 2007

Stocks Finish Mostly Higher, Led Again by Small-Caps

S&P 500 1,453.00 -.14%
DJIA 13,207.27 -.19%
NASDAQ 2,601.01 +.19%
Russell 2000 756.13 +.27%
Wilshire 5000 14,583.24 -.07%
Russell 1000 Growth 604.86 +.01%
Russell 1000 Value 787.87 -.20%
Morgan Stanley Consumer 738.31 -.39%
Morgan Stanley Cyclical 973.32 -.10%
Morgan Stanley Technology 615.58 +.53%
Transports 4,584.10 -1.69%
Utilities 536.81 -.71%
MSCI Emerging Markets 148.33 +.73%

Total Put/Call 1.14 +10.68%
NYSE Arms 1.01 +24.30%
Volatility(VIX) 21.68 -4.24%
ISE Sentiment 110.0 -9.09%

Futures Spot Prices
Crude Oil $91.29 +1.35%
Reformulated Gasoline 233.40 +1.29%
Natural Gas 7.17 +.41%
Heating Oil 260.23 +1.84%
Gold 806.80 -.07%
Base Metals 208.28 +1.06%
Copper 295.60 +2.48%

10-year US Treasury Yield 4.03% -9 basis points
US Dollar 77.58 +.23%
CRB Index 350.19 +.90%

Leading Sectors
Airlines +1.61%
Alternative Energy +1.4%
REITs +1.37%

Lagging Sectors
Retail -1.33%
Oil Tankers -1.61%
Restaurants -2.55%

Evening Review
Market Summary
Today’s Movers
Market Performance Summary

WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
PM Market Call
After-hours Commentary
After-hours Movers

After-hours Stock Quote
In Play

Afternoon Recommendations
Bank of America:

- Rated (ULTI) Buy, target $40.
- Rated (CMI) Buy, target $140.
- Rated (TEX) Buy, target $80.

Afternoon/Evening Headlines
- Oracle Corp.(ORCL), the world’s largest maker of database software, reported second-quarter sales and profit that beat analysts’ estimates, bolstered by orders for new programs and revenue from customer-support contracts. The stock surged 4.2% in after-hours trading.
- Accenture(ACN) reported a 19% gain in first quarter sales and boosted full-year guidance. The stock rose 4.4% in extended trading.
- Nike Inc.(NKE), the world’s largest athletic shoe maker, said second-quarter profit rose on higher sales in China and Europe and a weaker dollar.
- Activision Inc.(ATVI) raised its forecast for fiscal third-quarter and full-year sales and profit because of better-than-expected holiday sales of video games.
- Google’s $3.1 billion purchase of DoubleClick Inc. will be cleared by US antitrust enforcers as early as this week.

- Bertelsmann AG, Europe’s largest media company, may try to buy News Corp.s(NWS/A) HarperCollins publishing unit for about $1 billion, German publication Manager Magazin said.
- The House approved a bill today that indexes the alternative minimum tax for inflation, preventing a tax increase of about $2,000 for some 23 million US households.
- US Energy Secretary Samuel Bodman plans to ask OPEC to boost production.
- General Motors(GM) may announce an agreement to sell a medium-duty truck unit to Navistar Intl. as soon as tomorrow.
- Nelson Peltz, the billionaire investor who pressured HJ Heinz to raise its stock price, acquired more than a 10% stake in Cheesecake Factory(CAKE).
- Wall Street is turning to Asia and the Middle East for $25 billion to prop up balance sheets battered by writedowns from the collapse of the subprime market.

Wall Street Journal:
- The average farmland price in Iowa has jumped 22% from last year due to rising biofuel demand, according to a new survey.

- Bankers foresee the rise next year of a new instrument in Europe – synthetic collateralized loan obligations (CLOs) – even as investors in the thick of the credit crisis are wary of complex, structured products.

BOTTOM LINE: The Portfolio finished higher today on gains in my Software longs, Biotech longs, Medical longs, Semi longs and Retail longs. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was mildly positive today as the advance/decline line finished slightly higher, most sectors rose and volume was about average. Measures of investor anxiety were above average into the close. Today's overall market action was bullish. The fact that Oracle(ORCL) posted such a strong quarter after the close today, given their exposure to the financial sector, is a big positive. Oracle also said that sales of new licenses, the best gauge of future growth, jumped 38% versus estimates in September of a 25% increase. Moreover, Accenture(ACN) said, after the close, that revenue from financial services rose 17% during the quarter, that they have “great momentum” at the start of the year and that no deals have been terminated due to the economy. Finally, Nike’s(NKE) results also illustrate the underlying strength of the global economy. Nike reported Q2 worldwide future orders of 13% versus an estimate of 7-9%. None of these reports indicate a US economy that is on the verge of sliding into recession. Given the extreme worries of late over the possibility of weak business spending on technology and how bearishly positioned many investors are right now, I would expect to see stocks rally on this news tomorrow. Nikkei futures are indicating a +220 open in Japan.

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