Tuesday, December 18, 2007

Stocks Finish Near Session Highs, Boosted By Small-Caps

S&P 500 1,454.98 +.63%
DJIA 13,232.47 +.50%
NASDAQ 2,596.03 +.84%
Russell 2000 754.06 +2.03%
Wilshire 5000 14,592.92 +.68%
Russell 1000 Growth 604.80 +.53%
Russell 1000 Value 789.42 +.64%
Morgan Stanley Consumer 741.22 +.42%
Morgan Stanley Cyclical 974.30 +.69%
Morgan Stanley Technology 612.33 +.69%
Transports 4,662.73 +.42%
Utilities 540.64 +1.41%
MSCI Emerging Markets 147.32 +1.14%

Total Put/Call 1.03 -7.21%
NYSE Arms .86 -13.31%
Volatility(VIX) 22.64 -7.67%
ISE Sentiment 121.0 +14.15%

Futures Spot Prices
Crude Oil $90.49 -.15%
Reformulated Gasoline 230.45 -1.32%
Natural Gas 7.16 +1.85%
Heating Oil 255.57 -1.62%
Gold 806.90 +.95%
Base Metals 206.10 -.23%
Copper 289.20 +.10%

10-year US Treasury Yield 4.12% -3 basis points
US Dollar 77.43 +.04%
CRB Index 347.05 -.27%

Leading Sectors
Alternative Energy +3.98%
Computer Services +1.54%
Biotech +1.31%

Lagging Sectors
Tobacco -.38%
Gaming -.79%
I-Banks 1.24%

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 (XRTX) Buy, target $20.
- Rated (ELX) Buy, target $22.

- Rated (POWI) Buy, target $37.
- Rated (FMCN) Buy, target $73.
- Rated (SNDA) Buy, target $45.

Afternoon/Evening Headlines
- TD Ameritrade(AMTD) sees December Quarter EPS $.39, well above prior estimates of .27-.33 and analysts’ estimates of .32. The stock is rising 5% in after-hours trading.
- Goldman Sachs Group(GS) said clients pulled about $3 billion from quantitative hedge funds including Global Alpha in the fiscal fourth quarter and withdrawals will increase over the next three months.

- Federal Reserve Bank of Dallas President Richard Fisher said that while the US economy appears to be slowing, the central bank shouldn’t “overreact” and must ensure inflation stays low. “The actions we’ve taken should provide some buoyancy through the course of next year to the economy,” he said.
- The perceived risk of US companies defaulting on their debt fell as the European Central Bank injected an unprecedented $500 billion into the banking system. The Markit CDX North America Investment Grade Index, a US benchmark for the cost of protecting debt from default, fell 1.75 basis points to 77 basis points. Credit-default swap prices decline as perceptions of credit quality improve. The cost to borrow in euros plunged after the central bank stepped in as part of a global effort to ease credit-market gridlock. The two-week euro interbank offered rate dropped a record 50 basis points to 4.45%, the European Banking Federation said.
- Welsh, Carson, Anderson & Stowe, the buyout firm that has invested $16 billion since its founding in 1979, plans to buy as much as $1 billion of bank loans and debt securities hurt by this year’s credit-market turmoil.
- Palm Inc., the maker of the Treo e-mail phone, forecast profit and sales that missed analysts’ estimates after customers defected to the BlackBerry and iPhone. The shares fell 8.4% in late trading.

BOTTOM LINE: The Portfolio finished higher today on gains in my Software longs, Biotech longs, Medical 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 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. The fact that the (XLF) finished +.02 today despite the meaningful decline in leader Goldman Sachs(GS) is a positive. As well, the Russell 2000 outperformed substantially, which may indicate diminishing recession fears. I suspect we will see a decent rally in the broad market from current levels into year-end. Nikkei futures are indicating an up 90 open in Japan.

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