Dow Jones 30: Industrials Index

[setravis]

Stocks Lose Steam, Close Nearly Flat.......


Into the close, Monday, 4/7/2008


Stocks in New York lost their strength late in the session Monday and finished little changed as investors grew jittery ahead of the kickoff of earnings season, even as word surfaced that another troubled financial name could soon get a cash injection.

After surging nearly 125 points earlier, the Dow Jones Industrial Average closed up just 3.01 points, or 0.02%, to 12,612.43 under pressure from Alcoa (AA:NYSE) , its worst-performing component. The aluminum maker lost 4% ahead of its post-close first-quarter report, an event that is generally regarded as marking the opening of the financial-reporting season, even though the big influx of reports doesn't begin in earnest till next week.

The S&P 500 finished up 2.14 points, or 0.16%, at 1372.54, and the Nasdaq Composite ticked down 6.15 points, or 0.26%, to 2364.83.

"What a waste of time!" said Art Hogan, chief market analyst with Jefferies. "We could have just not opened at all."

"I don't think this is any surprise," he added. "We've been up significantly in the past five trading days, and there are no negative or positive catalysts out there. The market did exactly what it was supposed to do."

Regarding the pullback from the Day's highs, Bruce Zaro, chief technical strategist with Delta Global Advisors, said it's possible investors temporarily surmised that the recent bounce had gone far enough. But, he noted, "I'm encouraged that this occurred early in the week, because it can still go higher over the next four days."

Pressuring tech shares was Cisco Systems (CSCO:NYSE) , which fell 1.9% after JPMorgan slashed the networker''s sales-growth estimate by 5 percentage points for fiscal 2009. Now, it's projecting a climb of just 10%.

On the blue-chip side, Arch Coal (ACI:NYSE) was a late-day drag after the company failed to boost its forecast for full-year profits. Shares lost 1.5%.

Fred Dickson, senior vice president and market strategist with D.A. Davidson, also believes that today's surge in oil may have caught up with investors toward the end of the day. "That's not a good sign," he said.

Indeed, as crude oil finished up $2.86 to $109.09 -- and gold futures added $13.60 to $926.80 -- the U.S. dollar slowed its gains, rising only marginally against the euro to $1.5704 while adding a fraction against the yen to 102.44. Still, the dollar index, which measures the greenback's value against a basket of major currencies, held its own to climb 0.2%.

In a somewhat positive sign for equities, Treasury prices lingered in the red even as they pared some of their losses late in the day. The 10-year note was off 22/32 in price to yield 3.55%, and the 30-year bond was down 25/32 in price, yielding 4.36%.

As for Alcoa, the company reported that its first-quarter earnings dropped by 54% to miss analyst estimates, though slipping revenue of $7.38 billion managed to beat consensus. Shares were lately up 1.4% in after-hours action after closing at $37.44.

Earlier in the regular session, the market was leaping amid reports that struggling bank Washington Mutual (WM:NYSE) is nearing a $5 billion cash injection deal with TPG and other investors, according to people familiar with the matter. The Wall Street Journal broke the story this morning. WaMu shares surged 29.3%.

"I think that's a big statement," said Hogan. "It's another example of somebody saying that the financials are getting overdone, that they're at bargain-basement prices."

M&A news otherwise dominated the corporate front. Novartis (NVS:) , for example, announced it's buying Nestle's 25% stake in Alcon (ACL:) for $11 billion. Novartis also has an option for another 52% stake in the eye-care company for $28 billion. Alcon shares rose 1.5%, while Novartis surrendered 4.1%.

Also, credit-card company Discover (DFS:NYSE) spiked 5.5% after agreeing to snap up Diners Club International from Citigroup (C:NYSE) for $165 million. Citi shares advanced 2.2%.

Yahoo! (YHOO:Nasdaq) fell 2.3%, however, after rebuffing Microsoft's (MSFT:Nasdaq) latest attempt to get the Internet-portal operator to sign a $31-a-share takeout deal. The software company told Yahoo! that it had three weeks to agree to be acquired, warning that it's otherwise prepared to launch a proxy fight to replace at least part of the board.

Yahoo! said it isn't opposed to getting bought out by Microsoft, but that its management and many of its investors still believe the current offer undervalues the company.

Staying in the tech sector, Apple (AAPL:) shares rose 1.8% after Thomas Weisel upgraded the computer and iPhone maker''s stock to overweight from market perform. Citigroup, meanwhile, upped chipmaking-materials maker KLA-Tencor (KLAC:NYSE) to buy from hold, pushing shares up 6.6%.

Among other actions, Applied Materials (AMAT:NYSE) shed 3.4% on a Credit Suisse downgrade to neutral from outperform. Women''s-apparel maker Ann Taylor (ANN:NYSE) and makeup company Estee Lauder (EL:NYSE) were cut to neutral ratings at Piper Jaffray and UBS, respectively. Shares slipped 6.5% and 2.6%.

Also, Motorola (MOT:NYSE) gained 1.8% amid news that the cell-phone maker will end its long battle with activist shareholder Carl Icahn.

Keith Meister, a managing director of Icahn investment funds, has been installed as a Motorola director, and the company has agreed to take input from Icahn regarding its plan to split itself in two. The sides have agreed to dismiss all pending litigation.

Both Meister and William Hambrecht, CEO of WR Hambrecht + Co., will be put on the company's 2008 proxy statement as nominees for election to Motorola's board. Icahn nominated Hambrecht for a seat earlier this year without company support.

On the economic docket, the Federal Reserve said that consumers carried a lower-than-expected $5.2 billion in debt in February. That compares with $10.3 billion in January -- which was revised sharply upward -- and a consensus estimate of $6 billion.

The major overseas markets were mostly higher. Tokyo's Nikkei 225 tacked on 1.2% overnight, and the Hang Seng in Hong Kong climbed 1.3%. In Europe, London's FTSE, Germany's Xetra Dax, and the Paris Cac were all up 0.9% or more.

[setravis]

The market indices moved sideways again Friday in an attempt to correct a near-term overbought situation; however, further correction is needed, and a shallow pull-back is still anticipated to take place this week.

The strong buying force underpinning the market indices, but also points to the need for a pause before any subsequent phase to the uptrend can recommence.
The critical question to be answered is whether the last two weeks of buying force were enough to cause the long and intermediate-term trends to find bottoms and build bases from which an investors' rally can set in for an extended period of time.

There is insufficient evidence to draw that conclusion at present, but a number of signs are encouraging. The long-term trend, which had been down since January 7, turned to flat last week, and the intermediate-term trend has moved up from an oversold bottom on March 28.

It is the near-term trend indicators which are in need of a downward correction. All four have been in an overbought state for the last four trading days. Historically, such circumstances last for up to not more than two weeks, rarely three weeks, before starting down again.
The week before last,
the near-term trend indicators climbed from oversold to overbought territory, while the DJIA was declining from about 12,600 to 12,200. All the while buying forces were accumulating, and last week the DJIA climbed back over 12,600, providing a good sign that a new near-term trend high had been reached. An important hallmark of the market having found a meaningful bottom is when measured trends' successive highs and lows are higher than their predecessors'. The reverse has been the case up until last week, thus properly characterizing the time period for the first three months of this year as an investors' downtrend, made up mainly of downtrending indices and long- and intermediate-term indicator declines.

Any meaningful turn in the longer-term market trends would expect to commence with upturns in the shorter term trends. The trade-term trend appears to be trying to cooperate by finding higher intraday highs and lows in both the indices and the indicators, although so far the trend is only slightly up. A good sign would be for the DJIA to rise above the 12,750 level intraday before any corrective pull-back sets in. There is likely to be a follow-on rally this morning as the trade-term trend indicators became oversold on Friday, and were headed north as the day ended. However, the same indicators may become overbought before the DJIA can reach 12,750, and clearly demonstrate that what might still be a bear market rally has turned in to a longer-turn uptrend.

Bear market rallies are notably abrupt and short-lived, and last Tuesday's 400-point rally proved no exception. However, the core of its momentum rested upon a vital market determinant: improved sentiment for financials' solvency issues, as indicated by the oversubscription of the Lehman offering. Furthermore, the day's rally contained the key elements of equity strength beyond the surge in financial shares: a heightened appetite among investors for risk with attendant price declines in US Treasuries, an 11% drop in the Vix, US dollar strength, and a fall-off in commodity prices.

By week's end, however, stock markets had digested increasingly worrisome economic news. Fed Chairman Bernanke, while still proffering an accommodative monetary policy, for the first time suggested the possibility of negative US growth, also citing financial markets still under stress. And on Friday the nonfarm payrolls numbers topped the 400K level for the first time since Katrina, at its worst level in five years with troublesome indications of broad-based job cuts throughout the economy. Nevertheless, the markets still managed a healthy rally on the week. Both the Nasdaq and S&P 500 posted weekly gains of over 4%, narrowing year-to-date losses to 10.6% on the Nasdaq and 6.7% on the S&P. The DJIA dropped 0.1% Friday on a 4.7% drop in General Motors shares specific to news that an investor group wanted to back out of its $2.55 billion equity investment in major supplier Delphi Corp. And yet the index still managed a 3.2% gain on the week, off 4.9% so far this year.

So, is the market poised for further recovery or a shimmer of fool's gold? This week's market tale is expected to rest upon the micro unwinding of corporate earnings' tales, well bracketed by two key companies reflecting polar earnings trends. Alcoa kicks off the earnings season today with analysts expecting a 36% earnings drop on poor auto industry and construction demand, higher energy costs and a weak US dollar. At week's end the earnings story rests upon results from General Electric, with analysts looking for 16% profit gains on offsetting improvements in global demand. But it must be noted that analysts have been notoriously and hugely mistaken in their estimates during the latest turndown, which showed fourth quarter profit declines of 25.1%, the worst showing since 1991. At the start of the year expectations called for a 4.7% gain in S&P first quarter results; currently estimates are for a 10.9% decline, fueled by a 58% profit drop among financials. Excluding banks, analysts are looking for 8.4% profit increases despite the adverse negative macro trends. For the year, analysts have been even more reluctant to cut projections, estimating a 15% gain in full year profits, believing last year's final quarter easy to beat and a turnaround in financials likely. Energy companies' gains should stand out, up 33%, with gains of 9% expected in consumer staples (which include such firms as Wal-Mart, Coca-Cola and Procter and Gamble); however, drops of 10% are projected at consumer discretionary companies (such as retailers and homebuilders). Profit warnings this week may provide more perspective on the analysts' accuracy and optimism.

In any case, market action for the week will find few top-tier market-moving economic reports. Remarks following next Thursday's ECB interest rate policy meeting, which is generally expected to result in no rate change, will nonetheless be of significance to any resumption of US dollar strength. Should ECB President Trichet emphasize growth, shifting from the need to control prices there, a dollar rally could ensue. Monday February consumer credit numbers are due with Fed speakers San Francisco President Yellen and Fed Vice Chairman Kohn taking the podium. On Tuesday, February pending homes sales and FOMC minutes are due for release. Wednesday includes posting of February wholesale inventories and weekly crude stockpiles with Fed Chairman Bernanke and Dallas Fed President Fisher speaking. Thursday looks to February trade balance, March same-store-sales, March's Treasury budget and weekly initial jobless claims with Fed Chairman Bernanke again speaking. Friday marks the release of March import and export prices and the University of Michigan's preliminary April consumer sentiment report with a speech from Dallas Fed President Fisher.

In the corporate corner, deal activity over the weekend provided upward impetus to today's futures, including reports that Nestle plans to sell its 77% stake in Alcon to Novartis for as much as $39 billion. Microsoft warned Yahoo in an open letter it has three weeks to accept its bid, threatening a proxy battle; Yahoo reportedly believes the offer undervalues the company. Private equity firm TPG plans a $5 billion cash injection in Washington Mutual, the largest US S&L. And talks between Delta Air Lines and Northwest have reportedly been revived. Metals and mining issues advanced overseas on a Goldman Sachs upgrade. UBS received a Merrill upgrade based on share valuation levels.

[setravis]

Tech Leads Market to Sunny Side of Street.......


Into the close, Thursday, 4/10/2008


Stocks in the U.S. finished on an upswing Thursday as relatively positive news out of the tech and retail space outweighed lackluster numbers on the economic front.

The Dow Jones Industrial Average was well off its top for the day, but still ended higher by 54.72 points, or 0.44%, to 12,581.98, and the S&P 500 added 6.06 points, or 0.45%, to 1360.55.

Turning in a more solid performance throughout was the Nasdaq Composite, which surged 29.58 points, or 1.27%, to close at 2351.70, thanks especially to Intel (INTC:NYSE) , which got an upgrade to buy from hold from Bank of America. Intel, up 3.1%, was also the Dow's best-performing component.

Breadth was positive. Around 3.64 billion shares changed hands on the New York Stock Exchange, and roughly 2.21 billion on the Nasdaq, as winners topped losers 3 to 2.

Still, remarked Paul Nolte, director of investments with Hinsdale Associates, "What we're seeing is nothing more than a rally. We've had three or four of these types of rallies, but really haven't broken any prior peaks. I still see it more as a continuation of the trading range we've been in for awhile."

Alan Gayle, senior investment strategist with RidgeWorth Capital Management, was surprised the market was able to work past some of the more negative developments, particularly out of Lehman Brothers (LEH:NYSE) . The investment bank said in its quarterly filing that broad-market turmoil had pulled down the value of some of its funds, and that it liquidated three funds worth roughly $1 billion.

"I was kind of surprised that the market was able to blow that off," said Gayle.

He also noted, however, that a guidance boost from Wal-Mart (WMT:NYSE) could at least be giving the impression that the economy isn't spiraling down uncontrollably. "Clearly consumer news is the most important thing right now, so anything suggesting that consumer retrenchment will be modest will be good news to this market."

"I think the [consumer-related] news is far from conclusive," he continued. "Nevertheless, incremental data is conclusive, and it looks like the market is in the mood to rise."

Along with Intel, BofA's positive note helped other chip stocks. Among those getting an upgrade to buy from hold were Analog Devices (ADI:NYSE) , Power Integrations (POWI:NYSE) and Semtech (SMTC:NYSE) . Shares were up 5.1%, 10.1%, and 5.3%, respectively.

In addition, PMC-Sierra (PMCS:NYSE) , LSI Logic (LSI:NYSE) and National Semiconductor (NSM:NYSE) were raised to neutral from sell. Shares tacked on 4.6% or more.

The Philadelphia Semiconductor Index shot up 1.8%.

Elsewhere on the corporate front, a number of retailers were shuttling in fresh numbers, among them Dow component Wal-Mart. The world's biggest retailer lifted its profit guidance for the fiscal first quarter even as it posted lower-than-expected same-store sales for March, and shares advanced 1%.

The rest of the nation's chains were also turning in monthly reports, many of which showed declines or slowdowns in spending. Still, much of the news came in better than expected, and retail shares were on the rise: the Dynamic Retail Intellidex and the S&P Retail Index jumped 1.7% and 1.8%, respectively.

Big-box retailer Costco (COST:) said March comps climbed an above-par 7% thanks in large part to rising gas prices, without which the figure would have risen just 3%. Favorable currency exchange rates also had a significant impact. Shares ended up 0.7%.

Kohl's (KSS:) and Gap (GPS:) , however, both reported double-digit decreases in same-store sales. Still, Kohl's numbers still weren't as bad as expected, and shares finished up 3.1%. Gap, whose results were well under consensus, gave back 2.2%.

Out of retail, DuPont (DD:NYSE) stock added 1.2% after the company predicted a first-quarter profit of $1.29 a share, up from its earlier view of $1.14 to $1.19, citing strong growth in its agricultural business and emerging markets.

Also, the battle between Microsoft (MSFT:) and Yahoo! (YHOO:) waged on as reports surfaced that the software giant is in talks to have News Corp. (NWS:) join its bid for Yahoo!.

Meanwhile, the Internet-portal operator is reportedly in merger negotiations with Time Warner's (TWX:) AOL subsidiary. The developments come just as Yahoo! confirmed that it has agreed to do a trial run of an advertising partnership with Google (GOOG:) .

Separately, American Airlines grounded another 900 flights, bringing the total number of cancellations this week to more than 2,400, as the airliner finishes inspections of wiring in its MD-80 fleet. According to reports, the groundings could continue to mount tomorrow, but the company is aiming to get back to normal within the next few days.

AMR (AMR:NYSE) , the parent company of American Airlines, climbed 7.6% in partial recovery from a sharp slide yesterday.

On the data side, the Labor Department said the number of people filing for unemployment benefits dropped to 357,000 last week -- 23,000 less than expected -- from the prior week's upwardly revised number of 410,000.

Ian Shepherdson, chief U.S. economist with High Frequency Economics, remarked, "We always assumed early Easter seasonals were largely to blame for the unexpectedly massive leap in claims last week. These new data strongly support that view."

Still, he noted that the trend continues to be poor. The eight-week moving average for claims has edged just above March 2001 levels, when the U.S. was at the start of the last recession.

"As far as we can tell, companies are increasingly taking the view that the slowdown will be longer, deeper and broader than they have been expecting, and layoffs are the only way to cut costs rapidly enough to support earnings growth," he said.

Also on the economic docket, the Census Bureau reported that the U.S. trade deficit in February, or the amount by which imports outweighed exports, jumped 5.6% from the prior month to $62.3 billion.

"The stubbornly large trade deficit heightens the risk of recession," said Peter Morici, a business professor with the University of Maryland and former chief economist at the International Trade Commission. "The deficit subtracts about $250 billion from [gross domestic product] , and that amount could double if the economy slips into a prolonged recession."

Still, commodities erased an early uptick as equities gained ground, with crude oil closing down 76 cents to $110.11 a barrel. Gold futures lost $5.70 to $931.80 an ounce. The U.S. dollar also reversed course, lately firming against the euro to $1.5731, while adding 0.1% against the yen to 101.82.

Further, Treasury prices took a dip. The 10-year note was off 13/32 in price to yield 3.53%, and the 30-year bond shed 10/32 in price, yielding 4.34%.

Markets abroad were mostly falling. In Asia, Hong Kong's Hang Seng Index tacked on 0.8% overnight, but the Nikkei 225 in Tokyo lost 1.3%. Among European bourses, London's FTSE 100, Germany's Xetra Dax, and the Paris Cac closed down 0.3% apiece.

[setravis]

Intel's Earnings Leave Wall Street Beaming.......


Into the close, Wednesday 4/16/2008


Stocks in New York rallied Wednesday as solid earnings from microprocessor maker Intel (INTC:) led the technology sector and the broad market higher.

The Dow Jones Industrial Average soared 256.8 points, or 2.08%, to 12,619.27, and the S&P 500 jumped 30.28 points, or 2.27%, to 1364.71. The Nasdaq Composite rocketed 64.07 points, or 2.8%, to 2350.11.

Kim Caughey, senior investment analyst with Fort Pitt Capital Group, said that investors are finding relief in the positive numbers as earnings season picks up the pace. "The end of the world hasn't happened," she said. "It's going to be a seasonally soft next couple of quarters, but it looks like we'll do okay."

Breadth was positive. Around 2.10 billion shares changed hands on the New York Stock Exchange, with advancers outrunning decliners by a 4-to-1 margin. Volume on the Nasdaq reached roughly 2.11 billion shares, as winners topped losers 7 to 3.

Tech shares got a special boost after chipmaking giant Intel exceeded analysts'' estimates in the first quarter, even as earnings came in lower than last year. Current-quarter sales guidance leaned to the higher end of consensus. Shares of the Dow component jumped 5.8%. The Philadelphia Semiconductor Sector Index sprang higher by 5.5%.

Fellow industrial Coca-Cola (KO:) said first-quarter earnings climbed 19% to a better-than-expected $1.5 billion, or 64 cents a share, on sales that swelled 21% from a year earlier. Shares ended up 21 cents at $61.15.

Caughey commented that the report was encouraging, since many investors had been worried that Coke wouldn't be able to pass on heightened inflationary pressures to the consumer. But, she said, that doesn't appear to have been an issue.

In the financial sector, JPMorgan Chase (JPM:) said its quarterly earnings dropped roughly by half to $2.37 billion, or 68 cents a share, but that bested analyst targets. The investment bank blamed its dwindling bottom line on a bigger loan-loss reserve and writedowns related to leveraged lending. Shares added 6.7%.

Similarly, Wells Fargo's (WFC:NYSE) profit was squeezed as the bank set aside more money to cover soured loans, but the decline was a relatively tame one -- 11% to $2 billion -- and that was good enough to handily surpass expectations. Shares were ahead by 4.3%.

Following the prior close Washington Mutual (WM:) said it swung to a steeper-than-expected loss of $1.14 billion, or $1.40 a share -- as it first predicted a week ago -- in large part due to a soaring loan-loss provision.

Further, the Bank's finance committee chair, Mary Pugh, stepped down under investor pressure at the company's annual meeting. WaMu also announced that it closed last week's $7 billion cash infusion. The stock finished up 2.3%.

After the closing bell, Dow member IBM (IBM:NYSE) said continuing-operations earnings vaulted 25.7% to $2.32 billion, or $1.65 a share, trouncing analyst estimates. The stock, which ran up 2.8% in heavy volume during the regular session, was adding another 3.3% to $124.46 in late trading.

But eBay (EBAY:NYSE) saw mixed after-hours action after user growth came in weaker than expected, even though earnings and revenue were both above par, rising more than 20% apiece from last year. Shares of the auction Web site operator were recently up 0.7% at $32.22 after the close.

On the data side, the Federal Reserve issued a downbeat but hardly surprising beige book, saying that nine of its 12 districts have suffered weakening economic conditions since the last report in March amid softening consumer spending and a worsening labor market. The remaining three districts -- Boston, Cleveland, and Richmond -- described general economic activity as "mixed or steady."

As for the housing sector, residential real estate and construction were "generally anemic" and commercial growth was slowing. Factory numbers were widely mixed among the districts, and commodities prices were rising across the board, which partially contributed to a mostly robust agricultural sector. The report also said tourism from foreign visitors was particularly strong, presumably due to the weakening dollar.

Elsewhere on the economic docket, Labor Department's March consumer price index matched projections with a 0.3% increase in the core rate, which excludes food and energy, was also in line with estimates, climbing 0.2%. The year-over-year changes similarly yielded no surprises.

Brian Bethune, chief financial economist with Global Insight, sees the report as a positive. He believes that because prices fell in such key products as apparel, passenger cars and consumer electronics -- and because the biggest upward drivers were energy-related -- the economy's troubles lie in energy rather than broad-based inflation.

"There's no evidence of generalized inflationary movements here," he said. "People unfortunately are confusing what is a serious problem in the energy sector, in terms of demand-and-supply balance, with inflation. They're missing the point."

Indeed, crude oil hit another new high for the second day straight -- $115.07 a barrel -- after the Energy Information Administration said crude stockpiles sank by 2.3 million barrels last week.

Bethune also noted that those ill effects are spilling into food thanks to ramped-up corn production for the ethanol industry, which has led to ballooning prices in corn and other grains. He added that, since it's not in the Fed's mandate to deal with that energy problem, and since Congress has done "too little" in the way of encouraging adoption of energy-efficient technologies, these energy-rooted troubles seem far from over.

Crude finished up $1.14 at $114.93, and gold futures jumped $16.30 to settle at $948.30 an ounce. The dollar earlier dropped to a record low against the euro, at $1.5977, and settled only somewhat higher than that. The greenback did, however, firm a bit against the yen. The dollar index, which measures the greenback against a basket of currencies, was off 0.8%.

Regardless, Treasury prices lost ground as investors swung their money into equities. The 10-year note slipped 18/32 in price to yield 3.67%, and the 30-year bond slid 21/32 in price, yielding 4.48%.

Separately, the Commerce Department said housing starts and building permits for last month were both weaker than expected, but Caughey finds the development heartening. "We have a lot of supply to work off, and something has to give," she said, "so it's good to know that more supply isn't going in."

Also, the Fed said industrial production climbed 0.3% in March, a bit better than the negative 0.1% consensus and up from a revised 0.7% downtick in February. Capacity utilization registered at 80.3%, flat with the prior month's revised number and a hair lower than consensus.

Back in earnings, Seagate (STX:) , a disk-drive maker, said first-quarter earnings jumped 62% and edged out analyst targets, though the company guided under the consensus for the second quarter. Shares lost 5.5%.

Railroad company CSX (CSX:) rose 3.7% after topping expectations and issuing bullish full-year guidance. The company said it was helped by the red-hot commodities market, among other things.

Markets abroad were mostly rising. The Hang Seng Index in Hong Kong lost 0.1% overnight, but Tokyo's Nikkei 225 added 1.2%. As for European bourses, the FTSE 100 in London surged 2.4% as Germany's Xetra Dax leapt 1.8%. The Paris Cac climbed 1.6%.

[setravis]

Stocks End Week on Jubilant Note.......


Into the close, Friday 4/18/2008


Wall Street finished higher Friday as a string of upbeat quarterly results convinced droves of investors to bulk up on U.S. equities.

The Dow Jones Industrial Average was off its peak for the day but still soared 228.87 points, or 1.81%, to 12,849.36. The S&P 500 jumped 24.77 points, or 1.81%, to 1390.33, and the Nasdaq Composite climbed 61.14 points, or 2.61%, to 2402.97.

Breadth was strongly positive to end the week. Roughly 2.09 billion shares changed hands on the New York Stock Exchange, with advancers crushing decliners by a 4-to-1 margin. Volume reached about 2.21 billion on the Nasdaq as winners beat losers 7 to 3.

James Park, managing director with Rodman & Renshaw, pointed to the powerful effect that these solid earnings -- and, more importantly, guidance -- have been imbuing on equity measures. "I think that's shaking out a lot of the shorts, and that there are a lot more fundamental buys going on," he said. "I think there are a lot of guys putting their cash to work."

Phillip Roth, chief technical market strategist with Miller Tabak, noted that the major averages are all closing in on their February highs, the top end of the trading range in which the market has been hemmed for most of this year.

"I don't think it's a big breakout," he added. "I think the market may futz around next week, but eventually it will go higher again. Because it looks like people have absorbed the bad news, fundamentally, and the market has also gone through resistance areas."

Given all that, Roth believes today's action should mark a step forward in a recovery that he says began in January.

Robert Pavlik, chief investment officer with Oaktree Asset Management, voiced similar predictions for next week's action. "If we see some selling early next week, that will not be all that unusual, especially after such a strong week like what we've had," he said.

The Dow and the S&P have both surged 4.3% since Monday, and the Nasdaq has catapulted by 4.9%, driven largely by rallies Wednesday and Friday.

With that, the Dow's losses for the year have now pared back to 3.1%, though the S&P is still registering a 5.3% loss since the beginning of January. The Nasdaq has sunk 9.4% so far in 2008.

As for longer-term trends, Pavlik believes that if the market can hold above the February resistance -- specifically, if the Dow and the S&P can break and stay above 12,900 and 1420, respectively -- "we'll have broken out above the long-term downtrends which were started back on October 9th."

One of the key drivers behind Friday's upward action was Google (GOOG:) , which said its first-quarter profit rose 31% from the prior year to $1.31 billion, or $4.12 a share, thumping analyst estimates on an adjusted basis. Revenue was also better than expected.

Google's stock, which has taken a pounding in recent months amid reports of declining paid-click numbers and an earnings miss last quarter, bolted past the $500 mark for the first time since February. Shares were up $89.87, or 20%, to $539.41.

Also bolstering buying sentiment was Dow component Citigroup (C:) . The banking behemoth missed the average analyst target with a loss of $5.1 billion, or $1.02 a share, as $6 billion in pretax writedowns and subprime credit costs ate into its bottom line.

Still, that was far better than the gargantuan writeoffs that some analysts were expecting, and shares bounced 4.5%.

Bulldozer maker Caterpillar (CAT:NYSE) , another member of the Dow, gained 8.5% after saying its its first-quarter earnings ramped up 13% to $922 million, or $1.45 a share, on better-than-expected revenue.

Honeywell (HON:NYSE) was also contributing to the rally, saying quarterly sales grew 11% year over year, prompting the aerospace-equipment company to raise its full-year forecast. Schlumberger (SLB:NYSE) , an oilfield-services firm, offered a bullish outlook in a conference call even as rising earnings fell short of consensus.

Honeywell rose 6.3%, and Schlumberger added 6.9%.

One of the Day's biggest price jumps, meanwhile, came from staffing firm Manpower (MAN:NYSE) , which achieved an easy earnings beat as favorable currency-exchange rates helped to push income higher by 27%. Shares were up 12%.

Xerox's (XRX:NYSE) adjusted profit, which excludes heavy one-off litigation costs, was in line with expectations. Shares ticked up 0.5%.

As for financial-space results, joining Citi in the green were online broker E*Trade (ETFC:NYSE) and regional bank Zions (ZION:NYSE) .

E*Trade lost $91.2 million in the first quarter, but shares ratcheted up 9.7% as it also cited a growing customer base and detailed the progress of its reorganization plan. Zions saw a big profit drop that was just off the consensus estimate, but the stock still moved up 6.4%.

Capital One (COF:NYSE) shares were under pressure, however, after saying its outlook had "significantly deteriorated due to weakness in U.S. economy," even though the credit-card company also edged ahead of analyst projections with a slipping profit of $1.47 a share. The stock was cut to negative ratings at both Piper Jaffray and Keefe Bruyette, and Friedman Billings shaved down its price target. Shares fell 3.1%.

Back in the tech space, Advanced Micro Devices (AMD:NYSE) shares also turned in a lackluster performance after the chipmaker posted a loss of $358 million, or 59 cents a share, even though that was in line with analysts'' subdued targets and sharply narrowed from a year earlier. Shares shed 1.3% at $6.11.

Fellow semiconductor concern SanDisk (SNDK:NYSE) missed on earnings but beat on revenue, and shares rose 5.8%.

Away from earnings, AT&T (T:NYSE) disclosed that it's firing 1.5% of its workforce, or about 4,650 employees, primarily from management positions. The company added that it will take a related charge of $374 million, and that the actual headcount should remain "stable" this year as it hires other employees in order to "support growth areas." Shares were down marginally at $37.51.

Crude oil had its fifth straight record-breaking day, hitting a new high of $116.93 before retreating to a gain of $1.83 at $115.62, a closing record.

Gold futures, however, slid $27.70 to $915.20 an ounce, spurring a selloff in the gold-mining sector. Agnico-Eagle Mines (AEM:NYSE) ,Barrick Gold (ABX:NYSE) , Goldcorp (GG:NYSE) , Newmont Mining (NEM:NYSE) and Kinross Gold (KGC:NYSE) were all losing between 1.7% and 4.8%.

At the same time, the U.S. dollar was healing some of its wounds. The greenback firmed by 0.5% against the euro to $1.5807 and was fetching 103.68 yen, a 1.2% climb from the prior settlement.

Markets abroad were mostly higher. The Hang Seng Index in Hong Kong lost 0.3% overnight, but the Nikkei 225 in Tokyo rose 0.6%. Among European exchanges, the FTSE 100 in London was up 1.3%, and Germany's Xetra Dax surged 2.4%. The Paris Cac tacked on 2.1%.

[setravis]

Stocks Greenbacked.......


Into the close, Thursday 4/24/2008


Stocks in New York finished higher Thursday as investors took heart in a recovering U.S. dollar, improving jobless numbers and relatively positive news out of the financial sector.

The Dow Jones Industrial Average took a brief morning dip, then shot higher by some 180 points before losing about half those gains. In the end, the index closed up 85.73 points, or 0.67%, at 12,848.95. The S&P 500 rose 8.89 points, or 0.64%, to 1388.82, and the Nasdaq Composite climbed 23.71 points, or 0.99%, to 2428.92.

The market started off on an upbeat note after the Labor Department reported that the number of people filing for unemployment benefits dropped by 33,000 people last week to a better-than-expected 342,000. The consensus called for an unchanged figure.

Peter Cardillo, chief market economist with Avalon Partners, believes the data had a part in boosting the U.S. dollar, which eventually translated into an equities rally as it helped cool down the recent surge in oil prices.

An analyst note from Brown Brothers Harriman said the dollar's main propellants today included a hint that the European Central Bank won't raise interest rates, which would have diminished the dollar's value. Marc Chandler, who also writes for RealMoney.com, sister site to TheStreet.com, noted the ECB has been warning of possible rate hikes for about a month.

Also helping the greenback, Chandler said, was the prospect that the Fed is about done with cutting U.S. rates. In an effort to stimulate the economy, the central bank has slashed the benchmark lending rate by 3 percentage points since September, and that has tended to weaken the dollar.

The greenback was rising 1.5% against the euro at $1.5682, and it firmed by 0.9% against the yen. The dollar index, which measures the currency against a basket of its major counterparts, climbed 1%. Simultaneously, crude oil was down $2.24 to $116.06 a barrel. Gold futures were sliding, as well, losing $19.60 to $889.40 an ounce.

"The weak dollar seemed to be hanging over the market along with oil prices, and with good reason," said Bill Stone, chief investment strategist with PNC Wealth Management. "Oil remains stubbornly high, but at least we got a break from it."

He pointed out that the market's surge comes even as futures are pricing in a 20% chance that next week's Fed meeting will yield no interest-rate easing at all. Just last week, he noted, futures were indicating a 100% chance of at least some change.

"I almost think the market would seem to be okay with no cut, that we'll be all right," he said. "We were in such a crisis mode, and a good number of people were looking for financial Armageddon. I don't think anyone's looking for that now."

Stocks' breadth was mixed Thursday despite the market's strong finish. Around 2.2 billion shares changed hands on the New York Stock Exchange, with advancers beating decliners by a 3-to-1 margin. But on the Nasdaq, which saw volume reach 2.32 billion shares, decliners edged out advancers.

On the corporate front, helping intensify buying pressure was Merrill Lynch's (MER:NYSE) announcement that the investment bank is keeping its dividend steady at 35 cents a share, bolstering the hope that financials have endured the worst of the credit crisis and are now primed for recovery. Merrill shares ended up 7.1%.

Also, insurers were rallying after Aflac (AFL:NYSE) and Travelers (TRV:NYSE) each beat Wall Street projections and lifted the bottom end of their respective full-year forecasts. Shares finished up 4% and 5%, respectively.

But Aetna (AET:NYSE) was shut out of the rally after reporting a sinking -- though in-line -- first-quarter profit. The insurer also reaffirmed its full-year guidance, which comes in a penny below consensus. Shares began higher but were recently off 1.9%.

Joining the strong insurance names, however, was Dow component American International Group (AIG:NYSE) , which climbed 7.1% to become one of the index's best-performing components.

The Dow also got support from General Motors (GM:NYSE) , which was lately up 5.6% after rival Ford (F:) posted a surprise first-quarter profit of $100 million. The carmaker said a robust showing in Europe and South America offset a loss in its North American segment, which itself was narrowed sharply from last year. Ford shares bounded up 11.7%.

Commodities names were losing ground in the wake of falling oil and gold futures. ConocoPhillips (COP:NYSE) reported crushing Wall Street targets with earnings of $4.1 billion, or $2.62 a share, thanks to advancing oil futures. But the stock was still losing 1.9%.

Rivals Exxon Mobil (XOM:NYSE) and Chevron (CVX:NYSE) gave up 1.7% and 2.2%, respectively.

Meanwhile, gold miners Goldcorp (GG:NYSE) , Barrick Gold (ABX:NYSE) and Kinross Gold (KGC:NYSE) sank between 3.9% and 7.5%.

Back among financial winners, Credit Suisse (CS:NYSE) gained ground, as well, despite posting its first shortfall in more than five years as it wrote off $5.14 billion in bad assets in the first quarter. That pales in comparison to writedowns at Swiss rival UBS (UBS:NYSE) , and Credit Suisse called its capital position "strong," suggesting it won't need to raise any cash, as UBS was forced to do this month. Credit Suisse shares rose 4.8%.

T. Rowe Price (TROW:NYSE) was also among the big financial winners, adding 11.8%, after the asset manager said first-quarter earnings grew by 6% to $151.5 million despite broader economic troubles. Per-share income missed expectations by a penny.

The NYSE Financial Sector Index surged 2.2%, and the KBW Bank Index rocketed 4.4%.

Further, tech titan Apple (AAPL:) recovered from early losses, gaining 3.7%, after the company saw its profit jump 36% to comfortably beat analyst estimates. Shares were down earlier as investors reacted to weak guidance for the current quarter.

Away from earnings, Arby's franchiser Triarc Cos. (TRY:NYSE) finally agreed to buy Wendy's (WEN:NYSE) for about $2.34 billion in stock, following months of discussion on that possibility. Wendy's stock was recently up 4.2%, and Triarc tacked on 2.7%.

On the losing side, Amazon.com (AMZN:) fell 4.1% after the online retailer eased its 2008 operating-earnings forecast and reporting an essentially flat operating margin in the first quarter. Analysts were hoping for some improvement. The Internet retailer also reported better-than-expected earnings of $143 million on soaring sales of $4.13 billion.

Cell phone maker Motorola (MOT:NYSE) surrendered 3.1% after its quarterly loss and weak second-quarter projection.

Outside of tech, Starbucks (SBUX:) was also losing ground on its soft guidance. The coffee seller said tough economic conditions should keep its customer-traffic numbers down and force a first-quarter profit drop to 15 cents a share from 19 cents last year. That's well under the consensus estimate. Shares plunged 10.4%.

Back on the economic docket, the Census Bureau said new-home sales in March sank 8.5% from the prior month to a 526,000 annual pace. A number more on the order of 580,000 had been anticipated.

Paul Mendelsohn, chief investment strategist with Windham Financial, believes that those dismal numbers may have had a part in temporarily taking down the indices this morning.

Durable-goods orders -- an important indicator of factory activity -- stepped back 0.3% last month, according to the Commerce Department. That's worse than the flat number economists were expecting, but still an improvement on February's figure, which itself was revised to a 0.9% drop from the prior figure of minus 1.7%.

Treasury prices took a slide as investors moved their funds into equities. The 10-year note was down 22/32 in price to yield 3.82%, and the 30-year bond gave up 25/32 in price, yielding 4.54%.

Markets overseas were mixed. The Hang Seng Index in Hong Kong jumped 1.6% overnight at 25.681, but Tokyo's Nikkei 225 lost 0.3%. In Europe, London's FTSE 100 dropped 0.5% and the Paris Cac shed 0.3%. Germany's Xetra Dax added 0.4%.

[setravis]

If we get to 13,200.......
we may see 13,800. However the 200 DMA is 13,077 and we have only 4 more trading days in this month. It may back off a little and plunge ahead in early May. Indicators all say go.

[setravis]

Blue Chips Rebound; Nasdaq Stays Down.......


Into the close, Friday 4/25/2008


Blue chips dug themselves out of early losses to end higher Friday, though tech shares ended to the downside, as investors dealt with mixed earnings reports, resurging oil prices and a confirmation of poor consumer-sentiment numbers.

After having posted declines for much of the day, the Dow Jones Industrial Average closed up 42.91 points, or 0.33%, to 12,893, and the S&P 500 rose 9.02 points, or 0.65%, to 1398.84. The Nasdaq Composite remained in the red, however, dragged lower by Microsoft's (MSFT:NYSE) disappointing near-term guidance. The index was in better shape at the close, but still lost 5.99 points, or 0.25%, to 2422.93.

Breadth was positive to end the week. Some 1.92 billion shares changed hands on the New York Stock Exchange, with advancing issues topping decliners by a 3-to-2 margin. On the Nasdaq, winners outpaced losers 5 to 4, despite the weak finish, as volume reached 1.98 billion shares.

"I think we're just seeing a normal Friday in a somewhat jittery market," said Steven Sheldon, CFA and principal with SMS Capital Management. "I think the market's just getting set up for next week's [Federal Reserve] meeting, and oil prices continue to be rather volatile. Every day we're getting head-faked up and down."

Crude-oil futures, after sustaining a big drop Thursday, ballooned in the new session on a raft of supply-disruption concerns.

News broke that a ship contracted by the U.S. military fired warning shots at two Iranian vessels, which spurred worries of a U.S.-Iran conflict that could halt shipments from the Gulf. Also, militants in Nigeria said they had assailed another pipeline following a recent attack on two others, and Bloomberg reported that Britain's BP (BP:NYSE) will begin shutting down a major North Sea pipeline tomorrow ahead of a planned refinery strike in Scotland.

Crude jumped $2.46 to settle at $118.52 a barrel, and gold futures took back a nominal amount of yesterday's losses, climbing 30 cents to $889.70 an ounce.

The dollar continued to climb against the euro, however, adding 0.6% at $1.5595. Against the yen, the greenback was up 0.1% at 104.42.

Against that backdrop, all three major indices ended the week on an upbeat note. The Dow has added 0.3% over the past five trading sessions, the S&P has climbed 0.5%, and the Nasdaq has risen 0.8%.

On the data side Friday, the University of Michigan's April consumer-confidence reading was revised slightly downward to 62.6 in April, a dismal level not seen since the early 1980s. That's about 7 points lower than March. The survey found that 9 out of 10 American consumers believe the U.S. is already in recession.

Still, said Peter Morici, a business professor at the University of Maryland and former director of economics at the U.S. Trade Commission, "My feeling is that this data is not unexpected."

"Economists have a lot of trouble with sentiment data," Morici added. "It's harder to predict that translating into actual purchases and sales. My feeling is, someone drives past the gas pump and you call the guy up and ask how he feels, and he says he feels bad. So it's not that big a deal."

Separately, President Bush announced that the federal government's tax-rebate checks will begin shipping out Monday, a week ahead of schedule. The cash is intended to help stimulate the sluggish U.S. economy by giving strapped consumers extra spending money.

As for corporate news, shares of Microsoft, a Dow component, sagged 6.2% after the software giant offered fiscal fourth-quarter profit guidance that leans to the lower end of analyst targets, even as it projected more robust numbers for fiscal 2009 and bested last quarter's expectations.

Disk-drive maker Western Digital (WDC:) beat top- and bottom-line analyst views for the fiscal third quarter, and issued in-line profit guidance for the next, but also said a bigger-than-expected decline in demand for its products should weigh on current-quarter sales. Revenue was projected at $1.825 billion to $1.9 billion, the midpoint of which is a bit below the Wall Street consensus. Shares tumbled 9.1%.

On a brighter note, American Express (AXP:) gave support to the Dow after its first-quarter profit drop wasn't as steep as analysts were expecting, thanks to its international presence. The credit-card company also reaffirmed its above-consensus view for the full year. Shares tacked on 5.7%.

Also having a good day was Goodyear (GT:NYSE) , which reported swinging to a profit on a "record" top line of $4.9 billion. The tire maker also trounced Street profit views on an adjusted basis. Shares climbed 6.1%.

Among the Day's research calls, Wal-Mart (WMT:NYSE) was upgraded to buy from neutral at Merrill Lynch, while Ford (F:NYSE) was downgraded at JPMorgan, Bear Stearns and Merrill a day after the automakers earnings-inspired rally. Wal-Mart shares rose 20 cents at $57.65 while Ford plunged 10.7%.

Oppenheimer initiated three ethanol stocks, Pacific Ethanol (PEIX:Nasdaq) , VeraSun (VSE:NYSE) and Aventine Renewable Energy (AVR:NYSE) , with perform ratings, after which shares were up between 5.9% and 22.4%.

Citigroup upgraded China-based Internet stocks Baidu.com (BIDU:Nasdaq) and Sohu.com (SOHU:Nasdaq) to buy from hold, lifting shares by 6.3% and 6.6%, respectively.

Treasury prices were losing ground. The 10-year note lost 10/32 in price to yield 3.87%, and the 30-year bond lost 23/32 in price, yielding 4.59%.

Overseas markets were mixed. In Asia, Tokyo's Nikkei 225 jumped 2.4% overnight, and the Hang Seng Index in Hong Kong declined 0.6%. As for European bourses, the FTSE 100 in London, Germany's Xetra Dax, and the Paris Cac were each rising 0.7% or more.

[setravis]

Stocks Stumble to a Mixed Close.......


Into the close, Monday 4/28/2008


New York's major averages finished about where they started Monday as investors awaited the upcoming Federal Reserve gathering and digested a batch of merger news and positive earnings reports.

After spending much of the afternoon modestly higher, the Dow Jones Industrial Average ended down 20.11 points, or 0.16%, to 12,871.75, having swung in a range of about 80 points. The S&P 500 ticked down 1.47 points, or 0.11%, at 1396.37, and the Nasdaq Composite gained 1.47 points, or 0.06%, to 2424.4.

Alan Gayle, senior investment strategist with RidgeWorth Capital Management, said, "My guess is that a lot of investors don't want to make big calls in front of a Fed meeting and all the other data that's coming out."

The Fed will begin its two-day meeting Tuesday, and it is widely expected to cut the fed funds target rate by 25 basis points. Many analysts also believe the central bank will signal a pause in its months-long easing cycle, which since September has taken the overnight lending rate down three percentage points to 2.25%.

Gayle also pointed out that this week we will see nationwide manufacturing data from the Institute for Supply Management and the Labor Department's monthly unemployment report. "The market's had a positive couple of weeks," he said, "and right now this week's calendar is either going to reinforce that or it's going to challenge it. So far it looks like not too many money managers want to step out in front of that."

Breadth was positive in spite of the market's lackluster close. Advancers outpaced decliners by 3-to-2 on the New York Stock Exchange, which saw volume reach about 1.77 billion shares. Roughly the same amount traded on the Nasdaq as winners edged out losers 5 to 4.

Regarding the afternoon uptick, Fred Dickson, senior vice president and market strategist with D.A. Davidson, said the pickup in merger activity could reflect an uplifted mood overall.

Dickson added: "I think there's a general feeling that, while the credit crisis hasn't entirely passed, the front wall of the hurricane has passed." He cited the recent stabilization of triple-A-rated subprime mortgage credit swaps, as well as an earnings season that so far hasn't been quite as calamitous as many had feared.

As for the M&A news, Wrigley (WWY:) today shot up 23.2% to $76.91 after Mars and Warren Buffett's Berkshire Hathaway (BRK.A:) said they would acquire the chewing-gum outfit for roughly $23 billion, or $80 a share.

Wrigley also beat analysts'' first-quarter expectations with earnings that surged 18.1% to $168.6 million, or 61 cents a share.

Rival Hershey (HSY:NYSE) , meanwhile, climbed 4.6% on the hope that the chocolatier would seek a similarly generous bid. Britain's Cadbury Schweppes (CSG:NYSE) , which has discussed a potential merger with Hershey several times in the past, bumped up 2.6% on the NYSE

Ford (F:NYSE) was also advancing on word that Kirk Kerkorian's Tracinda has collected a 4.7% stake in the automaker, or about 100 million shares, and plans to offer $8.50 each for an additional 20 million shares. Ford spiked 9.5% to $8.21, and the Dow's General Motors (GM:NYSE) simultaneously added 2.6%.

Also, reports surfaced this morning that United Airlines parent UAL Corp. (UAUA:NYSE) is in "very advanced" talks to merge with U.S. Airways (LCC:NYSE) . The Associated Press said a merger announcement should come within two weeks. UAL shares slumped 2.6%; U.S. Airways soared 20.4%.

The news came just as United said it would abandon talks with Continental (CAL:) , which said this weekend it would remain independent. Continental stock lost 1.5%.

Elsewhere, Dow component Verizon (VZ:NYSE) posted in-line first-quarter earnings, lifting shares by 2.5%. Separately, health insurer Humana (HUM:) padded its full-year earnings guidance as first-quarter income jumped 12.5% and topped the average Wall Street consensus. Shares closed up 3.3% at $46.38.

On the losing side, conglomerate Loews (LTR:NYSE) reported that consolidated earnings -- which includes results from cigarette subsidiary Carolina Group (CG:NYSE) -- slid 13.8% to $662 million. Both companies, by themselves, saw earnings declines from last year. Loews lost 5.3% as Carolina gave up 6.5%.

Back in merger news, the deadline for Yahoo! (YHOO:Nasdaq) to respond to Microsoft's (MSFT:Nasdaq) takeover bid passed without any comment from either company. Shares of Microsoft shed 2.8%; Yahoo! ended down 1.4% at $26.43.

Traders were also dealing with another new high for crude oil, which reached $119.93 a barrel before pulling back to a 23-cent gain at $118.84. Gold ratcheted up $5.80 to $895.50 an ounce. The U.S. dollar was slipping against both the euro and the yen.

At the same time, the European Union predicted that eurozone countries would see inflation spike to 3.2% this year, compared with 2.1% in 2007. The forecast could keep the European Central Bank from making cuts to its own benchmark lending rate, even as many of its member countries suffer economic slowdowns.

Treasury prices were rising. The 10-year note added 11/32 in price to yield 3.83%, and the 30-year bond stepped up 16/32 in price, yielding 4.56%.

Markets overseas were mostly rising. The Nikkei 225 in Japan added 0.2% overnight, and the Hang Seng Index in Hong Kong climbed 0.6%. Among European bourses, London's FTSE 100 was ticking down, and Germany's Xetra Dax advanced 0.4%. The Paris Cac tacked on 0.7%.



The Dow is nearing the resistance of its 200-day moving average.

[setravis]

Nasdaq Leads Rebound.......


Thursday 5/1/2008


Stocks in New York were making their way higher Thursday as traders continued digesting the Federal Reserve's rate-cut decision, while working past mixed economic data and disappointing corporate earnings.

The Dow Jones Industrial Average was up 46 points at 12,866, and the S&P 500 climbed 7 points at 1393. The best performer was the tech-heavy Nasdaq Composite, which was rising 39 points at 2462 as big-caps Intel (INTC:NYSE) , Apple (AAPL:NYSE) and Google (GOOG:NYSE) advanced.

The market's upturn also represents a recuperation from Wednesday, when the major indices erased their gains after the Federal Reserve eased its benchmark lending rate by another quarter-point, but also seemed to leave the door at least slightly open to further cuts in the future.

"Yesterday was a short-term reaction, perhaps a myopic reaction, to what the Fed was doing," said Matt King, chief investment officer with Bell Investment Advisors. "Long term, we think it's definitely a positive. We were getting concerned the Fed was cutting too aggressively, that we were getting too much stimulus fiscally and monetarily."

In the currency market, the dollar was likewise recovering from the previous session's losses. The dollar surged by 1.2% against the euro to $1.5455, while also firming against the pound and the yen. The dollar index, which stacks the greenback against a basket of other currencies, jumped 1%.

But Meg Browne, senior currency strategist with Brown Brothers Harriman, doesn't believe the rally is based in a shift in sentiment.

"The market really got what it wanted. What we've had over the past couple of days was shorter-term players getting in a day or two and then getting out," she said, specifically referring to the greenback's action against the euro.

"Our view is that the Fed really is paused now, and what the market will react to is whether data point to not just a possible [economic] contraction in the second quarter, but a sharp contraction. Today's data doesn't really give us that."

Indeed, investors had several reports to consider. The Institute for Supply Management said nationwide factory activity in April was unchanged from the prior month. The ISM index came in at 48.6, indicating a slight contraction, though that's a bit better than the 48 figure economists had expected. The index's break-even point is at 50.

The Labor Department said the number of people filing for unemployment benefits last week spiked by 35,000 from the prior week's revised data to 380,000. That's 20,000 more claims than economists were expecting. The report comes a day before the government releases its always important monthly report on job growth and the unemployment rate. On Wednesday, ADP said private employers added 10,000 workers to their payrolls in March, a stronger result than economists had predicted.

Meanwhile, March personal spending was 0.4% higher than the prior month and was slightly ahead of what was expected. Personal income rose 0.3%, compared with a 0.5% climb in the prior month. Also, March construction spending slid a steeper-than-anticipated 1.1% sequentially, reversing a revised 0.4% uptick in February.

Browne added that fundamentals on the euro side have also helped ease some of the dollar's pain as several eurozone countries suffer economic slowdowns. Though the process will be slow, she said, eventually the European Central Bank will be forced to cut its own interest rates amid that deceleration, which would be a boon for the greenback.

As the dollar strengthened, crude oil slid $1.89 to $111.57 a barrel, and gold shed $16.20 to $865.10 an ounce.

Among companies, Dow component Exxon Mobil (XOM:NYSE) was an early drag on the market after its first-quarter earnings missed analysts'' projections, despite surging 17% to $10.89 billion.

Revenue, though sharply higher, was also on the light side, and the stock was falling 4.2%.

Tyco International (TYC:) roughly doubled its adjusted first-quarter profit to $326 million, or 67 cents a share, and was well ahead of the average analyst estimate from Thomson Financial. Still, shares were falling 4.3%.

Pharmacy chain CVS Caremark (CVS:) slipped 2.4% even though same-store sales rose 3.9% as first-quarter earnings climbed to 55 cents a share, in line with expectations.

Elsewhere, Starbucks (SBUX:) climbed 2.7% even though the coffee giant said 2008 earnings should come in lower than last year's 87 cents a share. For the first quarter, the company posted a bottom line that met Wall Street targets, though sales were a bit short.

Cable provider Comcast (CMCSA:) said first-quarter income sank 12.5% amid declining subscription numbers, though the company's 19-cent profit per share matched the consensus estimate. Shares were higher by 5.8%.

Treasury prices were rising. The 10-year note and the 30-year bond were each adding 6/32 in price, yielding 3.71% and 4.46%, respectively.

Overseas markets were mixed. Tokyo's Nikkei 225 and the Hang Seng Index in Hong Kong each lost 0.6% overnight. In Europe, however, London's FTSE 100 tacked on 0.2% as Germany's Xetra Dax ramped up 0.9%. The Paris Cac was better by 0.4%.

[setravis]

Bad Day Gets Worse for Stocks.......


Into the close, Monday 5/5/2008


Stocks in New York finished lower Monday as prospects unraveled for at least one big proposed merger, and oil prices again charged into uncharted territory.

The Dow Jones Industrial Average spent most of the day in the red before closing off 86.66 points, or 0.68%, at 12,969.54. The S&P 500 gave up 6.41 points, or 0.45%, to 1407.49, and the Nasdaq Composite lost 12.87 points, or 0.52%, to 2464.12.

Breadth was negative to start the week. Declining issues outpaced advancers by nearly a 3-to-2 margin on both the New York Stock Exchange and the Nasdaq, as volume on the bourses reached 1.67 billion shares and 2.05 billion shares, respectively.

Even amid the apparent collapse of an anticipated tie-up between Microsoft (MSFT:NYSE) and Yahoo! (YHOO:NYSE) , however, Peter Cardillo, chief market economist with Avalon Partners, believes that stocks'' broader movements represent "a normal pullback after last week's healthy run-up."

Doug Roberts, chief investment strategist at ChannelCapitalResearch.com, agreed that the market's seeming reaction is probably, in essence, an incidental move. "It's more that everybody doesn't trust what's happening," he said. "They're looking for any excuse they can to take tips under the table. If you were looking to trade something totally on fundamentals, there were as many excuses last week for stocks to go down when they rallied."

Bruce Zaro, chief technical strategist with Delta Global Advisors, agreed. "I think [the merger news] is probably as good of an explanation or an excuse as any," he said. "This is pretty typical from what I've seen, that Mondays at least start with some weakness. But certainly I think the market will continue to exhibit this two-steps-up and one-step-back phenomenon."

Zaro added that the "old highs," roughly 1,000 points away on the Dow, are on his radar screen. "The upside from here on out might be a little bit slower than what we've had over the past month or so," he said, tentatively predicting that the current run-up will take several months to unfold. "I would expect this rally to play itself out in fairly dramatically overbought conditions. Right now we're only slightly overbought."

Cardillo moreover pointed out that the jump in oil was acting as a further drag on the market, and Roberts remarked that the development was "really the key" today. Last week's equities rally, he pointed out, was accompanied by a tumble in oil prices.

Crude futures hit a record high of $120.36 earlier before easing back to a $3.65 gain at $119.97 a barrel. At the same time, the U.S. dollar yielded 0.5% to the euro at $1.5496 and sank 0.4% against the yen.

The inflation of crude prices, believes Roberts, is demand-driven, and he said that -- barring a "major exogenous supply interruption, not just short-term disruptions" -- it will remain that way. So, eventually, he predicted, a ceiling will be placed on gas prices as people begin to pare back on their gas usage and look to new alternatives. He noted, however, that such changes will probably take awhile to materialize on a grand scale.

As for the M&A news on the corporate front, over the weekend Microsoft announced it had thrown in the towel on its months-long efforts to take out Yahoo!. The software maker said it was willing to sweeten its offer by some $5 billion, to $33 a share, but claimed Yahoo! wanted at least $5 billion more than that.

Regarding Microsoft's prior threats that it would go hostile if Yahoo! didn't accept its original bid, the company decided against that path, believing that Yahoo! would in that case try to make itself unattractive as a buyout target.

On the heels of the news, Yahoo! was downgraded to sell by Citigroup, Soleil Securities and ThinkPanmure. RBC Capital Markets and Stanford Research each slashed their price targets on the stock. Yahoo! shares were plummeting 15% to $24.37. Microsoft investors reacted positively to the development in the early going, though shares of the Dow component ended down 0.6%.

Also having a rough day was Countrywide (CFC:NYSE) , which sank 10.4% a trading day after Bank of America (BAC:NYSE) disclosed it might not assume part of Countrywide''s debt in its deal to take out the struggling mortgage lender.

Friedman Billings cut Countrywide to underperform, saying that BofA should abandon the merger entirely, or at least sharply lower the buyout price. On Friday, Standard & Poor''s downgraded Countrywide''s credit rating to junk. Dow member BofA was down 2.1%.

Sprint Nextel (S:NYSE) was one of the winners, after separate reports emerged that it was considering spinning off its Nextel division and that Deutsche Telekom (DT:NYSE) was mulling a bid for the entire company. Sprint Nextel rose 10.5%.

As for the Day's earnings reports, gold miner Goldcorp (GG:NYSE) topped the consensus profit estimate by 2 cents a share in a quarter that saw gold prices reach record-breaking levels. The company's income soared 84% to $229.5 million, or 32 cents a share. Shares bumped up 2.2%.

In the wake of Goldcorp''s results, as well recovering gold futures, peers Barrick Gold (ABX:NYSE) , Kinross Gold (KGC:NYSE) , and Newmont Mining (NEM:NYSE) climbed between 2% and 4%.

Gold settled the day up $16.10 at $874.10 an ounce.

Entertainment company Marvel Enterprises (MVL:NYSE) ramped up 9.4% after sailing past first-quarter analyst targets and lifting its full-year guidance. Marvel also announced that its Iron Man movie took the top spot in its opening weekend, raking in $100.75 million in domestic box-office receipts.

In the red was poultry concern Pilgrim's Pride (PPC:NYSE) , which lost $111.4 million last quarter as it suffered from ballooning feed costs that CEO Clint Rivers blames squarely on "the federal government's deeply flawed ethanol policy." Pilgrim's Pride said its costs for corn and soybean meal have surged $200 million from last year. Shares gave up 0.8%.

Elsewhere, Apple (AAPL:NYSE) added 2.1% on an upgrade to buy at AmTech Research. In more analyst calls, Stifel Nicolaus brought Google''s (GOOG:NYSE) price target up $65 to $675, after which the search giant''s shares climbed 2.3%.

Lehman Brothers shaved down Nortel''s (NT:NYSE) price target, pressuring the stock by 2.2%, but lifted its price targets on mining-equipment makers Joy Global (JOYG:NYSE) and Bucyrus International (BUCY:NYSE) . Shares advanced 2.2% and 3.8%, respectively.

On the data side, the Institute for Supply Management said its April nonmanufacturing index came in at 52, indicating expansion -- albeit slight -- for the first time in four months. Improved employment, among other things, buoyed the reading, which has a break-even point of 50. Economists were projecting slight contraction to 49.1.

Treasury prices were little changed. The 10-year note rose 3/32 in price to yield 3.85%, and the 30-year bond slipped 3/32 in price, yielding 4.58%.

Markets abroad were mixed. Hong Kong's Hang Seng Index slipped 0.2%. In Europe, Germany's Xetra Dax was up 0.1%, and the Paris Cac dipped by roughly that same amount. Tokyo's Nikkei 225 and London's FTSE 100 were each closed for a public holiday.

[setravis]

Stocks Make Peace With Bad News, End Higher.......


Into the close, Tuesday 5/6/2008


Stocks in New York closed on the upside Tuesday as traders looked past a fresh batch of bad news from the financial sector and another record day for oil prices.

The Dow Jones Industrial Average was down more than 100 points this morning, but the index hoisted itself up around midday, and finished ahead by 51.29 points, or 0.4%, at 13,020.83. The S&P 500 climbed 10.77 points to 1,418.26, and the Nasdaq Composite rose 19.19 points to 2,483.31, as both indices booked gains of around 0.8%.

"Now that we've got the bulk of earnings out of the way, and a lot of the uncertainty out of the way, people are more comfortable with this trading environment," said James Park, managing director with Rodman & Renshaw. "There's a lot more confidence in the market, and we're seeing some more cautious buying going on."

Breadth was positive. Roughly 1.92 billion shares changed hands on the New York Stock Exchange, and around 2.13 billion traded on the Nasdaq, as each bourse saw winners topping losers by about a 3-to-2 margin.

Paul Nolte, director of investments with Hinsdale Associates, said the economic data from the past 10 days suggest the economy has probably flattened out and that the potential exists for a short and shallow recession.

"I think investors are also anticipating the spending rebates will provide a shot in the arm to the economy in the second and third quarters," he added. "So I think they're ignoring, at this point, the higher energy and commodity prices, at least for now."

Crude oil soared to yet another all-time high of $122.73 a barrel after Goldman Sachs said prices could balloon to between $150 and $200 in the coming six months to two years as supply fails to keep up with demand.

"When the Goldman Sachs report came out, that just gave more psychological support to a market that was already wildly bullish," said Phil Flynn, vice president and senior market analyst with Alaron Trading. "It's almost going beyond reason here."

Flynn remarked that supply concerns of various sorts, as well as the weaker U.S. dollar, are helping feed into the upward drive today. "But it's really a situation where the momentum is so bullish that it's overshadowing every other issue," he said. "It's become sort of a money game right now, and it just isn't going to stop in the near term."

He added: "This could be a blow-up off the top, a final gasp of the market going higher, or it could be that we're never going to come down on oil again."

Crude later stepped back to a $1.87 gain at $121.84. Gold futures, meanwhile, added $3.60 to end at $877.70 an ounce. The U.S. dollar lost 0.3% against the euro to $1.5529 and edged down against the yen.

As for corporate news, Fannie Mae (FNM:NYSE) was a morning drag as the mortgage buyer reported a loss of $2.51 billion, or $2.57 a share, in the latest quarter, after payment of preferred dividends. The firm also said it will cut its dividend and raise $6 billion through share offerings. Shares tumbled out of the gate but recovered to finish up 8.9%.

Fellow government-sponsored mortgage investor Freddie Mac (FRE:NYSE) tacked on 7.1%, also in reversal from early losses.

Park said when the news in the space is negative, "you see these stocks take a hit, but longer-term investors are coming in and scooping things up." He added that some of the upward action is probably due to traders covering their short positions in the stocks.

In more evidence for the continued slide in housing, D.R. Horton (DHI:NYSE) swung to a steep first-quarter loss that was far worse than analysts had anticipated. The stock was down earlier but ended the day higher by 5.5%.

Merrill Lynch (MER:NYSE) shares remained lackluster recently, however, after news that the government has asked for information about auction-rate securities and the failure of some recent auctions. Shares dipped by a nickel at $51.35.

Elsewhere among financials, UBS (UBS:) said it took a loss of $10.97 billion in its most recent quarter after a $19 billion writedown. UBS also said it would shrink its workforce by 5,500 workers by the middle of next year, including cutting up to 2,600 employees in the investment banking division, and sell $15 billion in troubled mortgage assets to BlackRock (BLK:) . UBS shares shed 1.6%.

Also, Legg Mason (LM:NYSE) slid 10.3% after the asset manager reported a fiscal fourth-quarter shortfall of $255.5 million -- its first-ever quarterly loss -- and set plans to offer 20 million equity units in order to raise $1 billion. Underwriters will have the option to buy another $150 million worth.

On the flip side, NYSE Euronext''s (NYX:NYSE) first-quarter pro forma income soared by 52.5% at $241 million, or 91 cents a share, thanks to surging trading volume. The exchange operator also beat on both top and bottom lines. Shares ramped up 7.2%.

Last time out, equity measures closed lower under pressure from crude oil, which got past the $120 mark for the first time ever, as well as the evident disintegration of a proposed merger between Microsoft (MSFT:) and Yahoo! (YHOO:) .

Back on the corporate front, Dow component Merck (MRK:) announced plans to lay off 1,200 workers, a decision that comes a few days after the Food and Drug Administration rejected the company's new cholesterol drug. Shares eased fractionally at $38.84.

Staying in the health-care sector, Israeli drugmaker Teva (TEVA:NYSE) topped the first-quarter analyst consensus for both sales and adjusted income, but shares still closed off 1.3%.

Barrick Gold (ABX:NYSE) also came in ahead, as did Anadarko Petroleum (APC:NYSE) , which crushed the average target by 22 cents a share after stripping out one-time items. Shares were up 1.2% and 9.4%, respectively.

Treasury prices were slipping. The 10-year note was down 7/32 in price to yield 3.90%, and the 30-year bond fell 18/32 in price, yielding 4.64%.

Overseas markets were mixed. Hong Kong's Hang Seng ticked up 0.3% overnight. In Europe, London's FTSE 100 was about flat at 6215. Germany's Xetra Dax and the Paris Cac were losing 0.5% and 0.4%, respectively.

[setravis]

The DOW seems to be trying to reestablish the 13000, as a base for an official trend reversal for 2008, and redefine it from being a "resistance point", as we have seen so far, since the earlier correction. The MA have crossed over, and the rest of the technicals are positive, for the obvious reason that the market has moved relatively higher lately, since March.

To stay simply with TA at this point, would suggest a consolidation phase, prior to any move, whether a retest of the spring lows, or a rally to 2007 highs. However, as we know, fundamental factors affecting the companies in the Dow, as well as the FED and the assortment of economic data that came and is still to come, one would be foolish to not think about it comprehensively. Of course, it is hard to tell what people are focused on... a move in the DOW over only a 2 day period seems to drive many opinions.
How to incorporate these shorter term moves into an overall analysis of major trend shifts or long term TA, seems to more relevant. More relevant still, would be to use the shorter term sentiments of the major indexes, to help guide the shorter term trades of specific equities...as I am sure most people here trade stocks, not just the major index...

Now we have been around 13000, "last August", "last December", and "last February", and now again in May.... In the previous instances, major market sentiment (psychology concerning financial market news), as well as basic TA 101, seemed to be easily detectable and ended up being very predictive in all of these instances. What is new now? The Fed slowing easing... Iran totally off the Dollar transaction...etc etc...we can see the TA indicators speaking clearly, whether vague or not, but in this election year, with many Macro issues still in the minds of the "big" money, putting our finger on this pulse and keeping it there, is yet another suggestion.

What seems to lie ahead, is yet another opportunity, as the moves in the very near future can be played on rather easily, considering the nature of the move (if not much changes in the sentiment of the overall economy for example). We have experienced some volatility since we turned into 08, and even in a consolidation phase, overreaction in either direction is still in the cards, and can be profitable to the patient, and trigger-ready trader.


Below are the 1, 2 and 3 year charts.......

[setravis]

U.S. Stocks Slip on Crude Oil, Fall Hard.......


Into the close, Wednesday 5/7/2008


Stocks in the U.S. plunged into the close Wednesday after crude oil tapped a new record, as mostly positive earnings and a better-than-expected productivity report failed to pull buyers out of the woodwork.

The Dow Jones Industrial Average finished down 206.48 points, or 1.59%, to 12,814.35 -- just shy of the index's session low. The S&P 500 slid 26 points at 1393, and the Nasdaq Composite was off 44.82 points at 2438.49, meaning losses of 0.8% for both.

Stocks began on soft footing, but slid even further after crude oil hit a new high, $123.75 a barrel, even though the government said crude stockpiles were up by 5.7 million barrels last week. Crude later eased to a $1.69 gain at $123.53.

"It is unfortunate that oil rallied with the market, making the gains more difficult," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "I do think that we could have easily broken above [the major indices''] 200-day moving average targets had it not been for crude."

Mushrooming crude futures have been gnawing at investors, since higher gas prices tend to deflate consumer spending. On the bright side, noted Georges Yared, chief investment strategist with Yared Investment Research, people are already receiving their tax-rebate stimulus checks from the federal government.

"Some people say everyone's going to put that money into savings, but I think people are going to spend those checks," he said. "Americans are shoppers."

Stocks'' breadth was poor. Decliners outran advancers by a 7-to-3 margin on both the New York Stock Exchange and the Nasdaq as trading volume reached 2.03 billion shares and 2.29 billion shares, respectively.

"I think we're in a fragile recovery," said Phillip Roth, chief technical market analyst with Miller Tabak, referring to the market's longer-term action. "The market's in a struggling advance. And after yesterday's reversal early, which seemed like a pretty powerful reversal, it fizzled at the end of the day, and there's no follow-through."

Bill Stone, chief investment strategist with PNC Wealth Management, pointed out that the S&P has risen nearly 11%, including dividends, since its March low point. "Most people would call that a year's return," he said. "I would expect people to digest it a little bit."

Roth, who maintains that the market's climb for most of 2008 remains a bear-market rally, called the action over the past few months "a crummy, light-volume rally with poor breadth. And it looks like it might be ending. It's also more than 3 months old. It basically began in the third week of January for most stocks."

"We haven't seen the low," Roth continued, "and I think we're going to break below the March lows. It's just a question of when."

On the plus side Wednesday, the Labor Department said first-quarter nonfarm productivity rose at a 2.2% annual rate, topping the 1.5% consensus estimate and the 1.8% pace in the fourth quarter. Job cuts and reductions in hours worked helped the increase. Growth in productivity is viewed as a sign that inflation is being kept under control.

At the same time, unit labor costs were up 2.2%, a cooler figure than had been forecast and down from a 2.8% advance in the previous quarter.

However, hawkish remarks from a Federal Reserve official were contributing to keeping the major averages in check. Thomas Hoenig, president of the Kansas City Fed, though not a voting member of the Federal Open Market Committee, said during a speech Tuesday that policymakers might have to look at raising interest rates in order to deal with "serious" inflation issues.

The Fed has lowered its fed funds target rate by 325 basis points since last September as part of its effort to stem the credit crises that has been plaguing financial firms, but during that time, energy and food prices have been soaring, leading to worries that inflation rates could rise too far, too fast.

Those comments, combined with the productivity data, were supporting the dollar, which rose across the board. The euro lost 0.8% to $1.5398, and the yen closed off 0.2% at 104.86. The British pound sank 1% to $1.9527.

At the same time, gold futures ended down $6.50 to $871.20 an ounce.

Elsewhere, traders were taking in stride another report showing a drop in home sales. The National Association of Realtors said that pending home sales in March fell 1%, meeting expectations. February's decline was revised to 2.8%.

Among companies, tech bellwether Cisco Systems (CSCO:) reported coming in ahead of analyst expectations last quarter with an adjusted profit of $2.3 billion, or 38 cents a share. Sales ramped up 10.4% to $9.8 billion. Still, shares were shed 2.1%.

Meanwhile, fellow tech names Sprint (S:) and Clearwire (CLWR:) confirmed they are planning to merge their wireless broadband businesses.

The new company, to be named Clearwire, is set to receive a $3.2 billion collective investment from Intel (INTC:) , Google (GOOG:) , Time Warner Cable (TWC:) and Bright House Networks.

Sprint shares erased early gains to finish down slightly at $9.16, and Clearwire also reversed course to lose 1.5%.

Back on the earnings front, digital television purveyor DirecTV (DTV:NYSE) said its first-quarter profit swelled by 10% to a better-than-anticipated $371 million, on a top line that surged 17% to $4.6 billion. The stock gained 4.7%.

Dow component Disney (DIS:) saw its shares tack on 2.9% after the entertainment conglomerate said earnings leaped 22% to $1.1 billion in the most recent quarter. Per-share income handily beat the Wall Street consensus.

Meanwhile, health-care name Allergan (AGN:NYSE) edged past first-quarter projections and issued in-line guidance, but shares were backing off from early gains to slip 3.3%.

Cognizant Technology (CTSH:NYSE) beat by a penny, but the Internet-technology consulting firm also offered subpar guidance for the current quarter and for all of 2008, and shares were sliding 10.5%.

As for the Day's analyst research, Deutsche Bank and Sandler O''Neill each lifted NYSE Euronext's (NYX:NYSE) rating to buy from hold a day after the Big Board reported a soaring first-quarter profit. On the other hand, Deutsche Bank cut China-based Sohu.com (SOHU:NYSE) to hold from buy.

Shares of NYSE ended up a 31 cents at $73.26, having pared back from bigger gains earlier in the day, and Sohu.com surrendered 10.1%.

Treasury prices were picking up amid the decline in equities. The 10-year note rose 19/32 in price to yield 3.84%, and the 30-year bond jumped 30/32 in price, yielding 4.60%.

Markets abroad were mostly higher. Hong Kong's Hang Seng Index lost 2.5% overnight, but Nikkei 225 in Tokyo climbed 0.4%. In Europe, London's FTSE 100, Germany's Xetra Dax and the Paris Cac were all ahead by 0.7% or more.

[setravis]

Stocks Start Week With Rally.......


Into the close, Monday 5/12/2008


Stocks in the U.S. booked substantial gains Monday as traders welcomed a downturn in oil prices and several pieces of good news out of the tech sector, including a potential merger involving Hewlett-Packard (HPQ:NYSE) .

The Dow Jones Industrial Average advanced 130.43 points, or 1.02%, to 12,876.31, and the S&P 500 swelled by 15.3 points, or 1.1%, at 1403.58. The Nasdaq Composite was the best-performing index, spiking 42.97 points, or 1.76%, to 2488.49.

One boon for tech shares came late in the day amid word that Hewlett-Packard is in advanced talks to buy Electronic Data Systems (EDS:NYSE) . The Wall Street Journal said the deal could be worth $12 billion to $13 billion.

H-P was off 4.7%, but EDS surged 27.9%, and the prospect for a pact may have shored up hopes that merger activity is gaining traction once again after stalling amid the credit crunch.

"Deals really dry up when the market is having a rough patch," said Richard Sparks, senior equities analyst with Schaeffer's Investment Research. "Nobody wants to buy if they think the stocks are going to be lower later on. Then again, EDS had a pretty sharp downturn over the past few months, so that made it more attractive."

Robert Pavlik, chief investment officer with Oaktree Asset Management, said that this shows companies are still seeing value out there. "For stronger companies like the H-Ps, I think the credit crunch plays less of a role in their operations," he said. "These are highly capitalized and high-credit-rated companies who don't find troubles going to the market and issuing paper if need be."

Other tech names helped the sector outperform throughout the day. Research in Motion (RIMM:NYSE) , for example, bounced 6.9% after unveiling the design for its new BlackBerry Bold, a 3G smartphone seen as a rival to Apple's (AAPL:NYSE) iPhone. Apple shares picked up 2.3%.

Simultaneously, the Dow Jones U.S. Software Index and the Amex Networking Index trekked higher by 1.9% and 1.7%, respectively. Dow components Microsoft (MSFT:NYSE) and IBM (IBM:NYSE) both rose.

Overall, stocks'' breadth was positive to start the week. Winners outpaced losers by a 7-to-3 margin on both the New York Stock Exchange and the Nasdaq, though volume was light, reaching just 1.66 billion shares and 1.76 billion shares, respectively.

"It looks to me like a lot of investors believe [last week''s] pullback provides an opportunity to step back into the market," said Paul Mendelsohn, chief investment strategist with Windham Financial.

He also noted that the S&P tagged its 20-day moving average in the prior session's selloff. "That's the natural point for the market to stop here, so there's basically a support right at that level," he said. "A lot of the activity you're seeing today is more technical in nature."

Pavlik noted that Friday's slide occurred amid the lowest-volume day since Dec. 28. "I think that's pretty telltale, that the market isn't that interested in selling things off just because oil prices are going higher," he said. "I get a sense from the market that many are expecting a pullback in oil, and what's been driving it is largely speculation."

A new record for crude oil accompanied the last session's equities plunge, but today futures were in retreat, and that appeared to help bolster investor sentiment. Crude ended down $1.73 at $124.23 a barrel.

Even though the nationwide average for gas prices at the pump touched an all-time high of $3.718, according to AAA, retailers were benefiting from the crude reprieve. Dow components Wal-Mart (WMT:NYSE) and Home Depot (HD:NYSE) were up 1.5% and 2.4%, respectively, and the Dow Jones U.S. Retail Index and the S&P Retail Index ramped up 2.1% and 2.7%.

At the same time, gold futures sank 90 cents to $884.90 an ounce. The U.S. dollar lost its early gains against the euro, finishing down 0.4% to $1.5540. Against the yen, however, the greenback remained higher by 0.8%.

Meanwhile, investors were overlooking plenty of bad news. For instance, JPMorgan Chase (JPM:NYSE) CEO James Dimon said that the recession has just started, even if the credit crisis appears to be mostly over. Dimon, speaking at a conference, also said there is a one-third chance the contraction is "going to be pretty bad ... closer to the 1982 recession than the very mild recessions we had in 2001 and 1990."

Over in the financial sector, MBIA (MBI:) lost $2.41 billion in the first quarter after $3.6 billion in unrealized losses on insured derivatives. Still, the stock took back the bulk of its Friday losses, tacking on 4.5%.

Mortgage insurer PMI (PMI:NYSE) also swung to a quarterly loss, and Radian (RDN:NYSE) did the same when excluding unrealized gains on derivatives and hybrid securities. Keeping in those gains, the company booked a profit of $195.6 million. PMI was up 3%, and Radian shares rose 2.2%.

IndyMac (IMB:) , a mortgage lender lost $184.2 million, or $2.27 a share, in the first quarter and warned that it won't achieve a profit until the plunge in housing prices eases up. Shares sank 10.5%.

HSBC (HBC:) was up 3.1%, however, after saying first-quarter earnings climbed from last year, thanks to its success in emerging markets such as Asia. That came even as the Britain-based bank wrote down $2.6 billion in assets and doubled its loan-impairment charges.

Away from financials, Sprint Nextel (S:) saw choppy trading after sharply widening its first-quarter loss to $505 million, or 18 cents a share, as it continued to lose subscribers. Stripping out one-time expenses, Sprint made 4 cents a share, or 2 cents better than expected, even as revenue fell short. Shares dropped 1.5%.

XM Satellite Radio (XMSR:NYSE) also lost more money in its latest quarter, missing the consensus target, but shares rose 4.2%.

XM''s merger partner Sirius (SIRI:Nasdaq) , which posted a narrowed first-quarter loss after the market closed, finished the regular session up 4.2% at $12.30. Recent late trading saw a further gain of 0.7%.

Meanwhile, confirmation came that Cablevision (CVC:) has agreed to pay Tribune Co. $650 million for the Long Island newspaper Newsday. Over the weekend, Rupert Murdoch's News Corp. (NWS:) retracted its own $580 million offer for the paper. Cablevision slipped 1.8%, and News Corp. ended 1.1% better.

Elsewhere, after Friday's market close FedEx (FDX:) said harsh economic conditions and climbing fuel prices have squeezed its bottom line, and the package-delivery outfit slashed its current-quarter earnings forecast. Shares finished nominally higher at $90.50.

Treasury prices were erasing early gains. The 10-year note and the 30-year bond were each losing 7/32 in price to yield 3.80% and 4.54%, respectively.

Markets abroad were mixed. In Asia, Tokyo's Nikkei 225 added 0.6% overnight. Hong Kong was closed. Among European exchanges, the FTSE 100 in London and the Paris Cac finished up roughly 0.3% apiece, and Germany's Xetra Dax climbed 0.5%.