Reply #121: Closing Numbers and Blather

[RawMaterials]

Dow 10192.51 +122.14 (+1.21%)
Nasdaq 1921.65 +17.47 (+0.92%)
S&P 500 1156.85 +13.63 (+1.19%)
10-Yr Bond 4.201% +0.28

NYSE Volume 2,358,435,000
Nasdaq Volume 2,039,547,000



Close: Falling oil prices reversed sentiment, turned the indices positive and removed much of the nervousness initially sparked by mixed economic data and earnings reports... While crude oil futures ($49.72/bbl -$2.05) were weak most of the day, amid speculation that rising OPEC supplies will assure sufficient inventories to meet summer gasoline demand, a retreating desire to hold onto positions into the weekend exacerbated a late-day sell-off that closed oil near session lows... The commodity closed below $50/bbl for the first time since mid February and nearly 15% off an April high of $58.28/bbl...

Arguably also renewing interest that helped all ten economic sectors finish higher was a rotation out of bonds around 1:15 ET, amid speculation that traders were positioning for a new corporate bond deal and some end-of-the month portfolio rebalancing by fund managers that involved the selling of Treasurys... Yields on the benchmark 10-year note (-13/32) closed near pre-market levels of 4.19%...

Meanwhile, investors initially held a positive bias following an upbeat outlook from Microsoft (MSFT 25.28 +0.83) and found some relief with respect to the outlook for inflation and consumer spending amid stronger than expected economic data... Last night, the tech bellwether nearly doubled Q3 profits and issued surprisingly optimistic FY05 and FY06 guidance while better than expected March personal income and consumption data and an encouraging read on regional manufacturing were also contributing factors... Mar Personal Income rose 0.5% (consensus +0.4%) and Spending rose 0.6% (consensus +0.4%), while the Q1 Employment Cost Index - a key inflation measure - rose just 0.7%, below forecasts of 1.0% and the 0.8% in Q4...

April Chicago PMI index checked in at 65.6, down from 69.2 a month earlier, but still represented a fairly high level of growth... But after investors got wind of a disappointing final read on Michigan Sentiment, which declined for the fourth straight month checking in at 87.7 (consensus 88.9), the market was under pressure throughout most of the session... And it wasn't until inflationary pressures were mitigated by the sell-off in oil that really boosted investors' confidence to sustain a rally into the weekend...Materials (+2.6%) paced the way higher with gains across the board...

Strength in shares of Weyerhaeuser (WY 68.65 +3.21) after Franklin Mutual Advisers reported a 7.1% stake in the company and weakness in the dollar against the yen contributed to the huge upside... The yen surged after a Chinese state-sponsored newspaper reported the government may let the yuan float freely at anytime... Financial (+1.6%), while showing relative strength most of the day, also surged, getting a huge boost late in the day amid reports than Morgan Stanley (MWD 52.50 +2.06) will hold an emergency board meeting to discuss management crisis at the firm...

Technology (+1.2%) was also an influential leader to the upside, as gains in Networking, Software and Hardware and only minimal strength in Semiconductor offset weakness in Disk Drive... Within an hour of trading, the Semiconductor Index set a new six month low in the wake of KLA Tencor's (KLAC 39.01 -1.01) downside Q4 guidance, but a rebound in chip giant Intel (INTC 23.53 +0.34) helped the index inch into the green... Even Consumer Discretionary held onto modest late-day gains, despite widespread weakness in Retail...

Retailers were under pressure after Merrill Lynch lowered its Q2 earnings estimates for a dozen U.S. retailers - WMT, TGT and GPS to name just three - citing worries that unusually cool weather in late April hurt sales of spring and summer clothing...NYSE Adv/Dec 2153/1115, Nasdaq Adv/Dec 1846/1233