Reply #62: time to go home

[ozymandius]

Dow 10,889.44 +55.71 (+0.51%)
Nasdaq 2,246.49 +14.83 (+0.66%)
S&P 500 1,268.12 +5.33 (+0.42%)
10-Yr Bond 44.33 -0.53 (-1.18%)
NYSE Volume 1,856,656,000
Nasdaq Volume 1,529,656,000

Unlike the last few sessions, which succumbed to late-afternoon selling pressures, the major averages found renewed buying interest heading into the finish. Acting as sources of support that helped closed nine out of ten economic sectors higher and offset some negative news on the corporate front were encouraging economic data, falling bond yields and a decline in crude. Before the bell, Nov. personal income and spending both rose 0.3%, which were about what economists expected and consistent with current Q4 real GDP expectations of about 3% growth. More notably, though, the core PCE deflator was up just 0.1% for the second straight month, easing previous concerns that inflationary pressures were building. While stock investors seemed a bit lethargic in their attempts to fully embrace low-level inflation, as the market traded in a narrow range throughout most of the day, they eventually took notice from the bullish bond traders that helped knock the yield on the 10-yr note (+14/32) down to 4.43% ahead of tomorrow's holiday-shortened session for the Treasury market. It would be remiss, however, to say that there was much conviction behind today's upswing in stocks and bonds, as limited participation, due largely to the NYC transit strike, only served to exacerbate today's run-up in both markets. With regard to sector leadership, Materials turned in the day's best performance, led by strength in chemicals, paper and other gold stocks, with the latter in focus after Barrick Gold (ABX 27.14 -0.08) sweetened its bid for Placer Dome (PDG 22.35 -0.30). Industrials posted the next biggest gain. The sector got a lift from General Electric (GE 35.39 +0.32), which is buying Arden Realty for $3.2 bln, Caterpillar (CAT 58.42 +1.34), which CSFB named as their top large-cap machinery stock for 2006, and Burlington Northern Sante Fe (BNI 70.50 +1.49), a suggested holding in Briefing.com's portfolio for active investors which hit a historic high. Health Care was strong across the board but an extra shot in the arm from continued appreciation for HMOs, in particular, Humana (HUM 55.30 +6.98). Humana hit an all-time reaffirmed its FY06 EPS outlook and said it expects enrollment in its Medicare plans to more than triple by January 1st has provided the biggest boost. While a disappointing Q1 (Nov) report from Micron Technology (MU 13.67 -0.47) threatened to pressure Technology early on, a rotation into other chip stocks and bargain hunting in underperforming groups like software, hardware and networking have been sources of sector support. Financial was another influential sector to post a healthy gain, as falling bond yields helped rate-sensitive banks and mortgage lenders while brokerage got a boost following better than expected Q3 (Nov) earnings from A.G. Edwards (AGE 46.04 +0.74). Even Consumer Staples, which was weak most of the day as reports that a proposed $9.6 bln deal for Albertsons (ABS 23.28 -0.82) won't get done underpinned a profound sense of disappointment, eked out a small gain. So did Consumer Discretionary, which found just enough strength from media companies and homebuilders to counter weakness in retail spurred by disappointing guidance from Bed Bath & Beyond (BBBY 36.27 -4.97). Energy, however, closed lower as an analyst upgrade on Transocean (RIG 70.16 +0.91) -- a suggested holding in Briefing.com's portfolio for active investors, was not enough to offset declines across the energy complex. CRB +0.8, DJTA +1.2, DJUA +0.7, DOT +1.1, Nasdaq 100 +0.6, SOX +1.2, S&P Midcap 400 +0.6, XOI -0.03, NYSE Adv/Dec 2028/1285, Nasdaq Adv/Dec 1906/1164