Reply #81: 12:31 EST and the band plays on ...

[UpInArms]

Dow 10,812.83 +63.07 (+0.59%)
Nasdaq 2,257.70 +12.74 (+0.57%)
S&P 500 1,260.55 +5.77 (+0.46%)
10-Yr Bond 4.581 +0.14 (+0.31%)

NYSE Volume 1,219,087,000
Nasdaq Volume 1,135,824,000

12:00 pm : Heading into the afternoon, the major indices hang onto moderate gains. A slightly better than expected fiscal Q3 earnings report from Cisco Systems (CSCO 19.28 +1.19) has helped support the market, and a much better than expected build in gasoline supply has fostered some further optimism. At the same time, the market's advance is somewhat tempered by continued uncertainty over inflation and Fed tightening.

The fact that Cisco did not disappoint has given the market a boost. That stock has enjoyed several subsequent upgrades, and upgraded Dell (DELL 31.04 +1.35) and Applied Materials (AMAT 19.84 +0.34) shares give bargain hunters more reasons to look towards the Tech sector. Its 1.1% advance leads the market. Health Care (+0.7%) also lends solid upside. The driver there is Pfizer (PFE 26.03 +1.09), which is considering a divesture of its lower-margin Consumer Health Care business. On the heels of Time Warner (TWX 18.36 0.00) and Univision (UVN 33.84 +3.30), the Telecom sector (+0.4%) is also advancing today. With respect to the former, reports indicate that Carl Icahn is advancing a plan to split the company. Univision, meanwhile, is considering a sale.

The Energy Department's latest crude inventory report was a mixed bag. Crude supply unexpectedly declined, but gasoline supply rose more than twice as much as analysts had expected. Given the implication that higher gasoline inventories should translate into lower prices at the pump for consumers, the latter point has been a supportive factor. McDonald's (MCD 36.36 +0.17) adds to the Discretionary sector's upside. For the 33th consecutive month, the Briefing.com recommended holding reported solid same-restaurant sales growth. Despite the drawdown in crude supply, crude futures extend yesterday's 2.3% drop. In turn, the Energy sector has fallen victim to profit taking. Its 1.2% decline is countered by gains in seven other sectors, but it also serves as somewhat of a cap on the broader market's advance. We remain bullish on Energy, and very strong fourth quarter earnings reports from both Grant Prideco (GRP 45.01 -3.44), another one of our portfolio picks, and Diamond Offshore (DO 79.35 -0.73) underpin that view.DJ30 +53.31 NASDAQ +10.66 SP500 +4.42 NASDAQ Dec/Adv/Vol 1493/1368/988.4 mln NYSE Dec/Adv/Vol 1685/1400/786.6 mln