Reply #40: 12:17 lunchtime check-in

[54anickel]

Dow 10,515.60 +66.46 (+0.64%)
Nasdaq 2,130.88 +18.00 (+0.85%)
S&P 500 1,218.38 +6.52 (+0.54%)
10-Yr Bond 41.40 +0.31 (+0.75%)
NYSE Volume 846,332,000
Nasdaq Volume 916,386,000


12:00PM : Market holding steady at sharply higher levels midday, as falling oil prices, fresh M&A news and growing optimism about upcoming earnings reports lift virtually every sector... Ongoing weakness in crude oil futures ($58.35/bbl -$1.28), amid reports that Hurricane Dennis caused less damage and fewer supply disruptions than initially anticipated, has helped calm investors' nerves about high energy prices weighing on corporate profit margins, as Q2 earnings season gets underway...

Current estimates have Q2 aggregate EPS growth for the S&P checking in around 7%, but final EPS growth rates every quarter come in about 2-5% above the forecast at the start of the earnings reports, which could leave Q2 EPS growth around 9-12% when it's all said and done, much closer to the 13% growth realized in Q1... Several new M&A deals, such as VNU's $7 bln bid for IMS Health (RX 26.46 +0.57) and Pogo Producing's (PPP 54.34 -0.44) $1.8 bln bid for Unocal's (UCL 65.89 +0.15) Northrock Resources, have also helped improve sentiment across the board...

Meanwhile, The Materials sector, benefiting in part from dollar weakness, continues to lead the charge to the upside, after Deutsche Bank reiterated their Buy rating on DuPont (DD 44..26 +0.76) and a CSFB upgraded the Metals/Mining industry on valuation... Technology, however, has been a more influential leader to the upside, benfiting in part from positive comments from Bear Stearns about DRAM pricing (i.e. MU)... Health Care has traded higher, getting a boost from an analyst upgrade on Schering-Plough (SGP 19.31 +0.34) and upside Q1earnings guidance from Mylan Labs (MYL 19.94 +0.53)...

Even though benchmark yields have hit their highest levels since mid June, interest-rate sensitive areas like Financial and Utilities have shown relative strength, with the former taking advantage of strength in brokerage, banks and a relief rally in insurance following the downgrade of Hurricane Dennis to a tropical depression... The Treasury market has been weak across the board, as investors rotate out of fixed income products and into stocks... The 10-year note is off 10 ticks to yield 4.13%... A recent turnaround in Energy, which opened lower amid falling oil prices, has also provided some early support, as analysts' expectations of Q2 EPS growth for the sector have been raised to about 33% (from 27% last week)... DJTA +1.1, DJUA +0.8, DOT +1.3, Nasdaq 100 +0.7, Russell 2000 +1.4, SOX +1.5, S&P Midcap 400 +0.7, XOI +0.2, NYSE Adv/Dec 2241/855, Nasdaq Adv/Dec 2083/804

11:30AM : Market continues to climb at the expense of ongoing deterioration in oil prices... Crude oil futures recently falling to fresh session lows around $58.10/bbl (-$1.53) has helped pave the way for strong follow-through buying interest in equities... Despite hitting record levels last week, declines in the commodity on Thursday and Friday, coupled with encouraging employment data, helped the Dow, S&P and Nasdaq record strong gains of 1.4%, 1.5% and 2.7%, respectively, heading into the weekend... NYSE Adv/Dec 2215/828, Nasdaq Adv/Dec 2031/818