This 10-Month Low Is Sending Us A Message

Gains
were made for the day as the major indexes trended higher
off the
opening bell and closed the session just off its highs. The buying was
broad-based, with no stocks on the Dow closing negative. The day’s leadership
came from a mixture of tech, chemicals, and insurance, and the losers’ column
was led by oil service stocks reacting to lower oil prices. Standing out today,
the volatility index,

VIX
, hit another 10-month low suggesting even more complacency for current
prices. Volume came in below average, while news headlines were on the quiet
side.

The Dow Jones
Industrial Average

(
$INDU.X |
Quote |
Chart |
News |
PowerRating)
closed +1.98
%
at 8,471.61. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
closed +1.78% at 914.84. The
Nasdaq

(
$COMPQ |
Quote |
Chart |
News |
PowerRating)
closed +1.93% at 1,462.24.

The day’s top gainers were in
airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating)
, +3.65%, networking
(
$NWX.X |
Quote |
Chart |
News |
PowerRating)
,
+3.18%, chemicals
(
$CEX.X |
Quote |
Chart |
News |
PowerRating)
, +2.54%, and telecoms
(
$XTC.X |
Quote |
Chart |
News |
PowerRating)
,
+2.53%.

Down today were oil service

(
$OSX.X |
Quote |
Chart |
News |
PowerRating)
, -1.05%, and REITs
(
DJR.X |
Quote |
Chart |
News |
PowerRating)
, -0.10%, and gold
and silver

(
$XAU.X |
Quote |
Chart |
News |
PowerRating)
, -0.03%.

In economic news, personal
income
came in at an expected 0.4%, and personal spending came in at
0.4% vs. estimates of 0.6%.

The Ten Year Note  was
-030 at 114 240.

The US dollar was +0.30
at 98.92.

Volume was below
average
, with the NYSE coming in at 1,244,241,000 and the Nasdaq at
1,448,348,000.

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 3.06, and up
volume over down volume by a 6.84 ratio. Nasdaq advancing issues over declining
issues came in at 2.01, and up volume beat down volume by a 4.10 ratio.

The

VIX
was -0.85 at 23.05. The

TRIN
was -1.59 at 0.44
.

Strongest in the Dow were:

McDonalds
(
MCD |
Quote |
Chart |
News |
PowerRating)
,
+7.08% at 16.93, SBC Communications
(
SBC |
Quote |
Chart |
News |
PowerRating)
, +4.20% at 23.05, AT&T
Corp.

(
T |
Quote |
Chart |
News |
PowerRating)
, +3.73% at 16.95, 3M Co.
(
MMM |
Quote |
Chart |
News |
PowerRating)
, +3.17% at 126.80,
JP Morgan

(
JPM |
Quote |
Chart |
News |
PowerRating)
, +3.04% at 28.81, and Intel Corp.
(
INTC |
Quote |
Chart |
News |
PowerRating)
,
+2.57% at 18.75.

Stocks in the news:

Insurer SAFECO Corp.
(
SAFC |
Quote |
Chart |
News |
PowerRating)
, +3.98% at 37.82,
announced earnings $0.04 ahead of expectations with profits of $0.65 per share.

Fast Food giant McDonalds
(
MCD |
Quote |
Chart |
News |
PowerRating)
, +7.08% at 16.93, beat its first-quarter earnings by $0.01 with
profits of $0.29 per share.

Personal and household product
maker Procter and Gamble
(
PG |
Quote |
Chart |
News |
PowerRating)
, +1.73% at 90.69, reported third-quarter
earnings in line with expectations with profits of $0.96 per share.

Aerospace and defense company
Boeing
(
BA |
Quote |
Chart |
News |
PowerRating)
, +0.69% at 27.38, was downgraded by JP Morgan to
“underweight” from “neutral”.

Conglomerate General
Electric

(
GE |
Quote |
Chart |
News |
PowerRating)
, +1.40 at 29.52, was the focus of a Wall Street Journal
article which claims the company may face continued exposure to asbestos claims.

Drug maker Shire
Pharmaceuticals

(
SHPGY |
Quote |
Chart |
News |
PowerRating)
, -5.64% at 19.06, and Noven Pharmaceuticals

(
NOVN |
Quote |
Chart |
News |
PowerRating)
, -37.92% at 8.97, have been denied FDA approval for
Methylphenidate Transdermal Sys.

Chip maker Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating)
, +1.90% at 14.46, was downgraded by First Albany to “underperform”
from “neutral”.

Also in the drug biz,
Weyerhaeuser Co.

(
WY |
Quote |
Chart |
News |
PowerRating)
, -1.34% at 50.00, was downgraded by JP Morgan to
“underweight” from “neutral”.

Business services company
Manpower

(
MAN |
Quote |
Chart |
News |
PowerRating)
, +5.51% at 31.56, was upgraded by UBS Warburg to “buy”
from “neutral”.

Food distributor Sysco Corp.
(
SYY |
Quote |
Chart |
News |
PowerRating)
, +2.64% at 28.36, missed its third-quarter earnings by $0.01 with
profits of $0.26 per share.

Creator and manufacturer of
fragrance products,  International Flavors
(
IFF |
Quote |
Chart |
News |
PowerRating)
, -0.75% at 32.77,
missed its first-quarter earnings by $0.01 with profits of $0.48 per share.

Electric utilities company
Entergy

(
ETR |
Quote |
Chart |
News |
PowerRating)
, -1.26% at 47.47, beat its first-quarter earnings by $0.07
with profits of $1.12 per share.

Off shore oil driller
Pride International

(
PDE |
Quote |
Chart |
News |
PowerRating)
, +3.23% at 15.66, was upgraded by Goldman Sachs
to “outperform” from “in line”.

Household product retailer
Bed Bath and Beyond

(
BBBY |
Quote |
Chart |
News |
PowerRating)
, +2.97% at 39.05, was mentioned in
Barron’s
over the weekend as a top growth stock pick by William Blair.

TM’s Momentum
List
, Internet company United Online
(
UNTD |
Quote |
Chart |
News |
PowerRating)
, +5.96% at 20.96,
biotech firm Hi-Tech Pharmaceutical
(
HITK |
Quote |
Chart |
News |
PowerRating)
, +6.39% at 34.44, and and
also in the Internet biz, Netease.com
(
NTES |
Quote |
Chart |
News |
PowerRating)
, +4.33% at 20.22.


danielb@tradingmarkets.com