Two Reasons Why We Could Rally Tomorrow

Market breadth was positive,
with NYSE advancing issues over declining issues by a ratio of 2.37, and up
volume over down volume by a 5.35 ratio. Nasdaq advancing issues over declining
issues came in at 1.65, and up volume beat down volume by a 3.02 ratio.

The

VIX was -2.14 at 29.98. The

TRIN was -0.92 at 0.44.

Leading the Dow higher: SCB Communications,
(
SBC |
Quote |
Chart |
News |
PowerRating),
+5.35% at 27.13, JP Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating), +4.99% at 24.80, Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating),
+4.86% at 24.15, Du Pont
(
DD |
Quote |
Chart |
News |
PowerRating), +4.15% at 44.33, Citigroup
(
C |
Quote |
Chart |
News |
PowerRating),
+4.11% at 37.48, and Microsoft Corp.
(
MSFT |
Quote |
Chart |
News |
PowerRating), +3.80% at 54.50.

Stocks in
the news:

Chip giant Intel
(
INTC |
Quote |
Chart |
News |
PowerRating), +3.64% at 18.22, and
computer box maker Dell Computer
(
DELL |
Quote |
Chart |
News |
PowerRating), +3.30% at 27.15, shrugged
off negative comments in a Barron’s article which cited a hedge fund
manager who listed the stocks as good short sale candidates.

Computer hardware maker
Hewlett Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating), +1.99% at 18.95, has been added to Merrill
Lynch’s Focus One List.

In the retail sector, these two
stocks don’t seem to care much about negative news, as Target
(
TGT |
Quote |
Chart |
News |
PowerRating),
+2.68% at 31.80, was the subject of a negative Barron’s article over the
weekend which claims the company’s credit card business is likely to face rising
defaults and hurt earnings. Also, Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating), +2.77% at 51.94,
announced that it expects same store sales to rise 3% to 5% for the month of
December, as sales track at the low end of expectations. The company also said
it filed to sell $10 billion in debt securities.

Elsewhere in the retail sector, Federated Department
Stores
(
FD |
Quote |
Chart |
News |
PowerRating), +2.05% at 29.32, JC Penney
(
JCP |
Quote |
Chart |
News |
PowerRating), +4.87% at
24.75, May Department Stores
(
MAY |
Quote |
Chart |
News |
PowerRating), +1.03% at 23.50, and The
Limited
(
LTD |
Quote |
Chart |
News |
PowerRating), +2.95% at 15.00.

Communications services company Bell South
Communications
(
BLS |
Quote |
Chart |
News |
PowerRating), +4.72% at 27.25, announced that is awaiting
approval from federal regulators for its plan to sell long distance service in
Florida and Tennessee.

Software company Internet
Security Systems
(
ISSX |
Quote |
Chart |
News |
PowerRating), -4.70% at 21.25, was downgraded by SG Cowen to
“underperform” from “market perform”.

Security systems company
Invision
(
INVN |
Quote |
Chart |
News |
PowerRating), +19.32% at 27.41, raised its fourth-quarter earnings
estimated to $1.60 per share vs. the Multex consensus of $1.38-$1.39 per share.

In the pharmaceutical biz,
Glaxo-SmithKline
(
GSK |
Quote |
Chart |
News |
PowerRating), +2.85% at 37.80, announced that the U.S. Food
and Drug Administration has approved the use of Pediarix, a drug given to
infants for the prevention of diphtheria, tetanus, polio, hepatitis B, and
pertussis.