Does This Rally Have Legs?

December 9, 2005
Brice Wightman

Stocks closed higher Friday after oil pulled back mid-session. Traders
pondered news from two Dow components.

In its lackluster mid-quarter update yesterday, Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) lowered
the high end of its guidance and sees Q4 revenues between $10.4 -10.6 billion. The New England Journal of Medicine said a study financed by Merck
(
MRK |
Quote |
Chart |
News |
PowerRating) could have fudged data. A third Vioxx trial just went to the jury.

Roger Levine, Managing Director, Equity
Trading at Pacific Crest, says "Breadth is very encouraging; you’ve got
advancers just about 2:1 on Nasdaq and near that on the NYSE…a great recovery.
We had a five-week rally with a little bit of selloff the past few days and it
seems to be coming back, so maybe the rally’s got new legs."

Gold traded up $7.50 to a 24-year high intraday and crude traded as high as
$61.10 intraday before pulling back. The University of Michigan sentiment
index was 88.7, better than expected.

Eli Lilly
(
LLY |
Quote |
Chart |
News |
PowerRating) (Power
Rating) guided higher for fiscal 2006. Separately, the company said it will
ask the FDA in 2006 to approve its Cymbalta depression drug.

Goldman Sachs downgraded National Semiconductor
(
NSM |
Quote |
Chart |
News |
PowerRating) (Power
Rating) to inline from outperform.

Dow

+23.46

10,778.58

Nasdaq

+10.27

2256.73

S&P 500

+3.53

1259.37

More stocks on the move:

Furniture Brands
(
FBN |
Quote |
Chart |
News |
PowerRating) guided higher.

KH Homes
(
KBH |
Quote |
Chart |
News |
PowerRating) raised its dividend 33% to an annual $100/share.

Credence
(
CMOS |
Quote |
Chart |
News |
PowerRating) missed by 0.02 and guided lower.

Brice Wightman

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Commodities 2006 Readers’ Choice Awards

Does This Rally Have Legs?

BUY THE FEAR, SELL THE GREED

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