New Highs! (And Dow Theorists, Take Note)

Stocks were in rally mode on the highest payroll
number in four months,
with the
Dow and S&P making new multi-year highs. The Transports also made new highs (Dow
theorists, take note). The Dow hits its highest level since June 2001, closing
near 11,000. Twenty-seven Dow components traded higher.

February nonfarm payrolls jumped to 262,000 vs a 225, 000 estimate. The January
number was revised to 132,000 from 146,000. The unemployment rate was 5.4%,
higher than the expected 5.2%.  Over the past year, 2.4 million jobs were
added, and average wages rose 2.5%. The S&P small cap and mid cap indices–as
well as the Dow utilities–hit historic highs. News from Lebanon is helping the
“Democracy trade.”

Elan
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ELN |
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and Biogen Idec
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were in focus after
a second person developed a central nervous system disorder that killed a
patient recently.

AIG was lower after The Wall Street Journal reported that
federal prosecutors are investigating a financial transaction with General
Reinsurance.

Martha Stewart was released from prison and begins five months of
house arrest at her Winter home in Bedford, New York. She can leave her home up
to 48 hours per week to work, shop, etc. Traders reacted to the news by placing
buy orders on Martha Stewart Living
(
MSO |
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before the open. The stock
shot up to  37.06, making its intraday high on the second 5-minute bar, and
is now in the red. This is a classic case of “buy on the rumor, sell on the
news.” MSO began its stellar rally just before Ms. Stewart reported to prison
for her 5-months stay. The media hype over Stewart’s release has been nothing
less than amazing–although not altogether unexpected.

Krispy Kreme
(
KKD |
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rose 20% on more than three times average
vole–no public news.

Circuit City
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CC |
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said same store sales fell -1.8%.

Strong sectors were: Homebuilders
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$HGX.X |
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+2.41%   Airlines
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$XAL.X |
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+2.58%  Gold 
(
$HUI.X |
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+2.77%      

Weak sectors were:  Biotech  
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$BTK.X |
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-1.01%   Semis
(
SOX.X |
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-0.24%  

Dow +107.37 10,940.40
Nasdaq +12.21 2070.92
S&P 500 +11.66 1222.14

The dollar was -0.73 at
82.54

Crude Oil was +0.08 at
53.65

Gold was +4.40 to 433.80

ce=”Arial” size=”2″ face=”Arial”>Volume was 1.62 billion on the NYSE and
1.80 billion on the Nasdaq

Market breadth was positive.

NYSE Issues
Advancing 2564 Up Vol 1098
Declining 757 Down Vol 350
38 3.13
Nasdaq
Advancing 1798 Up Vol 1044
Declining 1311 Down Vol 616
1.37 1.69

Stocks in the News

Take Two Interactive
(
TTWO |
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saw a sharp Q1 earnings spike; sales
of its game “Grand Theft Auto: San Andreas” rose above 12 million units.   

Sonus
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will delay Q4 results; the company received two
downgrades.

Dell
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DELL |
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authorized an additional $10 billion in stock
buy-backs.

Saks
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was in-line at 0.67; the company will restate 1999-2004
earnings.

Brice Wightman