Where Are Rates Going? Find Out What This Big Bond Trader Says…

Stocks are higher on tame inflation data.
The major indices are all trading to five-week highs.
The CPI for April was 0.5%; ex-food/energy, unchanged.
Year over year, it rose 2.2%, a little less than expectations. Crude inventories
rose 4.3 million barrels, much more than expected, and the highest level since
March 1999. Gas inventories also rose more than expected, +1.1 million barrels.

Hewlett Packard
(HPQ)
beat by a penny and revenues ($21.6 billion) also beat slightly. The company
lowered Q3 guidance.

Abercrombie & Fitch (ANF)
beat by 0.03.
Q1 profit rose 38%.

Applied Materials
(
AMAT |
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beat by a penny but said orders were
down and lowered Q3. Profits fell 18% and new orders for the three months ending
May 1 fell 30%. CIBC downgraded the stock.

Yahoo
(
YHOO |
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unveiled a modified instant messaging service which
allows free worldwide PC-to-PC calls without a phone.

Merrill Lynch upgraded technology to marketweight from underweight.

Pimco’s Bill Gross sees 10-year rates between 3 – 4.5% over the next
five years.

Federal Reserve Board Governor Ed Gramlich is resigning effective
August 31. Greenspan is planning to leave in January.

Strong sectors are:  Airlines 
(
$XAL.X |
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+3.86% 
Gold

(
$HUI.X |
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+2.91%   Chemicals 
(
$CEX.X |
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+2.19%  

Weak sectors are:   Oil Services  
(
$OSX.X |
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-1.41%   Natural Gas
(
$XNG.X |
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-0.23%    

Dow +81.65 10,413.53
Nasdaq +14.6 2018.76
S&P 500 +7.57 1181.37

The dollar is -0.13 at
86.08

Crude Oil is -1.02 at
49.65

Gold is +1.30 at 420.20

ce=”Arial” size=”2″ face=”Arial”>Volume is 884 million on the NYSE and
795 million on the Nasdaq.

Market breadth is positive.

NYSE Issues
Advancing 2398 Up Vol 631
Declining 707 Down Vol 150
3.39 4.20
Nasdaq
Advancing 1914 Up Vol 538
Declining 890 Down Vol 190
2.15 2.83

Stocks in the News

Nordstrom
(
JWN |
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beat and raised its 2005 view. Q1 profit rose 52%.

Intel
(
INTC |
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holds its annual meeting today.

Boise Cascade slashed the price of its IPO and now sees $17-$19, down
from $24-$26.

Yum Brands’
(
YUM |
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PowerRating)
same store sales rose 4%–analysts were
expecting between 2-4%.

Honeywell
(
HON |
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PowerRating)
said all of its business are on track.

Ross Stores
(
ROST |
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beat by 0.03.

Brice Wightman