Stocks Rally, Giving Traders Hope

[Excerpted from Bill Cara's Daily Report]

Equity markets made steady progress on Wednesday as Energy (XLE+4.8%) and Basic Material (XLB) stocks rallied from the opening bell,giving traders hope that an upside move was about to commence. By theend of the session, the DJIA (+149.82 +2.23% to 6875.84, still downfrom Friday’s 7062.93 close); the S&P 500 (+16.54 +2.38% to 712.87,still down from Friday’s 735.09); and the NASDAQ Composite (+32.73+2.48% to 1353.74, still down from 1377.84) showed promise.

The Canadian markets were also firm as the Toronto Composite gained +183.13 +2.40% to 7814.75 (down from Friday’s 8123.02 close), while the Venture Board gained just +6.88 +0.83% to 830.95 (down from Friday’s 861.66).

Earlier in the day Thursday, Asia-Pacific equity markets were mixed: Australia (+0.73% to 3148.8); Japan (+1.95% to 7433.5); and Shanghai China (+1.04% to 2221.1) were strong, whereas Hong Kong (-0.97% to 12211.2), and India (-2.94% to 8197.9) went south.

The French CAC (-2.1%), the German DAX (-2.3%), and the UK FTSE 100 (-2.7%) were weak as of 6:30am ET today.

Wednesday in NY, the Energy sector leader was led by Oil Services ($OSX +6.4%); and NatGas ($XNG) and Big Oil ($XOI), both up +5.0%. The losing Financials (XLF -1.3%) were the only losing sector, pulled down on the session by the big Banks ($BKX 3.3%).

The Goldminers ($XAU +0.02%) were flat as $GOLD futures contracts dipped further (-$6.90/oz) to 906.70, after being down -$26.40/oz, the prior day.

At 6:43 am ET Thursday (compared to 9:30 am Wednesay), the spot prices for gold, palladium, platinum and silver were: 915.81 (918.15); 198 (192.5); 1053 (1035.5); and 13.15 (13.08), respectively.

Crude Oil ($WTIC) closed up Wednesday +$3.73/bbl to 45.38, after being up +$1.50/bbl the previous day. Inventories were reported to be lower.

As for the Cara 100 ), the big winners were Russian telco Mobile TeleSystems (MBT +17.8%); Brazilian metals miner Vale CVRD (RIO +16.0%); emerging world telco MICC (MICC +16.0%); Canadian oiler Suncor (+14.9%); and the Aussie natural resources powerhouse BHP (BHP +13.9%). The losers were two companies I removed yesterday morning from the Cara 100, General Electric (GE -12.6%) and Manulife Financial (MFC -3.9%), plus Brunswick Corp (BC -10.3%) and Teck (TCK -2.6%).

Teck remains in the Cara 100 quality company list. After speaking to the company VP of IR and corporate strategy plus reviewing nine research reports Thursday morning (so far), I’m not yet ready to report, but my initial impression is that the short-term debt that is coming due in October is do-able. After the review is complete, I may be a buyer of the stock and the calls, and a writer of the puts, on weakness. If, as and when that decision is made, I will publish it here.

Wednesday, US Treasuries lost -0.56% to close at 125.06. Treasury yields for the 30-, 10-, and 5-year paper closed higher.

The $USD lost -0.42% to 88.56, but was a little stronger early today. The Euro closed at 126.60, and was down to 125.49 early this morning.

April Crude Oil futures are down a tad to 44.42. Equity futures for the DJIA were down -87 to 6743, as weakness has set into European markets following the rating agency downgrades on JP Morgan after the close Wednesday, indicating a lower open this morning.

Comments

[Conan the B...:]

That was 24 hrs ago by short covering in reponse to rumors. IMHO

Mar 05 09:21 AM

[BxCapricorn:]

Bill, thanks for the constant reminder that you know very little about the world as we all know it. Thanks for continuing to focus on your positive calls, because the negative ones are killing me. BTW, if you see Louis Navellier somewhere, I'd prefer it if you'd hit him with a hammer, and remind him that his constant bullish calls on Fertilizers, Oil, Metals, and such, killed all of his 2008 subscribers' portfolios. and he is welcomed to squat a hot rock. I see that he is now pushing Walmart and Abbot Labs. Very nice choices. Would he like to buy back my May 2008 pick list? I track MMFAIS.com and I'm pretty sure that's all he does, as well. Like you, he knows nothing. Group hug.

Mar 06 12:32 AM