Mid-Day Summary

Monday, May 19, 2008

Mid-Day Summary: Major averages are hovering near session highs

The stock market is turning back around in afternoon trading, heading back towards session highs. Following a flat start, the major averages popped higher about 15 minutes into the session and never looked back, trending upwards throughout the morning, though they look to be topping out at midday. With first quarter earnings season over, there were very few notable news stories this morning. There was, however, one piece of economic data. April leading indicators came in at a better than expected 0.1% (consensus 0.0%), though it's worth mentioning that eight of the ten economic indicators that make up the report have already been reported. Among sectors, rails have been one of today's best performers, as they have been all year, with CSX (CSX), Northern Southern (NSC) and Burlington Northern (BNI) powering the Dow Transport Index to a fresh all-time high. Other outperforming sectors today include coal and solar. It's worth noting that June crude oil ($126.27 -0.02) fell short of Friday's all-time high of $127.93 in an early morning rally and has pulled back to unchanged on the session. Dow is currently +124 to ~13111; Nasdaq is currently +18 to ~2547; S&P is currently +13 to ~1438... A technical vantage point: The major indices are all holding onto strong gains moving through the midday portion of trading. The Russell 2K (RUT) joined the S&P 500 (SPX), and NASDAQ Composite (COMPQ) @ new four month highs this morning, leaving only the Dow (INDU) as the lone index to confirm. The INDU needs to trade above the early May highs surrounding 13132 in order to confirm & continue the bullish pattern. The SPX made a clean breakout above the key 200day SMA/1428.00 handle with the next potential target for position traders now standing @ 1454.00, the 61.8% Fibonacci retracement derived from the Oct. highs to the Mar. lows. Internals confirm the bullish trend with the A/D line on NYSE @ 1.70:1 and 1:4:1 advancers over decliners on the NASDAQ...In Commodities, June crude ($126.18 -0.11), which expires after the close tomorrow, has given back all of its gains from this morning's modest upward move. Helping crude higher this morning were reports that OPEC's President, Chakib Khelil, said that the cartel will not call an early meeting and even at its Sept gathering was unlikely to boost supply as the world had enough oil. Heading into the afternoon, crude is trading right around the unchanged mark. Note that the spread to July is -0.23... In Europe, mkts rose as buoyant oil and commodity stocks offset weaker financials, while gains on Wall Street lent further support. FTSE closed +0.7%; DAX closed -0.3%; CAC closed -0.1%... Note in Asia, the Nikkei closed +0.4%, the Hang Seng closed +0.5% and the Shanghai Composite closed -0.5%... On the Earnings calendar, 4 cos are confirmed to report today after the close including DRYS. Tomorrow before the open, 11 cos are confirmed to report including CSUN, HD, MDT and MF... On the Economic calendar nothing remains on the schedule for today. Tomorrow before the open, the PPI and the Core PPI figures are scheduled to be released at 8:30ET.