Traders-Blog.com

Today was a good day for the market. Stocks held their own as Circuit City’s stocks rose based on the news of a possible buyout. The Dow rose 46.19 points today closing at 10,837.32. The S&P rose 3.93 points to close at 1,210.07, while the Nasdaq closed at 2,089.23 after rising 6.32 points throughout the day.

S&P reported that dividend payouts are being made at a record pace and rate. However, the yields are still low compared to other years. The major difference is the decrease in the tax rate on qualified dividends made by the government; tax rates were lowered to 15% in 2003.

Circuit City was big in the news today as they reported the possibility of a buyout in the near future. The company received an unsolicited offer from Highfields Capital Management, a major shareholder for the past two years. Highfields has offered $3.25 billion for a stock buyout taking the company private, which values each share at $17. Making the company private would help rid them of public-company transparency, which, according to Highfields’ proposal letter, “is uniquely damaging in a highly competitive industry where Circuit City is going head-to-head with a tough and entrenched rival.” Shares jumped 21% during the day ending up around 17% when they closed at $16.17.

Microsoft Corp. announced today that it would be offering consumers who use the popular Windows software free spyware-combating programs. Costs of software to get rid of spyware have been rising over the past few years, and Microsoft’s plan will put some of the companies who are selling those products at risk. Corporate customers who will need more intensive services will be offered a version to buy for their companies.

The CEO of ChevronTexaco made news today as he demanded that the United States revise its energy policy. CEO David O’Reilly says that he did not see a need for a new policy until recently, but with the increasing demands for energy, he considers a new policy a major priority. O’Reilly believes that the administration should support policies and companies seeking to focus on energy types other than oil, such as coal and nuclear power. Additionally, he recommends that renewable sources of fuel, such as wind and solar energy be made a first priority; he also stated that making products and usage more energy efficient is key.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter