Traders-Blog.com

Today was a day of gains for the market. The Dow rose 63.77 points to close at 10,830.00. Besides, both the S&P and the Nasdaq rose today. The S&P rose 6.83 points closing at 1,210.41, while the Nasdaq close at 2,071.25 after rising 19.53 points. In currency trading, the dollar gained versus the euro and fell over the yen. Stocks bounced back well today as investors found good news in economic reports signaling a mild inflation. Besides, upgrades of Dow components Intel and Johnson & Johnson added to the positive gains.

Mixed economic news seemed to ease concerns of investors about inflation. The Institute for Supply Management’s manufacturing index fell to 55.3 in February from 56.4 in January. But, according to economists surveyed by Briefing.com, the index would increase to 57 in February. On the other hand, a separate report showed that construction spending rose 0.7 percent in February, after gaining 1.2 percent in January. In this case, economists thought it would be up only 0.4 percent. Then, a weaker-than-expected reading on manufacturing in February and solid construction numbers in January helped investors to realize that the economy is not overheating.

Among Dow components, Intel Corp. rallied 2.6 percent after positive comments by J. P Morgan. Besides, Texas Instruments (TXN), Fairchild Semiconductor (FCS), Cypress Semiconductor (CY), and National Semiconductor (NSM) were upgraded by J.P Morgan and posted gains today. Also, Johnson & Johnson gained 1.6 percent after Merrill Lynch raised its recommendation on the drug and consumer products giant, giving a more positive earnings outlook for 2005. Nevertheless, energy and oil services stock retreated sharply as a drop in crude futures prompted investors to lock in gains made over the last few weeks.

OmniVision Technologies had a decrease in its share price of about 16 percent after the semiconductor firm’s fourth quarter forecast and inventory rise disappointed some investors. Its shares closed trading down $3.19 at $17.02. According to Adam Benjamin, Jefferies analyst, he recommends investors to “stay on the sidelines until OmniVision is able to improve OmniPixel yields and gain back lost camera phone share”.

U.S. auto sales fell 1.9 percent in February as General Motors Corp. and Ford Motor Co. had big declines, and Asian automakers had increased sales. Ford said it will cut North American production 1.2 percent in the second quarter and further reduce output in the current quarter. And, General Motors said it intends to build 1.25 million vehicles in the second quarter, down 10 percent from last year. Nevertheless, Nissan Motor Co., Japan’s second largest automaker, said its February U.S. sales of cars and light trucks rose 10 percent. The company sold 82,412 Nissan and Infinity cars and trucks.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter