Traders-Blog.com

The Dow rallied 114.85 points, to close at 10,405.63. Also, the Nasdaq rose 24.69 points, to close at 2,069.89. The S&P closed at 1,201.57, after rising 10.88 points. This big rally in the U.S stock market was caused by a pullback in crude-oil prices, and other good economic news. Although crude-oil prices closed above $60 yesterday, oil skid almost 4 percent with the August contract closing down $2.34 at $58.20 a barrel on the New York Stock Exchange. Also, Morgan Stanley raised its oil price forecast, saying it sees $50 crude for 2005, and upgraded its rating in the oil sector to attractive.

The only two companies that posted losses in the Dow were Pfizer Inc., and Exxon Mobil Corp. On the other hand, Home Depot, General Motors Corp., Wal-Mart Stores Inc., and United Technologies Corp. posted the biggest gains in the Dow. In the technology sector, International Business Machines (IBM) was targeted by the Securities and Exchange Commission, which has opened an informal investigation into disclosures that the company made regarding stock option expenses in its first-quarter earnings report.

The former chief executive of HealthSouth Corp., Richard Scrushy, was acquitted of directing a $2.7 billion accounting fraud, which almost bankrupted the company he built into the largest U.S. operator of rehabilitation hospitals. Scrushy was the first executive cleared at trial of fraud charges since the government began prosecuting corporate wrongdoing following the collapse of Enron Corp. in 2001. HealthSouth also released its first audited financial statements since 2002, lowering the previously stated profit in 2000 and 2001 by $1 billion. The company’s net loss in 2002 was $466.8 million, or $200 million more than previously stated.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter