PortfolioCrafter - Market Commentary 5/22/06
May 22nd, 2007 / 10:26 pm / by portfoliocrafter
Stocks finished mixed as investors consolidated some of the market’s strong gains, but with sentiment supported by talks aimed at easing economic tensions between the U.S. and China and signs that deal making continues unabated. The M&A activity provides an underlying support for the market. However, we are trading sideways because there doesn’t seem to be that much news and no macro economic data to guide the investors.
Today, the Dow Jones industrial average closed up 3.41 or 0.02% to 13,546.29, the S&P 500 index closed down 1.50 or 0.06% to 1,523.60, and the tech-fueled Nasdaq composite closed up 8.35 or 0.36% to 2,587.14, ending the session at a new six-year high.
Market breadth was positive. On the New York Stock Exchange, winners topped losers 17 to 14 on volume of 1.5 billion shares. On the Nasdaq, advancers beat decliners 9 to 5 on volume of 2.0 billion shares.
Talks between the Treasury Secretary, Paulson, and a group led by Chinese Vice Premier Wu Yi are on to ease economic tension between the two countries. Topics include the growing trade deficit with China, which hit $235 billion last year, in connection to its undervalued currency.
The M&A puts money back into the hands of investors and helps lift stocks. This is a phenomenon that has been seen for few weeks. While the overall market trend remains bullish, stocks could be a little choppy in the short term, with earnings pretty much done and the upcoming long holiday weekend looming.
Shares of MGM closed up $16.92 or 27% to $79.87, on news that billionaire investor Kirk Kerkorian’s Tracinda Corp. has offered to buy its two properties: the Bellagio and CityCenter.
Stock of Fremont General closed up $3.18 or 38% to $10.29, after it stated that it was selling its commercial real estate lending business to iStar Financial for about $1.9 billion. Stock of istar closed up $2.09 to $47.90.
Shares of Advancis Pharmaceutical closed up $0.40 or 17% to $3.13, after the Food and Drug Administration said it will review its treatment for strep throat.
U.S. light crude oil for June delivery fell $1.30 to $64.97 a barrel on the New York Mercantile Exchange. Crude futures had rallied as violence in Nigeria, Lebanon and Israel, along with concerns over supply led oil to a three-session win of 6%.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
