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Reversal of fortunes despite weaker consumer confidence numbers

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Stocks have firmed in the last couple of hours despite this morning's Conference Board showed consumer confidence fell to 97.1 from June's 106.4 reading.

The Dow Industrials (INDU) 8,646 -0.75% came within 4 points of trading unchanged, but have since slipped back 65 points.

The broader NASDAQ Composite (COMPX) 1,336 +0.06% has moved into positive territory, lead by biotechs as the Biotechnology Index (BTK.X) 359 +4.24% leads technology sector gains.

Investor may be doing some YIELD/dividend hunting today as we are seeing some buying in the longer-term 30-year Treasury ($TYX.X) 5.379%, while selling is being found in the shorter-term and lower yielding 5-year Treasury ($FVX.X) 3.594%. This "yield" hunting may be present as the higher dividend paying utilities have the Utility Sector Index ($UTY.X) 265.11 +5.06% leading sector gains.

Utility HOLDRS Chart - Daily Interval

The Utilility HOLDRS (AMEX:UTH) $68.10 +5.66% are a "favorite" equity to trade among short-term traders. There were a multitude of "inside days" in a number of stocks and sectors on Friday, with the UTH being no exception. Yesterday's "inching" above Friday's inside day didn't trigger a surge of buying, but the sector is getting a nice boost today and has some near-term upside to $71.32. Volume has been heavy near the relative lows last week and supply may be limited. Look for pullbacks to the $63 level to find buyers and target the $81.66 level in coming months.

Jeff Bailey
Senior Market Technician
Option Investor

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