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Building some gains

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As the markets approach the final 45-minutes of trading, the major market averages have reached their highs of the session with the broader NASDAQ Composite (COMPX) 1,321 +1.74% and NYSE Composite (NYA.X) 477 +1.03% both posting gains.

In the last hour, the Dow Industrials (INDU) 8,405 +1.05% posted a gain of 121 points, retracing about 1/2 of yesterday's declines.

Of the 30 Dow components, breadth is positive with 25 showing gains versus 5 trading in the red.

Dow standouts have a computer technology theme with Intel (NASDAQ:INTC) $16.42 +5%, Hewlett Packard (NYSE:HPQ) $14.33 +3.8% and IBM (NYSE:IBM) $72.28 +3% showing strength. Also strong are drug giant Merck (NYSE:MRK) $52.67 +4.3% as it approaches its 200-day SMA at $53.25.

After a monumental run from a 52-week low of $19.57, telecom service provider SBC Communications (NYSE:SBC) $24.74 -3.7% gives back some recent gains after reporting earnings yesterday morning that missed the Street's estimates by 3-cents a share.

Sector strength today remains to be the Semiconductor Index (SOX.X) 288 +3.6% and Disk Drive Index (DDX.X). Sector bellwether's in the semiconductor space have shares of Applied Materials (NASDAQ:AMAT) $14.34 +5.67 matching Intel's gains, while other semi-equipment makers have Novellus (NASDAQ:NVLS) $28.92 +3.02% and KLA-Tencor (NASDAQ:KLAC) $33.30 +4.81% trading higher.

Volume on both the NYSE and NASDAQ have just breached the 1 billion mark with breadth building to the bullish side. NYSE breadth has improved to a 2 to 1 margin, while NASDAQ breadth is positive with 3 stocks advancing for every 2 declining.

Treasuries ended the session higher with the 10-year December futures (ty02z) 113'045 +0.36% edging up, while the benchmark bond's YIELD ($TYX.X) fell to 4.095%.

Jeff Bailey

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