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Stocks rebound as gold stocks rest

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It's been a tale of two markets in recent weeks as the major indexes have pulled back from their highs as gold stocks have rebounded in the wake of a weaker U.S. dollar and heightened geopolitical uncertainty, but equity bulls are getting a rebound today as the Dow Industrials (INDU) 8,550 gets a triple-digit gain in the early morning.

Sector action is green today, with only the Gold/Silver Index (XAU.X) 75.97 -1.49% taking a rest after last week's 8% gain.

This morning's Dow winners have shares of SBC Communications (NYSE:SBC) $26.90 +4.46% and Alcoa (NYSE:AA) $24.11 +4.68%, while AT&T (NYSE:T) $27.20 -1.3% bucks the Dow's gains and hovers near its session low with a rising 50-day SMA at $27 serving support last week.

Despite some less than bullish news in the pre-market regarding Wal-Mart (NYSE:WMT) $51.28 +1.46% and Target (NYSE:TGT) $31.65 +2.16%, the broader S&P Retail Index (RLX.X) 277.20 +1.56% and Retail HOLDRs (AMEX:RTH) 72.70 +1.53% have reversed losses and trade a session high. Pacific Sunwear (NASDAQ:PSUN) $28.57 +2.77% marks a notable 52-week high in the retailers and the NASDAQ.

Tobacco stocks are getting a boost in the early going after the business wires reported that the San Diego superior court has ruled in favor of defendants Phillip Morris (NYSE:MO) $41.66 +1.65%, RJ Reynolds (NYSE:RJR) $43.18 +1.12%, Lorillard Tobacco, and Brown & Williamson in the Daniels versus Philip Morris case.

After filing for Chapter 11 Bankruptcy protection, shares of UAL Corp. (NYSE:UAL) $1.47 -16% are giving back the bulk for their recent gains after CNBC reported that the recent rise in the stock was due to lack of stock availability to short as the stock's price was most likely worthless. In essence, the recent rise was most likely due to speculative day traders trading the limited supply issue. However, since the CNBC commentary, the stock has dropped sharply as speculators understand their recent good fortune.

Shares of biotech drug developer IDEC Pharmaceuticals (NASDAQ:IDPH) $33.59 +0.46% have edged into positive territory. Earlier this morning, the stock traded as low as $32.00 after Goldman Sachs said it expects Corixa's (NASDAQ:CRXA) $6.95 +3.18% Bexxar data to be sufficient for approval after it is reviewed by an Advisory Committee tomorrow. While Goldman's analysts believe the outcome for Bexxar to be neutral to IDEC (IDPH), shares of IDPH did trade under pressure ahead of tomorrow's Bexxar review. The broader Biotechnology Index (BTK.X) 351 +1.69% gets a rebound here back to its 50-day SMA, after closing below this intermediate-term MA on Friday, the first time this has happened since October 24th.

The broader S&P 500 Index (SPX.X) 904.01 +1.62% has reclaimed the psychologically important 900 level. When S&P futures (sp03h) traded this 900 level, we did receive a "buy program" premium alert, and traders may look for SPX 900 to serve near-term support this week. According to the Stock Trader's Almanac, the Monday before Triple Within (today) has seen mixed results in the past 11 years, putting in 6 gaining versus 5 losing session. The Almanac also points out that December Triple-Witching (this Friday) has been more bullish, trading up 8 out of the last 11 years.

Jeff Bailey

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