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War rally takes hold

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The major U.S. indexes as well as European bourses have reversed losses to now post gains with the Dow Industrials (INDU) 8,031 +2.18% now showing a 171-point gain, with the broader S&P 500 Index (SPX.X) 851 +2.27% rising 19 points, and the tech-heavy NASDAQ-100 Index (NDX.X) 1,068 +3.66% jumping 38 points.

Stocks reversed their earlier losses after the White House said that President Bush was address the country later tonight.

While U.S. equity indexes have turned higher, European markets have also reversed earlier losses to now post strong gains. Fracne's CAC 40 is higher by 92 points, or 3.3%, Germany's DAX is now gaining 98 points, or +4.1%, while the United Kingdom's FTSE- 100 is up 3.8%, rising 138 points to 3,740.

Early buying in U.S. Treasuries as turned to a strong round of selling with the March 10-year Treasury futures contract (ty03h) $116'005 -0.49% down 18/32, with the benchmark bond's YIELD ($TNX.X) jumping to 3.787%.

Sector action has erupted into positive territory with the Semiconductor Index (SOX.X) 325 +6.62% leading sector gainers. Also showing strong gains is the Networking Index (NWX.X) 148 +5%, Fiber Optic Index (FOP.X) 51.98 +5.3%, GSTI Software Index (GSO.X) 110 +3.8% and S&P Retail Index (RLX.X) 270 +3.87%.

Most actives have the NASDAQ-100 Tracking Stock (AMEX:QQQ) $26.67 +3.9%, Microsoft (NASDAQ:MSFT) $25.81 +3.8%, Intel (NASDAQ:INTC) $18.00 +4.82%, Sun Microsystems (NASDAQ:SUNW) $3.46 +6.79%, and Boots&Coots (AMEX:WEL) $1.11 +86%.

In this morning's market monitor, shares of Boots&Coots (WEL) traded as high as $1.20, but I've suggested that speculators look to remove some risk from the trade, by taking 1/2 of their bullish positions off the table. This was a stock we had rated as bullish, but HIGHLY SPECULATIVE with regard to the company possibly benefiting from a scenario of Iraq blowing up its oil wells under a U.S.-lead invasion. While there may be further upside to the shares, I would much prefer to sell strength in this company, as it is still on certain that the company might not fall into bankruptcy.

Jeff Bailey

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