Option Investor
Market Updates

Hooves rumble with indexes forging higher

Printer friendly version

The major indexes are just off their highs of the session as bulls once again have the major indexes making new highs for the year with the Dow Industrials (INDU) 8,980 +1.47% gaining 130 points, the broader S&P 500 Index (SPX.X) 976.66 +1.35% rising 13 points and NASDAQ-100 Index (NDX.X) moving above the 1,200 level at 1,210 (+1.31%) with a 12-point rise.

At the 10:00 AM EST mark, the Institute for Supply Management said its May index stood at 49.4, which still shows contraction, but better than economist's forecast of 48.5 and April's 45.4 reading. May's 49.4 reading has now been below 50.0, the point that indicates expansion, for three straight months.

Still, today's market reaction to the number still appears to have market participants factoring in some type of "post-war" rebound in some rather anemic economic data as investors continue to push the major indexes higher.

In a separate report, the Commerce Department said outlays on construction spending fell 0.3% in April to a seasonally adjusted annualized rate of $862.6 billion, which was the lowest level since December of 2002.

A quick look inside the construction numbers had spending on private projects falling 0.4% to $661.4 billion, with a 2.6% drop in non-residential construction to $156.1 billion. Spending on private residences dropped 0.3% to $449.9 billion, which was the largest percentage decline in nine months. Some economists attributed the drop in private residence construction to weather.

In other news, the Federal Communications Commission (FCC) agreed to allow broadcasters to buy more television stations and to let one company own newspapers and TV channels in the same city by a narrow 3 to 2 vote. The vote had 3 Republicans voting for the new legislation, while 2 Democrats voted against.

Shares of NASDAQ-100 Index (NDX) component Lamar Advertising (NASDAQ:LAMR) $37.06 +5.10% are notably higher in today's trade and have now moved up to number 3 spot in this widely followed major market index and look to be benefiting from today's FCC ruling. Lamar is an owner/operator of outdoor advertising structures in the United States, and I can only "speculate" the stock finding gains as today's FCC ruling most likely increases or heightens competition among the larger media outlets in major metropolitan areas across the country. Markets, which may see LAMR benefiting as TV/Radio/New Paper media outlets look to inform and drive consumer awareness toward a "one stop shop" for all of our news information.

Market Monitor - Lamar Advertising comments

Some FCC watchers and media analysts feel that fears by consumer groups that the FCC ruling will ignite a wave of acquisitions and wind up being monopolistic may be unfound. Many analysts expect companies to simply swap smaller properties or to engage in very selective buying of TV stations and newspapers.

I see Linda Piazza was discussing market internals and a quick look at the 01:00 PM EST internals show market volumes heavy with internals notably strong.

The NYSE currently reports trade volume at 815 million shares, with advancers outnumbering decliners by a 23 to 9 margin. There have been 450 stocks trading new 52-week highs compared to just 3 stocks hitting new lows. The 450 new 52-week highs is a new high number of for 2003 and continues to hint of bullish leadership taking place at the NYSE.

NASDA volume is heavy at 1.3 billion shares, and recent 2003 record volume of over 2 billion shares may be exceeded by today's close. Advancers outnumber decliners by a 2 to 1 margin with 324 stocks hitting new 52-week highs compared to just 5 stocks hitting new lows. Here too the 324 new highs is a new 2003 high reading for NASDAQ.

Jonathan's comments regarding the CRB have my attention. A couple of week's ago, I saw an interview with Jimmy Rogers on CNBC. It was his thought that commodity prices would continue to rise and that some were too "overbought" to chase at this point. However, when asked what commodity might be the better performer, he thought for about 5-seconds and said.... "Cocoa and sugar have been the laggards and they will probably play some catch up." A trader just never knows for sure what he/she might read in the market monitor that "strikes a cord" with something they've read or heard from other analysts. Often times, when the market appears to "confirm" some fundamental thought, then good things can happen for a trader.

When I'm done here, I'm going to jump over to my point and figure chart of the cocoa market and see what the supply/demand chart has to "say" about the cocoa futures. Futures traders don't really care what they trade. After all... futures are futures!

Jeff Bailey

Intraday Update Archives