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John Deere green

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Market participants bid stocks higher after manufacturing data from the regional New York State Empire indices as well as broader January industrial production data revealed continued growth at many of the nations factories. Enough growth was seen to have January capacity utilization rising to 76.2% from December's 75.6%, giving investors and/or the unemployed hope that the growing economy may indeed bare fruit in the form of more jobs in coming months.

By session's end, all equity sectors were colored John Deere green, where even Joe Diffie may have been at a loss for lyrics after seeing heavy equipment maker Deere & Company (NYSE:DE) $67.00 +4.67% trade an all-time high in today's session after posting stronger-than-expected quarterly earnings as its easily recognizable farm equipment and earthmoving machinery found healthy demand from farmers and constructors alike.

The AMEX Gold Bugs Index ($HUI.X) 242.03 +3.41% edged out the Airline Index ($XAL.X) 63.28 +3.26% for today's sector winner.

While gold equities traded broadly higher with the U.S. Dollar Index (dx00y) 84.97 -0.58% showing dollar weakness, industrial metal stocks also performed admirably on the heels of today's manufacturing/industrial data with Dow component Alcoa (NYSE:AA) $37.75 +1.99% jumping $0.75 per share, while copper producer Phelps Dodge (NYSE:PD) $83.80 +2.35% gained $1.93. Palladium producers Stillwater Mining (NYSE:SWC) $13.99 +7.6% and North American Palladium (AMEX:PAL) $10.00 +7.99% rose to new 52-week highs, while Titanium Metals Corp. (NYSE:TIE) $77.91 +6.74% surged to all-time highs.

Silver $6.78 +3.19% jumped $0.12 to trade multiyear highs, while Western Silver Corp. (AMEX:WTZ) $7.44 +14.28%, which has yet to report any revenues from current operations, surged to all-time highs.

Financials also put in another strong session with the Securities Broker/Dealer Index ($XBD.X) 739.87 +2.28% closing at an all-time high as merger and acquisition activity along with more robust trading volumes continues to drive sector gains.

Banking mergers had National City (NYSE:NCC) $34.56 -2.34% buying Provident Financial (NASDAQ:PFGI) $38.70 +11.11% for approximately $2.1 billion, while North Fork Bancorp (NYSE:NFB) $43.37 -0.86% is acquiring Greenpoint Financial (NYSE:GPT) $45.25 -3.37% for $6.3 billion, where the transaction will create the largest regional bank in the New York metro area and the 16th largest bank holding company in the nation.

Market Snapshot / Internals - 02/17/04 Close

A pickup in volume in today's last-hour of trade kept volumes respectable at both the NYSE and NASDAQ, where AT&T Wireless (NASDAQ:AWE) $13.78 +16.58 accounted for just over 10% of NASDAQ volume after agreeing to be acquired by Cingular for $15 per share, in a cash transaction valued at approximately $41 billion.

Pivot Analysis Matrix -

Friday's close found the major indices closing below this week's WEEKLY Pivot levels, but this morning's upbeat economic data had the major indices rising to trade their WEEKLY R1s intra-day. Applied Materials (NASDAQ:AMAT) $21.94 +0.78% reports quarterly EPS after tomorrow's close, and views from fundamental shops in recent days has been mixed, where forward guidance most likely dictates whether the SOX.X can break back above the correlative WEEKLY R1 and MONTHLY Pivot of 526.

Semiconductor Index (SOX.X) Chart - Daily Interval

According to Dorsey/Wright and Associates, the Semiconductor Sector Bullish % (BPSEMI) is "bear confirmed" at 69.47%, which has me more cautious from the bullish side as long as the SOX remains below the 531 level. Last week, Allen Steinkopf, an analyst at Federated Investors, said that Federated funds sold all their positions in semiconductor equipment names like AMAT, KLAC and ASML in January on thought that the equipment makers have come too far too fast and that valuations appear stretched. Today, Banc of America Securities said it thinks AMAT will report blowout quarterly earnings, but thinks a strong quarterly report is already factored into the stock.

NASDAQ-100 Index (NDX.X) Chart - Daily Interval

Both the NASDAQ-100 Index (NDX.X) and its Tracking Stock (AMEX:QQQ) $37.44 +1.35% gapped higher at the open. I would have to think bullish traders are going to be tentative into tomorrow evening's Applied Materials (AMAT) $21.94 +0.78% earnings where the NDX/QQQ will be susceptible to backfilling a portion of today's gap higher. MACD continues to waiver just above the zero level where it would appear that any type of resurgence in strength for the NDX comes above the 1,516 level, or QQQ $37.70.

S&P 500 Index (SPX.X) Chart - Daily Interval

The broader S&P 500 (SPX.X) just barely achieved a new 52-week high intra-day as Friday's declines and weaker than forecasted February Michigan sentiment survey was quickly erased by hard data in the form of today's January industrial production figures.

I wouldn't try to argue that the Michigan sentiment data released on Friday wasn't a negative, but traders, and economists will often note that sentiment or consumer confidence is survey data, where those polled are giving anecdotal data, while Industrial production is based more on hard numbers, where some traders and economists give greater weight.

S&P 100 Index (OEX.X) Chart - Daily Intervals

Nine of the ten most heavily weighted OEX components saw gains in today's session. Of the top 5, only XOM managed a new 52-week high. A quick review of bar charts shows C looking as if it wants to challenge its recent 52-week high of $52.00, where GE and PFE look to stabilize after a more modest pullback. Meanwhile, Microsoft (NASDAQ:MSFT) $26.99 +1.5% moved back above its longer-term 200-day SMA after the European Commission told the company it didn't find MSFT's willingness to enclose CD-ROMS with competitors software a likely solution to anti-trust issues.

Dow Industrials (INDU) Chart - Daily Intervals

The INDU finds near-term resistance at/around the 10,730 level. MACD oscillator has edged above its Signal, and in an upward trend, a Dow break above 10,760 would easily see gains to the MONTHLY R2 of 10,857. IBM (NYSE:IBM) 99.37 -0.34% has been seeing higher lows in recent sessions, but has found willing sellers just below $100.50. With CAT $79.52 +2.71% showing some signs of recovery after a pullback from $85 to $75, look for further strength in IBM and some continued strength from CAT to provide upside catalysts for the INDU.

Jeff Bailey

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