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Market Wrap

Wilshire 5000 Tests Downward Trend

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Stocks mirrored much of last week's trade on Monday, finishing mixed-to-higher, where the bulk of today's action was concentrated in a few select names.

As I return from a week in remote parts of Kansas, I'm getting caught up on some of the major technicals at this point, and after covering some of today's stock specific news and revelations, I'll be reviewing some of the major technicals that will be grabbing trader's attention into Wednesday's plethora of economic data.

Economic news released here in the U.S. was regional.

The Fed Bank of Chicago says its manufacturing index fells to a seasonally adjusted level of 107.6 in March, from an upwardly revised 108.4 in February, pressured by another sharp decline in auto production.

Tomorrow we'll get a look at consumer confidence for April. A Dow Jones Newswire survey has economists looking for a reading of 61.5 versus 64.5 in March.

I think that (61.5) might be a little low.

Today's economic news out of Germany showed the mood among German consumers improved markedly in April. Their consumer confidence indicator for May jumped to 5.9 (versus a forecast of 4.6) after a revised 4.8 points in April.

The Gfk consumer climate study noted that it was striking that the economic outlook indicator, income expectations and the propensity to buy readings all climbed significantly.

While not a double from Friday's close, it was a "double your pleasure, double your fun" day for traders and investors that held shares of Wrigley (NYSE:WWY) $76.91 +23.15% at his morning's open. The stock surged after candy maker Mars Inc. said it was buying the company with some financing help from Warren Buffett's Berkshire Hathaway (NYSE:BRK.A) $128,460.00 +1.24% for an estimated $23 billion in cash. Berkshire will purchase a $2.1 billion minority equity interest in the Wrigley subsidiary once the deal is completed. Berkshire also offered $4.4 billion of subordinated debt to fund the deal.

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Wrigley executives said family owned Mars first began eyeing Wrigley in January and approached the company with their unsolicited bid in April. Since that time, the two sides have haggled to reach an $80-per share offer.

"A good time to buy a really great business is when you can do it," Warren Buffett said, adding that he understands Mars and Wrigley's balance sheets better than most of the major banks.

Credit market watchers noted that Mars' decision to turn to Warren Buffett to help fund the purchase shows a growing role that nontraditional sources of financing play in making deals, as the credit markets remain tight.

Shares of Ford Motor (NYSE:F) $8.21 +9.46% were atop today's list of most actives after billionaire investor Kirk Kerkorian said he has accumulated a 100 million-share stake in the auto maker and offered to buy 20 million more shares at $8.50 per share.

A couple of weeks ago I noted for several days that the stock was "suspiciously" showing up in the most actives. I'd look to book, or protect bullish gains here.

NASDAQ-100 (NDX.X) 1,923.26 +0.24% heavyweight Microsoft (NASDAQ: MSFT) $28.99 -2.81% fell for a second-straight session and weighed on the Software HOLDRs (SWH) $40.14 -1.01% after Citigroup's Mark Mahaney asserted that there is a 45% chance that the software giant may reach a deal with Yahoo! Inc. (NASDAQ: YHOO) $26.43 -1.38% at a higher price than $31.00/share and a 40% chance that Microsoft goes hostile at the current offer of $31.00 a share. Mr. Mahaney said he thought there was a 10% chance Microsoft walks; and a 5% chance they cut a deal at the current price.

While traders contemplate the MSFT/YHOO acquisition, shares of Sohu.com (NASDAQ:SOHU) $70.81 +14.50% surged to an all-time higher after the Chinese Internet firm reported upside earnings.

U.S. Market Watch - 04/28/08 Close

Again, a rather mixed session for the major averages and sector action was very mixed.

Dow component Verizon (NYSE:V) $27.79 +2.02% gained $0.75/share after the telephone company said it earned $1.64 billion, or $0.57 a share in its recently completed first quarter. The company said its wireless business continues to offset its weaker land-line business with total revenue rising 5.5% to $23.38 billion.

After today close, shares of Visa (NYSE:V) $75.63 +0.70% slid to $71.00 in the extended session after the credit card giant reported net income of $314 million, or $0.39 a share, in its first quarterly report as a public company.

Wilshire 5000 Index ($DWC) - Daily Intervals

One of the primary technicals I wanted to point out in tonight's Market Wrap is that the VERY BROAD Wilshire 5000 (DWC) is did test its longer-term downward trend in today's session, and this will likely be a tough level to eat through near-term.

While there are few traders/investor that will actually trade any product this BROAD, this index will be utilized by technicians as a further indication of PRICE strength and weakness..

Be VERY selective in "new bull" entries, instead looking for pullback points like 13,750.

SSPY and IWM Montage - Daily Intervals

I need to wrap things up to meet our new 08:00 PM EDT deadline, but the also "broader" indices using the S&P Depository Receipts (SPY) and Shares Russell 2000 (IWM) would have the IWM working its way above downward trend, but volume isn't all that heavy, and for bullishness, I'd really like to see more volume than we've had. The SPY, a "broad" index with more LARGE CAP names, and heavily weighted in the FINANCIAL arena lags.

Need those financials to really start participating more..
 

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