Strong economic reports boost stocks

Morning News of Note:

• Consumer Discretionary: Consumer Stocks That Can Shine THERE'S A LOT OF ANXIETY about just how free and easy consumers will be with their spending in the coming months. But that doesn't mean all stocks tied to consumer spending are doomed. Stocks in the consumer discretionary sector have declined almost 6%, while the Standard & Poor's 500 index is up nearly 4% this year. (Full Story) BARRONS
• CMCSK: Cable Rates To Increase As Much as 6% Comcast Leads Way, but Others Plan Smaller Moves as Competition From Phone Companies Heats Up Most Cable-TV bills will continue to climb next year, with Comcast Corp., the country's largest cable operator, leading the way with a 6% increase for its most popular service. But with industry pricing under scrutiny from the federal government and new competition emerging from phone companies, price increases at other large cable companies are expected to be more subdued. (Full Story) WSJ
• EBAY: Skype 2.0 Clarifies Video Chat Picture Skype Technologies, the Luxemburg company famous for its free Internet telephone calls, today launches an update that brings us closer to an elusive technological dream — the videophone. The new Skype 2.0 software provides the ability to see as well as hear computer-to-computer callers — provided both parties have webcams. (Full Story) LA Times
• TIVO: TiVo adds movie tickets, photos to offerings TiVo hopes to raise the stakes today in its battle with cable and satellite digital video recorders (DVRs) by introducing a suite of broadband-related services that enable many subscribers to use their TVs to buy movie tickets, share photos, check local weather and traffic, listen to radio podcasts and play games. The DVR pioneer is teaming with movie-ticketing service Fandango, Yahoo and programming service Live365. (Full Story) USA Today
• Mad Money Summary: Cramer was positive on shares of Deckers Outdoor (DECK) last night on his show as he believes that the shorts have weighed on shares too much and expects shares to trade to $30 but no higher than $35. Cramer gave a "'mon back" for shares of Eli Lilly (LLY) last night as the provision attached to a bill that is designed to reduce Medicaid spending, makes it harder for states to substitute generic mental health drugs for newer, more expensive ones. Cramer said that Schering-Plough (SGP) & Wyeth (WYE) have good pipelines but that Genentech (DNA) has the best pipeline. Commenting on questions from the audience, Cramer said he would hold shares of Gymboree (GYMB) and was bullish on Diamond Offshore (DO), Medco Health Solutions (MHS) and UnitedHealth Group (UNH). Sirius Satellite Radios (SIRI) CEO Mel Karmazin joined Cramer last night on his show and said that "there is no question Howard is worth the money that he is getting paid." Cramer believes that shares go higher and summed the interview up by saying "I said to own this stock to year-end...I am sticking by that."

Market Comments: The markets are trading sharply higher this morning on some strong retail sales reports, solid consumer spending (+0.2%), and a smaller-than-expected rise in the PCE deflator (+0.1%). That puts the 12-month inflation rate at +1.8%, within Bernanke's comfort zone. That has helped push stocks and bond prices higher, pushing yields down to 4.48%.

Strong retail reports came from ANF, CHS, CTRN, ZUMZ, and WMT. Weaker reports were from COST, KSS, and TGT.

I always worry about strong market opens, as I prefer to see strenght build late in the day. So let's see if the market can hang on to these early gains.

long CMCSK, KSS, UNH, WMT