Thursday, March 30, 2006

S&P 500 Nearing New Highs

Morning News of Note:
  • NDAQ: Nasdaq Abandons $4.2 Billion Takeover Offer for LSE Nasdaq Stock Market Inc. withdrew a 2.4 billion-pound ($4.2 billion) bid for London Stock Exchange Plc, abandoning an attempt to create the first transatlantic stock market. Shares of LSE slumped the most in more than 4 1/2 years. Nasdaq, the largest U.S. electronic equity market, pulled its offer of 950 pence a share, the New York-based company said in a statement today. (Full Story) Bloomberg
  • GM: GM Moves Closer to Selling 51% Stake in GMAC General Motors Corp. yesterday was moving closer to striking a deal to sell a majority stake in its finance arm, General Motors Acceptance Corp., to an investor group led by Cerberus Capital Management, people familiar with the matter said. A transaction would be a milestone for GM, which would be giving up control of the 87-year-old unit at a time when it faces enormous financial stress. (Full Story) WSJ
  • LVS: Las Vegas Sands Corp. announced the company has formally submitted its proposal to the Singapore Government to build an integrated resort at Marina Bay in Singapore. Demonstrating its long-term commitment to Singapore's tourism future, LVS is proposing to invest $3.6 billion to develop The Marina Bay Sands, making it possibly the most expensive integrated resort ever proposed. LVS is also committed to opening 100 percent of the Gross Floor Area of The Marina Bay Sands in 2009. Its proposal includes plans for 2,500 hotel rooms, 1.2 million square feet of flexible meetings, incentive, convention and exhibition space, one million square feet of retail space, three large entertainment venues and a Paiza Club, LVS' successful premium player venue
  • TRID GNSS: Samsung raised forecast for LCD industry shipments-Bloomberg. To reflect higher-than-expected demand for TVs, LCD shipments will rise to 265 million units this year, above its previous forecast of 256M units. Samuung said LCD TV shipments worldwide will rise 58%to 44M units this year
  • Mad Money Summary: Cramer opened his show last night by suggesting Roper Industries (ROP), a diversified industrial company that makes water meters, pumps and measuring instruments. The company was added to the S&P MidCap 400. Cramer researched the last 19 stocks that were added to this index and found they produced an average return of 34.66%. Cramer then told a caller he recommends Aqua America (WTR) as a pure play on water. Then Cramer discussed pain medication, specifically the drug he believes is the next OxyContin. OxyMorphene, which is made by Penwest Pharmaceuticals (PPCO), could be a potential blockbuster, he said. In the Lightning Round, Cramer was bullish on Headwaters (HW), KFx (KFX), Radiant Systems (RADS), Websense (WBSN), Symantec (SYMC), Radvision (RVSN), Sanofi-Aventis (SNY), Novartis (NVS), Matsushita Electric Industrial (MC), Rackable Systems (RACK), Sony (SNE), Western Digital (WDC), Seagate Technology (STX), Amgen (AMGN), XM Satellite Radio (XMSR), Ciena (CIEN), JDSU (JDSU), Conexant Systems (CNXT), Bookham (BKHM), Finisar (FNSR), PepsiCo (PEP), Qualcomm (QCOM), Level 3 Communications (LVLT), Dynamic Materials (BOOM), United Tech (UTX), Broadcom (BRCM), Marvell (MRVL) and Apple (AAPL) and was bearish on Google (GOOG), Secure Computing (SCUR) and Brigham Exploration (BEXP).

Market Comments: The market is seeing some early strength in the first hour of trading. 4Q GDP came in in-line at +1.7%. The Fed has stated that they expect the growth rate of the economy to rebound strongly in 1Q. I expect economic growth to moderate later in the year, as all of these rate hikes work their way into the economy.

Tech bounced at the open, but is currently struggling to stay in positive territory. Energy stocks are strong again, as oil and natural gas prices firm. And the brokers continue to make new highs. Not a bad mix.

The fact that the market is able to stay this strong in the face of both rising oil and higher interest rates (10-yr. = 4.84%) is a good indicator of the market's belief that this expansion is sustainable. Of course, this is predicated on the assumption that the Fed doesn't go too far and kill things.

The SPX got thisclose to making a new high above 1310 this morning, while the COMP extended its rally to new highs.


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