Will End of Quarter Rally Spark New Uptrend?

Morning News of Note:

• EMC: EMC to Acquire RSA Security For About $2.3 Billion EMC Corp. won a bidding war for RSA Security Inc., buying the computer-security company for about $2.3 billion. EMC, once primarily a vendor of data-storage hardware to big corporations, has taken steps to broaden its scope because prices are tumbling for big-business tech gear. (Full Story) WSJ
• AAPL CA: Apple and CA Report Problems In Options Grants Apple Computer Inc. and CA Inc. became the latest companies to report potential problems with their stock-option programs. Apple, Cupertino, Calif., announced yesterday that an internal investigation discovered "irregularities" related to stock options between 1997 and 2001, including a problematic grant to Chief Executive Steve Jobs. The company said the grant to Mr. Jobs was canceled in March 2003 and resulted in "no financial gain." (Full Story) WSJ
• F: Ford Plans Shift in Focus Away From Hybrids Detroit auto companies, which have lagged far behind their Japanese rivals in developing and selling hybrid vehicles, are taking a new direction in a bid to emerge as leaders in their own right on environmental issues. The latest sign of this shift occurred Thursday, when the Ford Motor Company confirmed that it would not meet its widely publicized goal of selling 250,000 hybrid vehicles a year by 2010, a goal set last fall when energy prices spiked after Hurricane Katrina. (Full Story) NY Times
• VZ: Verizon, Battling To Roll Out TV, Sues a County Verizon Communications Inc. filed a federal lawsuit against Montgomery County in Maryland, saying the county government has illegally thwarted its attempts to get permission to roll out its new television services. The suit, filed in U.S. District Court in Maryland yesterday, is another sign of the difficulty the phone company is meeting as it seeks to roll out TV service to better compete with cable companies now offering phone service. (Full Story) WSJ
• RIMM PALM: Movistar offers BlackBerry Connect for PALM's Treo 650 Smartphone in Spain. Telefonica Moviles Espana, Palm, Inc. and Research In Motion announced the availability of BlackBerry Connect software for the Palm Treo 650 smartphone in Spain. With BlackBerry Connect, movistar's enterprise and multinational customers will benefit from a wider range of devices compatible with BlackBerry services from movistar

Market Comments: Yesterday's rally was very strong. The SPX has now rallied all the way back up to its overhead 50-day average. If it can convert this resistance into support, this rally could have some legs.

I think it will take several more strong rally days to convert some of this built up pessimism into optimism. The market will still be watching incoming economic data closely, but a Fed pause is looking more likely. And the 10-year yield is dropping below 5.20% today, below the new fed funds rate (5.25%).

There were a lot of high-volume movers yesterday. Hopefully, you have been building up your watchlist. I think many of the stocks that held up the best during this last correction could break out now and lead future rallies. I will highlight ideas as I see them.
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long AAPL