Stock Market News Update
Wednesday, 12th May, 2010

Wednesday turned out a great day for the bulls obviously shrugging off the European concerns.

The Commerce Department certainly gave a boost to the market, with some encouraging economic data. They reported that exports soared 3.2% in March, tapping their highest level since October 2008, and pointing to a continual recovery in the manufacturing sector. This was a big factor in setting the tone of the markets for the day.

The April Treasury Department Budget which showed a greater-than-expected $82.7bln deficit following a $65.4bln deficit the previous month certainly did not deter the bull’s momentum.

Nasdaq may 12

The Dow Jones Industrial Average (DJIA – 10,896.91) finished with a gain of 148.7 points, or 1.4%. The S&P 500 Index (SPX – 1,171.67) also had a good gain on the day, of 15.9 points, or 1.4%, whilst the Nasdaq Composite (COMP – 2,425.02) fared the best of the three major indexes, once again, by settling, for the day, on a gain of 49.7 points, or 2.1%.

Graph: Nasdaq Composite (COMP – 2,425.02)

Notes of Interest….

• The Dow Jones Industrial Average (DJIA) conquered its 10-week moving average.

• The S&P 500 Index (SPX) could not re-capture its 10-week trend lines.

• Also, the Nasdaq Composite (COMP) regained both its 10-day and 10-week moving averages.

• Crude futures neared a three-month low today, as traders reacted to a record-high glut in oil inventories. Earlier today, the Energy Information Administration (EIA) said domestic crude stockpiles rose by 1.9 million barrels in the week ended May 7, more than doubling analysts' expectations. By the close, June-dated crude futures surrendered 72 cents, or 0.9%, to settle at $75.65 per barrel.

• June-dated gold futures gained $22.80, or 1.9%, to settle at an all-time peak of $1,243.10 an ounce, due basically to the pessimism that is surfacing in regard to the rescue package.

VIX may 12

The CBOE Market Volatility Index (VIX), the "fear gauge," is retreating in the wake of the bulls push forward.

Company Earnings Reports

There has been some positive notes today particularly from the earnings arena. Several companies have presented earnings reports that exceeded the analysts’ expectations. These are:-

Walt Disney (DIS)

• Helen of Troy Ltd. (HELE)

• Macy’s Inc. (M)

Electronic Arts Inc. (ERTS)

SunPower Corp. (SPWRA) and A123 Systems (ALONE) presented negative quarterly earnings reports on the day, which surprised analysts.

Company News and Happenings:

• Constellation Brands Inc. (STZ) was upgraded to “buy” at Deutsche Bank.

• Cree Inc. (CREE) ratings were lifted to “buy”, by Sidoti, due to strong LED demand.

• Federal prosecutors are reportedly investigating whether Morgan Stanley (MS) misled investors over mortgage derivatives. Morgan Stanley sometimes placed bets against the CDOs it designed, and officials are examining whether Morgan Stanley properly represented the role it played. The investigation is said to be in a preliminary stage.

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