Stock Market News Update
Friday, June 11, 2010



Due to the continued volatility of the markets, on which we were able to capitalize, our members who followed the recommendations for the past week enjoyed a 485% gain.

Here are the gains on some of the stock options recommended by SOME during the last week:-

Transocean Ltd (RIG)…………….15%

China Unicom (CHU)…………..23%

Coach, Inc. (COH)………….55%

China Mobile Ltd. (CHL)………….28%

Lululemon Athletica inc. (LULU)………….45%

Research In Motion Ltd. (RIMM)……………32%

AK Steel Holding Corporation (AKS)…………43%

THE GEO GROUP INC (GEO)…………16%

Vale SA (VALE) ……………..26%

Bristol Myers Squibb (BMY)………..43%

BP Plc (BP)………..54%

Manitowoc (MTW)……..15%

Cintas (CTAS)…………………..45%

SPYders (SPY)……………26%

Congratulations on a great week and let’s keep the profits rolling!

If you are not already a member of Stock Options Made Easy, then you may wish to become one so that you can benefit from the profits that are being generated!



nyse

Friday saw the U.S. stocks turn up during the last hour of trade Friday after a choppy session, erasing deep losses triggered by a disappointing retail sales report, and the Dow posted its first weekly gain in a month.

The stock market finished the second week of June on a high note, posting gains both for Friday's session and the week as investors looked past a surprise drop in U.S. retail sales to focus on upbeat consumer sentiment and reduced fear over European debt.

Picture: Brokers and specialists work the trading floor of the New York Stock Exchange. Credit: Reuters/ Brendan McDermid

Results for Major Market Indexes

DJIA-june11,2010

The Dow Jones Industrial Average (DJIA – 10,211.07) finished with a gain of 38.54 points, or 0.38%. The S&P 500 Index (SPX – 1,091.60) also had a gain on the day, of 4.76 points, or 0.44%, whilst the Nasdaq Composite (COMP – 2,170.57) fared the best of the three major indexes, finishing with a gain of 24.89, or 1.12%.

The Russell 2000 Index of smaller companies had a very good gain of 9.21 points, or 1.44%, to settle at 649.00.

Gains in shares of Pfizer Inc. (PFE), up 3.7%, and Microsoft Corp. (MSFT), up 2.6%, led the way.

Meanwhile, consumer shares weighed, with Home Depot Inc. (HD) off 1.5%, while Procter & Gamble Co. (PG) fell 1.5% and Coca-Cola Co. (KO) fell 0.7%.

The S&P 500 Index (SPX) was led by a 1.2% advance in the materials sector and a 1.1% rise in technology shares.

b>By the close of the week, after suffering some volatile days, the Dow Jones Industrial Average (DJIA) still faces pressure from its 10-month moving average, the blue-chip index snapped a three-week losing streak, finishing the week 2.8% ahead.

The S&P 500 Index (SPX) advanced 2.5% for the week, to end north of its 20-day trend line for the first time since early May as well as looking up at the 1,100 level.

Meanwhile, the Nasdaq Composite (COMP) finished up the week on a loss of 1.0%. The tech-rich index toppled its own 20-day trendline for only the second time since April 29.

The end result, for the week, is as follows:-

• The Dow Jones Industrial Average (DJIA – 10,211.07).

• The S&P 500 Index (SPX – 1,091.60).

• The Nasdaq Composite (COMP – 2,170.57).

Trading volume: About 7.31 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, the lowest in more than two months and sharply below last year's estimated daily average of 9.65 billion.

Nearly three stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to 4.1 billion shares, compared with 5.2 billion Thursday.

On the Nasdaq advancers topped decliners five to two on 1.8 billion shares.

Notes of Interest….

• The Dow Jones Industrial Average’s (DJIA) re-took the important psychological 10,000 level as well as finishing the session north of its 20-day moving average for the first time in more than a month.

• The S&P 500 Index’s (SPX) also gained the important hold of support at 1,050 but failed to surpass its own 20-day trend line, which hasn't been breached on a daily closing basis since May 3.

Crude futures surrendered $1.70, or 2.4%, to settle at $73.78 per barrel as they pulled back from a four-month peak and snapped a three-session run higher today, as weaker-than-anticipated retail sales data sparked concerns about demand in the world's biggest oil-consuming country. For the week, however, black gold added 3.2%.

Gold futures finished higher today, as a non-event session in the equities market triggered safe-haven demand. The malleable metal even defied a strengthening greenback, which typically weighs on the dollar-denominated commodity. By the close, gold for August delivery advanced $8, or 0.7%, to end at $1,230.20 an ounce. For the week, the precious metal gained 1%.

• Treasury prices rose as some investors sought safety following the retail sales report. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.24 percent from 3.33 percent late Thursday.

• CBOE Volatility Index (VIX), a gauge of investor anxiety, fell 5.8 percent to settle at 28.79, its lowest level since May 13.

Economic Data

Consumer Sentiment Rises In June

U.S. consumer sentiment rose in early June, hitting the highest level since January 2008, according to media reports on Friday of the Reuters/University of Michigan index. The consumer sentiment index increased to 75.5 in June from 73.6 in May.

Economists surveyed by MarketWatch had been expecting the sentiment index to hit 74 in June. The index hit a 30-year low of 55.3 in November 2008.

The jump in confidence was an encouraging sign, but still doesn't signal the all-clear for the economy, said Michael Sheldon, chief market strategist at RDM Financial Group in Westport, Conn.

"We recovered some lost ground, but there is still some ways to go," Sheldon said. That was evident in the disappointing retail sales report, which initially sent stocks lower.

The dollar rose against the yen and euro on the better-than-expected rise in the Thomson Reuters/University of Michigan's Surveys of Consumers.

consumer sentiment

Lingering worries about euro zone debt and technical barriers also contributed to the euro's decline, ending a three-day winning streak that drove it as high as $1.2152.

The dollar was up 0.3 percent at 91.67 yen in late trading. The euro fell 0.2 percent to $1.2087, its first daily decline since Monday, when it hit $1.1876, its lowest level since 2006. The euro edged up to 110.86 yen.

Photo: A pedestrian is reflected in a stock index board outside a brokerage house in Tokyo May 28, 2010. Credit: Reuters/Kim Kyung-Hoon

U.S. Retail Sales Fall For First Time since September

retail sales

The Commerce Department said retail sales, which showed a marked decline in the spending habits of consumers, .dropped 1.2% last month, well below the 0.2% increase economists had been expecting. It was the biggest drop since last September’s 2.2% falloff.

Removing sales of autos and gas, sales fell 0.8%. On a bright note, April sales were revised higher, to a 0.6% increase from the previously reported 0.4% improvement.

Photo: A customer shops in the expanded baby department at a remodeled Sam's Club in Rogers, Arkansas June 3, 2010.

Gas station sales dropped 3.3%, clothing-store sales pulled back by 1.3% and building materials and garden supply stores fells plunged 9.3%.

Sales at electronics and appliance stores gained 0.6%, and furniture sales rose by 1%.

Stock-index futures pulled back on the disappointing news, with futures on the Dow Jones Industrial Average lower by 72 to 10019, having been slightly positive earlier in the morning.

retailsales graph-june11,2010



It was the first drop in eight months. It was a surprise to economists who had predicted the pace of growth would slow between April and May, but still rise.

Companies dependent on consumer spending fell after the report. Proctor & Gamble Co., which makes Tide detergent and Gillette razors, lost 1.5 percent. J.C.Penney Co. fell 1.1 percent, while Macy's Inc. shares also slipped.

Traders said the latest data about consumers -- traditionally a key engine of growth in the U.S. economy -- is keeping markets uncertain about global growth.

"People are seeing that the economy isn't booming, but it's also not getting worse," said Malcolm Polly, chief investment officer at Stewart Capital Advisors. "That's why the confidence numbers are getting a little better. But actual spending still isn't strong enough where we can say that we'll get a traditional consumer-led recovery."

"Consumer confidence won out over retail sales," said Dan Alpert, managing partner at Westwood Capital. "Even though stocks were still flowing mostly in negative territory through the day, the downslide would have been sharper without that boost in consumer confidence."

Business inventories hit 10-month high in April

Business inventories rose to a 10-month high in April as businesses continued to restock warehouses amid rising sales, a government report showed on Friday.

The Commerce Department said inventories rose 0.4 percent to $1.35 trillion, the highest level since June last year, following a 0.7 percent increase in March. Markets had expected April inventories to rise 0.5 percent from a previously reported 0.4 percent increase.

Inventories are a key component of gross domestic product changes over the business cycle and the rebuilding of merchandise stock from record low levels is one of the key drivers of the economy's recovery from the worst recession since the 1930s.

Business sales increased 0.6 percent to $1.10 trillion in April, the highest level since October 2008, following a revised 2.5 percent increase in March. Sales in March were previously reported to have increased 2.3 percent.

The rise in April sales left the inventory-to-sales-ratio, which measures how long it would take to clear shelves at the current sales pace, at 1.23 months' worth, unchanged from March.

Business Inventories

This photo taken May 4, 2010 shows customers looking at wide screen TV sets Costco store in Mountain View, Calif. Inventories held by wholesalers rose for a fourth straight month in April while sales rose for a 13th consecutive time. Both gains were encouraging signs pointing to a sustained economic recovery. (AP Photo/Paul Sakuma, file) (Paul Sakuma - AP)



Overseas Concerns

China's major economic indicators for May showed consumer-price inflation breaching the 3% level for the first time in more than 1 1/2 years, but economists said they expect inflationary pressures to ease in the second half of the year on falling global raw material prices.

euro

In currencies, The euro's level against other currencies has become a key indicator of confidence in European governments' ability to resolve their fiscal problems. The currency, which is used by 16 countries, was little-changed against the dollar. It stood at $1.2108 late Friday.



Overseas Markets

European Markets ended mixed: Britain's FTSE 100 rose 0.6 percent, Germany's DAX index fell 0.1 percent, and France's CAC-40 rose 1.1 percent. Japan's Nikkei stock average rose 1.7 percent.

Asian Markets:- closed higher. Tokyo's Nikkei 225 jumped 1.1% to 9542.55, Hong Kong's Hang Seng closed up 0.06% to 19632.70 and China's Shanghai Composite fell 0.82% to 2562.58.

Company Earnings Reports

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

• National Semiconductor Corp. (NSM)

• Finisar Corp. (FNSR)

• ArcSight Inc. (ARST)

• Del Monte Foods (DLM)

China-Biotics Inc. (CHBT) surprised analysts with a negative earnings report.

National Semiconductor Corp (NSM)

NSM-june11,2010

U.S. stocks rose in a late rally on Friday as a strong forecast from the chip maker, National Semiconductor Corp (NSM), lifted tech shares and helped alleviate concerns about the economy's health after an unexpected drop in retail sales.

National Semiconductor Corp (NSM) rose 5 percent to $14.21 a day after it forecast margins and revenues above estimates after a horrible 2009. The Philadelphia Semiconductor index .SOXX rose 1.4 percent.

"The macro news has been increasingly negative, but you still have some companies reporting good forecasts, and people start to think (selling) got a bit overdone," said Doug Roberts, chief investment strategist at ChannelCapitalResearch.com in Shrewsbury, New Jersey.

"National Semiconductor made a positive announcement. That's why you're seeing the strength primarily in tech," he said.

Company News and Movements:

aotm-june11,2010


nah-june11,2010


nal-june11,2010



BP PLC (BP) led a climb in European stocks as investors regained some confidence in the oil major's ability to cope with the fallout from the Gulf of Mexico oil spill. American depositary shares of BP (BP) rose 3.6%.

Wendy's/Arby's Group (WEN) jumped 7% after billionaire Nelson Peltz said a third party expressed interest in a potential acquisition involving the fast-food restaurant chain operator.

Pfizer shares rose 3.7%.Pfizer and Bristol-Myers Squibb (BMY) said they stopped a clinical trial early because the data so far suggest an experimental drug for irregular heart rhythm is superior to aspirin. Bristol-Myers Squibb rose 1.8%.

American depositary shares of Banco Santander (STD) rose 6.5% after the Spanish bank's chairman said the company expects to have a similar net profit this year as in 2009, despite ongoing economic uncertainty and weakness in Spain.

Dell (DELL) said late Thursday it is nearing a resolution with the Securities and Exchange Commission on a mysterious case linked to a government investigation into the computer giant launched in August 2005. The company said it has set aside $100 million for a potential fraud settlement. Shares of Dell (DELL) were down 0.4%.

Conclusion

Friday's reports follow a trend over the past month showing an uneven recovery, which has added concern to a market that is already struggling with worries about the health of Europe's economy. The Dow has mostly fallen since late April as investors worry about whether debt problems and steep government spending cuts in countries like Greece, Spain, Italy, Portugal and Hungary will slow Europe's economy so much that the economic slump would spread around the globe.

Analysts say everyday investors, in particular, are still nervous about the market and economy, and are sitting on the sidelines. That leaves institutional investors as the main players in the stock market, which explains why volatility has been so high.

Institutional traders' "sense of long-term holding is in minutes," said Bob Tull, chief operating officer of Old Mutual Global Index Trackers. The quick trades and constant movement of professional money managers means stocks are bound to gyrate more than if there is a steady flow of cash from retail investors heading into the market.

Despite two straight days of gains, analysts said the markets will remain choppy, as Europe's debt crisis, BP's oil mess, stubbornly high unemployment and recent volatility weigh on stocks.

"There's not a whole lot of good news and investors are standing on the sidelines waiting for the smoke to clear," said Kenny Landgraf, principal and founder of Kenjol Capital Management. "We need to see some stability, but we're not likely to get it until the quarter ends and earnings season begins. But that's still a few weeks away."

Traders said the latest data about consumers, traditionally a key engine of growth in the U.S. economy, is keeping markets uncertain about global growth.

"People are seeing that the economy isn't booming, but it's also not getting worse," said Malcolm Polly, chief investment officer at Stewart Capital Advisors. "That's why the confidence numbers are getting a little better. But actual spending still isn't strong enough where we can say that we'll get a traditional consumer-led recovery."

So make the most of the market, get with options trading.



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