Saturday, April 21, 2007

Dow Erupts to New Record; NASDAQ at 6-Year High

Up nearly 150 points within the first ten minutes of trading, the Dow Jones Industrial Average eclipsed yesterday's record by a staggering sum, closing within hailing distance of the 13,000 mark at 12,961.98, up 153.35 points at day's end.

Dow 12,961.98 +153.35; NASDAQ 2,526.39 +21.04; S&P 500 1,484.35 +13.62; NYSE Composite 9,697.34 +95.65

Trade was heavily unbalanced to the buy side. Advancing issues led decliners by nearly a 3-1 margin while new highs popped to 507 against merely 65 new lows.

Possible catalysts include Google's stellar earnings report, in which the search and online ad company blew away analyst estimates along with year-ago figures. It's no surprise that the nation's leading technology company would lead to a significant breakout in all sectors, though there have been solid earnings all around.

Friday morning could have been simply an expression of extreme amounts of money not willing to sit idle any longer. Volume was easily the heaviest of the week with heavy money entering right at the open.

The big moves in equities came despite a lack of cooperation from commodities. Oil continues to be a thorny issue, rising $1.55 to close at $63.38. Gold was up $7.50 to $695.80, and silver gained 22 cents to end at $13.96 per ounce.

Perhaps the stock gains and commodity motion were nothing more than adjustment to the value of the US currency, which continues to slide against most other world monies. The US$/Euro ratio is close to $1.36 with no pullback in sight under current policies. The Fed's reluctance to tighten the credit tap is making the currency worth less, so stocks continually have to gain just to keep pace. In the long run, it's a no win situation which needs to be rectified some time soon.

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