Friday, May 25, 2007

Stocks Rebound From Greenspan's China Gambit

Shares of US equities rebounded on Friday ahead of the Memorial Day weekend, apparently shrugging off suggestions from former Fed chairman Alan Greenspan, who opined that China stocks were overvalued and needed "correcting." Well, that's his opinion and China is China, not the USA. Stocks in the US are still the "gold" standard by which all other markets are measured, as the US is seen by most as having the most stable and mature markets. Risk is spread out among multiple millions and billions of shares on many stocks, adding to the appeal.

Adios, Mr. Greenspan. Have a nice retirement.

Dow 13,507.28 +66.15; NASDAQ 2,557.19 +19.27; S&P 500 1,515.73 +8.22; NYSE Composite 9,876.11 +63.60

All major indices were up smartly on the day, with the NASDAQ once again getting the best percentage gain (0.76%). Techs truly rule in this environment and many companies have been growing by leaps and bounds since the meltdown of 2000.

Stocks overall were led by a better than 2-1 margin of advancing issues over decliners.
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However, there were only 167 new highs and 98 new lows, the closest those two measures have been to each other in quite a while - well over a month. The lack of new highs - down significantly from the 400+ a week ago - may be due to profit-taking. There's no sin in taking profits on a stock that has made new highs and the end of May, in the midst of a long, long bull market is certainly not beyond reasonable trading etiquette.

While stock traders were having a solid day, so too the players on the oil bourses, who pumped the price of crude up another $1.02 to $65.20. Gas prices are at an all-time high in the US - that's not news to anybody - and after this holiday weekend, something has to be done to ameliorate the heavy price consumers are paying. The gluttony of the oil companies still threatens to derail the entire US economy, though, sadly, the Congress and the president have not shown leadership on the issue of protecting the public well-being.

Gold and silver gained marginally, but are still at multi-month lows.

For the week, the Dow fell by 49 points, the NASDAQ was down 1 point and change, the S&P 500 lost 7 points. Better days are just ahead as the S&P hints towards an all-time high.

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