Jim Cramer Blog

Bulls fought back Tuesday to take the major market indices into positive territory at the close. The Dow ($INDU) ended the session with a gain of 25.48 points to close at 12,423.49. The S&P 500 ($SPX) added 3.13 points to 1,412.84. The NASDAQ ($COMPQ) tacked on 3.95 points to close at 2,438.20. Volume was a bit lighter than recent sessions with the NYSE trading 1.57 billion shares and the Naz turning over 1.93 billion shares. Market breadth was positive by a 19-to-13 and 15-to-14 margin on the Big Board and Naz respectively.Despite the mild gains seen today, it was surprising to not see larger advances given the good news released Tuesday. Merger activity didn’t provide much of a boost, nor did positive comments from Fed vice Chairman Donald Kohn. An upgrade of several tech firms also benefited the tech sector. Nonetheless, there continue to be concerns about how strong earnings were in the fourth-quarter and what to expect in the near term from corporate America.The energy sector continued to struggle today despite a couple of merger announcements within the group. General Electric (GE) announced plans to acquire private oil and gas service company Vetco Gray for $1.9 billion. This led to flat trading for GE. Forest Oil (FST) stated that it would buy Houston Exploration (THX) for $1.5 billion. This pushed FST shares lower by 3.5 percent, but sent THX shares higher by 4.1 percent.UBS helped tech stocks Tuesday on upgrades of several tech firms. IBM (IBM) saw its shares rise 1.5 percent after UBS raised its rating on the stock to “Buy” from “Neutral” and lifted its price target to $118 from $100. IBM shares closed the session at $98.90. UBS also had positive things to say about EMC (EMC) and Network Appliance (NTAP) with the two stocks rising 3.45 percent and 2.97 percent respectively.Mr. Kohn was part of today’s success after the Fed vice Chairman stated that the economy should experience a soft landing and that inflation in 2007 should cool. However, he did note that it might be too early for the Fed to relax its stance on inflation. Later this week there will other Fed members that will speak and it will be interesting to see if their views mirror Mr. Kohn’s. Shares of Alcoa (AA) fell one percent today ahead of its earnings report Tuesday. Alcoa’s earnings release is thought of as the kick off to the season. Earnings are now the focus of traders with the next Fed meeting not for several months. Traders will be interested in hearing how corporate America views the future and this news will be a key as to how stocks react the first quarter of 2007.
Jody Osborne

Labels: AA, EMC, FST, GE, IBM, NTAP, THX