Updated late Tuesday and Friday nights
Friday’s Close for May 8th, 2009
Written by: Mike Coval

And it still keeps trending higher. We are however, starting to see a chink in the armor, the tech stocks and more specifically the semi conductor stocks have been heading lower despites the Big Board’s advances. Could this signal a potential top? I think so especially since it comes when the markets are near their Jan highs.

To watch a video of Friday’s market action, along with my thoughts, Click here. The DOW closed up 165 points at 8,575 while the NASDAQ closed higher by 23 to finish the day at 1,739.

Energy: Oil prices were up for a second day reaching short term highs. Late in the day, the price of crude futures was trading up $1.82 at $58.53 a barrel. Track the price of crude with the Oil ETF, USO.

A little hard work and practice and you can accomplish just about anything.

So why the rally today? A surprising jobs report brought the bulls back out, helping close the eighth week out of the last nine in positive territory.The latest jobs report hinted that the labor market may have found a bottom and the government's stress tests of financial firms gave traders some insight into the state of the banking system.

Economic News: Traders cheered the April jobs report, which showed non-farm payrolls fell last month by 539,000, well below the 699,000 jobs lost in March and far fewer than economists had been expecting. The data suggest the labor market could be stabilizing.

Earlier this week, Federal Reserve Chairman Ben Bernanke said the economy should begin to grow again before the end of the year but warned that labor market would continue to get worse before it got better.

Technology: Activision Blizzard, ATVI, shares rose 7.4%. The video-game publisher beat Wall Street's earnings targets for the first quarter on strong sales of its video-game franchises. For the quarter ended March 31, the company reported net income of $189 million, or 14 cents a share. Revenue came in at $981 million. The stock broke up above its $11.10 resistance on strong volume with the MACD’s and Stochastics turning higher. There has to be a bullish trade in this one somewhere?

Financials: In finance, the Federal Reserve suggested ten of the nation's top 19 financial institutions must raise their capital levels by a cumulative sum of $74.6 billion to adequately prepare themselves for another downward swing. The Fed also warned all 19 banks' losses could total $599 billion by the end of the year. Traders appeared to welcome the results, which ended at least some speculation over the fate and steadfastness of those firms.

American Express, AXP, charged up some profits with a $2.43 gain. The company is seeking permission to repay the government $3.4 billion in bailout funds that was handed over as part of the Troubled Asset Relief Program. The decision comes after the Federal Reserve said the firm has "no capital need."

AIG moved back up above $2.00 per share as the company recorded its sixth straight quarter in the red, however, in a sign that conditions may be improving, the insurer's loss narrowed to $4.4 billion, 44% below that of the year-ago period.

Energy: This sector was hearting up with plenty of investor buying. AES rose 18%. The electricity generator and distributor's earnings dropped to $218 million, or 33 cents a share, down from $233 million, or 34 cents, earned in first three months of 2008. The consensus of three analysts surveyed by FactSet Research had been for AES to earn 26 cents a share. The energy sector ETF, XLE moved up on the news.

Consumer Cyclicals: No good news for the autos. Toyota, TM fell $1.77, from its 7 month high. The company, recently anointed the world's largest automaker, predicted an annual loss of $8.6 billion, as a sharp decline in sales weighed on guidance. The firm also said it expects global sales to drop 14% during the current fiscal year. MACD’s and Stochastics are rolling down as well.

Good and or bad stocks to watch: TTES, EBAY, BEAV, VAR, CAL, FNF

Homework: None Today

Cheers,
Mike