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Market Wrap
(Briefing):

Stocks rallied across the board, closing at their best levels for the week, as investors embraced encouraging employment data and a strong Q2 earnings report from Alcoa... The Dow recorded its first 100+ point gain of the month, the Nasdaq closed at its best levels since January and the S&P came within inches of breaking even for the year (again)... Before the bell, the Labor Dept. showed that June nonfarm payrolls rose by 146K, less than the 195K increase economists had anticipated... However, with ongoing uncertainty as to when the Fed may finally end its "measured" pace of hiking interest rates, further analysis of the data proved to be quite reassuring to investors, as the tepid payrolls figure still reflected growth but didn't sound inflation alarms... Upward revisions in the May and April data to 104K (from 78K) and 292K (from 274K), respectively, coupled with the unemployment rate falling to 5.0% (from 5.1%) - the lowest since Sept. 2001 - and average hourly earnings holding steady at +0.2%, also provided a floor of support that closed nine out of ten economic sectors in positive territory... Turning in the day's best performance was the Materials sector, after Alcoa (AA 27.19 +1.10) officially kicked off earnings season last night with its best quarter in history... Finishing the afternoon a close second, but providing more of the leadership, was Technology... Of the top ten sector components accounting for more than 50% of the weighting in tech, International Business Machines (IBM 79.31 +1.93) paced the gains, closing at its best levels in three months following several upbeat analyst comments regarding IBM's upcoming Q2 report... Aside from strength in hardware, semiconductor, storage, networking and software also surged; but gains in the latter were minimized after Siebel Systems (SEBL 8.59 -0.20) and Borland (BORL 5.91 -0.79) issued downside Q2 guidance... The Industrials sector got a lift after analysts said recent weakness in General Electric (GE 34.99 +0.81) shares created an attractive buying opportunity at current levels... Strong follow-through buying interest in retail, fueled by Thursday's strong June same-store sales figures, helped Consumer Discretionary surge while 35 of the 36 components that make up Consumer Staples resulted in another sector gain of more than 1.0%... Despite selling pressure in the Treasury market which lifted benchmark yields on the 10-year note (-11/32) to 4.10%, interest-rate sensitive areas like Financial and Utilities also attracted buyers... Bonds, which initially climbed on the jobs data, closed near session lows at the expense of the rally in stocks... Energy, however, closed lower as oil prices ($59.63/bbl -$1.10) failed to hold onto early gains... Crude oil futures had surged as much as 1.9% amid concerns that Hurricane Dennis may cause further supply disruptions in the Gulf of Mexico over the weekend... But late-day selling pressure closed the commodity near session lows as traders consolidated gains going into a weekend that, with newly added event risk following Thursday's terrorist attacks, could see less demand for oil should travel slow down... Separately, May wholesale inventories rose 0.1% (consensus +0.5%) while May consumer credit declined for the first time since Nov. 2003, checking in at -$3.0 bln (consensus -$4.0 bln); but since the inventories data say nothing about personal consumption and the credit report is released well after every other consumer spending indicator, the market paid little attention to either report... The U.S. markets also took notice of strength in European markets, as major averages throughout the region also demonstrated their resilience to Thursday's terrorist attacks... The FTSE 100 Index, which was down as much as 4.0% Thursday immediately following news of the explosions, rebounded to finish up 1.4% friday... The CAC 40 and DAX Index also closed near session highs, posting gains of 1.9% and 1.5%, respectively...NYSE Adv/Dec 2459/824...NASDAQ Adv/Dec 2192/843.

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Trade system guidelines (edited):
Only available to Newsletter Subscribers.

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Today's Picks - July 11, 2005

1.   HET - HARRAHS ENTMT

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-11		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 75.41

2.   XMSR - XM SATELLITE RADIO

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-11		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 35.68

3.   NXTL - NEXTEL COMMUNICATIONS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-11		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 32.94

4.   COH - COACH

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-11		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 35.31

5.   CVS - CVS CORP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-11		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 30.35

6.   AT - ALLTEL CORP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-11		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 64.70

7.   SO - SOUTHERN CO

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-11		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 35.75

8.   LSCP - LASERSCOPE

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-11		Short	Below 15 min low	Cover 1/2 once risk covered	Above HOD at time of setup
	* Please Note: If the stock gaps up at the open do not enter the trade unless it trades below 38.15

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EOD = End of day.
LOD = Low of day.
PDC = Previous Day's Close.
S/R = Support/Resistance.
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