Market Surges Again

The stock market shook off weak leading economic indicators and a cautious outlook from Microsoft to post another day of strong gains.

The Nasdaq rose 21 to 1309, the S&P 500 gained 15 to 899, and the Dow surged 215 to 8538. Volume rose to 1.42 billion shares on the NYSE, but declined to 1.57 billion on the Nasdaq. Advancers led 19 to 12 on the NYSE, and 19 to 13 on the Nasdaq. Upside volume was 82% on the NYSE, and 74% on the Nasdaq.

After the close, Texas Instruments missed estimates and warned. International Rectifier , Veritas and JDA beat estimates, and Altera matched estimates.

During the day, Microsoft fell 1.2% after CEO Steve Ballmer said the company’s strong quarter may not be sustainable.

Siebel gained 4% on a pact with Microsoft.

Checkfree lost 7% on a downgrade, and Yahoo slipped on a valuation downgrade.

Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the story link at the top of the newsletter.

The Dow (first chart) and S&P (second chart) had nice breakouts of their May downtrends today. While that’s a big plus for the bulls, it also raises critical support to 8350 on the Dow and 885 on the S&P. Below those levels, the indexes would have bearish breakout failures. The Dow is coming up on tough resistance in the 8700-8800 area, and the S&P in the 915-920 area. The Nasdaq (third chart) has resistance at 1315-1320 and 1350, and support is 1267 and 1250. The Nasdaq 100 (fourth chart) has support at 940 and 915, and resistance at 985-1000. Another plus for the bullish case here is that the VIX, the options volatility index (fifth chart), has fallen barely more (23%) than the Dow has gained (18%), so bearish sentiment remains a supportive factor for the rally. The market remains overbought and due for a pullback, but those May downtrend lines should now be support. A strong rally indeed.






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