Daily Market Summary 11/16/06

[Portfolio Crafter]

End of Day Market Summary Thursday 11/16/2006
by Portfolio Crafter
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Stocks closed higher with the Dow Jones Industrial Average finishing at another record high level, as tame consumer-price inflation and a big drop in crude oil prices helped offset bad news from Applied Materials Inc. and Dell Inc.

Today, the Dow Jones industrial average closed up 54.11 or 0.44% to 12,305.82, ending at a record close for the 17th time since Oct. 3. The broader S&P 500 index closed up 3.19 or 0.23% to 1,399.76, ending at a new six-year high. The tech-fueled Nasdaq composite index closed up 6.31 or 0.26% to 2,449.06, ending at its highest point since February 2001.

Market breadth was mixed. On the New York Stock Exchange, winners beat losers by 17 to 15 on volume of 1.68 billion shares. On the Nasdaq, advancers barely edged decliners by 15 to 14 on 2.1 billion shares changed hands.

Lower oil and gas prices means less inflationary pressure. It also means more money stays in the hands of consumers. The day's read on inflation that gave investors hope for soft landing for the economy in coming months. The CPI fell 0.5% against the expected fall of 0.3%.

The core CPI rose just 0.1%, against a forecast rise of 0.2%t. This showed that inflation pressures continue to abate and that the economic slowdown won't result in recession.

Chicago Fed President Michael Moskow said he sees the possibility of more tax increases to cool inflation, even though economic growth is likely to be below trend for the next year or so. St. Louis Fed President William Poole said that while inflation pressures are waning, they remain an issue.

Amongst economic news, U.S. industrial production rose 0.2% in October after dropping 0.6% in September, while capacity utilization rose to 82.2%. Both were roughly in line with economist expectations. The Philly Fed index rose to 5.1 from negative 0.7 in October and negative 0.4 in September. Economists expected an increase to 5.8. Any reading above zero indicates growth in the region's manufacturing sector. The new orders index, a gauge of future growth, fell to -3.7 in November from 13.4 in October.

Shares of Dell closed down $0.65 or 2.6% to $25.10, as it stated that it would delay filing its quarterly report until later in the month. It clarified that the delay was due to issues it's facing in preparing the results and not linked to an ongoing SEC probe into its accounting. Analysts expect the EPS to sink 38% to 24 cents and the revenue to edge higher by 4% to $14.4 billion.

Stock of Applied Materials closed down $0.67 or 4% to $17.98, despite reporting higher quarterly earnings and revenue that was shy of forecasts. The company also warned that sales and earnings in the current quarter will miss forecasts. It expects an EPS of 26 to 27 cents against the expected EPS of 29 cents.

Shares of Pfizer Inc. rose 23 cents to $26.76. The company said results of a new analysis showed that patients who have heart disease and chronic kidney disease and took 80 mg Lipitor tablets reduced their risk of heart attack and stroke by 32% compared with patients taking a 10 mg dose.

U.S. light crude oil for December delivery tumbled $2.50 to settle at $56.26 a barrel on the New York Mercantile Exchange. This is the lowest point this year. While this was bad news for oil stocks, it was encouraging for the rest of the market.

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