Thursday, October 20, 2005

Home Run: Dow Rises on Strong Volume

With so much attention placed on the Astro win yesterday, investors may have overlooked the Dow's explosive close/rally late Wednesday.

Good week for baseball -- but a rough one for stocks.

Until yesterday, that is.

Volume surged in the last 1/2 hour of trading as investors piled back into stocks after traders were greeted with sanguine remarks from the Fed.

It wasn't a day at the beach for everyone, though.

eBay got hammered after reporting numbers Wednesday; a la Intel (INTC), investors were let down by forecasts for the next quarter.

We got sick and tired of eBay after they bought voIP leader Skype for $3 billion.

We still think the voIP market is susceptible to low entry barriers; in addition, Vonage's forthcoming IPO should put pressure on eBay/skype in 2006.

Financials rocked on Wednesday, thanks to JP Morgan (JPM).

As we reported earlier, Atlanta-based regional bank SunTrust (STI) also had a blockbuster showing.

The recent shift of attention to financials tells us that the market is on the cusp of a major sector rotation.

Oil stocks, which were the place to be in 2005, have been selling off.

A correction in that sector was expected after oil's yearlong joyride.

Where are investors turning to now, you ask?

Medical stocks -- health care providers, biotechs, and medical device suppliers are all experiencing strong cash inflows.

Today, all eyes are on Pfizer (PFE), who reports earnings.

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