Bear Mountain Bull

It’s time again for a little BMB R&R, especially with the market behaving as bizarrely as it’s been. Maybe if we stop watching it start to behave a little better…

Posting will be very light and variable over the course of this week, but we’ll put up an open thread each market day for our readers to comment on the day’s market activity or to post any interesting links they might run across.

Check the space below for whatever the latest might be during this ‘off’ time, and please visit the various sites in the ‘Links’ and ‘Regular Stops’ for up-to-date market news and analysis.

BMB will be back in full swing by next weekend.

It was kind of the same old story today, with certain areas of the market doing well - today it was energy and resources along with a few big-cap drugs names helping the Dow - but the rest of the market really didn’t play along. The Dow finished 31 points higher (+0.3%, helped by an 13% move in Merck and 7% in Pfizer) at 10785, the S&P 500 gained less than 1 point to 1202 and the Nasdaq fell 3 points (-0.1%) to 2059. The Russell 2000 fell 1 point (-0.2%) to 630, while the bond market dropped sharply on the morning’s PPI number and pushed the yield on the 10-year note up to 4.27%.

Market internals were definitely on the weak side, though volume was very light on the Nasdaq at just over 1.6 billion shares. Advances/declines came in at 4 to 7 on the NYSE and 4 to 5 on the Nasdaq, with up/down volume about flat on the NYSE and 7 to 9 on the Nasdaq. There were 248 new highs to 61 new lows.

Leading the way higher were steel stocks (+2.7%), drugs (+2.5%), oil (+1.8%), natural gas (+1.6%), oil services (+1.6%) and commodities (+1.4%). Losers were led by disk drives (-2.3%), broker/dealers (-1.7%) and utilities (-1.3%).

Crude oil finished the week above $48 at $48.35/barrel. The US dollar index remained pretty much unchanged and gold prices hovered near $427/ounce.

There’s a possibility that Merck may bring Vioxx back into the market, if it is determined that the benefits balance the risks. Merck stock (MRK) is up 3.6% on the news. The big pharmas need all the help they can get at this point.

The Producer Price Index for January rose at its highest rate in 6 years. The bond market responded to the inflationary fears this morning by sending Treasuries lower and yields higher, with the 10-year now at 4.26%.