Stock Market Commentary

The stock market recovered a bit yesterday following Wednesday's sharp sell off and also managed to hold above the correction lows of last Thursday. Early economic news proved to be of little significance, and after an initial retest of the previous day's late lows, the market staged a broad based recovery.

Profit-taking among crude oil traders provided the backdrop for the stock market rebound, but a late recovery in crude oil to another record high contributed to an afternoon giveback in the stock market. The Dow finished up 52.43 after trading from down 20 to up 96; NASDAQ finished up 7.94 after trading from down 2 to up 24. Market breadth finished positive. NYSE issues finished 7/5 positive, volume 6/5; NASDAQ issues 9/8 positive, volume 5/3. Overall trading volume lagged Wednesday's pace.

Financials were the big losers; energy and materials were big winners. Crude oil reversed from down $2/ bbl to finish up $1.02 and another record high of $124.55, gold closed up $13.70 at $884.90 and the CRB index futures contract traded to new highs. The stock market continues to work through a normal timeout following the earlier 1400 Dow point run up but is nearing our time and downside price targets, suggesting a recovery could be close at hand.

Today - Crude oil rises to yet another record high ($125.98) on concern violence will reduce Nigeria's oil exports. Also American Intl. Group (44.15,AIG) is expected to open sharply lower after announcing steep quarterly losses and plans to raise $12.5 billion. Foreign markets traded lower overnight and Globex futures point to a lower open for U.S. stocks.

The Dow and Nasdaq remain lower at midsession as the major stock averages head for their first weekly losses in a month. High oil prices and new credit concerns are applying pressure on stocks today. The Dow has been down as many as 144 points. The Nasdaq has been down as many as 22. Currently the Dow is down 0.9%, the S&P 500 is down 0.8%, and the Nasdaq is down 0.5%.

Comments by American International Group stirred up new fears about the credit markets. AIG disclosed plans to raise $12.5 billion and said losses could continue. Shares fell 4.03 to 40.12. Citigroup said it would pare $400 billion in assets over the next three years. Shares were down 13 cents at 24.17.

The continued climb in fuel costs put pressure on shares of airline stocks. Oil briefly rose to a record above $126 per barrel and is set for the biggest weekly gain since March of last year. The U.S. trade deficit in March was lower than forecast. Imports dropped by the most in six years, a sign the economy may be slowing. On the plus side, Circuit City rose 40 cents to 5.19 as the company put itself up for sale. H&R Block gained 1.63 to 23.49. The company received regulatory approval to ease capital requirements.

The NYSE was 3-2 negative on issues, 5-2 negative on volume. The Nasdaq was 8-5 negative on issues and 3-2 negative on volume. The 10-year Treasury note was up 9/32 to yield 3.74%.

Mr. Goldman has been quoted in many national media outlets including radio, television and print. He has been interviewed frequently on various radio programs (CBS, ABC, WSJ Radio News Network and National Public Radio) and quoted in The Wall Street Journal, New York Times, USA Today, Investor's Business Daily, Associated Press and Bloomberg Business News. In addition to several appearances on ABC's "World News Tonight," he has appeared on CNBC, CNN, Fox News Channel, Bloomberg TV and PBS' "Nightly Business Report." He has also appeared several times as a special guest on the former PBS program, "Louis Rukeyser's Wall Street." He is a member of the St. Louis Society of Security Analysts and the Market Technicians Association.