Bond & equity report for Nov. 6

U.S. EQUITIES rebounded on Thursday, closing near the highs of the session, as strong earnings and guidance by Cisco Systems, coupled with better than expected readings on weekly unemployment claims and productivity supported a cautiously optimistic sentiment for equity buyers.

The technology sector was the primary driver of today’s rally, which allowed the Dow to move back above the 10,000 level and powered the NASDAQ to the position of highest percentage gainer of the three major indexes. The homebuilding sector received a boost as the U.S. government will extend the homebuyers tax credit and unemployment benefits. The credit would be extended for seven months and will now include an additional tax credit for qualified individuals that already own homes, as the market tries to bolster purchases by “step up” buyers of homes in an effort to stimulate drawdown of higher priced real estate.

Technically, December S&P futures are coming up toward resistance at 1071.00. A break of this level should set up for test of 1083.00; 1103.00 continues as an upside breakout target level. Adjust initial downside support level to 1035.00. 1022.00, 1007.00 continue as key downside target levels.

Prepared by Rich Roscelli & Paul Brittain.

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