“Stanley Jacobs Image”

U.S. stocks got back on the winning track last week, with only the NASDAQ
Comp posting a modest loss.

Monday, the ISM Manufacturing index posted its
8th straight monthly advance and defense shares were stronger off of
rumored big increases to the 2005 defense budget.

A ricin scare on Capitol
Hill Tuesday sent stock prices sharply lower. Cisco reported lackluster
results Tuesday evening, leading to a sell-off on Wednesday. The tech
giants shares lost 8 percent on the day while the tech heavy NASDAQ was down over
2 percent.

Retailers were stronger later in the week off of encouraging January
sales reports. Gap and Wal-mart were two big beneficiaries.

Stocks rallied
on Friday following an employment report that, while showing job gains,
came in weaker than expected. Investors interpreted the report to mean the
Fed is less likely to raise rates in the near term as the economy is
improving but not so fast as to cause inflation fears. Industrials and
other cyclical names were stronger on the day.

Looking ahead, earnings
season is coming to a close. To date, company reports have showed strong
year over year earnings gains with more gains forecasted for the coming
year. While several big names have yet to report, investors will be
looking to Fed Chairman Greenspan this week as he gives his semi-annual
monetary policy update on Capitol Hill. Investors will be looking for any
subtle changes in the chairman’s stance on the economy.

Given the current
economic conditions, equities should continue to be the investment class
of choice for those with a long-term horizon.

”Weekly Index Performance:”

*DJIA: 10593.03 (+104.96,+1.0%)

*S&P 500: 1142.76 (+11.63,+1.0%)

*S&P MidCap: 594.41 (+6.35,+1.1%)

*S&P SmallCap: 280.67 (+2.62,+0.9%)

*Nasdaq Comp: 2064.01 (-2.14,-0.1%)

*Russell 2000: 584.07 (+3.31,+0.6%)

”’Interesting Web site of the week: Freedom Rock at:”’ http://www.ticz.com/homes/users/bob/On-A-Rock/On-A-Rock.htm

”’Stanley Jacobs is a financial professional at 201 Merchant St., Suite 2200, in Honolulu, Hawaii. He can be reached by phone at (808)537-4591 ext 227. Jacobs is a registered representative of and offers securities through MML Investors Services, Inc. The supervisory office is in Springfield, Massachusetts, and its phone number is (413)737-8400.”’

Comments

comments