EARLY TRADE

Bullish corporate news and a weak but kinda just right report on the retail front has Wall Street bulldozing forward, while another hill has yet to be fully conquered. As of 10:30 ET, the NASDAQ Composite ($COMPQ) and S&P500 ($SPX) are up .61% to .96% on slightly more enthusiastic levels of investor satisfaction.

Testimony from ‘da Hill is underway and so far, Wall Street apparently likes what it's hearing from Fed Chief Bernanke. Call it a relief rally if you like, although one intent to cherry pick from a bouquet of information. With the majority opinion heading into the conference being concerned over a hawkish stance, tidbits such as "there are some indications that inflation pressures are beginning to diminish" have been well-received and assuaged some of investors' fears to be certain. With that being said, the Fed Chief also noted that it would be some time before confidence over inflation pressures could be actualized due to "noisy" monthly data. Apparently, with the bulls cheering so loudly, some testimony was lost. However, without being a wrecking ball at the bull's shindig, it should be noted that the semi-annual address is a two-day affair and bulldozers have been known to shift gears when getting a job done.

For the bulls and obviously Wall Street's working stiffs of the moment, ‘Benny ‘da Bulldozer Hill' isn't the only factor behind Wednesday's early bid. Investors rolled up their sleeves out-the-gate this morning on better-than-expected earnings reports and an upgrade of note from a couple of market heavyweights. A premarket report on retail sales has been well-received, despite not delivering what analysts had hoped for. January's 0.0% headliner fell short of the Street's expectations by .3%. Excluding autos, sales rose by .3%, but came in below estimates by .1%. However, December's results were bumped up by .3%, which net-net has been interpreted as a signal that consumer spending remains steady overall.

On the corporate side, headlining for the bulls is Deere & Co. (DE). The machinery giant bulldozed its way through its top and bottom line estimates as earnings of 1.04 beat the Street by 23 cents and sales bested forecasts by $100M with a figure of $3.82B. Adding to the bountiful harvest for investors, management sees Q2 sales to be up by 5% and overall FY07 results slightly higher. Much of the enthusiasm is also being attributed to expectations of a significant global agricultural cycle in the works and a company that has continued to maneuver successfully. After gapping to an all-time-high, DE remains firmly bid and up roughly 9.35 points at 112 and prone to crop circle anxieties in one market observer's opinion.

Semiconductor equipment manufacturer Applied Materials (AMAT) is spearheading a bid in technology. The company tripled its profits from the year-ago period and beat estimates by a penny in delivering earnings of 28 cents a share. On the downside, revenues missed slightly and some customer push-outs were also part of the report. However, management was decidedly upbeat about 2H07 orders and Wall Street has cast its vote in favor of looking in that direction. On the session, AMAT is up 76 cents at 18.95 on a handful of analyst reiterations and upgrades.

Elsewhere on the corporate landscape, an upgrade of FedEx (FDX) is also helping bulls on their trajectory into the high heavens. The air freight operator was upgraded to "outperform" at Morgan Keegan. With the stock tacking on roughly 2.55 points at 116.09, the performance is another influential catalyst behind the Dow Industrials ($INDU) thrust into unknown territories this morning. And finally, Coke (KO) was supposed to be ‘it' after posting better-than-expected results. The company posted a two-cent earnings beat of 52 cents a share and revenues of 5.93B versus estimates of 5.80B. However, investors have stopped sipping the soda giant after a bit of a bit of opening fizz. Intraday, profit-taking within an existing bull flag is now saying no thanks to the bubbly stuff still being found elsewhere.

GROWTH & MOVERS COVERAGE

EARNINGS CALENDAR

Select reports scheduled after the market close and in the premarket:

REPORT CALENDAR

Economic releases scheduled for tomorrow:

INDICES & MARKET MOOD

"Inflation pressures starting to ease," that's one of the utterances heard today which sent bulls charging forward. I thought Ben said ‘tease,' so I was late to the party. However, as a two day fiesta, there's still time to act of course. Although, depending on one's own strategies, the directional motivation might not figure in with the current tango up Wall Street.

The weekly crude inventory report is helping push the bulls along. Today's figures have figured to be bearish, at least temporarily, with traders drilling the black stuff down by -1.50 points to 57.50 per barrel. With the latest action, some might be seeing a high-level triple bottom of sorts, carved out during the last week and one-half. Others might be finding a bearish daily flag being close to a key breaking point from the lows not set all too long ago. Which side will win the short-term war will no doubt be interesting to see in the days ahead. Just as important, it also establishes yet another case of not being able to eat your cake and having it too and why limited risk strategies should always be an option.

Chris Tyler
Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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The information offered here is based upon Christopher Tyler's observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.