Stocks: Follow Me Higher

The market story of the week was follow-through. While the major markets -- the Dow Inidustrials, the S&P 500, the Nasdaq and Russell 2000 all remain below their 200-day moving averages -- those looking for higher stock prices were no doubt heartened by the behavior of equities mid-week, as stocks bounded higher for three days in a row.

Indeed with positive economic news in the form of better than expected January retail sales reported this week seeming to counteract previous pessimism in response to the disappointing ISM Non-Manufacturing Sector report from last week, it was entertaining to hear and see financial media reporters badgering their guests about the World's Most Anticipated Recession. While there are a number of market watchers and money managers who continue to beat on the recession drum, their ranks were fewer this week than they had been in months.

The economy -- like the stock market -- is hardly out of the woods. UBS was among the banks still reporting massive writedowns from subprime mortgage-related losses -- though this news appears to have less and less dramatic immediate effect on the market compared to months ago. And although the four-week moving average initial jobs claims continues to trend upward, the most recent month's report saw fewer unemployed workers seeking unemployment assistance.

The full court press was in effect toward week's end as Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson and Securities and Exchange Commission Chairman Christopher Cox all met before the Senate Banking Committee on Thursday to discuss the state of the economy, President Bush's recently signed economic stimulus package, the unfolding mortgage debt crisis and the likelihood of further rate cuts from the Fed. The message from all three was the same odd mix of caution when it came to claiming that the economy was weak or pre-recessionary, and an eagerness to do whatever was necessary to stave off such weakness should it occur. The consensus, such as it was, suggested that economic weakness was likely to continue into the middle of the year, but that is the economy was not overwhelmingly likely to slide into recession.

Unfortunately, the markets which had been trending higher before the Senate Banking Committee meeting began, reversed course over the course of the meeting, with the Dow down more than 100 points in the hour leading up to noon.

New at TradingMarkets: Up or Down?

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Stocks in the News

Stocks making news this week include more news from Microsoft's unsolicited bid for Yahoo, a possible mini-merger of Nortel and Motorola, and positive profit news from cable companies, biotechs and soft-drink maker Coca Cola.

Yahoo (YHOO | Quote | Chart | News | PowerRating) reported that it would reject Microsoft's $44.5 billion dollar unsolicited bid as too low. Later in the week, Rupert Murdoch of News Corporation (NWS | Quote | Chart | News | PowerRating) suggested that he might be interested in a partnership with Yahoo.

Nortel (NTL | Quote | Chart | News | PowerRating) and Motorola (MOT | Quote | Chart | News | PowerRating) announced plans to launch a joint venture to combine wireless networking businesses.

Schering-Plough (SGP | Quote | Chart | News | PowerRating) reported sales growth of more than 40% as well as earnings that beat analyst estimates this week.

Coca Cola (KO | Quote | Chart | News | PowerRating) handily beat earnings estimates this week as sales grew in Asia and Latin America. Sales of VitaminWater were particularly strong in the United States.

Good news on their drug Avastin helped a rally in shares of Genentech (DNA | Quote | Chart | News | PowerRating) this week. The drug proved successful in helping treat tumors in breast cancer patients.

Swiss bank UBS (UBS | Quote | Chart | News | PowerRating) reported its first full-year loss ever as subprime-related losses continue to plague the financial sector.

Profits surged at Comcast (CMCSA | Quote | Chart | News | PowerRating) as the cable company announced plans to renew its dividend and start a $6.9 billion stock buyback.

What to Look for Next Week

Monday: President's Day / Markets Closed
Tuesday: Housing Markets Index
Wednesday: Consumer Price Index / Housing Starts / FOMC Minutes
Thursday: Jobless Claims / Leading Indicators / Money Supply
Friday: None

Best Performing Stocks (PR 8-10) of the Last Five Days

Here are some of the best performing, high Long Term PowerRatings stocks of the past five days. This week, all of the listed stocks have PowerRatings of 8 or 9.

Kellogg (K@K | Quote | Chart | News | PowerRating). Long Term PowerRating 9
H.J. Heinz (HNZ@HNZ | Quote | Chart | News | PowerRating). Long Term PowerRating 9
The Walt Disney Company (DIS@DIS | Quote | Chart | News | PowerRating). Long Term PowerRating 9
BCE, Inc. (BCE@BCE | Quote | Chart | News | PowerRating). Long Term PowerRating 8
Automatic Data Processing (ADP@ADP | Quote | Chart | News | PowerRating). Long Term PowerRating 8

Worst Performing Stocks (PR 1-3) of the Last Five Days

Here are some of the worst performing, low Long Term PowerRatings stocks of the past five days. This week, all of the listed stocks have PowerRatings of 2 or 3.

Career Education Corporation (CECO@CECO | Quote | Chart | News | PowerRating). Long Term PowerRating 3
JetBlue Airways Corporation (JBLU@JBLU | Quote | Chart | News | PowerRating). Long Term PowerRating 3
Dillard's (DDS@DDS | Quote | Chart | News | PowerRating). Long Term PowerRating 3
Blue Nile (NILE@NILE | Quote | Chart | News | PowerRating). Long Term PowerRating 3
Daktronics (DAKT@DAKT | Quote | Chart | News | PowerRating). Long Term PowerRating 2