Market Recovery Complete

As of the closing bell on April 16,the stock market had fully recovered from its February 27 correction.Indeed,the S&P 500 index stood at a six and a half year high.According to Jason Trennert,Chief Investment Strategist of Strategas Research Partners,the economic fundamentals are the same as they were at the end of February.Interest rates are stable,and many companies are supporting stock prices by buying back their own shares.Serat Sethi of Douglas C. Lane Associates remains cautious,however.He advises a broad-based allocation to protect against risks which many may have already forgotten about.

Genentech Expands

Genentech(DNA),the largest biotech company in terms of market capitalization,has a vast pipeline.It is currently developing thirty new drugs and has an inventory of thirteen new molecules.These prospects follow the blockbusters Herceptin(breast cancer),Avastin(late stage colon cancer) and Lucentis(macular degeneration).The latter drug can literally restore sight to the blind.To accomodate its research,DNA is erecting eleven new buildings on its San Francisco Bay Area campus.The volume of its quality work looks to ensure continuing benefit to the chronically ill,as well as its shareholders.

Easter Break

As we approach the Easter holiday,I wish all of you a blessed spring.Thank you for visiting this site,Andrew Taylor

Alcatel-Lucent Gets Big Deal

Alcatel-Lucent(ALU),the Franco-American telecom giant,has landed a huge contract with Verizon Communications.It is a three year,six billion dollar network expansion and improvement deal.ALU offers an encyclopedic array of products and services worldwide,but its stock has been pummeled because of a low earnings forecast on account of merger costs.Late last year,the Paris-based Alcatel completed its merger with Lucent Technologies,the former Western Electric component of the old Bell System.Alcatel-Lucent is headed by American CEO Patricia Russo.

More Testing Ahead

There seems to be a consensus on Wall Street that the correction will go on.Just how long it will is unclear.Andrew Siebart of Stewart Capital feels the rest of the year will be choppy.Sarat Sethi of Douglas C. Lane thinks the volatility will continue for a few more months.According to Steve Hochberg of Elliot Wave,we have gone from a rally phase to a declining phase,a sea change in the market.There was a rally yesterday,but the volume was thin.The market is still weak,and those who have been shaken need a lot more firmness before they will come back.

Correction Question

Is the stock market correction over,or will another shoe drop? There are analysts on both sides of the issue.It has only been two weeks since the precipitous decline,however,so it does seem to be premature to be declaring victory.As Mark Arbeter of Standard and Poors noted yesterday,trading volume during the partial recovery has been light,casting doubt on its authenticity;nor have there been any shocks to put the market to the test.If a surprising piece of significant data is weathered,then we might breathe easier.Until then,many investors are holding back in bonds and cash.

Bond Funds Beckon

A number of bond funds are available to investors at this time of crisis.They include the iShares Lehman Brothers TIP,TLH,SHY,TLT,IEI,IEF and AGG funds.Black Rock offers the BFK and BNA funds.One option is to put new money in these funds,while holding on to good equity positions.It could be weeks or even months before the market regains its composure.In the meantime,bond funds provide some stability and income to beleaguered holdings.