By Clyde Noel

Stock Report

The good news says the stock market bottom has been reached. The bad news says the market isn’t going anywhere.

Sentiment is changing. Bad news drifts in and the market doesn’t react badly as it has in the past. The lack of negative surprises was heartening after all the revelations of corporate financial skullduggery.

The market’s major gauges, and the Town Crier index, claimed a second straight weekly advance. That hasn’t happened since March 8.

For the week, The Dow rose 32.61 points or 0.4 percent. The Nasdaq had a weekly gain of 54.89 points or 4.2 percent, while the Town Crier Index increased 5.04 percent.

Double-digit movers on the Town Crier index were: Adobe Systems, 13.53 percent; BEA Systems, 15.68; Cisco, 10.14; E-Trade, 28.53; Hewlett Packard, 12.30; LSI Logic, 19.88; Network Appliance, 23.78; Network Associates, 28.52; and Nvidia, up 16.20 percent.

Tech stocks appear to be gathering investor sentiment and forming a bottom. The rally may continue for a couple of weeks before we retest the technical lows again.

Stock prices are becoming more attractive to investors as other investments are becoming less eye-catching. Bonds and money markets are becoming less attractive since the 10-year note yield bottomed and people start asking, “How long can I continue to live on my CDs and the money market paying only 1 percent?”

Astute investors have noted stock market gains have not come easily. The Dow gained 1000 points, then lost 700, and then gained back the 700, which is another indication of market stabilization.

The stock market trades on the future. Many analysts agree the recovery will be slow and discouraging at times, but they are not concerned about a return to recession.

Last week’s certification for some 700 companies helped ease the widespread fear of financial skullduggery. That move made the stock market a bit more comfortable with investors and gave it an upward bias.

To get the market to take off, more positive reports on the economy are needed. Last week we had weaker-than-expected job and consumer sentiment data as well as sluggish industrial production numbers.

Stocks are expected to resume a belated summer rally that we’ve seen in recent years, but with many individual investors still on vacation there won’t be much action other than traders covering their shorts.

Noel, a seasoned investor, covers the stock market for the Town Crier.