Burst of Confidence Fuels Rally

[The Finman]

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<h2><font color=#003399>Burst of Confidence Fuels Rally</font></h2>
A tidy surge in consumer confidence gave enough investors enough optimism to drive the Dow Jones industrials up an impressive 179 points Tuesday.

Tech stocks led the post-Memorial Day rally, with stalwarts such as Intel (INTC, news, msgs), Cisco Systems (CSCO, news, msgs) and Oracle (ORCL, news, msgs) driving upward between 3% and 6% apiece.

For a look at the most actively traded shares today -- most of which jumped skyward -- see this Top 10 list.

The Conference Board said its consumer confidence index hit 83.8 for May.

This was roughly what economists had anticipated, but the fact that the number hit the highest level in five months helped boost stocks.

The other main factor today: home sales.

The Commerce Department reported that both new-home and existing-home sales rose 1.7%.See the numbers that lenders see.

All of this was important because investors want to see economic growth return before putting money to work, Tracy Eichler, an investment strategist at UBS PaineWebber, said on CNBC this morning.

Before this morning's numbers, they hadn't seen much they liked.

The firm's Investor Optimism Index plunged this month to 42 from 66 in April, Eichler said.

Economic data -- the fuel for today's rocket ride -- will continue to roll in this week.

Thursday will offer a new look at joblessness.

And Friday brings yet another reading on consumer sentiment.

For details, see our Economic Data Calendar.

It may be too early to sell stocks and take profits, but it's also probably too late to buy.

That's the signal from a noticeable step-up in insider selling in recent weeks, according to Argus Research, which publishes Vickers Weekly Insider Report.

Vickers' trailing eight-week ratio of insider selling to buying has climbed to 2.74 from 1.61 in the past two months, a bearish move that is "not something to be taken lightly," says the newsletter.

"Executives and directors may now be signaling that we are moving upwards at an unsustainable pace."

Another sign of the times came today, with news that Michael Dell, CEO of Dell Computer (DELL, news, msgs) would be selling 10 million shares of his own company.

Instead, the firm's insider models suggest stocks will continue to drift inside recent trading ranges.

That'll change, however, if insider sentiment continues to deteriorate.

Two of the strongest performing names in the market these days are Amazon.com (AMZN, news, msgs) and eBay (EBAY, news, msgs).

One of the best-performing small-cap growth funds, Bjurman Barry Micro Cap Growth (BMCFX), will permanently close to new investors on Friday.

A companion fund, Bjurman Barry Small Cap Growth (BBSFX), has been opened to invest in larger companies, with capitalizations of $100 million to $1 billion.


Full Article <font color="red"><u>Here</u></font>