• Most US stocks rebounded late in trading to close slightly higher – Dow Jones +17.5pts or +0.2% to 10642.2pts, S&P 500 +0.05% to 1150.5pts. The NASDAQ remained in the red, down 0.2% to 2362.2pts.
• A weaker crude oil price drove energy stocks lower – Chevron (-0.2%) and Exxon Mobil (-0.8%). Other major drags on the Dow included Alcoa (-0.7%), Caterpillar (-1.5%), Travelers (-0.8%) and Boeing (-0.6%). The best performers were General Electric (+1.5%), Merck (+1.6%) and Wal-Mart (+2.8%).
• Wal-Mart (+2.8%) helped boost the Dow higher after Citigroup upgraded the major retailer to “buy” from “hold”. Analysts highlighted the group’s potential for gaining market share from supermarkets with minimal margin contraction as a key driver of earnings going forward. Google (-2.9%) slumped lower on news it was close to shutting down its Chinese search engine, with Google advertisers switching across to rivals such as Baidu. In M&A news, Phillips-Van Heusen (+10%) traded higher after news it was close to acquiring Tommy Hilfiger for US$3bn.
• Financials rebounded late in trading, eliminating earlier losses – Bank of America (unchanged), JPMorgan (-0.2%) - after Senate Banking Committee Chairman Chris Dodd released his financial reform bill that appeared more conservative than initially anticipated. The proposed legislation highlights the creation of an independent consumer watchdog agency within the Fed Reserve to help protect consumers and includes a version of the Volcker Rule legislating against prop trading.
• Crude declined 1.7% to US$79.9/bbl and Gold edged 0.4% higher to US$1106/oz. On the LME, base metals declined – Copper -1.9%, Nickel -1.1%, Aluminium -1.5%, Zinc -2.4%. The US dollar strengthened – AUD/USD -0.03% to US$0.9144 and the EUR/USD -0.7% to US$1.3676.
• European shares closed lower – FTSE 100 (-0.6%), DAX 30 (-0.7%), CAC 40 (-0.9%). Mining stocks declined on fears China may further tighten monetary policy in an attempt to stem inflationary concerns – BHP (-1.5%), RIO (-1.4%), Anglo American (-1.6%), Xstrata (-3%). In Asia yesterday, the Hang Seng (-0.6%) and Shanghai Composite (-1.2%) declined, while the NIKKEI closed flat.

Evans and Partners will always look for, and promote, the simplest investment solution for each individual client. We promote our investment strategy ideas through three regular publications, the weekly View from the Outer, monthly Financial Engineer and monthly Investment Chartbook keep clients up to date with our key investment themes and ideas.