Markets Trading Near Daily Hights With Mixed Retail Reports

The Dow has been up as many as 78 points. The Nasdaq has been up as many as 23 points. Currently the Dow is up 0.6%, the S&P 500 is up 0.7% and the Nasdaq is up 0.9%. Other economic reports this morning delivered no surprises. First quarter gross domestic product was revised higher to a gain of 0.9%. Initial jobless claims rose 4,000 to 372,000 last week.

Retailers delivered mixed results. Sears Holdings dropped 2.91 to 86.57 after reporting an unexpected loss in the latest quarter. Results at Costco and Big Lots beat estimates. However Costco was off 1.38 to 71.83 after the company said analysts' expectations for the fourth quarter were "a bit too high." Big Lots rose 2.67 to 31.21. HJ Heinz raised its dividend as well as its sales and earnings forecast for the next two years. Shares were up 1.35 at 48.90. MasterCard gained 23.53 to 310.44 after increasing its profit growth target.

The NYSE was 3-2 positive on issues and on volume. The Nasdaq was 8-5 positive on issues, 5-2 positive on volume. The yield on the 10-year Treasury note rose to the highest level since December. The 10-year Treasury note was down 28/32 to yield 4.11%.

What was encouraging about yesterday's market performance was that stocks rallied in the afternoon even as oil prices climbed steadily, and despite hawkish comments from Fed President Stern who said that inflation is 'too rapid for comfort'. He went on to say that Fed policy makers are highly sensitive to their mandate to ensure sustained low inflation.

Today - Foreign markets were moderately higher overnight and crude oil eased once again. In this morning's economic data both jobless claims and 1st quarter GDP were reported in line with expectations. With yesterday's decent showing, we look for more follow-through today. Also positive, the dollar rose to the highest level in more than a week against the euro after Fed Governor Fisher said the central bank will raise interest rates should consumers expect faster inflation.

Source: Reported by A. G. Edwards Midday Market Commentary Alfred E. Goldman, Chief Market Strategist at Wachovia Securities