Weekly Stock Market Update

Market Beating Foresight: Broad Market Reaches 52 Week High

The broad market hit a 52 week high on Wednesday and finished the week 2.3% higher. The market strength shown over the past two weeks is encouraging, although the S&P still has not broken that sticky 1100 level. Declines in the dollar and positive corporate earnings remain the big drivers of the market. Consumer confidence levels came in lower than expected, but the market was able to shrug off those concerns. Third quarter earnings report are mostly complete and generally speaking have been better than expected. However, we would note one recent statistic that suggests only 27% of companies were able to increase revenue year to year. Cost cuts and reduced spending has helped companies short term, but over time more companies will have to show top line revenue gains to ensure sustainable long term growth. We believe that a slow recovery will continue to challenge and pressure revenue growth into next year. For us, the 1100 mark on the S&P is a very significant resistant level. We will be more comfortable with current market highs once the market breaks through and holds that 1100 level.

Momentum And Value Screen: Hot Stocks To Buy

What Stock Tips do we have? We have kept Kapstone Paper & Packaging (KPPC, Paper Products), VSE Corp (VSEC, Business Services), Telenor (TELNY, Telecommunications), Conseco (CNO, Insurance), and Bucyrus International (BUCY, Const. & Agric. Machinery). We added one new stock to our watch list and that is Par Pharmaceutical. This company develops, manufactures, and distributes generic and branded drugs in the United States. Par has had strong growth rates over the past year and the stock price has reflected that in the price momentum shown over the past six months. The PE is a little higher than what we look for at 22, but we think the higher price is worth the risk given prospects for company growth. Overall we still like this market and would encourage investors to continue buying on dips. The stock market will likely remain very bumpy, until investor and consumer confidence reach higher levels. Show patience on down days and take some profits when the market moves up sharply. We will become even more bullish once the market breaks and holds the 1100 level on the S&P Index.

Remember, you can access daily updates on Hot Stocks to Buy directly from our web site At: http://www.marketbeatingstocks.com