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WEEK IN REVIEW :

The market traded with a sense of caution Monday as investors stayed
close to the sidelines ahead of the first FOMC meeting not chaired
by Alan Greenspan in 19 years. While a 15th consecutive 1/4% hike in
the overnight lending rate has already been priced into the market,
uncertainty as to the whether or not the accompanying policy
statement will offer clues about the direction for interest rates
underpinned a sense of nervousness and stalled some of the wishful
thinking behind recent market strength. The S&P 500, which is up
4.5% in 2006, is positioned to record its biggest first-quarter gain
in seven years. The McClellan Oscillator slipped below the 0 line
today.

It was anticipation of, and then digestion of, Tuesday's FOMC event
that dictated trade. For the fifteenth consecutive time, the Fed
raised the fed funds rate by 25 basis points. As had been expected,
it wasn't today's tightening that sparked selling. The rate hike, to
4.75%, had been fully expected. The catalyst was instead the
accompanying policy statement. Some participants had been hoping
that the Fed would signal an imminent end to the current monetary
tightening cycle. The directive's diction was little changed,
though, and provided no signal that rate hikes are coming to an
end. Dow Jones industrials dropped 95 points after the Federal
Reserve disappointed investors by suggesting that more interest rate
hikes were on the way. Today we saw the effect on the market when
the McClellan Oscillator slips below the 0 line. OEX stocks that
were sold the most during sell programs executed by program trading
firms: HCA, PFE, MCD, PG, CL, MDT, DELL, MO, PG, AMGN, MER, T, TWX ,
PG, TXN, MDT, HNZ, PEP, BAX, HET.

The market reclaimed the ground it had lost Tuesday. The S&P and
Nasdaq fully erased their FOMC-induced losses, and the Dow came
close to doing the same. The Technology sector's leadership was the
muscle behind the advance, but buying was broad-based and took
virtually every area of the market higher. Buyers dominated the
trading action from start to finish. On the NYSE, advancing stocks
outpaced decliners by an eight-to-three ratio. On the Nasdaq,
meanwhile, advancers had a 22-to-nine lead over declining issues.
The market's internals Wednesday were starkly different than
Tuesday. Yesterday, decliners led by 21-to-12 on the NYSE and three-
to-two on the Nasdaq. There was not much meaningful news to account
for investors' bullish bias. As such, it appeared to be a result of
the stock market's hopeful view that the Fed is near the end of its
tightening cycle.The Department of Energy's weekly inventory report
was a mixed picture. In its report, the Energy Dept. announced a
greater than expected build in crude but bigger than expected
drawdowns in gasoline and distillate supply.

Two factors to which the stock market turned a blind eye yesterday
came back into focus today. Fresh signs of inflation risk left
stocks mixed Thursday as new data on the nation's gross domestic
product bolstered the Federal Reserve's view that the economy
remains strong. Treasuries came under increased pressure as crude
hurdled $67 per barrel, and investors began to sell. By the close of
trade, each of the indices had recovered from their lows. Still, a
lack of leadership left the Dow and Nasdaq with losses. The UN
Security Council issued a warning, giving Iran 30 days to freeze its
uranium enrichment program.

Stocks closed out a solid first quarter with a modest decline Friday
despite lower oil prices and a round of temperate economic data that
mitigated concerns about inflation and higher interest rates. The
major indexes finished mixed for the week, but were higher for the
month and the quarter. Crude Oil futures pulled back as investors
took profits following several days of sharp gains on concerns about
political instability overseas. A barrel of light crude fell 52
cents to settle at $66.63 on the New York Mercantile Exchange.The
Dow Jones industrial average dropped 41.38, or 0.37 percent, to
11,109.32. The broader stock indicators were also lower. The
Standard & Poor's 500 index fell 5.42, or 0.42 percent, to 1,294.83;
the Nasdaq composite index dropped 1.03, or 0.04 percent, to
2,339.79, after reaching a five-year high the day before.
Despite suffering sharp losses this week, the major indexes ended
with modest gains for the month of March, giving them their best
first-quarter performances in several years. For the week, the Dow
lost 170 points or 1.51 percent and the S&P 500 dropped 0.62
percent, while the Nasdaq surged 1.17 percent. But in March, the Dow
rose 1.05 percent, the S&P 500 added 1.11 percent and the Nasdaq
climbed 2.56 percent. For the quarter, the Dow gained 3.66 percent,
the S&P 500 rose 3.73 percent and the Nasdaq is 6.1 percent higher.


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