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News & Our Thinking

Weekly Investor

Weekly Investor – Oct. 04, 2010

04 October 2010

Taking a Break

Market Summary:

The major equity averages ended the week slightly lower after delivering impressive gains for the month of September.  Last month, the DJIA rose 7.7%, the S&P 500 gained 8.8%, the Russell 1000 Growth rose 10.5% and the NASDAQ advanced 12.0%.   Economic data was mixed, including an unexpected drop in September Consumer Confidence on one hand, and better than expected initial jobless claims on the other.  It was another busy week for M&A announcements, as Southwest Airlines, Wal-Mart and Unilever all announced deals, which points to general management confidence in investing in the future.  In the face of mixed data and growing election noise, investors will begin to look to earnings season to gain clarity on the direction and pace of the economic recovery.

Over the past week, top-performing sectors in the S&P 500® Index included Energy (+2.5%) and Telecommunications (+0.9%), while bottom-performing sectors included Financials (-0.8%) and Technology (-0.7%).  In the fixed-income market the 10-year Treasury remained at the same level, ending the week at 2.5%.

We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.

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Improving Fundamentals

eBay, Inc. (EBAY) and its subsidiaries provide online marketplaces for the sale of goods and services and online payments services, including PayPal and BillMeLater, to individuals and businesses in the United States and internationally.

Over the past year, EBAY has orchestrated a revitalization of its online auction offerings while continuing to generate impressive growth in its payment services business.  While some of the company results have been masked by the overall economic pressures, EBAY has shown improvements in several key operating metrics.  With the company’s online auction restructuring on track and a management team focused on restoring growth to the company, we are encouraged by EBAY’s progress and a strategy that has the potential to offer attractive upside to investors.

 

 

Top 10 Equity Holdings


Newell Rubbermaid 4.2%
Google Inc. 4.1%
Cisco Systems Inc. 3.9%
Starwood Hotels 3.9%
Danaher Corp. 3.8%
Energizer Holdings 3.6%
Carnival Corp. 3.5%
MasterCard Inc. 3.3%
EMC Corp. 3.2%
FactSet Research Systems 3.2%

U.S. Equity Indices


Index 10/01/10 Week % Chg YTD % Chg
DJIA 10,829.7 -0.3% 3.9%
NASDAQ 2,370.8 -0.4% 4.5%
S&P 500 1,146.2 -0.2% 2.8%
Russell 1000 G 517.2 -0.1% 3.4%

U.S. Credit Rates


Index 10/01/10 09/24/10 12/31/09
3 Month T-Bill 0.2% 0.1% 0.1%
5 Year T-Note 1.3% 1.3% 2.6%
10 Year T-Note 2.5% 2.5% 3.8%
30 Year T-Bond 3.7% 3.7% 4.6%
Prime Rate 3.3% 3.3% 3.3%

This newsletter presents selected recommendations from portfolio managers of Argent Capital Management LLC, a registered investment advisor. Opinions reflect the portfolio manager’s judgment on the date above and are subject to change. A list of stocks recommended by Argent is available upon request. You should not assume that these recommendations are or will be profitable. In the course of it’s business, Argent’s client accounts may be buying and selling these stocks.