bull vs. turkey on wall street

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    Bull vs. turkey on Wall Street
    The month long stock market advance will try to withstand the challenges of Thanksgiving week.
    November 19, 2005: 7:14 PM EST
    By Alexandra Twin, CNNMoney.com staff writer

    NEW YORK (CNNMoney.com) - Like many on Wall Street, the bull will likely be taking a vacation for at least some of the week ahead.

    A four week stock market advance has pushed the Nasdaq composite and the S&P 500 to 4-1/2 year highs. And the Dow's gains have been none too shabby as well.

    But the advance showed signs of fatigue near the end of last week, and there are plenty of good reasons for the rally to pause in the week ahead, analysts say.

    Next week will be an abbreviated trading week due to the Thanksgiving holiday Thursday. All financial markets are closed Thursday and close early on Friday. Additionally, the Treasury bond market closes early on Wednesday.

    Few market-moving earnings are due and the biggest piece of economic news is the Tuesday release of the minutes from the November Federal Reserve policy meeting. Wall Streeters who stumble in Friday in a tryptophan coma after their Thanksgiving feasts are unlikely to push the market much one way or another.

    "It's the type of week where we're going to see slow volume and basically a half day Wednesday and a dead Friday," said Timothy Ghriskey, chief investment officer at Solaris Asset Management.

    Light volume days can often mean more volatility and big swings in the major averages. At the same time, stocks have risen for 4 weeks straight and investors may be looking for an incentive to back out. The combination of these two factors could suggest declines next week.

    "The market has had a good run, so it wouldn't be surprising to see it take a little break next week," said Jim Dunigan, chief investment officer at PNC Advisors.

    "Most of the earnings have already been reported, oil prices have come down considerably, and there isn't much in the way of events next week," he added.

    In addition to the minutes from the last Fed meeting, the consumer sentiment number is usually a market mover, Ghriskey said.

    Recharging after the pause?

    Beyond next week, the analysts say that the advance looks like it could recharge heading into the end of the year, assuming that oil prices don't turn around and the Fed doesn't throw out any surprises.

    "There is still strong underlying demand for financial securities," Ghriskey added. "That, combined with the strength of the economy could carry us to year-end."

    Ghriskey said he is not looking for major gains, but a modest continued advance.

    The next short-term catalyst for investors will likely be the aftermath of "Black Friday," the day after Thanksgiving that is traditionally seen as the start of the holiday shopping season. A month ago, the assumption was that holiday sales would be somewhat anemic due to a consumer drained by sustained high energy prices.

    But oil prices have backed off their highs and some recent reports -- from retailers such as Wal-Mart Stores -- suggest the holiday period could be better than expected. (Full story.)

    "The advance we've seen over the last month has been a reaction to fundamentals," Dunigan added. "Those fundamentals remain, and as long as we get a fairly solid holiday season, I think we'll continue to see stocks move up."

    Key events next week

    The October read on leading economic indicators is due Monday. LEI is expected to have risen 0.8 percent after falling 0.7 percent in September.

    Also Monday, Chicago Fed President Moskow will speak about the outlook for the economy at a meeting in New York.

    Campbell Soup (Research) reports earnings Monday and is expected to have earned 56 cents per share, according to a consensus of economists surveyed by First Call. The company earned 56 cents a year ago.

    Albertson's (Research) reports earnings Tuesday. The grocery chain is expected to have earned 27 cents, versus 32 cents a year ago.

    Deere (Research) also reports results Tuesday and is expected to have earned 79 cents per share, down from $1.41 a year ago.

    The Federal Reserve releases the minutes from its November policy-setting meeting Tuesday afternoon.

    Wednesday brings the revised read on November consumer sentiment from the University of Michigan. The index is expected to be revised up to 80.5 from an initial read of 79.9.

    Wednesday also brings the weekly jobless claims report. The number of Americans filing new claims for unemployment is expected to have risen to 310,000 from 303,000 the previous week.
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