BROAD MARKET SUMMARY:
Upon reading the market recap, one would likely think the markets took it on the chin this week, especially after such nice gains last week. Earnings season is in full swing and notable headlines this week include historically high oil prices, 52 week lows, numerous decreased forecasts, and continued domestic financial crises.

Albeit, some of the “attention grabbers” do have a strong air of dissatisfaction about them. Traders did find the good in the market information this week and managed to keep the indices above water.

Improved crude oil reserves, better unemployment data, a smoothing of home sales data, and tech giants beating estimates did their part in helping the markets hang on to the widespread profits from a week ago.

INDEX	4/25 Close	4/18 Close	% Chg
DJIA	12,891.86	12,849.36	+0.33%
S&P 500	1,397.84	1,390.33	+0.54%
NASDAQ	2,422.93	2,402.97	+0.83%

West Texas Intermediate Crude closed at $118.52/bbl.
Gold Futures closed at $889.70/oz

Next FOMC Meeting: April 29 & 30, 2008 - Tuesday/Wednesday

Notable Economic Data This Week:
•  Existing home sales for March met expectations at 4.93m.
•  New home sales in March came in lower than projections at 526k.
•  Weekly unemployment initial claims were better than expected at 342k new claimants for the week.
•  Crude Oil inventories were significantly higher than the projections at 2.421m.
•  U of Mich. Sentiment reading for April was revised downward to reflect continuing consumer cautiousness.

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FINANCIALS:
Bank of America (BAC) is the second largest bank in the U.S. behind only Citi (C). This week the company announced earnings of 23 cents per share, well short of the expected 41 cents analysts were looking for and down from $1.17 from a year ago. The dividend wasn’t cut, but Moody’s cut the bond rating at BAC noting its weakened capital position and tough operating environment.

Continuing our weekly “low”light, National City (NCC) follows in the footsteps of Washington Mutual (WM) and Wachovia (WB). Earnings falling short of expectations is only one of the big three factors these financials have in common. All have missed their earnings estimates this quarter; all have announced necessary capital injections; and all have drastically cut their dividend. All three companies are doing everything in their power to stay in business through this tumultuous time.

Merrill Lynch (MER) is chatting with TPG in an attempt to build a closer relationship, where the private equity partner may invest in the investment bank if greater capital needs arise. It seems TPG may have seen the inherent value in the manner in which JP Morgan (JPM) was able to “save” Bear Stearns (BSC) investment bank last month and immediately strengthen their own balance sheet.

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TECHNOLOGY:
In the most recent quarter, Apple (AAPL) sold 2.29 million Macs, 10.6 million iPods, and 1.7 million iPhones. Thanks to continued demand, the company posted a 36 increase in quarterly profit. These results solidly beat street expectations on both revenue and profit measurements.

Texas Instruments (TXN) is setting a conservative view of Q2 amid economic concerns. The CFO had this to say: “We’re just responding to our customers’ conservatism.” Q1 earnings beat the street, but the forecast from such a market giant left shareholders unsettled.

Yahoo (YHOO) beat expectations this period with revenue of $1.35 billion. The company has a strong outlook for next quarter, but shareholders still have Microsoft (MSFT) to thank. Without the bid earlier this year for cash-plus-stock of $31 per share, this quarter’s announcement wouldn’t have got the share price to where it is. However, it is worth noting that MSFT currently has no intention of increasing its bid to acquire YHOO in the deal that is likely to turn hostile and see proxy votes in coming weeks. Microsoft (MSFT) also announced earnings this week with a relative disappointment where profit came in at the low end of the range of analyst expectations.

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PILLARS OF THE U.S. ECONOMY:
Starbucks (SBUX) hit a 52 week low this week. Don’t get too excited, we’re talking about share price - not a Grande Caramel Macchiato! While the price of the latter is as high as ever, the share price in fact hasn’t seen these levels since back in 2004 (split-adjusted). Blaming the weak economy, the company lowered its outlook saying its customers are still coming to the stores, just not as often.

United Airlines parent UAL Corp (UAL) emerged from bankruptcy just two years ago and this quarter posted a net loss of $4.45 per share in Q1. This compares with a loss a year ago of $1.32 per share. Plans for job cuts and cost saving initiatives are hailed as the saviors to battle soaring fuel costs. The company saw an increase of $618 million for fuel in Q1 alone. Cutting 1,100 employees and $200 millon from planned CapEx could help the situation.

Profit fell this quarter at United Parcel Service (UPS) due to a decrease in U.S. economic activity, the company said while cutting its full year forecast. The CFO at the company didn’t hold back much in stating “we see no signs of economic strengthening in the second quarter.”

Ford Motor Company (F) posted a $100 million profit in Q1 but still expects to lose money in the full year as the U.S. auto market deteriorates. However, the CEO projects positive net income in 2009. Strong sales in Europe and S. America along with cost controls helped keep the quarter intact. The stock was downgraded partly due to valuation, and partly due to the recognized threat to future profitability.

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OIL SETS A RECORD:
This week, oil prices hit an all time intraday high of $119.90 as the commodity price bumped up against the recognized threshold of $120 per barrel. U.S. inventories are higher than were expected, but attacks on pipelines in Nigeria coupled with OPEC declining to raise short-term output drove the prices higher.