BOTTOM LINE: Overall, last week's market performance was very positive as US stocks posted meaningful gains even as worries over Iran’s nuclear program remained, oil stayed elevated, economic data was mixed, earnings were about at expectations and long-term rates increased. The advance/decline line rose, most sectors gained and volume was above average on the week. Measures of investor anxiety were mostly lower. However, the AAII % Bulls plunged to 30.77%, which is approaching depressed levels. This is a big positive for stocks.

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Weekly Outlook
at 2006-02-06 23:45:56
Click here for The Week Ahead by Reuters

There are a number of economic reports and some significant corporate earnings reports scheduled for release this week.

Economic reports for the week include:

Mon. - Personal Income, Personal Spending, PCE Deflator
Tues. - 4Q Employment Cost Index, Consumer Confidence, Chicago Purchasing Manager, FOMC Rate Decision
Wed. - Construction Spending, Pending Home Sales, ISM Manufacturing, ISM Prices Paid, Total Vehicle Sales
Thur. - Non-farm Productivity, 4Q Unit Labor Costs, Initial Jobless Clai

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Monday Watch
at 2006-02-06 23:45:56
Weekend Headlines
Bloomberg:
- Wal-Mart(WMT) said January same-store sales rose about 4.7%, the biggest January gain in two years.
- Former President Clinton called on Hamas to renounce violence as it prepares to form a government after winning Palestinian parliamentary elections.
- President Bush called on Congress to hold a confirmation vote on US Supreme Court nominee Samuel A. Alito Jr., and lashed out at Democrats for their handling of the judge’s nomination.
- The NFL said it will show eight regular-season games on its cable-tv channel on Thursday and Saturday nights starting next season.
- Morgan Stanley’s(MWD) international chairman Jonathan Chenevix-Trench downplayed the recent departure of four senior investment bankers, saying the firm is in “great shape.”
- Israel said it will cut off contact with the Palestinian Authority unless Hamas, which won last wee

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Links of Interest
at 2006-02-06 23:45:56
Market Snapshot
Detailed Market Summary
Market Internals
Economic Commentary
Movers & Shakers
Today in IBD
NYSE OrderTrac

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Personal Incomes Remain Healthy, Spending Accelerates, Inflation Decelerates
at 2006-02-06 23:45:56

- Personal Income for December rose .4% versus estimates of a .4% increase and a .4% gain in November.
- Personal Spending for December rose .9% versus estimates of a .7% gain and a .5% increase in November.
- PCE Core(M-o-M) for December rose .1% versus estimates of a .2% increase and a .2% gain in November.

BOTTOM LINE: US personal spending increased more than expected in December as incomes grew, suggesting a pickup in demand at the end of 2005 that may help boost first-quarter growth, Bloomberg reported. The PCE Core, the Fed’s favorite inflation gauge, rose a less-than-expected .1%. Inflation-adjusted spending on big-ticket items such as cars and furniture rose 5.0% in December, the largest gain since July. For all of 2005 the PCE Core gained 1.9% versus a 2.3% increase in 2004. Incomes rose 5.4% for all of 2005, almost double most measures of inflation. I continue to expect c

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