Investors Choosing Growth & Risk Over Value & Defensive Stocks

DJIA                    12,133.40; Up 57.44 (0.48%)
NASDAQ            2,371.74; Up 21.17 (0.90%)
S&P500              1,387.17; Up 9.22 (0.67%)
10YR-Bond        4.522%; Up 0.0270
NYSE Volume    3,726,042,000
NASD Volume    2,301,636,000

Interestingly enough, after more than a 100 point drop in the DJIA and then after a huge recovery buying session that led the markets back into positive territory, out of the 20 FIRST LINE DEFENSIVE STOCKS TO OWN IN A CRUMMY MARKET there were only 10 of the 20 that closed up for the day.  Out of the 10 down on the day there were 3 of the 10 down members that were barely negative, but that doesn’t matter in advance/decline lines.  Out of the 15 SECOND LINE DEFENSE STOCKS 11 of the 15 components closed up.

Out of the 30 DJIA components, there were 20 of the 30 components that closed up for the session.  Out of the NASDAQ 100 Index, there were 72 of the components that closed in positive territory.  This is puzzling that the techs are leading the turn this quickly out of the chute, assuming it isn’t a one-off day.  Are people seeking growth over value right off the bat?  Or are they going back into risk?  Out of the subprime lenders, many of these closed back up with double-digit gains.  Maybe investors are nowhere as risk averse as the defensive market players would have assumed.

Below is the effect of all of these stocks in the value sectors:

20 FIRST LINE DEFENSIVE STOCKS FOR A CRUMMY MARKET
Ticker     Close   Change   Volume
KO       $47.04      $(0.02)   16,276,000
PEP     $62.69      $0.53      5,619,900
JNJ      $60.71      $(0.06)   16,215,904
MRK     $43.27      $(0.10)   12,334,600
PFE     $24.86      $(0.08)    49,773,296
PG       $61.36      $0.19      10,522,000
CAG     $24.18      $(0.15)   5,751,100
BUD     $50.50      $0.45      3,145,661
HRL     $36.49      $0.11      228,100
CPB     $39.10      $(0.14)   1,570,200
K         $50.67      $0.13      2,292,900
GIS     $55.32      $0.28      1,794,900
DUK    $19.39      $0.05     8,992,700
CL      $65.33      $(0.54)     3,223,196
MO      $83.90      $(0.14)   34,761,100
RAI      $59.66      $0.37      2,513,336
MCD    $43.65      $0.17    6,574,100
CLX     $61.71      $(0.10)  1,304,200
KFT     $30.20      $(0.73)   20,493,100
TAP     $87.70      $1.77      1,242,200

15 SECOND LINE DEFENSIVE STOCKS            
Ticker     Close    Change   Volume            
LTR     $43.59      $0.10      1,850,600
FLO     $28.66      $0.10      263,000
THS     $28.47      $0.15      73,400
DLM     $11.10      $(0.03)   486,900
NVO     $84.83      $0.48      56,500
ALO     $25.34      $(0.06)   813,500
PYX     $13.66      $(0.06)   288,500
AACC   $15.11      $0.15    100,175
CSH     $39.58      $1.00      652,100
YUM     $57.60      $0.25      2,231,500
HME     $54.59      $0.01      834,600
DTE     $46.32      $0.20      1,936,100
WTR     $21.69      $0.14      1,050,700
SNH     $22.70      $0.13      560,100

Jon C. Ogg
March 14, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.