"Coming out of the fourth quarter we saw good corporate enthusiasm -- you heard CEOs and CFOs on conference calls in January looking optimistically into 2007," Georges Yared, chief investment strategist for Yared Investment Research tells Aaron Task on Monday's
"The Real Story" podcast. "Results out of the March quarter looked good
too with great pockets of strength. I was very pleased with the optimism and enthusiasm coming into the second quarter."
Yared sees this improving business confidence as a precursor to improving business spending. He is bullish on retailers
, as well as Internet security firm
after last week's departure of its "polarizing" CEO Stratton Sclavos.
Improved business confidence and spending jibes with Monday's April factory orders report, Task says. Although the 0.3% headline increase was weaker than expected, March levels were revised higher and a 1% increase in nondefense capital goods, excluding aircraft orders, in April is a bullish sign for business spending going forward.
Task's second guest,
Adam Feuerstein, was on location at the ASCO cancer drug meeting, where he discussed the latest trial data from
, among others.
In the remainder of the podast, Task discussed the day's corporate news, including another batch of M&A activity, featuring:
Solectron agreeing to be acquired by Flextronics International in a $3.6 billion deal;
Netherlands-based diagnostic products maker Qiagen purchasing Digene , which makes gene-based medical tests, for about $1.6 billion;
Dominion Resources selling most of its U.S. onshore natural gas, oil exploration and production operations in two separate transactions to Loews Corp. and XTO Energy for about $6.5 billion.
Regarding the latter, Task notes the
managed to secure a fourth-straight record close because (not in spite of, as widely reported elsewhere) energy prices -- and related stocks -- were higher.
The S&P was also aided by strength in "lumbering giants"
, he notes, but held back by weakness in airlines such as
and financials like
fell into the dreaded "Geoff Tate Zone."
here to listen to the entire podcast.