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"Today the equity market feels better," says Margaret Patel, portfolio manager of Pioneer's Equity Opportunity Fund. "Whether it is choppy between now and the end of summer is still a good possibility, but any indicator you'd look at shows we're due for a bounce back."

The market "is really hungry for themes," says Patel, and perhaps the


(MA) - Get Mastercard Incorporated Class A Report

IPO aided the bullish case today. Or maybe the

Enron verdict, which makes people believe in the power of justice, says Sid Bakst, senior portfolio manager at Weiss, Peck & Greer Investments, which has about $9 billion in fixed-income assets under management. He joked that he could just as easily argue it the other way -- that the Enron trial is a sour reminder of bad times and corporate greed, especially as the options-backdating investigations heat up.

Today, however, the markets saw the glass half-full with major averages closing at their highs for the day.


Dow Jones Industrial Average

closed up 0.84% to 11,211.05. The

S&P 500

gained 1.14% to 1272.88 and the

Nasdaq Composite

gained 1.34% to 2198.24.

The companies that led the gains included

General Motors

TheStreet Recommends

(GM) - Get General Motors Company Report

(for a second-straight day),

Conoco Phillips

(COP) - Get ConocoPhillips Report


Exxon Mobil

(XOM) - Get Exxon Mobil Corporation Report


Newmont Mining

(NEM) - Get Newmont Corporation Report

. Also, shares of





(EBAY) - Get eBay Inc. Report

gained on news of the Internet companies' partnership agreement.

Among smaller companies, big gainers included

Big Lots

( BLI), which posted strong first-quarter earnings and raised guidance, and

Stone Energy


, which gained 22% to on news that

Energy Partners Ltd.

offered to buy the company for $2 billion.

Advancers beat decliners by better than 3-to-1 in both

Big Board

and Nasdaq trading, on volume that was solid but not exceptional.

The Supply Factor

Spin the anxiety wheel and (depending on the day) it lands on inflation, the Fed, the carry trade, the weak dollar, high oil prices, Iran, Iraq, options backdating or avian bird flu. And if that isn't enough, add the past weeks' deluge of new issue supply.

"I think history has shown that when you come with too much supply, you sop up the cash and demand, and it leads the market to top out and retrench a bit," says Patel. "That is part of what has been going on."

The IPO market of late tells the story of waning interest in new deals. MasterCard priced its $2.4 billion offering at $39 per share Thursday, lower than the expected $40 to $43 range. It ended the day up 18% to $46.02. The deal was led by Goldman Sachs.

Perhaps Goldman took a cue to reprice from Wednesday's IPO of Internet phone company


(VG) - Get Vonage Holdings Corp. Report

. Vonage was a complete flop, and it was much more difficult to price than prior deals, says a source familiar with the offering, who added that investors are likely to push back harder on new deals in this choppy market environment.

Vonage's shares dropped 13% in its first day of trading -- the worst day-one performance of any IPO this year. The shares were sold at $17 and dropped to $14.85 by the closing bell Wednesday. They fell another 12.12% to $13.05 Thursday. The deal was led by Deutsche Bank, Citigroup and UBS.

Burger King Holdings'


IPO last week did trade up in its first day on the market, but many considered it relatively weak. The $425 million offering rose 2.9% on its first day, climbing to $17.50, from $17 per share. The stock fell 1.76% Thursday to $17.35.

The market has digested $23 billion of new equity offerings in the past three weeks, which is well above the average $18.5 billion monthly deal volume thus far this year, according to Charles Biderman, CEO and publisher of TrimTabs Investment Research. Through April this year there have been $75 billion of new offerings, beating $48 billion through the first four months of last year.

There is usually a spike in supply ahead of holiday weekends, he says, adding that there has been an unusually hefty load of about $10 billion PIPEs (private investments in public equity) sold over the past three weeks as well. Institutional investors and qualified investors can buy these less regulated and quick-to-market sales of public equity, which are usually priced at a discount to current market value.

"This is one of the major reasons for the stock market downturn," says Biderman, who last week changed his stock market recommendation to neutral from bullish. "We're probably going to turn bullish next week," he says, adding that issuance typically trails off in June, and that the economy is in great shape and "growing very fast."

If he's thinking about the first quarter, it did. The Commerce Department revised its first- quarter GDP growth estimate to 5.3% from 4.8%. The market took the news well, even after reacting negatively to Wednesday's report of a slowdown in durable goods orders. The markets also allegedly responded to a letter response written by Fed Chairman Ben Bernanke to Rep. Jim Saxton (R., N.J.), chairman of the Joint Economic Committee.

Bernanke said what he's been saying -- that inflation is at the upper end of the comfort zone, but that expectations for the long term are contained; that policy must be forward-looking and data dependent; and that it may raise rates again in the future.

Bonds fell and stocks rallied following the headlines, writes Tony Crescenzi, chief bond market strategist at Miller Tabak and


contributor. "Both should rally if indeed the statements indicate an end to rate hikes," he writes. "Bonds

prices are falling more likely because stocks have rallied."

The 10-year Treasury note yield, which moves in opposition to its price, rose to 5.07% from 5.05% Wednesday.

In keeping with TSC's editorial policy, Rappaport doesn't own or short individual stocks. She also doesn't invest in hedge funds or other private investment partnerships. She appreciates your feedback. Click


to send her an email.