The Last Week in Review:

The large cap Dow stocks continued to show their leadership last week. So far this year the tech and small cap issues have lagged the overall market. Currently the Dow Jones Index is the only index in the black for 2005. For the week the Dow rose almost 80 points and closed at 10796 Friday, now up 13 points for the year. The S&P 500 rose 2 points, to leave it down 6 points year-to-date. Small caps and technology stocks declined, pushing the NASDAQ down another 10 points for the week now off 4.5% for the year. The Russell 2000 lost 3 points and is now off 2.6% year-to-date.

Even though the Semiconductor Index (SOX) has been surprisingly strong, up 3.9% alone last week and up 13% since late January, the tech heavy NASDAQ has continued to under perform other indexes. Last week, earnings from Cisco Systems (CSCO) and Dell Computer (DELL) were somewhat disappointing, failing to impress investors. Last year's leaders eBay (EBAY) and Qualcomm (QCOM) continue to come under selling pressure. The NASDAQ Index continues to find resistance at its 50-day moving average.

New claims for unemployment dropped 13,000 to 303,000 for the week ending February 5th. This is the lowest level in four years. The trend indicates that layoffs are low enough now to allow a modest uptrend in hiring, producing net payroll gains consistent with 3% to 3 1/2% real GDP growth. The claims number should be supportive for stocks.

What to Watch for this week:

Now that most of the S&P 500 companies have reported Q4 earnings, there are fewer high-profile companies left that could impact the markets dramatically. Tuesday, high-end retailers Abercrombie (ANF) and Nordstrom (JWN) post results, along with semi equipment manufacturer Applied Materials (AMAT). On Wednesday Coca-Cola (KO) and InterActive Corp. (IACI) post their earnings, along with tech companies Hewlett-Packard (HWP) and Medtronic (MDT). Thursday, Baker Hughes (BHI) and retail giants Wal-Mart (WMT) and Target (TGT) post results along with graphic chipmaker Nvidia (NVDA).

The economic calendar is packed full this week, led by Fed Chairman Greenspan's Feb 16th testimony to the Senate on monetary policy. Mr. Greenspan's speech is likely to provide some hints as to how aggressively the Fed will move on interest rates throughout the year.

Merrill Lynch will host a three-day Insurance Conference beginning Monday in New York. Microsoft (MSFT) holds an analysts meeting Tuesday on security. The RSA Conference, featuring the leading security companies, begins Monday in San Francisco. UBS will hold a three-day Global Healthcare Services Conference also beginning Monday in New York. America's Growth Capital holds another Information Security Conference on Monday in San Francisco. CIBC World Markets holds an Institutional Investor Conference beginning on Wednesday. CSFB holds a Small/Mid Cap Internet Conference on Wednesday in Boston. Smith Barney Citigroup holds their Annual Small and Mid-cap Conference in Las Vegas on Thursday.

While all eyes will be on Fed Chairman Greenspan's semi-annual presentation to Congress Wednesday, January Retail Sales and December Business Inventories will be reported Tuesday along with the New York State Manufacturing Index for February. Wednesday morning, January Housing Starts, Business Permits and Industrial Production and Capacity Utilization all will be released. Thursday, the Weekly Jobless Claims, January Import/Export prices and January Index of Leading Indicators will all be reported. The Semiconductor Book-To-Bill Report will also be released on Thursday afternoon. Friday, the January Producer Price Index (PPI) and the February Michigan Sentiment Indicator will be released.

In summary, this week we need to see if the NASDAQ's technical condition can improve and listen for Fed Chairman Greenspan to give us some guidance on interest rates for the rest of 2005.

Stay tuned!