DAVE HARRIS: Welcome to Dave On Stocks Podcast #60. It's Friday June 1^st 2007. I'm Dave Harris. I'm a long term investor with a perspective on the market and individual stock advice.

The gains continued on Wall Street with a heavy dose of economic data. Spending rose while personal income fell. May was a time for growth in manufacturing according to the ISM's latest index, despite rising gas and food costs. It rose to 55 from the previous month's reading of 54.7. But perhaps the most important piece of news was jobcreation. We had a stronger than expected May employment report. Non-farm payrolls rose by 157,000 and ahead of expectations. The unemployment rate is holding steady at 4.5%. The PCE (personal consumption expenditures) came in at 2.0% year over year and that's at the high end of the Fed's comfort zone. So I think it's clear our economy has gained momentum and the current data suggests inflation is declining. Average hourly earnings went up a nice .3%. Yesterday we heard jobless claims fell to 310,000 last week. That was better than Wall Street expected. Since the job environment looks good here, I think the stock market will continue to the upside. I don't expect any major correction in the near term. We are in great shape.

Retailer Wal-Mart (WMT) said they would reduce the number of store openings this year to around 200 from a previous goal of roughly 270. The company is refining a growth strategy that most efficiently uses their capital resources. They're also going to buyback $15 billion worth of stock. Investors liked the news, sending the shares 1.87 higher to close at $49.47. I have a buy on the stock and see it going to $55.

There was strength in tech stocks today. Dell (DELL) the computer maker said their fiscal first quarter came in above expectations with earnings at .34 cents per share. Still, the $759 million made in the quarter was down from $762 million they earned last year.  The company will cut 10% of it's workforce in cost reduction efforts. I'm not fully convinced this restructuring plan will work for DELL. I suggest you buy Hewlett Packard (HPQ) instead. DELL closed up .39 to $27.30. HPQ rose by .10 to $45.81.

Apple (AAPL) the maker of iPods announced a deal with Google (GOOG) to carry YouTube's video clips to your T.V. set. Apple introduced this digital device yesterday and I think this is a great opportunity for both companies. Both Apple and Google are going higher in my opinion. I have a buy on both stocks. GOOG closed up 2.49 to $500.40. APPL fell 2.79 to $118.40.

Heinz (HNZ) the catsup maker said earnings rose 25% in the quarter on higher prices. This company is in turnaround mode, but I suggest you buy Kellogg (K) instead.

Buy the end of this year, Starbucks (SBUX) will be using 2% instead of whole milk in their espresso drinks in the US and Canada. This is in response to a study that more homes have low fat milk than ever before. Customers will still be able to request whole milk in their Starbucks espresso if they want it.

The DOW closed Friday at another record high and up 40.47 to 13,668.11. The NASDAQ was up 9.40 to 2,613.92. The S&P added 5.72 points to 1,536.34.

And now some listener email questions. These came from Andy from Seattle.:

What ever happened to the KBR spin off for Halliburton (HAL) shareholders? The KBR shares were distributed thru the exchange offer and there's not going to be a spin off of KBR shares to Halliburton shareholders.

What do I think about the bond market ETF BND? I think you are better off stickling with tax exempt municipals, especially if you are in a higher tax bracket.

What do you think of short ETFs as a portfolio hedge like SH and DOG? I think those funds are way too risky. This is an attempt to short the market. Dealing with derivatives and leveraged accounts is not the way to go in my opinion. There are so many good stocks to buy. Why put money in those risky investments?

That's all for today's podcast. I'm Dave Harris. Write me with any questions or comments in the "contact us" link on this page. My website is www.daveonstocks.com. This is Dave On Stocks.