Thursday Watch

Earnings Announcements
Company/Estimate
ARO/.69
BGP/1.51
DKS/.99
DISH/.10
ELBO/1.41
NSM/.41
ORCL/.12
URBN/.42

Splits
FIC 3-for-2

Economic Data
Advance Retail Sales for Feb. estimated up .6% vs. -.3% in Jan.
Retail Sales Less Autos estimated up .5% in Feb. vs. +.9% in Jan.
Initial Jobless Claims for last week estimated at 343K vs. 345K the prior week.
Continuing Claims estimated at 3075K vs. 3091K the prior week.

Recommendations
Goldman Sachs reiterates Outperform on FDC. GS reiterating Outperform on AG after an end to SEC investigation into its revenue recognition practices. GS reiterates Outperform on DNA based on momentum from launch of Avastin and a robust pipeline. GS reiterated Outperform on DHR and raised estimates. Finally, Goldman is saying the recent weakness in base metal prices/stocks is a great buying opportunity. Their favorites are N, AL and AA.

Late-Night News
General Motors will start selling one-ton pickup trucks in Thailand for the first time to boost sales in Southeast Asia's biggest automobile market. China will begin operating the first nuclear power plant designed and built in the country, needed to ease power shortages along the east coast, China Daily reported. The U.S. Senate approved a plan by Democrats that will make it tougher to make President Bush's tax cuts permanent or to extend tax cuts that expire this year, Bloomberg reported. Terrorist groups trying to establish bases in Western Iraq are in total disarray, Major General Charles Swannack said. Shares of TOM Online, a Chinese Internet company controlled by Asia's richest business man, fell as much as 11% on the company's Hong Kong debut. The yen gained against the euro and the dollar in Asia after the Ministry of Finance said overseas investors bought the most Japanese shares last week in over 3 years, Bloomberg reported. As well, the euro dropped against the dollar for a third day in Asia on speculation the European economic expansion is falling further behind that of America. Martha Stewart may start serving a 10-16 month sentence in June as it is unlikely that she will remain free pending her planned appeal, Bloomberg reported.

Late-Night Trading
Asian markets are mostly lower, ranging from unch. to down 1.4%. China is the exception, rising 1.17%.
S&P 500 indicated +.05%.
NASDAQ indicated +.11%.

BOTTOM LINE: I think a few main things are currently troubling the U.S. equity markets. High energy prices, politics, profit-taking and investor complacency. I believe energy prices are very close to a short-term top. The tone of political rhetoric is especially nasty with the election still 9 months away. Hopefully, this will create a backlash and the candidates will turn it down a notch. I doubt it, but it is possible. The markets had an exceptional run over the last 12 months without so much as a 5% correction. Corrections are normal and healthy in bull markets. Finally, the volatility indices and investor bullish % surveys were both showing a large amount of complacency. I do not view any of these reasons as sufficiently large enough problems to derail the current bull. The NASDAQ is down about 9% from its recent high. I expect that it is nearing a bottom. At the very worst it may test 1900, which is around the 200 day m.a. and another 3% drop from here. I don't think the S&P will fall as much in total. I expect it to find support around 1,100 which is also down another 3% from current levels. The market is a discounting mechanism and one of the problems I have mentioned in the last couple of days may continue to worsen and justify the current fall. However, as of now I believe this is a healthy correction within the confines of a bull market and I would view extreme weakness in favorite stocks as a buying opportunity.