Tuesday Close

S&P 500 1,118.15 -1.56%
NASDAQ 1,978.63 -2.07%

Leading Sectors
Fashion +.80%
Hospitals +.74%
Airlines +.16%

Lagging Sectors
Homebuilders -2.82%
Networking -3.52%
Semis -3.56%

Other
Crude Oil 36.20 -.82%
Natural Gas 5.55 -.14%
Gold 394.00 -1.08%
Base Metals 114.38 -.60%
U.S. Dollar 90.49 +.77%
10-Yr. Long-Bond Yield 4.41% +.60%
VIX 16.67 +8.11%
Put/Call .80 +21.21%
NYSE Arms 1.21 +24.74%

After-hours Movers
MOT +21.1% after beating 1Q estimates substantially and raising 2Q guidance substantially.
CVTX +6.95% after saying data from a recent study on its Ranexa drug shows positive results.
CACS +15.2% after beating 1Q estimates.
MKSI +9.07% after beating 1Q estimates substantially and raising 2Q guidance.
EZPW +14.95% after beating 2Q estimates and boosting 04 forecast.
SCSS -11.01% after meeting 1Q estimate, but lowering 2Q guidance.
WEBX -10.02% after meeting 1Q estimate, but lowering 04 forecast.
ISSX -7.81% after missing 1Q estimate.
ACS -7.32% after missing 3Q estimates, maintaining forecast.
SNTO -9.71% exceeding 4Q estimates, but disappointing guidance.
CALM -6.48% after announcing a 5M share secondary.

Recommendations
Goldman Sachs reiterated Outperform on TRI, CTSH, ALL, PFE, TRMS and STN.

After-hours News
U.S. stocks finished solidly lower today after bonds fell in response to comments by Alan Greenspan about the strength of the economy. After the close, General Electric's NBC said it has received FTC approval to acquire Vivendi Universal's U.S. entertainment assets, CNBC reported. U.S. venture capital funds are outpacing their European counterparts, raising almost 8 times more money in the first-quarter of 04 than a year ealier, the Financial Times said. California Governor Schwarzenegger signed an executive order calling for a network of 200 hydrogen fuel stations to be built along major highways in California by the end of the decade as a way to encourage consumers to buy clean air vehicles, Bloomberg reported. Motorola(MOT) said first-quarter profit tripled to the highest since at least 1990 as handset sales surged 67%, Bloomberg reported.

BOTTOM LINE: The Portfolio fell slightly today as my shorts could not offset losses in long positions. I added a few more shorts and exited a couple of winning longs in the afternoon, leaving the Portfolio with 25% net long market exposure. The weakness I expected in the tech sector came to fruition late in the afternoon, as traders used rising interest rates as an excuse to sell shares. Greenspan basically said the economy is doing very well, will continue to do well and that companies are slowly regaining some pricing power. These very obvious observations resulted in the large afternoon sell-off. I expect the Fed will broadly telegraph its first rate hike, which should occur at the June 28-30 meeting. Once the timing is certain, the U.S. equity markets can start working higher and eventually resume their bull run after it becomes clear that destructive inflation is not a problem. Until this time, I expect tech and interest-rate sensitive sectors to continue to underperform and the broad market to remain slightly negative to neutral.