Friday Watch

Company/Estimate
CVNS/.12
SOL/.51
TTWO/-.14

Splits
ASD 3-for-1
ERES 3-for-2
KIND 2-for-1

Economic Data
Personal Income in April estimated +.5% versus +.4% in March.
Personal Spending in April estimated +.2% versus +.4% in March.
PCE Deflator (Y-O-Y) in April estimated +1.8% versus +1.6% in March.
University of Mich. Consumer Confidence Final May reading estimated at 94.2 versus 94.2 prior.
Chicago Purchasing Manager in May estimated at 62.0 versus 63.9 in April.

Recommendations
Goldman Sachs reiterated Outperform on BIIB, TYC and TPX. Goldman thinks FLEX will maintain upbeat tone on their mid-quarter update next Thur. TDW is undervalued at $27/share, Business Week reported. STJ shares may be poised to gain because the maker of cardiac devices could be a takeover target, Business Week reported. Napco Security's(NSSC) plan to provide a lock system to a unit of Tyco will help boost shares of the manufacturer of electronic security systems' shares, Business Week said.

Late-Night News
Asian indices are mostly higher as strength in Japanese shares boosts regional optimism. Japanese household spending rose a seasonally adjusted 9.3% from March, the largest increase since the survey began in 1975, as job growth sparked consumer spending, which makes up more than half the economy, Bloomberg reported. PETS, UTI, UOPX, MGAM and ARO topped Business Week's Hot Growth list for 2004, the magazine reported. Time Warner CEO Parsons refused to reduce stated revenue from a $400 million advertising contract with Bertelsmann AG unless outside auditors said the accounting was wrong, Business Week reported. Infineon Technologies AG may exit the computer memory-chip business to focus on making semiconductors for cars, mobile phones and other communications products, Silicon Strategies reported. Fighting in the Iraqi holy city of Najaf stopped after al-Sadr agreed with religious leaders to withdraw his militiamen, the AP reported. There have been 10 times the normal amount of tips reported to the FBI Web site since Wednesday's warning of a potential al-Qaeda attack on U.S. soil this summer, the AP reported. As many as 2,000 people may have been killed in floods and landslides caused by a week of rains in Haiti and the Dominican Republic, the AP reported. Riggs National, which was fined $25 million this month for allegedly failing to follow rules to stop money laundering, has put itself up for sale, Bloomberg reported. Exxon's purchase of Mobil and five other oil-company mergers since 1990 lifted U.S. gas prices an average of one or two cents a gallon, the U.S. General Accounting Office said. The average sale price for a home in the Hamptons rose 29% to an all-time high of $1.1 million in the first quarter as Wall Street bonuses rebound, Bloomberg reported.

Late-Night Trading
Asian Indices -.50% to +1.25% on average.
S&P 500 indicated -.02%.
NASDAQ indicated -.07%.

BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on strength in Asia and U.S. semiconductor shares. I continue to believe that the economic news from Japan, the world's second largest economy, is very positive and underreported. The Iraq situation is getting a lot better, energy prices are dropping and interest rates are falling. These are all surprisingly positive recent developments which should provide the catalysts for the major U.S. indices to continue to rally in the near-term, barring a significant terrorist attack. The Portfolio is 125% net long heading into trading tomorrow.