S&P 500 1,121.53 +.18%
NASDAQ 1,957.26 +.35%
Leading Sectors
Biotech +1.52%
Gaming +1.52%
HMO’s +1.51%
Lagging Sectors
Networking -.69%
Papers -.97%
Oil Service -1.77%
Other
Crude Oil 39.57 unch.
Natural Gas 6.31 unch.
Gold 393.60 -.05%
Base Metals 105.20 -.53%
U.S. Dollar 89.35 +.03%
10-Yr. Long-Bond Yield 4.57% +.23%
VIX 15.77 -4.71%
Put/Call .85 +28.79%
NYSE Arms .77 -2.53%
After-hours Movers
ADRX +7.03% on strong 1Q earnings from royalty payments from its generic version of the Wellbutrin antidepressant.
THQI +10.88% after beating 1Q estimates, lowering 2Q guidance and raising 04 forecast.
Recommendations
Goldman Sachs reiterated Underperform on KZL.
After-hours News
U.S. stocks finished mostly higher Tuesday as strength in biotechnology and gaming shares offset weakness in the energy sector. After the close, the staff of the U.S. FTC said it may urge commissioners to try to block R.J. Reynolds Tobacco's $3B purchase of British American Tobacco's Brown & Williamson unit, Bloomberg reported. Chinese Premier Wen Jiabao said the earlier investment bubbles are pricked, the less damage to the economy, but the government won't slam the brakes on growth, the South China Morning Post reported. Crude oil rose to a 13-year high for a third straight day after an Energy Department report showed that U.S. inventories increased less than expected last week. Lockheed Martin won an order to develop and build a new common missile, a program the company estimates could be worth as much as $5.5B over 20 years, Bloomberg reported. President Bush asked Congress for a $25B reserve to cover further military operations in Iraq. Spending on Iraq now totals about 1% of annual U.S. GDP versus 12% during the Vietnam War, 15% during the Korean War and 130% during WWII, Bloomberg reported.
BOTTOM LINE: The Portfolio rose today as my biotech and healthcare longs rose and my technology and retail shorts fell. I did not trade in the afternoon, leaving the Portfolio with market neutral exposure. Continuing weakness in the tech sector and the relentless rise in crude oil prices are weighing on the market. Breadth/volume readings continue to disappoint and investor complacency is still relatively high. My guess is another spike-up in interest rates or $40+/bbl oil will be the catalyst for another down-leg in the current correction. I will maintain a relatively market neutral stance until I evaluate the bond market's reaction to Friday's employment report.
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