Friday, June 04, 2004

Mid-day Update

S&P 500 1,125.57 +.80%
NASDAQ 1,988.91 +1.46%

Leading Sectors
Gaming +3.01%
Semis +2.63%
Airlines +2.35%

Lagging Sectors
Iron/Steel +.06%
Oil Service -.38%
Energy -.69%

Crude Oil 38.58 -1.60%
Natural Gas 6.28 -1.30%
Gold 390.50 +.44%
Base Metals 105.74 -2.20%
U.S. Dollar 88.72 -.26%
10-Yr. T-note Yield 4.73% +.50%
VIX 16.05 -5.75%
Put/Call .83 -26.55%
NYSE Arms .67 -56.77%

Market Movers
SKIL -24.83% after beating 1Q estimates and lowering 05 guidance.
DYAX +21.83% after saying the FDA allowed it to resume clinical trials on a rare genetic disorder.
PETS +10.0% on continued rise after being named Business Week's #1 hot growth company.
KMRT +11.0% after saying Home Depot may buy as many as 24 stores for $365 million.
MBG +8.29% after beating 1Q estimates substantially.
CRDN +6.19% after Roth Capital raised to Buy, target $38.
RDEN -13.5% after meeting 1Q estimates and CL King downgrade.
FBN -8.0% after cutting 2Q forecast.
MYG -7.42% after cutting 2Q/04 forecast and announcing restructuring.

Economic Data
Unemployment Rate for May was 5.6%, meeting estimates and the same as April.
Average Hourly Earnings for May +.3% versus estimates of +.2% and +.3% in April.
Change in Non-farm Payrolls for May was +248,000 versus estimates of +225,000 and an upwardly revised +346,000 in April.
Change in Manufacturing Payrolls for May was +32,000 versus estimates of +20,000 and an upwardly revised +29,000 in April.
Average Weekly Hours for May came in at 33.8 versus an estimate of 33.8 and an upwardly revised 33.8 in April.

WSH rated Buy at UBS, target $43. Goldman Sachs raised SLB to Outperform, target $72. Goldman reiterated Outperform on EMC, target $14-17. Goldman reiterated Outperform on AMD, IR, ADP, CEN, PAYX and INTC. MBG rated Buy at Legg Mason, target $70. FD raised to Outperform at CSFB, target $55. Citi SmithBarney reiterated Buy on INTC, target $33. Citi said tone of analog semi companies on day 2 of semi conference was upbeat, favorites are MXIM and LLTC. Citi reiterated Sell on KFT, target $29.50. Citi reiterated Buy on NMG/A, target $68. Citi reiterated Buy on AV, target $25.

Mid-day News
U.S. stocks are higher mid-day as a government report showing significant U.S. job growth and falling energy prices boost investor optimism. China will start on Sunday a weeklong energy-saving campaign, aiming to avoid a repeat this summer of the power shortages that affected parts of the country last year, Bloomberg reported. GM expects China to become its second-biggest vehicle market this year behind the U.S., Xinhua reported. is targeting a new subscription service to entertainment-industry insiders, hoping to not only sell movies but also help Hollywood make them, the LA Times said. Crude oil prices have plummeted 8.6% from recent highs, heading toward the third straight weekly drop, as rising OPEC production bolsters U.S. inventories and eases concern over summer fuel supplies, Bloomberg reported. U.S. employers added 248,000 workers to payrolls in May, helped by the biggest gain in manufacturing employment in almost six years. The only major category showing job losses was government employment, which declined by 27,000. The economy has now recouped all the jobs lost in the aftermath of 9/11 and the recession, Bloomberg reported. Moreover, American's incomes are now rising at a 5.7% annual rate, the fastest pace since the stock market bubble burst in early 2000, Bloomberg said.

BOTTOM LINE: The Portfolio is having a very good day today as most of my long positions are higher. I added a few internet and semiconductor longs in the morning, bringing the Portfolio's market exposure to 100% net long. One of my new longs is PMCS and I am using a $13.25 stop-loss on the position. I expect U.S. stocks to rise into the close on falling oil prices, great economic news, stabilizing interest rates and positive technology sector comments.

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