Friday, June 18, 2004

Mid-day Update

S&P 500 1,136.78 +.42%
NASDAQ 1,992.29 +.43%

Leading Sectors
Iron/Steel +1.44%
Airlines +1.28%
I-Banks +1.07%

Lagging Sectors
Fashion -.22%
Wireless -.46%
Oil Service -.59%

Crude Oil 38.95 +.36%
Natural Gas 6.53 -.71%
Gold 396.20 +1.72%
Base Metals 108.96 +2.03%
U.S. Dollar 89.11 -.55%
10-Yr. T-note Yield 4.71% +.68%
VIX 14.75 -2.64%
Put/Call .89 +14.10%
NYSE Arms .61 -43.52%

Market Movers
CECO -10.3% after saying it had reviewed a copy of the amended class action complaint and saying the complaint is without merit.
AMHC +19.2% after beating 3Q estimates and raising 04 forecast.
ION +12.71% on Robert Baird upgrade to Outperform, target $31.
PRGS +11.24% after beating 2Q estimates, raising 04 forecast and Needham upgrade to Strong Buy, target $28.
CHTT +7.0% after beating 2Q estimates and raising 04 guidance.
GIVN +6.0% after pricing 2.5m share secondary at $32.
FMT -13.0% after saying it was being sued by California insurance commissioner who alleges company improperly used deductions.
RHAT -9.65% after missing 1Q revenue estimates, but meeting profit forecast.

Economic Data
Current Account Balance for 1Q came in at -$144.9B versus estimates of -$141.0B and -$127.0B in 4Q.

Goldman Sachs reiterated Outperform on SRE, CSCO, AA, SLR and AL. Citi SmithBarney said to Buy CKFR on weakness, target $39. Citi reiterated Buy on PG, target $120. Citi reiterated Buy on AGMN, target $90. Citi reiterated Buy on CWST, target $20. Citi reiterated Sell on ATO, target $22. Citi reiterated Buy on OEH, target $22. SLE rated Overweight at JP Morgan. CAG rated Underweight at JP Morgan. TIVO rated Underweight at JP Morgan. GLW raised to Overweight at Morgan Stanley, target $14. IVGN raised to Outperform at Bear Stearns, target $75. EPL rated Strong Buy at Raymond James, target $20. JBL raised to Strong Buy at Raymond James, target $31.

Mid-day News
U.S. stocks are quietly higher today, led by cyclicals, as interest rates stabilize at lower levels. Russian President Putin said his country provided the U.S. with intelligence that Saddam Hussein's Iraqi regime was planning to carry out terrorist attacks on U.S. territory, Bloomberg reported. The imam of Mecca's Grand Mosque in Saudi Arabia, Islam's holiest shrine, called for an end to attacks on non-Muslims in the country, Agence France-Presse said. Comcast will test a video-dating service on its digital-cable system, the AP reported. Viacom said it will spit-off its 82% stake in Blockbuster and expects to receive $738 million in cash from the transaction. The benchmark 10-year T-note is headed for its biggest weekly gain since March, Bloomberg said. The U.S. and China agreed to increase by almost 500% the number of flights between the countries over six years, the U.S. Transportation Dept. said. President Bush's approval rating among adults in the U.S. climbed in the last month as more Americans said the military effort in Iraq was going well, according to a poll from Pew Research, Bloomberg said. The U.S. Commerce Dept. slapped tariffs of as much as 198% on imported bedroom furniture from China, a decision that could cut the $1 billion a year of those imports, Bloomberg reported.

BOTTOM LINE: The Portfolio is slightly higher today as my base metal longs are rising and Chinese ADR shorts are falling. I have not traded and the Portfolio is still 50% net long. More of the same today as U.S. stocks churn on light volume. I continue to believe the fundamentals are falling into place and will provide the catalysts for a significant breakout within the next month. Any weakness over the next 2 weeks should be used by long-term investors to accumulate more shares in favorite long positions.

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