S&P 500 1,104.69 -.36%
NASDAQ 1,893.06 -1.25%
Leading Sectors
Oil Service +1.26%
Fashion +.96%
I-Banks +.81%
Lagging Sectors
Airlines -1.65%
Iron/Steel -1.75%
Disk Drives -3.12%
Other
Crude Oil 40.84 +.99%
Natural Gas 5.91 +1.34%
Gold 497.10 -1.24%
Base Metals 110.85 -.77%
U.S. Dollar 88.55 +.82%
10-Yr. T-note Yield 4.49% +1.14%
VIX 14.31 +.92%
Put/Call .62 -6.06%
NYSE Arms .74 +12.12%
Market Movers
MERQ -13.0% after missing 2Q estimates, lowering 3Q and 04 forecast.
IMCL -17.5% after beating 2Q estimates, but saying it would wait until next near to seek U.S. approval for a new use of Erbitux in head and neck cancer.
ERICY +5.5% after better-than-expected 2Q results.
IVGN -18.5% after meeting 2Q estimates, but lowering 3Q/4Q sales forecast.
PLT +8.77% after beating 1Q estimates, raising 2Q guidance and initiating cash dividend.
WEBX +10.05% after beating 2Q estimates, raising 3Q and 04 guidance.
INTL +10.7% after slightly missing 2Q forecast, but raising dividend.
WNC +11.3% after substantially beating 2Q estimates.
TSS +7.4% after meeting 2Q estimates and reaffirming 04 forecast.
WIRE +9.8% after declaring 3-for-2 split.
SGTL -31.0% after beating 2Q estimates and lowering 3Q forecast.
HIBB -17.4% after lowering 2Q guidance.
BLUD -13.4% after meeting 4Q estimates, but lowering 04 guidance.
Economic Data
None of note.
Recommendations
POS raised to Buy at JP Morgan. SANM raised to Sector Outperform at CIBC, target $17. RFMD cut to Sell at Bank of America, target $5. Goldman reiterated Underperform on INFA, AMCC, F, SLG, RSH, HMT, CL and SGP. Goldman reiterated Outperform on MSFT, JCI, LIZ, NFX, HD, FDC, ABK, GE, MERQ, INTC and N. Citi SmithBarney reiterated Buy on MSFT, target $33. Citi reiterated Buy on AFCI, target $24. Citi reiterated Buy on LLTC, target $45. Citi reiterated Buy on AINV, target $18. Citi reiterated Buy on CMCSK, target $34. Citi reiterated Sell on TER, target $20. Citi reiterated Buy on FCX, target $50. Citi reiterated Buy on INFA, target $10.50. Citi reiterated Buy on SPRT, target $11.50.
Mid-day News
U.S. stocks are mostly lower mid-day on rising interest rates, increasing oil prices and some earnings disappointments. Google's IPO conditions are frustrating some investment banks involved in the transaction and may cause some to drop out, as Merrill Lynch did last month, the Wall Street Journal reported. The U.S. government will announce a plan to get the computer systems of doctors, hospitals, laboratories, pharmacists and insurers communicating and sharing information, the NY Times reported. Saudi Arabian authorities have found the head of Paul Johnson, a Lockheed Martin engineer who was abducted and beheaded by militants last month, the AP said. Harrah's CEO Loveman told CNBC that Atlantic City, NJ, was the company's weakest market in the second quarter, Bloomberg reported. California Governor Schwarzenegger vetoed a Democratic bill that would have let people grow at least 6 marijuana plants and possess at least eight ounces without being arrested, the San Jose Mercury News reported. General Motors said second-quarter profit rose 49%, boosted by rising sales in China and income from its finance unit, Bloomberg said. Delta Air's pilots union proposed a 23% wage cut and other measures to help the carrier avoid a bankruptcy filing, Bloomberg reported. DreamWorks plans to raise as much as $650 million through an IPO to finance at least two productions a year and repay debt, Bloomberg said. The dollar had its biggest gain in more than two months against the yen on speculation the Fed will boost its interest-rate target four more times this year as economic growth accelerates, Bloomberg said.
BOTTOM LINE: The Portfolio is lower today on weakness in my biotech, airline and internet longs. A number of my longs hit stop-losses and I added a few new shorts this morning, leaving the Portfolio 50% net long. One of my new shorts is SSNC and I am using a $22 stop-loss on this position. The tone of the market is pretty bad. The advance/decline line is very poor and investor complacency is high. It is also disappointing there is no follow-through to yesterday's fall in oil. Finally, rising interest rates and more disappointing earnings reports will likely prevent any meaningful rally today. I expect U.S. stocks to weaken into the close.
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