Friday Watch

Earnings of Note
Company/Estimate
BRK/A/844.50
MXIM/.36
PWR/-.04

Splits
None of note.

Economic Data
Unemployment Rate for July estimated at 5.6% versus 5.6% in June.
Change in Non-farm Payrolls for July estimated at 240K versus 112K in June.
Change in Manufacturing Payrolls for July estimated at 10K versus -11K in June.
Consumer Credit for June estimated at $4.0B versus $8.2B in May.

Recommendations
Goldman Sachs reiterated Outperform on KO, DVN and AL. Goldman reiterated Attractive view of lodging sector. Shares of PTEN, the No. 2 provider of onshore-drilling services to oil-and-gas producers, are expected to rise on increased demand for drilling gear, Business Week reported.

Late-Night News
Asian indices are mostly lower on worries over declines in U.S. shares and higher oil prices. A31 Action Coalition, whose members include self-described anarchists, has called for a nationwide day of non-violent civil disobedience on Aug. 31 during the Republican Convention in midtown Manhattan, the NY Times reported. NYSE seat owners have requested that the exchange buy back more than a quarter of its seats to prevent their prices from declining further, Dow Jones reported. Gap Inc. wants to start a chain that sells moderately priced clothes aimed at women aged 35-50, Business Week reported. Krispy Kreme doesn't write down the value of franchises it buys back, Business Week reported. BP Plc shut a gasoline production unit at its Texas City refinery in the U.S. after a fire, Reuters reported. The U.S. government said North Korea is developing ballistic missile systems designed to carry nuclear warheads and having them tested in Iran, the AP reported. Electronic Data Systems gained a $34 million contract with New Zealand's tax department to replace and maintain computer equipment, the Dominion Post reported. Google is being investigated by California's Department of Corporations for possible securities-law violations between September 2001 and June 2004, Bloomberg reported.

Late-Night Trading
Asian Indices are -.75% to -.25% on average.
S&P 500 indicated +.11%.
NASDAQ 100 indicated +.18%

BOTTOM LINE: I expect U.S. stocks to open modestly higher as the Change in Non-farm Payrolls report likely meets expectations. However, continuing worries over terrorism, politics and high energy prices will likely result in weakening stock prices later in the day. A much better-than-expected jobs report could lead to an oversold short-covering rally for a few days and a much worse-than-expected report will further fuel fears of an economic slowdown and probably send stocks lower. The Portfolio is 50% net short heading into tomorrow.