Monday, October 25, 2004

Monday Close

S&P 500 1,094.80 -.09%
NASDAQ 1,914.04 -.06%

Leading Sectors
Airlines +4.22%
Homebuilders +3.88%
Steel +3.61%

Lagging Sectors
HMOs -.64%
Restaurants -.80%
Biotech -1.27%

Crude Oil 54.35 -1.49%
Natural Gas 7.92 -2.28%
Gold 430.10 +1.06%
Base Metals 111.02 -1.63%
U.S. Dollar 84.97 -1.05%
10-Yr. T-note Yield 3.97% -.10%
VIX 16.58 +8.51%
Put/Call .73 -1.35%
NYSE Arms 1.16 -8.66%

After-hours Movers
PHRM +5.3% after beating 3Q estimates and raising 04 outlook.
NVDA +11.7% after boosting 3Q sales estimate.
MMC +9.4% after CEO Greenberg resigned, 11 days after Spitzer probe was announced.
DAL +6.4% after saying American Express agreed to provide as much as $600 million in financing, including $500 million to prepay for the airline's frequent-flier points.
SLAB -20.7% after meeting 3Q estimates and lowering 4Q guidance substantially.
FLEX -7.5% after missing 2Q estimates and lowering 3Q/4Q guidance.
ATRS -7.1% after missing 3Q estimates and raising 4Q outlook.

Goldman Sachs reiterated Outperform on KO, BC and BSX. Goldman reiterated Underperform on ASH.

After-hours News
U.S. stocks finished slightly lower today as continuing worries over high energy prices, politics and terrorism offset a strong housing report. After the close, Time Warner and Comcast will be allowed to bid together for assets of Adelphia Communications, the Wall Street Journal reported. Japan will take action to prevent a rapid appreciation of the yen as the U.S. dollar declines, Reuters reported. Pitney Bowes, the word's largest maker of postal meters and mailing equipment, said third-quarter profit rose 15% on lower costs and higher sales of software and services, Bloomberg said. American Express said quarterly profit climbed 14% to a record as customers spent more on travel and carried larger loan balances, Bloomberg reported. Boston's wins over St. Louis in the first two games of the World Series, televised by Fox, drew the highest tv ratings for the start of the World Series since 1996, Bloomberg said. Electronic Data Systems said it delayed the release of third-quarter earnings while it reviews the value of a contract with the U.S. Navy, Bloomberg said. Toyota Motor's U.S. auto-loan unit said it will restate financial results for the past three years, raising profit and revenue because some fees paid to dealers were accounted for incorrectly, Bloomberg said.

BOTTOM LINE: The Portfolio had its best day of the year today on substantial strength in my internet, security and steel longs. I did not trade in the afternoon, thus leaving the Portfolio's market exposure at 100% net long. Notwithstanding the small losses in the major indices, most stocks were higher on the day. The VIX is moving up ahead of the election which is also a positive. Any sell-off related to weaker-than-expected economic reports over the next few days should be bought as the U.S. economy is poised to accelerate on the conclusion of the election without terrorism.

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