Monday, November 01, 2004

Mid-day Update

S&P 500 1,128.17 -.18%
NASDAQ 1,974.87 -.01%


Leading Sectors
Software +.94%
Telecom +.80%
Homebuilders +.69%

Lagging Sectors
Biotech -.48%
Drugs -1.03%
Oil Service -1.43%

Other
Crude Oil 49.80 -3.79%
Natural Gas 8.75 +.29%
Gold 428.10 -.30%
Base Metals 114.83 -1.10%
U.S. Dollar 85.22 +.37%
10-Yr. T-note Yield 4.08% +1.34%
VIX 16.36 +.55%
Put/Call .92 +37.31%
NYSE Arms 1.20 +29.03%

Market Movers
PSFT +10.5% after ORCL raised its offer for the company by 14%.
MRK -8.3% after the Wall Street Journal reported that the drugmaker tried for years to stop safety concerns from hurting sales of its Vioxx painkiller.
IVX -18.7% after missing 3Q estimates and lowering 04 guidance.
KSL +36.3% after Valero(VLI) agreed to purchase it for $2 billion.
TZOO +21.5% on short-squeeze.
CHLN +15.2% after it accepted Domaines Barons de Rothschild's increased bid for the 51% of the company it doesn't already own.
LFUS +16.6% after beating 3Q outlook.
KCI +12.0% after beating 3Q estimates and boosting 04/05 guidance.
WSTC +12.2% on SunTrust Robinson upgrade to Buy.
OSTK +5.0% on short-covering.
SHOP +7.9% on continuing strong demand after IPO.
DE +3.7% on Citi SmithBarney upgrade to Buy.
LZ -7.0% after missing 3Q estimates and lowering 4Q guidance.
NTE -9.8% after beating 3Q estimates substantially and lowering 4Q guidance.
PSRC -8.6% on Needham downgrade to Hold.

Economic Data
Personal Income for September rose .2% versus estimates of a .3% rise and a .3 increase in August.
Personal Spending for September rose .6% versus estimates of a .6% rise and a .1% decline in August.
PCE Deflator(YoY) for September rose 2.0% versus estimates of a 2.0% increase and a 2.1% gain in August.
PCE Core(YoY) for September rose 1.5% versus estimates of a 1.5% increase and a 1.4% rise in August.
Construction Spending for September was unchanged versus estimates of a .4% rise and a .9% increase in August.
ISM Manufacturing for October was 56.8 versus estimates of 58.5 and a reading of 58.5 in September.
ISM Prices Paid for October was 78.5 versus estimates of 79.0 and a reading of 76.0 in September.

Recommendations
-Goldman Sachs reiterated Outperform on VLTR, KSS, FRX, AIG, PXD, AGN and MDT. Goldman reiterated Underperform on AMCC, FHCC, AKS and DCLK. Goldman initiated CBG with Outperform rating.
-Citi SmithBarney upgraded DE to Buy, target $74. Citi upgraded EXC to Buy, target $45. Citi reiterated Buy on GIS, target $51.50. Citi said RSH, BBY, CC and PETC had good Sept. sales. Citi reiterated Buy on WMT, target $65. Citi reiterated Buy on CAM, target $60.
-Prudential cut PAYX to Underweight, target $25.
-JP Morgan raised CAM, MVL to Overweight. ICCI cut to Underweight at JP Morgan.
-CSFB raised ECA to Outperform, target $58.

Mid-day News
U.S. stocks are quietly lower mid-day as optimism over falling energy prices is offset by apprehension over the election. General Electric's NBC is trying to take more risks to retake its position as the leading network in term of viewers, the LA Times said. A federal judge issued an order barring political parties from challenging the eligibility of voters at polling locations in Ohio during the presidential election tomorrow, the AP reported. Oracle raised its takeover offer for PeopleSoft to $24 a share from $21 and said the offer is final, Bloomberg reported. Tyco Intl., the world's biggest maker of security systems, said it had a fourth-quarter profit as electronics and health sales rose, Bloomberg said. Crude oil prices plunged below $50/bbl. in NY for the first time since Oct. 5 on speculation that demand growth will fall next year as supplies increase, Bloomberg said. General Electric agreed to delay for two months its $900 million purchase of InVision Technologies while U.S. officials continue an investigation, Bloomberg reported.

Bottom Line: The Portfolio is slightly higher mid-day on strength in my internet and wireless longs. I have not traded today and the Portfolio remains 125% net long. The underlying tone of the market is pretty good today considering recent gains and election apprehension. The breakdown in energy prices makes me more confident in my prediction for accelerating U.S. economic growth over the next few months. Areas of technology that have been plagued by excess inventory should benefit as demand increases. Measures of investor anxiety are rising today which is also a positive. I expect U.S. stocks to rise modestly this afternoon on short-covering, optimism over falling energy prices and diminishing domestic terrorism fears.

No comments: