Tuesday, December 07, 2004

Tuesday Close

S&P 500 1,177.07 -1.11%
NASDAQ 2,114.66 -1.70%


Leading Sectors
Hospitals +.31%
Drugs -.57%
I-Banks -.58%

Lagging Sectors
Software -2.24%
Iron/Steel -2.84%
Disk Drives -3.14%

Other
Crude Oil 41.53 +.17%
Natural Gas 6.65 +.44%
Gold 452.40 -.29%
Base Metals 117.98 +.62%
U.S. Dollar 81.24 -.05%
10-Yr. T-note Yield 4.22% unch.
VIX 13.67 +3.64%
Put/Call .73 -3.95%
NYSE Arms 1.52 +53.54%

After-hours Movers
STX +10.6% after boosting 2Q estimates substantially.

Recommendations
Goldman Sachs reiterated Outperform on INTC, PFE and HOT.

After-hours News
U.S. stocks finished lower today on profit-taking and worries over global growth. Crude oil fell to the lowest in more than four months on speculation that warm weather and increased refinery production bolstered U.S. heating-oil stockpiles last week, Bloomberg said. The California Public Employees' Retirement System, the largest U.S. pension fund, agreed to disclose the fees it pays to venture capital and hedge fund managers as part of a legal settlement, Bloomberg reported. Texas Instruments narrowed its fourth-quarter sales forecast because industrial customers for its chips continue to reduce inventory, Bloomberg said. Axa SA, Manulife Financial and other global life insurers are preparing for rule changes in China this week that will give them greater access to a $50 billion market that is growth at more than 20% a year, Bloomberg said. General Motors will add rebates on many models starting Dec. 10 to attract buyers after U.S. sales fell 16% in November, Bloomberg reported. Global aluminum prices may rise after China said it will curb output to try to prevent a repeat of power shortages next year, Bloomberg reported. U.S. Representative Allen Boyd became the leading Democrat to endorse President Bush's plan to create private Social Security accounts, Bloomberg reported. The U.S. House of Representatives approved legislation reorganizing the nation's intelligence agencies and creating the job of national intelligence director to oversee efforts to thwart terrorist attacks, Bloomberg said.

BOTTOM LINE: The Portfolio finished lower today and I pared a number of long positions in various sectors, thus lowering market exposure to 50% net long. The tone of the market was poor today as volume increased and the advance/decline line was very weak, finishing at it lows for the day. As well, measures of investor complacency remained elevated. U.S. stocks will likely weaken further in the near-term. However, I do not anticipate a substantial pullback from current levels. As well, I foresee a resumption of the recent rally closer to year-end. Thus, I will look to rebuild long exposure into any near-term weakness.

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