Friday Watch

Earnings of Note
Company/Estimate
BBT/.76

Splits
None of note.

Economic Data
Producer Price Index for December estimated down .1% versus a .5% increase in November.
PPI Ex Food & Energy for December estimated to rise .2% versus a .2% increase in November.
Business Inventories for November estimated up .6% versus a .2% increase in October.
Industrial Production for December estimated up .4% versus a .2% increase in November.
Capacity Utilization for December estimated at 78.9% versus 78.7% in November.

Recommendations
Goldman Sachs reiterated Outperform on MSFT and RE. Goldman said restrictions for the American Jobs Creation Act repatriation provision include: share buybacks, dividend payments to shareholders, portfolio investments or payment of taxes. Important permitted uses include: debt repayment, research and development, employee benefit plan contributions, acquisition of intangible property including patent rights, advertising and marketing and certain acquisitions. Goldman also thinks payment of tort liabilities could be included.

Late-Night News
Asian indices are mostly higher, led by technology stocks in the region. Rio Tinto, the biggest supplier of iron ore to Japan, has asked Nippon Steel to pay 50% more for the material, the Nihon Keizai newspaper reported. International Data Group's venture capital unit in China will open a $150 million venture capital fund in February to invest in consumer Web services, digital media and software companies, Business Week reported. China's State Administration of Radio, Film and Television is keeping curbs on foreign investment in media by restricting overseas companies to one venture in film production and in television, South China Morning Post reported. St. Louis Federal Reserve Bank President William Poole said the central bank will eventually have to drop its commitment to increasing interest rates at a "measured" pace, Reuters reported. Corporate information technology budgets may show their biggest increase since 2001, rising by an average 2.5% this year, the Financial Times said. Howard Dean paid Jerome Armstrong and Markos Zuniga, who publish the political blogs MyDD and DailyKos, $12,000 each to promote his unsuccessful Democratic presidential nomination campaign on their sites last year, the Wall Street Journal reported. China's crude oil demand may expand at a rate of 6.4% this year, down from 14.2% last year, Xinhua news agency reported. President Bush said his administration has a "strong dollar policy" and is confident foreign investors will continue to find America a good place to invest, USA Today reported. Viacom's CBS unit may cancel "60 Minutes Wednesday," which aired the discredited report on President Bush's National Guard record, when the television season ends in May, the NY Times reported. Samsung Electronics, Asia's biggest electronics maker by market value, said profit in the final three months of 2004 fell for the first time in six quarters as prices of mobile phones, flat-panel displays and chips dropped, Bloomberg said. The threat of terrorist attacks in Indonesia prompted the U.S. to issue an alert to its citizens and the U.K. to close its embassy and consulate offices in the capital, Jakarta, Bloomberg reported.

Late-Night Trading
Asian Indices are -.25%. to +1.0% on average.
S&P 500 indicated +.07%.
NASDAQ 100 indicated +.10%.

BOTTOM LINE: I expect U.S. equities to open modestly higher on strength in Asia, lower interest rates and a bounce from today's sell-off. However, stocks may fall later in the day on worries over too many Fed rate hikes and higher energy prices. The Portfolio is 25% net long heading into tomorrow.