NASDAQ 2,100.85 +.62%
Leading Sectors
I-Banks +1.78%
Tobacco +1.68
Insurance +1.49%
Lagging Sectors
HMOs +.08%
Iron/Steel -.89%
Papers -1.17%
Other
Crude Oil 48.00 -.79%
Natural Gas 6.18 -3.28%
Gold 423.50 +.05%
Base Metals 118.80 -.29%
U.S. Dollar 83.34 +.11%
10-Yr. T-note Yield 4.21% +.05%
VIX 12.39 -.32%
Put/Call .87 +19.18%
NYSE Arms .76 -3.80%
ISE Sentiment 152.00 -3.18%
Market Movers
MAY +17.0% after CEO Kahn resigned and multiple upgrades.
KKD +13.3% after saying its replacing CEO Livengood with Stephen Cooper, a turnaround specialist who led Enron and Laidlaw out of bankruptcy.
NCR +5.0% after substantially raising 4Q estimates and slightly boosting 05 guidance.
ATW +6.15% on CSFB upgrade to Neutral and raising target to $66.
OSTK +7.6% short-covering and optimism over upcoming earnings report.
IMPC +19.69% after Elekta AB, the world’s largest maker of radiation surgery equipment, agreed to buy it for about $250 million in cash.
JOBS -36.5% after lowering 4Q estimates substantially.
HNR -32.9% after saying it suspended drilling in Venezuela after the company’s 05 business plan was rejected by state oil company Petroleos de Venezuela.
FLE -15.65% after cutting 3Q estimates substantially.
PH -8.66% after missing 2Q estimates and widening 3Q guidance.
AL -5.1% on disappointing 4Q.
PETM -6.19% after cutting 4Q and 05 forecast.
GP -4.95% after lowering 4Q estimates.
Economic Data
Empire Manufacturing for January fell to 20.08 versus estimates of 25.0 and a reading of 27.07 in December.
Recommendations
-Goldman Sachs: Reiterated Outperform on ADP, KRB, JTX, YHOO, AL, GE, DKS and ACS. Reiterated Underperform on FRX. Upgraded AWA and SYK to Outperform.
-Bank of America: Upgraded MAY to Buy, target $37. Rated SMA Buy, target $22. Upgraded PSA to Buy, target $59. Cut EXR to Sell, target $11.
-JP Morgan: Reiterated Buy on YHOO, target $50. Raised DOX, MAY, BLX to Overweight. Cut BCH, WBSN, TIBX and VRST to Underweight.
-Citi SmithBarney: Raised DOX to Buy, target $34. Rated PII Buy, target $75. Raised LUV to Buy, target $19.
-UBS: Raised GLG and MDG to Buy. Rated FCL Buy, target $27. Cut SCT to Reduce.
-CSFB: Reiterated Outperform on RIG.
-Legg Mason: Raised BRCM to Buy, target $39.
-Oppenheimer: Raised MAY to Buy.
Mid-day News
U.S. stocks are higher mid-day on a continuation of Friday’s bounce and strong earnings reports. Ntelos Inc., a telecom service provider that services customers in Virginia, West Virginia, Kentucky and North Carolina, will likely be bought for about $750 million by investors headed by Quadrangle Capital Partners and Citigroup Venture Capital, the Wall Street Journal reported. TD Waterhouse, Fidelity and E*Trade are seeking customers by offering new online trading tools, the Wall Street Journal reported. New government regulations, such as the Sarbanes-Oxley Act, are driving demand for accountants and lawyers at US corporations, USA Today reported. A government advisory panel of economists, and health-care experts and providers recommended that the US Congress make lower Medicare payments than promised next year to hospitals and keep payments to nursing homes unchanged, the NY Times reported. Kimberly-Clark and Procter & Gamble plan to introduce new toiletries for babies and toddlers, the NY Times said. Archipelago Holdings, which operates the Archipelago Exchange stock-trading network, plans to open for trading by 4am NY time as soon as March to lure business from Europe, the Financial Times reported. An Internet virus is embedded in a bogus e-mail soliciting aid for victims of last month’s tsunami, Reuters reported. National City Corp. CFO Daberko told CNBC it will consider expanding this year through smaller acquisitions, as it did last year. Teva Pharmaceuticals said a study linking its Copaxone multiple sclerosis drug to breast cancer is flawed and that its own research shows no such connection, Bloomberg said. Bank of America said quarterly profit rose 41% as consumer banking fees climbed and the company arranged more loans for both individuals and companies, Bloomberg reported. International investors increased their net holding of US assets in November by the most since June, driven by the biggest stock purchases in more than three years, the Treasury Department said. 3M Co. said fourth-quarter profit increased 16%, helped by higher sales in its security and health businesses, Bloomberg said. Charter Communications said CEO Vogel resigned, becoming the third top executive to leave in the last six months, Bloomberg said. MeadWestvaco Corp., the second-largest US maker of coated paper for magazines, agreed to sell its papers unit and forest assets for $2.3 billion to Cerberus Capital Management to pay debt and focus on packaging, Bloomberg reported. The US dollar approached a two-month high against the euro and gained versus the yen after a Treasury Department report showed international investors increased purchases of US assets by 67.7% in November from October, Bloomberg said. Crude oil is falling on speculation that stronger demand for heating fuel during a cold wave in the US Northeast doesn’t justify the recent surge in prices, Bloomberg reported.
Bottom Line: The Portfolio is substantially higher mid-day as my computer service, semiconductor and alternative energy longs are rising and my software and auto parts shorts are falling. I added to a few of my current tech longs this morning, thus bringing the Portfolio to 75% net long. I increased my long position in DRIV and I am using a $32.25 stop-loss on this position. The tone of the market is good today on continuing improvement in the advance/decline line and decent volume. Financials and small-caps are outperforming, which is also a positive. The fact the international investors added to US stock holdings by the most in 3 1/2 years is also a big positive considering the weaker US dollar. Measures of investor anxiety are mixed. I expect US stocks to trade modestly higher into the close on short-covering and bargain-hunting.
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