NASDAQ 2,087.99 -.85%
Leading Sectors
Oil Service +.94%
Hospitals +.39%
Restaurants +.30%
Lagging Sectors
Wireless -1.79%
Airlines -2.45%
Networking -2.95%
Other
Crude Oil 48.10 -.58%
Natural Gas 6.29 +2.49%
Gold 422.80 -.17%
Base Metals 120.36 +1.31%
U.S. Dollar 83.57 +.26%
10-Yr. T-note Yield 4.19% +.05%
VIX 12.65 +1.60%
Put/Call .80 -4.76%
NYSE Arms 1.54 +133.33%
ISE Sentiment 171.00 +17.93%
Market Movers
MOT -7.11% on profit-taking after beating 4Q estimates, raising 1Q outlook and multiple downgrades.
TASR -9.11% on the announcement of several class action lawsuits against the company.
HUBG +9.74% on Raymond James upgrade to Strong Buy.
OSTK +6.2% after saying auction listings are up 50% in 5 days after EBAY price increases.
EDO +7.3% on Friedman, Billings, Ramsey upgrade to Outperform.
CLF +4.03% after Morgan Stanley raised 05/06 estimates.
APH +5.24% after beating 4Q estimates and raising 05 guidance.
DRL -10.45% after missing 4Q estimates.
RMBS -11.64% after missing 4Q estimates and lowering 1Q outlook.
PLT -6.0% after beating 3Q estimates and lowering 4Q outlook.
SNDA -5.98% on continuing sell-off over worries over slowing growth in China.
Economic Data
-The Consumer Price Index for December fell .1% versus estimates of unch. and a .2% rise in November.
-CPI Ex Food & Energy for December rose .2% versus estimates of a .2% gain and a .2% increase in November.
-Housing Starts for December rose to 2004K versus estimates of 1903K and an upwardly revised 1807K.
-Building Permits for December rose to 2021K versus estimates of 1985K and an upwardly revised 2028K in November.
-Initial Jobless Claims for last week fell to 319K versus estimates of 345K and 367K the prior week.
-Continuing Claims rose to 2694K versus estimates of 2675K and 2647K prior.
Recommendations
-Goldman Sachs: Reiterated Outperform on IBM, KMR, MUR, EBAY, YHOO, PFE, RIO, MMM, USB, WAG and JNPR. Reiterated Underperform on GAP, WIN and MARSA. Rated BBG Outperform, target $46.
-Bank of America: Downgraded WEN to Sell, target $34. Downgraded OSI to Sell, target $39. Rated YRK Buy, target $45.
-CSFB: Reiterated Outperform on STX.
-UBS: Raised PBG to Buy, target $31.
-JP Morgan: Raised ACXM to Overweight.
-Deutsche Bank: Raised MTSN to Buy, target $12. Cut FCX to Sell.
-Thomas Weisel: Raised CSTR to Outperform.
-Merrill Lynch: Reiterated Buy on RIO, target $35.
-Legg Mason: Rated YSI Buy, target $19.
-Morgan Stanley: Raised SBC to Overweight, target $26.
-Prudential: Rated DTV Overweight, target $19. Rated DISH Underweight, target $35.
-Raymond James: Raised HUBG to Strong Buy, target $64.
Mid-day News
U.S. stocks are lower mid-day on losses in the technology sector. Choice Hotels International plans to introduce a higher-priced brand called Cambria Suites to compete with Hilton Hotels’ Hilton Garden Inn and other chains, the Wall Street Journal said. A group of health and technology organizations gave the Bush administration recommendations yesterday on how to begin creating a national health information network to digitize medical records, the NY Times reported. Exchange-traded funds have been growing more popular with US individuals, as brokerage firms push services that allow investors’ goals to be matched by corresponding portfolios, the Wall Street Journal said. Cablevision Systems’ board decided to oppose the wishes of Chairman Dolan and sell its Voom satellite-television unit, the NY Times reported. Triarc Cos., which operated Arby’s fast-food restaurants, may make an IPO of shares of the sandwich chain, the NY Post said. Donald Trump formed a company called Trump Gold Management to create a golf brand, the Star-Ledger reported. President Bush may host a meeting with the leaders of Canada and Mexico later this year to discuss expanding NAFTA, the Globe and Mail reported. Harvard University President, and former US Treasury Secretary in the Clinton administration, Lawrence Summers issued a written apology yesterday for remarks he made last week at a conference that men have more aptitude for math and science than women, the Boston Globe reported. Venetian Group met with Detroit officials to discuss adding a casino to the city’s Cobo Center, the Detroit Free Press reported. Envoys from Iraqi political parties said last night that corruption in the UN/Iraqi oil-for-food program has damaged the world body’s legitimacy, with one envoy envisioning a “zero” role for the UN in his country’s future, Bloomberg reported. Carl Icahn has fallen short of his $3 billion target for a new hedge fund that would back the type of corporate raids carried out by the financier at RJR Nabisco and Trans World Airlines, Bloomberg said. Bonds of DaimlerChrysler AG are outperforming the debt of its larger US competitors as the company’s Chrysler unit benefits from rising commercial vehicle sales in North America, Bloomberg said. Soybean prices are likely to plunge to a three-year low as importers delay purchases just as farmers in Brazil, the world’s second-largest grower, are about to harvest a record crop, said The Linn Group, a Chicago futures broker. US Chief Justice Rehnquist rejected a California atheist’s bid to block clergy-led prayer at tomorrow’s inauguration ceremony for President Bush, Bloomberg said. US home construction rebounded in December to cap the best year since 1978 as cheap mortgages and increased employment buoyed demand, Bloomberg said. Initial Jobless Claims dropped by 48,000 last week, the biggest decline in three years, Bloomberg reported. Prices paid by US consumers fell in December, restrained by lower gasoline costs, Bloomberg said. Best Buy said it will stop selling Maytag Corp.’s line of washers, dryers and ranges because of growing demand for other brands, Bloomberg reported.
Bottom Line: The Portfolio is lower mid-day on losses in my internet and semiconductor longs. I exited a number of longs this morning as they hit stop-losses, thus leaving the Portfolio 50% net long. The tone of the market is weaker today as decliners outpace advancers, most sectors are lower, technology shares are underperforming and volume is decent. It is also a negative that very good economic reports and mostly positive earnings reports are resulting in losses for the major indices. Measures of investor anxiety are mixed. I expect US stocks to trade mixed-to-higher into the close.
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