NASDAQ 2,040.18 -.28%
Leading Sectors
Iron/Steel +1.47%
Oil Service +1.28%
Broadcasting +.84%
Lagging Sectors
Papers -1.22%
Disk Drives -1.83%
Airlines -3.01%
Other
Crude Oil 48.90 +3.47%
Natural Gas 6.46 +2.49%
Gold 426.70 +.97%
Base Metals 121.05 +.86%
U.S. Dollar 83.28 -.66%
10-Yr. T-note Yield 4.13% -.56%
VIX 13.85 +.22%
Put/Call .79 -16.84%
NYSE Arms 1.15 -13.64%
ISE Sentiment 172.00 +18.62%
Market Movers
EBAY +5.0% on Legg Mason upgrade to Buy and bounce from yesterday’s sell-off.
SYNA +22.7% after beating 2Q estimates and raising 3Q/4Q guidance.
CVC +10.99% after the company said it will terminate its money-losing Voom satellite-tv business and sell the service’s satellite to EchoStar Communications.
SEAB +14.38% on strong demand for IPO.
HLIT +17.02% after beating 4Q estimates and raising 1Q guidance substantially.
ACR +15.14% on strong demand for secondary.
TRID +14.99% after beating 2Q estimates.
CKFR +7.65% after beating 2Q estimates and raising 3Q outlook.
VIRL -16.62% after meeting 1Q earnings estimates and slightly missing revenue estimates.
ACS -5.82% after meeting 2Q estimates, multiple downgrades and lowering 3Q guidance.
SFA -7.06% after missing 2Q revenue estimates
JNY -4.31% after lowering 4Q and 05 forecasts.
Economic Data
Preliminary Univ. of Mich. Consumer Confidence for January fell to 95.8 versus estimates of 97.5 and 97.1 in December.
Recommendations
-Goldman Sachs: Reiterated Outperform on KSS, INTC and CSCO. Reiterated Underperform on CVC and WTW. Cut SKS to Underperform.
-Merrill Lynch: Added C to its Focus 1 List.
-CSFB: Cut ACS to Underperform, target $48.
-Deutsche Bank: Raised LRCX to Buy, target $33. Raised CVC to Buy, target $32. Raised VZ to Buy, target $40. Raised ACC to Buy, target $25.
-Citi SmithBarney: Rated AD Buy, target $50. Downgraded SXL to Sell, target $36.
-JP Morgan: Rated CNO Overweight. Raised GMST to Overweight.
-Legg Mason: Raised EBAY to Buy, target $100.
-Bear Stearns: Rated TTWO Outperform, target $40.
-Oppenheimer: Rated IPAR Buy, target $19.
Mid-day News
U.S. stocks are lower mid-day on higher energy prices, terrorism worries and economic concerns. US sales of goods over the Internet rose 29% before and during the recent holiday season, but Amazon.com’s gains may have been quite small, the Wall Street Journal reported. Taser International is boosting the power of its new X26 electric stun gun by about 14% to ensure that suspects are subdued when targeted with the device, the NY Times reported. Bond investors are seeking higher yield for their investments as interest rates remain relatively low, and are willing to take on more risk with corporate bonds than before, the NY Times reported. Russia raised its forecast for oil exports in the first quarter, Bloomberg said. Gannett Co., Lee Enterprises Inc. and Stephens Group are expected to make bids for Pulitzer Inc. by Monday, the Wall Street Journal reported. Ten people have been added to the list of those wanted for questing in the federal probe of a possible terror threat in Boston, the AP reported. Actors and Hollywood’s entertainment companies reached a three-year contract agreement that raises the performers’ pay and doesn’t give them a bigger share of revenue from DVD sales, the LA Times reported. 14 Stanford University freshmen posed naked in their dormitory for a calendar that is being sold to help raise money for Save the Children, the San Francisco Chronicle reported. General Electric said fourth-quarter profit rose 18% as acquisitions and higher demand for turbine parts and consumer loans pushed sales higher, Bloomberg reported. Hewlett-Packard will pay $141 million to Intergraph to settle a patent dispute, cutting first-quarter earnings by 3 cents a share, Bloomberg said. BP Plc will avoid doing business in Iran because of US sanctions, focusing instead on Russia, Africa and the Gulf of Mexico, Bloomberg said. US consumer confidence unexpectedly dropped for the first time in three months in early January as stock prices fell, Bloomberg said. US FCC Chairman Powell will resign after four years of struggling to loosen restrictions on media, cable and telephone companies, Bloomberg reported. Crude oil rose almost $1.50/bbl. as freezing weather in the US Northeast increased consumption of heating fuels and unrest before the Iraqi election disrupted oil shipments from the country, Bloomberg said. Goldman Sachs will merger its financing and investment-banking units, Bloomberg reported.
Bottom Line: The Portfolio is slightly higher mid-day on gains in my software, auto parts and semiconductor shorts. I added a few new shorts from various sectors this morning, thus bringing the Portfolio to market neutral(shorts-longs=0). One of my new shorts is ADBL and I am using a $25.75 stop-loss on this position. The tone of the market is moderately weak and measures of investor anxiety are mixed. As I forecasted several months ago, interest rates continue to move lower on decelerating inflation readings, a stabilizing US dollar and worries over slowing global growth. This trend will likely persist for the next several months. Oil prices should begin heading lower in the next 10 days as speculators sell ahead of the Iraqi elections and begin to anticipate warmer weather. I expect US stocks to trade mixed-to-weaker into the close.
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