Tuesday, January 11, 2005

Tuesday Close

S&P 500 1,182.99 -.61%
NASDAQ 2,079.62 -.83%


Leading Sector
HMOs +.22%
Oil Service +.09%
Energy +.05%

Lagging Sectors
Networking-1.82%
Iron/Steel -2.16%
Semis -2.48%

Other
Crude Oil 45.78 +.22%
Natural Gas 6.07 -.41%
Gold 422.50 +.02%
Base Metals 120.49 +1.29%
U.S. Dollar 83.07 -.34%
10-Yr. T-note Yield 4.24% -.78%.
VIX 13.19 -.30%
Put/Call .88 +14.29%
NYSE Arms 1.77 +86.32%
ISE Sentiment 218.00 +36.25%

After-hours Movers
ADIC +6.2% after saying that fourth-quarter earnings will increase by 2 cents a share because of a correction in how it recognized about $1 million in cumulative losses in connection with investments made in a private tech partnership since 2000.
NEOF +21.8% after saying it hired Merrill Lynch to evaluate a possible sale of the company.
CAMP +5.5% after meeting 3Q estimates and raising 4Q guidance.
CRM -6.9% after slightly lowering 4Q outlook.
*Semi-equipment stocks up across the board on Intel cap-ex forecast.

Recommendations
Goldman Sachs upgraded Telecom equipment sector to Attractive, favorites are Outperform rated JNPR, RIMM, CSCO and In-line rated SONS, MOT, NTGR. Goldman also upgraded its handset market forecast to 11% growth in unit volume from 6% in 2005. Goldman reiterated Underperform on TLAB.

After-hours News
U.S. stocks finished lower today on further weakness in small-cap and technology shares. After the close, General Motor’s cost of restructuring its European operations in 2005 may be less than anticipated, at $1.05 billion, the Financial Times said. Burlington Coat Factory Warehouse CEO Milstein told CNBC financial network that same-store sales were up more than 20% in the week before and the week after Christmas. Iraqi Prime Minister Allawi said some small parts of the country will be unable to take part in elections Jan. 30, Bloomberg said. A levee in San Juan Capistrano is southern California that may not be able to hold back a swollen river led local officials to evacuate about 4,000 people, CNN reported. Johnson & Johnson’s drug-coated Cypher heart stent may be better than Boston Scientific’s Taxus for repeat procedures to unclog some arteries, according to a study in the Jan. 12 Journal of the American Medical Association, Bloomberg reported. Cattle prices in Chicago rose to a 13-month high on speculation that the US will withdraw a plan to resume imports of beef and live cattle from Canada because of a new case of mad cow disease, Bloomberg reported. The yen rose by the most in almost a month against the US dollar after European Central Bank Chief Economist Issing suggested Asian nations must let their currencies strengthen to help shrink the US trade deficit, Bloomberg said. A US judge, acting on a complaint by the US FTC, ordered 11 businesses and individuals to stop sending sexually explicit spam e-mail, Bloomberg said. Microsoft said CFO Connors is retiring to become a partner at a Seattle-area venture capital firm, Bloomberg reported. United Parcel Service said fourth-quarter earnings, excluding a tax benefit, were 75 cents to 76 cents a share, compared with the company’s previous forecast of 83 cents to 87 cents a share, Bloomberg said. Intel said fourth-quarter sales rose to a record, exceeding $9 billion for the first time as holiday-season demand for laptops lifted orders, Bloomberg reported.

BOTTOM LINE: The Portfolio finished slightly lower today as weakness in my retail, internet and networking longs more than offset gains in my steel, chemical and auto parts shorts. I did not trade in the afternoon, thus leaving the Portfolio 50% net long. Volume increased once again on today’s losses and breadth was poor. I continue to expect a better bounce at any time, however measures of investor sentiment are still showing too much complacency for a solid bottom. I will closely monitor the market’s reaction to Intel’s report in the morning and react accordingly.

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