Thursday, April 21, 2005

Thursday Close

Indices
S&P 500 1,159.95 +1.97%
DJIA 10,218.60 +2.06%
NASDAQ 1,962.41 +2.54%
Russell 2000 598.98 +2.40%
DJ Wilshire 5000 11,431.55 +1.92%
S&P Barra Growth 562.38 +2.29%
S&P Barra Value 593.15 +1.66%
Morgan Stanley Consumer 579.02 +1.92%
Morgan Stanley Cyclical 715.55 +2.82%
Morgan Stanley Technology 443.07 +3.25%
Transports 3,513.02 +3.47%
Utilities 364.94 +1.27%
Put/Call .84 +3.70%
NYSE Arms .53 -71.80%
Volatility(VIX) 14.41 -14.83%
ISE Sentiment 126.00 -5.97%
US Dollar 83.70 +.22%
CRB 306.71 -.09%

Futures Spot Prices
Crude Oil 54.30 +.18%
Unleaded Gasoline 162.45 +.28%
Natural Gas 7.06 +.53%
Heating Oil 153.20 -.13%
Gold 434.40 unch.
Base Metals 125.70 -2.16%
Copper 148.00 -.24%
10-year US Treasury Yield 4.29% +2.61%

Leading Sectors
Airlines +3.68%
Oil Tankers +3.55%
Wireless +3.24%

Lagging Sectors
Papers +.05%
Restaurants -.18%
Gold & Silver -1.09%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on AMGN, ALK, YUM, ODP and GOOG.
- Reiterated Underperform on JBLU and NFB.

Business Week:
- Asta Funding(ASFI), which purchases debt, may boost 2005 earnings by 20% as it profits from a new bankruptcy law.

Afternoon/Evening Headlines
Bloomberg:
- Hynix Semiconductor has agreed to pay $185 million to settle US charges that the company engaged in a conspiracy to fix prices of dynamic random access memory computer chips.
- Qwest Communications International will raise its bid for MCI Inc. to $30 a share, or $9.75 billion, to derail MCI’s agreement to be bought by Verizon Communications.
- Google said first-quarter profit rose six-fold as sales of online advertising outside the US surged and new features lured more Web surfers.
- News Corp.’s Fox Sports offered the NFL an equity stake in its proposed sports channel.

BOTTOM LINE: US stocks finished sharply higher today on optimism over earnings and fewer worries that the US economy is slowing too rapidly. The Portfolio finished unchanged today as gains in my Networking and Homebuilding longs offset losses in my Oil Tanker and Computer Hardware shorts. I exited a few shorts as they hit stop-losses and added a few new longs from various sectors in the afternoon, thus leaving the Portfolio 75% net long. One of my new longs is FFIV and I am using a $43.50 stop-loss on this position. The tone of the market strengthened into the afternoon as the advance/decline finished at its daily highs, almost every sector rose and volume was above average. Measures of investor anxiety were mixed. However, the AAII % Bulls rose 123.54% this week to 36.84%. Overall, today’s market action was very positive, considering the rise in long-term rates, a bounce in energy prices from daily lows and yesterday’s decline. While I feel strongly that US stocks have seen their lows for the year, the major indices will likely trade only modestly higher until the Fed starts making less hawkish comments and oil falls back below the psychologically important $50/bbl level. I expect these events to occur within the next couple of months and further spur US equities. As I stated a few days ago, longer-term investors should use any further weakness to begin acquiring shares of favorite longs.

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