Tuesday, February 01, 2005
Between the Hedges 1 Year Anniversary
93,316 visitors since February 1, 2004. Thank you very much for your support.
Mid-day Report
Indices
S&P 500 1,187.92 +.56%
Dow 10,547.21 +.55%
NASDAQ 2,067.83 +.26%
Russell 2000 626.55 +.41%
DJ Wilshire 5000 11,693.44 +.57%
S&P Barra Growth 570.74 +.57%
S&P Barra Value 612.96 +.57%
Morgan Stanley Consumer 584.66 +.22%
Morgan Stanley Cyclical 759.05 +.68%
Morgan Stanley Technology 475.24 +.31%
Transports 3,607.73 +.26%
Utilities 344.78 +.38%
Put/Call .86 +26.47%
NYSE Arms .85 -3.41%
Volatility(VIX) 12.41 -3.20%
ISE Sentiment 173.00 +11.61%
US Dollar 83.56 -.01%
CRB 283.91 -.30%
Futures Spot Prices
Crude Oil 47.73 -.98%
Unleaded Gasoline 133.25 -1.12%
Natural Gas 6.34 +.38%
Heating Oil 133.10 -1.27%
Gold 422.40 -.40%
Base Metals 121.52 -1.09%
Copper 141.50 -1.39%
10-year US Treasury Yield 4.12% -.09%
Leading Sectors
HMOs +2.24%
Homebuilders +1.52%
Gaming +1.37%
Lagging Sectors
Restaurants -.35%
Broadcasting -.46%
Internet -.46%
Market Movers
ARBA -28.7% after missing 1Q estimates.
AXP +5.66% after saying it plans to spin off its 12,000-broker financial-advisory unit and Merrill Lynch upgrade to Buy.
CTMI +17.11% after substantially beating 1Q estimates, raising 2Q/05 guidance and Piper Jaffray upgrade to Outperform.
AGI +15.64% after missing 2Q estimates and making positive comments on rest of 05.
ZMH +8.62% after beating 4Q estimates and raising 05 guidance.
SRX +8.95% after beating 2Q estimates, raising 3Q/05 guidance and multiple upgrades.
VLO +7.66% after beating 4Q estimates substantially and raising 05 guidance.
JNC +10.8% after a Morningstar analyst said it may benefit from the sale of a 79% stake by St. Paul Travelers.
ASD +6.54% after beating 4Q estimates and raising 05 guidance.
SIE +5.24% after beating 4Q estimates and widening 05 guidance.
ISSX -9.93% after beating 4Q estimates and widening 1Q/05 guidance.
CME -10.43% after missing 4Q estimates and saying it is considering acquisitions.
MAN -9.74% after meeting 4Q estimates and lowering 1Q guidance.
RCL -5.34% after meeting 4Q estimates and lowering 1Q outlook.
WMS -9.86% after missing 2Q estimates and raising 3Q/05 guidance.
ATRS -7.44% on profit-taking after beating 4Q estimates.
VLTR -10.13% on profit-taking after beating 4Q estimates.
Market Internals
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon
Economic Data
-Construction Spending for December rose 1.1% versus estimates of a .5% increase and an upwardly revised .3% gain in November.
-ISM Manufacturing for January fell to 56.4 versus estimates of 57.0 and a downwardly revised reading of 57.3 in December.
-ISM Prices Paid for January fell to 69.0 versus estimates of 71.5 and a reading of 72.0 in December.
Recommendations
-Goldman Sachs: Reiterated Outperform on MERQ, DIS, AVP, IR, TYC and BSX. Reiterated Underweight on Semi Equipment stocks.
-Citi SmithBarney: Reiterated Sell on XOM, target $47.50. Reiterated Sell on ONB, target $17. Reiterated Buy on KBH, target $141. Reiterated Sell on AFL, target $35. Reiterated Buy on WYE, target $45.
-Banc of America: Upgraded CNP to Buy, target $13. Upgraded BHE to Buy.
-UBS: Raised MCK to Buy, target $41.
-CIBC: Raised WYE to Sector Outperform, target $45. Raised WIND to Sector Outperform, target $16.
-Thomas Weisel: Raised FON to Outperform.
-Bear Stearns: Raised XOM to Outperform, target $60. Raised HHS to Outperform, target $30.
-Prudential: Raised N to Overweight, target $38.
-Merrill Lynch: Raised ARO to Buy, target $34.
-Raymond James: Rated CNF Strong Buy, target $57.
Mid-day News
US stocks are modestly higher mid-day on lower energy prices, more optimism and declining long-term interest rates. Medicare has started a pilot program to pay some physicians bonuses to curtail costs, the Wall Street Journal reported. United Technologies is close to an agreement to buy Boeing’s Rocketdyne rocket-engine unit, the Wall Street Journal reported. Sun Microsystems is expanding and modifying programs to sell computing services and software on a utility-style basis, the Wall Street Journal reported. Merrill Lynch will buy a $30 million minority stake in a Beijing real-estate project, marking the securities firm’s first investment in Chinese property, the Wall Street Journal reported. Hewlett-Packard says it’s developed a technology that could help to replace the transistor, the smallest building block of the computer, the Wall Street Journal reported. Home Depot will work with Mark Burnett, who created reality tv shows such as “Survivor” and “The Apprentice,” to develop programs to help with its branding image, the Wall Street Journal reported. Google has started giving out an award potentially valued at millions of dollars to employees who work on outstanding projects, the NY Times reported. Iraqi interim President Ghazi al-Yawar today said the withdrawal of US-led troops is being discussed, and that the country’s security problems won’t escalate into a civil war, Bloomberg reported. US construction spending rose 1.1% in December, more than expected, to $1.032 trillion at an annual rate, as residential, office and highway building increased, Bloomberg said. The growth rate of US manufacturing slowed for a second month in January, the ISM report showed. Ford Motor, Toyota Motor and Honda Motor’s US car and truck sales fell in January as buyers backed off after December’s industry rate was the highest in three years, Bloomberg reported. Shareholders of Adolph Coors approved a $3.4 billion merger with Canada’s Molson as the two family-controlled companies try to keep pace with larger rivals, Bloomberg reported.
S&P 500 1,187.92 +.56%
Dow 10,547.21 +.55%
NASDAQ 2,067.83 +.26%
Russell 2000 626.55 +.41%
DJ Wilshire 5000 11,693.44 +.57%
S&P Barra Growth 570.74 +.57%
S&P Barra Value 612.96 +.57%
Morgan Stanley Consumer 584.66 +.22%
Morgan Stanley Cyclical 759.05 +.68%
Morgan Stanley Technology 475.24 +.31%
Transports 3,607.73 +.26%
Utilities 344.78 +.38%
Put/Call .86 +26.47%
NYSE Arms .85 -3.41%
Volatility(VIX) 12.41 -3.20%
ISE Sentiment 173.00 +11.61%
US Dollar 83.56 -.01%
CRB 283.91 -.30%
Futures Spot Prices
Crude Oil 47.73 -.98%
Unleaded Gasoline 133.25 -1.12%
Natural Gas 6.34 +.38%
Heating Oil 133.10 -1.27%
Gold 422.40 -.40%
Base Metals 121.52 -1.09%
Copper 141.50 -1.39%
10-year US Treasury Yield 4.12% -.09%
Leading Sectors
HMOs +2.24%
Homebuilders +1.52%
Gaming +1.37%
Lagging Sectors
Restaurants -.35%
Broadcasting -.46%
Internet -.46%
Market Movers
ARBA -28.7% after missing 1Q estimates.
AXP +5.66% after saying it plans to spin off its 12,000-broker financial-advisory unit and Merrill Lynch upgrade to Buy.
CTMI +17.11% after substantially beating 1Q estimates, raising 2Q/05 guidance and Piper Jaffray upgrade to Outperform.
AGI +15.64% after missing 2Q estimates and making positive comments on rest of 05.
ZMH +8.62% after beating 4Q estimates and raising 05 guidance.
SRX +8.95% after beating 2Q estimates, raising 3Q/05 guidance and multiple upgrades.
VLO +7.66% after beating 4Q estimates substantially and raising 05 guidance.
JNC +10.8% after a Morningstar analyst said it may benefit from the sale of a 79% stake by St. Paul Travelers.
ASD +6.54% after beating 4Q estimates and raising 05 guidance.
SIE +5.24% after beating 4Q estimates and widening 05 guidance.
ISSX -9.93% after beating 4Q estimates and widening 1Q/05 guidance.
CME -10.43% after missing 4Q estimates and saying it is considering acquisitions.
MAN -9.74% after meeting 4Q estimates and lowering 1Q guidance.
RCL -5.34% after meeting 4Q estimates and lowering 1Q outlook.
WMS -9.86% after missing 2Q estimates and raising 3Q/05 guidance.
ATRS -7.44% on profit-taking after beating 4Q estimates.
VLTR -10.13% on profit-taking after beating 4Q estimates.
Market Internals
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon
Economic Data
-Construction Spending for December rose 1.1% versus estimates of a .5% increase and an upwardly revised .3% gain in November.
-ISM Manufacturing for January fell to 56.4 versus estimates of 57.0 and a downwardly revised reading of 57.3 in December.
-ISM Prices Paid for January fell to 69.0 versus estimates of 71.5 and a reading of 72.0 in December.
Recommendations
-Goldman Sachs: Reiterated Outperform on MERQ, DIS, AVP, IR, TYC and BSX. Reiterated Underweight on Semi Equipment stocks.
-Citi SmithBarney: Reiterated Sell on XOM, target $47.50. Reiterated Sell on ONB, target $17. Reiterated Buy on KBH, target $141. Reiterated Sell on AFL, target $35. Reiterated Buy on WYE, target $45.
-Banc of America: Upgraded CNP to Buy, target $13. Upgraded BHE to Buy.
-UBS: Raised MCK to Buy, target $41.
-CIBC: Raised WYE to Sector Outperform, target $45. Raised WIND to Sector Outperform, target $16.
-Thomas Weisel: Raised FON to Outperform.
-Bear Stearns: Raised XOM to Outperform, target $60. Raised HHS to Outperform, target $30.
-Prudential: Raised N to Overweight, target $38.
-Merrill Lynch: Raised ARO to Buy, target $34.
-Raymond James: Rated CNF Strong Buy, target $57.
Mid-day News
US stocks are modestly higher mid-day on lower energy prices, more optimism and declining long-term interest rates. Medicare has started a pilot program to pay some physicians bonuses to curtail costs, the Wall Street Journal reported. United Technologies is close to an agreement to buy Boeing’s Rocketdyne rocket-engine unit, the Wall Street Journal reported. Sun Microsystems is expanding and modifying programs to sell computing services and software on a utility-style basis, the Wall Street Journal reported. Merrill Lynch will buy a $30 million minority stake in a Beijing real-estate project, marking the securities firm’s first investment in Chinese property, the Wall Street Journal reported. Hewlett-Packard says it’s developed a technology that could help to replace the transistor, the smallest building block of the computer, the Wall Street Journal reported. Home Depot will work with Mark Burnett, who created reality tv shows such as “Survivor” and “The Apprentice,” to develop programs to help with its branding image, the Wall Street Journal reported. Google has started giving out an award potentially valued at millions of dollars to employees who work on outstanding projects, the NY Times reported. Iraqi interim President Ghazi al-Yawar today said the withdrawal of US-led troops is being discussed, and that the country’s security problems won’t escalate into a civil war, Bloomberg reported. US construction spending rose 1.1% in December, more than expected, to $1.032 trillion at an annual rate, as residential, office and highway building increased, Bloomberg said. The growth rate of US manufacturing slowed for a second month in January, the ISM report showed. Ford Motor, Toyota Motor and Honda Motor’s US car and truck sales fell in January as buyers backed off after December’s industry rate was the highest in three years, Bloomberg reported. Shareholders of Adolph Coors approved a $3.4 billion merger with Canada’s Molson as the two family-controlled companies try to keep pace with larger rivals, Bloomberg reported.
BOTTOM LINE: The Portfolio is slightly lower mid-day on losses in my internet and semiconductor longs. I exited a few technology longs this morning as they hit stop-losses, thus bringing the Portfolio to 100% net long. The tone of the market is modestly positive as the advance/decline line is mildly higher, most sectors are gaining and volume is better. However, measures of investor anxiety are mostly lower and some market leaders are weak. Energy prices will likely fall further tomorrow on the government inventory reports. I expect US stocks to rise modestly into the close on more optimism, short-covering and bargain-hunting ahead of the Fed rate decision, State of the Union and earnings reports.
Tuesday Watch
Late-Night News
Asian indices are mostly lower as gains in Australia are more than offset by losses in Korea and Hong Kong. InterContinental Hotels Group Plc may sell $1.9 billion worth of UK hotel assets to Lehman Brothers Holdings, the London-based Times said. US venture capitalists raised $17.6 billion from investors in 2004, exceeding the combined amount raised in the previous two years, the Financial Times said. China will add 43 million metric tons of new steel production capacity this year, the Shanghai Securities News reported. Motorola bought a stake in researcher T3G Technologies to help the company commercialize China's high-speed third-generation wireless service, the Beijing Times reported. Libya will offer 40 oil permits in March to attract companies that didn't receive licenses in last week's oil exploration auction, the Financial Times said. Time Warner's Warner Bros. International Cinemas has teamed up with a fourth partner in China to tap the growing market for movie entertainment, Xinhua News Agency said. General Motors, which may be forced to buy the 90% of Fiat Auto it doesn't already own, will settle with Fiat SpA to avoid a legal fight that would hurt both auto companies, Bloomberg reported. A court-appointed law professor filed a plan that would allow investors who lost money due to biased Wall Street research to share a $433 million settlement early next year, Bloomberg said. Vietnam should allow political and religious figures to express their views, the US State Department said after Vietnam announced an amnesty for prisoners, Bloomberg reported. Citigroup CEO Prince is withdrawing from insurance underwriting, seven years after his predecessor, Sanford Weill, said it was crucial to creating the world's largest financial-services firm, Bloomberg said. The Pentagon plans to assign as many as 10,000 US combat troops to Iraqi military units to serve as instructors and advisers in an effort to speed up and improve their training, said Lieutenant General Petraeus, the top US commander training Iraqi troops. Iraq plans to invest $3 billion in its oil industry this year to boost production by as much as 45% to 2.9 million barrels a day by Dec. 31, Al-Hayat reported. China may ease the yuan's fixed-exchange rate to the dollar by the end of June and manage the currency against a trade-weighted basket of currencies, Lehman Brothers' senior economist said.
Late Recommendations
Goldman Sachs: Reiterated Outperform on WAG, DO, RIG and CL. Reiterated Underperform on ATI, AVB and CVH.
Night Trading
Asian Indices are -.75% to unch. on average.
S&P 500 indicated -.05%.
NASDAQ 100 indicated -.03%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
CNBC Guest Schedule
Earnings of Note
Company/Estimate
AVP/.61
BJS/.55
BSX/.48
CME/1.69
CB/1.97
EMR/.69
GP/.49
GOOG/.77
HCA/.66
IR/1.22
LLL/1.01
MXIM/.41
MBI/1.34
MGG/.44
MNST/.19
OSI/.57
RCL/-.03
THQI/1.15
TYC/.42
YUM/.72
Splits
None of note.
Economic Data
-Construction Spending for December is estimated to rise .5% versus a .4% decline in November.
-ISM Manufacturing for January is estimated to fall to 57.0 versus a reading of 57.3 in December.
-ISM Prices Paid for January is estimated to fall to 71.5 versus a reading of 72.0 in December.
-Total Vehicle Sales for January are estimated to fall to 16.2M versus sales of 18.4M in December.
-Domestic Vehicle Sales for January are estimated to fall to 13.1M versus sales of 14.7M in December.
Asian indices are mostly lower as gains in Australia are more than offset by losses in Korea and Hong Kong. InterContinental Hotels Group Plc may sell $1.9 billion worth of UK hotel assets to Lehman Brothers Holdings, the London-based Times said. US venture capitalists raised $17.6 billion from investors in 2004, exceeding the combined amount raised in the previous two years, the Financial Times said. China will add 43 million metric tons of new steel production capacity this year, the Shanghai Securities News reported. Motorola bought a stake in researcher T3G Technologies to help the company commercialize China's high-speed third-generation wireless service, the Beijing Times reported. Libya will offer 40 oil permits in March to attract companies that didn't receive licenses in last week's oil exploration auction, the Financial Times said. Time Warner's Warner Bros. International Cinemas has teamed up with a fourth partner in China to tap the growing market for movie entertainment, Xinhua News Agency said. General Motors, which may be forced to buy the 90% of Fiat Auto it doesn't already own, will settle with Fiat SpA to avoid a legal fight that would hurt both auto companies, Bloomberg reported. A court-appointed law professor filed a plan that would allow investors who lost money due to biased Wall Street research to share a $433 million settlement early next year, Bloomberg said. Vietnam should allow political and religious figures to express their views, the US State Department said after Vietnam announced an amnesty for prisoners, Bloomberg reported. Citigroup CEO Prince is withdrawing from insurance underwriting, seven years after his predecessor, Sanford Weill, said it was crucial to creating the world's largest financial-services firm, Bloomberg said. The Pentagon plans to assign as many as 10,000 US combat troops to Iraqi military units to serve as instructors and advisers in an effort to speed up and improve their training, said Lieutenant General Petraeus, the top US commander training Iraqi troops. Iraq plans to invest $3 billion in its oil industry this year to boost production by as much as 45% to 2.9 million barrels a day by Dec. 31, Al-Hayat reported. China may ease the yuan's fixed-exchange rate to the dollar by the end of June and manage the currency against a trade-weighted basket of currencies, Lehman Brothers' senior economist said.
Late Recommendations
Goldman Sachs: Reiterated Outperform on WAG, DO, RIG and CL. Reiterated Underperform on ATI, AVB and CVH.
Night Trading
Asian Indices are -.75% to unch. on average.
S&P 500 indicated -.05%.
NASDAQ 100 indicated -.03%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
CNBC Guest Schedule
Earnings of Note
Company/Estimate
AVP/.61
BJS/.55
BSX/.48
CME/1.69
CB/1.97
EMR/.69
GP/.49
GOOG/.77
HCA/.66
IR/1.22
LLL/1.01
MXIM/.41
MBI/1.34
MGG/.44
MNST/.19
OSI/.57
RCL/-.03
THQI/1.15
TYC/.42
YUM/.72
Splits
None of note.
Economic Data
-Construction Spending for December is estimated to rise .5% versus a .4% decline in November.
-ISM Manufacturing for January is estimated to fall to 57.0 versus a reading of 57.3 in December.
-ISM Prices Paid for January is estimated to fall to 71.5 versus a reading of 72.0 in December.
-Total Vehicle Sales for January are estimated to fall to 16.2M versus sales of 18.4M in December.
-Domestic Vehicle Sales for January are estimated to fall to 13.1M versus sales of 14.7M in December.
BOTTOM LINE: I expect US equities to open mixed-to-lower on worries over slowing growth. However, stocks may rise later in the day on falling energy prices, more optimism, short-covering, declining long-term interest rates and strong earnings reports. The Portfolio is 125% net long heading into tomorrow.
Monday, January 31, 2005
Monday Close
Indices
S&P 500 1,181.27 +.85%
Dow 10,489.94 +.60%
NASDAQ 2,062.41 +1.31%
Russell 2000 624.02 +1.80%
DJ Wilshire 5000 11,627.25 +.95%
S&P Barra Growth 567.53 +.66%
S&P Barra Value 609.50 +1.03%
Morgan Stanley Consumer 583.41 +.15%
Morgan Stanley Cyclical 753.89 +1.12%
Morgan Stanley Technology 473.66 +1.43%
Transports 3,598.48 +1.48%
Utilities 343.46 +1.15%
Put/Call .68 -11.69%
NYSE Arms .88 -31.78%
Volatility(VIX) 12.82 -3.17%
ISE Sentiment 155.00 -13.41%
US Dollar 83.57 +.11%
CRB 284.75 +.20%
Futures Spot Prices
Crude Oil 48.15 -.10%
Unleaded Gasoline 134.20 -.42%
Natural Gas 6.29 -.49%
Heating Oil 134.60 -.16%
Gold 424.20 +.02%
Base Metals 122.86 +.26%
Copper 143.00 -.35%
10-year US Treasury Yield 4.13% -.24%
Leading Sectors
Disk Drives +2.59%
I-Banks +2.39%
Airlines +2.27%
Lagging Sectors
Telecom -.11%
Papers -.12%
Drugs -.46%
After-hours Movers
ARBA -20.68% after missing 1Q estimates.
ISSX -5.06% after beating 4Q estimates and widening 1Q/05 guidance.
OS +6.79% after boosting 4Q estimates on higher plate demand and lower scrap prices.
SRX +4.41% after beating 2Q estimates, raising 3Q/05 guidance.
VLTR -8.12% on profit-taking after beating 4Q estimates.
RNOW -7.95% after meeting 4Q estimates, reiterating 1Q outlook and lowering 05 guidance.
ATRS -5.41% on profit-taking after beating 4Q estimates.
Detailed Market Summary
Market Wrap CNBC Video(bottom right)
Futures Recap
NASDAQ 100 After-hours Indicator
Real-time/After-hours Stock Quote
Afternoon Recommendations
-Goldman Sachs: Reiterated Outperform on LVS, XOM, RE, DIS and WYNN.
After-hours News
US stocks finished higher today on optimism over the Iraqi election, increased merger activity and short-covering. After the close, Duke Energy, the biggest US utility owner, may begin auctioning its wholesale electricity unit within six weeks, the Power Finance & Risk newsletter said. China will probably expand the band where it lets is currency trade against the dollar by 3% or more this year, the Nikkei Financial Daily reported. Time Warner’s HBO channel sold the rights to “The Sopranos” to A&E Television Networks for a record price of about $195 million, or $2.5 million per episode, Daily Variety reported. Huawei Technologies, China’s top phone-equipment maker, has considered selling its optical and access units to foreign buyers as part of a review, the Financial Times reported. The US dollar had its biggest monthly advance against the euro since May 2001, Bloomberg said. Brazil sold $1.25 billion of 20-year bonds and Mexico’s credit rating was lifted by Standard & Poor’s, underscoring increased confidence in the creditworthiness of Latin America’s two biggest economies, Bloomberg reported. The European Union may hold consultations with the US and Japan over its possible lifting of its arms embargo on China and any subsequent arms sales, the Financial Times reported.
S&P 500 1,181.27 +.85%
Dow 10,489.94 +.60%
NASDAQ 2,062.41 +1.31%
Russell 2000 624.02 +1.80%
DJ Wilshire 5000 11,627.25 +.95%
S&P Barra Growth 567.53 +.66%
S&P Barra Value 609.50 +1.03%
Morgan Stanley Consumer 583.41 +.15%
Morgan Stanley Cyclical 753.89 +1.12%
Morgan Stanley Technology 473.66 +1.43%
Transports 3,598.48 +1.48%
Utilities 343.46 +1.15%
Put/Call .68 -11.69%
NYSE Arms .88 -31.78%
Volatility(VIX) 12.82 -3.17%
ISE Sentiment 155.00 -13.41%
US Dollar 83.57 +.11%
CRB 284.75 +.20%
Futures Spot Prices
Crude Oil 48.15 -.10%
Unleaded Gasoline 134.20 -.42%
Natural Gas 6.29 -.49%
Heating Oil 134.60 -.16%
Gold 424.20 +.02%
Base Metals 122.86 +.26%
Copper 143.00 -.35%
10-year US Treasury Yield 4.13% -.24%
Leading Sectors
Disk Drives +2.59%
I-Banks +2.39%
Airlines +2.27%
Lagging Sectors
Telecom -.11%
Papers -.12%
Drugs -.46%
After-hours Movers
ARBA -20.68% after missing 1Q estimates.
ISSX -5.06% after beating 4Q estimates and widening 1Q/05 guidance.
OS +6.79% after boosting 4Q estimates on higher plate demand and lower scrap prices.
SRX +4.41% after beating 2Q estimates, raising 3Q/05 guidance.
VLTR -8.12% on profit-taking after beating 4Q estimates.
RNOW -7.95% after meeting 4Q estimates, reiterating 1Q outlook and lowering 05 guidance.
ATRS -5.41% on profit-taking after beating 4Q estimates.
Detailed Market Summary
Market Wrap CNBC Video(bottom right)
Futures Recap
NASDAQ 100 After-hours Indicator
Real-time/After-hours Stock Quote
Afternoon Recommendations
-Goldman Sachs: Reiterated Outperform on LVS, XOM, RE, DIS and WYNN.
After-hours News
US stocks finished higher today on optimism over the Iraqi election, increased merger activity and short-covering. After the close, Duke Energy, the biggest US utility owner, may begin auctioning its wholesale electricity unit within six weeks, the Power Finance & Risk newsletter said. China will probably expand the band where it lets is currency trade against the dollar by 3% or more this year, the Nikkei Financial Daily reported. Time Warner’s HBO channel sold the rights to “The Sopranos” to A&E Television Networks for a record price of about $195 million, or $2.5 million per episode, Daily Variety reported. Huawei Technologies, China’s top phone-equipment maker, has considered selling its optical and access units to foreign buyers as part of a review, the Financial Times reported. The US dollar had its biggest monthly advance against the euro since May 2001, Bloomberg said. Brazil sold $1.25 billion of 20-year bonds and Mexico’s credit rating was lifted by Standard & Poor’s, underscoring increased confidence in the creditworthiness of Latin America’s two biggest economies, Bloomberg reported. The European Union may hold consultations with the US and Japan over its possible lifting of its arms embargo on China and any subsequent arms sales, the Financial Times reported.
BOTTOM LINE: The Portfolio finished substantially higher today on gains in my internet, retail, computer and RFID longs. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. The tone of the market improved in the final hour as most sectors rose and the advance/decline line finished near its daily highs. Small-caps, financials and technology outperformed throughout the afternoon. Long-term interest rates fell again today and look to be headed still lower over the next few months. It was disappointing to see oil rise in the face of more stability in Iraq. As well, most measures of investor anxiety fell and volume was lighter. I expect US stocks to continue heading modestly higher in the near-term on increased optimism, more dovish Fed comments and strong earnings reports.
Mid-day Report
Indices
S&P 500 1,180.08 +.74%
Dow 10,491.12 +.61%
NASDAQ 2,060.40 +1.21%
Russell 2000 620.29 +1.19%
DJ Wilshire 5000 11,608.07 +.78%
S&P Barra Growth 567.23 +.61%
S&P Barra Value 608.67 +.89%
Morgan Stanley Consumer 583.08 +.10%
Morgan Stanley Cyclical 753.53 +1.07%
Morgan Stanley Technology 473.84 +1.46%
Transports 3,592.38 +1.31%
Utilities 342.30 +.81%
Put/Call .68 -11.69%
NYSE Arms .87 -32.56%
Volatility(VIX) 12.97 -2.11%
ISE Sentiment 185.00 +3.35%
US Dollar 83.49 +.01%
CRB 283.16 -.36%
Futures Spot Prices
Crude Oil 46.65 -.81%
Unleaded Gasoline 128.40 -1.85%
Natural Gas 6.19 -1.10%
Heating Oil 130.20 -2.69%
Gold 423.10 -1.17%
Base Metals 122.86 +.26%
Copper 143.30 -.38%
10-year US Treasury Yield 4.14% +.14%
Leading Sectors
Airlines +2.74%
Iron/Steel +2.66%
I-Banks +1.86%
Lagging Sectors
Telecom -.11%
Drugs -.67%
Boxmakers -.84%
Market Movers
WYE -7.3% after missing 4Q estimates, lowering 05 guidance and Prudential downgrade to Neutral.
AAPL +4.2% after unveiling faster, more affordable PowerBooks.
CREO +13.65% after Eastman Kodak(EK) agreed to buy it for $980 million in cash.
AVL +19.87% after saying GE gave it exclusive rights to distribute certain parts for GE’s CF6-50 and CF6-80A aircraft engines.
NOVN +17.21% after the FDA denied pending citizen petitions intended to prevent or delay the approval of certain generic versions of Johnson & Johnson’s Duragesic product and RBC upgrade to Outperform.
SEE +9.63% after substantially beating 4Q estimates and raising 05 guidance.
RYAAY +9.05% after raising 3Q estimates and 4Q outlook.
GRMN +7.53% after saying the original equipment parts and accessories provider for Chrysler, Dodge and Jeep will begin offering a new Garmin-built GPS automotive navigation system as a dealer-installed option.
MSTR +3.9% on Maxim upgrade to Buy.
NVEC +11.56% after confirming that Magnetoresistive Random Access Memory alpha samples recently announced by Cypress Semiconductor are covered by NVE’s technology agreement.
RSTG -13.68% on profit-taking.
SIR -33.88% after lowering 4Q estimates and saying it may restate results after an internal review found accounting errors.
HSP -7.4% after lowering 05 outlook.
Market Internals
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon
Economic Data
-Personal Income for December rose 3.7% versus estimates of a 3.4% increase and a .4% gain in November.
-Personal Spending for December rose .8% versus estimates of a .8% increase and a .4% rise in November.
-PCE Deflator(YoY) for December rose 2.4% versus estimates of a 2.4% increase and a 2.7% increase in November.
-PCE Core(YoY) for December rose 1.5% versus estimates of a 1.5% gain and a 1.6% rise in November.
-New Home Sales for December were 1098K versus estimates of 1200K and 1097K in November.
-Chicago Purchasing Manager for January rose to 62.4 versus estimates of 59.0 and a reading of 61.9 in December.
Recommendations
-Goldman Sachs: Reiterated Outperform on SBC, BBY and TSMC. Reiterated Underperform on T and MMC. Reiterated Underweight rating on Newspaper stocks.
-Citi SmithBarney: Upgraded CEG to Buy, target $55. Downgraded EOP to Sell, target $26. Reiterated Buy on NE, target $65. Upgraded SII to Buy, target $73. Reiterated Buy on HAL, target $50. Reiterated Sell on MYG, target $11. Reiterated Buy on WMT, target $65. Reiterated Buy on DNA, target $87.50. Reiterated Sell on NYB, target $17. Reiterated Sell on MU, target $11.50. Reiterated Sell on SIVB, target $34. Reiterated Buy on STZ, target $53.
-UBS: Raised MATR to Buy, target $55.
-Banc of America: Rated ISTA Buy, target $13.
-Morgan Stanley: Cut HAL and BJS to Underweight.
-CSFB: Raised JBL to Outperform, target $28.
-CIBC: Raised RTEC to Sector Outperform, target $20.
-Legg Mason: Raised CCE to Buy, target $26. Raised COTT to Buy, target $30. Raised PBG to Buy, target $32.
-Prudential: Cut NUE to Underweight, target $43. Cut FISV to Underweight, target $35. Cut T to Underweight, target $16.
-Merrill Lynch: Raised AWA to Buy, target $7. Raised CAL to Buy, target $14.
-Bear Stearns: Rated NCTY Outperform, target $32.
-Raymond James: Raised RSAS to Strong Buy, target $22. Cut SBC to Underperform. Raised VRSN to Buy, target $35.
Mid-day News
US stocks are higher mid-day on optimism over the outcome of the Iraqi elections, merger activity and lower energy prices. Yahoo! plans to increase its financial data offerings online, a move that would allow the company to add to its popular finance site and become a data provider for other sites, the Wall Street Journal reported. MetLife is close to buying Citigroup’s Travelers Life & Annuity unit for about $12 billion, the Wall Street Journal reported. The SEC is considering rules that would give investors a better idea of how much their mutual funds spend to buy and sell securities, the Wall Street Journal reported. Time Warner’s cable unit plans to provide America Online accounts to high-speed Internet customers at no extra cost, the Wall Street Journal reported. Vivendi Universal SA has filed suit against EchoStar Communications to force the No. 2 US satellite-television service to carry a new 24-hour music channel, the NY Post reported. Coach Inc. plans to add 100 new stores over the next four to five years, bringing the company’s total outlets to almost 300, the NY Daily News reported. International home-video sales are the fastest-growing part of the film industry, although the Motion Picture Association of America and most studios won’t give specific figures, the NY Times reported. An internal UN investigation and a US Justice Department probe over corruption in the UN/Iraq Oil-for-food Program have clashed over access to documents and witnesses, the NY Times reported. American Indian tribes in Southern California are trying to transform their desert casinos into resorts to compete with Las Vegas, the LA Times reported. SBC Communications agreed to buy AT&T for about $16 billion in stock and cash, marking the end of the 130-year-old company that brought phones into American homes, Bloomberg reported. Lee Enterprises, which operates 44 daily newspapers in 19 states, agreed to buy Pulitzer, owner of 14 daily newspapers, for about $1.41 billion in cash, Bloomberg said. US personal spending accelerated in December and incomes jumped the most on record as Microsoft made a one-time $32.6 billion dividend payout, Bloomberg reported. French President Chirac offered US President Bush help with the training of the Iraqi police force following yesterday’s election, Bloomberg said. Crude oil fell to its lowest in almost three weeks after Iraq’s election yesterday passed without attacks against pipelines and OPEC agreed to leave production quotas unchanged, Bloomberg reported. Marsh & McLennan agreed to pay $850 million to settle NY Attorney General Spitzer’s accusations that it rigged bids and took kickbacks from insurers, Bloomberg said. US sales of new homes rose .1% last month to 1.098 million houses at an annual rate, capping the fourth consecutive all-time record year, Bloomberg reported. US fourth-quarter GDP figures were likely adversely affected as much as .5 percentage points by an error in Canada’s trade report for November, a Commerce Department official said. United Airlines pilots voted to ratify a new contract that will cut pilot pay be 12% and help save the company $180 million annually as part of the airline’s plan to stem losses and exit bankruptcy, Bloomberg said. Iraqi interim Prime Minister Allawi said today the country’s new national assembly should work with Sunni Arabs to create a government and constitution, Bloomberg reported.
S&P 500 1,180.08 +.74%
Dow 10,491.12 +.61%
NASDAQ 2,060.40 +1.21%
Russell 2000 620.29 +1.19%
DJ Wilshire 5000 11,608.07 +.78%
S&P Barra Growth 567.23 +.61%
S&P Barra Value 608.67 +.89%
Morgan Stanley Consumer 583.08 +.10%
Morgan Stanley Cyclical 753.53 +1.07%
Morgan Stanley Technology 473.84 +1.46%
Transports 3,592.38 +1.31%
Utilities 342.30 +.81%
Put/Call .68 -11.69%
NYSE Arms .87 -32.56%
Volatility(VIX) 12.97 -2.11%
ISE Sentiment 185.00 +3.35%
US Dollar 83.49 +.01%
CRB 283.16 -.36%
Futures Spot Prices
Crude Oil 46.65 -.81%
Unleaded Gasoline 128.40 -1.85%
Natural Gas 6.19 -1.10%
Heating Oil 130.20 -2.69%
Gold 423.10 -1.17%
Base Metals 122.86 +.26%
Copper 143.30 -.38%
10-year US Treasury Yield 4.14% +.14%
Leading Sectors
Airlines +2.74%
Iron/Steel +2.66%
I-Banks +1.86%
Lagging Sectors
Telecom -.11%
Drugs -.67%
Boxmakers -.84%
Market Movers
WYE -7.3% after missing 4Q estimates, lowering 05 guidance and Prudential downgrade to Neutral.
AAPL +4.2% after unveiling faster, more affordable PowerBooks.
CREO +13.65% after Eastman Kodak(EK) agreed to buy it for $980 million in cash.
AVL +19.87% after saying GE gave it exclusive rights to distribute certain parts for GE’s CF6-50 and CF6-80A aircraft engines.
NOVN +17.21% after the FDA denied pending citizen petitions intended to prevent or delay the approval of certain generic versions of Johnson & Johnson’s Duragesic product and RBC upgrade to Outperform.
SEE +9.63% after substantially beating 4Q estimates and raising 05 guidance.
RYAAY +9.05% after raising 3Q estimates and 4Q outlook.
GRMN +7.53% after saying the original equipment parts and accessories provider for Chrysler, Dodge and Jeep will begin offering a new Garmin-built GPS automotive navigation system as a dealer-installed option.
MSTR +3.9% on Maxim upgrade to Buy.
NVEC +11.56% after confirming that Magnetoresistive Random Access Memory alpha samples recently announced by Cypress Semiconductor are covered by NVE’s technology agreement.
RSTG -13.68% on profit-taking.
SIR -33.88% after lowering 4Q estimates and saying it may restate results after an internal review found accounting errors.
HSP -7.4% after lowering 05 outlook.
Market Internals
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon
Economic Data
-Personal Income for December rose 3.7% versus estimates of a 3.4% increase and a .4% gain in November.
-Personal Spending for December rose .8% versus estimates of a .8% increase and a .4% rise in November.
-PCE Deflator(YoY) for December rose 2.4% versus estimates of a 2.4% increase and a 2.7% increase in November.
-PCE Core(YoY) for December rose 1.5% versus estimates of a 1.5% gain and a 1.6% rise in November.
-New Home Sales for December were 1098K versus estimates of 1200K and 1097K in November.
-Chicago Purchasing Manager for January rose to 62.4 versus estimates of 59.0 and a reading of 61.9 in December.
Recommendations
-Goldman Sachs: Reiterated Outperform on SBC, BBY and TSMC. Reiterated Underperform on T and MMC. Reiterated Underweight rating on Newspaper stocks.
-Citi SmithBarney: Upgraded CEG to Buy, target $55. Downgraded EOP to Sell, target $26. Reiterated Buy on NE, target $65. Upgraded SII to Buy, target $73. Reiterated Buy on HAL, target $50. Reiterated Sell on MYG, target $11. Reiterated Buy on WMT, target $65. Reiterated Buy on DNA, target $87.50. Reiterated Sell on NYB, target $17. Reiterated Sell on MU, target $11.50. Reiterated Sell on SIVB, target $34. Reiterated Buy on STZ, target $53.
-UBS: Raised MATR to Buy, target $55.
-Banc of America: Rated ISTA Buy, target $13.
-Morgan Stanley: Cut HAL and BJS to Underweight.
-CSFB: Raised JBL to Outperform, target $28.
-CIBC: Raised RTEC to Sector Outperform, target $20.
-Legg Mason: Raised CCE to Buy, target $26. Raised COTT to Buy, target $30. Raised PBG to Buy, target $32.
-Prudential: Cut NUE to Underweight, target $43. Cut FISV to Underweight, target $35. Cut T to Underweight, target $16.
-Merrill Lynch: Raised AWA to Buy, target $7. Raised CAL to Buy, target $14.
-Bear Stearns: Rated NCTY Outperform, target $32.
-Raymond James: Raised RSAS to Strong Buy, target $22. Cut SBC to Underperform. Raised VRSN to Buy, target $35.
Mid-day News
US stocks are higher mid-day on optimism over the outcome of the Iraqi elections, merger activity and lower energy prices. Yahoo! plans to increase its financial data offerings online, a move that would allow the company to add to its popular finance site and become a data provider for other sites, the Wall Street Journal reported. MetLife is close to buying Citigroup’s Travelers Life & Annuity unit for about $12 billion, the Wall Street Journal reported. The SEC is considering rules that would give investors a better idea of how much their mutual funds spend to buy and sell securities, the Wall Street Journal reported. Time Warner’s cable unit plans to provide America Online accounts to high-speed Internet customers at no extra cost, the Wall Street Journal reported. Vivendi Universal SA has filed suit against EchoStar Communications to force the No. 2 US satellite-television service to carry a new 24-hour music channel, the NY Post reported. Coach Inc. plans to add 100 new stores over the next four to five years, bringing the company’s total outlets to almost 300, the NY Daily News reported. International home-video sales are the fastest-growing part of the film industry, although the Motion Picture Association of America and most studios won’t give specific figures, the NY Times reported. An internal UN investigation and a US Justice Department probe over corruption in the UN/Iraq Oil-for-food Program have clashed over access to documents and witnesses, the NY Times reported. American Indian tribes in Southern California are trying to transform their desert casinos into resorts to compete with Las Vegas, the LA Times reported. SBC Communications agreed to buy AT&T for about $16 billion in stock and cash, marking the end of the 130-year-old company that brought phones into American homes, Bloomberg reported. Lee Enterprises, which operates 44 daily newspapers in 19 states, agreed to buy Pulitzer, owner of 14 daily newspapers, for about $1.41 billion in cash, Bloomberg said. US personal spending accelerated in December and incomes jumped the most on record as Microsoft made a one-time $32.6 billion dividend payout, Bloomberg reported. French President Chirac offered US President Bush help with the training of the Iraqi police force following yesterday’s election, Bloomberg said. Crude oil fell to its lowest in almost three weeks after Iraq’s election yesterday passed without attacks against pipelines and OPEC agreed to leave production quotas unchanged, Bloomberg reported. Marsh & McLennan agreed to pay $850 million to settle NY Attorney General Spitzer’s accusations that it rigged bids and took kickbacks from insurers, Bloomberg said. US sales of new homes rose .1% last month to 1.098 million houses at an annual rate, capping the fourth consecutive all-time record year, Bloomberg reported. US fourth-quarter GDP figures were likely adversely affected as much as .5 percentage points by an error in Canada’s trade report for November, a Commerce Department official said. United Airlines pilots voted to ratify a new contract that will cut pilot pay be 12% and help save the company $180 million annually as part of the airline’s plan to stem losses and exit bankruptcy, Bloomberg said. Iraqi interim Prime Minister Allawi said today the country’s new national assembly should work with Sunni Arabs to create a government and constitution, Bloomberg reported.
BOTTOM LINE: The Portfolio is substantially higher mid-day on gains in my retail, internet, networking and computer longs. I added a few new longs this morning, thus bringing the Portfolio to 125% net long. One of my new longs is AUO and I am using a $14.50 stop-loss on this position. The tone of the market is pretty good today as most sectors are higher and the advance/decline line is very good. Small-caps and technology shares are outperforming. On the negative side, volume is lighter than I would like to see on a rally and oil isn’t declining as much as I anticipated. As well, measures of investor anxiety are falling. I expect US stocks to rise modestly into the close on more optimism, short-covering and bargain-hunting.
Subscribe to:
Posts (Atom)