IndicesS&P 500 1,222.83 -.20%
Dow 10,942.41 +.05%
NASDAQ 2,083.42 -.32%
Russell 2000 640.81 -.47%
DJ Wilshire 5000 12,043.08 -.24%
S&P Barra Growth 588.30 -.14%
S&P Barra Value 630.06 -.26%
Morgan Stanley Consumer 591.23 -.22%
Morgan Stanley Cyclical 782.60 -.05%
Morgan Stanley Technology 478.71 -.50%
Transports 3,879.87 +.10%
Utilities 361.44 -.50%
Put/Call .84 +10.53%
NYSE Arms 1.09 +41.56%
Volatility(VIX) 12.33 +.57%
ISE Sentiment 196.00 +15.98%
US Dollar 82.01 -.94%
CRB 312.10 +.88%
Futures Spot Prices Crude Oil 54.75 +1.60%
Unleaded Gasoline 153.50 +1.97%
Natural Gas 6.84 +1.88%
Heating Oil 152.20 +2.42%
Gold 439.80 +.92%
Base Metals 131.25 +.98%
Copper 149.90 +.17%
10-year US Treasury Yield 4.37% +1.57%
Leading Sectors Defense +.46%
Energy +.35%
Insurance +.20%
Lagging Sectors Gaming -1.41%
Restaurants -1.47%
Iron/Steel -2.24%
Market MoversAAPL -4.33% on competitive worries.
X -3.5% on worries over slowing Chinese demand.
ADLR +21.21% after it and partner GalxoSmithKline said a study showed their drug Entereg helped patients with pain from bowel dysfunction.
NVDA -4.38% on profit-taking.
GRU +27.82% after announcing that it has signed an agreement with Google to include Google’s contextual AdSense advertising on its information pages, as well as the integration of Google search into its Answers.com product.
CKP +16.16% after meeting 4Q estimates and raising 05 outlook.
SNE +4.0% on optimism over new CEO.
EXM -15.52% after announcing 5.9M share secondary.
PRFT -11.86% after announcing 5.03M share secondary.
WRES -12.87% after 4Q estimates, giving disappointing outlook and KeyBanc downgrade to Hold.
Mid-day OverviewMarket InternalsI-Watch Sector OverviewNYSE Unusual VolumeNASDAQ Unusual VolumeNASDAQ 100 HeatmapDJIA Quick ChartsChart ToppersHot SpotsOption DragonReal-time Intraday Chart/QuoteEconomic Data None of note.
Recommendations- Goldman Sachs: Reiterated Outperform on PFE, FSH, KR, AIG, DKS, LVS and CZN. Reiterated Underperform on THC and DJ. Reaffirmed Attractive View of Hospital sector.
- Smith Barney: Reiterated Buy on COO, target $93. Reiterated Sell on PP, target $33. Reiterated Buy on TXN, target $32. Expects to see lower dayrates for oil tanker companies in the second quarter and believes earnings for most of these companies will trail last year’s levels.
- Banc of America: Upgraded SMTC to Buy, target $23.
- JP Morgan: Raised PNCL to Overweight.
- UBS: Raised KAR to Buy, target $30. Raised YHOO to Buy, target $41.
- CIBC: Raised GSIC to Sector Outperform, target $18.
- Morgan Stanley: Raised COF to Overweight, target $79. Raised CDN to Overweight, target $18.
- Thomas Weisel: Raised APSG to Outperform.
Mid-day News US stocks are mostly lower mid-day on worries over rising energy prices and long-term interest rates. Devon Energy may halt its operations in Syria amid mounting US political pressure on Syrian leaders, Asharq al-Awsat reported. OPEC is unlikely to change output when it meets in Iran next week, Dow Jones reported. Limited Brands, which owns Victoria’s Secret and Bath & Body Works chains, is focusing on skin-care products and cosmetics to avoid fluctuations in apparel prices and slow growth, the Wall Street Journal reported. Boeing expects its satellite division to make a profit in 2005 after years of losses, the Wall Street Journal reported. The US Financial Accounting Standards Board is proposing to force mergers-and-acquisitions fees to be booked as expenses, which would affect the reporting of profit for companies making acquisitions, the Wall Street Journal reported. US gains in energy efficiency and manufacturing rationalization have mitigated the negative impact of rising oil prices on economic growth, the Wall Street Journal reported. Interpublic Group won the $300 million global advertising account for Intel Corp., beating WPP Group Plc in a competitive pitch, Adweek said. Tata Steel, India’s second-biggest steelmaker, may raise prices of its products in April, the Press Trust of India reported. The US economy is showing good prospects for growth, with increased business investment and signs of relatively tame inflation, although some analysts are concerned about the global economy, the NY Times reported. Warner Music Group, the world’s fourth-largest record company, plans an IPO in the next 30-60 days that may raise $750 million to $1 billion, the NY Post reported. Boeing learned that former CEO Stonecipher was having an affair with an employee from an anonymous tip accompanying an excerpt of a graphic e-mail he wrote, the Wall Street Journal reported. Gtech Holdings filed a libel lawsuit over a campaign by Scientific Games to derail its bid for a contract in Mexico, the Wall Street Journal reported. Blockbuster Inc. is discussing a settlement to end investigation in at least 37 states over its “End of Late Fees” tv ad campaign, Reuters reported. Democratic lawmakers have been told by advisers that their united opposition to some of President Bush’s Social Security proposals haven’t paid off politically because voters don’t think Democrats have an alternative, the Washington Post reported. Imad Moustapha, Syria’s ambassador to the US, told MSNBC today “the sooner, the better” for the country’s withdrawal of its forces from neighboring Lebanon. Robert Friedman, the former CIO of Michael Price’s mutual fund company, is starting his first global stock hedge fund, Bloomberg reported. Italian Foreign Minister Fini said the fatal shooting by US soldier of an Italian intelligence officer in Baghdad was an accident, disputing charges by an anti-war journalist injured in the attack, Bloomberg said. The cleric-backed coalition that won the most seats in Iraq’s Jan. 30 election may join forces with the second-placed Kurdish Alliance, Ahmad Chalabi said. ValueAct Capital Partners LP, one of Martha Stewart Living Omnimedia’s largest shareholders, cut its stake to less than 1% from 6.1% in December, Bloomberg reported. Qualcomm named Paul Jacobs to succeed his father Irwin as CEO, Bloomberg said. President Bush said Syria must withdraw its troops and intelligence forces from Lebanon before that nation’s elections in May, Bloomberg reported. France’s main unions will stage a one-day national strike on March 10, even as unemployment in the country recently rose to 10%, to protest government plans to loosen the mandatory 35-hour workweek and to demand higher pay, Bloomberg said. Former President Clinton will have surgery on March 10 in NY to remove fluid and scar tissue in his chest cavity from open-heart surgery last September that is causing discomfort, Bloomberg reported. Crude oil is rising to within $1 of an all-time high in NY on speculation that OPEC will do little to rein in prices at a meeting next week, Bloomberg reported. The US dollar is falling to a two-month low against the euro after European Central Bank policy maker Wellink suggested to the Financial Times Deutschland the bank may raise its benchmark interest rate, Bloomberg said.
BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my Chinese ADR, Alternative Energy and Biotech longs are offsetting losses in my Gaming, Homebuilding and Semi longs. I took profits in a few longs from various sectors this morning and added a few new tech longs, thus leaving the Portfolio’s market exposure at 125% net long. One of my new longs is AAPL and I am using a $38 stop-loss on this position. The tone of the market is modestly negative as the advance/decline line is lower, sector performance is mostly negative and volume is light. Measures of investor anxiety are mostly higher. Today’s overall market action appears to be a further healthy consolidation on light volume after recent gains. The mildly negative reaction by the semis to TXN’s mid-quarter update is a positive. NSM and INTC should give a more positive assessment of business conditions later in the week. While I believe steel stocks will see a substantial correction later in the year, the latest pullback is likely a buying opportunity near-term. I expect US stocks to trade mixed from current levels into the close as optimism over US economic growth, short covering and bargain hunting offset worries over higher energy prices and interest rates.
