Economic Releases

- Initial Jobless Claims fell to 334K versus estimates of 330K and 353K the prior week.
- Continuing Claims rose to 2688K versus estimates of 2625K and 2598K prior.
- Wholesale Inventories for February rose .6% versus estimates of a .7% increase and a 1.0% increase in January.

Morning Buy/Sell Recommendations

Goldman Sachs:
- Reiterated Outperform on GE, YUM and FRNT.

Smith Barney:
- Cut GM to Sell, target $24.
- Reiterated Buy on HAL, target $56.
- Reiterated Buy on CMS, target $14.25
- Reiterated Buy on AA, target $42.

Morgan Stanley:
- Raised PRE to Overweight, target $72.
- Cut CB to Underweight.

Lehman Brothers:
- Upgraded BLS to Overweight, target $32.

Banc of America:
- Raised CPV to Buy, target $26.
- Reiterated Sell on FRX, target $37.

CIBC:
- Reiterated Sector Outperform on FVRL, target $9.
- Reiterated Sector Outperform on AEOS, target $36.

Bear Stearns:
- Rated PRSP Outperform, target $30.
- Rated FFIN Underperform.
- Rated SBIB Underperform.
- Rated TCBI Outperform, target $25.
- Reiterated Outperform on BBBY, target $46.

CSFB:
- Rated HXL Outperform, target $18.
- Raised BJS to Outperform, target $56.

Piper Jaffray:
- Raised EMBT to Outperform.

Deutsche Securities:
- Reiterated Buy on PFE, target $34.
- Reiterated Sell on SHOP, target $15.

UBS:
- Rated NUCO Reduce, target $22.

Thursday Watch

Late-Night Headlines
Bloomberg:
- Democratic Senators Patty Murray and Hillary Clinton said they would block confirmation of Lester Crawford as FDA chief because of delays in approving over-the-counter sales of Barr Pharmaceuticals' Plan B contraceptive.
- The NBA signed a multiyear marketing and content supply agreement with China Mobile Communications, which owns the world's largest mobile phone operator by subscribers, extending the league's reach in the most populous nation.

Wall Street Journal:
- General Motors is pressuring its suppliers in the US to lower prices so they are more in line with auto-parts markers outside the US.

Washington Post:
- The US military has accelerated the hand-off of counterinsurgency operations to Iraqi security forces since the country's Jan. 30 elections at a much faster pace than previously acknowledged.

Legal Week:
- The 50 largest American law firms had 12.3% profit growth in 2004 on $33 billion in fees.

Commercial Times:
- Taiwan's five flat-panel display makers lifted output by a combined 22% to 7 million units in March from the previous month.

Xinhua News Agency:
- China's 39 major passenger car assemblers' sales fell 8% in the first quarter from a year earlier.

Financial Times:
- Advertisers will come to rely more on mobile telephones, laptops and other wireless communications to reach customers as technology now allows viewers to increasingly avoid commercials on television.

Chinese-language Financial News:
- Bank of China, the nation's second-biggest lender, said it's in talks with Bank of America and other lenders on the sale of a stake in itself as a prelude to going public.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on IBM, DELL, KRB and BBBY.

Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated -.03%.
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
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
ACN/.32
STZ/.58
KKD/-.03
PIR/.26
VIP/.67
UTIW/.51

Splits
None of note

Economic Releases
8:30 EST:
- Initial Jobless Claims for last week are estimated to fall to 330K versus 350K the prior week.
- Continuing Claims are estimated to rise to 2625K versus 2608K prior.

10:00 EST:
- Wholesale Inventories for February are estimated to rise .7% versus a 1.0% increase in January.

3:00 EST:
- Consumer Credit for February is estimated to rise to $11.5B versus $7.5B in January.

BOTTOM LINE: Asian indices are mostly higher, led by a bounce in Chinese shares. The Chinese central bank said it will allow three commercial lenders to set up fund management units, boosting optimism capital will flow into stocks. I expect US equities to open mixed on earnings reports, stubbornly high energy prices and lower long-term interest rates. The Portfolio is Market Neutral heading into tomorrow.

Wednesday Close

Indices
S&P 500 1,184.07 +.23%
DJIA 10,486.02 +.26%
NASDAQ 1,999.14 -.01%
Russell 2000 616.21 +.28%
DJ Wilshire 5000 11,670.94 +.23%
S&P Barra Growth 570.81 +.06%
S&P Barra Value 608.89 +.39%
Morgan Stanley Consumer 581.78 +.10%
Morgan Stanley Cyclical 745.74 +.25%
Morgan Stanley Technology 453.70 -.06%
Transports 3,713.66 -.20%
Utilities 362.35 -.35%
Put/Call .98 +13.95%
NYSE Arms 1.15%
Volatility(VIX) 13.15 -3.87%
ISE Sentiment 148.00 -20.0%
US Dollar 84.68 +.02%
CRB 308.07 -.23%

Futures Spot Prices
Crude Oil 55.91 +.11%
Unleaded Gasoline 165.81 -.07%
Natural Gas 7.53 -.37%
Heating Oil 158.58 +.11%
Gold 428.90 -.07%
Base Metals 129.08 +1.36%
Copper 150.50 -.23%
10-year US Treasury Yield 4.42% -.90%

Leading Sectors
Oil Service +1.99%
Energy +1.75%
Biotech +1.44%

Lagging Sectors
Iron/Steel -.71%
Internet -.87%
Homebuilders -1.06%

After-hours Movers
MW +3.5% on strong March same-store-sales.
BBBY +5.5% after beating 4Q estimates.

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

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on AIG and DELL.

Afternoon/Evening Headlines
Bloomberg:
- Goldman Sachs CEO Paulson said his analysts are “totally independent” from energy traders, responding to criticism about a Goldman oil report on the last day of the first quarter that helped send prices higher by suggesting crude may rise as high as $105/bbl.
- Shares of Archer Daniels Midland fell more than 12%, the biggest decline since 1987, on concern that a drop in the price of ethanol will erode the company’s earnings.
- Investors would be able to obtain the disciplinary history of stockbrokers on the Internet under legislation approved today by the US House of Representatives.
- Dell repeated its first-quarter profit and sales forecast and said it plans to spend $2 billion on a stock buyback this quarter.
- Bed Bath & Beyond, the largest US home-furnishing retailer, said fourth-quarter net income rose to $181 million, helped by new stores.
- Russia, which defaulted on $40 billion of domestic bonds in 1998, said it may pay back its entire $110 billion of foreign debt as soon as 2007 as record oil prices swell government revenue.

New York Post:
- New York City police issued 51% more tickets to drivers for talking on hand-held mobile phones in the first four months of fiscal 2005 than a year earlier.

BOTTOM LINE: US stocks finished most higher today as optimism over lower long-term interest rates more than offset worries over slowing growth. The Portfolio finished higher on gains in my Chinese ADR shorts, Computer longs, Retail longs and Energy longs. I took profits in a few trading longs in the afternoon and added a few new shorts, thus leaving the Portfolio market neutral. The tone of the market weakened into the afternoon as the advance/decline fell to its lows of the day, sector performance was mixed and volume was modest. Energy-related stocks outperformed into the afternoon, while Homebuilding shares underperformed and measures of investor anxiety were lower. Overall, today’s market action was slightly negative, considering the drop in long-term interest rates, stabilizing energy prices and the market’s oversold state. I plan to remain relatively conservative until the major indices break from the recent trading range. I suspect this will come during earnings season.

Mid-day Scoreboard

Indices
S&P 500 1,186.01 +.39%
DJIA 10,498.28 +.38%
NASDAQ 2,003.97 +.25%
Russell 2000 617.62 +.51%
DJ Wilshire 5000 11,683.94 +.33%
S&P Barra Growth 571.54 +.19%
S&P Barra Value 609.34 +.46%
Morgan Stanley Consumer 582.03 +.14%
Morgan Stanley Cyclical 746.73 +.39%
Morgan Stanley Technology 455.18 +.26%
Transports 3,721.89 +.02%
Utilities 362.69 -.25%
Put/Call .85 -1.16%
NYSE Arms .89 +2.63%
Volatility(VIX) 13.18 -3.58%
ISE Sentiment 134.00 -27.57%
US Dollar 84.68 +.02%
CRB 308.56 -.07%

Futures Spot Prices
Crude Oil 56.20 +.29%
Unleaded Gasoline 167.40 -.83%
Natural Gas 7.64 +.96%
Heating Oil 159.80 -1.42%
Gold 429.20 +.61%
Base Metals 129.08 +1.36%
Copper 150.80 +1.58%
10-year US Treasury Yield 4.42% -.95%

Leading Sectors
Biotech +1.71%
Oil Service +1.74%
Energy +1.62%

Lagging Sectors
Internet -.32%
Telecom -.51%
Homebuilders -.62%

BOTTOM LINE: US stocks are modestly higher mid-day on optimism over falling long-term interest rates. The Portfolio is higher on gains in my Chinese ADR shorts, Retail longs, Energy longs and Computer Longs. I exited a few trading longs into this morning’s strength, thus leaving the Portfolio’s market exposure at 25% net long. The tone of the market is modestly positive as the advance/decline line is higher, sector performance is mostly positive and volume is modest. Consumer stocks are underperforming, while Energy-related shares are outperforming and measures of investor anxiety are mixed. Today’s overall market action is mixed, considering another decline in long-term interest rates, the market’s oversold state and the stabilization of energy prices. I continue to believe the lows for the year will be made over the coming weeks, making for a much more positive second half in equities. I expect US stocks to trade mixed into the close as optimism over falling long-term interest rates is offset by concerns over slowing global growth and earnings.