S&P 500 1,151.03 +.17%
NASDAQ 2,033.36 -.31%
Leading Sectors
Insurance +.96%
Computer Service +.86%
Restaurants +.75%
Lagging Sectors
Telecom -.79%
Iron/Steel -.91%
Semis -1.90%
Other
Crude Oil 35.72 -.22%
Natural Gas 5.375 unch.
Gold 394.20 +.38%
Base Metals 110.55 -3.32%
U.S. Dollar 89.05 +.17%
10-Yr. Long-Bond Yield 4.05% +.33%
VIX 14.54 -2.09%
Put/Call .72 +2.86%
NYSE Arms .98 -27.94%
After-hours Movers
AFCI +4.21% after CNBC guest recommendation.
EVOL +15.25% more, after a 35% rise today on volume, no news.
SCOX +6.13% after suing Linux users AZ and DCS.
IMCL +3.81% on report that Carl Icahn boosted stake to 6.9%.
Recommendations
Cramer, of TheStreet.com, says he sees massive put buying on the semis and QQQs that should result in a tech bounce by Fri. TheStreet.com is also recommending covering shorts in N and AAII. TheStreet.com is also saying that ChevronTexaco's recent announcement that it is hiring another 5 rigs for development drilling in the waters off the shore of Angola is positive for GSF, ESV, NE, RDC, HAL, SLB, BHI and TDW. Goldman Sachs is reiterating its Outperform rating and $52 target on BSX. GS says DIS is seeing accelerating momentum at their Theme Parks. GS sees consumer credit outlook as benign and says bankruptcies are down 5.4% from 03 in January. Finally, Goldman reiterated its Outperform rating on BAX and $38 target.
After-hours News
U.S. stocks rebounded in the afternoon as interest rate and currency fears subsided, leaving the major averages mixed on the day. After the close, Smith Travel is reporting that business travel trends are accelerating. Former Disney director Stanley Gold told CNBC that its weak performance makes it vulnerable to the Comcast takeover. He stated that "The best thing to head off a Comcast offer is a new management and a high stock price." Some of Delphi Corp.'s suppliers have said they will break their contracts with the auto-parts maker if they don't get compensated for higher steel costs which could lead to temporary plant shutdowns, Dow Jones reported. Roger Noriega, the U.S. diplomat overseeing Haiti policy, rejected accusations of an American coup in the Caribbean country as he told Congress that former President Jean-Bertrand Aristide had undermined democracy and squandered economic aid.
BOTTOM LINE: The main weakness today was in tech and base metal stocks. Semis are selling off in anticipation of a bad call from INTC. The put buying in the SOX and the call itself should spark a rally in this sector. Base metal stocks are correcting from overbought levels and will likely continue to fall in the short-term. The Biotech index is very close to a technical breakout and my short-term indicators are all giving buy signals, thus I will look to add exposure in this sector on the technical breakout. The Portfolio is currently 50% net long, as I did not add any new positions in the afternoon.
Wednesday, March 03, 2004
Mid-day Update
S&P 500 1,148.18 -.08%
NASDAQ 2,028.72 -.53%
Leading Sectors
Computer Services +.57%
HMO's +.56%
Banks +.43%
Lagging Sectors
Homebuilders -1.18%
Iron/Steel -1.36%
Semis -1.93%
Other
Crude Oil 36.04 -1.69%
Natural Gas 5.43 -2.43%
Gold 391.60 -.56%
Base Metals 110.55 -3.32%
U.S. Dollar 89.43 +.58%
10-Yr. Long-Bond Yield 4.07% +.86%
VIX 14.93 +.47%
Put/Call .82 +17.14%
NYSE Arms 1.07 -21.32%
Market Movers
MAMA +37% on continued strength from 4Q report.
LGND +11.5% after significantly beating 4Q estimates and raising guidance.
COO +10.2% after beating 1Q estimates and raising guidance.
SEAC -19.9% after beating 4Q estimates and having lawsuit against CCUR thrown out.
BVF -9.3% after missing 4Q estimates and lowering guidance.
AZ -4.5% after 2Q beat estimates by cutting costs and raising prices, thus hurting sales.
Economic Data
ISM Non-Manufacturing came in at 60.8 in February vs. 63.5 forecast.
Recommendations
PAYX price target raised to $41 and rating raised to Outperform at SoundView. IGT rated new Buy at Bank of America, price target set at $50. BOFA also rated AGI Buy and set price target of $33. ESRX price target raised by CSFB to $86. Goldman Sachs recommends buying Yen against US dollar. GS says they would buy IBM, EMC and DELL on weakness related to STX report. GS says Tuesday's court decision reversing the FCC's UNE-P, handing a near-term victory to the RBOCs, is a non-event for communications equipment vendors and continues to favor JNPR, NT, SONS and CSCO. GS is expecting lumber prices to average 18% higher in 04 vs. 03 on continued strength in US housing market. Citi Smith Barney says XLNX experiencing packaging-related delivery constraints in March Q limiting upside, but making June Q better. Citi likes SAP and says its demand is improving with pipeline strong, win rates increasing and deal sizes stabilizing. TheSteet.com's Cramer says commodity rally may be in its very early stages still as demand will outstrip supply for years. Jason Goepfert of Sentimetrader.com says February market action bodes will for next few months, reported TheStreet.com
Mid-day News
U.S. stocks are falling mid-day as traders continue to speculate Friday's employment report will result in an immediate Fed rate hike. The US dollar and interest rates continued their recent rebound. Saudi Arabia will reduce the price of its shipments to the U.S. in April, compared with a benchmark grade, Reuters reported. Deutsche Telekom and France Telecom, Europe's two largest phone companies, had their credit raised by Moody's after they cut debt. Copper futures had their biggest decline in more than 4 years on concern that its price has risen so much that it will cut demand in the future. The ISM Non-Manufacturing Index declined to 60.8 in February from January's all-time high reading of 65.7. The employment component of the index fell slightly to 52.7 from January's 53.4, the highest reading since 1987. The Business Roundtable said that 33% of CEO's plan to increase hiring in the next 2 quarters, up from 25% last quarter. Railroads have hauled 5.5% more truck trailers and multi-use containers so far in 04 than 03, according to the Amer. Assoc. of Railroads. Arrow Electronics, the world's largest distributor of computer parts, is seeing a lot of demand from small and mid-sized businesses according to the CEO.
BOTTOM LINE: The U.S. equity markets seem to be overreacting to the rally in the U.S. dollar and interest rates. The dollar is up 5% after a decline of 30% from its all-time high. It is a positive that it is not falling at such a rapid rate. I do not believe, at this time, that we have begun a new bull market in the U.S. currency. Interest rates have barely moved up from their recent lows and yields are still down 11% since Sept. 03. Interest rates normally rise substantially before a series of Fed moves. That is not the case at this time. The Portfolio is down today as it took a hit on a recent buy of SEAC. I exited this position after it penetrated my stop-loss, notwithstanding my opinion that the fall is an overreaction to the court loss. I also trimmed some other longs, leaving the Portfolio with 50% net long market exposure. The market appears to be making a short-term bottom and I will look to increase exposure at the appropriate time.
NASDAQ 2,028.72 -.53%
Leading Sectors
Computer Services +.57%
HMO's +.56%
Banks +.43%
Lagging Sectors
Homebuilders -1.18%
Iron/Steel -1.36%
Semis -1.93%
Other
Crude Oil 36.04 -1.69%
Natural Gas 5.43 -2.43%
Gold 391.60 -.56%
Base Metals 110.55 -3.32%
U.S. Dollar 89.43 +.58%
10-Yr. Long-Bond Yield 4.07% +.86%
VIX 14.93 +.47%
Put/Call .82 +17.14%
NYSE Arms 1.07 -21.32%
Market Movers
MAMA +37% on continued strength from 4Q report.
LGND +11.5% after significantly beating 4Q estimates and raising guidance.
COO +10.2% after beating 1Q estimates and raising guidance.
SEAC -19.9% after beating 4Q estimates and having lawsuit against CCUR thrown out.
BVF -9.3% after missing 4Q estimates and lowering guidance.
AZ -4.5% after 2Q beat estimates by cutting costs and raising prices, thus hurting sales.
Economic Data
ISM Non-Manufacturing came in at 60.8 in February vs. 63.5 forecast.
Recommendations
PAYX price target raised to $41 and rating raised to Outperform at SoundView. IGT rated new Buy at Bank of America, price target set at $50. BOFA also rated AGI Buy and set price target of $33. ESRX price target raised by CSFB to $86. Goldman Sachs recommends buying Yen against US dollar. GS says they would buy IBM, EMC and DELL on weakness related to STX report. GS says Tuesday's court decision reversing the FCC's UNE-P, handing a near-term victory to the RBOCs, is a non-event for communications equipment vendors and continues to favor JNPR, NT, SONS and CSCO. GS is expecting lumber prices to average 18% higher in 04 vs. 03 on continued strength in US housing market. Citi Smith Barney says XLNX experiencing packaging-related delivery constraints in March Q limiting upside, but making June Q better. Citi likes SAP and says its demand is improving with pipeline strong, win rates increasing and deal sizes stabilizing. TheSteet.com's Cramer says commodity rally may be in its very early stages still as demand will outstrip supply for years. Jason Goepfert of Sentimetrader.com says February market action bodes will for next few months, reported TheStreet.com
Mid-day News
U.S. stocks are falling mid-day as traders continue to speculate Friday's employment report will result in an immediate Fed rate hike. The US dollar and interest rates continued their recent rebound. Saudi Arabia will reduce the price of its shipments to the U.S. in April, compared with a benchmark grade, Reuters reported. Deutsche Telekom and France Telecom, Europe's two largest phone companies, had their credit raised by Moody's after they cut debt. Copper futures had their biggest decline in more than 4 years on concern that its price has risen so much that it will cut demand in the future. The ISM Non-Manufacturing Index declined to 60.8 in February from January's all-time high reading of 65.7. The employment component of the index fell slightly to 52.7 from January's 53.4, the highest reading since 1987. The Business Roundtable said that 33% of CEO's plan to increase hiring in the next 2 quarters, up from 25% last quarter. Railroads have hauled 5.5% more truck trailers and multi-use containers so far in 04 than 03, according to the Amer. Assoc. of Railroads. Arrow Electronics, the world's largest distributor of computer parts, is seeing a lot of demand from small and mid-sized businesses according to the CEO.
BOTTOM LINE: The U.S. equity markets seem to be overreacting to the rally in the U.S. dollar and interest rates. The dollar is up 5% after a decline of 30% from its all-time high. It is a positive that it is not falling at such a rapid rate. I do not believe, at this time, that we have begun a new bull market in the U.S. currency. Interest rates have barely moved up from their recent lows and yields are still down 11% since Sept. 03. Interest rates normally rise substantially before a series of Fed moves. That is not the case at this time. The Portfolio is down today as it took a hit on a recent buy of SEAC. I exited this position after it penetrated my stop-loss, notwithstanding my opinion that the fall is an overreaction to the court loss. I also trimmed some other longs, leaving the Portfolio with 50% net long market exposure. The market appears to be making a short-term bottom and I will look to increase exposure at the appropriate time.
Wednesday Watch
Earnings Announcements
Company/Estimate
AZ/1.00
CHS/.28
LDG/.42
MIK/1.32
NMG.B/1.03
SKS/.68
TOY/1.05
Splits
None of Note
Economic Data
ISM Non-Manufacturing estimated at 63.5 in Feb. vs. 65.7 in Jan.
Fed's Beige Book Report
Late-Night News
China's semiconductor consumption will jump 30% to $37B this year as expansion by television, mobile-phone and digital camera-makers fuels demand, Gartner Inc. said. It will rise another 27% to $47B in 05, with overseas chipmakers accounting for 90% of the market. Ask Jeeves will no longer allow advertisers and web site operators to pay to boost their ranking in its search index, the Wall Street Journal said. California's plan to sell as much as $15B in bonds appears headed for voter approval, the LA Times reported. South Korean business confidence reached a 17-month high in February as exports grew at their fastest pace in 15 years. Senator Kerry won primaries in 8 states on the biggest night of voting in the Democratic presidential nomination race. Kerry's victories prompted Senator Edwards to drop out of the race.
Late-Night Trading
Asian markets are mostly lower, ranging from unch. to -2.5%.
S&P 500 indicated -.06%.
NASDAQ indicated -.03%.
BOTTOM LINE: The weakness in Asia could lead to more selling in the U.S. markets in the morning. While I don't expect a substantial down day, modest deterioration is likely. I will closely monitor the relative strength of the Portfolio on the open before making any reductions in market exposure.
Company/Estimate
AZ/1.00
CHS/.28
LDG/.42
MIK/1.32
NMG.B/1.03
SKS/.68
TOY/1.05
Splits
None of Note
Economic Data
ISM Non-Manufacturing estimated at 63.5 in Feb. vs. 65.7 in Jan.
Fed's Beige Book Report
Late-Night News
China's semiconductor consumption will jump 30% to $37B this year as expansion by television, mobile-phone and digital camera-makers fuels demand, Gartner Inc. said. It will rise another 27% to $47B in 05, with overseas chipmakers accounting for 90% of the market. Ask Jeeves will no longer allow advertisers and web site operators to pay to boost their ranking in its search index, the Wall Street Journal said. California's plan to sell as much as $15B in bonds appears headed for voter approval, the LA Times reported. South Korean business confidence reached a 17-month high in February as exports grew at their fastest pace in 15 years. Senator Kerry won primaries in 8 states on the biggest night of voting in the Democratic presidential nomination race. Kerry's victories prompted Senator Edwards to drop out of the race.
Late-Night Trading
Asian markets are mostly lower, ranging from unch. to -2.5%.
S&P 500 indicated -.06%.
NASDAQ indicated -.03%.
BOTTOM LINE: The weakness in Asia could lead to more selling in the U.S. markets in the morning. While I don't expect a substantial down day, modest deterioration is likely. I will closely monitor the relative strength of the Portfolio on the open before making any reductions in market exposure.
Tuesday, March 02, 2004
Tuesday Close
S&P 500 1,149.10 -.59%
NASDAQ 2,039.65 -.88%
Leading Sectors
Telecom +2.13%
Fashion +.40%
Oil Service +.31%
Lagging Sectors
Commodities -1.32%
Internet -1.67%
Airlines -2.88%
Other
Crude Oil 36.66 unch.
Natural Gas 5.56 unch.
Gold 393.70 -.03%
Base Metals 114.35 -.88%
U.S. Dollar 88.90 +1.58%
10-Yr. Long-Bond Yield 4.04% +1.74%
VIX 14.86 +2.91%
Put/Call .70 -5.41%
NYSE Arms 1.36 +97.10%
After-hours Movers
COO +5.64% on exceeding 1Q estimates and raising 2Q and 04/05 guidance.
ADEX +11% after significantly beating 3Q estimates and raising 4Q guidance.
AVNC +16.7% after announcing partnership with Par Pharma. to collaborate on development and marketing of new branded version of amoxicillin; Product could be introduced as soon as 06.
SEAC -9.6% after beating 4Q estimates and leaving guidance unchanged; Also, a jury threw out claims by SEAC against CCUR; CCUR unch.
XLNX -3% on profit-taking after raising 4Q guidance.
Economic Data
Total Vehicle Sales for Feb. were 16.4M vs. expectations of 16.6M.
Domestic Vehicle Sales were 13.2M vs. expectations of 13.3M.
Recommendations
Goldman says lower tier auto suppliers VC and DPH are vulnerable to earnings disappointments. GS reiterates Outperform on WAG, its favorite drug retailer. GS also saying that MERQ continues to be a favorite and that accounting rumor has no basis.
After-hours News
U.S. stocks fell today as interest rate jitters, a rising U.S. dollar and middle-eastern violence led to profit-taking in a broad array of sectors. However, the big local phone companies surged in late trading after a judge struck down a costly line-sharing rule. The federal appeals court's move means the Bells may not have to share their networks with rivals at cut-rate prices, TheStreet.com reported. After the close, TheStreet.com said same-store-sales at retailers are expected to rise 6-7%, blowing away the previous year's results, when they report on Thur. The NRF said customer traffic soared in Feb. at most mall retailers, reported TheStreet.com. Europe is failing to assert itself against the U.S. economy because Europeans are more afraid to start their own businesses, the Financial Times reported. Comcast won't support re-election of Disney's Eisner, FT said. Alberto-Culver may be purchased by L'Oreal, BuinessWeek says. The U.S. tells Haitian rebels to disarm, as intl. peacekeeper force grows.
BOTTOM LINE: The Portfolio had a good day today, notwithstanding the weakness in most stocks. I did not sell into the weakness in the late afternoon, thus leaving the Portfolio 75% net long. The market's reaction to a 2% increase in the U.S. dollar and interest rates seemed overdone by late afternoon. I may trim exposure if the weakness continues on the open tomorrow. While I think there is a good chance Friday's employment numbers will meet or slightly exceed expectations, I do not think it will be the type of blow-out report that would panic the bond and currency markets. If weakness in U.S. stocks continues through Thur., I would expect to see a rally on the news Fri.
NASDAQ 2,039.65 -.88%
Leading Sectors
Telecom +2.13%
Fashion +.40%
Oil Service +.31%
Lagging Sectors
Commodities -1.32%
Internet -1.67%
Airlines -2.88%
Other
Crude Oil 36.66 unch.
Natural Gas 5.56 unch.
Gold 393.70 -.03%
Base Metals 114.35 -.88%
U.S. Dollar 88.90 +1.58%
10-Yr. Long-Bond Yield 4.04% +1.74%
VIX 14.86 +2.91%
Put/Call .70 -5.41%
NYSE Arms 1.36 +97.10%
After-hours Movers
COO +5.64% on exceeding 1Q estimates and raising 2Q and 04/05 guidance.
ADEX +11% after significantly beating 3Q estimates and raising 4Q guidance.
AVNC +16.7% after announcing partnership with Par Pharma. to collaborate on development and marketing of new branded version of amoxicillin; Product could be introduced as soon as 06.
SEAC -9.6% after beating 4Q estimates and leaving guidance unchanged; Also, a jury threw out claims by SEAC against CCUR; CCUR unch.
XLNX -3% on profit-taking after raising 4Q guidance.
Economic Data
Total Vehicle Sales for Feb. were 16.4M vs. expectations of 16.6M.
Domestic Vehicle Sales were 13.2M vs. expectations of 13.3M.
Recommendations
Goldman says lower tier auto suppliers VC and DPH are vulnerable to earnings disappointments. GS reiterates Outperform on WAG, its favorite drug retailer. GS also saying that MERQ continues to be a favorite and that accounting rumor has no basis.
After-hours News
U.S. stocks fell today as interest rate jitters, a rising U.S. dollar and middle-eastern violence led to profit-taking in a broad array of sectors. However, the big local phone companies surged in late trading after a judge struck down a costly line-sharing rule. The federal appeals court's move means the Bells may not have to share their networks with rivals at cut-rate prices, TheStreet.com reported. After the close, TheStreet.com said same-store-sales at retailers are expected to rise 6-7%, blowing away the previous year's results, when they report on Thur. The NRF said customer traffic soared in Feb. at most mall retailers, reported TheStreet.com. Europe is failing to assert itself against the U.S. economy because Europeans are more afraid to start their own businesses, the Financial Times reported. Comcast won't support re-election of Disney's Eisner, FT said. Alberto-Culver may be purchased by L'Oreal, BuinessWeek says. The U.S. tells Haitian rebels to disarm, as intl. peacekeeper force grows.
BOTTOM LINE: The Portfolio had a good day today, notwithstanding the weakness in most stocks. I did not sell into the weakness in the late afternoon, thus leaving the Portfolio 75% net long. The market's reaction to a 2% increase in the U.S. dollar and interest rates seemed overdone by late afternoon. I may trim exposure if the weakness continues on the open tomorrow. While I think there is a good chance Friday's employment numbers will meet or slightly exceed expectations, I do not think it will be the type of blow-out report that would panic the bond and currency markets. If weakness in U.S. stocks continues through Thur., I would expect to see a rally on the news Fri.
Mid-day Update
S&P 500 1,150.08 -.51%
NASDAQ 2,047.33 -.50%
Leading Sectors
Iron/Steel +.56%
Fashion +.39%
I-Banks +.30%
Lagging Sectors
Telecom -1.22%
Wireless -1.51%
Airlines -2.5%
Other
Crude Oil 36.68 -.3%
Natural Gas 5.55 +.09%
Gold 392.80 -1.7%
Base Metals 114.35 -.88%
U.S. Dollar 88.99 +1.68%
10-Yr. Long-Bond Yield 4.06% +2.27%
VIX 14.75 +2.42%
Put/Call .71 -4.05%
NYSE Arms 1.48 +114.49%
Market Movers
MAMA +113% on 4Q sales up 127%.
MU +4.1% on SoundView upgrade to Outperform.
SLNK +23.44% after signing an OEM agreement with NT. NT will brand and sell SLNK's wireless phones as components of its enterprise voice over IP product suite.
VAPH +8.9% on continued optimism over its Athlete's Foot treatment.
MVK +9.7% after presentation at Raymond James conference.
MVL -6.9% after beating 4Q estimates, announcing 3-for-2 split and lowering 04 guidance.
MERQ -4.3% on downgrade to Sell at Oppenheimer.
MVSN -9.0% on beating 4Q estimates, but lowering 1Q guidance.
Economic Data
Auto sales have not yet been reported. Greenspan is currently speaking at the Economics Club of NY.
Recommendations
SEPR price target raised at Deutshe Bank to $49. MU raised to Outperform at SoundView. UOPX and GSF cut to Neutral at CSFB. TXN, PXD, PPP, TLM, NXY and CHK raised to Buy at Bank of America. BOFA cut UHS to Neutral. UBS raised price target on URBN to $52. Morgan Stanley rates TYC Overweight. MERQ rated Sell at Oppenheimer, while FFIV and PKTR were raised to Buy. BMC and BEAS rated Underperform at Bear Stearns, while CA, ORCL and TIBX were rated Outperform. Goldman Sachs is saying carrier spending on cell-towers will continue to accelerate through 05, raised estimates on AMT, CCI and SSI. GS says online advertising is showing continued strength. GS also positive on BBY ahead of earnings. Goldman is also recommending RRI for a turnaround play. Finally, GS would be buying MERQ on weakness. Citi Smith Barney initiating coverage of Oil majors with Cautious View, XOM and COP sell. Citi also thinks Oil Service stocks fully valued. Citi reiterated 1L rating on AXP. XLNX and IDTI may raise guidance before open tomorrow, according to Citi. TheStreet.com is saying PSUN will likely exceed estimates after close.
Mid-day News
U.S. stocks are mostly lower mid-day on concerns that rising interest rates and U.S. dollar could crimp future profit growth. U.S. Attorney General John Ashcroft announced criminal charges against former WorldCom CEO Bernie Ebbers. As well, former WorldCom CFO Scott Sullivan has agreed to plead guilty and will cooperate with the U.S. government. AT&T is being investigated in Mass. for allegedly sending phone bills to people who weren't customers and then trying to sell them services when they complained, the Boston Globe reported. The U.S. dollar had its biggest rally against the euro in a year, and surged to a 4-month high against the yen, on speculation U.S. employment growth is accelerating. Bombers attacked Shiite Muslims in Iraq and Pakistan on a holy day, killing at least 184 and injuring 590, the U.S. suspects al-Qaeda involvement. Applied Materials said it may add 500 manufacturing jobs this year to help fill increasing orders from chipmakers.
BOTTOM LINE: The recent market leaders are pulling back today. Tech is outperforming in a down market. I took profits in a few cyclical longs, bringing market exposure for the Portfolio down to 75% net long. The Portfolio is up slightly today, as a few longs are up significantly, offsetting small losses elsewhere. The market seems to be anticipating a strong jobs report on Fri. Further deterioration on the close will likely result in more long sales for the Portfolio. However, with such a high Arms Index reading, it is more likely the markets will rally modestly late afternoon.
NASDAQ 2,047.33 -.50%
Leading Sectors
Iron/Steel +.56%
Fashion +.39%
I-Banks +.30%
Lagging Sectors
Telecom -1.22%
Wireless -1.51%
Airlines -2.5%
Other
Crude Oil 36.68 -.3%
Natural Gas 5.55 +.09%
Gold 392.80 -1.7%
Base Metals 114.35 -.88%
U.S. Dollar 88.99 +1.68%
10-Yr. Long-Bond Yield 4.06% +2.27%
VIX 14.75 +2.42%
Put/Call .71 -4.05%
NYSE Arms 1.48 +114.49%
Market Movers
MAMA +113% on 4Q sales up 127%.
MU +4.1% on SoundView upgrade to Outperform.
SLNK +23.44% after signing an OEM agreement with NT. NT will brand and sell SLNK's wireless phones as components of its enterprise voice over IP product suite.
VAPH +8.9% on continued optimism over its Athlete's Foot treatment.
MVK +9.7% after presentation at Raymond James conference.
MVL -6.9% after beating 4Q estimates, announcing 3-for-2 split and lowering 04 guidance.
MERQ -4.3% on downgrade to Sell at Oppenheimer.
MVSN -9.0% on beating 4Q estimates, but lowering 1Q guidance.
Economic Data
Auto sales have not yet been reported. Greenspan is currently speaking at the Economics Club of NY.
Recommendations
SEPR price target raised at Deutshe Bank to $49. MU raised to Outperform at SoundView. UOPX and GSF cut to Neutral at CSFB. TXN, PXD, PPP, TLM, NXY and CHK raised to Buy at Bank of America. BOFA cut UHS to Neutral. UBS raised price target on URBN to $52. Morgan Stanley rates TYC Overweight. MERQ rated Sell at Oppenheimer, while FFIV and PKTR were raised to Buy. BMC and BEAS rated Underperform at Bear Stearns, while CA, ORCL and TIBX were rated Outperform. Goldman Sachs is saying carrier spending on cell-towers will continue to accelerate through 05, raised estimates on AMT, CCI and SSI. GS says online advertising is showing continued strength. GS also positive on BBY ahead of earnings. Goldman is also recommending RRI for a turnaround play. Finally, GS would be buying MERQ on weakness. Citi Smith Barney initiating coverage of Oil majors with Cautious View, XOM and COP sell. Citi also thinks Oil Service stocks fully valued. Citi reiterated 1L rating on AXP. XLNX and IDTI may raise guidance before open tomorrow, according to Citi. TheStreet.com is saying PSUN will likely exceed estimates after close.
Mid-day News
U.S. stocks are mostly lower mid-day on concerns that rising interest rates and U.S. dollar could crimp future profit growth. U.S. Attorney General John Ashcroft announced criminal charges against former WorldCom CEO Bernie Ebbers. As well, former WorldCom CFO Scott Sullivan has agreed to plead guilty and will cooperate with the U.S. government. AT&T is being investigated in Mass. for allegedly sending phone bills to people who weren't customers and then trying to sell them services when they complained, the Boston Globe reported. The U.S. dollar had its biggest rally against the euro in a year, and surged to a 4-month high against the yen, on speculation U.S. employment growth is accelerating. Bombers attacked Shiite Muslims in Iraq and Pakistan on a holy day, killing at least 184 and injuring 590, the U.S. suspects al-Qaeda involvement. Applied Materials said it may add 500 manufacturing jobs this year to help fill increasing orders from chipmakers.
BOTTOM LINE: The recent market leaders are pulling back today. Tech is outperforming in a down market. I took profits in a few cyclical longs, bringing market exposure for the Portfolio down to 75% net long. The Portfolio is up slightly today, as a few longs are up significantly, offsetting small losses elsewhere. The market seems to be anticipating a strong jobs report on Fri. Further deterioration on the close will likely result in more long sales for the Portfolio. However, with such a high Arms Index reading, it is more likely the markets will rally modestly late afternoon.
Tuesday Watch
Earnings Announcements
Company/Estimate
BIIB/.32
BJ/.65
CVC/-.45
PSUN/.42
PETM/.36
SEAC/.07
FL/.45
MVL/.17
Splits
BMS 2-for-1
HCSG 3-for-2
Economic Data
Total Vehicle Sales estimated at 16.6M for Feb. vs. 16.1M in Jan.
Domestic Vehicle Sales estimated at 13.3M in Feb. vs. 13.2M in Jan.
Recommendations
Goldman Sachs expects a very bullish tone from FLEX on their mid-quarter conf. call Thur. and thinks it has 20% upside by year-end.
Late-Night News
Jean-Bertrand Aristide, former President of Haiti, told CNN that he was the victim of a coup d'etat and would like to live in the United States. Advanced Semiconductor Engineering and other chip packagers are raising prices by as much as 20% on higher component prices and strong demand. IBM will spend $1B in an attempt to win over software developers and grab market share from MSFT, the Financial Times reported. Nigeria and Algeria have ordered intl. energy companies operating in the two countries to reduce oil output by 10 percent along with OPEC's plan to cut production quotas in March, FT reported. The Vietnamese government says it has contained the bird flu.
Late-Night Trading
Asian markets are mostly up, ranging from -.25% to +2.5%.
S&P 500 indicated +.01%.
NASDAQ indicated unch.
BOTTOM LINE: I expect tech to outperform the broad market tomorrow, as the leaders take a well deserved rest. The Portfolio is 110% net long and I will likely begin to pare positions into strength between tomorrow and Friday's employment report.
Company/Estimate
BIIB/.32
BJ/.65
CVC/-.45
PSUN/.42
PETM/.36
SEAC/.07
FL/.45
MVL/.17
Splits
BMS 2-for-1
HCSG 3-for-2
Economic Data
Total Vehicle Sales estimated at 16.6M for Feb. vs. 16.1M in Jan.
Domestic Vehicle Sales estimated at 13.3M in Feb. vs. 13.2M in Jan.
Recommendations
Goldman Sachs expects a very bullish tone from FLEX on their mid-quarter conf. call Thur. and thinks it has 20% upside by year-end.
Late-Night News
Jean-Bertrand Aristide, former President of Haiti, told CNN that he was the victim of a coup d'etat and would like to live in the United States. Advanced Semiconductor Engineering and other chip packagers are raising prices by as much as 20% on higher component prices and strong demand. IBM will spend $1B in an attempt to win over software developers and grab market share from MSFT, the Financial Times reported. Nigeria and Algeria have ordered intl. energy companies operating in the two countries to reduce oil output by 10 percent along with OPEC's plan to cut production quotas in March, FT reported. The Vietnamese government says it has contained the bird flu.
Late-Night Trading
Asian markets are mostly up, ranging from -.25% to +2.5%.
S&P 500 indicated +.01%.
NASDAQ indicated unch.
BOTTOM LINE: I expect tech to outperform the broad market tomorrow, as the leaders take a well deserved rest. The Portfolio is 110% net long and I will likely begin to pare positions into strength between tomorrow and Friday's employment report.
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