Indices
S&P 500 1,120.57 -3.14%
Dow 10,240.08 -3.35%
NASDAQ 1,984.73 -3.07%
Russell 2000 582.84 -2.78%
Wilshire 5000 10,968.18 -3.06%
Volatility(VIX) 18.30 +26.38%
AAII Bullish % 41.29 -13.67%
US Dollar 89.12 +1.10%
CRB 271.50 -.73%
Futures Spot Prices
Gold 395.60 -1.57%
Crude Oil 36.19 -2.98%
Natural Gas 5.60 +3.24%
Base Metals 108.59 -1.17%
10-year US Treasury Yield 3.76% -2.36%
Average 30-year Mortgage Rate 5.41% -3.22%
Leading Sectors
Broadcasting -1.21%
Transports -1.25%
HMO's -1.66%
Lagging Sectors
I-Banking -4.96%
Iron/Steel -5.78%
Airlines -6.71%
*% Gain or loss for the week
Friday, March 12, 2004
Friday Close
S&P 500 1,120.57 +1.25%
NASDAQ 1,984.73 +2.10%
Leading Sectors
Networking +3.50%
Airlines +3.50%
Disk Drives +3.11%
Lagging Sectors
Foods +.41%
Fashion -.24%
Tobacco -.49%
Other
Crude Oil 36.19 -1.60%
Natural Gas 5.59 -.83%
Gold 395.60 -1.35%
Base Metals 108.59 -.94%
U.S. Dollar 89.12 +.69%
10-Yr. Long-Bond Yield 3.76% +1.77%
VIX 18.30 -11.47%
Put/Call 1.03 -6.36%
NYSE Arms .40 -81.57%
After-hours Movers
None of note.
Recommendations
None of note.
After-hours News
U.S. stocks finished broadly higher on Friday, sparked by analyst upgrades in the technology sector and falling oil prices. After the close, Telefonos de Mexico delivered a bid for the controlling stake in Embratel, owned by WorldCom, reported Reuters. A BellSouth contract in Nicaragua is being canceled after the country's comptroller's office said it was improperly granted, the AP said. U.S. securities regulators are considering a plan for requiring brokers to settle stock trades the same day they are executed by using an automated system that would replace the current three-day process. Restaurants and food makers should give consumers better information on the nutritional value of their products to fight obesity, U.S. regulators said. Perini Corp. and Washington Group each received $500M contracts for reconstruction work in Iraq, the U.S. Defense Dept. said.
BOTTOM LINE: The Portfolio ended up having a good day, as one of my shorts dropped significantly and my technology longs rose substantially. I added a few more longs during the course of the day, bringing net market exposure for the Portfolio to 75%. Barring any more terrorist attacks over the weekend, I would expect some follow-through to this rally early in the week.
NASDAQ 1,984.73 +2.10%
Leading Sectors
Networking +3.50%
Airlines +3.50%
Disk Drives +3.11%
Lagging Sectors
Foods +.41%
Fashion -.24%
Tobacco -.49%
Other
Crude Oil 36.19 -1.60%
Natural Gas 5.59 -.83%
Gold 395.60 -1.35%
Base Metals 108.59 -.94%
U.S. Dollar 89.12 +.69%
10-Yr. Long-Bond Yield 3.76% +1.77%
VIX 18.30 -11.47%
Put/Call 1.03 -6.36%
NYSE Arms .40 -81.57%
After-hours Movers
None of note.
Recommendations
None of note.
After-hours News
U.S. stocks finished broadly higher on Friday, sparked by analyst upgrades in the technology sector and falling oil prices. After the close, Telefonos de Mexico delivered a bid for the controlling stake in Embratel, owned by WorldCom, reported Reuters. A BellSouth contract in Nicaragua is being canceled after the country's comptroller's office said it was improperly granted, the AP said. U.S. securities regulators are considering a plan for requiring brokers to settle stock trades the same day they are executed by using an automated system that would replace the current three-day process. Restaurants and food makers should give consumers better information on the nutritional value of their products to fight obesity, U.S. regulators said. Perini Corp. and Washington Group each received $500M contracts for reconstruction work in Iraq, the U.S. Defense Dept. said.
BOTTOM LINE: The Portfolio ended up having a good day, as one of my shorts dropped significantly and my technology longs rose substantially. I added a few more longs during the course of the day, bringing net market exposure for the Portfolio to 75%. Barring any more terrorist attacks over the weekend, I would expect some follow-through to this rally early in the week.
Mid-day Update
S&P 500 1,115.45 +.78%
NASDAQ 1970.57 +1.37%
Leading Sectors
Airlines +2.84%
Networking +2.33%
Computer Boxmakers +2.26%
Lagging Sectors
Foods -.10%
Telecom -.11%
Fashion -.24%
Other
Crude Oil 35.43 -3.67%
Natural Gas 5.54 -1.83%
Gold 396.10 -1.22%
Base Metals 108.97 -.59%
U.S. Dollar 89.32 +.92%
10-Yr. Long-Bond Yield 3.71% +.35%
VIX 18.43 -10.84%
Put/Call 1.31 +19.09%
NYSE Arms .59 -72.81%
Market Movers
DELL +3.3% on multiple upgrades.
IDXX +9.7% after raising 1Q and 04 guidance.
CAMD -11.7% on lowering 04 estimates.
VRTY -14.2% after meeting 3Q estimates and lowering 4Q guidance.
Economic Data
Business Inventories came in +.1% in Jan. vs. estimates of +.3%.
Preliminary Univ. of Mich. Consumer Confidence came in at 94.1 in March vs. a forecast of 94.5.
Recommendations
DELL raised to Overweight at J.P. Morgan. DELL raised to Overweight at Morgan Stanley. HAL upgraded to Outperform at Bear Stearns. AL raised to Buy at Merrill. ESPD raised to Outperform at Thomas Weisel. JBL raised to Buy at Bank of America. BRCM, INTC, FCS, MU raised to Buy at Oppenheimer. Goldman Sachs reiterating Outperform on ACN, saying it will benefit from RFID rollouts. GS reiterates Outperform on PETC. Goldman reiterated Outperform on AET and raised estimates. Citi Smith Barney reiterates Buy on AFCI, says that revenue recognition from Verizon FTTP contract is tracking 1-2 quarters ahead of schedule. Citi reiterates Outperform on HAL and $36 target. Citi reiterates Buy on GE. Citi says recent survey of 125 companies in the electronics supply chain showed that inventories as a percent of sales have declined to the leanest levels in 13-years. Citi says high-end IP telephony equipment market is 3 horse race between CSCO, NT and AV. TheStreet.com says to look at CPHD, PWER and PKG as potential shorts. Cramer, of TheStreet.com, says he thinks U.S. equity markets bottomed yesterday.
Mid-day News
U.S. stocks are rallying mid-day on a host of technology upgrades and falling oil prices. New York Mayor Bloomberg said security in the city's subway system was increased yesterday after the terrorist bombings in Madrid, the NY Times reported. Chinese steelmakers paid on avg. $45 a ton for imported iron ore in Dec., a 74% increase from a year earlier, the Tex Report said. Electronic Arts is developing a video game based on "The Godfather", the NY Post reported. CNBC reported that Venezuelan President Chavez won't cut U.S. oil shipments, despite his threats. China's State Reserves Bureau plans to sell 30,000-40,000 metric tons of copper from its stockpile to ease the country's shortage of the metal, Reuters reported. New York crude-oil futures fell after the U.S. Senate voted to sell oil rather than deposit it in the nation's Strategic Petroleum Reserve, which would make more crude available to refiners.
BOTTOM LINE: The Portfolio is up slightly on the day as my tech positions are solidly higher. I added a few longs in the technology and base metal sectors, bringing the Portfolio's market exposure to 25% net long. If the indices have reached a short-term bottom, stocks should rally into the close as shorts cover before the weekend. A late-afternoon sell-off would likely indicate that we have further downside early next week. Two of my long purchases were AV and AA. I am using stops of $16.00 and $34.50 respectively.
NASDAQ 1970.57 +1.37%
Leading Sectors
Airlines +2.84%
Networking +2.33%
Computer Boxmakers +2.26%
Lagging Sectors
Foods -.10%
Telecom -.11%
Fashion -.24%
Other
Crude Oil 35.43 -3.67%
Natural Gas 5.54 -1.83%
Gold 396.10 -1.22%
Base Metals 108.97 -.59%
U.S. Dollar 89.32 +.92%
10-Yr. Long-Bond Yield 3.71% +.35%
VIX 18.43 -10.84%
Put/Call 1.31 +19.09%
NYSE Arms .59 -72.81%
Market Movers
DELL +3.3% on multiple upgrades.
IDXX +9.7% after raising 1Q and 04 guidance.
CAMD -11.7% on lowering 04 estimates.
VRTY -14.2% after meeting 3Q estimates and lowering 4Q guidance.
Economic Data
Business Inventories came in +.1% in Jan. vs. estimates of +.3%.
Preliminary Univ. of Mich. Consumer Confidence came in at 94.1 in March vs. a forecast of 94.5.
Recommendations
DELL raised to Overweight at J.P. Morgan. DELL raised to Overweight at Morgan Stanley. HAL upgraded to Outperform at Bear Stearns. AL raised to Buy at Merrill. ESPD raised to Outperform at Thomas Weisel. JBL raised to Buy at Bank of America. BRCM, INTC, FCS, MU raised to Buy at Oppenheimer. Goldman Sachs reiterating Outperform on ACN, saying it will benefit from RFID rollouts. GS reiterates Outperform on PETC. Goldman reiterated Outperform on AET and raised estimates. Citi Smith Barney reiterates Buy on AFCI, says that revenue recognition from Verizon FTTP contract is tracking 1-2 quarters ahead of schedule. Citi reiterates Outperform on HAL and $36 target. Citi reiterates Buy on GE. Citi says recent survey of 125 companies in the electronics supply chain showed that inventories as a percent of sales have declined to the leanest levels in 13-years. Citi says high-end IP telephony equipment market is 3 horse race between CSCO, NT and AV. TheStreet.com says to look at CPHD, PWER and PKG as potential shorts. Cramer, of TheStreet.com, says he thinks U.S. equity markets bottomed yesterday.
Mid-day News
U.S. stocks are rallying mid-day on a host of technology upgrades and falling oil prices. New York Mayor Bloomberg said security in the city's subway system was increased yesterday after the terrorist bombings in Madrid, the NY Times reported. Chinese steelmakers paid on avg. $45 a ton for imported iron ore in Dec., a 74% increase from a year earlier, the Tex Report said. Electronic Arts is developing a video game based on "The Godfather", the NY Post reported. CNBC reported that Venezuelan President Chavez won't cut U.S. oil shipments, despite his threats. China's State Reserves Bureau plans to sell 30,000-40,000 metric tons of copper from its stockpile to ease the country's shortage of the metal, Reuters reported. New York crude-oil futures fell after the U.S. Senate voted to sell oil rather than deposit it in the nation's Strategic Petroleum Reserve, which would make more crude available to refiners.
BOTTOM LINE: The Portfolio is up slightly on the day as my tech positions are solidly higher. I added a few longs in the technology and base metal sectors, bringing the Portfolio's market exposure to 25% net long. If the indices have reached a short-term bottom, stocks should rally into the close as shorts cover before the weekend. A late-afternoon sell-off would likely indicate that we have further downside early next week. Two of my long purchases were AV and AA. I am using stops of $16.00 and $34.50 respectively.
Friday Watch
Earnings Announcements
Company/Estimate
APOL/.32
MOV/.47
ALOG/.11
Splits
None of note.
Economic Data
Business Inventories for Jan. estimated +.3% vs. +.3% in Dec.
Preliminary Univ. of Mich. Consumer Confidence estimated at 94.5 in March vs. 94.4 last month.
Recommendations
Goldman Sachs reiterating Outperform on FCE. Goldman, Morgan Stanley and ABN Amro said they lowered forecasts for the euro against the dollar amid signs Europe's economy is barely growing. PLCE is expected to benefit as it stocks its stores with better-quality merchandise and as rival Kids 'R' Us closes 146 outlets, Business Week reported in its "Inside Wall Street" column. GENZ may consider acquiring BIV, Business Week reported.
Late-Night News
Starbucks(SBUX) plans to start an in-store music service where customers will be able to make a custom CD from a selection of 250,000 songs, Business Week reported. U.S. local and long-distance telephone carriers have reached a tentative agreement to resolve a years-old dispute over how much long-distance phone companies should pay local carriers to connect their calls, Business Week said. France has stepped-up security on its border with Spain to high alert following the terrorist attacks in Madrid, the Financial Times said. Morgan Stanley is to reorganize its fixed-income dept. and will separate analysts from trading and sales staff to avoid potential conflicts of interest, FT said. The purported al-Qaeda letter sent to an Arabic Newspaper in London contained statements saying that an attack on the U.S. was 90% ready and would be carried out soon. President Roh Moo Hyun of South Korea was impeached by lawmakers who accused him of breaking laws that bar the president from publicly taking sides in parliamentary elections. The Korean KOSPI is down 3% on the news.
Late-Night Trading
Asian markets are lower, ranging from -1.0% to -1.75%, with South Korea dropping 3.0%.
S&P 500 indicated -.12%.
NASDAQ indicated -.21%.
BOTTOM LINE: Tomorrow should be another volatile day, as terror fears and declines in Asia will likely result in a lower open for U.S. shares. The short-term oversold state of the major indices, option expiration and high readings on various gauges of fear should lead to a good rally at some point tomorrow. I will look to add positions slowly into any significant weakness in the morning.
Company/Estimate
APOL/.32
MOV/.47
ALOG/.11
Splits
None of note.
Economic Data
Business Inventories for Jan. estimated +.3% vs. +.3% in Dec.
Preliminary Univ. of Mich. Consumer Confidence estimated at 94.5 in March vs. 94.4 last month.
Recommendations
Goldman Sachs reiterating Outperform on FCE. Goldman, Morgan Stanley and ABN Amro said they lowered forecasts for the euro against the dollar amid signs Europe's economy is barely growing. PLCE is expected to benefit as it stocks its stores with better-quality merchandise and as rival Kids 'R' Us closes 146 outlets, Business Week reported in its "Inside Wall Street" column. GENZ may consider acquiring BIV, Business Week reported.
Late-Night News
Starbucks(SBUX) plans to start an in-store music service where customers will be able to make a custom CD from a selection of 250,000 songs, Business Week reported. U.S. local and long-distance telephone carriers have reached a tentative agreement to resolve a years-old dispute over how much long-distance phone companies should pay local carriers to connect their calls, Business Week said. France has stepped-up security on its border with Spain to high alert following the terrorist attacks in Madrid, the Financial Times said. Morgan Stanley is to reorganize its fixed-income dept. and will separate analysts from trading and sales staff to avoid potential conflicts of interest, FT said. The purported al-Qaeda letter sent to an Arabic Newspaper in London contained statements saying that an attack on the U.S. was 90% ready and would be carried out soon. President Roh Moo Hyun of South Korea was impeached by lawmakers who accused him of breaking laws that bar the president from publicly taking sides in parliamentary elections. The Korean KOSPI is down 3% on the news.
Late-Night Trading
Asian markets are lower, ranging from -1.0% to -1.75%, with South Korea dropping 3.0%.
S&P 500 indicated -.12%.
NASDAQ indicated -.21%.
BOTTOM LINE: Tomorrow should be another volatile day, as terror fears and declines in Asia will likely result in a lower open for U.S. shares. The short-term oversold state of the major indices, option expiration and high readings on various gauges of fear should lead to a good rally at some point tomorrow. I will look to add positions slowly into any significant weakness in the morning.
Thursday, March 11, 2004
Thursday Close
S&P 500 1,106.78 -1.52%
NASDAQ 1,943.89 -1.03%
Leading Sectors
Broadcasting +.47%
Transports +.02%
Homebuilders -.15%
Lagging Sectors
Wireless -2.4%
Fashion -2.98%
Airlines -3.42%
Other
Crude Oil 37.05 +.73%
Natural Gas 5.63 -.14%
Gold 403.30 +.57%
Base Metals 109.62 +2.07%
U.S. Dollar 88.32 +.02%
10-Yr. Long-Bond Yield 3.69% -.80%
VIX 20.67 +10.71%
Put/Call 1.10 +29.41%
NYSE Arms 2.17 -10.33%
After-hours Movers
IDXX +4.12% after raising guidance for 1Q and 04.
FLML +7.7% after reporting strong license and rev. growth during 4Q.
PETC -6.43% after missing 4Q estimates and lowering 1Q guidance.
VRTY -12.2% after meeting 3Q estimates and lowering 4Q guidance.
CAMD -15.5% after lowering 4Q forecast.
Recommendations
Goldman Sachs reiterating its very positive view on non-life insurance stocks. Favorites are ALL, AIG, ENH and RE.
After-hours News
U.S. stocks, already under pressure, fell precipitously after rumors surfaced that al-Qaeda had taken credit for the rush-hour train bombings in Spain, which killed at least 192 and injured another 1,400. After the close, U.S. regulators said they are demanding that 23 companies stop selling products containing androstenedione, the diet supplement known as andro, Bloomberg reported. Oracle(ORCL) reported 3Q results that met expectations as database sales and favorable exchange rates boosted license sales 13% year-over-year.
BOTTOM LINE: The Portfolio had a good day, finishing down slightly. I sold a few of my relatively strong longs and rotated into some beaten-up stocks that look ready for an oversold bounce. I also added an overbought retail short, bringing the Portfolio's market exposure back to 0% or market neutral. Signs of fear are emerging, with high put/call, vix and arms readings. Thus, I suspect we are very close to a short-term bottom. I will look to slowly add market exposure into further weakness.
NASDAQ 1,943.89 -1.03%
Leading Sectors
Broadcasting +.47%
Transports +.02%
Homebuilders -.15%
Lagging Sectors
Wireless -2.4%
Fashion -2.98%
Airlines -3.42%
Other
Crude Oil 37.05 +.73%
Natural Gas 5.63 -.14%
Gold 403.30 +.57%
Base Metals 109.62 +2.07%
U.S. Dollar 88.32 +.02%
10-Yr. Long-Bond Yield 3.69% -.80%
VIX 20.67 +10.71%
Put/Call 1.10 +29.41%
NYSE Arms 2.17 -10.33%
After-hours Movers
IDXX +4.12% after raising guidance for 1Q and 04.
FLML +7.7% after reporting strong license and rev. growth during 4Q.
PETC -6.43% after missing 4Q estimates and lowering 1Q guidance.
VRTY -12.2% after meeting 3Q estimates and lowering 4Q guidance.
CAMD -15.5% after lowering 4Q forecast.
Recommendations
Goldman Sachs reiterating its very positive view on non-life insurance stocks. Favorites are ALL, AIG, ENH and RE.
After-hours News
U.S. stocks, already under pressure, fell precipitously after rumors surfaced that al-Qaeda had taken credit for the rush-hour train bombings in Spain, which killed at least 192 and injured another 1,400. After the close, U.S. regulators said they are demanding that 23 companies stop selling products containing androstenedione, the diet supplement known as andro, Bloomberg reported. Oracle(ORCL) reported 3Q results that met expectations as database sales and favorable exchange rates boosted license sales 13% year-over-year.
BOTTOM LINE: The Portfolio had a good day, finishing down slightly. I sold a few of my relatively strong longs and rotated into some beaten-up stocks that look ready for an oversold bounce. I also added an overbought retail short, bringing the Portfolio's market exposure back to 0% or market neutral. Signs of fear are emerging, with high put/call, vix and arms readings. Thus, I suspect we are very close to a short-term bottom. I will look to slowly add market exposure into further weakness.
Mid-day Update
S&P 500 1,122.39 -.15%
NASDAQ 1972.64 +.43%
Leading Sectors
Iron/Steel +1.79%
Semis +1.31%
Internet +1.13%
Lagging Sectors
Drugs -.89%
Wireless -1.36%
Fashion -2.98%
Other
Crude Oil 36.38 +.78%
Natural Gas 5.47 +1.35%
Gold 400.30 -.05%
Base Metals 109.62 +2.07%
U.S. Dollar 88.77 -.20%
10-Yr. Long-Bond Yield 3.77% +1.31%
VIX 17.92 -3.91%
Put/Call 1.13 +32.94%
NYSE Arms 1.28 -47.11%
Market Movers
NT -3.3% after it said it may restate results for 03 after an accounting review.
DCTH +76.0% after it said clinicians at the Sydney Melanoma Unit in Australia successfully completed the first treatment in the company's Phase III clinical trial for inoperable cancer in the liver.
TGT +8.3% on plans to sell its Mervyn's and Marshall Field's department stores and multiple upgrades.
LF -26.3% after lowering 1Q and 04 guidance and multiple downgrades.
HAL -4.7% after the U.S. Justice Dept. said it would take over a criminal investigation looking into whether or not HAL inflated fees for its work in Iraq.
YELL +11.2% after raising 1Q estimates significantly.
TASR +6.6% on short-covering.
NSM +5.6% after significantly beating 3Q estimates and raising 4Q guidance.
Economic Data
Advance Retail Sales for Feb. were up.6%, meeting estimates.
Retail Sales Less Autos for Feb. unch. vs. expectations of a .5% increase.
Initial Jobless Claims 341K last week vs. expectations of 343K.
Continuing Claims were 3032K vs. expectations of 3075K.
Recommendations
Goldman Sachs reiterates Underperform on DDS. GS reiterating Outperform on BBY. Goldman would buy steel stocks on current weakness, favorites are STLD and X. Citi Smith Barney is recommending AMTD before they release Daily Avg. Revenue Trade data on Fri. Citi initiated coverage of LXK with a 1M rating and $95 target. Citi is upgrading TGT to 1M and raising target to $50. Citi reiterating Buy rating on MATK. Citi says tone of presentations at their industrial conference was almost universally upbeat. They reiterate Buys on GE, TYC, ASD and ITT. LAMR is mentioned positively on Barron's Online saying the company should benefit from a rebound in local ad revenues. RHAT raised to Outperform at Thomas Weisel. LF lowered to Underperform at CSFB with $18 target. TGT raised to Outperform at CSFB. DG rated Buy at Bank of America, $35 target. CENX raised to Buy at Merrill, $28 target. CKFR raised to Outperform at Lehman, $34 target. ERES cut to Underperform at Raymond James.
Mid-day News
U.S. stocks are mixed mid-day on strength in Cyclicals and weakness in wireless and pharmaceuticals. Spains's government said the ETA terror group was behind rush-hour train bombings that killed more than 190 people and injured 1,247 in Spain's worst-ever terrorist attack. Codelco, the world's largest copper producer, sold 3/4 of its stockpile of the metal, raising the risk of a shortage this year, Reuters reported. Crude oil rose for the first time in 4 days after the IEA said that demand this year will rise to the highest since 1997 because of surging global economies. Alan Greenspan reiterated his belief that U.S. job growth will soon accelerate. He also said the U.S. should not pursue protectionist policies as it will cost more jobs than it will save. He said we need to focus on retraining our un-skilled labor force. The surge in Lucent bonds, which have almost doubled since the beginning of last year, is a sign that communications companies' debt-reductions efforts are paying off, Bloomberg reported. The U.S. House passed a bill that stiffens federal penalties against t.v. and radio broadcasters for indecency.
BOTTOM LINE: The market's ability to rally in the face of the Spanish terror attacks is a good sign. National Semis exceptional numbers are also being rewarded as it leads the SOX higher. I added a few technology and base metal longs on the morning weakness, bringing the Portfolio's market exposure to 25% net long. While I am not ready to be aggressive on the long-side, the market's tone is much better today. I may add another 25% long exposure if the market can hold today's gains and strengthen into the close.
NASDAQ 1972.64 +.43%
Leading Sectors
Iron/Steel +1.79%
Semis +1.31%
Internet +1.13%
Lagging Sectors
Drugs -.89%
Wireless -1.36%
Fashion -2.98%
Other
Crude Oil 36.38 +.78%
Natural Gas 5.47 +1.35%
Gold 400.30 -.05%
Base Metals 109.62 +2.07%
U.S. Dollar 88.77 -.20%
10-Yr. Long-Bond Yield 3.77% +1.31%
VIX 17.92 -3.91%
Put/Call 1.13 +32.94%
NYSE Arms 1.28 -47.11%
Market Movers
NT -3.3% after it said it may restate results for 03 after an accounting review.
DCTH +76.0% after it said clinicians at the Sydney Melanoma Unit in Australia successfully completed the first treatment in the company's Phase III clinical trial for inoperable cancer in the liver.
TGT +8.3% on plans to sell its Mervyn's and Marshall Field's department stores and multiple upgrades.
LF -26.3% after lowering 1Q and 04 guidance and multiple downgrades.
HAL -4.7% after the U.S. Justice Dept. said it would take over a criminal investigation looking into whether or not HAL inflated fees for its work in Iraq.
YELL +11.2% after raising 1Q estimates significantly.
TASR +6.6% on short-covering.
NSM +5.6% after significantly beating 3Q estimates and raising 4Q guidance.
Economic Data
Advance Retail Sales for Feb. were up.6%, meeting estimates.
Retail Sales Less Autos for Feb. unch. vs. expectations of a .5% increase.
Initial Jobless Claims 341K last week vs. expectations of 343K.
Continuing Claims were 3032K vs. expectations of 3075K.
Recommendations
Goldman Sachs reiterates Underperform on DDS. GS reiterating Outperform on BBY. Goldman would buy steel stocks on current weakness, favorites are STLD and X. Citi Smith Barney is recommending AMTD before they release Daily Avg. Revenue Trade data on Fri. Citi initiated coverage of LXK with a 1M rating and $95 target. Citi is upgrading TGT to 1M and raising target to $50. Citi reiterating Buy rating on MATK. Citi says tone of presentations at their industrial conference was almost universally upbeat. They reiterate Buys on GE, TYC, ASD and ITT. LAMR is mentioned positively on Barron's Online saying the company should benefit from a rebound in local ad revenues. RHAT raised to Outperform at Thomas Weisel. LF lowered to Underperform at CSFB with $18 target. TGT raised to Outperform at CSFB. DG rated Buy at Bank of America, $35 target. CENX raised to Buy at Merrill, $28 target. CKFR raised to Outperform at Lehman, $34 target. ERES cut to Underperform at Raymond James.
Mid-day News
U.S. stocks are mixed mid-day on strength in Cyclicals and weakness in wireless and pharmaceuticals. Spains's government said the ETA terror group was behind rush-hour train bombings that killed more than 190 people and injured 1,247 in Spain's worst-ever terrorist attack. Codelco, the world's largest copper producer, sold 3/4 of its stockpile of the metal, raising the risk of a shortage this year, Reuters reported. Crude oil rose for the first time in 4 days after the IEA said that demand this year will rise to the highest since 1997 because of surging global economies. Alan Greenspan reiterated his belief that U.S. job growth will soon accelerate. He also said the U.S. should not pursue protectionist policies as it will cost more jobs than it will save. He said we need to focus on retraining our un-skilled labor force. The surge in Lucent bonds, which have almost doubled since the beginning of last year, is a sign that communications companies' debt-reductions efforts are paying off, Bloomberg reported. The U.S. House passed a bill that stiffens federal penalties against t.v. and radio broadcasters for indecency.
BOTTOM LINE: The market's ability to rally in the face of the Spanish terror attacks is a good sign. National Semis exceptional numbers are also being rewarded as it leads the SOX higher. I added a few technology and base metal longs on the morning weakness, bringing the Portfolio's market exposure to 25% net long. While I am not ready to be aggressive on the long-side, the market's tone is much better today. I may add another 25% long exposure if the market can hold today's gains and strengthen into the close.
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