Earnings Announcements
Company/Estimate
AM/.64
BBBY/.44
BBY/1.39
CC/.36
MANU/.03
MON/.57
VXGN/-.15
Splits
GGG 3-for-2
IDSA 2-for-1
WRI 3-for-2
Economic Data
Chicago Purchasing Manager for March estimated at 61.0 vs. 63.6 last month.
Factory Orders for February estimated +1.5% vs. -.5% in January.
Recommendations
Goldman Sachs reiterated Outperform on CCU.
Late-Night News
Asian stocks are mixed as strength in China is being offset by weakness in Japan and Hong Kong. Honda filed a lawsuit against Shuanghuan Automobile, alleging the Chinese company infringed its copyright on a sport utility vehicle, the Beijing Times reported. Wal-Mart suppliers will miss the January deadline set by the world's largest retailer for equipping shipments with radio-frequency tags, the Wall Street Journal reported. Aluminum producers in China have shuttered 350,000 tons a year of production capacity as efforts by the government to slow growth in the industry take effect, reported Bloomberg. Chinese steel producers are preparing to set up steel mills in the U.S., Brazil and Australia, from where they will ship the metal back to their home country, the Wall Street Journal reported. Kmart has sued almost 500 U.S. towns, cities and counties because the discount retailer claims its tax bills are too high, the WSJ reported. Crude oil in NY surged as much as 1.2% after reports of a fire in a refinery in Texas raised concern of gasoline shortages ahead of the peak demand season in the third-quarter.
Late-Night Trading
Asian Indices -.25% to +1.00%.
S&P 500 indicated -.18%.
NASDAQ indicated -.35%.
BOTTOM LINE: U.S. stocks will likely open weaker as gasoline in New York climbed to its highest price in 18 years after the explosion at the third largest refinery in the U.S. As of now, it is not clear if this was an act of terrorism or an accident. If the explosion was in fact an accident, U.S. shares will likely rally after early morning weakness. The Portfolio is 100% net long and I will look to trim market exposure into Friday's employment report. If terrorism was responsible, U.S. shares will fall significantly on the open. Under this scenario, I will wait for a bounce to reduce exposure significantly.
Wednesday, March 31, 2004
Tuesday, March 30, 2004
Tuesday Close
S&P 500 1,127.00 +.40%
NASDAQ 2,000.63 +.40%
Leading Sectors
Homebuilders +2.47%
Oil Service +2.44%
Energy +1.97%
Lagging Sectors
Drugs -.18%
Gaming -.58%
Airlines -1.28%
Other
Crude Oil 36.17 -.22%
Natural Gas 5.76 +.23%
Gold 422.60 -.05%
Base Metals 112.28 +.02%
U.S. Dollar 88.41 -.24%
10-Yr. Long-Bond Yield 3.89% +.15%
VIX 16.28 -1.33%
Put/Call .61 -6.15%
NYSE Arms .76 +117.14%
After-hours Movers
TKR +10.13% after raising 1Q guidance.
ONNN -5.81% after saying it is going to issue convertible bonds.
USNA -8.62% after lowering 1Q guidance.
Recommendations
TheStreet.com is recommending ASE.
After-hours News
U.S. stocks finished higher Tuesday on strength in energy-related shares and strong earnings reports from Accenture(ACN) and Autodesk(ADSK). Investors are the most bearish on U.S. Treasury notes than they've been in almost 7 years, according to a poll by JP Morgan. The European Union has warned China it must stop restrictions on the export of coking coal designed to protect the Chinese steel industry, the Financial Times reported. Trump Hotels & Casino Resorts' auditor Ernst & Young raised doubts about the ability of Donald Trump's casino company to survive because of increased competition and losses. The NYSE will give federal regulators its detailed plan for automated stock trading within a few weeks in a bid to win status as a "fast" market, NYSE CEO John Thain said.
BOTTOM LINE: The Portfolio finished unchanged on the day as my shorts rose and my longs finished mixed. I did not make any changes in the afternoon as my short-term models gave buy signals. Thus, the Portfolio is 100% net long heading into the last day of the quarter. The above-mentioned JP Morgan poll is significant as rates may not rise as much as I had anticipated on a much better-than expected jobs report. Bond investors extreme bearishness implies that a lot of investors have already sold or are short, thus providing fuel for future bond gains and falling interest rates.
NASDAQ 2,000.63 +.40%
Leading Sectors
Homebuilders +2.47%
Oil Service +2.44%
Energy +1.97%
Lagging Sectors
Drugs -.18%
Gaming -.58%
Airlines -1.28%
Other
Crude Oil 36.17 -.22%
Natural Gas 5.76 +.23%
Gold 422.60 -.05%
Base Metals 112.28 +.02%
U.S. Dollar 88.41 -.24%
10-Yr. Long-Bond Yield 3.89% +.15%
VIX 16.28 -1.33%
Put/Call .61 -6.15%
NYSE Arms .76 +117.14%
After-hours Movers
TKR +10.13% after raising 1Q guidance.
ONNN -5.81% after saying it is going to issue convertible bonds.
USNA -8.62% after lowering 1Q guidance.
Recommendations
TheStreet.com is recommending ASE.
After-hours News
U.S. stocks finished higher Tuesday on strength in energy-related shares and strong earnings reports from Accenture(ACN) and Autodesk(ADSK). Investors are the most bearish on U.S. Treasury notes than they've been in almost 7 years, according to a poll by JP Morgan. The European Union has warned China it must stop restrictions on the export of coking coal designed to protect the Chinese steel industry, the Financial Times reported. Trump Hotels & Casino Resorts' auditor Ernst & Young raised doubts about the ability of Donald Trump's casino company to survive because of increased competition and losses. The NYSE will give federal regulators its detailed plan for automated stock trading within a few weeks in a bid to win status as a "fast" market, NYSE CEO John Thain said.
BOTTOM LINE: The Portfolio finished unchanged on the day as my shorts rose and my longs finished mixed. I did not make any changes in the afternoon as my short-term models gave buy signals. Thus, the Portfolio is 100% net long heading into the last day of the quarter. The above-mentioned JP Morgan poll is significant as rates may not rise as much as I had anticipated on a much better-than expected jobs report. Bond investors extreme bearishness implies that a lot of investors have already sold or are short, thus providing fuel for future bond gains and falling interest rates.
Mid-day Update
S&P 500 1,121.43 -.09%
NASDAQ 1,985.91 -.33%
Leading Sectors
Oil Service +2.59%
Energy +1.85%
Fashion +1.48%
Lagging Sectors
Gaming -1.12%
Airlines -1.22%
Semis -1.50%
Other
Crude Oil 36.25 +2.26%
Natural Gas 5.71 +4.16%
Gold 423.10 +1.17%
Base Metals 112.28 +.02%
U.S. Dollar 88.30 -.37%
10-Yr. Long-Bond Yield 3.87% -.49%
VIX 16.67 +1.09%
Put/Call .54 -16.92%
NYSE Arms 1.08 +211.43%
Market Movers
VASC +53.86% after the maker of products that help doctors control patients' bleeding said a new version of one of its bandages received approval from the FDA.
NPSP +9.68% after saying its main experimental drug, Preos, was effective in a study that may lead to U.S. marketing approval.
INGR +17.31% after INTC said it would pay it $225M to settle a patent-infringement dispute over the Itanium chip.
ALDN +17.84% after raising 1Q guidance.
NSSC +13.88% after announcing a 2-for-1 split.
KVHI -9.72% after downgrade to Market Perform at CE Unterberg Towbin.
MATR -6.02% after lowering 1Q guidance.
Economic Data
Conference Board's Consumer Confidence for March was 88.3 vs. expectations of 86.0.
Recommendations
Goldman Sachs reiterated Outperform on MCH, PEP and ACN. GS cut S to Underperform. GS upgraded FD to Outperform. GS reiterated Underperform on SCS. Citi Smith Barney reiterated Buy on PEP. Citi removed MCH and CALD from focus list and adding EXTR. SWIR price target raised to $40.00 at CIBC. ATRX raised to Sector Outperform at CIBC. EMC rated Buy at Bank of America. MRO raised to Overweight at Lehman, target $40. TheStreet.com recommended ASYT. Cramer, of TheStreet.com, likes ERTS as MSFT left the video sports game biz.
Mid-day News
U.S. stocks are mostly lower mid-day on rising energy prices and profit-taking. Autodesk(ADSK) management said, "We are seeing increased demand across all geographies and industries, particularly in our Design Solutions Group." Russia's oil exports rose 22% from the start of the year to March 29, as the country's producers boosted output, said OAO Transneft. Crude oil futures rose after OPEC ministers said the group should reduce production targets as planned next month to prevent prices from sliding during the second quarter. U.S. House lawmakers proposed legislation to speed installation of airliners defenses against shoulder-fired missiles, saying the devices remain one of the greatest threats to aviation security, Bloomberg reported. Elaine Garzarelli told CNBC her models show that U.S. stocks are the cheapest they have been since before the 90's bull run, taking into account interest rates and profits.
BOTTOM LINE: The Portfolio is down today on weakness in airline and technology positions. I have taken profits in a few longs, bringing market exposure down to 100%. I will likely reduce this further on any strength in the afternoon. I don't want to have too much exposure into Friday's employment report.
NASDAQ 1,985.91 -.33%
Leading Sectors
Oil Service +2.59%
Energy +1.85%
Fashion +1.48%
Lagging Sectors
Gaming -1.12%
Airlines -1.22%
Semis -1.50%
Other
Crude Oil 36.25 +2.26%
Natural Gas 5.71 +4.16%
Gold 423.10 +1.17%
Base Metals 112.28 +.02%
U.S. Dollar 88.30 -.37%
10-Yr. Long-Bond Yield 3.87% -.49%
VIX 16.67 +1.09%
Put/Call .54 -16.92%
NYSE Arms 1.08 +211.43%
Market Movers
VASC +53.86% after the maker of products that help doctors control patients' bleeding said a new version of one of its bandages received approval from the FDA.
NPSP +9.68% after saying its main experimental drug, Preos, was effective in a study that may lead to U.S. marketing approval.
INGR +17.31% after INTC said it would pay it $225M to settle a patent-infringement dispute over the Itanium chip.
ALDN +17.84% after raising 1Q guidance.
NSSC +13.88% after announcing a 2-for-1 split.
KVHI -9.72% after downgrade to Market Perform at CE Unterberg Towbin.
MATR -6.02% after lowering 1Q guidance.
Economic Data
Conference Board's Consumer Confidence for March was 88.3 vs. expectations of 86.0.
Recommendations
Goldman Sachs reiterated Outperform on MCH, PEP and ACN. GS cut S to Underperform. GS upgraded FD to Outperform. GS reiterated Underperform on SCS. Citi Smith Barney reiterated Buy on PEP. Citi removed MCH and CALD from focus list and adding EXTR. SWIR price target raised to $40.00 at CIBC. ATRX raised to Sector Outperform at CIBC. EMC rated Buy at Bank of America. MRO raised to Overweight at Lehman, target $40. TheStreet.com recommended ASYT. Cramer, of TheStreet.com, likes ERTS as MSFT left the video sports game biz.
Mid-day News
U.S. stocks are mostly lower mid-day on rising energy prices and profit-taking. Autodesk(ADSK) management said, "We are seeing increased demand across all geographies and industries, particularly in our Design Solutions Group." Russia's oil exports rose 22% from the start of the year to March 29, as the country's producers boosted output, said OAO Transneft. Crude oil futures rose after OPEC ministers said the group should reduce production targets as planned next month to prevent prices from sliding during the second quarter. U.S. House lawmakers proposed legislation to speed installation of airliners defenses against shoulder-fired missiles, saying the devices remain one of the greatest threats to aviation security, Bloomberg reported. Elaine Garzarelli told CNBC her models show that U.S. stocks are the cheapest they have been since before the 90's bull run, taking into account interest rates and profits.
BOTTOM LINE: The Portfolio is down today on weakness in airline and technology positions. I have taken profits in a few longs, bringing market exposure down to 100%. I will likely reduce this further on any strength in the afternoon. I don't want to have too much exposure into Friday's employment report.
Tuesday Watch
Earnings Announcements
Company/Estimate
ACN/.25
KMX/.21
Splits
AMG 3-for-2
APH 2-for-1
XTEX 2-for-1
Economic Data
None of note.
Recommendations
Goldman Sachs says it sees a brighter outlook for IT spending as capital expenditure estimates among tech's 3 key end markets(financials, communications and manufacturing) have been moving higher. GS says EMC, DELL, IBM, BRCD, HPQ, LXK, NTAP and VRTSE will benefit. GS reiterated Outperform on DHR. Lehman Brothers recommended investors lower the duration of U.S. bond portfolios amid "ubiquitous" signs of rising interest rates, including faster inflation and employment growth that is poised to accelerate.
Late-Night News
Asian stocks are mostly higher, led by strength in Hong Kong shares on strong earnings reports. Japan sold about a third less yen in the second half of the past month compared with the previous two weeks because an improving economy made it harder to justify a weaker yen, JP Morgan said. The SEC is investigating whether some businesses have been awarding employees stock options before announcing information that boosts the shares, the Wall Street Journal reported. U.S. companies' politically controversial practice of sending technology industry work outside the country results in the creation of twice as many jobs in the U.S. and some wage increases, the Wall Street Journal said. PepsiCo(PEP) boosted its annual dividend by 44% after saying its quarterly and annual profit will be at the high end of forecasts. AT&T will allow New Jersey and Texas customers to make phone calls over the internet starting today, the WSJ reported. U.S. restaurants are beginning to rebound with the largest chains reporting sales growth of up to 6% in January and February, the WSJ reported.
Late-Night Trading
Asian Indices -.25% to +1.75%.
S&P 500 indicated -.12%.
NASDAQ indicated -.24%.
BOTTOM LINE: The Portfolio is 125% net long and I will use any strength in the next few days to reduce market exposure ahead of Friday's employment report. A rise in the yield of the 10-yr. T-note through 4.21% from its current level of 3.87% would break its short-term downtrend. This will likely happen on a much better-than-expected employment report. However, I expect an in-line to slightly better-than-expected report which shouldn't result in a significant rise in rates.
Company/Estimate
ACN/.25
KMX/.21
Splits
AMG 3-for-2
APH 2-for-1
XTEX 2-for-1
Economic Data
None of note.
Recommendations
Goldman Sachs says it sees a brighter outlook for IT spending as capital expenditure estimates among tech's 3 key end markets(financials, communications and manufacturing) have been moving higher. GS says EMC, DELL, IBM, BRCD, HPQ, LXK, NTAP and VRTSE will benefit. GS reiterated Outperform on DHR. Lehman Brothers recommended investors lower the duration of U.S. bond portfolios amid "ubiquitous" signs of rising interest rates, including faster inflation and employment growth that is poised to accelerate.
Late-Night News
Asian stocks are mostly higher, led by strength in Hong Kong shares on strong earnings reports. Japan sold about a third less yen in the second half of the past month compared with the previous two weeks because an improving economy made it harder to justify a weaker yen, JP Morgan said. The SEC is investigating whether some businesses have been awarding employees stock options before announcing information that boosts the shares, the Wall Street Journal reported. U.S. companies' politically controversial practice of sending technology industry work outside the country results in the creation of twice as many jobs in the U.S. and some wage increases, the Wall Street Journal said. PepsiCo(PEP) boosted its annual dividend by 44% after saying its quarterly and annual profit will be at the high end of forecasts. AT&T will allow New Jersey and Texas customers to make phone calls over the internet starting today, the WSJ reported. U.S. restaurants are beginning to rebound with the largest chains reporting sales growth of up to 6% in January and February, the WSJ reported.
Late-Night Trading
Asian Indices -.25% to +1.75%.
S&P 500 indicated -.12%.
NASDAQ indicated -.24%.
BOTTOM LINE: The Portfolio is 125% net long and I will use any strength in the next few days to reduce market exposure ahead of Friday's employment report. A rise in the yield of the 10-yr. T-note through 4.21% from its current level of 3.87% would break its short-term downtrend. This will likely happen on a much better-than-expected employment report. However, I expect an in-line to slightly better-than-expected report which shouldn't result in a significant rise in rates.
Monday, March 29, 2004
Monday Close
S&P 500 1,122.47 +1.30%
NASDAQ 1,992.57 +1.66%
Leading Sectors
Biotech +3.11%
Wireless +2.61%
Airlines +2.60%
Lagging Sectors
Energy +.47%
Homebuilders -.16%
Oil Service -.54%
Other
Crude Oil 35.42 -.08%
Natural Gas 5.37 -.56%
Gold 419.00 +.19%
Base Metals 112.26 +.13%
U.S. Dollar 88.54 -.39%
10-Yr. Long-Bond Yield 3.89% +1.54%
VIX 16.50 -4.79%
Put/Call .65 -15.58%
NYSE Arms .35 -60.23%
After-hours Movers
VASC +28.0% after announcing that it had received 510(K) clearance by the FDA for its D-Stat Dry 3x3 hemostatic bandage.
BLTI +6.85% on no news.
ACS +3.65% after saying it would replace Travelers in the S&P 500 index.
Recommendations
Goldman Sachs reiterated Outperform on STN. GS says they expect upwards earnings guidance from a number of retailers given sold same-store sales, tight inventories and low markdowns.
After-hours News
U.S. stocks finished broadly higher Monday on falling energy prices, positive comments from WalMart, multiple takeover announcements and speculation that Friday's employment report will exceed consensus. A recent Australian poll found that 61% of voters thought Australian troops should stay in Iraq, supporting Prime Minister John Howard's stance, the Sydney Morning Herald reported.
BOTTOM LINE: The Portfolio had a very good day today. I rotated out of a few winning longs and into technology stocks that are just beginning to break-out technically, leaving Portfolio market exposure at 125% net long. I believe we have seen the lows for this recent correction. A test will likely occur in the early part of April and succeed. Long-term investors should use any weakness in the coming weeks to add to favorite long positions. In the short-term, the NASDAQ will likely begin a consolidation on a breach of the 2000 level. The employment report on Friday will dictate trading in the near-term, as well.
NASDAQ 1,992.57 +1.66%
Leading Sectors
Biotech +3.11%
Wireless +2.61%
Airlines +2.60%
Lagging Sectors
Energy +.47%
Homebuilders -.16%
Oil Service -.54%
Other
Crude Oil 35.42 -.08%
Natural Gas 5.37 -.56%
Gold 419.00 +.19%
Base Metals 112.26 +.13%
U.S. Dollar 88.54 -.39%
10-Yr. Long-Bond Yield 3.89% +1.54%
VIX 16.50 -4.79%
Put/Call .65 -15.58%
NYSE Arms .35 -60.23%
After-hours Movers
VASC +28.0% after announcing that it had received 510(K) clearance by the FDA for its D-Stat Dry 3x3 hemostatic bandage.
BLTI +6.85% on no news.
ACS +3.65% after saying it would replace Travelers in the S&P 500 index.
Recommendations
Goldman Sachs reiterated Outperform on STN. GS says they expect upwards earnings guidance from a number of retailers given sold same-store sales, tight inventories and low markdowns.
After-hours News
U.S. stocks finished broadly higher Monday on falling energy prices, positive comments from WalMart, multiple takeover announcements and speculation that Friday's employment report will exceed consensus. A recent Australian poll found that 61% of voters thought Australian troops should stay in Iraq, supporting Prime Minister John Howard's stance, the Sydney Morning Herald reported.
BOTTOM LINE: The Portfolio had a very good day today. I rotated out of a few winning longs and into technology stocks that are just beginning to break-out technically, leaving Portfolio market exposure at 125% net long. I believe we have seen the lows for this recent correction. A test will likely occur in the early part of April and succeed. Long-term investors should use any weakness in the coming weeks to add to favorite long positions. In the short-term, the NASDAQ will likely begin a consolidation on a breach of the 2000 level. The employment report on Friday will dictate trading in the near-term, as well.
Mid-day Update
S&P 500 1,123.22 +1.37%
NASDAQ 1,995.49 +1.81%
Leading Sectors
Biotech +3.28%
Wireless +2.72%
Networking +2.49%
Lagging Sectors
Utilities +.33%
Homebuilders +.22%
Oil Service -.41%
Other
Crude Oil 35.32 -1.15%
Natural Gas 5.38 -.19%
Gold 421.20 -.47%
Base Metals 112.26 +.13%
U.S. Dollar 88.64 -.28%
10-Yr. Long-Bond Yield 3.90% +1.84%
VIX 16.35 -5.65%
Put/Call .64 -16.88%
NYSE Arms .32 -63.64%
Market Movers
HLYW +27.6% after saying a management-led group would take it private in an $840M cash deal.
TLRK + 44.2% after announcing AMGN will acquire it for $1.3B in stock.
MCH +25.1% after announcing LYO will acquire it for $1B in stock.
HPQ +4.2% after positive Barron's article.
AWIN +29.8% after announcing MTOH will acquire it for $281.3M in cash and stock. MTOH -8.3%.
GVHR +10.2% after acquiring Epix HR outsourcing portfolio and raising estimates.
NFLX +10.2% after opening new shipping center, saying it expects 5M more members and $1B in revenue by 06 and upgrade to Buy at Roth Capital, target $36.
FMC +10.2% after significantly boosting 1Q forecast.
LWAY -8.1% after reporting disappointing earnings report.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on ATYT ahead of earnings release. GS reiterated Outperform on RCL and AMGN. GS says March same-store sales for retailers will be broadly strong, serving as catalyst for further stock gains due to EPS upside. Citi Smith Barney said to Buy TCB on any earnings related weakness(sees potential $2 downside) after it reports. Citi expects a positive earnings surprise from JPM and trimmed MER estimates $.03 for a one-time insurance adjustment and expects MER to begin expensing options, which would require restatement of prior results. Citi lowering DISH to Hold, target $38, prefers DTV. Citi maintains bullish stance on life insurance stocks, favorites are PRU, PFG, AMH, LNC, UNM and AFC. MXO cut to Underperform at JP Morgan. Qualcomm raised to Outperform at Schwab Soundview, target $75. C raised to Overweight at Prudential. PTEN raised to Buy at Merrill Lynch. STAK rated Buy at Merrill. KO and PEP raised to Outperform at Bear Stearns. TheStreet.com has positive article on MHS, CMX and ESRX, saying they will benefit from prescription drug benefit. State Street's Global Resource Fund says coal is the best place to be in energy, favorite is CNX, reported TheStreet.com. TSC has a positive article on railroad stocks, favorites are NSC and BNI. TSC also positive on CLB.
Mid-day News
U.S. stocks are rising sharply mid-day on multiple takeover announcements, falling energy prices and positive comments from WalMart. Citi Smith Barney said small-medium business demand for software remains solid as customers are using the tax code benefit of accelerated depreciation as a reason to buy. Sarbanes Oxley/other regulatory requirements have emerged as new demand drivers, and value-added-resellers are hiring. Citi is also looking for an above-consensus 200,000 rise in non-farm payrolls and a drop in the unemployment rate to 5.5%. WalMart said March same-store sales are coming in at the high-end of estimates. Federal Forge filed for Chapter 11 bankruptcy after GM refused to pay more for the supplier's steel components, Automotive News reported. The chief of al-Qaeda's intelligence operations was killed in last week's Pakistani raid, Agence France-Presse said. Qualcomm(QCOM) plans to hire 1,000 workers and increase its research budget to develop chips that will induce U.S. consumers to buy a handset as often as every year, Bloomberg reported.
BOTTOM LINE: The Portfolio is having a very good day today as its 125% net long exposure is paying dividends on today's rally. I will likely rotate out of a few of my significant winners on the long-side and into stocks that are just beginning to break-out technically. I may also trim my homebuilding exposure as I am beginning to believe the risk to Friday's jobs report is a blow-out number on the upside which would send interest rates higher. I am shifting my jobs report expectations to an "at-consensus" number to a slightly "above-consensus" number. This should evoke a positive response from the equity market. A jobs report that is significantly below expectations or significantly above expectations will likely result in a sell-off.
NASDAQ 1,995.49 +1.81%
Leading Sectors
Biotech +3.28%
Wireless +2.72%
Networking +2.49%
Lagging Sectors
Utilities +.33%
Homebuilders +.22%
Oil Service -.41%
Other
Crude Oil 35.32 -1.15%
Natural Gas 5.38 -.19%
Gold 421.20 -.47%
Base Metals 112.26 +.13%
U.S. Dollar 88.64 -.28%
10-Yr. Long-Bond Yield 3.90% +1.84%
VIX 16.35 -5.65%
Put/Call .64 -16.88%
NYSE Arms .32 -63.64%
Market Movers
HLYW +27.6% after saying a management-led group would take it private in an $840M cash deal.
TLRK + 44.2% after announcing AMGN will acquire it for $1.3B in stock.
MCH +25.1% after announcing LYO will acquire it for $1B in stock.
HPQ +4.2% after positive Barron's article.
AWIN +29.8% after announcing MTOH will acquire it for $281.3M in cash and stock. MTOH -8.3%.
GVHR +10.2% after acquiring Epix HR outsourcing portfolio and raising estimates.
NFLX +10.2% after opening new shipping center, saying it expects 5M more members and $1B in revenue by 06 and upgrade to Buy at Roth Capital, target $36.
FMC +10.2% after significantly boosting 1Q forecast.
LWAY -8.1% after reporting disappointing earnings report.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on ATYT ahead of earnings release. GS reiterated Outperform on RCL and AMGN. GS says March same-store sales for retailers will be broadly strong, serving as catalyst for further stock gains due to EPS upside. Citi Smith Barney said to Buy TCB on any earnings related weakness(sees potential $2 downside) after it reports. Citi expects a positive earnings surprise from JPM and trimmed MER estimates $.03 for a one-time insurance adjustment and expects MER to begin expensing options, which would require restatement of prior results. Citi lowering DISH to Hold, target $38, prefers DTV. Citi maintains bullish stance on life insurance stocks, favorites are PRU, PFG, AMH, LNC, UNM and AFC. MXO cut to Underperform at JP Morgan. Qualcomm raised to Outperform at Schwab Soundview, target $75. C raised to Overweight at Prudential. PTEN raised to Buy at Merrill Lynch. STAK rated Buy at Merrill. KO and PEP raised to Outperform at Bear Stearns. TheStreet.com has positive article on MHS, CMX and ESRX, saying they will benefit from prescription drug benefit. State Street's Global Resource Fund says coal is the best place to be in energy, favorite is CNX, reported TheStreet.com. TSC has a positive article on railroad stocks, favorites are NSC and BNI. TSC also positive on CLB.
Mid-day News
U.S. stocks are rising sharply mid-day on multiple takeover announcements, falling energy prices and positive comments from WalMart. Citi Smith Barney said small-medium business demand for software remains solid as customers are using the tax code benefit of accelerated depreciation as a reason to buy. Sarbanes Oxley/other regulatory requirements have emerged as new demand drivers, and value-added-resellers are hiring. Citi is also looking for an above-consensus 200,000 rise in non-farm payrolls and a drop in the unemployment rate to 5.5%. WalMart said March same-store sales are coming in at the high-end of estimates. Federal Forge filed for Chapter 11 bankruptcy after GM refused to pay more for the supplier's steel components, Automotive News reported. The chief of al-Qaeda's intelligence operations was killed in last week's Pakistani raid, Agence France-Presse said. Qualcomm(QCOM) plans to hire 1,000 workers and increase its research budget to develop chips that will induce U.S. consumers to buy a handset as often as every year, Bloomberg reported.
BOTTOM LINE: The Portfolio is having a very good day today as its 125% net long exposure is paying dividends on today's rally. I will likely rotate out of a few of my significant winners on the long-side and into stocks that are just beginning to break-out technically. I may also trim my homebuilding exposure as I am beginning to believe the risk to Friday's jobs report is a blow-out number on the upside which would send interest rates higher. I am shifting my jobs report expectations to an "at-consensus" number to a slightly "above-consensus" number. This should evoke a positive response from the equity market. A jobs report that is significantly below expectations or significantly above expectations will likely result in a sell-off.
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