Indices
S&P 500 1,140.60 +.53%
Dow 10,472.84 +.20%
NASDAQ 2,049.77 +2.71%
Russell 2000 590.71 +1.26%
Wilshire 5000 11,150.42 +.65%
Volatility(VIX) 14.01 -6.23%
AAII Bullish % 50.0% -21.57%
US Dollar 91.08 +1.30%
CRB 270.12 -2.67%
Futures Spot Prices
Gold 395.70 -1.40%
Crude Oil 36.46 -1.33%
Natural Gas 5.57 -.43%
Base Metals 107.35 -4.94%
10-year US Treasury Yield 4.45% +2.53%
Average 30-year Mortgage Rate 5.94% +.85%
Leading Sectors
Wireless +5.27%
Software +4.44%
Hospitals +4.23%
Lagging Sectors
Energy -1.29%
Drugs -1.34%
Commodity -1.95%
*% Gain or loss for the week
Saturday, April 24, 2004
Friday Close
S&P 500 1,140.60 +.06%
NASDAQ 2,049.77 +.83%
Leading Sectors
Iron/Steel +4.13%
Internet +3.90%
Papers +3.88%
Lagging Sectors
Semis +.36%
Fashion -.03%
Disk Drives -.80%
Other
Crude Oil 36.46 -.68%
Natural Gas 5.57 -.92%
Gold 395.70 +.46%
Base Metals 107.35 +.14%
U.S. Dollar 91.08 +.29%
10-Yr. Long-Bond Yield 4.45% +1.67%
VIX 14.01 -4.11%
Put/Call .67 +6.35%
NYSE Arms .80 +9.59%
After-hours Movers
None of note.
Recommendations
Goldman Sachs reiterated Outperform on SAP, IGT, KO, CCE, PEP, SUN, BAX, GDT, PHCC, CSCO and MSFT. GS reiterated Underperform on CYT and POT.
After-hours News
U.S. stocks finished higher Friday as strong corporate earnings and economic reports outweighed rising interest rates. After the close, Bloomberg reported that with more than half of the S&P 500 having reported quarterly results, 78% have exceeded expectations and only 11% have missed estimates. The average earnings increase so far is 26% versus estimates of 13% when the period began, Thomson Financial reported. Fannie Mae recently added Ernst & Young to a list of consultants advising it over its accounting practices, even though the SEC barred the firm from taking on new clients, Dow Jones reported. President Bush cautioned Israeli Prime Minister Sharon against harming Palestinian leader Yasser Arafat after the Israeli leader said he was no longer bound by a promise to spare Arafat from attack, the AP reported. With the U.S. lifting most economic sanctions on Libya in exchange for Qaddafi's agreement to give up weapons of mass destruction, Libyan businesses and government officials are expecting a boom. Africa's biggest holder of known oil reserves can now bring in U.S. companies to modernize its equipment and explore for new deposits. Libya's oil industry is pumping half as much oil as it did 35 years ago when Qaddafi took power. The country holds at least 36 billion barrels of proven oil reserves, worth more than $1 trillion at current prices. Exxon Mobil, ChevronTexaco, ConocoPhillips, Occidental Petroleum and Amerada Hess are all interested in returning to Libya, Bloomberg reported. Chinese President Hu Jintao vowed controls to keep the economy on a steady footing, amid overheating in some industries that has led to shortages of oil, coal, power and choked the transportation system, Bloomberg reported.
Bottom LINE: The Portfolio was unchanged today as more U.S. stocks declined than advanced, notwithstanding the performance of the major indices. I did not trade in the afternoon and the Portfolio is still 125% net long. Taking into account yesterday's large gains and today's interest rate/Iraq fears, I thought the major indices performed pretty well today. I would like to see a follow-through gap up on good volume in the near future to confirm yesterday's move.
NASDAQ 2,049.77 +.83%
Leading Sectors
Iron/Steel +4.13%
Internet +3.90%
Papers +3.88%
Lagging Sectors
Semis +.36%
Fashion -.03%
Disk Drives -.80%
Other
Crude Oil 36.46 -.68%
Natural Gas 5.57 -.92%
Gold 395.70 +.46%
Base Metals 107.35 +.14%
U.S. Dollar 91.08 +.29%
10-Yr. Long-Bond Yield 4.45% +1.67%
VIX 14.01 -4.11%
Put/Call .67 +6.35%
NYSE Arms .80 +9.59%
After-hours Movers
None of note.
Recommendations
Goldman Sachs reiterated Outperform on SAP, IGT, KO, CCE, PEP, SUN, BAX, GDT, PHCC, CSCO and MSFT. GS reiterated Underperform on CYT and POT.
After-hours News
U.S. stocks finished higher Friday as strong corporate earnings and economic reports outweighed rising interest rates. After the close, Bloomberg reported that with more than half of the S&P 500 having reported quarterly results, 78% have exceeded expectations and only 11% have missed estimates. The average earnings increase so far is 26% versus estimates of 13% when the period began, Thomson Financial reported. Fannie Mae recently added Ernst & Young to a list of consultants advising it over its accounting practices, even though the SEC barred the firm from taking on new clients, Dow Jones reported. President Bush cautioned Israeli Prime Minister Sharon against harming Palestinian leader Yasser Arafat after the Israeli leader said he was no longer bound by a promise to spare Arafat from attack, the AP reported. With the U.S. lifting most economic sanctions on Libya in exchange for Qaddafi's agreement to give up weapons of mass destruction, Libyan businesses and government officials are expecting a boom. Africa's biggest holder of known oil reserves can now bring in U.S. companies to modernize its equipment and explore for new deposits. Libya's oil industry is pumping half as much oil as it did 35 years ago when Qaddafi took power. The country holds at least 36 billion barrels of proven oil reserves, worth more than $1 trillion at current prices. Exxon Mobil, ChevronTexaco, ConocoPhillips, Occidental Petroleum and Amerada Hess are all interested in returning to Libya, Bloomberg reported. Chinese President Hu Jintao vowed controls to keep the economy on a steady footing, amid overheating in some industries that has led to shortages of oil, coal, power and choked the transportation system, Bloomberg reported.
Bottom LINE: The Portfolio was unchanged today as more U.S. stocks declined than advanced, notwithstanding the performance of the major indices. I did not trade in the afternoon and the Portfolio is still 125% net long. Taking into account yesterday's large gains and today's interest rate/Iraq fears, I thought the major indices performed pretty well today. I would like to see a follow-through gap up on good volume in the near future to confirm yesterday's move.
Friday, April 23, 2004
Mid-day Update
S&P 500 1,139.02 -.08%
NASDAQ 2,043.26 +.56%
Leading Sectors
Fashion +1.32%
Semis +1.17%
Broadband +.84%
Lagging Sectors
Iron/Steel -1.78%
Tobacco -2.06%
Airlines -2.07%
Other
Crude Oil 36.27 -1.20%
Natural Gas 5.56 -1.12%
Gold 394.80 +.23%
Base Metals 107.35 +.14%
U.S. Dollar 91.13 +.34%
10-Yr. Long-Bond Yield 4.42% +1.07%
VIX 14.10 -3.42%
Put/Call .63 unch.
NYSE Arms .72 -1.37%
Market Movers
MSFT +6.01% after beating 3Q estimates, raising 05 earnings and lowering 05 sales forecasts.
GLW +16.8% after beating 1Q estimates and raising 2Q guidance.
MCRL +14.1% after beating 1Q estimates and raising 2Q guidance.
MCHP +14.30% after beating 4Q estimates, raising 1Q forecast and announcing 2.5M buyback.
TESS +19.62% on better-than-expected 4Q and raised 05 guidance.
SYNA +20.64% after beating 3Q estimates and raising 4Q guidance.
CLS +16.6% after beating 1Q estimates and raising 2Q forecast.
PKTR +16.56% after beating 1Q estimates.
BWLD +15.38% after beating 1Q estimates, raising 2Q guidance and RBC upgrade to Outperform.
MTLG -19.2% after beating 1Q estimate, but lower 2Q guidance.
ABTL -23.83% after missing 1Q estimates and lowering 04 forecast.
PLCM -13.15% after beating 1Q estimate, but gave disappointing guidance.
STE -12.43% after meeting 4Q estimate, lowering 1Q and 04 guidance.
RSYS -11.11% after meeting 1Q estimate and lowering 2Q guidance.
Economic Data
Durable Goods Orders for March +3.4% versus +.7% estimate and +3.8% prior month.
Durable Goods Oders Less Transportation +3.3% versus +1.4% estimate and +1.1% prior month.
Recommendations
KSS raised to Buy at Deutsche Bank, target $52. PGR and PH cut to Reduce at UBS. AT and WC raised to Overweight at JP Morgan. CLS raised to Sector Outperform at CIBC, target $26. CELG raised to Outperform at Thomas Weisel, target $70.00. NUE cut to Underweight at Prudential. HOT raised to Buy at Merrill, target $46. MCHP raised to Buy at Legg Mason, target $36. GBP rated Underperform at CSFB. ASN rated Outperform at CSFB, target $30. CNX raised to Outperform at Bear Stearns. BRCM rated Outperform by Raymond James, target $50. RYL raised to Strong Buy at Raymond James, target $135. Goldman Sachs reiterated Outperform on MERQ, AA, GLW, BAX, PHCC, GDT, IGT, AMGN, GILD, AXP, TPX, and reiterated Underperform on EW, VRSN and T. Citi Smith Barney said to Buy NCX, target $32. Citi reiterated Buy on UPS, raised estimates, target $80. Citi reiterated Buy on MSFT, raised estimates and target to $34. Citi said AMGN is top biotech pick. Citi reiterated Buy on AXP, target $57. Citi upgraded FISV to Buy, target $46. Citi reiterated Buy on DOX, target $34. Citi reiterated Buy on OHP, $70 target. TheStreet.com has a column saying Chinese ADRs are good for a long trade here.
Mid-day News
U.S. stocks are mixed mid-day as a much better-than-expected Durable Goods Report sent interest rates higher, the U.S. dollar higher and crude oil lower. The U.S. FDA is seeking reports of any problems encountered with Boston Scientific's Taxus stent, the NY Times said. Merrill Lynch ousted Deutsche Bank last quarter as the most accurate forecaster of foreign exchange rates, Bloomberg reported. U.S. Durable Goods Orders rose 3.4% in March, significantly beating estimates, as corporate spending accelerated on machinery, metals and computers. "Spending on software and equipment appears to be increasing quite strongly," Fed Vice Chairman Roger Ferguson said. "Today's report suggests business investment exceeded 10% for a third straight quarter," said Steven Wieting, an economist at Citi Smith Barney said. U.S. Brigadier General Mark Kimmitt today said a U.S. offensive on the city of Fallujah may resume shortly if the heavy weapons of foreign fighters aren't handed over to U.S.-led forces soon, Bloomberg reported.
BOTTOM LINE: The Portfolio is down slightly today, as most stocks are lower and my 125% market exposure is hurting performance. I have not traded as of yet and the Portfolio is still 125% net long. I expect stocks to improve this afternoon as investors anticipate the positive collateral effects from the recent good news by numerous bell-weather companies. Bears are selling on interest rate and Iraq fears, both of which are widely known.
NASDAQ 2,043.26 +.56%
Leading Sectors
Fashion +1.32%
Semis +1.17%
Broadband +.84%
Lagging Sectors
Iron/Steel -1.78%
Tobacco -2.06%
Airlines -2.07%
Other
Crude Oil 36.27 -1.20%
Natural Gas 5.56 -1.12%
Gold 394.80 +.23%
Base Metals 107.35 +.14%
U.S. Dollar 91.13 +.34%
10-Yr. Long-Bond Yield 4.42% +1.07%
VIX 14.10 -3.42%
Put/Call .63 unch.
NYSE Arms .72 -1.37%
Market Movers
MSFT +6.01% after beating 3Q estimates, raising 05 earnings and lowering 05 sales forecasts.
GLW +16.8% after beating 1Q estimates and raising 2Q guidance.
MCRL +14.1% after beating 1Q estimates and raising 2Q guidance.
MCHP +14.30% after beating 4Q estimates, raising 1Q forecast and announcing 2.5M buyback.
TESS +19.62% on better-than-expected 4Q and raised 05 guidance.
SYNA +20.64% after beating 3Q estimates and raising 4Q guidance.
CLS +16.6% after beating 1Q estimates and raising 2Q forecast.
PKTR +16.56% after beating 1Q estimates.
BWLD +15.38% after beating 1Q estimates, raising 2Q guidance and RBC upgrade to Outperform.
MTLG -19.2% after beating 1Q estimate, but lower 2Q guidance.
ABTL -23.83% after missing 1Q estimates and lowering 04 forecast.
PLCM -13.15% after beating 1Q estimate, but gave disappointing guidance.
STE -12.43% after meeting 4Q estimate, lowering 1Q and 04 guidance.
RSYS -11.11% after meeting 1Q estimate and lowering 2Q guidance.
Economic Data
Durable Goods Orders for March +3.4% versus +.7% estimate and +3.8% prior month.
Durable Goods Oders Less Transportation +3.3% versus +1.4% estimate and +1.1% prior month.
Recommendations
KSS raised to Buy at Deutsche Bank, target $52. PGR and PH cut to Reduce at UBS. AT and WC raised to Overweight at JP Morgan. CLS raised to Sector Outperform at CIBC, target $26. CELG raised to Outperform at Thomas Weisel, target $70.00. NUE cut to Underweight at Prudential. HOT raised to Buy at Merrill, target $46. MCHP raised to Buy at Legg Mason, target $36. GBP rated Underperform at CSFB. ASN rated Outperform at CSFB, target $30. CNX raised to Outperform at Bear Stearns. BRCM rated Outperform by Raymond James, target $50. RYL raised to Strong Buy at Raymond James, target $135. Goldman Sachs reiterated Outperform on MERQ, AA, GLW, BAX, PHCC, GDT, IGT, AMGN, GILD, AXP, TPX, and reiterated Underperform on EW, VRSN and T. Citi Smith Barney said to Buy NCX, target $32. Citi reiterated Buy on UPS, raised estimates, target $80. Citi reiterated Buy on MSFT, raised estimates and target to $34. Citi said AMGN is top biotech pick. Citi reiterated Buy on AXP, target $57. Citi upgraded FISV to Buy, target $46. Citi reiterated Buy on DOX, target $34. Citi reiterated Buy on OHP, $70 target. TheStreet.com has a column saying Chinese ADRs are good for a long trade here.
Mid-day News
U.S. stocks are mixed mid-day as a much better-than-expected Durable Goods Report sent interest rates higher, the U.S. dollar higher and crude oil lower. The U.S. FDA is seeking reports of any problems encountered with Boston Scientific's Taxus stent, the NY Times said. Merrill Lynch ousted Deutsche Bank last quarter as the most accurate forecaster of foreign exchange rates, Bloomberg reported. U.S. Durable Goods Orders rose 3.4% in March, significantly beating estimates, as corporate spending accelerated on machinery, metals and computers. "Spending on software and equipment appears to be increasing quite strongly," Fed Vice Chairman Roger Ferguson said. "Today's report suggests business investment exceeded 10% for a third straight quarter," said Steven Wieting, an economist at Citi Smith Barney said. U.S. Brigadier General Mark Kimmitt today said a U.S. offensive on the city of Fallujah may resume shortly if the heavy weapons of foreign fighters aren't handed over to U.S.-led forces soon, Bloomberg reported.
BOTTOM LINE: The Portfolio is down slightly today, as most stocks are lower and my 125% market exposure is hurting performance. I have not traded as of yet and the Portfolio is still 125% net long. I expect stocks to improve this afternoon as investors anticipate the positive collateral effects from the recent good news by numerous bell-weather companies. Bears are selling on interest rate and Iraq fears, both of which are widely known.
Friday Watch
Earnings Announcements
Company/Estimate
AWE/.01
HGSI/.41
SLB/.47
STE/.43
SII/.42
WY/.56
Splits
None of note.
Economic Data
Durable Goods Orders for March estimated +.7% vs. +2.5% last month.
Durable Goods Less Transportation estimated +1.4% vs. -.3% prior month.
Recommendations
Goldman Sachs reiterated Underperform on TSG, SIAL, PYX and CR. GS reiterated Outperform on VIAB, ITT, AMGN, DHR and FORM.
Late-Night News
Asian indices are mostly higher on strength in U.S. stocks and strong corporate earnings reports. Shares of Doral Financial(DRL), the fourth largest Puerto Rican bank by assets, are worth buying amid a housing shortage on the island that is boosting mortgage demand, Business Week said. Walt Disney is in talks with China's Central Television and media companies in Beijing and Shanghai on a production venture for a network in the mainland, the South China Morning Post reported. China plans to scrap the ceiling on bank lending rates in its latest attempt to curb credit growth and excess investments that are fueling inflation. "We're seeing the beginning of a turnaround for the national market," with the volume of help-wanted advertising rising after 3 years of decline, said Kenneth Goldstein, chief economist of the Conference Board, a New York research group.
Late-Night Trading
Asian Indices -.75% to +1.0%.
S&P 500 indicated +.31%.
NASDAQ indicated +.77%.
BOTTOM LINE: U.S. stocks should extend recent gains tomorrow on strong corporate earnings reports after the close today. Rising Asian shares, declining interest rates and falling crude prices should also boost stocks on the open. The Portfolio is 125% net long heading into trading tomorrow.
Company/Estimate
AWE/.01
HGSI/.41
SLB/.47
STE/.43
SII/.42
WY/.56
Splits
None of note.
Economic Data
Durable Goods Orders for March estimated +.7% vs. +2.5% last month.
Durable Goods Less Transportation estimated +1.4% vs. -.3% prior month.
Recommendations
Goldman Sachs reiterated Underperform on TSG, SIAL, PYX and CR. GS reiterated Outperform on VIAB, ITT, AMGN, DHR and FORM.
Late-Night News
Asian indices are mostly higher on strength in U.S. stocks and strong corporate earnings reports. Shares of Doral Financial(DRL), the fourth largest Puerto Rican bank by assets, are worth buying amid a housing shortage on the island that is boosting mortgage demand, Business Week said. Walt Disney is in talks with China's Central Television and media companies in Beijing and Shanghai on a production venture for a network in the mainland, the South China Morning Post reported. China plans to scrap the ceiling on bank lending rates in its latest attempt to curb credit growth and excess investments that are fueling inflation. "We're seeing the beginning of a turnaround for the national market," with the volume of help-wanted advertising rising after 3 years of decline, said Kenneth Goldstein, chief economist of the Conference Board, a New York research group.
Late-Night Trading
Asian Indices -.75% to +1.0%.
S&P 500 indicated +.31%.
NASDAQ indicated +.77%.
BOTTOM LINE: U.S. stocks should extend recent gains tomorrow on strong corporate earnings reports after the close today. Rising Asian shares, declining interest rates and falling crude prices should also boost stocks on the open. The Portfolio is 125% net long heading into trading tomorrow.
Thursday, April 22, 2004
Thursday Close
S&P 500 1,139.93 +1.41%
NASDAQ 2,032.91 +1.87%
Leading Sectors
Iron/Steel +4.13%
Internet +3.90%
Papers +3.88%
Lagging Sectors
Semis +.36%
Fashion -.03%
Disk Drives -.80%
Other
Crude Oil 36.79 +.22%
Natural Gas 5.62 -.05%
Gold 394.40 +.13%
Base Metals 107.20 -1.03%
U.S. Dollar 90.71 -.44%
10-Yr. Long-Bond Yield 4.38% -.91%
VIX 14.61 -6.35%
Put/Call .63 -10.0%
NYSE Arms .73 +40.38%
After-hours Movers
MSFT +4.89% after beating 3Q estimates, raising 05 earnings and lowering 05 sales forecasts.
BRCM +5.39% after beating 1Q estimates and raising 3Q guidance.
GLW +9.07% after beating 1Q estimates and raising 2Q guidance.
CLS +10.75% after beating 1Q estimates and raising 2Q forecast.
MCHP +6.60% after beating 4Q estimates, raising 1Q forecast and announcing 2.5M buyback.
GILD +7.23% after significantly beating 1Q forecast.
OHP -9.32% after WC ended talks to purchase the company.
ELX -6.79% after meeting 3Q estimates and lowering 4Q guidance.
PLCM -4.31% on profit-taking after beating 1Q estimates.
Recommendations
Goldman Sachs reiterated Outperform on MERQ, MSFT, AMGN, CAH, UPS,ACS and Underperform on VRSN, SGP and RKY.
After-hours News
U.S. stocks finished sharply higher Wednesday as numerous corporate earnings reports were better-than-expected, CEO's made positive comments regarding their company's outlook and interest rates fell. After the close, Microsoft CFO Connors said, "Overall corporate IT spending continues to improve and we expect to see healthy demand through the end of the year." Microsoft reported a 17% increase in fiscal third-quarter revenue, beating analyst estimates for both the top and bottom lines, Bloomberg reported. Corning CFO Flaws said they hired 500 workers in the first quarter, the first hiring increase since the stock market bubble burst in 2000, Bloomberg reported. Shares of Mohawk(MHK) will rise as demand for ceramic tile grows, Business Week said in its Inside Wall Street column. Imation Corp.(IMN) is selling more tapes and disks used to store computer data, boosted by the popularity of downloading music from the Internet, Business Week reported.
BOTTOM LINE: The Portfolio fell slightly today as I took losses in a few shorts early in the morning. I added a few more longs in the afternoon and the Portfolio is now 125% net long. After the close, Microsoft, Broadcom, Corning, Microchip Tech, Gilead Sciences and Amazon all beat estimates handily which should provide the catalyst for another positive day tomorrow.
NASDAQ 2,032.91 +1.87%
Leading Sectors
Iron/Steel +4.13%
Internet +3.90%
Papers +3.88%
Lagging Sectors
Semis +.36%
Fashion -.03%
Disk Drives -.80%
Other
Crude Oil 36.79 +.22%
Natural Gas 5.62 -.05%
Gold 394.40 +.13%
Base Metals 107.20 -1.03%
U.S. Dollar 90.71 -.44%
10-Yr. Long-Bond Yield 4.38% -.91%
VIX 14.61 -6.35%
Put/Call .63 -10.0%
NYSE Arms .73 +40.38%
After-hours Movers
MSFT +4.89% after beating 3Q estimates, raising 05 earnings and lowering 05 sales forecasts.
BRCM +5.39% after beating 1Q estimates and raising 3Q guidance.
GLW +9.07% after beating 1Q estimates and raising 2Q guidance.
CLS +10.75% after beating 1Q estimates and raising 2Q forecast.
MCHP +6.60% after beating 4Q estimates, raising 1Q forecast and announcing 2.5M buyback.
GILD +7.23% after significantly beating 1Q forecast.
OHP -9.32% after WC ended talks to purchase the company.
ELX -6.79% after meeting 3Q estimates and lowering 4Q guidance.
PLCM -4.31% on profit-taking after beating 1Q estimates.
Recommendations
Goldman Sachs reiterated Outperform on MERQ, MSFT, AMGN, CAH, UPS,ACS and Underperform on VRSN, SGP and RKY.
After-hours News
U.S. stocks finished sharply higher Wednesday as numerous corporate earnings reports were better-than-expected, CEO's made positive comments regarding their company's outlook and interest rates fell. After the close, Microsoft CFO Connors said, "Overall corporate IT spending continues to improve and we expect to see healthy demand through the end of the year." Microsoft reported a 17% increase in fiscal third-quarter revenue, beating analyst estimates for both the top and bottom lines, Bloomberg reported. Corning CFO Flaws said they hired 500 workers in the first quarter, the first hiring increase since the stock market bubble burst in 2000, Bloomberg reported. Shares of Mohawk(MHK) will rise as demand for ceramic tile grows, Business Week said in its Inside Wall Street column. Imation Corp.(IMN) is selling more tapes and disks used to store computer data, boosted by the popularity of downloading music from the Internet, Business Week reported.
BOTTOM LINE: The Portfolio fell slightly today as I took losses in a few shorts early in the morning. I added a few more longs in the afternoon and the Portfolio is now 125% net long. After the close, Microsoft, Broadcom, Corning, Microchip Tech, Gilead Sciences and Amazon all beat estimates handily which should provide the catalyst for another positive day tomorrow.
Mid-day Update
S&P 500 1,141.49 +1.56%
NASDAQ 2,033.59 +1.90%
Leading Sectors
Iron/Steel +4.32%
Internet +3.90%
Airlines +3.86%
Lagging Sectors
Nanotechnolgoy +.56%
Fashion -.03%
Disk Drives -.13%
Other
Crude Oil 36.90 +3.27%
Natural Gas 5.64 +.95%
Gold 393.80 +.61%
Base Metals 107.20 -1.03%
U.S. Dollar 91.07 -.05%
10-Yr. Long-Bond Yield 4.38% -.96%
VIX 14.12 -9.49%
Put/Call .64 -8.57%
NYSE Arms .69 +32.69%
Market Movers
KLAC -6.71% after beating 3Q estimates, but disappointing 4Q guidance and First Albany downgrade to neutral.
EBAY +7.13% after beating 1Q estimates and raising 2Q/04 guidance.
LSCP +23.7% after beating 1Q estimates substantially and raising 04 guidance significantly.
KVHI +19.8% after beating 1Q estimates and positive comments.
EYE +16.78% after beating 1Q estimates, lowering 2Q sales forecast and raising 04 guidance.
ESI +11.65% after beating 1Q estimates.
ROG +9.87% after beating 1Q estimates and raising 2Q guidance.
ASCL -19.31% after missing 1Q estimates substantially, lowering 2Q guidance and Needham downgrade to hold.
GTI -16.9% after missing 1Q estimates and lowering 2Q/04 guidance.
PLXS -12.6% on profit-taking after meeting 2Q estimates and raising 3Q guidance.
CCMP -10.4% after missing 2Q estimates and WR Hambrecht downgrade to Hold.
SSTI -6.97% on profit-taking after beating 1Q estimates and raising 2Q guidance.
Economic Data
Producer Price Index for March +.5% versus +.4% estimate and +.1% prior month.
PPI Ex Food & Energy for March +.2% versus +.1% estimate and +.1% prior month.
Initial Jobless Claims last week were 353K versus 340K estimate and 362K prior week.
Continuing Claims were 3019K versus 2988K estimate and 2967K prior week.
Recommendations
JP Morgan raised TK to Overweight. Deutsche Bank raised CB to Buy, target $82. Oppenheimer raised TRI to Buy, target $40. CIBC raised ADS to Sector Outperform, target $46. Legg Mason raised UOPX to Buy, target $108. Legg Mason raised KNGT to Buy, target $30. Lehman raised CTX to Overweight, target $64. Raymond James raised UPS to Outperform, target $80. Raymond James raised WEBX to Strong Buy, target $30. Goldman Sachs reiterated Underperform on FISV, CMI, RKY and F. GS upgraded GLK to Outperform. GS rated JNPR Outperform. GS reiterated Outperform on VOD, UPS, WEN, FDC, AIG, ADP, GDT, GLW, SBC, AIG, PHCC, CIT, BAX, CAH, IGT, TRI, FE, KLAC and KRB. Citi Smith Barney raised JNPR to 1S from 2S, target $32.50. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on ATH, raised estimates and price target to $134. Citi believes NOC, LMT and LLL will beat estimates. Citi reiterated Buy on VIAB, target $54. Citi reiterated Buy on HOT, target $47. Citi reiterated Buy on RCL, target $50. Citi reiterated Buy on SBUX, raised earning and target to $46. Citi reiterated Buy on TEX after weak quarter. Citi reiterated Buy on CTX, target $88. TheStreet.com has a positive column on HDI.
Mid-day News
U.S. stocks are sharply higher mid-day on a slew of positive earnings reports, positive CEO comments and falling interest rates. The U.S. will be involved in the Middle East for many years, and needs to demonstrate its resolve or risk "losing face" in the region and elsewhere in the world, James Schlesinger wrote in the Wall Street Journal. Abbey Joseph Cohen, of Goldman Sachs, made bullish comments on the economy and U.S. stock market on CNBC. AIG, the world's largest insurance company, said first-quarter profit rose 36%, Bloomberg reported. UPS, the largest package-shipping company, said first-quarter profit rose 24%, Bloomberg said. American Express said first-quarter profit rose 15% as rising consumer confidence and tax cuts encouraged more spending on credit cards and travel, Bloomberg reported. Caterpillar, the world's largest maker of earthmoving equipment, said first–quarter profit rose more than 300% on strong sales. Jim Owens, CEO of Caterpillar, said "It appears the world economy will have one of the strongest, broadest recoveries in years." He also said, "We anticipate that keeping pace with volume growth will require additional hiring through the remainder of the year." As many as 3,000 people were killed or injured in North Korea today as two fuel-laden trains collided and exploded, Reuters reported.
BOTTOM LINE: The Portfolio is down slightly today as my shorts hurt performance early in the morning. I covered several of these positions as they hit stop losses. I also added a number of new long positions in a variety of sectors, thus bringing the Portfolio's market exposure to 100% net long. One of my new long positions is INTC. I put a stop-loss of $26.25 on this trade. I think the market is signaling the beginning of the next up-leg in the current bull-run. Psychology appears to have shifted from concentrating on the few negatives to focusing on the many positives. American net worth is at all-time highs, the U.S. and world economies are growing at the fastest pace since the early 80's, inflation and interest rates are relatively low, corporate profits are at all-time highs/executives are making very positive comments about the future, stock valuations are falling as earnings significantly exceed expectations, the job market is accelerating and there has not been any new significant terrorist attacks on U.S. soil. These huge positives are more than outweighing the tougher-than-expected road to democracy in Iraq and high energy prices. I continue to expect the major U.S. indices to experience another double-digit gain this year on top of last year's large increase.
NASDAQ 2,033.59 +1.90%
Leading Sectors
Iron/Steel +4.32%
Internet +3.90%
Airlines +3.86%
Lagging Sectors
Nanotechnolgoy +.56%
Fashion -.03%
Disk Drives -.13%
Other
Crude Oil 36.90 +3.27%
Natural Gas 5.64 +.95%
Gold 393.80 +.61%
Base Metals 107.20 -1.03%
U.S. Dollar 91.07 -.05%
10-Yr. Long-Bond Yield 4.38% -.96%
VIX 14.12 -9.49%
Put/Call .64 -8.57%
NYSE Arms .69 +32.69%
Market Movers
KLAC -6.71% after beating 3Q estimates, but disappointing 4Q guidance and First Albany downgrade to neutral.
EBAY +7.13% after beating 1Q estimates and raising 2Q/04 guidance.
LSCP +23.7% after beating 1Q estimates substantially and raising 04 guidance significantly.
KVHI +19.8% after beating 1Q estimates and positive comments.
EYE +16.78% after beating 1Q estimates, lowering 2Q sales forecast and raising 04 guidance.
ESI +11.65% after beating 1Q estimates.
ROG +9.87% after beating 1Q estimates and raising 2Q guidance.
ASCL -19.31% after missing 1Q estimates substantially, lowering 2Q guidance and Needham downgrade to hold.
GTI -16.9% after missing 1Q estimates and lowering 2Q/04 guidance.
PLXS -12.6% on profit-taking after meeting 2Q estimates and raising 3Q guidance.
CCMP -10.4% after missing 2Q estimates and WR Hambrecht downgrade to Hold.
SSTI -6.97% on profit-taking after beating 1Q estimates and raising 2Q guidance.
Economic Data
Producer Price Index for March +.5% versus +.4% estimate and +.1% prior month.
PPI Ex Food & Energy for March +.2% versus +.1% estimate and +.1% prior month.
Initial Jobless Claims last week were 353K versus 340K estimate and 362K prior week.
Continuing Claims were 3019K versus 2988K estimate and 2967K prior week.
Recommendations
JP Morgan raised TK to Overweight. Deutsche Bank raised CB to Buy, target $82. Oppenheimer raised TRI to Buy, target $40. CIBC raised ADS to Sector Outperform, target $46. Legg Mason raised UOPX to Buy, target $108. Legg Mason raised KNGT to Buy, target $30. Lehman raised CTX to Overweight, target $64. Raymond James raised UPS to Outperform, target $80. Raymond James raised WEBX to Strong Buy, target $30. Goldman Sachs reiterated Underperform on FISV, CMI, RKY and F. GS upgraded GLK to Outperform. GS rated JNPR Outperform. GS reiterated Outperform on VOD, UPS, WEN, FDC, AIG, ADP, GDT, GLW, SBC, AIG, PHCC, CIT, BAX, CAH, IGT, TRI, FE, KLAC and KRB. Citi Smith Barney raised JNPR to 1S from 2S, target $32.50. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on ATH, raised estimates and price target to $134. Citi believes NOC, LMT and LLL will beat estimates. Citi reiterated Buy on VIAB, target $54. Citi reiterated Buy on HOT, target $47. Citi reiterated Buy on RCL, target $50. Citi reiterated Buy on SBUX, raised earning and target to $46. Citi reiterated Buy on TEX after weak quarter. Citi reiterated Buy on CTX, target $88. TheStreet.com has a positive column on HDI.
Mid-day News
U.S. stocks are sharply higher mid-day on a slew of positive earnings reports, positive CEO comments and falling interest rates. The U.S. will be involved in the Middle East for many years, and needs to demonstrate its resolve or risk "losing face" in the region and elsewhere in the world, James Schlesinger wrote in the Wall Street Journal. Abbey Joseph Cohen, of Goldman Sachs, made bullish comments on the economy and U.S. stock market on CNBC. AIG, the world's largest insurance company, said first-quarter profit rose 36%, Bloomberg reported. UPS, the largest package-shipping company, said first-quarter profit rose 24%, Bloomberg said. American Express said first-quarter profit rose 15% as rising consumer confidence and tax cuts encouraged more spending on credit cards and travel, Bloomberg reported. Caterpillar, the world's largest maker of earthmoving equipment, said first–quarter profit rose more than 300% on strong sales. Jim Owens, CEO of Caterpillar, said "It appears the world economy will have one of the strongest, broadest recoveries in years." He also said, "We anticipate that keeping pace with volume growth will require additional hiring through the remainder of the year." As many as 3,000 people were killed or injured in North Korea today as two fuel-laden trains collided and exploded, Reuters reported.
BOTTOM LINE: The Portfolio is down slightly today as my shorts hurt performance early in the morning. I covered several of these positions as they hit stop losses. I also added a number of new long positions in a variety of sectors, thus bringing the Portfolio's market exposure to 100% net long. One of my new long positions is INTC. I put a stop-loss of $26.25 on this trade. I think the market is signaling the beginning of the next up-leg in the current bull-run. Psychology appears to have shifted from concentrating on the few negatives to focusing on the many positives. American net worth is at all-time highs, the U.S. and world economies are growing at the fastest pace since the early 80's, inflation and interest rates are relatively low, corporate profits are at all-time highs/executives are making very positive comments about the future, stock valuations are falling as earnings significantly exceed expectations, the job market is accelerating and there has not been any new significant terrorist attacks on U.S. soil. These huge positives are more than outweighing the tougher-than-expected road to democracy in Iraq and high energy prices. I continue to expect the major U.S. indices to experience another double-digit gain this year on top of last year's large increase.
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