S&P 500 1,116.64 -.74%
NASDAQ 1,960.26 -1.44%
Leading Sectors
Drugs -.02%
HMO's -.08%
Retail -.11%
Lagging Sectors
Semis -2.45%
Nanotechnology -2.83%
Airlines -3.86%
Other
Crude Oil 39.25 -.08%
Natural Gas 6.36 +.03%
Gold 389.00 +.03%
Base Metals 108.12 -.29%
U.S. Dollar 88.95 +.12%
10-Yr. T-note Yield 4.71% -.59%
VIX 17.03 +5.91%
Put/Call 1.13 +20.21%
NYSE Arms 1.55 +38.39%
After-hours Movers
MBG +3.24% after beating 1Q estimates substantially.
FLSH +4.01% after INTC said flash memory biz was exceptionally strong.
SKIL -14.39% after beating 1Q estimates and lowering 05 guidance.
Recommendations
Citigroup Inc. said investors should buy the yen versus the dollar on the view that increased investment in Japan's stock market will boost the currency. Apex Silver(SIL) shares are expected to double in a year as the company prepares to develop its property in Bolivia, Business Week reported. Adelphia Communication's assets would be more valuable if combined with another company, Business Week reported. Pain Therapeutics(PTIE) is undervalued at $8 as its Remoxy painkilling medication has $1 billion market potential, Business Week reported.
After-hours News
U.S. stocks finished lower Thursday on investor fears over Intel's mid-quarter update and tomorrow's jobs report. After the close, McDonald's said it will begin giving away Sony Corp. music downloads with Big Macs to help extend its monthly sales gains, Bloomberg said. Wal-Mart may change its employee wage scales in the coming months, Business Week said. The Nasdaq is trying to attract European companies to list their shares on the U.S. exchange, the FT Deutschland said. Hoshyar Zebari, Iraq's foreign misister-designate, told the UN today that Iraqi soldiers must be under command of the interim government, while declaring that the U.S.-led military coalition is necessary for the stability of the country. The U.S. Commerce Dept. said it will cut duties on $4.6 billion in Canadian lumber imports to as low as 13% from about 27%. Tyco had its debt ratings raised to investment grade by Moody's Investors Service, Bloomberg reported. Intel said sales may meet its highest estimates this quarter as demand rises for flash-memory chips used in mobile phones, Bloomberg said. James Pavitt, the CIA's director of operations, will step down later this summer, CNN reported.
BOTTOM LINE: The Portfolio fell today on weakness in my technology long positions. I took profits in several of my biotech and security long positions in the afternoon as they hit stop-loss levels and I added a semiconductor long in the after-hours session, leaving the Portfolio with 75% net long exposure. I added SNDK long and I am using a $22.75 stop-loss on the position. As I expected, Intel had a good mid-quarter report, raising its revenue guidance range and upping gross margin expectations. With oil declining and Intel giving a positive mid-quarter update, the bond market's reaction to tomorrow's data will determine whether or not the recent rally reignites or stalls. I expect tomorrow's Non-farm Payrolls to modestly exceed economists' estimates of 225,000. However, I expect Manufacturing payrolls to significantly exceed expectations of 20,000. Under this scenario, I would expect bonds and stocks to move lower in the morning and then rally into the afternoon, leaving U.S. stocks higher on the day. A payroll number below or at expectations would likely result in a higher opening for U.S. stocks and bonds that would be sustainable throughout the day.
Thursday, June 03, 2004
Mid-day Update
S&P 500 1,122.03 -.26%
NASDAQ 1,976.15 -.65%
Leading Sectors
Broadcasting +.70%
Restaurants +.61%
Drugs +.58%
Lagging Sectors
Nanotechnology -1.60%
Semis -1.63%
Airlines -1.97%
Other
Crude Oil 38.75 -3.03%
Natural Gas 6.33 -2.90%
Gold 389.10 -.89%
Base Metals 108.12 -.29%
U.S. Dollar 89.05 +.24%
10-Yr. T-note Yield 4.71% -.42%
VIX 16.41 +2.05%
Put/Call 1.20 +27.66%
NYSE Arms 1.17 +4.46%
Market Movers
IPIX +37.5% after Tom Ridge commended the company for helping to make America more secure.
CVTX +19.38% after the company's plan to test its Ranexa heart drug for chronic chest pain was approved by the FDA.
CMVT +7.92% after beating 1Q estimates and raising 2Q and 05 forecasts.
GSL +13.28% on strong demand for its IPO.
TLB +8.77% after announcing May same-store-sales increase of 10% versus estimates of 2.3%.
ARO +7.36% after announcing May same-store-sales increase of 27% versus estimates of 13.4%.
PGTV -14.9% after saying two of its units filed for bankruptcy protection from creditors under Chapter 11.
FCEL -12.36% after missing 2Q estimates.
BRLI -10.39% after missing 2Q estimates.
Economic Data
Final Non-farm Productivity for 1Q was +3.8% versus estimates of +3.7% and +3.5% prior.
Final Unit Labor Costs for 1Q were +.8% versus +.4% estimates and +.5% prior.
Initial Jobless Claims last week came in at 339K versus 335K estimate and 345k prior week.
Continuing Claims came in at 3003K versus 2925K estimate and 2938K prior.
Factory Orders for April -1.7% versus -1.4% estimate and revised +5.0% in March.
ISM Non-Manufacturing for May was 65.2 versus estimates of 66.0 and 68.4 in April.
Recommendations
PD raised to Sector Outperform at CIBC, target $95. SFNT raised to Strong Buy at Raymond James, target $32. Goldman Sachs said there is no evidence in yesterday's auto numbers that high gas prices are impacting pick-up or SUV sales. Goldman reiterated Outperform on RSE, CCL, SRE, FD, BBY, RCL, FS, HOT, IGT, STN, GCI and CBL. Goldman reiterated Underperform on DJ, SKS, F and HRB. Goldman said to Buy retail-oriented REITS ahead of the annual National Assoc. of REITs Investor Forum in NY next week, favorite is DDR. Citi SmithBarney said to Buy MCD ahead of their comp report next Mon, target $34. Citi said to Buy GIS on weakness ahead of EPS report, target $51. Citi reiterated Buy ratings on HIG and ALL, price targets are $55 and $81, respectively. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on ITT, target $92. Citi reiterated Buy on IR, target $83. Citi reiterated Buy on BJ, target $30. Citi reiterated Buy on NMGA, target $68. Citi reiterated Buy on WYE, target $47. Citi reiterated Buy on DTV, target $21.
Mid-day News
U.S. stocks are modestly lower mid-day as investor nervousness persists ahead of Intel's mid-quarter update, tomorrow's jobs report and Bush's trip to Rome. Symbol Technologies today will likely announce a settlement with the U.S. SEC, which has been investigating Symbol's business practices, the NY Times reported. Honeywell International is testing a prototype electronic system for large airlines that would prevent commercial aircraft from crashing into nuclear power and chemical plants, the Star-Ledger reported. China has halted loans made to fixed-asset investment projects that aren't approved by the government in a bid to help slow the pace of economic growth, Agence-France Presse reported. Dust on PCs may contain a flame retardant with a chemical known to cause brain damage in animals, the San Jose Mercury News reported. About 250 investors are attending a convention in Las Vegas on opportunities in Iraq, the Washington Post reported. Cendant plans to offer 37.5 million shares of its Jackson Hewitt tax preparation unit in an IPO, Bloomberg reported. Children's Place said its in talks with Disney for the purchase of the Disney Store chain in the U.S. and Canada. Wal-Mart said May U.S. sales rose 5.9%, at the high end of forecasts, as consumers bought more groceries and electronics, Bloomberg said. OPEC agreed to the biggest increase in oil quotas in more than 6 years, seeking to prevent near-record prices from slowing world economic growth, Bloomberg said. American’s risk of getting cancer or dying of the disease is on the decline, according to a government report, Bloomberg reported. Crude oil stockpiles in the U.S. rose by a larger-than-expected 2.8 million barrels last week, sending oil prices lower, Bloomberg reported. George Tenet resigned as director of the CIA for personal reasons, Bloomberg reported. A gauge of activity at U.S. service companies, which make up the largest share of the economy, reached the fourth highest on record in May as businesses increased hiring, Bloomberg reported.
BOTTOM LINE: The Portfolio is down slightly today as one of my retail longs is up substantially, mostly offsetting losses in my technology long positions. I have not traded today and the Portfolio is still 100% net long. I continue to believe worries over Intel's report are overdone. I also expect tomorrow's Non-farm payrolls to exceed estimates of 225K. U.S. markets should respond favorably tomorrow. Finally, I expect stocks to strengthen into the close. High Put/Call and ARMs readings should cushion any unexpected afternoon weakness. Some short-covering will likely occur as well.
NASDAQ 1,976.15 -.65%
Leading Sectors
Broadcasting +.70%
Restaurants +.61%
Drugs +.58%
Lagging Sectors
Nanotechnology -1.60%
Semis -1.63%
Airlines -1.97%
Other
Crude Oil 38.75 -3.03%
Natural Gas 6.33 -2.90%
Gold 389.10 -.89%
Base Metals 108.12 -.29%
U.S. Dollar 89.05 +.24%
10-Yr. T-note Yield 4.71% -.42%
VIX 16.41 +2.05%
Put/Call 1.20 +27.66%
NYSE Arms 1.17 +4.46%
Market Movers
IPIX +37.5% after Tom Ridge commended the company for helping to make America more secure.
CVTX +19.38% after the company's plan to test its Ranexa heart drug for chronic chest pain was approved by the FDA.
CMVT +7.92% after beating 1Q estimates and raising 2Q and 05 forecasts.
GSL +13.28% on strong demand for its IPO.
TLB +8.77% after announcing May same-store-sales increase of 10% versus estimates of 2.3%.
ARO +7.36% after announcing May same-store-sales increase of 27% versus estimates of 13.4%.
PGTV -14.9% after saying two of its units filed for bankruptcy protection from creditors under Chapter 11.
FCEL -12.36% after missing 2Q estimates.
BRLI -10.39% after missing 2Q estimates.
Economic Data
Final Non-farm Productivity for 1Q was +3.8% versus estimates of +3.7% and +3.5% prior.
Final Unit Labor Costs for 1Q were +.8% versus +.4% estimates and +.5% prior.
Initial Jobless Claims last week came in at 339K versus 335K estimate and 345k prior week.
Continuing Claims came in at 3003K versus 2925K estimate and 2938K prior.
Factory Orders for April -1.7% versus -1.4% estimate and revised +5.0% in March.
ISM Non-Manufacturing for May was 65.2 versus estimates of 66.0 and 68.4 in April.
Recommendations
PD raised to Sector Outperform at CIBC, target $95. SFNT raised to Strong Buy at Raymond James, target $32. Goldman Sachs said there is no evidence in yesterday's auto numbers that high gas prices are impacting pick-up or SUV sales. Goldman reiterated Outperform on RSE, CCL, SRE, FD, BBY, RCL, FS, HOT, IGT, STN, GCI and CBL. Goldman reiterated Underperform on DJ, SKS, F and HRB. Goldman said to Buy retail-oriented REITS ahead of the annual National Assoc. of REITs Investor Forum in NY next week, favorite is DDR. Citi SmithBarney said to Buy MCD ahead of their comp report next Mon, target $34. Citi said to Buy GIS on weakness ahead of EPS report, target $51. Citi reiterated Buy ratings on HIG and ALL, price targets are $55 and $81, respectively. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on ITT, target $92. Citi reiterated Buy on IR, target $83. Citi reiterated Buy on BJ, target $30. Citi reiterated Buy on NMGA, target $68. Citi reiterated Buy on WYE, target $47. Citi reiterated Buy on DTV, target $21.
Mid-day News
U.S. stocks are modestly lower mid-day as investor nervousness persists ahead of Intel's mid-quarter update, tomorrow's jobs report and Bush's trip to Rome. Symbol Technologies today will likely announce a settlement with the U.S. SEC, which has been investigating Symbol's business practices, the NY Times reported. Honeywell International is testing a prototype electronic system for large airlines that would prevent commercial aircraft from crashing into nuclear power and chemical plants, the Star-Ledger reported. China has halted loans made to fixed-asset investment projects that aren't approved by the government in a bid to help slow the pace of economic growth, Agence-France Presse reported. Dust on PCs may contain a flame retardant with a chemical known to cause brain damage in animals, the San Jose Mercury News reported. About 250 investors are attending a convention in Las Vegas on opportunities in Iraq, the Washington Post reported. Cendant plans to offer 37.5 million shares of its Jackson Hewitt tax preparation unit in an IPO, Bloomberg reported. Children's Place said its in talks with Disney for the purchase of the Disney Store chain in the U.S. and Canada. Wal-Mart said May U.S. sales rose 5.9%, at the high end of forecasts, as consumers bought more groceries and electronics, Bloomberg said. OPEC agreed to the biggest increase in oil quotas in more than 6 years, seeking to prevent near-record prices from slowing world economic growth, Bloomberg said. American’s risk of getting cancer or dying of the disease is on the decline, according to a government report, Bloomberg reported. Crude oil stockpiles in the U.S. rose by a larger-than-expected 2.8 million barrels last week, sending oil prices lower, Bloomberg reported. George Tenet resigned as director of the CIA for personal reasons, Bloomberg reported. A gauge of activity at U.S. service companies, which make up the largest share of the economy, reached the fourth highest on record in May as businesses increased hiring, Bloomberg reported.
BOTTOM LINE: The Portfolio is down slightly today as one of my retail longs is up substantially, mostly offsetting losses in my technology long positions. I have not traded today and the Portfolio is still 100% net long. I continue to believe worries over Intel's report are overdone. I also expect tomorrow's Non-farm payrolls to exceed estimates of 225K. U.S. markets should respond favorably tomorrow. Finally, I expect stocks to strengthen into the close. High Put/Call and ARMs readings should cushion any unexpected afternoon weakness. Some short-covering will likely occur as well.
Thursday Watch
Company/Estimate
CPST/.14
FCEL/-.34
COO/.59
MBG/1.12
Splits
None of note.
Economic Data
Final Non-farm Productivity reading for 1Q is estimated +3.7% versus +3.5% prior.
Final Unit Labor Costs for 1Q estimated +.4% versus +.5% prior.
Initial Jobless Claims for last week estimated at 335K versus 344K prior week.
Continuing Claims estimated at 2925K versus 2948K prior.
Factory Orders for April estimated -1.4% versus +4.3% in March.
ISM Non-Manufacturing for May estimated at 66.0 versus 68.4 in April.
Recommendations
Goldman Sachs reiterated Outperform on NFP, TRMS and ITT. Goldman reiterated Outperform on STN and IGT ahead of June 9th Gaming Conference in NYC, favorite is IGT.
Late-Night News
Asian indices are lower on concerns over Intel's mid-quarter update and another rise in oil prices. Viacom Entertainment said its Group Chairman Jonathan Dolgen resigned after a decade of leading Paramount Pictures, the Wall Street Journal reported. Serono SA, one of Europe's biggest biotechnology companies, may relocate its Swiss-based headquarters to the U.S. if industry conditions in Europe continue to worsen, the Wall Street Journal said. India will start work late this year to build a strategic oil reserve scheduled for completion by late 2007, the Asian Wall Street Journal reported. Japanese companies increased capital spending 10.2% in the first quarter from a year earlier, the fastest since 1997, as companies including Sharp invested rising earnings on expansion, Bloomberg reported. Crude oil futures are rising tonight as hedge funds and speculators bet increased production by OPEC will take several weeks to reach markets and ease concern about fuel shortages, Bloomberg said.
Late-Night Trading
Asian Indices -2.5% to unch. on average.
S&P 500 indicated -.44%.
NASDAQ indicated -.61%.
BOTTOM LINE: I expect U.S. stocks to open modestly lower on weakness in Asia and rising oil prices. I will decide whether or not to change the Portfolio's market exposure after evaluating the many economic reports and the market's reaction to them. While I do not have a position in Intel, I believe that fears over its mid-quarter update are overdone. It is unlikely the market will mount any serious rally ahead of Intel's comments, the jobs report and Bush's Rome trip. The Portfolio is 100% long heading into tomorrow.
CPST/.14
FCEL/-.34
COO/.59
MBG/1.12
Splits
None of note.
Economic Data
Final Non-farm Productivity reading for 1Q is estimated +3.7% versus +3.5% prior.
Final Unit Labor Costs for 1Q estimated +.4% versus +.5% prior.
Initial Jobless Claims for last week estimated at 335K versus 344K prior week.
Continuing Claims estimated at 2925K versus 2948K prior.
Factory Orders for April estimated -1.4% versus +4.3% in March.
ISM Non-Manufacturing for May estimated at 66.0 versus 68.4 in April.
Recommendations
Goldman Sachs reiterated Outperform on NFP, TRMS and ITT. Goldman reiterated Outperform on STN and IGT ahead of June 9th Gaming Conference in NYC, favorite is IGT.
Late-Night News
Asian indices are lower on concerns over Intel's mid-quarter update and another rise in oil prices. Viacom Entertainment said its Group Chairman Jonathan Dolgen resigned after a decade of leading Paramount Pictures, the Wall Street Journal reported. Serono SA, one of Europe's biggest biotechnology companies, may relocate its Swiss-based headquarters to the U.S. if industry conditions in Europe continue to worsen, the Wall Street Journal said. India will start work late this year to build a strategic oil reserve scheduled for completion by late 2007, the Asian Wall Street Journal reported. Japanese companies increased capital spending 10.2% in the first quarter from a year earlier, the fastest since 1997, as companies including Sharp invested rising earnings on expansion, Bloomberg reported. Crude oil futures are rising tonight as hedge funds and speculators bet increased production by OPEC will take several weeks to reach markets and ease concern about fuel shortages, Bloomberg said.
Late-Night Trading
Asian Indices -2.5% to unch. on average.
S&P 500 indicated -.44%.
NASDAQ indicated -.61%.
BOTTOM LINE: I expect U.S. stocks to open modestly lower on weakness in Asia and rising oil prices. I will decide whether or not to change the Portfolio's market exposure after evaluating the many economic reports and the market's reaction to them. While I do not have a position in Intel, I believe that fears over its mid-quarter update are overdone. It is unlikely the market will mount any serious rally ahead of Intel's comments, the jobs report and Bush's Rome trip. The Portfolio is 100% long heading into tomorrow.
Wednesday, June 02, 2004
Wednesday Close
S&P 500 1,124.99 +.34%
NASDAQ 1,988.98 -.09%
Leading Sectors
Airlines +4.28%
Fashion +1.10%
Transports +1.07%
Lagging Sectors
Disk Drives -.98%
Nanotechnology -1.07%
Semis -2.26%
Other
Crude Oil 39.87 -.23%
Natural Gas 6.52 +.06%
Gold 392.00 -.13%
Base Metals 108.43 -1.80%
U.S. Dollar 88.84 -.05%
10-Yr. T-note Yield 4.73% +.67%
VIX 16.08 -1.35%
Put/Call .94 -1.05%
NYSE Arms 1.12 +.90%
After-hours Movers
ARO +6.13% after May same-store sales beat estimates substantially.
CMVT +4.36% after beating 1Q estimates and raising 2Q and 05 forecasts.
CVTX +5.60% after saying it has reached an agreement with the FDA on a protocol for a clinical trial of Ranexa, a treatment for chronic angina.
Recommendations
Goldman Sachs reiterated Outperform on CSCO, HD, WAG, NT, EPD and GTM. Goldman reiterated Underperform on HRB.
After-hours News
U.S. stocks finished mostly higher Wednesday as falling energy prices propelled airline and consumer discretionary shares higher. After the close, General Motors and DaimlerChrysler said sales in May rose as higher gasoline prices failed to curb demand for trucks, Bloomberg reported. Tyson Foods workers in Nebraska said they are preparing for a possible strike at the company's largest beef plant later this month unless a new contract is approved, the Omaha World-Herald reported. OPEC ministers said they will increase oil production, allowing members to pump at will and bypass the quota system that has governed supplier for most of the last two decades, Bloomberg said. Osama bin Laden and other leaders of al-Qaeda were close to being captured in Afghanistan on at least 2 separate occasions since 2002, Agence France-Presse reported. China is set to raise interest rates and electricity prices in a continuing effort to cool an overheating economy, the South China Morning Post reported.
BOTTOM LINE: The Portfolio fell slightly today on weakness in a few of my internet and security long positions. I took profits in some of my internet longs in the afternoon, leaving the Portfolio with 100% net long market exposure. I was a little disappointed in today's action, considering the fall in oil. However, I am trying not to read too much into it at this point as I think Intel's mid-quarter update, Bush's trip to Rome and the employment numbers on Friday are leaving traders and investors a bit hesitant.
NASDAQ 1,988.98 -.09%
Leading Sectors
Airlines +4.28%
Fashion +1.10%
Transports +1.07%
Lagging Sectors
Disk Drives -.98%
Nanotechnology -1.07%
Semis -2.26%
Other
Crude Oil 39.87 -.23%
Natural Gas 6.52 +.06%
Gold 392.00 -.13%
Base Metals 108.43 -1.80%
U.S. Dollar 88.84 -.05%
10-Yr. T-note Yield 4.73% +.67%
VIX 16.08 -1.35%
Put/Call .94 -1.05%
NYSE Arms 1.12 +.90%
After-hours Movers
ARO +6.13% after May same-store sales beat estimates substantially.
CMVT +4.36% after beating 1Q estimates and raising 2Q and 05 forecasts.
CVTX +5.60% after saying it has reached an agreement with the FDA on a protocol for a clinical trial of Ranexa, a treatment for chronic angina.
Recommendations
Goldman Sachs reiterated Outperform on CSCO, HD, WAG, NT, EPD and GTM. Goldman reiterated Underperform on HRB.
After-hours News
U.S. stocks finished mostly higher Wednesday as falling energy prices propelled airline and consumer discretionary shares higher. After the close, General Motors and DaimlerChrysler said sales in May rose as higher gasoline prices failed to curb demand for trucks, Bloomberg reported. Tyson Foods workers in Nebraska said they are preparing for a possible strike at the company's largest beef plant later this month unless a new contract is approved, the Omaha World-Herald reported. OPEC ministers said they will increase oil production, allowing members to pump at will and bypass the quota system that has governed supplier for most of the last two decades, Bloomberg said. Osama bin Laden and other leaders of al-Qaeda were close to being captured in Afghanistan on at least 2 separate occasions since 2002, Agence France-Presse reported. China is set to raise interest rates and electricity prices in a continuing effort to cool an overheating economy, the South China Morning Post reported.
BOTTOM LINE: The Portfolio fell slightly today on weakness in a few of my internet and security long positions. I took profits in some of my internet longs in the afternoon, leaving the Portfolio with 100% net long market exposure. I was a little disappointed in today's action, considering the fall in oil. However, I am trying not to read too much into it at this point as I think Intel's mid-quarter update, Bush's trip to Rome and the employment numbers on Friday are leaving traders and investors a bit hesitant.
Mid-day Update
S&P 500 1,120.17 -.09%
NASDAQ 1,982.88 -.40%
Leading Sectors
Fashion +1.08%
Telecom +.68%
Hospitals +.65%
Lagging Sectors
Oil Service -1.16%
Iron/Steel -1.36%
Semis -2.38%
Other
Crude Oil 41.57 -1.84%
Natural Gas 6.63 -.76%
Gold 392.50 -.66%
Base Metals 110.69 +.24%
U.S. Dollar 88.69 -.21%
10-Yr. T-note Yield 4.70% +.08%
VIX 16.44 +.80%
Put/Call .80 -15.79%
NYSE Arms 1.37 +23.42%
Market Movers
SOHU +5.7% on a continued rebound in Chinese internet stocks.
XLNX -4.57% on profit-taking after raising 2Q forecast.
BGG +6.93% after acquiring Simplicity Manufacturing for $277.5M, purchase will boost 05 earnings .35-.40/share.
RECN +6.98% on optimism over U.S. job growth.
FCS -9.49% after reiterating 2Q forecast, but warning "backlog volatility" could be a problem.
Economic Data
None of note.
Recommendations
NVDA raised to Buy at UBS, target $28. MEDI raised to Overweight, target $32. BIIB raised to Overweight at Morgan Stanley, target $77. PCAR rated Outperform at CSFB, target $77. OSI raised to Overweight at Prudential, target $49. Goldman Sachs reiterated Outperform on TIF, IR, BSX, AMGN, HD, DNA and PG. Goldman remains cautious on brokerage stocks ahead of quarterly reports. Citi SmithBarney reiterated Buy on DPMI, target $30. Citi reiterated Sell on BRKS, target $17. TER reiterated Sell at Citi, target $20. Citi reiterated Buy on LRCX, target $35. Citi reiterated Buy on WFR, target $14. Citi reiterated Buy on INTC, target $33. Citi reiterated positive view on lodging sector, reiterated Buy ratings on HOT, HLT and MAR, top pick is MAR. Citi said average wait time at PFCB up 41% year-over-year.
Mid-day News
U.S. stocks are mixed mid-day as falling oil prices cannot offset weakness in technology shares. New York Mets owner Fred Wilpon and financial supporters have approached Time Warner about forming a new sports network in the New York area, the New York Post reported. Recently released price measures have made Alfred Broaddus, the retiring president of the Federal Reserve Bank of Richmond, "even more comfortable" about the outlook for inflation, Market News International reported. Pfizer CEO McKinnell told CNBC that the U.S. labor market is the best in over 3 years, as 38% of chief executives surveyed by the Business Roundtable expect to add employees in the next six months. As well, the survey found that 44% of CEOs plan to raise capital spending, Bloomberg reported. Goldman Sachs hired three companies, including Standard & Poor's, to provide its clients with independent research as part of the bank's settlement with U.S. regulators about biased stock advice, Bloomberg said. OPEC should pump oil at will in the next few months, Qatar's energy minister said as the group's president called for efforts to cause a "significant" drop in oil prices, Bloomberg said. General Motors is offering rebates of as much as $5,000 on most 04 models to customers who have bought the company's vehicles before, Bloomberg reported. New York Attorney General Eliot Spitzer filed a lawsuit against GlaxoSmithKline, accusing it of hiding negative information about the effects of its anti-depression drug Paxil when prescribed for children, Bloomberg said. Saudi Arabia will consolidate all its charities into one entity in an effort to put a stop to the funding of terrorism, Bloomberg reported.
BOTTOM LINE: The Portfolio is down slightly today on weakness in a few of my internet and telecom equipment longs that are pulling back after recent gains. I have not traded today and the Portfolio is still 125% net long. There in trader nervousness ahead of Bush's trip to Rome, Friday's jobs report and tomorrow's OPEC meeting. I expect U.S. stocks to remain neutral to higher through this afternoon's close.
NASDAQ 1,982.88 -.40%
Leading Sectors
Fashion +1.08%
Telecom +.68%
Hospitals +.65%
Lagging Sectors
Oil Service -1.16%
Iron/Steel -1.36%
Semis -2.38%
Other
Crude Oil 41.57 -1.84%
Natural Gas 6.63 -.76%
Gold 392.50 -.66%
Base Metals 110.69 +.24%
U.S. Dollar 88.69 -.21%
10-Yr. T-note Yield 4.70% +.08%
VIX 16.44 +.80%
Put/Call .80 -15.79%
NYSE Arms 1.37 +23.42%
Market Movers
SOHU +5.7% on a continued rebound in Chinese internet stocks.
XLNX -4.57% on profit-taking after raising 2Q forecast.
BGG +6.93% after acquiring Simplicity Manufacturing for $277.5M, purchase will boost 05 earnings .35-.40/share.
RECN +6.98% on optimism over U.S. job growth.
FCS -9.49% after reiterating 2Q forecast, but warning "backlog volatility" could be a problem.
Economic Data
None of note.
Recommendations
NVDA raised to Buy at UBS, target $28. MEDI raised to Overweight, target $32. BIIB raised to Overweight at Morgan Stanley, target $77. PCAR rated Outperform at CSFB, target $77. OSI raised to Overweight at Prudential, target $49. Goldman Sachs reiterated Outperform on TIF, IR, BSX, AMGN, HD, DNA and PG. Goldman remains cautious on brokerage stocks ahead of quarterly reports. Citi SmithBarney reiterated Buy on DPMI, target $30. Citi reiterated Sell on BRKS, target $17. TER reiterated Sell at Citi, target $20. Citi reiterated Buy on LRCX, target $35. Citi reiterated Buy on WFR, target $14. Citi reiterated Buy on INTC, target $33. Citi reiterated positive view on lodging sector, reiterated Buy ratings on HOT, HLT and MAR, top pick is MAR. Citi said average wait time at PFCB up 41% year-over-year.
Mid-day News
U.S. stocks are mixed mid-day as falling oil prices cannot offset weakness in technology shares. New York Mets owner Fred Wilpon and financial supporters have approached Time Warner about forming a new sports network in the New York area, the New York Post reported. Recently released price measures have made Alfred Broaddus, the retiring president of the Federal Reserve Bank of Richmond, "even more comfortable" about the outlook for inflation, Market News International reported. Pfizer CEO McKinnell told CNBC that the U.S. labor market is the best in over 3 years, as 38% of chief executives surveyed by the Business Roundtable expect to add employees in the next six months. As well, the survey found that 44% of CEOs plan to raise capital spending, Bloomberg reported. Goldman Sachs hired three companies, including Standard & Poor's, to provide its clients with independent research as part of the bank's settlement with U.S. regulators about biased stock advice, Bloomberg said. OPEC should pump oil at will in the next few months, Qatar's energy minister said as the group's president called for efforts to cause a "significant" drop in oil prices, Bloomberg said. General Motors is offering rebates of as much as $5,000 on most 04 models to customers who have bought the company's vehicles before, Bloomberg reported. New York Attorney General Eliot Spitzer filed a lawsuit against GlaxoSmithKline, accusing it of hiding negative information about the effects of its anti-depression drug Paxil when prescribed for children, Bloomberg said. Saudi Arabia will consolidate all its charities into one entity in an effort to put a stop to the funding of terrorism, Bloomberg reported.
BOTTOM LINE: The Portfolio is down slightly today on weakness in a few of my internet and telecom equipment longs that are pulling back after recent gains. I have not traded today and the Portfolio is still 125% net long. There in trader nervousness ahead of Bush's trip to Rome, Friday's jobs report and tomorrow's OPEC meeting. I expect U.S. stocks to remain neutral to higher through this afternoon's close.
Wednesday Watch
Company/Estimate
ABS/.11
CMVT/.02
HOV/1.03
NMG/A/1.39
VRNT/.18
Splits
BNN 3-for-2
BR 2-for-1
ELAB 2-for-1
Economic Data
Total Vehicle Sales for May estimated at 16.8M versus 16.4M in April.
Domestic Vehicle Sales for May estimated at 13.4M versus 13.1M in April.
Recommendations
Goldman Sachs thinks ATYT will gain market share in 2H 2004 with OEMs on the back of the PCI Express transition. Goldman reiterated Outperform on DOW, DNA, CAL and CIT. Goldman reiterated Underperform on CMOS.
Late-Night News
Asian indices are mixed as strength in India and Hong Kong is being offset by weakness in Taiwan and Korea. The FBI issued a nationwide alert for two stolen propane tanker trucks, Reuters reported. China's economy will probably grow 11.4% in the second quarter, accelerating from a revised 9.8% pace in the first three months, the Beijing News reported. China's trials on high-speed mobile phone services reveal its networks are failing to transmit images and voices accurately, the South China Morning Post reported. The U.S. and five Central Asian nations signed an agreement to establish a trade council and strengthen U.S. ties to the region, the AP reported. Toyota Motor, the first automaker to sell cars powered by hybrid gasoline-electric engines, expanded annual production of its Prius hybrid sedan by as much as 44% to build as many as 130,000 units a year.
Late-Night Trading
Asian Indices -1.25% to +1.0% on average.
S&P 500 indicated +.11%.
NASDAQ indicated -.03%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on a fall in oil prices and carryover from today's afternoon rally. I would expect to see more investor complacency before the current rally runs its course. The Portfolio is 125% net long heading into trading tomorrow.
ABS/.11
CMVT/.02
HOV/1.03
NMG/A/1.39
VRNT/.18
Splits
BNN 3-for-2
BR 2-for-1
ELAB 2-for-1
Economic Data
Total Vehicle Sales for May estimated at 16.8M versus 16.4M in April.
Domestic Vehicle Sales for May estimated at 13.4M versus 13.1M in April.
Recommendations
Goldman Sachs thinks ATYT will gain market share in 2H 2004 with OEMs on the back of the PCI Express transition. Goldman reiterated Outperform on DOW, DNA, CAL and CIT. Goldman reiterated Underperform on CMOS.
Late-Night News
Asian indices are mixed as strength in India and Hong Kong is being offset by weakness in Taiwan and Korea. The FBI issued a nationwide alert for two stolen propane tanker trucks, Reuters reported. China's economy will probably grow 11.4% in the second quarter, accelerating from a revised 9.8% pace in the first three months, the Beijing News reported. China's trials on high-speed mobile phone services reveal its networks are failing to transmit images and voices accurately, the South China Morning Post reported. The U.S. and five Central Asian nations signed an agreement to establish a trade council and strengthen U.S. ties to the region, the AP reported. Toyota Motor, the first automaker to sell cars powered by hybrid gasoline-electric engines, expanded annual production of its Prius hybrid sedan by as much as 44% to build as many as 130,000 units a year.
Late-Night Trading
Asian Indices -1.25% to +1.0% on average.
S&P 500 indicated +.11%.
NASDAQ indicated -.03%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on a fall in oil prices and carryover from today's afternoon rally. I would expect to see more investor complacency before the current rally runs its course. The Portfolio is 125% net long heading into trading tomorrow.
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