S&P 500 1,140.62 -.30%
NASDAQ 2,015.57 -.27%
Leading Sectors
Fashion +2.13%
Homebuilders +1.83%
Nanotechnology +1.35%
Lagging Sectors
Telecom -1.30%
Broadcasting -1.30%
Oil Service -1.41%
Other
Crude Oil 37.87 +.80%
Natural Gas 6.46 +.78%
Gold 402.70 +1.82%
Base Metals 110.06 +1.80%
U.S. Dollar 88.69 -.82%
10-Yr. T-note Yield 4.64% -1.06%
VIX 14.81 +5.94%
Put/Call .66 -19.51%
NYSE Arms 1.39 +131.67%
After-hours Movers
SIMG +14.75% after raising 2Q guidance.
NKE +2.27% after beating 4Q estimates and announcing $1.5 billion share buy-back.
REY -10.14% after lowering 3Q and 4Q forecasts.
PSRC -4.95% after missing 4Q estimates and lowering 1Q forecast.
VRTY -4.0% after beating 4Q estimates, lowering 1Q forecast and announcing additional $50 share buy-back.
PAYX -3.54% after meeting 4Q estimates and lowering 05 guidance slightly.
Recommendations
Goldman Sachs reiterated Outperform on ATYT, BBY, HD, VIA/B, FS, AMD and UPS. Tom Kurlak made positive comments on semis on CNBC, saying they have a lot further to go.
After-hours News
U.S. stocks finished slightly lower today as violence in the Middle East increased investor jitters ahead of the June 30 handover of power to Iraq. After the close, the militia of Moqtada al-Sadr announced a truce in Baghdad and said they would protect important sites from attacks by terrorists, Agence France-Presse reported. John Mack, co-CEO of CSFB is leaving the company, the Wall Street Journal reported. ITV, the UK's largest commercial tv network, has secured what it says is a world exclusive interview with Monica Lewinsky in response to former President Clinton's version of events, the Guardian reported. Shares of International Game Technology, WMS Industries, Alliance Gaming and Penn National Gaming rose after Pennsylvania legislators and Governor Ed Rendell reached a tentative agreement on allowing slot-machine gambling in the state, Bloomberg reported. Nike said fourth-quarter earnings increased 24% as demand for products including Shox running shoes and Huarache 2K4 basketball sneakers bolstered sales in the U.S. and Asia, Bloomberg said. U.S. President Bush will appeal to NATO to take on a broader security role for Iraq and prod Europeans to reduce much of the country's $120 billion in debt, Bloomberg said.
BOTTOM LINE: The Portfolio finished substantially higher today as my Chinese ADR, security and RFID-related longs rose substantially and my oil-service shorts fell. I did not trade and the Portfolio is still 150% net long. It was a positive for the bulls today that significant violence in the Middle East could not take stocks substantially lower or move oil prices much higher. As well, the bears are losing their main source of pessimism as interest rates continue to fall. It was also good to see the ARMS index rise substantially, however I would also like to see the Put/Call and VIX readings rise more ahead of June 30. I continue to believe the market will consolidate recent gains before a gap up within the next 10 days.
Thursday, June 24, 2004
Mid-day Update
S&P 500 1,143.90 -.02%
NASDAQ 2,024.05 +.15%
Leading Sectors
Homebuilders +3.80%
Fashion +2.13%
Nanotechnology +1.89%
Lagging Sectors
Oil Service -.72%
Broadcasting -.73%
Telecom -1.45%
Other
Crude Oil 37.73 +.43%
Natural Gas 6.47 +.94%
Gold 402.50 +1.72%
Base Metals 110.06 +1.80%
U.S. Dollar 88.69 -.82%
10-Yr. T-note Yield 4.65% -.97%
VIX 14.49 +3.65%
Put/Call .58 -29.27%
NYSE Arms 1.10 +83.33%
Market Movers
T -9.32% after lowering 04 forecast and multiple downgrades.
ATYT +8.7% after beating 3Q estimates and raising 4Q forecast.
TASR +8.8% on continued speculation over Sharper Image deal and short squeeze.
OVTI +9.3% after beating 4Q estimates, restating 1-3 quarters.
UNTD -16.92% after comments by Schwab that competition is heating up and co. will cut prices and miss quarter.
ALD -11.3% after saying it's under investigation by the SEC.
DLM -9.0% after missing 1Q estimates and lowering 4Q/05 forecast.
*Education companies are down across the board after U.S. regulators raised their probe of CECO to a formal inquiry and a newspaper reported COCO may have helped students file fraudulent loan applications.
*Homebuilders up across the board on a fall in interest rates, strong new home sales and positive comments by TOL CFO.
Economic Data
Durable Goods Orders for May fell 1.6% versus expectations of a 1.5% rise and a 2.6% fall in April.
Durable Goods Orders Less Transportation for May fell .7% versus expectations of a 1.3% rise and a 1.7% fall in April.
Initial Jobless Claims for last week were 349K versus a 340K estimate and 336K prior week.
Continuing Claims were 2967K versus estimates of 2875K and 2892K prior.
New Home Sales for May were 1369K versus estimates of 1125K and 1192K in April.
Help Wanted Index for May was 39 versus estimates of 39 and 38 in April.
Recommendations
Goldman Sachs reiterated Attractive view of steel sector, favorites are NUE and ISG. Goldman reiterated Outperform on BBY, UPS and BSX. Goldman reiterated Underperform on T and SGP. Citi SmithBarney says to Buy BJ ahead of same-store-sales release, target $30. Citi said to Buy LPX and WY on weakness. Citi reiterating Sell on MU, target $12. Citi reiterated Buy on GIS, target $51.50. Citi reiterated Sell on T, target $14. Citi reiterated Buy on CVH, target $58. Citi reiterated Buy on COGN, target $41. Morgan Stanley raised USFC to Overweight, target $40. SGP raised to Overweight at Morgan Stanley, target $25. MCIA cut to Underperform at CSFB, target $10. XMSR rated Buy at Legg Mason, target $35. TSA rated Overweight at JP Morgan. MSFT raised to Buy at Bank of America, target $35.
Mid-day News
U.S. stocks are mixed today as falling interest rates and stable energy prices are offsetting Middle-eastern violence and mixed economic reports. The eight UK servicemen who were seized by Iran have arrived at the British Embassy in Tehran and appear to be in good condition, Bloomberg reported. Washington Mutual obtained the first-ever patent for a bank branch, the NY Daily News reported. The average tuition increase at state colleges and universities is expected to be 9% as the U.S. economy improves, down from the average of 14% in 03, the Wall Street Journal reported. One in three Americans would exclusively use a mobile phone rather than a fixed line, the NY Times reported. A group backed by veteran Democrats and vital to Senator Kerry's presidential bid employed felons to conduct door-to-door voter registration campaign in at least three key states, the AP reported. LA-area hotels and the hotel workers' union have halted negotiations after the hotels rejected a union call for contract expiration dates that could lead to a nationwide strike, the LA Times reported. Office vacancy rates in the Boston area are declining after about three years of increases, the Boston Herald reported. "All of the demographic groups we sell to are increasing in both size and affluence," Toll Brothers' CFO told CNBC. Violence erupted today in Iraq, with insurgents targeting Iraqi police forces, killing 66 Iraqis and 3 U.S. soldiers, Bloomberg said. France's economy will probably grow 2.3% this year, the fastest pace since 2000, as demand from China and the U.S. boosts exports and encourages investment, Bloomberg reported. Time Warner's AOL unit agreed to buy closely held Advertising.com for $435 million in cash to offer more customized services such as tracking responses to marketing campaigns, Bloomberg reported. U.S. new home sales surged 14.8% in May to a record, boosted by job and income gains this year that have offset a rise in mortgage rates, Bloomberg reported. Fifteen U.S. cities will get federal assistance in identifying and arresting their most violent criminals, the Justice Department said. The U.S. House Energy and Commerce Committee approved a measure designed to ban "spyware" computer programs that install themselves and monitor users' Web-surfing habits without their knowledge, Bloomberg said. NATO leaders may agree to help train Iraqi security forces, as requested by the country's interim prime minister, when they meet in Turkey next week, Bloomberg reported. The dollar and interest rates are falling today after U.S. orders for durable goods unexpectedly declined and bombs exploded in Turkey and Iraq, Bloomberg reported.
BOTTOM LINE: The Portfolio is having another very good day today as my Chinese ADR, security and RFID-related longs are rising substantially. I have not traded today and the Portfolio is still 150% net long. I expect U.S. stocks to rise modestly into the close as falling interest rates, a rising ARMS reading, short-covering and strength in technology shares offset Middle-east violence, mixed economic reports and a low Put/Call ratio.
NASDAQ 2,024.05 +.15%
Leading Sectors
Homebuilders +3.80%
Fashion +2.13%
Nanotechnology +1.89%
Lagging Sectors
Oil Service -.72%
Broadcasting -.73%
Telecom -1.45%
Other
Crude Oil 37.73 +.43%
Natural Gas 6.47 +.94%
Gold 402.50 +1.72%
Base Metals 110.06 +1.80%
U.S. Dollar 88.69 -.82%
10-Yr. T-note Yield 4.65% -.97%
VIX 14.49 +3.65%
Put/Call .58 -29.27%
NYSE Arms 1.10 +83.33%
Market Movers
T -9.32% after lowering 04 forecast and multiple downgrades.
ATYT +8.7% after beating 3Q estimates and raising 4Q forecast.
TASR +8.8% on continued speculation over Sharper Image deal and short squeeze.
OVTI +9.3% after beating 4Q estimates, restating 1-3 quarters.
UNTD -16.92% after comments by Schwab that competition is heating up and co. will cut prices and miss quarter.
ALD -11.3% after saying it's under investigation by the SEC.
DLM -9.0% after missing 1Q estimates and lowering 4Q/05 forecast.
*Education companies are down across the board after U.S. regulators raised their probe of CECO to a formal inquiry and a newspaper reported COCO may have helped students file fraudulent loan applications.
*Homebuilders up across the board on a fall in interest rates, strong new home sales and positive comments by TOL CFO.
Economic Data
Durable Goods Orders for May fell 1.6% versus expectations of a 1.5% rise and a 2.6% fall in April.
Durable Goods Orders Less Transportation for May fell .7% versus expectations of a 1.3% rise and a 1.7% fall in April.
Initial Jobless Claims for last week were 349K versus a 340K estimate and 336K prior week.
Continuing Claims were 2967K versus estimates of 2875K and 2892K prior.
New Home Sales for May were 1369K versus estimates of 1125K and 1192K in April.
Help Wanted Index for May was 39 versus estimates of 39 and 38 in April.
Recommendations
Goldman Sachs reiterated Attractive view of steel sector, favorites are NUE and ISG. Goldman reiterated Outperform on BBY, UPS and BSX. Goldman reiterated Underperform on T and SGP. Citi SmithBarney says to Buy BJ ahead of same-store-sales release, target $30. Citi said to Buy LPX and WY on weakness. Citi reiterating Sell on MU, target $12. Citi reiterated Buy on GIS, target $51.50. Citi reiterated Sell on T, target $14. Citi reiterated Buy on CVH, target $58. Citi reiterated Buy on COGN, target $41. Morgan Stanley raised USFC to Overweight, target $40. SGP raised to Overweight at Morgan Stanley, target $25. MCIA cut to Underperform at CSFB, target $10. XMSR rated Buy at Legg Mason, target $35. TSA rated Overweight at JP Morgan. MSFT raised to Buy at Bank of America, target $35.
Mid-day News
U.S. stocks are mixed today as falling interest rates and stable energy prices are offsetting Middle-eastern violence and mixed economic reports. The eight UK servicemen who were seized by Iran have arrived at the British Embassy in Tehran and appear to be in good condition, Bloomberg reported. Washington Mutual obtained the first-ever patent for a bank branch, the NY Daily News reported. The average tuition increase at state colleges and universities is expected to be 9% as the U.S. economy improves, down from the average of 14% in 03, the Wall Street Journal reported. One in three Americans would exclusively use a mobile phone rather than a fixed line, the NY Times reported. A group backed by veteran Democrats and vital to Senator Kerry's presidential bid employed felons to conduct door-to-door voter registration campaign in at least three key states, the AP reported. LA-area hotels and the hotel workers' union have halted negotiations after the hotels rejected a union call for contract expiration dates that could lead to a nationwide strike, the LA Times reported. Office vacancy rates in the Boston area are declining after about three years of increases, the Boston Herald reported. "All of the demographic groups we sell to are increasing in both size and affluence," Toll Brothers' CFO told CNBC. Violence erupted today in Iraq, with insurgents targeting Iraqi police forces, killing 66 Iraqis and 3 U.S. soldiers, Bloomberg said. France's economy will probably grow 2.3% this year, the fastest pace since 2000, as demand from China and the U.S. boosts exports and encourages investment, Bloomberg reported. Time Warner's AOL unit agreed to buy closely held Advertising.com for $435 million in cash to offer more customized services such as tracking responses to marketing campaigns, Bloomberg reported. U.S. new home sales surged 14.8% in May to a record, boosted by job and income gains this year that have offset a rise in mortgage rates, Bloomberg reported. Fifteen U.S. cities will get federal assistance in identifying and arresting their most violent criminals, the Justice Department said. The U.S. House Energy and Commerce Committee approved a measure designed to ban "spyware" computer programs that install themselves and monitor users' Web-surfing habits without their knowledge, Bloomberg said. NATO leaders may agree to help train Iraqi security forces, as requested by the country's interim prime minister, when they meet in Turkey next week, Bloomberg reported. The dollar and interest rates are falling today after U.S. orders for durable goods unexpectedly declined and bombs exploded in Turkey and Iraq, Bloomberg reported.
BOTTOM LINE: The Portfolio is having another very good day today as my Chinese ADR, security and RFID-related longs are rising substantially. I have not traded today and the Portfolio is still 150% net long. I expect U.S. stocks to rise modestly into the close as falling interest rates, a rising ARMS reading, short-covering and strength in technology shares offset Middle-east violence, mixed economic reports and a low Put/Call ratio.
Thursday Watch
Earnings of Note
Company/Estimate
AGE/.65
APOL/.51
DLM/.33
FDO/.43
NKE/1.08
PAYX/.21
RAD/.05
VRTY/.12
Splits
None of note.
Economic Data
Durable Goods Orders for May estimated +1.5% versus -3.2% in April.
Durable Goods Less Transportation estimated +1.3% versus -2.6% in April.
Initial Jobless Claims for last week estimated at 340K versus 336K prior week.
Continuing Claims estimated at 1125K versus 1093K prior.
Help Wanted Index for May estimated at 39 versus 38 in April.
Recommendations
Goldman Sachs reiterated Outperform on BSX, remains a favorite idea. Goldman reiterated Outperform on TRB and AGR/A. Goldman reiterated Underperform on SGP and DJ. The Street.com has a positive column on JDSU, AVNX and MTZ, saying they will benefit from FTTP build-out.
Late-Night News
Asian indices are higher as investors in Japan, Hong Kong and Korea boosted shares of financial and technology companies. Asian companies, led by technology businesses, have raised $2.5 billion of equity capital in the U.S. this year, a fivefold increase from a year earlier, the Financial Times reported. Samsung Electronics has cut prices of LCD display televisions by as much as 20% because sales in the U.S. have lagged expectations, the DigiTimes Web site reported. Porsche AG plans to increase annual production by 33%, the Financial Times said. News Corp. is in talks with the owner of the biggest city daily newspaper in China's western region as it seeks to expand into the nation's print business, the China Securities Journal reported. British diplomats met eight UK servicemen held in Iran as talks take place to try to secure their release today, the BBC reported. Japanese service industries expanded in April and a survey showed confidence among corporate executives is higher this quarter, adding to optimism that the world's second largest economy will extend its longest recovery since 1997, Bloomberg reported. The U.S. Senate approved a $447.2 billion Defense Department authorization bill for the next fiscal year that preserves $13.9 billion for missile defense, raises military pay and increases the active duty army by 20,000 troops, Bloomberg reported.
Late-Night Trading
Asian Indices are unch. to +2.0% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated -.17%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on strength in Asia and a continuation of the technology stock rally. While the current rally may last a couple of days, a consolidation is likely before June 30. However, after this brief pause, I expect the current rally to resume for a few more weeks as U.S. stocks test the highs set in the first quarter. The Portfolio is 150% net long heading into tomorrow.
Company/Estimate
AGE/.65
APOL/.51
DLM/.33
FDO/.43
NKE/1.08
PAYX/.21
RAD/.05
VRTY/.12
Splits
None of note.
Economic Data
Durable Goods Orders for May estimated +1.5% versus -3.2% in April.
Durable Goods Less Transportation estimated +1.3% versus -2.6% in April.
Initial Jobless Claims for last week estimated at 340K versus 336K prior week.
Continuing Claims estimated at 1125K versus 1093K prior.
Help Wanted Index for May estimated at 39 versus 38 in April.
Recommendations
Goldman Sachs reiterated Outperform on BSX, remains a favorite idea. Goldman reiterated Outperform on TRB and AGR/A. Goldman reiterated Underperform on SGP and DJ. The Street.com has a positive column on JDSU, AVNX and MTZ, saying they will benefit from FTTP build-out.
Late-Night News
Asian indices are higher as investors in Japan, Hong Kong and Korea boosted shares of financial and technology companies. Asian companies, led by technology businesses, have raised $2.5 billion of equity capital in the U.S. this year, a fivefold increase from a year earlier, the Financial Times reported. Samsung Electronics has cut prices of LCD display televisions by as much as 20% because sales in the U.S. have lagged expectations, the DigiTimes Web site reported. Porsche AG plans to increase annual production by 33%, the Financial Times said. News Corp. is in talks with the owner of the biggest city daily newspaper in China's western region as it seeks to expand into the nation's print business, the China Securities Journal reported. British diplomats met eight UK servicemen held in Iran as talks take place to try to secure their release today, the BBC reported. Japanese service industries expanded in April and a survey showed confidence among corporate executives is higher this quarter, adding to optimism that the world's second largest economy will extend its longest recovery since 1997, Bloomberg reported. The U.S. Senate approved a $447.2 billion Defense Department authorization bill for the next fiscal year that preserves $13.9 billion for missile defense, raises military pay and increases the active duty army by 20,000 troops, Bloomberg reported.
Late-Night Trading
Asian Indices are unch. to +2.0% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated -.17%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on strength in Asia and a continuation of the technology stock rally. While the current rally may last a couple of days, a consolidation is likely before June 30. However, after this brief pause, I expect the current rally to resume for a few more weeks as U.S. stocks test the highs set in the first quarter. The Portfolio is 150% net long heading into tomorrow.
Wednesday, June 23, 2004
Wednesday Close
S&P 500 1,144.06 +.85%
NASDAQ 2,020.98 +1.35%
Leading Sectors
Networking +4.38%
Disk Drives +4.02%
Nanotechnology +4.02%
Lagging Sectors
Foods +.01%
Broadcasting -.11%
Gaming -.13%
Other
Crude Oil 37.62 +.13%
Natural Gas 6.42 +.08%
Gold 395.40 -.03%
Base Metals 108.11 +1.12%
U.S. Dollar 89.43 -.01%
10-Yr. T-note Yield 4.69% -.46%
VIX 13.98 -2.31%
Put/Call .82 +2.50%
NYSE Arms .60 -9.09%
After-hours Movers
OVTI +11.15% after beating 4Q estimates, restating 1-3 quarters.
MLHR -4.73% after missing 4Q forecast and widening 1Q forecast.
T -4.14% after lowering 04 forecast.
MU -3.88% after beating 3Q earnings estimates but missing revenue estimates.
BBBY -3.14% after beating 1Q estimates and maintaining 2Q guidance.
Recommendations
Goldman Sachs said Sprint's announcement of its EV-DO rollout will benefit LU, NT and MOT. Goldman says SBC's announcement of an incremental $4-6 billion in capex over the next 5 years will benefit TLAB, ALA and CIEN. Goldman reiterated Outperform on NT, CSCO and JNPR.
After-hours News
U.S. stocks finished higher today, led by technology shares, as interest rates and oil prices fell. After the close, the BBC said it plans to start an Arabic-language television channel to broadcast 24-hour news across the Middle East, the Financial Times said. MasterCard will team up with NameProtect, a private U.S. online fraud detection company, to fight illegal misuse of the Internet, the London-based Times said. Comdex, once the biggest U.S. technology trade show, has been canceled this year because companies' budgets were "better suited" to hosting an event in 2005, Bloomberg reported. U.S. Treasuries rose in New York for a second day in three after the government sold $25 billion of two-year notes at the highest yield since June 2002, Bloomberg reported. FedEx raised its earnings forecast for the fiscal year and said fourth-quarter profit climbed 47% on an expanding global economy, Bloomberg said. Time Warner may form a partnership to offer wireless service to its cable television customers, Bloomberg reported. Six former executives of Enron and Merrill Lynch face additional charges in their fraud trial scheduled to begin August 16, Bloomberg said. Delta Air Lines' $11.8 billion in debt securities was downgraded by Moody's Investors Service because of concerns that losses will continue and cash flow will be reduced without labor and operating cost reductions, Bloomberg reported. An AOL software engineer was arrested and charged today with scheming to steal the Internet provider's subscriber list and send "massive amounts" of spam, Bloomberg reported.
BOTTOM LINE: The Portfolio finished substantially higher today. I covered several shorts and added a few new longs in various sectors in the afternoon, bringing the Portfolio's market exposure to 150% net long. One of my new longs is ACH and I am using a stop-loss of $47 on this position. The summer rally I anticipated appears to have begun in earnest today. I expect this rally will continue in fits and starts for the next several weeks.
NASDAQ 2,020.98 +1.35%
Leading Sectors
Networking +4.38%
Disk Drives +4.02%
Nanotechnology +4.02%
Lagging Sectors
Foods +.01%
Broadcasting -.11%
Gaming -.13%
Other
Crude Oil 37.62 +.13%
Natural Gas 6.42 +.08%
Gold 395.40 -.03%
Base Metals 108.11 +1.12%
U.S. Dollar 89.43 -.01%
10-Yr. T-note Yield 4.69% -.46%
VIX 13.98 -2.31%
Put/Call .82 +2.50%
NYSE Arms .60 -9.09%
After-hours Movers
OVTI +11.15% after beating 4Q estimates, restating 1-3 quarters.
MLHR -4.73% after missing 4Q forecast and widening 1Q forecast.
T -4.14% after lowering 04 forecast.
MU -3.88% after beating 3Q earnings estimates but missing revenue estimates.
BBBY -3.14% after beating 1Q estimates and maintaining 2Q guidance.
Recommendations
Goldman Sachs said Sprint's announcement of its EV-DO rollout will benefit LU, NT and MOT. Goldman says SBC's announcement of an incremental $4-6 billion in capex over the next 5 years will benefit TLAB, ALA and CIEN. Goldman reiterated Outperform on NT, CSCO and JNPR.
After-hours News
U.S. stocks finished higher today, led by technology shares, as interest rates and oil prices fell. After the close, the BBC said it plans to start an Arabic-language television channel to broadcast 24-hour news across the Middle East, the Financial Times said. MasterCard will team up with NameProtect, a private U.S. online fraud detection company, to fight illegal misuse of the Internet, the London-based Times said. Comdex, once the biggest U.S. technology trade show, has been canceled this year because companies' budgets were "better suited" to hosting an event in 2005, Bloomberg reported. U.S. Treasuries rose in New York for a second day in three after the government sold $25 billion of two-year notes at the highest yield since June 2002, Bloomberg reported. FedEx raised its earnings forecast for the fiscal year and said fourth-quarter profit climbed 47% on an expanding global economy, Bloomberg said. Time Warner may form a partnership to offer wireless service to its cable television customers, Bloomberg reported. Six former executives of Enron and Merrill Lynch face additional charges in their fraud trial scheduled to begin August 16, Bloomberg said. Delta Air Lines' $11.8 billion in debt securities was downgraded by Moody's Investors Service because of concerns that losses will continue and cash flow will be reduced without labor and operating cost reductions, Bloomberg reported. An AOL software engineer was arrested and charged today with scheming to steal the Internet provider's subscriber list and send "massive amounts" of spam, Bloomberg reported.
BOTTOM LINE: The Portfolio finished substantially higher today. I covered several shorts and added a few new longs in various sectors in the afternoon, bringing the Portfolio's market exposure to 150% net long. One of my new longs is ACH and I am using a stop-loss of $47 on this position. The summer rally I anticipated appears to have begun in earnest today. I expect this rally will continue in fits and starts for the next several weeks.
Mid-day Update
S&P 500 1,135.47 +.09%
NASDAQ 2,004.78 +.53%
Leading Sectors
Nanotechnology +3.63%
Networking +3.50%
Iron/Steel +1.74%
Lagging Sectors
Insurance -.56%
Foods -.61%
Broadcasting -.63%
Other
Crude Oil 37.58 -1.75%
Natural Gas 6.36 -.81%
Gold 395.40 -.03%
Base Metals 108.11 +1.12%
U.S. Dollar 89.37 -.06%
10-Yr. T-note Yield 4.69% -.55%
VIX 14.52 +1.47%
Put/Call .94 +17.50%
NYSE Arms .74 +12.12%
Market Movers
CECO -17.7% after the company said it received a formal order of investigation from the SEC.
OSUR +25.8% after the FDA approved its test to detect HIV Type 2 in saliva.
PFGC -18.09% after cutting 2Q, 3Q and 4Q forecasts.
RJR +4.0% after winning FTC approval to acquire Brown & Williamson and saying it may sell some less popular cigarette brands to compete against Philip Morris.
MYL -9.2% after withdrawing its earnings forecast and suing the FDA after the agency delayed approval of the company's version of the Duragesic pain-relief skin patch.
IBPI -69.0% after saying it halted a trial of it iseganan drug for preventing pneumonia because participants who got the medicine had higher rates of pneumonia and death.
NVEC +14.22% on continued short squeeze following its announcement of a new patent.
MINI +15.07% after raising 2Q and 04 guidance.
TASR +8.02% on rumors of a deal with Sharper Image to sell a consumer version of its stun gun.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on KRI, PFGC, NKE and GCI. Goldman reiterated Attractive coverage view on Paper stocks, favorites are DTC, SPP and IP. Citi SmithBarney reiterated Buy ratings on FON, APCS and TEL. Citi reiterated Buy on GE, target $36. Citi reiterated Buy on MDC, target $100. Citi reiterated Buy on MWD, target $72. Citi reiterated Buy on GS, target $117. Citi reiterated Sell on IM, target $13. SFNT raised to Buy at Legg Mason, target $32. STA cut to Underweight at Morgan Stanley.
Mid-day News
U.S. stocks are mostly higher today as continued strength in computer networking shares boosts the entire tech sector. The U.S. military's Central Command has informally asked for as many as 25,000 more soldiers to send to Iraq, the Baltimore Sun reported. The Recording Industry Association of America filed lawsuits against 482 more computer users yesterday for alleged illegal Internet music copying, the AP reported. Saudi Arabia's leader, King Fahd, today offered an amnesty to suspected terrorists who turn themselves in within a month, Agence France-Presse reported. Tenet Healthcare, the U.S. hospital chain facing allegations it defrauded the government, doubled a junk-bond sale to $1 billion last week to give the company its biggest cash reserves since at least 1990, Bloomberg said. Eight U.K. servicemen who were seized by Iran with their naval vessels on a waterway between Iran and Iraq will be freed today, the U.K. and Iranian governments said. The SEC approved a pilot program that would ease short-selling restrictions on 1,000 stocks, Bloomberg reported. Shares of Salesforce.com, an Internet-based seller of business software, rose as much as 43% in their first trading after the company boosted its IPO to $110 million, Bloomberg said. Crude oil futures are falling after the Energy Department reported that U.S. inventories increased more than expected last week, Bloomberg reported. President Bush said the U.S. would add Vietnam to the list of countries under a pilot program to treat HIV and AIDS patients, and said the U.S. is committed to ending the modern-day "plague," Bloomberg reported. Bank of America will spit its stock 2-for-1 and boost the quarterly dividend 13% to .90/share, Bloomberg said.
BOTTOM LINE: The Portfolio is having a very good day today as a few of my semiconductor, security and base metal longs are rising substantially. I added a few new longs in various sectors this morning, leaving the Portfolio with 125% net long market exposure. One of my new longs is TLAB and I am using a stop-loss of $8 on this position. I expect stocks to rise modestly into the close on short-covering, falling energy prices and declining interest rates.
NASDAQ 2,004.78 +.53%
Leading Sectors
Nanotechnology +3.63%
Networking +3.50%
Iron/Steel +1.74%
Lagging Sectors
Insurance -.56%
Foods -.61%
Broadcasting -.63%
Other
Crude Oil 37.58 -1.75%
Natural Gas 6.36 -.81%
Gold 395.40 -.03%
Base Metals 108.11 +1.12%
U.S. Dollar 89.37 -.06%
10-Yr. T-note Yield 4.69% -.55%
VIX 14.52 +1.47%
Put/Call .94 +17.50%
NYSE Arms .74 +12.12%
Market Movers
CECO -17.7% after the company said it received a formal order of investigation from the SEC.
OSUR +25.8% after the FDA approved its test to detect HIV Type 2 in saliva.
PFGC -18.09% after cutting 2Q, 3Q and 4Q forecasts.
RJR +4.0% after winning FTC approval to acquire Brown & Williamson and saying it may sell some less popular cigarette brands to compete against Philip Morris.
MYL -9.2% after withdrawing its earnings forecast and suing the FDA after the agency delayed approval of the company's version of the Duragesic pain-relief skin patch.
IBPI -69.0% after saying it halted a trial of it iseganan drug for preventing pneumonia because participants who got the medicine had higher rates of pneumonia and death.
NVEC +14.22% on continued short squeeze following its announcement of a new patent.
MINI +15.07% after raising 2Q and 04 guidance.
TASR +8.02% on rumors of a deal with Sharper Image to sell a consumer version of its stun gun.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on KRI, PFGC, NKE and GCI. Goldman reiterated Attractive coverage view on Paper stocks, favorites are DTC, SPP and IP. Citi SmithBarney reiterated Buy ratings on FON, APCS and TEL. Citi reiterated Buy on GE, target $36. Citi reiterated Buy on MDC, target $100. Citi reiterated Buy on MWD, target $72. Citi reiterated Buy on GS, target $117. Citi reiterated Sell on IM, target $13. SFNT raised to Buy at Legg Mason, target $32. STA cut to Underweight at Morgan Stanley.
Mid-day News
U.S. stocks are mostly higher today as continued strength in computer networking shares boosts the entire tech sector. The U.S. military's Central Command has informally asked for as many as 25,000 more soldiers to send to Iraq, the Baltimore Sun reported. The Recording Industry Association of America filed lawsuits against 482 more computer users yesterday for alleged illegal Internet music copying, the AP reported. Saudi Arabia's leader, King Fahd, today offered an amnesty to suspected terrorists who turn themselves in within a month, Agence France-Presse reported. Tenet Healthcare, the U.S. hospital chain facing allegations it defrauded the government, doubled a junk-bond sale to $1 billion last week to give the company its biggest cash reserves since at least 1990, Bloomberg said. Eight U.K. servicemen who were seized by Iran with their naval vessels on a waterway between Iran and Iraq will be freed today, the U.K. and Iranian governments said. The SEC approved a pilot program that would ease short-selling restrictions on 1,000 stocks, Bloomberg reported. Shares of Salesforce.com, an Internet-based seller of business software, rose as much as 43% in their first trading after the company boosted its IPO to $110 million, Bloomberg said. Crude oil futures are falling after the Energy Department reported that U.S. inventories increased more than expected last week, Bloomberg reported. President Bush said the U.S. would add Vietnam to the list of countries under a pilot program to treat HIV and AIDS patients, and said the U.S. is committed to ending the modern-day "plague," Bloomberg reported. Bank of America will spit its stock 2-for-1 and boost the quarterly dividend 13% to .90/share, Bloomberg said.
BOTTOM LINE: The Portfolio is having a very good day today as a few of my semiconductor, security and base metal longs are rising substantially. I added a few new longs in various sectors this morning, leaving the Portfolio with 125% net long market exposure. One of my new longs is TLAB and I am using a stop-loss of $8 on this position. I expect stocks to rise modestly into the close on short-covering, falling energy prices and declining interest rates.
Wednesday Watch
Earnings of Note
Company/Estimate
ARRO/.35
BBBY/.25
FDX/1.33
MLHR/.17
MU/.09
OVTI/.31
WOR/.76
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on MERQ, AMGN and ADP. Goldman reiterated Attractive view on Energy sector seeing 30-50% upside, favorites are XOM, AHC, NFX, MUR, DVN and PXD.
Late-Night News
Asian indices are mixed as strength in Taiwan is being offset by weakness in China. Over 100 Goldman Sachs bankers may be able to sell stock worth $4.8 billion as the shares they were awarded at the securities firm's IPO are unlocked, the London-based Times said. Shanghai General Motors, which earned $965 million in net income last year, was the most profitable vehicle maker in China, the Shanghai Morning Post said. The U.S. won't repatriate Chinese citizens held at Guantanamo Bay because it's concerned they will be tortured or executed on their return, the Financial Times said. Salesforce.com, the maker of Internet-based sales software, raised $110 million in an IPO as it prepares to escalate its battle with business-software leaders including Siebel Systems, Bloomberg reported. Merrill Lynch plans to set up an investment banking venture in China that would manage share sales and trade bonds in the world's fastest growing major economy, Bloomberg said. U.S. Commerce Secretary Evans told China it will gave to cut barriers to American investment and trade, including cracking down on software piracy, to shore up support for free trade with the U.S., Bloomberg reported. Iran may release three U.K. navy vessels and eight crew members in the event an investigation shows they strayed inadvertently into Iranian waters, the Islamic Republic News Agency said. The Bank of Japan's Tankan survey, released next week, will show the number of executives at large manufacturers who are optimistic about business conditions has reached the highest level since 1991, Nikkei English News reported.
Late-Night Trading
Asian Indices -.50% to +1.0% on average.
S&P 500 indicated -.05%.
NASDAQ 100 indicated -.17%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on strength in technology shares and falling energy prices. I continue to believe the U.S. markets will embark upon an outsized upwards move within the next few weeks. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
ARRO/.35
BBBY/.25
FDX/1.33
MLHR/.17
MU/.09
OVTI/.31
WOR/.76
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on MERQ, AMGN and ADP. Goldman reiterated Attractive view on Energy sector seeing 30-50% upside, favorites are XOM, AHC, NFX, MUR, DVN and PXD.
Late-Night News
Asian indices are mixed as strength in Taiwan is being offset by weakness in China. Over 100 Goldman Sachs bankers may be able to sell stock worth $4.8 billion as the shares they were awarded at the securities firm's IPO are unlocked, the London-based Times said. Shanghai General Motors, which earned $965 million in net income last year, was the most profitable vehicle maker in China, the Shanghai Morning Post said. The U.S. won't repatriate Chinese citizens held at Guantanamo Bay because it's concerned they will be tortured or executed on their return, the Financial Times said. Salesforce.com, the maker of Internet-based sales software, raised $110 million in an IPO as it prepares to escalate its battle with business-software leaders including Siebel Systems, Bloomberg reported. Merrill Lynch plans to set up an investment banking venture in China that would manage share sales and trade bonds in the world's fastest growing major economy, Bloomberg said. U.S. Commerce Secretary Evans told China it will gave to cut barriers to American investment and trade, including cracking down on software piracy, to shore up support for free trade with the U.S., Bloomberg reported. Iran may release three U.K. navy vessels and eight crew members in the event an investigation shows they strayed inadvertently into Iranian waters, the Islamic Republic News Agency said. The Bank of Japan's Tankan survey, released next week, will show the number of executives at large manufacturers who are optimistic about business conditions has reached the highest level since 1991, Nikkei English News reported.
Late-Night Trading
Asian Indices -.50% to +1.0% on average.
S&P 500 indicated -.05%.
NASDAQ 100 indicated -.17%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on strength in technology shares and falling energy prices. I continue to believe the U.S. markets will embark upon an outsized upwards move within the next few weeks. The Portfolio is 100% net long heading into tomorrow.
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