Earnings of Note
Company/Estimate
ABT/.54
DLP/.86
FAST/.41
GE/.37
GNW/.51
PWAV/-.02
Splits
BPOP 2-for-1
Economic Data
Wholesale Inventories for May estimated +.5% versus -.1% in April.
Recommendations
Goldman reiterated Outperform on FS, HOT, AMGN, GILD and TRMS. Goldman reiterated Underperform on PSS and VRTX. CNX may rise to $80 a share as the company would profit from rising coal prices sparked by a shortage in supply, Business Week reported. PIR is now cheap enough to draw investors, Business Week said. Shares of ERJ are worth at least $36, Business Week reported.
Late-Night News
Asian indices are mostly higher on rebounding financial shares. The SEC plans to sue more individuals at Invesco Funds Group, the Wall Street Journal reported. China is prepared to use foreign reserves to buy $256 million of Hong Kong government bonds to show its support for the city's government, the Hong Kong Economic Times reported. U.S. natural gas prices may rise to a record unless measures are introduced quickly to boost supply or slow demand, the Financial Times said. China's banks are the most at risk to a financial crisis and a bailout of the industry would cost about $650 billion, Standard & Poor's said. Afghan women are being targeted in attacks blamed on Taliban fighters trying to disrupt elections planned for September, the UN said. New York crude-oil futures may fall next week as rising output by OPEC boosts inventories in consuming countries, according to a Bloomberg survey of traders and analysts. Corporate insider stock purchases are up 11% year-over-year and up 75% from the first quarter, Bloomberg reported.
Late-Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated +.18%.
NASDAQ 100 indicated +.28%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on strength in Asia, stronger U.S. earnings reports and a bounce from today's sell-off. However, rising energy prices, elevated investor complacency and worries over terrorism will likely hold any rally in check. It is good to see insider buying accelerating. My short-term trading indicators are giving sell signals and the Portfolio is 25% net short.
Friday, July 09, 2004
Thursday, July 08, 2004
Thursday Close
S&P 500 1,109.11 -.82%
NASDAQ 1,935.32 -1.56%
Leading Sectors
Drugs +.24%
Fashion +.21%
Defense +03%
Lagging Sectors
Software -3.13%
Airlines -3.95%
Homebuilders -4.89%
Other
Crude Oil 40.18 +2.81%
Natural Gas 6.17 -3.14%
Gold 407.50 -.17%
Base Metals 112.35 -.35%
U.S. Dollar 87.60 -.05%
10-Yr. T-note Yield 4.47% -.09%
VIX 16.20 +2.47%
Put/Call .89 -9.18%
NYSE Arms 1.98 +76.79%
After-hours Movers
None of note.
Recommendations
Goldman Sachs reiterated Underperform on PBG.
After-hours News
U.S. stocks finished lower today on rising oil prices, terrorism worries and earnings concerns. After the close, DaimlerChrysler said its commercial vehicles unit may use its China truck-making joint-venture as a base to export to India, Russia and South Korea, the Financial Times reported. Cases of syphilis increased so much among homosexual men in San Francisco and Los Angeles that U.S. government scientists are warning about the risk of a wider spread in the virus that causes AIDS, Bloomberg reported. Adelphia Communications founder John Rigas and his son Timothy were convicted of conspiring to loot the company to fund lavish lifestyles and lie about finances before its bankruptcy, Bloomberg reported. Philip Morris agreed to pay about $1 billion over 12 years to settle European Union charges that the company aids cigarette smuggling, a person familiar with the situation said.
BOTTOM LINE: The Portfolio finished unchanged today. I added a few new shorts in the afternoon, leaving the Portfolio with 25% net short market exposure. One of my new shorts is ERTS and I am keeping a $53.50 stop-loss on this position. Another bad day for the bulls and it appears as though there is still too much investor complacency for a short-term bottom. As well, the recent spike-up in oil will continue to pressure stocks until investors begin to anticipate a reversal.
NASDAQ 1,935.32 -1.56%
Leading Sectors
Drugs +.24%
Fashion +.21%
Defense +03%
Lagging Sectors
Software -3.13%
Airlines -3.95%
Homebuilders -4.89%
Other
Crude Oil 40.18 +2.81%
Natural Gas 6.17 -3.14%
Gold 407.50 -.17%
Base Metals 112.35 -.35%
U.S. Dollar 87.60 -.05%
10-Yr. T-note Yield 4.47% -.09%
VIX 16.20 +2.47%
Put/Call .89 -9.18%
NYSE Arms 1.98 +76.79%
After-hours Movers
None of note.
Recommendations
Goldman Sachs reiterated Underperform on PBG.
After-hours News
U.S. stocks finished lower today on rising oil prices, terrorism worries and earnings concerns. After the close, DaimlerChrysler said its commercial vehicles unit may use its China truck-making joint-venture as a base to export to India, Russia and South Korea, the Financial Times reported. Cases of syphilis increased so much among homosexual men in San Francisco and Los Angeles that U.S. government scientists are warning about the risk of a wider spread in the virus that causes AIDS, Bloomberg reported. Adelphia Communications founder John Rigas and his son Timothy were convicted of conspiring to loot the company to fund lavish lifestyles and lie about finances before its bankruptcy, Bloomberg reported. Philip Morris agreed to pay about $1 billion over 12 years to settle European Union charges that the company aids cigarette smuggling, a person familiar with the situation said.
BOTTOM LINE: The Portfolio finished unchanged today. I added a few new shorts in the afternoon, leaving the Portfolio with 25% net short market exposure. One of my new shorts is ERTS and I am keeping a $53.50 stop-loss on this position. Another bad day for the bulls and it appears as though there is still too much investor complacency for a short-term bottom. As well, the recent spike-up in oil will continue to pressure stocks until investors begin to anticipate a reversal.
Mid-day Update
S&P 500 1,111.17 -.64%
NASDAQ 1,942.11 -1.22%
Leading Sectors
Drugs +.69%
Semis +.41%
Fashion +.21%
Lagging Sectors
Software -3.02%
Airlines -3.09%
Homebuilders -4.66%
Other
Crude Oil 40.0 +2.33%
Natural Gas 6.19 -2.75%
Gold 408.40 +.05%
Base Metals 112.35 -.35%
U.S. Dollar 87.51 -.15%
10-Yr. T-note Yield 4.47% -.09%
VIX 15.75 -.38%
Put/Call .90 -8.16%
NYSE Arms 1.62 +44.64%
Market Movers
YHOO -5.5% after meeting 2Q estimates and guiding lower for 3Q.
SEBL -12.1% after cutting 2Q forecast and multiple downgrades.
TUES +14.4% after raising 2Q forecast and Friedman Billings upgrade to Outperform.
CKFR +9.8% after announcing it signed a five-year contract extension with Wachovia to provide fully outsourced electronic billing and payment services to its customers.
JCP +4.3% after raising 2Q forecast.
PLCE -16.1% after lowering 2Q guidance.
BWS -16.2% after cutting 2Q forecast.
BMC -12.5% after cutting 1Q estimates.
TLB -11.5% after lowering 2Q forecast and Prudential downgrade to Neutral.
CAO -16.6% after lowering 2Q forecast and Raymond James downgrade to Market Perform.
STGS -7.8% after lowering 2Q guidance.
SCHN -9.66% after beating 3Q estimates and giving weaker 4Q forecast.
Economic Data
Initial Jobless Claims for last week were 310K versus estimates of 341K and a downwardly revised 349K prior week.
Continuing Claims came in at 2872K versus estimates of 2950K and a downwardly revised 2957K prior.
Recommendations
MRO raised to Overweight at JP Morgan. BAC rated Overweight at JP Morgan. ARDI cut to Reduce at UBS, target $6. BRKS rated Buy at Deutsche Bank, target $22. MOT raised to Outperform at Thomas Weisel. PIR raised to Strong Buy at Raymond James, target $28. DISH rated Sector Underperform at CIBC. BK rated Buy at Bank of America, target $37. MEL rated Buy at Bank of America, target $36. R rated Outperform at CSFB, target $45. QLTY rated Outperform at CSFB, target $13. FWRD rated Outperform at CSFB, target $50. STT rated Buy at Bank of America, target $58. NTRS rated Buy at Bank of America, target $52. CHRW rated Outperform at CSFB, target $52. CNF rated Underperform at CSFB, target $35. WERN rated Outperform at CSFB, target $23. SWFT rated Outperform at CSFB, target $21. JBHT rated Outperform at CSFB, target $45. Goldman Sachs reiterated Outperform on YHOO, IGT, AA, HOT, FS, ABK, CFC, AXP, DNA, MDT, AET, TYC, FDC, JNPR and AIG. PGN cut to Sell at Citi SmithBarney, target $38.50. Citi reiterated Buy on CKFR, target $39. Citi reiterated Buy on MOT, target $25. Citi reiterated Buy on SEBL, target $11.
Mid-day News
U.S. stocks are lower mid-day on weakness in software, homebuilding and airline shares. The U.S. Defense Department is beginning long-range planning on how to cut the number of U.S. soldiers in Iraq now that an interim government is established, the NY Times said. Israeli Prime Minister Sharon is ready to discuss making the Middle East a nuclear-free zone as part of future peace talks in the region, the AP reported. The Pentagon's top official for personnel and readiness told Congress that the military has no plans to reinstate a draft to support operations in Iraq and Afghanistan, the Washington Post reported. Two EBay customers have filed suit against the world's largest Internet auction company, questioning the company's billing practices, the San Francisco Chronicle reported. About 200 pounds of explosives and bomb-making equipment, stolen last weekend in California from a storage locker used by two public safety agencies, were found in a stolen van yesterday, the AP reported. Former Enron Chairman Ken Lay, charged yesterday in a sealed indictment in connection with the collapse of the former energy giant in 2001, surrendered to federal authorities in Houston this morning, Bloomberg reported. The ruble fell the most against the dollar in a month after Moody's Investors Service said it may reduce the credit ratings of 18 Russian lenders, adding to concern about the stability of the country's banks, Bloomberg said. The number of U.S. workers filing new claims for jobless benefits plunged by 39,000 last week to 310, 000, the lowest since October 2000, Bloomberg reported. DaimlerChrysler and Ford agreed to invest another $100 million in Ballard Power Systems, giving the money-losing maker of automotive fuel cells cash as the U.S. steps up programs to develop cars run by fuel cells, Bloomberg said. China bowed to pressure from Bush administration trade officials and agreed to drop a tax break that U.S. semiconductor makers said put them at a disadvantage, Bloomberg reported. Nextel will be required to pay about $3.2 billion to exchange some airwaves, $1 billion more than it had offered, Bloomberg said.
BOTTOM LINE: The Portfolio is slightly lower today as weakness in my internet, homebuilding and Chinese ADR longs is offsetting declines in my internet and retail shorts. I added a few new shorts this morning, thus bringing the Portfolio to market neutral(shorts-longs=0). One of my new shorts is ANF and I am using a stop-loss of $37.25 on this position. I expect stocks to remain weaker to neutral into the close on terrorism concerns, weakening technology shares and rising oil prices.
NASDAQ 1,942.11 -1.22%
Leading Sectors
Drugs +.69%
Semis +.41%
Fashion +.21%
Lagging Sectors
Software -3.02%
Airlines -3.09%
Homebuilders -4.66%
Other
Crude Oil 40.0 +2.33%
Natural Gas 6.19 -2.75%
Gold 408.40 +.05%
Base Metals 112.35 -.35%
U.S. Dollar 87.51 -.15%
10-Yr. T-note Yield 4.47% -.09%
VIX 15.75 -.38%
Put/Call .90 -8.16%
NYSE Arms 1.62 +44.64%
Market Movers
YHOO -5.5% after meeting 2Q estimates and guiding lower for 3Q.
SEBL -12.1% after cutting 2Q forecast and multiple downgrades.
TUES +14.4% after raising 2Q forecast and Friedman Billings upgrade to Outperform.
CKFR +9.8% after announcing it signed a five-year contract extension with Wachovia to provide fully outsourced electronic billing and payment services to its customers.
JCP +4.3% after raising 2Q forecast.
PLCE -16.1% after lowering 2Q guidance.
BWS -16.2% after cutting 2Q forecast.
BMC -12.5% after cutting 1Q estimates.
TLB -11.5% after lowering 2Q forecast and Prudential downgrade to Neutral.
CAO -16.6% after lowering 2Q forecast and Raymond James downgrade to Market Perform.
STGS -7.8% after lowering 2Q guidance.
SCHN -9.66% after beating 3Q estimates and giving weaker 4Q forecast.
Economic Data
Initial Jobless Claims for last week were 310K versus estimates of 341K and a downwardly revised 349K prior week.
Continuing Claims came in at 2872K versus estimates of 2950K and a downwardly revised 2957K prior.
Recommendations
MRO raised to Overweight at JP Morgan. BAC rated Overweight at JP Morgan. ARDI cut to Reduce at UBS, target $6. BRKS rated Buy at Deutsche Bank, target $22. MOT raised to Outperform at Thomas Weisel. PIR raised to Strong Buy at Raymond James, target $28. DISH rated Sector Underperform at CIBC. BK rated Buy at Bank of America, target $37. MEL rated Buy at Bank of America, target $36. R rated Outperform at CSFB, target $45. QLTY rated Outperform at CSFB, target $13. FWRD rated Outperform at CSFB, target $50. STT rated Buy at Bank of America, target $58. NTRS rated Buy at Bank of America, target $52. CHRW rated Outperform at CSFB, target $52. CNF rated Underperform at CSFB, target $35. WERN rated Outperform at CSFB, target $23. SWFT rated Outperform at CSFB, target $21. JBHT rated Outperform at CSFB, target $45. Goldman Sachs reiterated Outperform on YHOO, IGT, AA, HOT, FS, ABK, CFC, AXP, DNA, MDT, AET, TYC, FDC, JNPR and AIG. PGN cut to Sell at Citi SmithBarney, target $38.50. Citi reiterated Buy on CKFR, target $39. Citi reiterated Buy on MOT, target $25. Citi reiterated Buy on SEBL, target $11.
Mid-day News
U.S. stocks are lower mid-day on weakness in software, homebuilding and airline shares. The U.S. Defense Department is beginning long-range planning on how to cut the number of U.S. soldiers in Iraq now that an interim government is established, the NY Times said. Israeli Prime Minister Sharon is ready to discuss making the Middle East a nuclear-free zone as part of future peace talks in the region, the AP reported. The Pentagon's top official for personnel and readiness told Congress that the military has no plans to reinstate a draft to support operations in Iraq and Afghanistan, the Washington Post reported. Two EBay customers have filed suit against the world's largest Internet auction company, questioning the company's billing practices, the San Francisco Chronicle reported. About 200 pounds of explosives and bomb-making equipment, stolen last weekend in California from a storage locker used by two public safety agencies, were found in a stolen van yesterday, the AP reported. Former Enron Chairman Ken Lay, charged yesterday in a sealed indictment in connection with the collapse of the former energy giant in 2001, surrendered to federal authorities in Houston this morning, Bloomberg reported. The ruble fell the most against the dollar in a month after Moody's Investors Service said it may reduce the credit ratings of 18 Russian lenders, adding to concern about the stability of the country's banks, Bloomberg said. The number of U.S. workers filing new claims for jobless benefits plunged by 39,000 last week to 310, 000, the lowest since October 2000, Bloomberg reported. DaimlerChrysler and Ford agreed to invest another $100 million in Ballard Power Systems, giving the money-losing maker of automotive fuel cells cash as the U.S. steps up programs to develop cars run by fuel cells, Bloomberg said. China bowed to pressure from Bush administration trade officials and agreed to drop a tax break that U.S. semiconductor makers said put them at a disadvantage, Bloomberg reported. Nextel will be required to pay about $3.2 billion to exchange some airwaves, $1 billion more than it had offered, Bloomberg said.
BOTTOM LINE: The Portfolio is slightly lower today as weakness in my internet, homebuilding and Chinese ADR longs is offsetting declines in my internet and retail shorts. I added a few new shorts this morning, thus bringing the Portfolio to market neutral(shorts-longs=0). One of my new shorts is ANF and I am using a stop-loss of $37.25 on this position. I expect stocks to remain weaker to neutral into the close on terrorism concerns, weakening technology shares and rising oil prices.
Thursday Watch
Earnings of Note
Company/Estimate
PTNX/.09
FLE/.06
LI/.24
Splits
None of note.
Economic Data
Initial Jobless Claims for last week estimated at 341K versus 351K prior week.
Continuing Claims estimated at 2950K versus 2966K prior.
Consumer Credit for May estimated at $7.5B versus $3.9B in April.
Recommendations
Goldman Sachs reiterated Outperform on MDT, DNA, AA and FDC.
Late-Night News
Asian indices are mostly lower on weak after-hours technology reports in the U.S. China's passenger car sales in June grew at their slowest pace since 02 as government restrictions on bank loans sapped demand, the Shanghai Daily said. Iraq's finance ministry will auction $100 million of treasury bills on July 18 to start a bond market and "to recover the economy," the Financial Times said. U.S. lawmakers received a briefing by the FBI and CIA on the threat posed by al-Qaeda of a pre-election attack to try and influence the outcome, the AP reported. National Security Adviser Condoleezza Rice said the U.S. must bolster cooperation with China on a range of issues through "high-level dialogue," Bloomberg reported. U.S. trade officials plan to ask China to reverse a decision revoking a patent held by Pfizer, Bloomberg said. Japan's ruling Party faces a loss of seats in parliament's upper house elections this Sunday, posing a threat to stocks and the yen, Bloomberg reported.
Late-Night Trading
Asian Indices are -1.0% to unch. on average.
S&P 500 indicated -.52%.
NASDAQ 100 indicated -1.03%.
BOTTOM LINE: I expect U.S. stocks to open lower in the morning on weakness in software and internet shares. Weakness will likely persist throughout the day. The Portfolio is 25% net long heading into tomorrow.
Company/Estimate
PTNX/.09
FLE/.06
LI/.24
Splits
None of note.
Economic Data
Initial Jobless Claims for last week estimated at 341K versus 351K prior week.
Continuing Claims estimated at 2950K versus 2966K prior.
Consumer Credit for May estimated at $7.5B versus $3.9B in April.
Recommendations
Goldman Sachs reiterated Outperform on MDT, DNA, AA and FDC.
Late-Night News
Asian indices are mostly lower on weak after-hours technology reports in the U.S. China's passenger car sales in June grew at their slowest pace since 02 as government restrictions on bank loans sapped demand, the Shanghai Daily said. Iraq's finance ministry will auction $100 million of treasury bills on July 18 to start a bond market and "to recover the economy," the Financial Times said. U.S. lawmakers received a briefing by the FBI and CIA on the threat posed by al-Qaeda of a pre-election attack to try and influence the outcome, the AP reported. National Security Adviser Condoleezza Rice said the U.S. must bolster cooperation with China on a range of issues through "high-level dialogue," Bloomberg reported. U.S. trade officials plan to ask China to reverse a decision revoking a patent held by Pfizer, Bloomberg said. Japan's ruling Party faces a loss of seats in parliament's upper house elections this Sunday, posing a threat to stocks and the yen, Bloomberg reported.
Late-Night Trading
Asian Indices are -1.0% to unch. on average.
S&P 500 indicated -.52%.
NASDAQ 100 indicated -1.03%.
BOTTOM LINE: I expect U.S. stocks to open lower in the morning on weakness in software and internet shares. Weakness will likely persist throughout the day. The Portfolio is 25% net long heading into tomorrow.
Wednesday, July 07, 2004
Wednesday Close
S&P 500 1,118.33 +.19%
NASDAQ 1,966.08 +.13%
Leading Sectors
HMO's +1.39%
Iron/Steel +1.30%
Restaurants +1.29%
Lagging Sectors
Airlines -1.01%
Nanotechnology -1.54%
I-Banks -2.04%
Other
Crude Oil 39.22 +.36%
Natural Gas 6.36 -.16%
Gold 402.10 -.15%
Base Metals 112.74 +1.83%
U.S. Dollar 87.65 -.53%
10-Yr. T-note Yield 4.47% unch.
VIX 15.81 -2.71%
Put/Call .98 -9.26%
NYSE Arms 1.12 -48.39%
After-hours Movers
YHOO -11.8% after meeting 2Q estimates and guiding lower for 3Q.
SEBL -15.64% after cutting 2Q forecast.
CKFR +3.3% after announcing it signed a five-year contract extension with Wachovia to provide fully outsourced electronic billing and payment services to its customers.
SCHN -7.68% after beating 3Q estimates and giving weaker 4Q forecast.
BMC -7.62% after cutting 1Q estimates.
*Internet Stocks – down across the board on YHOO report.
Recommendations
Goldman Sachs reiterated Outperform on YHOO, ACN and DNA.
After-hours News
U.S. stocks finished mildly higher today on falling oil prices, a bounce in technology shares and strength in cyclicals. After the close, Kenneth Lay, former chief executive of Enron, was indicted in Houston on criminal charges related to the company's collapse, CNBC reported. The FBI waned guards at the Canadian and Mexican borders last month that al-Qaeda agents may try to cross into the U.S. to launch terrorist attacks in coming months, the National Post reported. Three dead bodies were found on the Hondo, New Mexico ranch of ABC tv newsman Sam Donaldson, the AP reported. Wholesales prices for pork in Japan are rising as demand increases for alternatives to beef and chicken on concern over mad cow and bird flu outbreaks, the Nihon Keizai reported. Michael Dell's investment firm bought the Four Seasons Resort Maui at Wailea in Hawaii as part of a plan to spend more than $1 billion on real estate, Bloomberg reported. Phillip Morris and other U.S. tobacco companies can't use a 1998 settlement with the states to shield them from a U.S. Justice Department suit seeking $280 billion, Bloomberg said. Citigroup and ABN Amro are among banks boosting loans to Russian companies, betting economic won't be derailed by the potential bankruptcy of OAO Yukos Oil, Bloomberg reported.
BOTTOM LINE: The Portfolio finished modestly higher today. I added a few new technology shorts in the afternoon, leaving the Portfolio with 25% net long market exposure. One of my new shorts is ERES and I am keeping a $28.50 stop-loss on this position. It looks as though technology stocks will take another hit tomorrow. Longer-term investors should not bottom-fish yet as there are still too many negative catalysts on the near-term horizon.
NASDAQ 1,966.08 +.13%
Leading Sectors
HMO's +1.39%
Iron/Steel +1.30%
Restaurants +1.29%
Lagging Sectors
Airlines -1.01%
Nanotechnology -1.54%
I-Banks -2.04%
Other
Crude Oil 39.22 +.36%
Natural Gas 6.36 -.16%
Gold 402.10 -.15%
Base Metals 112.74 +1.83%
U.S. Dollar 87.65 -.53%
10-Yr. T-note Yield 4.47% unch.
VIX 15.81 -2.71%
Put/Call .98 -9.26%
NYSE Arms 1.12 -48.39%
After-hours Movers
YHOO -11.8% after meeting 2Q estimates and guiding lower for 3Q.
SEBL -15.64% after cutting 2Q forecast.
CKFR +3.3% after announcing it signed a five-year contract extension with Wachovia to provide fully outsourced electronic billing and payment services to its customers.
SCHN -7.68% after beating 3Q estimates and giving weaker 4Q forecast.
BMC -7.62% after cutting 1Q estimates.
*Internet Stocks – down across the board on YHOO report.
Recommendations
Goldman Sachs reiterated Outperform on YHOO, ACN and DNA.
After-hours News
U.S. stocks finished mildly higher today on falling oil prices, a bounce in technology shares and strength in cyclicals. After the close, Kenneth Lay, former chief executive of Enron, was indicted in Houston on criminal charges related to the company's collapse, CNBC reported. The FBI waned guards at the Canadian and Mexican borders last month that al-Qaeda agents may try to cross into the U.S. to launch terrorist attacks in coming months, the National Post reported. Three dead bodies were found on the Hondo, New Mexico ranch of ABC tv newsman Sam Donaldson, the AP reported. Wholesales prices for pork in Japan are rising as demand increases for alternatives to beef and chicken on concern over mad cow and bird flu outbreaks, the Nihon Keizai reported. Michael Dell's investment firm bought the Four Seasons Resort Maui at Wailea in Hawaii as part of a plan to spend more than $1 billion on real estate, Bloomberg reported. Phillip Morris and other U.S. tobacco companies can't use a 1998 settlement with the states to shield them from a U.S. Justice Department suit seeking $280 billion, Bloomberg said. Citigroup and ABN Amro are among banks boosting loans to Russian companies, betting economic won't be derailed by the potential bankruptcy of OAO Yukos Oil, Bloomberg reported.
BOTTOM LINE: The Portfolio finished modestly higher today. I added a few new technology shorts in the afternoon, leaving the Portfolio with 25% net long market exposure. One of my new shorts is ERES and I am keeping a $28.50 stop-loss on this position. It looks as though technology stocks will take another hit tomorrow. Longer-term investors should not bottom-fish yet as there are still too many negative catalysts on the near-term horizon.
Mid-day Update
S&P 500 1,119.51 +.30%
NASDAQ 1,970.24 +.35%
Leading Sectors
Restaurants +1.46%
Semis +1.35%
HMO's +1.30%
Lagging Sectors
Airlines -.72%
Nanotechnology -.77%
I-Banks -1.80%
Other
Crude Oil 39.07 -1.59%
Natural Gas 6.36 -1.0%
Gold 403.30 +2.62%
Base Metals 112.74 +1.83%
U.S. Dollar 87.61 -.57%
10-Yr. T-note Yield 4.47% +.04%
VIX 16.03 -1.35%
Put/Call 1.05 -2.78%
NYSE Arms 1.20 -44.70%
Market Movers
FILE -19.4% after saying second-quarter profit was less than analysts expected.
MSGI +57.5% after announcing a strategic alliance with the SYTEX Group to deliver homeland security products.
ISSC +19.1% after saying that the FAA awarded the company a TSO certification for their Large Flat Panel display and upgrade to Buy at Friedman Billings.
ARO +7.9% after saying it will be added to the S&P Mid-cap 400 Index.
APPB +7.4% after reiterating 2Q and 04 forecasts.
NTES -16.7% after lowering 2Q forecast.
ASCL -15.4% after cutting 2Q and 3Q forecast.
LWAY -10.9% after announcing the acquisition of a closely held Philly-area cream cheese producer.
Economic Data
None of note.
Recommendations
SVU and LLL cut to Underweight at JP Morgan. DYAX rated Buy at Deutsche Bank, target $18. PDLI rated Buy at Deutsche Bank, target $30. CHIR rated Buy at Deutsche Bank, target $60. ENCY rated Buy at Deutsche Bank, target $16. DNA rated Buy at Deutsche Bank, target $68. BIIB rated Buy at Deutsche Bank, target $72. TKTX rated Buy at Deutsche Bank, target $28. MAT cut to Sell at Bank of America, target $13. AVP rated Overweight at Morgan Stanley, target $54. Goldman reiterated Outperform on AUO, AMGN, DNA, GCI and MSFT. Goldman reiterated Underperform on DJ. Citi SmithBarney said to Buy SSI ahead of tomorrow's FCC meeting. Citi says to Buy PLUG, as many catalysts are on the horizon. Citi reiterated Buy on JNPR, target $32.50. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on FDRY, target $15. Citi reiterated Buy on ETS, target $4. Citi reiterated Buy on RDWR, target $25. Citi reiterated Buy on EXTR, target $11. Citi reiterated Buy on QSFT, target $16. Citi reiterated Buy on VRTS, target $22. Citi reiterated Buy on ASCL, target $18. Citi reiterated Buy on SLM, target $46.
Mid-day News
U.S. stocks are quietly higher mid-day as a declining U.S. dollar and crude oil prices boost cyclical shares. Deutsche Telekom AG's T-Systems International unit is seeking to link 10,000 wireless computer-access locations into one network to make it more convenient for mobile users, Reuters reported. Boston school bus drivers and monitors say they will picket the Democratic Convention, causing a potential problem for Senator Kerry, who said he wouldn't cross a picket line, the Boston Globe reported. It takes the average U.S. worker 189 days of work just to pay off his or her share of federal, state and local taxes, the Washington Post reported. The U.S. Senate version of a six-year transportation bill calls for states to levy tolls on existing interstate highways to raise funds for road building and to ease congestion, the Washington Post reported. Phoenix and surrounding parts of Arizona face power shortages and blackouts after a fire damaged a power substation near Sun City, the Arizona Republic reported. Pfizer said Chinese authorities overturned the company's patent for Viagra, Dow Jones reported. Paul McCulley, a PIMCO managing director, told CNBC that a "great deal" of the bear market for bonds has passed and that the Fed can raise rates at a measured pace. U.S. mortgage applications surged last week by the most in more than three months as mortgage rates fell below 6% for the first time since April, Bloomberg reported. AT&T may lose its investment-grade credit ratings because of plunging profit, bond prices show. General Motors increased rebates to $5,000 on most sport-utility vehicles and Ford boosted offers on several models, Bloomberg said. Pfizer is expanding its drug-discount programs to allow 43 million uninsured Americans to buy medicines such as its Lipitor cholesterol treatment at a lower cost. Boeing won orders worth $1.2 billion for 10 7E7 airliners from Britain's First Choice Holidays and Italy's Blue Panorama, the first European customers for the aircraft, Bloomberg reported. 9 in 10 people in France favor loosening the 35-hour maximum work week limit, saying they want to be able to increase their earnings, Bloomberg reported. Crude oil prices are declining after the Saudi Oil Minister said the kingdom is committed to boosting OPEC output quotas August 1, Bloomberg reported.
BOTTOM LINE: The Portfolio is modestly higher today on strength in my telecom equipment, gold and internet longs and weakness in my oil service shorts. I have not traded today and the Portfolio is still 50% net long. I expect stocks to rise modestly into the close on declining oil prices and strength in basic materials/ technology shares.
NASDAQ 1,970.24 +.35%
Leading Sectors
Restaurants +1.46%
Semis +1.35%
HMO's +1.30%
Lagging Sectors
Airlines -.72%
Nanotechnology -.77%
I-Banks -1.80%
Other
Crude Oil 39.07 -1.59%
Natural Gas 6.36 -1.0%
Gold 403.30 +2.62%
Base Metals 112.74 +1.83%
U.S. Dollar 87.61 -.57%
10-Yr. T-note Yield 4.47% +.04%
VIX 16.03 -1.35%
Put/Call 1.05 -2.78%
NYSE Arms 1.20 -44.70%
Market Movers
FILE -19.4% after saying second-quarter profit was less than analysts expected.
MSGI +57.5% after announcing a strategic alliance with the SYTEX Group to deliver homeland security products.
ISSC +19.1% after saying that the FAA awarded the company a TSO certification for their Large Flat Panel display and upgrade to Buy at Friedman Billings.
ARO +7.9% after saying it will be added to the S&P Mid-cap 400 Index.
APPB +7.4% after reiterating 2Q and 04 forecasts.
NTES -16.7% after lowering 2Q forecast.
ASCL -15.4% after cutting 2Q and 3Q forecast.
LWAY -10.9% after announcing the acquisition of a closely held Philly-area cream cheese producer.
Economic Data
None of note.
Recommendations
SVU and LLL cut to Underweight at JP Morgan. DYAX rated Buy at Deutsche Bank, target $18. PDLI rated Buy at Deutsche Bank, target $30. CHIR rated Buy at Deutsche Bank, target $60. ENCY rated Buy at Deutsche Bank, target $16. DNA rated Buy at Deutsche Bank, target $68. BIIB rated Buy at Deutsche Bank, target $72. TKTX rated Buy at Deutsche Bank, target $28. MAT cut to Sell at Bank of America, target $13. AVP rated Overweight at Morgan Stanley, target $54. Goldman reiterated Outperform on AUO, AMGN, DNA, GCI and MSFT. Goldman reiterated Underperform on DJ. Citi SmithBarney said to Buy SSI ahead of tomorrow's FCC meeting. Citi says to Buy PLUG, as many catalysts are on the horizon. Citi reiterated Buy on JNPR, target $32.50. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on FDRY, target $15. Citi reiterated Buy on ETS, target $4. Citi reiterated Buy on RDWR, target $25. Citi reiterated Buy on EXTR, target $11. Citi reiterated Buy on QSFT, target $16. Citi reiterated Buy on VRTS, target $22. Citi reiterated Buy on ASCL, target $18. Citi reiterated Buy on SLM, target $46.
Mid-day News
U.S. stocks are quietly higher mid-day as a declining U.S. dollar and crude oil prices boost cyclical shares. Deutsche Telekom AG's T-Systems International unit is seeking to link 10,000 wireless computer-access locations into one network to make it more convenient for mobile users, Reuters reported. Boston school bus drivers and monitors say they will picket the Democratic Convention, causing a potential problem for Senator Kerry, who said he wouldn't cross a picket line, the Boston Globe reported. It takes the average U.S. worker 189 days of work just to pay off his or her share of federal, state and local taxes, the Washington Post reported. The U.S. Senate version of a six-year transportation bill calls for states to levy tolls on existing interstate highways to raise funds for road building and to ease congestion, the Washington Post reported. Phoenix and surrounding parts of Arizona face power shortages and blackouts after a fire damaged a power substation near Sun City, the Arizona Republic reported. Pfizer said Chinese authorities overturned the company's patent for Viagra, Dow Jones reported. Paul McCulley, a PIMCO managing director, told CNBC that a "great deal" of the bear market for bonds has passed and that the Fed can raise rates at a measured pace. U.S. mortgage applications surged last week by the most in more than three months as mortgage rates fell below 6% for the first time since April, Bloomberg reported. AT&T may lose its investment-grade credit ratings because of plunging profit, bond prices show. General Motors increased rebates to $5,000 on most sport-utility vehicles and Ford boosted offers on several models, Bloomberg said. Pfizer is expanding its drug-discount programs to allow 43 million uninsured Americans to buy medicines such as its Lipitor cholesterol treatment at a lower cost. Boeing won orders worth $1.2 billion for 10 7E7 airliners from Britain's First Choice Holidays and Italy's Blue Panorama, the first European customers for the aircraft, Bloomberg reported. 9 in 10 people in France favor loosening the 35-hour maximum work week limit, saying they want to be able to increase their earnings, Bloomberg reported. Crude oil prices are declining after the Saudi Oil Minister said the kingdom is committed to boosting OPEC output quotas August 1, Bloomberg reported.
BOTTOM LINE: The Portfolio is modestly higher today on strength in my telecom equipment, gold and internet longs and weakness in my oil service shorts. I have not traded today and the Portfolio is still 50% net long. I expect stocks to rise modestly into the close on declining oil prices and strength in basic materials/ technology shares.
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