Indices
S&P 500 1,112.81 -1.43%
Dow 10,213.22 -1.17%
NASDAQ 1946.33 -3.43%
Russell 2000 563.73 -3.21%
S&P Equity Long/Short Index 972.67 -.70%
Put/Call .74 -8.64%
NYSE Arms 1.02 -63.7%
Volatility(VIX) 15.78 +3.82%
AAII % Bulls 55.10 -3.28%
US Dollar 87.42 -1.66%
CRB 272.69 +1.30%
Futures Spot Prices
Gold 407.90 +2.87%
Crude Oil 39.96 +3.39%
Unleaded Gasoline 132.15 +7.97%
Natural Gas 6.14 -1.11%
Base Metals 113.33 +3.08%
10-year US Treasury Yield 4.46% unch.
Average 30-year Mortgage Rate 6.01% -3.22%
Leading Sectors
Commodity +1.56%
Energy +1.18%
Oil Service +.83%
Lagging Sectors
Computer Boxmakers -7.11%
Software -7.60%
Airlines -8.36%
*% Gain or loss for the week
Friday, July 09, 2004
Mid-day Update
S&P 500 1,111.24 +.19%
NASDAQ 1,941.47 +.32%
Leading Sectors
Disk Drives +2.20%
Software +1.62%
Semis +1.38%
Lagging Sectors
Computer Boxmakers -.41%
Utilities -.53%
Airlines -.76%
Other
Crude Oil 40.00 -.82%
Natural Gas 6.11 -1.13%
Gold 408.00 -.07%
Base Metals 113.17 +.73%
U.S. Dollar 87.51 -.03%
10-Yr. T-note Yield 4.46% -.18%
VIX 15.97 -1.42%
Put/Call .62 -30.34%
NYSE Arms .87 -56.06%
Market Movers
JBHT -8.4% after announcing that it had received from Burlington Northern and Santa Fe a notice of arbitration.
STK +10.3% after lowering 2Q estimates and increasing share buyback.
LI +12.7% after exceeding 3Q estimates.
FWHT +7.5% after announcing it would be added to S&P small-cap 600.
SAP +4.7% after raising 2Q guidance.
UIS -14.7% after cutting 2Q forecast.
CTMI -11.52% after cutting 3Q/4Q forecasts.
ACI -5.7% after cutting 2Q forecast.
Economic Data
Wholesale Inventories for May rose 1.2% versus estimates of a .5% rise and a .2% rise in April.
Recommendations
HOTT, ROST cut to Underweight at JP Morgan. MAXY raised to Overweight at JP Morgan. DRI raised to Buy at UBS. WFMI cut to Reduce at UBS, target $82. STZ raised to Buy at UBS, target $45. VRSN rated Buy at Deutsche Bank, target $24. WBSN rated Buy at Deutsche Bank, target $42. ISSX rated Buy at Deutsche Bank, target $19. SNDK rated Outperform at CSFB, target $35. LEXR rated Outperform at CSFB target $10. XXIA raised to Outperform at Thomas Weisel, target $12. IT rated Outperform at CSFB, target $18. CMC rated Overweight at JP Morgan. Goldman Sachs said Non-life Insurance stocks will surprise on the upside. Goldman reiterated Outperform on VZ, AIG, RE, FD, GE, SII and AGN. Citi SmithBarney reiterated Buy on BCII, target $30. Citi reiterated Buy on CEY, target $44. Citi reiterated Buy on AMGN, target $90.
Mid-day News
U.S. stocks are modestly higher mid-day on better-than-expected earnings reports from General Eelectric and SAP. Rail lines in Boston and New York, the sites of national political conventions, are vulnerable and easily accessible to terrorists for a possible attack, the Washington Times reported. FedEx plans to build a 218,000 square-foot distribution center in Carson, California, the LA Times said. Bear Stearns was removed as a co-manager of Chicago's $500 million bond sale because of the company's links to a state regulatory panel being investigated for steering work to associates, the Bond Buyer newspaper said. Amgen could lose sales of its best-selling Epogen drug if a new Medicare policy that calls for stricter review of reimbursement claims for the drug is adopted, the LA Times reported. Vail Resorts has hired an investment bank to help sell its assets, the Denver Post reported. Jeff Immelt, CEO of General Electric said, "This is the best economy we've seen in years," Bloomberg reported. New outbreaks of bird flu in China, Thailand and Vietnam show that the virus, which can spread to humans, is "still endemic" to the region, the United Nations' Food and Agriculture Organization said. Gilead Sciences said it will reduce the price of its HIV treatment Viread, the company's biggest drug, by 37% in Africa and 15 countries elsewhere that the United Nations classifies as "least developed," Bloomberg reported. Copper futures in New York rose to a one-month high and are headed for their biggest weekly gain since December on signs of improved demand in China, the world's biggest buyer, Bloomberg said.
BOTTOM LINE: The Portfolio is slightly lower today on weakness in my base metal longs and strength in my software and internet shorts. I have not traded today and the Portfolio is still 25% net short. Investor complacency is still too high as evidenced by the plunging Put/Call and Arms readings. The AAII % Bulls is still relatively high and the VIX is relatively low, as well. I expect U.S. stocks to fall modestly into the close on high oil energy prices, terrorism worries and earnings concerns.
NASDAQ 1,941.47 +.32%
Leading Sectors
Disk Drives +2.20%
Software +1.62%
Semis +1.38%
Lagging Sectors
Computer Boxmakers -.41%
Utilities -.53%
Airlines -.76%
Other
Crude Oil 40.00 -.82%
Natural Gas 6.11 -1.13%
Gold 408.00 -.07%
Base Metals 113.17 +.73%
U.S. Dollar 87.51 -.03%
10-Yr. T-note Yield 4.46% -.18%
VIX 15.97 -1.42%
Put/Call .62 -30.34%
NYSE Arms .87 -56.06%
Market Movers
JBHT -8.4% after announcing that it had received from Burlington Northern and Santa Fe a notice of arbitration.
STK +10.3% after lowering 2Q estimates and increasing share buyback.
LI +12.7% after exceeding 3Q estimates.
FWHT +7.5% after announcing it would be added to S&P small-cap 600.
SAP +4.7% after raising 2Q guidance.
UIS -14.7% after cutting 2Q forecast.
CTMI -11.52% after cutting 3Q/4Q forecasts.
ACI -5.7% after cutting 2Q forecast.
Economic Data
Wholesale Inventories for May rose 1.2% versus estimates of a .5% rise and a .2% rise in April.
Recommendations
HOTT, ROST cut to Underweight at JP Morgan. MAXY raised to Overweight at JP Morgan. DRI raised to Buy at UBS. WFMI cut to Reduce at UBS, target $82. STZ raised to Buy at UBS, target $45. VRSN rated Buy at Deutsche Bank, target $24. WBSN rated Buy at Deutsche Bank, target $42. ISSX rated Buy at Deutsche Bank, target $19. SNDK rated Outperform at CSFB, target $35. LEXR rated Outperform at CSFB target $10. XXIA raised to Outperform at Thomas Weisel, target $12. IT rated Outperform at CSFB, target $18. CMC rated Overweight at JP Morgan. Goldman Sachs said Non-life Insurance stocks will surprise on the upside. Goldman reiterated Outperform on VZ, AIG, RE, FD, GE, SII and AGN. Citi SmithBarney reiterated Buy on BCII, target $30. Citi reiterated Buy on CEY, target $44. Citi reiterated Buy on AMGN, target $90.
Mid-day News
U.S. stocks are modestly higher mid-day on better-than-expected earnings reports from General Eelectric and SAP. Rail lines in Boston and New York, the sites of national political conventions, are vulnerable and easily accessible to terrorists for a possible attack, the Washington Times reported. FedEx plans to build a 218,000 square-foot distribution center in Carson, California, the LA Times said. Bear Stearns was removed as a co-manager of Chicago's $500 million bond sale because of the company's links to a state regulatory panel being investigated for steering work to associates, the Bond Buyer newspaper said. Amgen could lose sales of its best-selling Epogen drug if a new Medicare policy that calls for stricter review of reimbursement claims for the drug is adopted, the LA Times reported. Vail Resorts has hired an investment bank to help sell its assets, the Denver Post reported. Jeff Immelt, CEO of General Electric said, "This is the best economy we've seen in years," Bloomberg reported. New outbreaks of bird flu in China, Thailand and Vietnam show that the virus, which can spread to humans, is "still endemic" to the region, the United Nations' Food and Agriculture Organization said. Gilead Sciences said it will reduce the price of its HIV treatment Viread, the company's biggest drug, by 37% in Africa and 15 countries elsewhere that the United Nations classifies as "least developed," Bloomberg reported. Copper futures in New York rose to a one-month high and are headed for their biggest weekly gain since December on signs of improved demand in China, the world's biggest buyer, Bloomberg said.
BOTTOM LINE: The Portfolio is slightly lower today on weakness in my base metal longs and strength in my software and internet shorts. I have not traded today and the Portfolio is still 25% net short. Investor complacency is still too high as evidenced by the plunging Put/Call and Arms readings. The AAII % Bulls is still relatively high and the VIX is relatively low, as well. I expect U.S. stocks to fall modestly into the close on high oil energy prices, terrorism worries and earnings concerns.
Friday Watch
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.
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.
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.
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