S&P 500 1,108.67 +.71%
NASDAQ 1,917.07 +1.76%
Leading Sectors
I-Banks +4.39%
Airlines +3.91%
Disk Drives +3.22%
Lagging Sectors
Insurance -.55%
Homebuilders -.67%
Papers -.71%
Other
Crude Oil 40.35 -.22%
Natural Gas 5.87 +.65%
Gold 401.60 -.12%
Base Metals 111.71 -.80%
U.S. Dollar 87.89 +.07%
10-Yr. T-note Yield 4.45% +.31%
VIX 14.17 -6.59%
Put/Call .66 -2.94%
NYSE Arms .66 -54.17%
After-hours Movers
SANM +14.99% after meeting 3Q guidance and raising 04 forecast.
WEBX +14.67% after beating 2Q estimates, raising 3Q and 04 guidance.
INTL +12.04% after slightly missing 2Q forecast, but raising dividend.
LLTC +5.59% after beating 4Q forecast, raising 1Q guidance and announcing 10M share buyback.
ET +5.73% after beating 2Q forecast and raising 04 guidance.
MSFT +5.26% after saying it will return $75 billion to shareholders over the next four years through a special payout, stock buybacks and a higher dividend.
MOT +4.97% after beating 2Q estimates and saying Nextel location service is hampered by glitch.
SGTL -21.12% after beating 2Q estimates and lowering 3Q forecast.
HIBB -19.1% after lowering 2Q guidance.
NVEC -15.03% after meeting 1Q estimate, but saying net income will be lower due to higher R&D expenses.
PXLW -5.9% after meeting 2Q forecast and lowering 3Q guidance.
MDCO -6.86% after missing 2Q estimate.
AFCI -4.64% after missing 2Q forecast.
Recommendations
Goldman Sachs reiterated Outperform on BSX, USB and MSFT.
After-hours News
U.S. stocks finished higher today on stronger earnings reports, comments by Alan Greenspan and falling oil prices. After the close, shares of Pilgrim's Pride had their biggest drop in seven weeks after the KFC unit of YUM! Brands threatened to suspend some meat purchases following reported abuses at a plant, Bloomberg reported. AU Optronics and rival flat-panel display makers in Taiwan will meet their profit forecasts this year even as prices for screens fall, the Commercial Times reported. China's Internet users increased about 28% in the first half of this year to 87 million, slowing from 48.5% growth in the same period last year, the South China Morning Most reported. Microsoft said it will buy back as much as $30 billion in shares over 4 years and set a one-time dividend of $3 a share. Sandy Berger, former U.S. National Security Adviser under Bill Clinton, quit as an adviser to Senator Kerry amid an investigation into Berger's possible theft of classified materials, Bloomberg reported. Federal Reserve Chairman Greenspan said a recent slowdown in consumer spending because of inflation "should prove short-lived" and that the central bank can continue to raise interest rates at a "measured" pace, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly higher today on strength in my technology longs. I added a few new airline and gaming longs in the afternoon, leaving the Portfolio with 125% net long market exposure. One of my new longs is JBLU and I am using a $24.25 stop-loss on this position. Today was a good day for the bulls as good news was rewarded, oil fell and many sectors saw substantial gains. Based on after-hours action, tomorrow should be a positive day as well. I continue to believe this is a tradable rally, but high levels of investor complacency will likely result in a resumption of the selling in the new few weeks.
Tuesday, July 20, 2004
Mid-day Update
S&P 500 1,104.48 +.33%
NASDAQ 1,903.29 +1.03%
Leading Sectors
I-Banks +3.59%
Internet +2.27%
Airlines +2.21%
Lagging Sectors
Insurance -.98%
Papers -1.02%
Homebuilders -1.83%
Other
Crude Oil 41.15 -.70%
Natural Gas 5.86 +.81%
Gold 400.80 -1.23%
Base Metals 111.71 -.80%
U.S. Dollar 87.53 +.40%
10-Yr. T-note Yield 4.37% +.58%
VIX 14.68 -3.36%
Put/Call .68 unch.
NYSE Arms .79 -45.14%
Market Movers
SINA +10.7% on CSFB upgrade to Outperform.
RHAT +9.5% after its restated 1Q results were consistent with its previous comments.
BSX -4.0% after saying it had completed its stent recall.
GLW +10.2% after beating 2Q forecast, raising 3Q guidance and saying it is encouraged by Fiber-to-the-premises sales.
TASR -11.6% after beating 2Q estimates and saying it found a minor accounting error in 1Q that did not materially affect results.
NTMD +15.8% on continued optimism over recent cardiovascular study in African-Americans.
AEN +22.0% on speculation JP Morgan Partners is close to an agreement to purchase the company for about $1.4 billion.
ALDN +15.4% after beating 2Q forecast and raising 3Q guidance.
TEN +14.3% after substantially beating 2Q estimates.
BRLI +15.75% after Jefferies upgrade from Hold to Buy, target $16.50.
SSNC +14.2% after beating 2Q estimates and boosting 3Q and 04 guidance. RSH +8.3% after beating 2Q forecast, raising 3Q and 04 guidance.
DNB +8.1% after beating 2Q estimates and raising 04 forecast.
CGNX -10.1% on profit-taking after meeting 2Q estimates and boosting 3Q guidance.
ITRI -11.2% after missing 2Q estimate, lowering 04 guidance and RBC Capital downgrade to Sector Perform.
DSPG -10.9% after missing 2Q sales forecast and lowering 04 guidance on product delays and reduced demand.
Economic Data
Housing Starts for June were 1802K versus an estimate of 1990K and an upwardly revised 1970K in May.
Building Permits for June were 1924K versus an estimate of 2000K and an upwardly revised 2097K in May.
Recommendations
LOW raised to Buy at UBS, target $61. CFC raised to Outperform at CSFB, target $85. OSIP rated Underperform at CSFB, target $50. IMCL rated Outperform at CSFB, target $105. CNP rated Overweight at Prudential, target $14. Goldman Sachs said to Buy FLEX on weakness. Goldman reiterated Outperform on RE, DOW and ALL. Goldman reiterated Underperform on F, FRX and ATI. Citi SmithBarney upgraded PEG to Buy, target $46. Citi reiterated Sell on RKY, target $52. Citi reiterated Sell on BA, target $36. Citi reiterated Buy on ALL, target $55. Citi reiterated Buy on MXRE, target $24. Citi reiterated Buy on PRE, target $69. Citi reiterated Sell on RNR, target $51. Citi reiterated Buy on ACGL, target $48. Citi reiterated Buy on LNCR, target $42. Citi reiterated Buy on MSFT, target $33. Citi reiterated Buy on SONSE, target $5.5. Citi reiterated Buy on PNR, target $40. Citi reiterated Sell on FLSH, target $15. Citi reiterated Buy on ASD, target $46.
Mid-day News
U.S. stocks are higher mid-day, led by rebounding technology shares after several strong earnings reports prompted bargain-hunting. The demand-supply imbalance in the U.S. coal market, which has almost doubled prices to about $60 a ton, won't last long, the Wall Street Journal reported. President Bush is pushing Congress to extend a series of tax cuts before it leaves for the August recess at the end of this week, the Washington Post reported. China Petrochemical estimates it has found more than 500 million metric tons of crude oil reserves in western China, China Central tv said. Richard Grasso has filed suit against the NYSE for at least $50 million, alleging breach of contract, CNBC reported. Mickey Levy, chief economist at Bank of America, told CNBC the weakness in housing starts is temporary and he is already seeing a bounce back in other indicators for the month of July. Japan's Cabinet Office plans to increase its official forecast for the current fiscal year's economic growth to 3.5% from 1.8%, Kyodo News said. George Soros of the Quantum fund made $750 million last year, regaining the top spot for highly paid hedge fund managers, according to Institutional Investor's Alpha magazine. OAO Yukos Oil's largest oil unit, which accounts for two-thirds of Yukos's output, will be seized and sold as Russia tries to recover $3.4 billion in back taxes, the Russian Justice Ministry said.
BOTTOM LINE: The Portfolio is unchanged today as my biotech longs are falling and a few of my shorts hit stop-losses, offsetting gains in other positions. I also added a few more technology longs this morning, leaving the Portfolio 100% net long. One of my new longs is YHOO and I am using a $28.25 stop-loss on the position. Crude oil may have made an intermediate-term top today as the news from Russia could not send prices higher. The tone of the market is much improved relative to the past few weeks. I expect U.S. stocks to strengthen into the close on comments from Greenspan, short-covering and bargain-hunting in technology and financial shares.
NASDAQ 1,903.29 +1.03%
Leading Sectors
I-Banks +3.59%
Internet +2.27%
Airlines +2.21%
Lagging Sectors
Insurance -.98%
Papers -1.02%
Homebuilders -1.83%
Other
Crude Oil 41.15 -.70%
Natural Gas 5.86 +.81%
Gold 400.80 -1.23%
Base Metals 111.71 -.80%
U.S. Dollar 87.53 +.40%
10-Yr. T-note Yield 4.37% +.58%
VIX 14.68 -3.36%
Put/Call .68 unch.
NYSE Arms .79 -45.14%
Market Movers
SINA +10.7% on CSFB upgrade to Outperform.
RHAT +9.5% after its restated 1Q results were consistent with its previous comments.
BSX -4.0% after saying it had completed its stent recall.
GLW +10.2% after beating 2Q forecast, raising 3Q guidance and saying it is encouraged by Fiber-to-the-premises sales.
TASR -11.6% after beating 2Q estimates and saying it found a minor accounting error in 1Q that did not materially affect results.
NTMD +15.8% on continued optimism over recent cardiovascular study in African-Americans.
AEN +22.0% on speculation JP Morgan Partners is close to an agreement to purchase the company for about $1.4 billion.
ALDN +15.4% after beating 2Q forecast and raising 3Q guidance.
TEN +14.3% after substantially beating 2Q estimates.
BRLI +15.75% after Jefferies upgrade from Hold to Buy, target $16.50.
SSNC +14.2% after beating 2Q estimates and boosting 3Q and 04 guidance. RSH +8.3% after beating 2Q forecast, raising 3Q and 04 guidance.
DNB +8.1% after beating 2Q estimates and raising 04 forecast.
CGNX -10.1% on profit-taking after meeting 2Q estimates and boosting 3Q guidance.
ITRI -11.2% after missing 2Q estimate, lowering 04 guidance and RBC Capital downgrade to Sector Perform.
DSPG -10.9% after missing 2Q sales forecast and lowering 04 guidance on product delays and reduced demand.
Economic Data
Housing Starts for June were 1802K versus an estimate of 1990K and an upwardly revised 1970K in May.
Building Permits for June were 1924K versus an estimate of 2000K and an upwardly revised 2097K in May.
Recommendations
LOW raised to Buy at UBS, target $61. CFC raised to Outperform at CSFB, target $85. OSIP rated Underperform at CSFB, target $50. IMCL rated Outperform at CSFB, target $105. CNP rated Overweight at Prudential, target $14. Goldman Sachs said to Buy FLEX on weakness. Goldman reiterated Outperform on RE, DOW and ALL. Goldman reiterated Underperform on F, FRX and ATI. Citi SmithBarney upgraded PEG to Buy, target $46. Citi reiterated Sell on RKY, target $52. Citi reiterated Sell on BA, target $36. Citi reiterated Buy on ALL, target $55. Citi reiterated Buy on MXRE, target $24. Citi reiterated Buy on PRE, target $69. Citi reiterated Sell on RNR, target $51. Citi reiterated Buy on ACGL, target $48. Citi reiterated Buy on LNCR, target $42. Citi reiterated Buy on MSFT, target $33. Citi reiterated Buy on SONSE, target $5.5. Citi reiterated Buy on PNR, target $40. Citi reiterated Sell on FLSH, target $15. Citi reiterated Buy on ASD, target $46.
Mid-day News
U.S. stocks are higher mid-day, led by rebounding technology shares after several strong earnings reports prompted bargain-hunting. The demand-supply imbalance in the U.S. coal market, which has almost doubled prices to about $60 a ton, won't last long, the Wall Street Journal reported. President Bush is pushing Congress to extend a series of tax cuts before it leaves for the August recess at the end of this week, the Washington Post reported. China Petrochemical estimates it has found more than 500 million metric tons of crude oil reserves in western China, China Central tv said. Richard Grasso has filed suit against the NYSE for at least $50 million, alleging breach of contract, CNBC reported. Mickey Levy, chief economist at Bank of America, told CNBC the weakness in housing starts is temporary and he is already seeing a bounce back in other indicators for the month of July. Japan's Cabinet Office plans to increase its official forecast for the current fiscal year's economic growth to 3.5% from 1.8%, Kyodo News said. George Soros of the Quantum fund made $750 million last year, regaining the top spot for highly paid hedge fund managers, according to Institutional Investor's Alpha magazine. OAO Yukos Oil's largest oil unit, which accounts for two-thirds of Yukos's output, will be seized and sold as Russia tries to recover $3.4 billion in back taxes, the Russian Justice Ministry said.
BOTTOM LINE: The Portfolio is unchanged today as my biotech longs are falling and a few of my shorts hit stop-losses, offsetting gains in other positions. I also added a few more technology longs this morning, leaving the Portfolio 100% net long. One of my new longs is YHOO and I am using a $28.25 stop-loss on the position. Crude oil may have made an intermediate-term top today as the news from Russia could not send prices higher. The tone of the market is much improved relative to the past few weeks. I expect U.S. stocks to strengthen into the close on comments from Greenspan, short-covering and bargain-hunting in technology and financial shares.
Tuesday Watch
Earnings of Note
Company/Estimate
MO/1.28
BCC/.29
CDWC/.66
CNF/.58
EMC/.08
ET/.19
CYMI/.29
ESV/.09
F/.50
FRX/.56
GNTX/.38
N/.85
MOT/.17
MCHP/.26
LLTC/.30
SUNW/-.04
TASR/.13
TXN/.25
WFC/1.04
Splits
None of note.
Economic Data
Housing Starts for June estimated at 1990K versus 1967K in May.
Building Permits for June estimated at 2000K versus 2097K in May.
Greenspan begins testimony to Congress.
Recommendations
CHTR cut to Reduce at UBS, target $3. China's telecom industry raised to Overweight at CSFB. AUO cut to Sell from Buy at Merrill Lynch. Goldman Sachs reiterated Outperform on IR, ALL, GLW, TPX, CEN and RE.
Late-Night News
Asian indices are mostly lower on concerns that slowing growth in China and the U.S. will further hurt technology shares in the region. China will tighten control on churches in Shanghai, extending surveillance for the first time to include the activities of foreigners, South China Morning Post reported. Israeli Prime Minister Sharon is unwelcome in France until he explains comments calling on French Jews to leave because of increased anti-Semitism, Agence France-Presse said, citing President Chirac. J.P. Morgan Chase is in final talks to buy Egg Plc, the U.K. internet bank, for $2.61 billion, the Financial Times said. Former U.S. National Security Adviser for the Clinton administration Sandy Berger is being investigated for taking home highly classified terror documents, the AP reported. Martha Stewart wants to write a how-to book about her legal experiences, she said in an interview with CNN. China's curbs on short-term lending are too tight and are causing difficulties to companies, the official Economic Daily reported, citing the deputy director of the National Bureau of Statistics. Juan del Olmo, the Spanish judge investigating the March 11 terrorist attacks in Madrid, said support cells that helped with the attacks may be taking over operations in the country, the AP reported. China plans to let banks convert mortgage loans and non-performing assets into tradable securities as part of plans to develop the country's bond market, the China Securities Journal reported. Oil-tanker rates for shipping crude oil from the Middle East to Asia surged to their highest in almost three years as near-record oil production from OPEC spurred demand for vessels, Bloomberg said. Striking workers shut LG-Caltex Oil's oil refinery, which accounts for 28% of South Korean fuel production, reducing supplies to plastics makers, transport companies and power stations, Bloomberg reported.
Late-Night Trading
Asian Indices are -1.75% to -.75% on average.
S&P 500 indicated -.06%.
NASDAQ 100 indicated -.07%.
BOTTOM LINE: I expect U.S. stocks to open modestly lower in the morning on weakness in Asia. However, I will likely add to market exposure on any extreme weakness as Greenspan's testimony, better earnings reports and a continuation of today's oversold technical bounce in technology shares boosts the major indices later in the day. The Portfolio is 50% net long heading into tomorrow.
Company/Estimate
MO/1.28
BCC/.29
CDWC/.66
CNF/.58
EMC/.08
ET/.19
CYMI/.29
ESV/.09
F/.50
FRX/.56
GNTX/.38
N/.85
MOT/.17
MCHP/.26
LLTC/.30
SUNW/-.04
TASR/.13
TXN/.25
WFC/1.04
Splits
None of note.
Economic Data
Housing Starts for June estimated at 1990K versus 1967K in May.
Building Permits for June estimated at 2000K versus 2097K in May.
Greenspan begins testimony to Congress.
Recommendations
CHTR cut to Reduce at UBS, target $3. China's telecom industry raised to Overweight at CSFB. AUO cut to Sell from Buy at Merrill Lynch. Goldman Sachs reiterated Outperform on IR, ALL, GLW, TPX, CEN and RE.
Late-Night News
Asian indices are mostly lower on concerns that slowing growth in China and the U.S. will further hurt technology shares in the region. China will tighten control on churches in Shanghai, extending surveillance for the first time to include the activities of foreigners, South China Morning Post reported. Israeli Prime Minister Sharon is unwelcome in France until he explains comments calling on French Jews to leave because of increased anti-Semitism, Agence France-Presse said, citing President Chirac. J.P. Morgan Chase is in final talks to buy Egg Plc, the U.K. internet bank, for $2.61 billion, the Financial Times said. Former U.S. National Security Adviser for the Clinton administration Sandy Berger is being investigated for taking home highly classified terror documents, the AP reported. Martha Stewart wants to write a how-to book about her legal experiences, she said in an interview with CNN. China's curbs on short-term lending are too tight and are causing difficulties to companies, the official Economic Daily reported, citing the deputy director of the National Bureau of Statistics. Juan del Olmo, the Spanish judge investigating the March 11 terrorist attacks in Madrid, said support cells that helped with the attacks may be taking over operations in the country, the AP reported. China plans to let banks convert mortgage loans and non-performing assets into tradable securities as part of plans to develop the country's bond market, the China Securities Journal reported. Oil-tanker rates for shipping crude oil from the Middle East to Asia surged to their highest in almost three years as near-record oil production from OPEC spurred demand for vessels, Bloomberg said. Striking workers shut LG-Caltex Oil's oil refinery, which accounts for 28% of South Korean fuel production, reducing supplies to plastics makers, transport companies and power stations, Bloomberg reported.
Late-Night Trading
Asian Indices are -1.75% to -.75% on average.
S&P 500 indicated -.06%.
NASDAQ 100 indicated -.07%.
BOTTOM LINE: I expect U.S. stocks to open modestly lower in the morning on weakness in Asia. However, I will likely add to market exposure on any extreme weakness as Greenspan's testimony, better earnings reports and a continuation of today's oversold technical bounce in technology shares boosts the major indices later in the day. The Portfolio is 50% net long heading into tomorrow.
Monday, July 19, 2004
Monday Close
S&P 500 1,100.90 -.04%
NASDAQ 1,883.83 +.04%
Leading Sectors
Airlines +1.46%
Computer Services +.80%
Restaurants +.73%
Lagging Sectors
I-Banks -1.57%
Homebuilders -1.57%
Gaming -1.61%
Other
Crude Oil 41.37 -.17%
Natural Gas 5.80 -.22%
Gold 406.40 +.15%
Base Metals 112.61 -.37%
U.S. Dollar 87.16 +.02%
10-Yr. T-note Yield 4.35% +.13%
VIX 15.17 +5.79%
Put/Call .68 -37.61%
NYSE Arms 1.44 -21.74%
After-hours Movers
JCOM +4.92% after beating 2Q estimates and boosting 3Q and 04 guidance.
SSNC +7.42% after beating 2Q estimates and boosting 3Q and 04 guidance.
GLW +6.48% after beating 2Q forecast, raising 3Q guidance and saying it is encouraged by Fiber-to-the-premises sales.
CYTK +4.2% after CSFB initiated with Neutral rating, $16 target.
FLEX -10.03% after missing 2Q estimates and lowering 3Q guidance.
CGNX -6.93% on profit-taking after meeting 2Q estimates and boosting 3Q guidance.
RLRN -4.25% after missing 2Q forecast and making negative comments on future growth.
Recommendations
TheStreet.com has a positive column on SYK. Jim Cramer, of TheStreet.com, thinks the selling is overdone in net stocks, he is nibbling at YHOO. Goldman Sachs reiterated Outperform on KO, STZ and Underperform on RKY, PBG.
After-hours News
U.S. stocks finished mixed today as a late-afternoon surge boosted technology shares. After the close, Sony and Bertelsmann's planned merger of their music businesses was approved by the European Commission a day earlier than expected, Dow Jones Newswires reported. Northwest Airlines may get competition in Detroit, its biggest airport hub, from discount carrier JetBlue, the Detroit News reported. U.S. investors should consider putting money into loan funds instead of bonds as interest rates rise, Christine Benz, associate director of fund analysis at Morningstar told CNN. Corning, the world's largest maker of fiber-optic cable, reported that sales rose 29% to $971 million on increased purchases of glass used in liquid-crystal displays, Bloomberg said. Allstate, the second-largest U.S. auto and home insurer, said second-quarter earnings rose 76% as losses from natural catastrophes fell and it targeted clients that file the fewest claims, Bloomberg reported. Halliburton said the U.S. Attorney for the Southern District of Texas subpoenaed documents related to the company's operations in Iran, Bloomberg said. Documents obtained by Human Rights Watch show that Sudanese government officials helped recruit and arm an Arab militia group responsible for abuses in the country's western Darfur province, Bloomberg reported. Researchers have discovered a genetic defect that may cause sudden infant death syndrome in some children, according to a National Academy of Science study. Molson and No. 3 U.S. brewer Coors confirmed media reports that they are in advanced discussions about a possible merger, Bloomberg reported. Winn-Dixie Stores agreed to include protections for gay and lesbian workers after a request from two of New York City's five public employee pension funds, which hold $1.57 million in the supermarket chain's stock, Bloomberg said.
BOTTOM LINE: The Portfolio finished higher today on strength in my Chinese ADR longs and weakness in my medical shorts. I took profits in a few retail shorts in the afternoon and added a some beaten up technology longs, bringing the Portfolio's market exposure to 50% net long. One of my new longs is DITC and I am using an $18 stop-loss on this position. The Advance/Decline line improved in the afternoon as well as the overall tone of trading. Many technology stocks have reached levels that should prompt more bargain-hunting later this week. I expect positive reports from Motorola, Microsoft, Amazon, Broadcom, SAP and Qualcomm to also provide catalysts for positive performance by tech stocks in the near-term. However, any rally will likely be short-lived as I expect more weakness later in the month on earnings worries, political fears and relatively high investor complacency.
NASDAQ 1,883.83 +.04%
Leading Sectors
Airlines +1.46%
Computer Services +.80%
Restaurants +.73%
Lagging Sectors
I-Banks -1.57%
Homebuilders -1.57%
Gaming -1.61%
Other
Crude Oil 41.37 -.17%
Natural Gas 5.80 -.22%
Gold 406.40 +.15%
Base Metals 112.61 -.37%
U.S. Dollar 87.16 +.02%
10-Yr. T-note Yield 4.35% +.13%
VIX 15.17 +5.79%
Put/Call .68 -37.61%
NYSE Arms 1.44 -21.74%
After-hours Movers
JCOM +4.92% after beating 2Q estimates and boosting 3Q and 04 guidance.
SSNC +7.42% after beating 2Q estimates and boosting 3Q and 04 guidance.
GLW +6.48% after beating 2Q forecast, raising 3Q guidance and saying it is encouraged by Fiber-to-the-premises sales.
CYTK +4.2% after CSFB initiated with Neutral rating, $16 target.
FLEX -10.03% after missing 2Q estimates and lowering 3Q guidance.
CGNX -6.93% on profit-taking after meeting 2Q estimates and boosting 3Q guidance.
RLRN -4.25% after missing 2Q forecast and making negative comments on future growth.
Recommendations
TheStreet.com has a positive column on SYK. Jim Cramer, of TheStreet.com, thinks the selling is overdone in net stocks, he is nibbling at YHOO. Goldman Sachs reiterated Outperform on KO, STZ and Underperform on RKY, PBG.
After-hours News
U.S. stocks finished mixed today as a late-afternoon surge boosted technology shares. After the close, Sony and Bertelsmann's planned merger of their music businesses was approved by the European Commission a day earlier than expected, Dow Jones Newswires reported. Northwest Airlines may get competition in Detroit, its biggest airport hub, from discount carrier JetBlue, the Detroit News reported. U.S. investors should consider putting money into loan funds instead of bonds as interest rates rise, Christine Benz, associate director of fund analysis at Morningstar told CNN. Corning, the world's largest maker of fiber-optic cable, reported that sales rose 29% to $971 million on increased purchases of glass used in liquid-crystal displays, Bloomberg said. Allstate, the second-largest U.S. auto and home insurer, said second-quarter earnings rose 76% as losses from natural catastrophes fell and it targeted clients that file the fewest claims, Bloomberg reported. Halliburton said the U.S. Attorney for the Southern District of Texas subpoenaed documents related to the company's operations in Iran, Bloomberg said. Documents obtained by Human Rights Watch show that Sudanese government officials helped recruit and arm an Arab militia group responsible for abuses in the country's western Darfur province, Bloomberg reported. Researchers have discovered a genetic defect that may cause sudden infant death syndrome in some children, according to a National Academy of Science study. Molson and No. 3 U.S. brewer Coors confirmed media reports that they are in advanced discussions about a possible merger, Bloomberg reported. Winn-Dixie Stores agreed to include protections for gay and lesbian workers after a request from two of New York City's five public employee pension funds, which hold $1.57 million in the supermarket chain's stock, Bloomberg said.
BOTTOM LINE: The Portfolio finished higher today on strength in my Chinese ADR longs and weakness in my medical shorts. I took profits in a few retail shorts in the afternoon and added a some beaten up technology longs, bringing the Portfolio's market exposure to 50% net long. One of my new longs is DITC and I am using an $18 stop-loss on this position. The Advance/Decline line improved in the afternoon as well as the overall tone of trading. Many technology stocks have reached levels that should prompt more bargain-hunting later this week. I expect positive reports from Motorola, Microsoft, Amazon, Broadcom, SAP and Qualcomm to also provide catalysts for positive performance by tech stocks in the near-term. However, any rally will likely be short-lived as I expect more weakness later in the month on earnings worries, political fears and relatively high investor complacency.
Mid-day Update
S&P 500 1,098.43 -.28%
NASDAQ 1,875.20 -.41%
Leading Sectors
Restaurants +.62%
Airlines +.56%
Computer Boxmakers +.48%
Lagging Sectors
Internet -1.79%
Homebuilders -1.89%
Biotech -2.52%
Other
Crude Oil 41.57 +.56%
Natural Gas 5.84 -.80%
Gold 406.10 -.15
Base Metals 112.61 -.37%
U.S. Dollar 87.16 +.02%
10-Yr. T-note Yield 4.36% +.22%
VIX 15.51 +8.16%
Put/Call .66 -39.45%
NYSE Arms 1.61 -12.50%
Market Movers
TASR -6.65% after the NY Times reported an increasing number of people have died after being shocked by Tasers.
BSX -3.88% on further sell-off after recalling 96,000 heart stents after 3 patients died and 43 were injured during implant surgery.
MMM -5.44% after slightly missing 2Q revenue forecast, lowering 3Q estimates and raising 04 forecast.
NFLX -9.2% after Thomas Weisel downgrade to Peerperform.
NTMD +108.2% after saying its experimental drug BiDil increased the survival of African Americans with heart failure in a study.
BDK +10.6% after beating 2Q estimates, raising 3Q and 04 guidance and agreeing to buy the tools business of Pentair.
SSNC +10.03% after JP Morgan upgrade to Overweight.
SWFT +7.96% after beating 2Q estimates substantially.
INSP -11.2% after announcing a partnership with Amplify.
LM -9.1% after missing 1Q estimates.
LXK -6.1% after slightly missing 2Q revenue estimate and lowering 3Q estimate.
Economic Data
NAHB Housing Market Index came in at 67 in July versus estimates of 67 and an upwardly revised reading of 68 in June.
Recommendations
AMX raised to Buy at UBS, target $44.07. SSNC raised to Overweight at JP Morgan. SIR rated Outperform at CSFB, target $33. PPDI raised to Outperform at Thomas Weisel, target $42. Goldman Sachs reiterated Outperform on MSFT, BSX, ITT, FS and INTC. Goldman reiterated Underperform on RKY. Citi SmithBarney raised SONSE to Buy, target $5.50. Citi reiterated Buy on HAS, target $24. Citi reiterated Buy on COX, target $34.
Mid-day News
U.S. stocks are lower mid-day on continuing earnings worries, stubbornly high oil prices and weakness in internet-related shares. The Bush administration is under pressure to develop policies to deal with Iran, as a pending report will say the country allowed terrorists to pass through its borders and as concern grows about the nation's nuclear weapon capacity, the Washington Post said. A U.S. Senate Intelligence Committee report raises serious questions about the credibility of former diplomat Joseph Wilson, whose wife, Valerie Plame, was publicly identified as a CIA operative, the Wall Street Journal reported. Lawyers who led a class-action lawsuit against AT&T Wireless Services could receive $3.75 million while customers won't receive any cash in the settlement, the Rocky Mountain News reported. Real estate prices in Baghdad are rising as wealthy Iraqis who guarded their money while Saddam controlled the country begin to spend, the LA Times said. Real estate prices in Iraq could multiply 10 times in two to three years if the nation becomes more secure, the Times said. Nasdaq is planning to increase the number of its non-U.S. listed companies by 50% to boost its global presence, the Financial Times said. General Dynamics has won a contract to supply U.S. troops with handheld radios, valued at $5-$10 billion, CNBC reported. Boeing won an order from Emirates airlines for four 777 aircraft with an additional nine options, valuing the contract at as much as $2.96 billion. Johnson & Johnson may sell more heart stents after Boston Scientific expanded a recall Friday of its Taxus stent, Bloomberg reported.
BOTTOM LINE: The Portfolio is slightly higher today as my retail and medical shorts are falling and Chinese ADR longs are rising. I have not traded this morning and the Portfolio is still 25% net short. The market's tone continues to deteriorate and investor complacency remains relatively high. The probability of the Fed raising rates in August is falling. Recent inflation data and a slowing in U.S. economic growth from blistering levels to more sustainable rates may prompt the Fed to adopt a wait and see approach with respect to raising rates. Greenspan's comments over the next 2 days should make his intentions evident. I would expect a tradable rally under this scenario.
NASDAQ 1,875.20 -.41%
Leading Sectors
Restaurants +.62%
Airlines +.56%
Computer Boxmakers +.48%
Lagging Sectors
Internet -1.79%
Homebuilders -1.89%
Biotech -2.52%
Other
Crude Oil 41.57 +.56%
Natural Gas 5.84 -.80%
Gold 406.10 -.15
Base Metals 112.61 -.37%
U.S. Dollar 87.16 +.02%
10-Yr. T-note Yield 4.36% +.22%
VIX 15.51 +8.16%
Put/Call .66 -39.45%
NYSE Arms 1.61 -12.50%
Market Movers
TASR -6.65% after the NY Times reported an increasing number of people have died after being shocked by Tasers.
BSX -3.88% on further sell-off after recalling 96,000 heart stents after 3 patients died and 43 were injured during implant surgery.
MMM -5.44% after slightly missing 2Q revenue forecast, lowering 3Q estimates and raising 04 forecast.
NFLX -9.2% after Thomas Weisel downgrade to Peerperform.
NTMD +108.2% after saying its experimental drug BiDil increased the survival of African Americans with heart failure in a study.
BDK +10.6% after beating 2Q estimates, raising 3Q and 04 guidance and agreeing to buy the tools business of Pentair.
SSNC +10.03% after JP Morgan upgrade to Overweight.
SWFT +7.96% after beating 2Q estimates substantially.
INSP -11.2% after announcing a partnership with Amplify.
LM -9.1% after missing 1Q estimates.
LXK -6.1% after slightly missing 2Q revenue estimate and lowering 3Q estimate.
Economic Data
NAHB Housing Market Index came in at 67 in July versus estimates of 67 and an upwardly revised reading of 68 in June.
Recommendations
AMX raised to Buy at UBS, target $44.07. SSNC raised to Overweight at JP Morgan. SIR rated Outperform at CSFB, target $33. PPDI raised to Outperform at Thomas Weisel, target $42. Goldman Sachs reiterated Outperform on MSFT, BSX, ITT, FS and INTC. Goldman reiterated Underperform on RKY. Citi SmithBarney raised SONSE to Buy, target $5.50. Citi reiterated Buy on HAS, target $24. Citi reiterated Buy on COX, target $34.
Mid-day News
U.S. stocks are lower mid-day on continuing earnings worries, stubbornly high oil prices and weakness in internet-related shares. The Bush administration is under pressure to develop policies to deal with Iran, as a pending report will say the country allowed terrorists to pass through its borders and as concern grows about the nation's nuclear weapon capacity, the Washington Post said. A U.S. Senate Intelligence Committee report raises serious questions about the credibility of former diplomat Joseph Wilson, whose wife, Valerie Plame, was publicly identified as a CIA operative, the Wall Street Journal reported. Lawyers who led a class-action lawsuit against AT&T Wireless Services could receive $3.75 million while customers won't receive any cash in the settlement, the Rocky Mountain News reported. Real estate prices in Baghdad are rising as wealthy Iraqis who guarded their money while Saddam controlled the country begin to spend, the LA Times said. Real estate prices in Iraq could multiply 10 times in two to three years if the nation becomes more secure, the Times said. Nasdaq is planning to increase the number of its non-U.S. listed companies by 50% to boost its global presence, the Financial Times said. General Dynamics has won a contract to supply U.S. troops with handheld radios, valued at $5-$10 billion, CNBC reported. Boeing won an order from Emirates airlines for four 777 aircraft with an additional nine options, valuing the contract at as much as $2.96 billion. Johnson & Johnson may sell more heart stents after Boston Scientific expanded a recall Friday of its Taxus stent, Bloomberg reported.
BOTTOM LINE: The Portfolio is slightly higher today as my retail and medical shorts are falling and Chinese ADR longs are rising. I have not traded this morning and the Portfolio is still 25% net short. The market's tone continues to deteriorate and investor complacency remains relatively high. The probability of the Fed raising rates in August is falling. Recent inflation data and a slowing in U.S. economic growth from blistering levels to more sustainable rates may prompt the Fed to adopt a wait and see approach with respect to raising rates. Greenspan's comments over the next 2 days should make his intentions evident. I would expect a tradable rally under this scenario.
Monday Watch
Earnings of Note
Company/Estimate
MMM/.96
ALL/1.15
DAL/-2.37
GLW/.09
FLEX/.14
JCOM/.28
JDAS/.04
LXK/.97
Splits
BLUD 3-for-2
Economic Data
NAHB Housing Market Index for July estimated at 67 versus 67 in June.
Weekend Recommendations
Forbes on Fox had guests that were positive on DSCP, ERES, IHP, MCD and mixed on ATG, FBC. Bulls and Bears had guests that were positive on JNS, HOV, TASR, FIC, mixed on FII, CSGP, COGN and negative on MSO. Cashin' In had guests that were positive on STZ, GE, FRO and mixed on ARO, GD, MGM, NT. Louis Rukeyser's Wall Street had guests that were positive on PD, AET, BER, UNH, MCD, APD, CMCSA, DJ, VIA, KO, LLY, AMGN, IACI. Wall St. Week w/Fortune had guests that were positive on LU, NT, CSCO, JNPR, CIEN, AV, CKR and negative on INTC, YUM. Barron's had positive comments on LOJN, LCUT, MCRS, CGNX, MBT, VIP, TROW and negative comments on KMRT. Goldman Sachs reiterated Outperform on ITT, BSX and Underperform on DPH.
Weekend News
An al-Qaeda-linked group threatened Italy with terror attacks for the second time in two day, Agence France-Presse reported. The U.S. Justice Department said it doesn't plan to examine federal laws to determine if the presidential election may be postponed because of the threat of a terrorist attack, the NY Times reported. At least 50 people have died after being shocked by Tasers, including six people last month, the NY Times reported. An Oracle victory in its antitrust dispute with the U.S. government might prompt consolidation in the software industry, especially after several companies missed sales targets, Barron's reported. Iraqi Interior Minister al-Nakib expects Iraqi police forces to be able to enforce security in the country within eight months, al-Hayat reported. Republican Senator McCain said he wouldn't serve in the Cabinet if Senator Kerry wins the election and he has no interest in replacing Dick Cheney as President Bush's running mate, Time magazine reported. General Electric is offering medical equipment, consulting services and financing to hospitals, boosting revenue in the $2 trillion U.S. healthcare industry, the NY Times said. Venture capital firms such as Sevin Rosen are attracting large numbers of investors, a change in course after a slump in the industry over the past 4 years, the NY Times reported. The Chinese government is ordering hundreds of companies in Shanghai to switch their operations to night time due to power shortages, the BBC reported. Philadelphia may replace Detroit as the largest U.S. urban city with full-scale gaming halls, the Philadelphia Inquirer reported. The panel investigating the 9/11 attacks found evidence that officials in Iran helped some al-Qaeda operatives enter the country from Afghanistan, including eight of the men who took part in the attacks, Newsweek reported. Adolph Coors and Molsen are in talks about a possible combination of the two breweries, the Wall Street Journal reported. Intel is delaying the introduction of a chip it has called "the linchpin" of its new product line for notebook computers, Reuters reported. Copper futures may rise for a sixth straight week in New York and London amid speculation that a week-old strike at Grupo Mexico SA's La Caridad complex will spread to sites in Mexico and the U.S., Bloomberg reported. France denounced as "unacceptable" a call by Israeli Prime Minister Sharon for French Jews to emigrate because of increasing anti-Semitism, Agence France-Presse reported.
Late-Night Trading
Asian indices are mixed, -.25% to +.25% on average.
S&P 500 indicated +.18%.
NASDAQ 100 indicated +.36%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on falling energy prices, an oversold bounce in tech shares and better earnings reports. The Portfolio is 25% net short heading into the week.
Company/Estimate
MMM/.96
ALL/1.15
DAL/-2.37
GLW/.09
FLEX/.14
JCOM/.28
JDAS/.04
LXK/.97
Splits
BLUD 3-for-2
Economic Data
NAHB Housing Market Index for July estimated at 67 versus 67 in June.
Weekend Recommendations
Forbes on Fox had guests that were positive on DSCP, ERES, IHP, MCD and mixed on ATG, FBC. Bulls and Bears had guests that were positive on JNS, HOV, TASR, FIC, mixed on FII, CSGP, COGN and negative on MSO. Cashin' In had guests that were positive on STZ, GE, FRO and mixed on ARO, GD, MGM, NT. Louis Rukeyser's Wall Street had guests that were positive on PD, AET, BER, UNH, MCD, APD, CMCSA, DJ, VIA, KO, LLY, AMGN, IACI. Wall St. Week w/Fortune had guests that were positive on LU, NT, CSCO, JNPR, CIEN, AV, CKR and negative on INTC, YUM. Barron's had positive comments on LOJN, LCUT, MCRS, CGNX, MBT, VIP, TROW and negative comments on KMRT. Goldman Sachs reiterated Outperform on ITT, BSX and Underperform on DPH.
Weekend News
An al-Qaeda-linked group threatened Italy with terror attacks for the second time in two day, Agence France-Presse reported. The U.S. Justice Department said it doesn't plan to examine federal laws to determine if the presidential election may be postponed because of the threat of a terrorist attack, the NY Times reported. At least 50 people have died after being shocked by Tasers, including six people last month, the NY Times reported. An Oracle victory in its antitrust dispute with the U.S. government might prompt consolidation in the software industry, especially after several companies missed sales targets, Barron's reported. Iraqi Interior Minister al-Nakib expects Iraqi police forces to be able to enforce security in the country within eight months, al-Hayat reported. Republican Senator McCain said he wouldn't serve in the Cabinet if Senator Kerry wins the election and he has no interest in replacing Dick Cheney as President Bush's running mate, Time magazine reported. General Electric is offering medical equipment, consulting services and financing to hospitals, boosting revenue in the $2 trillion U.S. healthcare industry, the NY Times said. Venture capital firms such as Sevin Rosen are attracting large numbers of investors, a change in course after a slump in the industry over the past 4 years, the NY Times reported. The Chinese government is ordering hundreds of companies in Shanghai to switch their operations to night time due to power shortages, the BBC reported. Philadelphia may replace Detroit as the largest U.S. urban city with full-scale gaming halls, the Philadelphia Inquirer reported. The panel investigating the 9/11 attacks found evidence that officials in Iran helped some al-Qaeda operatives enter the country from Afghanistan, including eight of the men who took part in the attacks, Newsweek reported. Adolph Coors and Molsen are in talks about a possible combination of the two breweries, the Wall Street Journal reported. Intel is delaying the introduction of a chip it has called "the linchpin" of its new product line for notebook computers, Reuters reported. Copper futures may rise for a sixth straight week in New York and London amid speculation that a week-old strike at Grupo Mexico SA's La Caridad complex will spread to sites in Mexico and the U.S., Bloomberg reported. France denounced as "unacceptable" a call by Israeli Prime Minister Sharon for French Jews to emigrate because of increasing anti-Semitism, Agence France-Presse reported.
Late-Night Trading
Asian indices are mixed, -.25% to +.25% on average.
S&P 500 indicated +.18%.
NASDAQ 100 indicated +.36%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on falling energy prices, an oversold bounce in tech shares and better earnings reports. The Portfolio is 25% net short heading into the week.
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