S&P 500 1,095.42 +.05%
NASDAQ 1,858.26 -.58%
Leading Sectors
Iron/Steel +8.25%
Cyclicals +1.38%
Transports +1.22%
Lagging Sectors
Airlines -1.27%
Hospitals -1.68%
Disk Drives -2.35%
Other
Crude Oil 42.66 -.56%
Natural Gas 6.12 -.28%
Gold 391.60 -.05%
Base Metals 110.09 +1.62%
U.S. Dollar 89.79 unch.
10-Yr. T-note Yield 4.58% -.60%
VIX 16.15 -2.42%
Put/Call .67 -6.94%
NYSE Arms 1.12 +43.59%
After-hours Movers
CNCT +6.37% after beating 2Q estimates and raising 3Q/04 guidance.
JDSU +6.67% after beating 4Q estimates and maintaining 1Q outlook.
SFNT +13.84% after beating 2Q estimates and raising 3Q guidance.
ALDA +17.3% after reporting better-than-expected 2Q.
INSP +27.23% after substantially beating 2Q estimates and raising 3Q/04 guidance.
WFMI -5.05% after missing 3Q estimates, but raising 04 outlook.
ESRX -13.1% after missing 2Q estimates, lowering 04 outlook and announcing it is being investigated by 19 states.
Recommendations
Goldman Sachs reiterated Underperform on HMT, AVP, AG and Outperform on SAP, VZ. OMC rated Focus 1 stock of the week at Merrill Lynch.
After-hours News
U.S. stocks finished mixed today as a short-covering rally boosted shares this afternoon. After the close, Saudi Arabia proposed deployment to Iraq of a military force drawn from Islamic nations to supplement and perhaps eventually replace the U.S.-led coalition, Saudi Foreign Minister Saud al-Faisal said. The U.S. plans to spend $53 million over five years on a multinational program to capture methane from coal mines and landfills in developing countries to provide energy and reduce the gas' affect on global warming, Bloomberg reported. JDS Uniphase, the world's largest maker of parts for fiber-optic networks, said its fourth-quarter net loss narrowed to $24.3 million after sales rose for the first time in 12 quarters, Bloomberg said.
BOTTOM LINE: The Portfolio finished unchanged today on the addition of a few new longs in the afternoon, leaving market exposure at 100% net long. One of my new longs is CYMI and I am using a stop-loss of $25.50 on this position. While not a great day by any means, it could have been much worse and should be viewed as a positive. Barring any domestic terror attacks, U.S. stocks should rally through week's end.
Wednesday, July 28, 2004
Mid-day Update
S&P 500 1,085.32 -.88%
NASDAQ 1,837.04 -1.72%
Leading Sectors
Iron/Steel +2.13%
Oil Service +1.71%
Commodity +.75%
Lagging Sectors
Semis -2.69%
Airlines -3.26%
Disk Drives -3.42%
Other
Crude Oil 42.85 +2.41%
Natural Gas 6.05 +1.02%
Gold 392.00 +.56%
Base Metals 110.09 +1.62%
U.S. Dollar 89.73 -.07%
10-Yr. T-note Yield 4.60% -.26%
VIX 17.15 +3.63%
Put/Call .71 -1.39%
NYSE Arms 1.15 +47.44%
Market Movers
CECO -23.4% after beating 2Q estimates, lowering 3Q sales forecast and multiple downgrades.
UTSI -28.8% after missing 2Q forecast, lowering 3Q/04 outlook and multiple downgrades.
TEVA -6.5% after a U.S. court blocked final approval for Alpharma's gabapentin capsule.
ZRAN +15.6% after beating 2Q estimates and raising 3Q/04 outlook.
CELL +15.2% after reporting strong 2Q results.
WBSN +14.2% after beating 2Q estimates, raising 3Q guidance and multiple upgrades.
KRON +11.77% after beating 3Q estimates and raising 4Q guidance.
AV +11.4% after beating 3Q estimates and giving positive outlook.
GRMN +11.0% after beating 2Q estimates and raising 3Q guidance.
X +5.2% after beating 2Q estimates, giving positive outlook and Prudential upgrade to Overweight.
ALD +7.4% after beating 2Q forecast.
CREE +8.4% after beating 4Q estimates and raising 1Q guidance.
WIRE -27.2% after weaker-than-expected 2Q.
ASCA -19.3% after missing 2Q estimates and lowering 3Q forecast.
NILE -18.3% after beating 2Q estimates and lowering 3Q/04 guidance.
EEFT -21.3% after beating 2Q estimates and lowering 3Q outlook.
WMGI -17.6% after meeting 2Q estimates, lowering 3Q/04 outlook and multiple downgrades.
LSCP -17.8% after beating 2Q estimates, but giving disappointing guidance.
Economic Data
Durable Goods Orders for June rose .7% versus estimates of a 1.5% rise and an upwardly revised decline of .9% in May.
Durable Goods Orders Less Transportation for June fell .6% versus estimates of a 1.1% rise and an upwardly revised .6% decline in May.
Recommendations
PENN raised to Buy at Deutsche Bank, target $45. MDCA rated Sector Outperform at CIBC, target $16. BBBB rated Outperform at Thomas Weisel. X raised to Overweight at Prudential, target $45. ABX cut to Underweight at Prudential, target $15. CB raised to Overweight at Prudential, target $80. MTSN raised to Overweight at JP Morgan. VRTS raised to Sector Outperform at CIBC, target $25. WBSN raised to Outperform at Raymond James, target $41. Goldman Sachs reiterated Outperform on AMGN, BIIB, DNA, AVP, AGN, IR, ETN, MERQ and LIZ. Goldman reiterated Underperform on LSI, AG and EW. Citi SmithBarney said to Buy Auto Suppliers for a trade, favorites are AXL, MGA and LEA. Citi reiterated Buy on VZ, target $43. Citi reiterated Buy on ATH, target $113. Citi reiterated Buy on WLP, target $140. Citi rated BRCD Buy, target $6.30. Citi reiterated Buy on SBUX, target $54. Citi reiterated Buy on BCII, target $30. Citi reiterated Buy on VRTS, target $24. Citi reiterated Buy on LLY, target $82.
Mid-day News
U.S. stocks are falling mid-day on rising oil prices, weaker-than-expected economic data and a few disappointing earnings reports. US Air will change its flight system later this year, including taking apart its Pittsburgh hub, to stay solvent and compete against low-fare carriers in its major East Coast markets, the New York Times reported. Paul Volcker, the head of a UN panel investigating corruption in its Iraq oil-for-food program, won't share information with U.S. congressional committees that also are conducting inquiries, the NY Times reported. California's proposed budget agreement would restore millions of dollars to the Univ. of California and allow it to offer admission to 5,800 freshmen whose entry would have been deferred for two years, the San Francisco Chronicle reported. Vice President Cheney drew the loudest cheers on his first bus tour of the 2004 election when he told audiences that trial lawyers wreck good companies, wipe out jobs and saddle doctors with costs they pass to patients, Bloomberg reported. A homicide car bomber today drove into a crowd of Iraqi civilians waiting in line for jobs in the central Iraqi city of Baqubah, killing 68 and wounding 56, the AP reported. OAO Yukos Oil, Russia's biggest oil exporter, said the government ordered a halt to production from its main Siberian unit as court bailiffs seek to recover $3.4 billion in back taxes and fines. This sent crude oil futures to a record, Bloomberg said.
BOTTOM LINE: The Portfolio is lower today on weakness in my technology longs. I sold several tech positions this morning as they hit stop-losses, bringing the Portfolio's market exposure to 50% net long. Another disappointing day for the Bulls as the averages are unable to hold even one day's gains. However, any slight pullback in oil prices should result in a tradable rally. I still believe the markets will form a short-term bottom this week as the Democratic Convention concludes with no domestic terror attacks. I expect U.S. stocks to rise modestly into the close on short-covering.
NASDAQ 1,837.04 -1.72%
Leading Sectors
Iron/Steel +2.13%
Oil Service +1.71%
Commodity +.75%
Lagging Sectors
Semis -2.69%
Airlines -3.26%
Disk Drives -3.42%
Other
Crude Oil 42.85 +2.41%
Natural Gas 6.05 +1.02%
Gold 392.00 +.56%
Base Metals 110.09 +1.62%
U.S. Dollar 89.73 -.07%
10-Yr. T-note Yield 4.60% -.26%
VIX 17.15 +3.63%
Put/Call .71 -1.39%
NYSE Arms 1.15 +47.44%
Market Movers
CECO -23.4% after beating 2Q estimates, lowering 3Q sales forecast and multiple downgrades.
UTSI -28.8% after missing 2Q forecast, lowering 3Q/04 outlook and multiple downgrades.
TEVA -6.5% after a U.S. court blocked final approval for Alpharma's gabapentin capsule.
ZRAN +15.6% after beating 2Q estimates and raising 3Q/04 outlook.
CELL +15.2% after reporting strong 2Q results.
WBSN +14.2% after beating 2Q estimates, raising 3Q guidance and multiple upgrades.
KRON +11.77% after beating 3Q estimates and raising 4Q guidance.
AV +11.4% after beating 3Q estimates and giving positive outlook.
GRMN +11.0% after beating 2Q estimates and raising 3Q guidance.
X +5.2% after beating 2Q estimates, giving positive outlook and Prudential upgrade to Overweight.
ALD +7.4% after beating 2Q forecast.
CREE +8.4% after beating 4Q estimates and raising 1Q guidance.
WIRE -27.2% after weaker-than-expected 2Q.
ASCA -19.3% after missing 2Q estimates and lowering 3Q forecast.
NILE -18.3% after beating 2Q estimates and lowering 3Q/04 guidance.
EEFT -21.3% after beating 2Q estimates and lowering 3Q outlook.
WMGI -17.6% after meeting 2Q estimates, lowering 3Q/04 outlook and multiple downgrades.
LSCP -17.8% after beating 2Q estimates, but giving disappointing guidance.
Economic Data
Durable Goods Orders for June rose .7% versus estimates of a 1.5% rise and an upwardly revised decline of .9% in May.
Durable Goods Orders Less Transportation for June fell .6% versus estimates of a 1.1% rise and an upwardly revised .6% decline in May.
Recommendations
PENN raised to Buy at Deutsche Bank, target $45. MDCA rated Sector Outperform at CIBC, target $16. BBBB rated Outperform at Thomas Weisel. X raised to Overweight at Prudential, target $45. ABX cut to Underweight at Prudential, target $15. CB raised to Overweight at Prudential, target $80. MTSN raised to Overweight at JP Morgan. VRTS raised to Sector Outperform at CIBC, target $25. WBSN raised to Outperform at Raymond James, target $41. Goldman Sachs reiterated Outperform on AMGN, BIIB, DNA, AVP, AGN, IR, ETN, MERQ and LIZ. Goldman reiterated Underperform on LSI, AG and EW. Citi SmithBarney said to Buy Auto Suppliers for a trade, favorites are AXL, MGA and LEA. Citi reiterated Buy on VZ, target $43. Citi reiterated Buy on ATH, target $113. Citi reiterated Buy on WLP, target $140. Citi rated BRCD Buy, target $6.30. Citi reiterated Buy on SBUX, target $54. Citi reiterated Buy on BCII, target $30. Citi reiterated Buy on VRTS, target $24. Citi reiterated Buy on LLY, target $82.
Mid-day News
U.S. stocks are falling mid-day on rising oil prices, weaker-than-expected economic data and a few disappointing earnings reports. US Air will change its flight system later this year, including taking apart its Pittsburgh hub, to stay solvent and compete against low-fare carriers in its major East Coast markets, the New York Times reported. Paul Volcker, the head of a UN panel investigating corruption in its Iraq oil-for-food program, won't share information with U.S. congressional committees that also are conducting inquiries, the NY Times reported. California's proposed budget agreement would restore millions of dollars to the Univ. of California and allow it to offer admission to 5,800 freshmen whose entry would have been deferred for two years, the San Francisco Chronicle reported. Vice President Cheney drew the loudest cheers on his first bus tour of the 2004 election when he told audiences that trial lawyers wreck good companies, wipe out jobs and saddle doctors with costs they pass to patients, Bloomberg reported. A homicide car bomber today drove into a crowd of Iraqi civilians waiting in line for jobs in the central Iraqi city of Baqubah, killing 68 and wounding 56, the AP reported. OAO Yukos Oil, Russia's biggest oil exporter, said the government ordered a halt to production from its main Siberian unit as court bailiffs seek to recover $3.4 billion in back taxes and fines. This sent crude oil futures to a record, Bloomberg said.
BOTTOM LINE: The Portfolio is lower today on weakness in my technology longs. I sold several tech positions this morning as they hit stop-losses, bringing the Portfolio's market exposure to 50% net long. Another disappointing day for the Bulls as the averages are unable to hold even one day's gains. However, any slight pullback in oil prices should result in a tradable rally. I still believe the markets will form a short-term bottom this week as the Democratic Convention concludes with no domestic terror attacks. I expect U.S. stocks to rise modestly into the close on short-covering.
Wednesday Watch
Earnings of Note
Company/Estimate
ATN/.42
BUD/.83
APPB/.33
ASKJ/.22
AVP/.46
BIIB/.32
BA/.47
CAH/.93
CMCSA/.09
EDS/-.03
ESRX/.94
HLT/.18
INSP/.14
JDSU/.00
NXTP/.05
SOHU/.24
SBL/.09
TWX/.15
ZBRA/.59
ZMH/.55
Splits
None of note.
Economic Data
Durable Goods Orders for June estimated +1.5% versus -1.8% in May.
Durable Goods Orders Less Transportation for June estimated +1.1% versus -1.4% in May.
Fed's Beige Book
Recommendations
Goldman Sachs reiterated Attractive view of non-life insurance industry, favorites are AIG, ALL, ENH, RE and STA. Goldman reiterated Outperform on AUO, DD, NFX and BC. Goldman reiterated Underperform on EDS and FSS.
Late-Night News
Asian indices are mostly higher, led by Japan, on optimism over exports after a report showed U.S. consumer confidence hit a 2-year high. Members of the al-Qaeda terrorist network are traveling through Europe on illegally obtained South African passports, the AP reported. Exxon Mobil is considering selling it 19% stake in China Petroleum & Chemical, raising about $1.2 billion, almost double what it paid four years ago, the Financial Times reported. Afghanistan will have 23 candidates for its presidential election in October, including the incumbent President Hamid Karzai, Agence France-Presse reported. A blood test may help prevent premature births by detecting infections in amniotic fluids, according to a study in the Journal of the AMA. The dollar traded near its highest in about six weeks against the euro and the yen in Asia after the strong U.S. consumer confidence report, Bloomberg reported. Charter Communications, the U.S. cable-tv operator controlled by billionaire Paul Allen, settled a SEC investigation into how it counted subscribers, Bloomberg said.
Late-Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated +.06%.
NASDAQ 100 indicated +.11%
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on stronger earnings reports, falling energy prices and stabilizing interest rates. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
ATN/.42
BUD/.83
APPB/.33
ASKJ/.22
AVP/.46
BIIB/.32
BA/.47
CAH/.93
CMCSA/.09
EDS/-.03
ESRX/.94
HLT/.18
INSP/.14
JDSU/.00
NXTP/.05
SOHU/.24
SBL/.09
TWX/.15
ZBRA/.59
ZMH/.55
Splits
None of note.
Economic Data
Durable Goods Orders for June estimated +1.5% versus -1.8% in May.
Durable Goods Orders Less Transportation for June estimated +1.1% versus -1.4% in May.
Fed's Beige Book
Recommendations
Goldman Sachs reiterated Attractive view of non-life insurance industry, favorites are AIG, ALL, ENH, RE and STA. Goldman reiterated Outperform on AUO, DD, NFX and BC. Goldman reiterated Underperform on EDS and FSS.
Late-Night News
Asian indices are mostly higher, led by Japan, on optimism over exports after a report showed U.S. consumer confidence hit a 2-year high. Members of the al-Qaeda terrorist network are traveling through Europe on illegally obtained South African passports, the AP reported. Exxon Mobil is considering selling it 19% stake in China Petroleum & Chemical, raising about $1.2 billion, almost double what it paid four years ago, the Financial Times reported. Afghanistan will have 23 candidates for its presidential election in October, including the incumbent President Hamid Karzai, Agence France-Presse reported. A blood test may help prevent premature births by detecting infections in amniotic fluids, according to a study in the Journal of the AMA. The dollar traded near its highest in about six weeks against the euro and the yen in Asia after the strong U.S. consumer confidence report, Bloomberg reported. Charter Communications, the U.S. cable-tv operator controlled by billionaire Paul Allen, settled a SEC investigation into how it counted subscribers, Bloomberg said.
Late-Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated +.06%.
NASDAQ 100 indicated +.11%
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on stronger earnings reports, falling energy prices and stabilizing interest rates. The Portfolio is 100% net long heading into tomorrow.
Tuesday, July 27, 2004
Tuesday Close
S&P 500 1,094.83 +.99%
NASDAQ 1,869.10 +1.64%
Leading Sectors
Retail +2.91%
Biotech +2.64%
Telecom +2.41%
Lagging Sectors
Hospitals -.51%
Airlines -.78%
HMO's -4.2%
Other
Crude Oil 41.82 -.05%
Natural Gas 5.98 -.10%
Gold 388.00 +.26%
Base Metals 108.33 -.74%
U.S. Dollar 89.73 +.79%
10-Yr. T-note Yield 4.60% +2.68%
VIX 16.55 -4.34%
Put/Call .72 -12.2%
NYSE Arms .78 -32.76%
After-hours Movers
CREE +6.76% after beating 4Q estimates and raising 1Q guidance.
VRTS +4.10% after beating 2Q estimates and raising 3Q forecast.
ZRAN +10.04% after beating 2Q estimates and raising 3Q/04 outlook.
MFE +7.84% after beating 2Q estimates and raising 3Q guidance.
UTSI -13.4% after missing 2Q forecast and lowering 3Q/04 outlook.
MNST +6.1% after beating 2Q estimates and lowering 3Q outlook.
Recommendations
Goldman Sachs reiterated Attractive view of Paper sector, favorite is IP. Goldman reiterated Outperform on AMGN, ADP, MSFT and GDT.
After-hours News
U.S. stocks finished higher today on better-than-expected economic reports and strong telecom earnings. After the close, Electronic Data Systems, the world's second-biggest computer-services provider, reduced its quarterly dividend to 5 cents a share, Bloomberg reported. Chubb, the second-biggest liability insurer for U.S. corporate boards, said second-quarter profit climbed 41% as premiums and investment income rose, Bloomberg said. New Jersey faces higher borrowing costs after S&P and Fitch cut credit ratings on more than $18 billion in debt, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly higher today as strength in my biotech, security and technology longs offset my rising retail shorts. I added a few more longs in the afternoon, bringing the Portfolio's market exposure to 100% net long. One of my new longs is ERES and I am using a $22.00 stop-loss on this position. The strength of today's rally was impressive given the extent to which rates rose and oil climbed. The advance/decline line and volume were much improved today as well. Finally, the CRB Index continued its recent slide, breaking down through its 200-day moving-average today, which bodes well for future inflation readings. While the major U.S. averages should continue to rally for awhile longer, recent lows will likely be tested in the coming weeks as investor complacency is still too high for a meaningful bottom.
NASDAQ 1,869.10 +1.64%
Leading Sectors
Retail +2.91%
Biotech +2.64%
Telecom +2.41%
Lagging Sectors
Hospitals -.51%
Airlines -.78%
HMO's -4.2%
Other
Crude Oil 41.82 -.05%
Natural Gas 5.98 -.10%
Gold 388.00 +.26%
Base Metals 108.33 -.74%
U.S. Dollar 89.73 +.79%
10-Yr. T-note Yield 4.60% +2.68%
VIX 16.55 -4.34%
Put/Call .72 -12.2%
NYSE Arms .78 -32.76%
After-hours Movers
CREE +6.76% after beating 4Q estimates and raising 1Q guidance.
VRTS +4.10% after beating 2Q estimates and raising 3Q forecast.
ZRAN +10.04% after beating 2Q estimates and raising 3Q/04 outlook.
MFE +7.84% after beating 2Q estimates and raising 3Q guidance.
UTSI -13.4% after missing 2Q forecast and lowering 3Q/04 outlook.
MNST +6.1% after beating 2Q estimates and lowering 3Q outlook.
Recommendations
Goldman Sachs reiterated Attractive view of Paper sector, favorite is IP. Goldman reiterated Outperform on AMGN, ADP, MSFT and GDT.
After-hours News
U.S. stocks finished higher today on better-than-expected economic reports and strong telecom earnings. After the close, Electronic Data Systems, the world's second-biggest computer-services provider, reduced its quarterly dividend to 5 cents a share, Bloomberg reported. Chubb, the second-biggest liability insurer for U.S. corporate boards, said second-quarter profit climbed 41% as premiums and investment income rose, Bloomberg said. New Jersey faces higher borrowing costs after S&P and Fitch cut credit ratings on more than $18 billion in debt, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly higher today as strength in my biotech, security and technology longs offset my rising retail shorts. I added a few more longs in the afternoon, bringing the Portfolio's market exposure to 100% net long. One of my new longs is ERES and I am using a $22.00 stop-loss on this position. The strength of today's rally was impressive given the extent to which rates rose and oil climbed. The advance/decline line and volume were much improved today as well. Finally, the CRB Index continued its recent slide, breaking down through its 200-day moving-average today, which bodes well for future inflation readings. While the major U.S. averages should continue to rally for awhile longer, recent lows will likely be tested in the coming weeks as investor complacency is still too high for a meaningful bottom.
Mid-day Update
S&P 500 1,089.19 +.47%
NASDAQ 1,853.49 +.75%
Leading Sectors
Telecom +2.60%
Retail +2.15%
I-Banks +1.8%
Lagging Sectors
Hospitals -1.33%
Airlines -1.67%
HMO's -5.37%
Other
Crude Oil 41.95 +1.23%
Natural Gas 5.98 +.39%
Gold 387.50 -.72%
Base Metals 108.33 -.74%
U.S. Dollar 89.68 +.73%
10-Yr. T-note Yield 4.57% +1.93%
VIX 16.85 -2.60%
Put/Call .69 -15.58%
NYSE Arms 1.23 +6.03%
Market Movers
NT -15.5% after saying it won't meet its gross margin target because of higher-than-expected operating costs.
VZ +3.9% after beating 2Q estimates and boosting 2H outlook.
CAH -13.7% after the company said yesterday that it CFO resigned amid U.S. accounting investigations.
ATH -8.4% after lowering 04 forecast.
SLAB -17.7% after beating 2Q estimates and lowering 3Q guidance.
TRMB +18.6% after beating 2Q estimates and raising 3Q/04 outlook.
IFLO +20.5% after beating 2Q revenue forecast and announcing 1M share buy-back.
GNSS +14.6% after beating 1Q estimates.
ATRS +13.2% after beating 2Q estimates.
RTEC +14.3% after beating 2Q estimates and raising 3Q outlook.
HYDL +9.6% after strong 2Q results and CSFB upgrade to Neutral.
ICLR -19.1% after beating 4Q estimates and lowering 05 outlook.
LNCR -7.6% after the NY Times reported that it may be hurt by a proposed 89% drop in the price paid by the U.S. government for two lung treatments.
SWK -5.2% after missing 2Q estimates and lowering outlook.
Economic Data
Consumer Confidence for July rose to 106.1 versus estimates of 102.0 and an upwardly revised 102.8 in June.
New Home Sales for June were 1326K versus estimates of 1272K and a downwardly revised 1337K in May.
Recommendations
Kellogg raised to Buy at Deutsche Bank, target $46. AXP raised to Buy at Deutsche Bank, target $57. CMCSA raised to Overweight at Prudential, target $39. Goldman Sachs reiterated Outperform on ATYT, ADP, CMX, PFE, BHI, SSL and CTSH. Goldman reiterated Underperform on ASH and TGS. Citi SmithBarney said to Sell DAL, target $1. Citi said to Buy AAI, target $18. Citi reiterated Sell on COP, target $65. Citi reiterated Sell on XOM, target $40.50. Citi reiterated Buy on CHE, target $64. Citi reiterated Buy on KIND, target $35. Citi reiterated Buy on WLP, target $150. Citi reiterated Buy on ATH, target $131. Citi reiterated Buy on BLS, target $32. Citi reiterated Buy on HCA, target $48. Citi reiterated Buy on CVH, target $65.
Mid-day News
U.S. stocks are rising mid-day on stronger-than-expected economic reports. Saks Fifth Avenue may close an undisclosed number of stores and remodel its flagship in Manhattan as part of an overhaul, the NY Times reported. Advertising dollars spent on Internet sites and other online media are expected to equal spending on magazines by 2007, and overtake more traditional areas in 2008, the Wall Street Journal reported. Starwood Hotels plans to build two of its W designer hotels in China, the Wall Street Journal reported. More than 35 bloggers received media credentials to cover the Democratic Convention, giving the Internet postings a new place in the press, the Wall Street Journal reported. The U.S. State Dept. wants to increase the pace of its rebuilding effort in Iraq, hoping to provide more jobs and show off the results of projects more quickly to Iraqis, the NY Times reported. Closely held Flight Options is expected to off business customers the opportunity to rent time on aircraft instead of forcing them to buy a share in the plane, the Wall Street Journal reported. Iran has resumed building and installing equipment that could be used to make nuclear weapons, the AP reported. U.S. new home sales fell less than forecast to a 1.326 million annual rate in June, the second-fastest on record, evidence more jobs and higher incomes are keeping homes affordable as interest rates rise, Bloomberg reported. Consumer confidence in the U.S. economy rose this month to a two-year high as expectations for the job market improved, Bloomberg said. Crude oil and interest rates are rising on strong U.S. economic reports, Bloomberg reported. California Republican Governor Schwarzenegger and legislative leaders reached agreement on a $103 billion spending plan that has no tax increases and relies on $7 billion in bonds, loans and spending cuts to cover a $14 billion projected deficit, Bloomberg reported. The Democratic Party is giving filmmaker Michael Moore what he called "red carpet treatment" at the party convention, including a box inside the FleetCenter and credentials to mingle with the delegates and press, Bloomberg reported. The Holy Land Foundation for Relief and Development, the largest Muslim charity in the U.S., was indicted on charges it provided financial support to the Islamist terror group Hamas, Bloomberg said.
BOTTOM LINE: The Portfolio is slightly lower today as my retail and technology shorts are rising more than my longs. I took profits in a number of shorts this morning and added a few longs, bringing the Portfolio's market exposure to 25% net long. One of my new longs is CCMP and I am using a $31.25 stop-loss on the position. I expect U.S. stocks to rise modestly into the close, notwithstanding rising interest rates and oil prices. This appears to be the beginning stages of a tradable rally, however I do not believe we have seen the lows as of yet. Weakness will likely resurface in the next couple of weeks.
NASDAQ 1,853.49 +.75%
Leading Sectors
Telecom +2.60%
Retail +2.15%
I-Banks +1.8%
Lagging Sectors
Hospitals -1.33%
Airlines -1.67%
HMO's -5.37%
Other
Crude Oil 41.95 +1.23%
Natural Gas 5.98 +.39%
Gold 387.50 -.72%
Base Metals 108.33 -.74%
U.S. Dollar 89.68 +.73%
10-Yr. T-note Yield 4.57% +1.93%
VIX 16.85 -2.60%
Put/Call .69 -15.58%
NYSE Arms 1.23 +6.03%
Market Movers
NT -15.5% after saying it won't meet its gross margin target because of higher-than-expected operating costs.
VZ +3.9% after beating 2Q estimates and boosting 2H outlook.
CAH -13.7% after the company said yesterday that it CFO resigned amid U.S. accounting investigations.
ATH -8.4% after lowering 04 forecast.
SLAB -17.7% after beating 2Q estimates and lowering 3Q guidance.
TRMB +18.6% after beating 2Q estimates and raising 3Q/04 outlook.
IFLO +20.5% after beating 2Q revenue forecast and announcing 1M share buy-back.
GNSS +14.6% after beating 1Q estimates.
ATRS +13.2% after beating 2Q estimates.
RTEC +14.3% after beating 2Q estimates and raising 3Q outlook.
HYDL +9.6% after strong 2Q results and CSFB upgrade to Neutral.
ICLR -19.1% after beating 4Q estimates and lowering 05 outlook.
LNCR -7.6% after the NY Times reported that it may be hurt by a proposed 89% drop in the price paid by the U.S. government for two lung treatments.
SWK -5.2% after missing 2Q estimates and lowering outlook.
Economic Data
Consumer Confidence for July rose to 106.1 versus estimates of 102.0 and an upwardly revised 102.8 in June.
New Home Sales for June were 1326K versus estimates of 1272K and a downwardly revised 1337K in May.
Recommendations
Kellogg raised to Buy at Deutsche Bank, target $46. AXP raised to Buy at Deutsche Bank, target $57. CMCSA raised to Overweight at Prudential, target $39. Goldman Sachs reiterated Outperform on ATYT, ADP, CMX, PFE, BHI, SSL and CTSH. Goldman reiterated Underperform on ASH and TGS. Citi SmithBarney said to Sell DAL, target $1. Citi said to Buy AAI, target $18. Citi reiterated Sell on COP, target $65. Citi reiterated Sell on XOM, target $40.50. Citi reiterated Buy on CHE, target $64. Citi reiterated Buy on KIND, target $35. Citi reiterated Buy on WLP, target $150. Citi reiterated Buy on ATH, target $131. Citi reiterated Buy on BLS, target $32. Citi reiterated Buy on HCA, target $48. Citi reiterated Buy on CVH, target $65.
Mid-day News
U.S. stocks are rising mid-day on stronger-than-expected economic reports. Saks Fifth Avenue may close an undisclosed number of stores and remodel its flagship in Manhattan as part of an overhaul, the NY Times reported. Advertising dollars spent on Internet sites and other online media are expected to equal spending on magazines by 2007, and overtake more traditional areas in 2008, the Wall Street Journal reported. Starwood Hotels plans to build two of its W designer hotels in China, the Wall Street Journal reported. More than 35 bloggers received media credentials to cover the Democratic Convention, giving the Internet postings a new place in the press, the Wall Street Journal reported. The U.S. State Dept. wants to increase the pace of its rebuilding effort in Iraq, hoping to provide more jobs and show off the results of projects more quickly to Iraqis, the NY Times reported. Closely held Flight Options is expected to off business customers the opportunity to rent time on aircraft instead of forcing them to buy a share in the plane, the Wall Street Journal reported. Iran has resumed building and installing equipment that could be used to make nuclear weapons, the AP reported. U.S. new home sales fell less than forecast to a 1.326 million annual rate in June, the second-fastest on record, evidence more jobs and higher incomes are keeping homes affordable as interest rates rise, Bloomberg reported. Consumer confidence in the U.S. economy rose this month to a two-year high as expectations for the job market improved, Bloomberg said. Crude oil and interest rates are rising on strong U.S. economic reports, Bloomberg reported. California Republican Governor Schwarzenegger and legislative leaders reached agreement on a $103 billion spending plan that has no tax increases and relies on $7 billion in bonds, loans and spending cuts to cover a $14 billion projected deficit, Bloomberg reported. The Democratic Party is giving filmmaker Michael Moore what he called "red carpet treatment" at the party convention, including a box inside the FleetCenter and credentials to mingle with the delegates and press, Bloomberg reported. The Holy Land Foundation for Relief and Development, the largest Muslim charity in the U.S., was indicted on charges it provided financial support to the Islamist terror group Hamas, Bloomberg said.
BOTTOM LINE: The Portfolio is slightly lower today as my retail and technology shorts are rising more than my longs. I took profits in a number of shorts this morning and added a few longs, bringing the Portfolio's market exposure to 25% net long. One of my new longs is CCMP and I am using a $31.25 stop-loss on the position. I expect U.S. stocks to rise modestly into the close, notwithstanding rising interest rates and oil prices. This appears to be the beginning stages of a tradable rally, however I do not believe we have seen the lows as of yet. Weakness will likely resurface in the next couple of weeks.
Tuesday Watch
Earnings of Note
Company/Estimate
ADP/.35
ATH/1.64
AV/.11
ABX/.06
BMCS/.13
CELL/.21
CB/1.58
DD/.81
JNY/.59
LLL/.79
LMT/.61
MFE/.06
MNST/.13
PSFT/.14
PD/2.48
SFA/.35
SINA/.31
TROW/.62
RIG/.10
UTSI/.33
VRTS/.19
VZ/.60
Splits
None of note.
Economic Data
Consumer Confidence for July estimated at 102.0 versus 101.9 in June.
New Home Sales for June estimated at 1272K versus 1369K in May.
Recommendations
Goldman Sachs reiterated Underperform on EK, SMP and VRTX. Goldman reiterated Outperform on AXP, BSX, IP, SLB, SII, BHI, EPD, ENH, AMGN, IDPH, DNA, GILD, AMLN, TRMS and BIIB.
Late-Night News
Asian indices are mixed as strength in Taiwan is being offset by weakness in Japan. Intel will cut prices of its processors used in desktop computers by as much as 35% next month to help reduce inventory and stimulate demand, the Commercial Times reported. China's first-half vehicle exports increased 84% to $290 million, the China news agency said. Cardinal Health said Richard Miller resigned as CFO after U.S. regulators stepped up a probe of the company's accounting, Bloomberg reported. Sleep Apnea, a breathing disorder that interrupts air flow during slumber, raises the risk of dying from a stroke, the European Respiratory Journal said. Almost 80% of Afghanistan's estimated 10 million eligible voters have registered to take part in presidential elections in October and a parliamentary poll next April, the UN said. Comcast will announce tomorrow that it is buying back more than $500 million of its own stock, the Wall Street Journal Reported.
Late-Night Trading
Asian Indices are -.50% to +.50% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.29%
BOTTOM LINE: I expect U.S. stocks to open mixed in the morning on better economic reports, continuing earnings worries and negative political rhetoric. The CRB Index is trading very close to its 200-day moving-average and I expect it to break this level in the near future. This continues to be an unreported positive development as inflation worries stem mainly from the rise in commodities' prices. The Portfolio is 50% net short heading into tomorrow.
Company/Estimate
ADP/.35
ATH/1.64
AV/.11
ABX/.06
BMCS/.13
CELL/.21
CB/1.58
DD/.81
JNY/.59
LLL/.79
LMT/.61
MFE/.06
MNST/.13
PSFT/.14
PD/2.48
SFA/.35
SINA/.31
TROW/.62
RIG/.10
UTSI/.33
VRTS/.19
VZ/.60
Splits
None of note.
Economic Data
Consumer Confidence for July estimated at 102.0 versus 101.9 in June.
New Home Sales for June estimated at 1272K versus 1369K in May.
Recommendations
Goldman Sachs reiterated Underperform on EK, SMP and VRTX. Goldman reiterated Outperform on AXP, BSX, IP, SLB, SII, BHI, EPD, ENH, AMGN, IDPH, DNA, GILD, AMLN, TRMS and BIIB.
Late-Night News
Asian indices are mixed as strength in Taiwan is being offset by weakness in Japan. Intel will cut prices of its processors used in desktop computers by as much as 35% next month to help reduce inventory and stimulate demand, the Commercial Times reported. China's first-half vehicle exports increased 84% to $290 million, the China news agency said. Cardinal Health said Richard Miller resigned as CFO after U.S. regulators stepped up a probe of the company's accounting, Bloomberg reported. Sleep Apnea, a breathing disorder that interrupts air flow during slumber, raises the risk of dying from a stroke, the European Respiratory Journal said. Almost 80% of Afghanistan's estimated 10 million eligible voters have registered to take part in presidential elections in October and a parliamentary poll next April, the UN said. Comcast will announce tomorrow that it is buying back more than $500 million of its own stock, the Wall Street Journal Reported.
Late-Night Trading
Asian Indices are -.50% to +.50% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.29%
BOTTOM LINE: I expect U.S. stocks to open mixed in the morning on better economic reports, continuing earnings worries and negative political rhetoric. The CRB Index is trading very close to its 200-day moving-average and I expect it to break this level in the near future. This continues to be an unreported positive development as inflation worries stem mainly from the rise in commodities' prices. The Portfolio is 50% net short heading into tomorrow.
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