Indices
S&P 500 1,101.72 +1.43%
Dow 10,139.71 +1.78%
NASDAQ 1,887.36 +2.07%
Russell 2000 551.29 +2.24%
S&P Equity Long/Short Index 956.51 -.97%
Put/Call .64 -17.95%
NYSE Arms 1.31 -24.71%
Volatility(VIX) 15.32 -7.15%
AAII % Bulls 34.0 -4.79%
US Dollar 89.96 +.77%
CRB 267.78 -.90%
Futures Spot Prices
Gold 393.70 +.13%
Crude Oil 43.80 +5.11%
Unleaded Gasoline 130.49 +2.75%
Natural Gas 6.11 -1.34%
Base Metals 112.13 +3.65%
10-year US Treasury Yield 4.47% +1.13%
Average 30-year Mortgage Rate 6.08% +1.67%
Leading Sectors
Iron/Steel +6.78%
Telecom +4.77%
Software +3.69%
Lagging Sectors
Foods -.64%
HMO's -1.97%
Hospitals -4.33%
*% Gain or loss for the week
Friday, July 30, 2004
Mid-day Update
S&P 500 1,100.92 +.04%
NASDAQ 1,892.74 +.62%
Leading Sectors
Broadcasting +2.21%
Semis +1.80%
Disk Drives +1.59%
Lagging Sectors
Airlines -.93%
Telecom -.99%
HMO's -1.85%
Other
Crude Oil 43.50 +1.71%
Natural Gas 6.15 .49%
Gold 393.30 +.90%
Base Metals 112.13 +1.15%
U.S. Dollar 89.92 -.02%
10-Yr. T-note Yield 4.48% -2.07%
VIX 15.49 -1.21%
Put/Call .60 -6.25%
NYSE Arms 1.51 +64.13%
Market Movers
APCC -13.1% after missing 2Q forecast and giving weaker outlook.
MGAM -25.0% after missing 3Q estimates and lowering 04 forecast.
KLAC +7.5% after meeting 4Q estimates, raising 1Q outlook and WR Hambrecht upgrade to Buy.
GILD +10.5% after beating 2Q estimates substantially.
VSEA +8.8%after meeting 3Q estimates, raising 4Q outlook and Bank of America upgrade to Neutral.
SWIR +8.1% as Piper Jaffray reiterated Outperform after meeting with management.
CYTC +8.5% after beating 2Q estimates and making positive comments.
IRF +7.3% after CEO made positive comments on CNBC.
ACAP +14.2% after substantially beating 2Q estimates and multiple upgrades.
VAS -17.3% on weaker-than-expected 2Q, multiple downgrades and executive resignations.
SYNA -13.6% after meeting 4Q estimates, but lowering 1Q forcast.
PHS -9.3% after beating 2Q estimates, but poor earnings quality.
TGI -9.2% after missing 2Q earnings estimates.
Economic Data
Advance 2Q Gross Domestic Product rose 3.0% versus expectations of a 3.7% rise and an upwardly revised 4.5% increase in 1Q.
Advance 2Q Personal Consumption rose 1.0% versus expectations of a 2.0% increase and an upwardly revised 4.1% increase in 1Q.
Advance 2Q GDP Price Deflator rose 3.2% versus estimates of a 3.0% rise and a downwardly revised 2.7% increase in 1Q.
Final Univ. of Mich. Consumer Confidence for July was 96.7 versus estimates of 96.2 and a reading of 96.0 prior.
Chicago Purchasing Manager report for July was 64.7 versus estimates of 60.0 and 56.4 in June.
Recommendations
Goldman Sachs reiterated Outperform on SYMC, DOW, BSX, CMX, AMIS, LIZ and MSFT. Goldman reiterated Underperform on KZL. Citi SmithBarney reiterated Buy on MWD, target $72. Citi reiterated Buy on BHI, target $50. Citi reiterated Buy on ACGL, target $48. Citi reiterated Buy on SPF, target $90. Citi reiterated Buy on BC, target $49. Citi reiterated Buy on BZH, target $174. Citi reiterated Sell on XOM, target $40.50. Citi reiterated Buy on BG, target $50. Citi reiterated Buy on UNH, target $86. DNR cut to Sector Underperform by CIBC. VAS cut to Sector Underperform by CIBC. KSS raised to Overweight at Prudential, target $53. JWN cut to Underweight at Prudential, target $45. GNTX raised to Overweight at Prudential, target $40. ITMN cut to Sell at Legg Mason. XMSR rated Buy at Bank of America, target $32. CVD raised to Outpeform at Bear Stearns, target $51. NILE raised to Buy at Merrill, target $36. HE cut to Sell at Merrill.
Mid-day News
U.S. stocks are mostly higher today on stronger earnings reports, falling interest rates and short covering. Spirit Air, the biggest privately owned U.S. airline, is lowering its prices in a bid to prevent JetBlue Air from grabbing customers when it starts flights from New York's LaGuardia airport to Florida in September, Bloomberg reported. The Sarbanes-Oxley Law, passed two years ago today, has made investors more confident about the accuracy of the financial information they receive from companies, Nasdaq Chief Executive Bob Greifeld wrote in the Wall Street Journal. The U.S. FBI warned police throughout the western U.S. that al-Qaeda terrorists may be planning to strike in California or New Mexico, the LA Times reported. Procter & Gamble may report its biggest quarterly earning gain in two years, on Monday, bolstered by acquisitions and surging sales in developing countries such as China, Bloomberg said. The U.S. economy grew at a 3% annual rate from April through June, less than forecast, Bloomberg reported. The Chicago Purchasing Manager report rebounded sharply in June to 64.7, near May's 16-year high reading of 68.0, Bloomberg reported. Bristol-Myers Squibb, the biggest maker of AIDS drugs, agreed to pay $300 million to settle a class-action lawsuit related to its wholesaler inventory practices, accounting and partnership with ImClone Systems, Bloomberg reported. Crude oil in New York rose to a record for the second time this week on concern that supply from the world's top exporters will be disrupted as fuel consumption surges, Bloomberg said.
BOTTOM LINE: The Portfolio is substantially higher today on strength in my internet, semi-equipment and alternative energy longs. I have not traded today and the Portfolio is still 125% net long. Anti-business political rhetoric and rising energy prices are restraining today's market. While GDP was weaker-than expected, I continue to believe that the slowdown is just a pause that refreshes and economic growth will accelerate in the near future. Signs of this are already appearing as evidenced by today's very strong Chicago Purchasing Manager's report. I expect U.S. stocks to remain mixed into the close as the spiking Arms Index and falling interest rates offset the negatives.
NASDAQ 1,892.74 +.62%
Leading Sectors
Broadcasting +2.21%
Semis +1.80%
Disk Drives +1.59%
Lagging Sectors
Airlines -.93%
Telecom -.99%
HMO's -1.85%
Other
Crude Oil 43.50 +1.71%
Natural Gas 6.15 .49%
Gold 393.30 +.90%
Base Metals 112.13 +1.15%
U.S. Dollar 89.92 -.02%
10-Yr. T-note Yield 4.48% -2.07%
VIX 15.49 -1.21%
Put/Call .60 -6.25%
NYSE Arms 1.51 +64.13%
Market Movers
APCC -13.1% after missing 2Q forecast and giving weaker outlook.
MGAM -25.0% after missing 3Q estimates and lowering 04 forecast.
KLAC +7.5% after meeting 4Q estimates, raising 1Q outlook and WR Hambrecht upgrade to Buy.
GILD +10.5% after beating 2Q estimates substantially.
VSEA +8.8%after meeting 3Q estimates, raising 4Q outlook and Bank of America upgrade to Neutral.
SWIR +8.1% as Piper Jaffray reiterated Outperform after meeting with management.
CYTC +8.5% after beating 2Q estimates and making positive comments.
IRF +7.3% after CEO made positive comments on CNBC.
ACAP +14.2% after substantially beating 2Q estimates and multiple upgrades.
VAS -17.3% on weaker-than-expected 2Q, multiple downgrades and executive resignations.
SYNA -13.6% after meeting 4Q estimates, but lowering 1Q forcast.
PHS -9.3% after beating 2Q estimates, but poor earnings quality.
TGI -9.2% after missing 2Q earnings estimates.
Economic Data
Advance 2Q Gross Domestic Product rose 3.0% versus expectations of a 3.7% rise and an upwardly revised 4.5% increase in 1Q.
Advance 2Q Personal Consumption rose 1.0% versus expectations of a 2.0% increase and an upwardly revised 4.1% increase in 1Q.
Advance 2Q GDP Price Deflator rose 3.2% versus estimates of a 3.0% rise and a downwardly revised 2.7% increase in 1Q.
Final Univ. of Mich. Consumer Confidence for July was 96.7 versus estimates of 96.2 and a reading of 96.0 prior.
Chicago Purchasing Manager report for July was 64.7 versus estimates of 60.0 and 56.4 in June.
Recommendations
Goldman Sachs reiterated Outperform on SYMC, DOW, BSX, CMX, AMIS, LIZ and MSFT. Goldman reiterated Underperform on KZL. Citi SmithBarney reiterated Buy on MWD, target $72. Citi reiterated Buy on BHI, target $50. Citi reiterated Buy on ACGL, target $48. Citi reiterated Buy on SPF, target $90. Citi reiterated Buy on BC, target $49. Citi reiterated Buy on BZH, target $174. Citi reiterated Sell on XOM, target $40.50. Citi reiterated Buy on BG, target $50. Citi reiterated Buy on UNH, target $86. DNR cut to Sector Underperform by CIBC. VAS cut to Sector Underperform by CIBC. KSS raised to Overweight at Prudential, target $53. JWN cut to Underweight at Prudential, target $45. GNTX raised to Overweight at Prudential, target $40. ITMN cut to Sell at Legg Mason. XMSR rated Buy at Bank of America, target $32. CVD raised to Outpeform at Bear Stearns, target $51. NILE raised to Buy at Merrill, target $36. HE cut to Sell at Merrill.
Mid-day News
U.S. stocks are mostly higher today on stronger earnings reports, falling interest rates and short covering. Spirit Air, the biggest privately owned U.S. airline, is lowering its prices in a bid to prevent JetBlue Air from grabbing customers when it starts flights from New York's LaGuardia airport to Florida in September, Bloomberg reported. The Sarbanes-Oxley Law, passed two years ago today, has made investors more confident about the accuracy of the financial information they receive from companies, Nasdaq Chief Executive Bob Greifeld wrote in the Wall Street Journal. The U.S. FBI warned police throughout the western U.S. that al-Qaeda terrorists may be planning to strike in California or New Mexico, the LA Times reported. Procter & Gamble may report its biggest quarterly earning gain in two years, on Monday, bolstered by acquisitions and surging sales in developing countries such as China, Bloomberg said. The U.S. economy grew at a 3% annual rate from April through June, less than forecast, Bloomberg reported. The Chicago Purchasing Manager report rebounded sharply in June to 64.7, near May's 16-year high reading of 68.0, Bloomberg reported. Bristol-Myers Squibb, the biggest maker of AIDS drugs, agreed to pay $300 million to settle a class-action lawsuit related to its wholesaler inventory practices, accounting and partnership with ImClone Systems, Bloomberg reported. Crude oil in New York rose to a record for the second time this week on concern that supply from the world's top exporters will be disrupted as fuel consumption surges, Bloomberg said.
BOTTOM LINE: The Portfolio is substantially higher today on strength in my internet, semi-equipment and alternative energy longs. I have not traded today and the Portfolio is still 125% net long. Anti-business political rhetoric and rising energy prices are restraining today's market. While GDP was weaker-than expected, I continue to believe that the slowdown is just a pause that refreshes and economic growth will accelerate in the near future. Signs of this are already appearing as evidenced by today's very strong Chicago Purchasing Manager's report. I expect U.S. stocks to remain mixed into the close as the spiking Arms Index and falling interest rates offset the negatives.
Friday Watch
Earnings of Note
Company/Estimate
BOBJ/.17
CVX/2.72
NTE/.28
Splits
None of note.
Economic Data
Advance 2Q Gross Domestic Product estimated +3.7% versus +3.9% in 1Q.
Advance 2Q Personal Consumption estimated +2.0% versus +3.8% in 1Q.
Advance 2Q Price Deflator estimated +3.0% versus +2.9% in 1Q.
Final Univ. of Mich. Consumer Confidence reading for July estimated at 96.2 versus 96.0 in June.
Chicago Purchasing Manager for July estimated at 60.0 versus 56.4 in June.
Recommendations
Goldman Sachs reiterated Outperform rating on AHC, MUR, BC, KLAC, NOC, BHI, ISG, NFX, PXD, VLO and DVN. Goldman reiterated Underperform on PCO and MGM.
Late-Night News
Asian indices are higher on strong earnings reports from technology and industrial companies in the region. Microsoft may start its online music store by the end of August, allowing consumers to buy and download digital audio tracks to their computers, the Financial Times said on its Web site. China said it may use military force against Taiwan if island President Chen Shui-bian doesn't scrap plans to amend Taiwan's constitution and fails to endorse the "one-China" policy, China Daily reported. Less than half of the 5.3 million tickets for the Olympics in Athens have been sold, the Guardian said. Target agreed to sell its Mervyn's department store chain to an investment group for approximately $1.65 billion in cash, Bloomberg said.
Late-Night Trading
Asian Indices are +1.0% to +1.5% on average.
S&P 500 indicated +.12%.
NASDAQ 100 indicated +.14%
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on the end of the Democratic Convention with no terror attacks, better economic reports and short covering. However, rising oil prices and anti-business political rhetoric will likely hold any rally in check. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
BOBJ/.17
CVX/2.72
NTE/.28
Splits
None of note.
Economic Data
Advance 2Q Gross Domestic Product estimated +3.7% versus +3.9% in 1Q.
Advance 2Q Personal Consumption estimated +2.0% versus +3.8% in 1Q.
Advance 2Q Price Deflator estimated +3.0% versus +2.9% in 1Q.
Final Univ. of Mich. Consumer Confidence reading for July estimated at 96.2 versus 96.0 in June.
Chicago Purchasing Manager for July estimated at 60.0 versus 56.4 in June.
Recommendations
Goldman Sachs reiterated Outperform rating on AHC, MUR, BC, KLAC, NOC, BHI, ISG, NFX, PXD, VLO and DVN. Goldman reiterated Underperform on PCO and MGM.
Late-Night News
Asian indices are higher on strong earnings reports from technology and industrial companies in the region. Microsoft may start its online music store by the end of August, allowing consumers to buy and download digital audio tracks to their computers, the Financial Times said on its Web site. China said it may use military force against Taiwan if island President Chen Shui-bian doesn't scrap plans to amend Taiwan's constitution and fails to endorse the "one-China" policy, China Daily reported. Less than half of the 5.3 million tickets for the Olympics in Athens have been sold, the Guardian said. Target agreed to sell its Mervyn's department store chain to an investment group for approximately $1.65 billion in cash, Bloomberg said.
Late-Night Trading
Asian Indices are +1.0% to +1.5% on average.
S&P 500 indicated +.12%.
NASDAQ 100 indicated +.14%
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on the end of the Democratic Convention with no terror attacks, better economic reports and short covering. However, rising oil prices and anti-business political rhetoric will likely hold any rally in check. The Portfolio is 125% net long heading into tomorrow.
Thursday, July 29, 2004
Thursday Close
S&P 500 1,100.43 +.46%
NASDAQ 1,881.06 +1.23%
Leading Sectors
HMO's +4.0%
Airlines +2.93%
Semis +2.93%
Lagging Sectors
Restaurants -.29%
Consumer -.35%
Iron/Steel -2.71%
Other
Crude Oil 42.90 +.35%
Natural Gas 6.18 unch.
Gold 390.50 +.18%
Base Metals 110.86 +.70%
U.S. Dollar 89.95 +.22%
10-Yr. T-note Yield 4.57% -.22%
VIX 15.68 -2.91%
Put/Call .64 -4.48%
NYSE Arms .92 -17.86%
After-hours Movers
AIRT +9.20% on continued rise after reporting strong 1Q results.
GILD +6.81% after beating 2Q estimates substantially.
ISIL +4.68% after slightly missing 2Q estimates, but maintaining 3Q forecast.
MGAM -26.2% after missing 3Q estimates and lowering 04 forecast.
APCC -12.9% after missing 2Q forecast and giving weaker outlook.
SYNA -11.6% after meeting 4Q estimates, but lowering 1Q forcast.
THQI -10.5% after missing 1Q estimates and lowering 2Q outlook.
FLML -6.58% after disappointing 2Q report.
Recommendations
Goldman Sachs reiterated Underperform on MKL, CNA and DUK. Goldman reiterated Outperform on AIG, AHC, XOM and AFL. MGI Pharma's(MOGN) drugs that are taken by caner patients to alleviate the side effects of treatment will help further boost the company's sales, Business Week reported. Albertson's(ABS) share price may more than double to $51 in the next 12 to 18 months, Business Week said. Audible(ADBL), a provider of audio books, magazines and newspapers on the Internet, will benefit as more readers flock to its service, Business Week reported.
After-hours News
U.S. stocks finished higher today on stabilizing oil prices, stronger earnings reports and short covering. After the close, the U.S. Supreme Court is expected to rule that Visa and MasterCard cannot ban banks from issuing other credit cards, allowing American Express to distribute bank-issued cards, Business Week reported. Boston Scientific's Taxus stent, which was recalled after being linking to three deaths and 43 serious injuries, will be used again at Brigham & Women's Hospital, on of several large hospitals to suspend use of the device, the Wall Street Journal reported. Senator Kerry's supporters in the U.S. presidential election are challenging Ralph Nader's candidacy in some states and hired Vermont Governor Howard Dean to help persuade voters not to support him, Business Week said. Some hedge fund managers have been informed they have been barred from bidding for shares through the retail portion of Google's IPO, Dow Jones reported. Janus Capital said a client plans to withdraw $5 billion in funds, Bloomberg reported. Intel delayed the release of a faster version of its Pentium desktop processor until next year, Bloomberg said.
BOTTOM LINE: The Portfolio finished substantially higher today as several of my technology longs increased significantly. I did not trade in the afternoon and the Portfolio is still 125% net long. The tone of the market was pretty good today as several sectors saw good gains and the advance/decline line was strong in the face of stubbornly high oil prices. U.S. stocks should see more gains in the near-term. A pull-back in energy could turn the recent rally into something more substantial. However, weakness will likely resurface in the coming weeks on the same worries that have recently plagued shares.
NASDAQ 1,881.06 +1.23%
Leading Sectors
HMO's +4.0%
Airlines +2.93%
Semis +2.93%
Lagging Sectors
Restaurants -.29%
Consumer -.35%
Iron/Steel -2.71%
Other
Crude Oil 42.90 +.35%
Natural Gas 6.18 unch.
Gold 390.50 +.18%
Base Metals 110.86 +.70%
U.S. Dollar 89.95 +.22%
10-Yr. T-note Yield 4.57% -.22%
VIX 15.68 -2.91%
Put/Call .64 -4.48%
NYSE Arms .92 -17.86%
After-hours Movers
AIRT +9.20% on continued rise after reporting strong 1Q results.
GILD +6.81% after beating 2Q estimates substantially.
ISIL +4.68% after slightly missing 2Q estimates, but maintaining 3Q forecast.
MGAM -26.2% after missing 3Q estimates and lowering 04 forecast.
APCC -12.9% after missing 2Q forecast and giving weaker outlook.
SYNA -11.6% after meeting 4Q estimates, but lowering 1Q forcast.
THQI -10.5% after missing 1Q estimates and lowering 2Q outlook.
FLML -6.58% after disappointing 2Q report.
Recommendations
Goldman Sachs reiterated Underperform on MKL, CNA and DUK. Goldman reiterated Outperform on AIG, AHC, XOM and AFL. MGI Pharma's(MOGN) drugs that are taken by caner patients to alleviate the side effects of treatment will help further boost the company's sales, Business Week reported. Albertson's(ABS) share price may more than double to $51 in the next 12 to 18 months, Business Week said. Audible(ADBL), a provider of audio books, magazines and newspapers on the Internet, will benefit as more readers flock to its service, Business Week reported.
After-hours News
U.S. stocks finished higher today on stabilizing oil prices, stronger earnings reports and short covering. After the close, the U.S. Supreme Court is expected to rule that Visa and MasterCard cannot ban banks from issuing other credit cards, allowing American Express to distribute bank-issued cards, Business Week reported. Boston Scientific's Taxus stent, which was recalled after being linking to three deaths and 43 serious injuries, will be used again at Brigham & Women's Hospital, on of several large hospitals to suspend use of the device, the Wall Street Journal reported. Senator Kerry's supporters in the U.S. presidential election are challenging Ralph Nader's candidacy in some states and hired Vermont Governor Howard Dean to help persuade voters not to support him, Business Week said. Some hedge fund managers have been informed they have been barred from bidding for shares through the retail portion of Google's IPO, Dow Jones reported. Janus Capital said a client plans to withdraw $5 billion in funds, Bloomberg reported. Intel delayed the release of a faster version of its Pentium desktop processor until next year, Bloomberg said.
BOTTOM LINE: The Portfolio finished substantially higher today as several of my technology longs increased significantly. I did not trade in the afternoon and the Portfolio is still 125% net long. The tone of the market was pretty good today as several sectors saw good gains and the advance/decline line was strong in the face of stubbornly high oil prices. U.S. stocks should see more gains in the near-term. A pull-back in energy could turn the recent rally into something more substantial. However, weakness will likely resurface in the coming weeks on the same worries that have recently plagued shares.
Mid-day Update
S&P 500 1,100.47 +.46%
NASDAQ 1,879.44 +1.14%
Leading Sectors
HMO's +3.66%
Airlines +3.41%
Semis +3.22%
Lagging Sectors
Consumer -.31%
Foods -.32%
Iron/Steel -3.74%
Other
Crude Oil 42.72 -.42%
Natural Gas 6.19 +.78%
Gold 390.30 -.38%
Base Metals 110.86 +.70%
U.S. Dollar 89.90 +.17%
10-Yr. T-note Yield 4.57% -.35%
VIX 15.71 -2.72%
Put/Call .63 -5.97%
NYSE Arms .94 -15.18%
Market Movers
ESRX -11.9% after the company said 19 states are investigating its business practices.
CCE -15.5% after missing 2Q estimates and giving weak guidance.
MVL -14.3% after beating 2Q estimates and giving weaker guidance.
TARO -22.6% after disappointing 2Q results.
INSP +28.5% after substantially beating 2Q estimates, raising 3Q/04 guidance and multiple upgrades.
SFNT +21.7% after beating 2Q estimates and raising 3Q/04 outlook.
ALDA +21.3% after better-than-expected 2Q.
OCLR +19.3% after announcing it is being acquired by COO for about $1.2B.
LAVA +21.8% after beating 1Q estimates, raising 2Q guidance and authorizing 1M share buyback.
PRX +17.7% on better-than-expected 2Q.
EQIX +13.2% after beating 2Q estimates and raising 3Q guidance.
BC +10.5% after beating 2Q estimates and raising 3Q forecast.
KKD -10.8% after saying the SEC is investigating how the company accounted for the repurchase of franchises and earnings forecasts.
FCN -10.6% after meeting 2Q estimates, but lowering 3Q/04 outlook.
ULBI -18.4% on profit-taking after beating 2Q estimates and maintaining 04 outlook.
Economic Data
2Q Employment Cost Index rose .9% versus expectations of a .9% rise and a 1.1% rise in 1Q.
Initial Jobless Claims last week rose to 345K versus estimates of 340K and an upwardly revised 341K prior week.
Continuing Claims were 2960K versus estimates of 2875K and a downwardly revised 2786K prior.
Help Wanted Index for June was 38 versus estimates of 40 and a reading of 39 in May.
Recommendations
Goldman Sachs reiterated Underperform on KMG, CAN, BMY, MKL, LVLT, TCO, EDS and GSIC. Goldman reiterated Outperform on NEM, ISG, BC, BHI, CMX, MDT, GDT, SPG and BIIB. Goldman's IT survey leads them to believe a trading bottom is near in tech. Goldman downgraded GM to Underperform. Citi SmithBarney said to Buy RJR now, target $77. Citi reiterated Buy on TYC, target $38. Citi reiterated Buy on IGT, target $50. Citi reiterated Buy on RCL, target $52. Citi reiterated Buy on EEFT, target $23. Citi reiterated Buy on CAM, target $63. Citi reiterated Buy on APD, target $57. Citi reiterated Buy on RSG, target $35. Citi reiterated Buy on SRCL, target $56. Citi reiterated Buy on QSFT, target $16. Citi reiterated Buy on WFR, target $14. Citi reiterated Buy on ACLS, target $15. Citi reiterated Buy on NEM, target $50. Citi reiterated Buy on SSI, target $54. CENX raised to Overweight at JP Morgan. BLDP raised to Buy at UBS, target $9. YHOO rated Sector Outperform at CIBC, target $36. IBM rated Outperform at CSFB, target $100. GPS rated Outperform at CSFB, target $27. GTK cut to Underperform at Morgan Stanley. NILE raised to Outperform at Bear Stearns, target $37.
Mid-day News
U.S. stocks are rising mid-day on strength in technology shares, stronger earnings reports and a slight decline in oil prices. Apria Healthcare(AHC), which provides respiratory therapy and home medical equipment, is considering a sale of the company, the NY Post reported. China imported 2.08 million tons of flat steel products in June, or 35% less than a year ago, the Tex Report said. Canada stepped up security at the U.S. border, searching travelers leaving the country over concern about the possibility of a terrorist attack on the Democratic Convention, the National Post reported. Two computer glitches at CIBC led to account errors for more than 66,000 clients at Canada's third-largest bank, the Toronto Star reported. California Pizza Kitchen founders Rosenfield and Flax, who regained control of the pizza chain a year ago, plan to open new outlets and will redesign stores to attract bigger dinner crowds, the LA Times reported. The Saudi Arabian government agreed to give $1 billion in aid to Iraq, Sky News said. LA County property assessments rose 7.6% in 2003 to a record high of $781 billion as of Jan. 1, the LA Times reported. Fortune Brands's Jim Beam unit and Starbucks will introduce next week a liqueur combining the companies' bourbon and coffee, the Rocky Mountain News reported. California's Fremont Police Dept. is acquiring stun guns made by Taser, and expects the weapons to be in use by Sept., the San Jose Mercury News reported. Crude oil prices are falling after Russia's Justice Ministry said OAO Yukos Oil can keep producing and selling oil, Bloomberg reported.
BOTTOM LINE: The Portfolio is substantially higher today on strength in my technology longs. I added a few new longs this morning, bringing the Portfolio's market exposure to 125% net long. One of my new longs is ANDW and I am keeping a $10.25 stop-loss on this position. I expect U.S. stocks to remain near current levels into the afternoon. However, tomorrow should see another positive day with the end of the Democratic Convention without terror attacks, better-than-expected economic reports and short-covering.
NASDAQ 1,879.44 +1.14%
Leading Sectors
HMO's +3.66%
Airlines +3.41%
Semis +3.22%
Lagging Sectors
Consumer -.31%
Foods -.32%
Iron/Steel -3.74%
Other
Crude Oil 42.72 -.42%
Natural Gas 6.19 +.78%
Gold 390.30 -.38%
Base Metals 110.86 +.70%
U.S. Dollar 89.90 +.17%
10-Yr. T-note Yield 4.57% -.35%
VIX 15.71 -2.72%
Put/Call .63 -5.97%
NYSE Arms .94 -15.18%
Market Movers
ESRX -11.9% after the company said 19 states are investigating its business practices.
CCE -15.5% after missing 2Q estimates and giving weak guidance.
MVL -14.3% after beating 2Q estimates and giving weaker guidance.
TARO -22.6% after disappointing 2Q results.
INSP +28.5% after substantially beating 2Q estimates, raising 3Q/04 guidance and multiple upgrades.
SFNT +21.7% after beating 2Q estimates and raising 3Q/04 outlook.
ALDA +21.3% after better-than-expected 2Q.
OCLR +19.3% after announcing it is being acquired by COO for about $1.2B.
LAVA +21.8% after beating 1Q estimates, raising 2Q guidance and authorizing 1M share buyback.
PRX +17.7% on better-than-expected 2Q.
EQIX +13.2% after beating 2Q estimates and raising 3Q guidance.
BC +10.5% after beating 2Q estimates and raising 3Q forecast.
KKD -10.8% after saying the SEC is investigating how the company accounted for the repurchase of franchises and earnings forecasts.
FCN -10.6% after meeting 2Q estimates, but lowering 3Q/04 outlook.
ULBI -18.4% on profit-taking after beating 2Q estimates and maintaining 04 outlook.
Economic Data
2Q Employment Cost Index rose .9% versus expectations of a .9% rise and a 1.1% rise in 1Q.
Initial Jobless Claims last week rose to 345K versus estimates of 340K and an upwardly revised 341K prior week.
Continuing Claims were 2960K versus estimates of 2875K and a downwardly revised 2786K prior.
Help Wanted Index for June was 38 versus estimates of 40 and a reading of 39 in May.
Recommendations
Goldman Sachs reiterated Underperform on KMG, CAN, BMY, MKL, LVLT, TCO, EDS and GSIC. Goldman reiterated Outperform on NEM, ISG, BC, BHI, CMX, MDT, GDT, SPG and BIIB. Goldman's IT survey leads them to believe a trading bottom is near in tech. Goldman downgraded GM to Underperform. Citi SmithBarney said to Buy RJR now, target $77. Citi reiterated Buy on TYC, target $38. Citi reiterated Buy on IGT, target $50. Citi reiterated Buy on RCL, target $52. Citi reiterated Buy on EEFT, target $23. Citi reiterated Buy on CAM, target $63. Citi reiterated Buy on APD, target $57. Citi reiterated Buy on RSG, target $35. Citi reiterated Buy on SRCL, target $56. Citi reiterated Buy on QSFT, target $16. Citi reiterated Buy on WFR, target $14. Citi reiterated Buy on ACLS, target $15. Citi reiterated Buy on NEM, target $50. Citi reiterated Buy on SSI, target $54. CENX raised to Overweight at JP Morgan. BLDP raised to Buy at UBS, target $9. YHOO rated Sector Outperform at CIBC, target $36. IBM rated Outperform at CSFB, target $100. GPS rated Outperform at CSFB, target $27. GTK cut to Underperform at Morgan Stanley. NILE raised to Outperform at Bear Stearns, target $37.
Mid-day News
U.S. stocks are rising mid-day on strength in technology shares, stronger earnings reports and a slight decline in oil prices. Apria Healthcare(AHC), which provides respiratory therapy and home medical equipment, is considering a sale of the company, the NY Post reported. China imported 2.08 million tons of flat steel products in June, or 35% less than a year ago, the Tex Report said. Canada stepped up security at the U.S. border, searching travelers leaving the country over concern about the possibility of a terrorist attack on the Democratic Convention, the National Post reported. Two computer glitches at CIBC led to account errors for more than 66,000 clients at Canada's third-largest bank, the Toronto Star reported. California Pizza Kitchen founders Rosenfield and Flax, who regained control of the pizza chain a year ago, plan to open new outlets and will redesign stores to attract bigger dinner crowds, the LA Times reported. The Saudi Arabian government agreed to give $1 billion in aid to Iraq, Sky News said. LA County property assessments rose 7.6% in 2003 to a record high of $781 billion as of Jan. 1, the LA Times reported. Fortune Brands's Jim Beam unit and Starbucks will introduce next week a liqueur combining the companies' bourbon and coffee, the Rocky Mountain News reported. California's Fremont Police Dept. is acquiring stun guns made by Taser, and expects the weapons to be in use by Sept., the San Jose Mercury News reported. Crude oil prices are falling after Russia's Justice Ministry said OAO Yukos Oil can keep producing and selling oil, Bloomberg reported.
BOTTOM LINE: The Portfolio is substantially higher today on strength in my technology longs. I added a few new longs this morning, bringing the Portfolio's market exposure to 125% net long. One of my new longs is ANDW and I am keeping a $10.25 stop-loss on this position. I expect U.S. stocks to remain near current levels into the afternoon. However, tomorrow should see another positive day with the end of the Democratic Convention without terror attacks, better-than-expected economic reports and short-covering.
Thursday Watch
Earnings of Note
Company/Estimate
ADPT/.04
AET/1.66
APCC/.19
BZH/4.06
BHI/.31
BMY/.39
CMX/.30
CNXT/.02
COX/.11
XOM/.88
GP/.92
G/.41
IM/.15
IRF/.51
KLAC/.45
LIZ/.43
MGAM/.33
NOC/.75
PTEN/.14
THQI/.11
Splits
None of note.
Economic Data
2Q Employment Cost Index estimated +.9% versus +1.1% in 1Q.
Initial Jobless Claims for last week estimated at 340K versus 339K prior week.
Continuing Claims estimated at 2875K versus 2797K prior.
Help Wanted Index for June estimated at 40 versus 39 in May.
Recommendations
Goldman Sachs reiterated Outperform on PFGC, ROH, AFL, MUR, PPL, SBC and NFX. Goldman Sachs reiterated Underperform on ACAI and JDSU.
Late-Night News
Asian indices are mostly lower on weakness in technology shares. Goldman Sachs won approval from the Chinese government to start a local investment banking venture, becoming the first overseas firm allowed to arrange bond and stock sales through a business it controls, the Financial Times reported. Siemens AG, Germany's biggest engineering company, set internal targets to increase U.S. sales by up to $2.5 billion in a 30 months strategy, the Financial Times said. ATI Technologies will increase computer-chip orders at Taiwan Semiconductor Manufacturing and United Microelectronics on expectations of sales growth in the second half of this year, the Commercial Times reported. China is willing to risk damage to its economic growth and the failure of the 2008 Beijing Olympics if it needs to take action to prevent Taiwan from declaring its independence, China Daily reported. Time Warner's International Cinemas teamed up with a third partner in China to tap the growing market for movie entertainment, Oriental Morning Post reported. Cooper Companies, which makes surgical instruments, agreed to purchase Ocular Sciences for about $1.2 billion to become the world's third-largest maker of contact lenses, Bloomberg said.
Late-Night Trading
Asian Indices are -1.25% to unch. on average.
S&P 500 indicated -.15%.
NASDAQ 100 indicated -.07%
BOTTOM LINE: I expect U.S. stocks to open modestly lower in the morning on weakness in Asia and anti-business political rhetoric. I continue to believe the major indices are in the midst of an oversold tradable rally. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
ADPT/.04
AET/1.66
APCC/.19
BZH/4.06
BHI/.31
BMY/.39
CMX/.30
CNXT/.02
COX/.11
XOM/.88
GP/.92
G/.41
IM/.15
IRF/.51
KLAC/.45
LIZ/.43
MGAM/.33
NOC/.75
PTEN/.14
THQI/.11
Splits
None of note.
Economic Data
2Q Employment Cost Index estimated +.9% versus +1.1% in 1Q.
Initial Jobless Claims for last week estimated at 340K versus 339K prior week.
Continuing Claims estimated at 2875K versus 2797K prior.
Help Wanted Index for June estimated at 40 versus 39 in May.
Recommendations
Goldman Sachs reiterated Outperform on PFGC, ROH, AFL, MUR, PPL, SBC and NFX. Goldman Sachs reiterated Underperform on ACAI and JDSU.
Late-Night News
Asian indices are mostly lower on weakness in technology shares. Goldman Sachs won approval from the Chinese government to start a local investment banking venture, becoming the first overseas firm allowed to arrange bond and stock sales through a business it controls, the Financial Times reported. Siemens AG, Germany's biggest engineering company, set internal targets to increase U.S. sales by up to $2.5 billion in a 30 months strategy, the Financial Times said. ATI Technologies will increase computer-chip orders at Taiwan Semiconductor Manufacturing and United Microelectronics on expectations of sales growth in the second half of this year, the Commercial Times reported. China is willing to risk damage to its economic growth and the failure of the 2008 Beijing Olympics if it needs to take action to prevent Taiwan from declaring its independence, China Daily reported. Time Warner's International Cinemas teamed up with a third partner in China to tap the growing market for movie entertainment, Oriental Morning Post reported. Cooper Companies, which makes surgical instruments, agreed to purchase Ocular Sciences for about $1.2 billion to become the world's third-largest maker of contact lenses, Bloomberg said.
Late-Night Trading
Asian Indices are -1.25% to unch. on average.
S&P 500 indicated -.15%.
NASDAQ 100 indicated -.07%
BOTTOM LINE: I expect U.S. stocks to open modestly lower in the morning on weakness in Asia and anti-business political rhetoric. I continue to believe the major indices are in the midst of an oversold tradable rally. The Portfolio is 100% net long heading into tomorrow.
Subscribe to:
Posts (Atom)