S&P 500 1,118.31 +1.12%
NASDAQ 1,873.43 +1.24%
Leading Sectors
Retail +2.74%
Disk Drives +2.46%
Airlines +2.31%
Lagging Sectors
Homebuilders +.23%
Hospitals +.12%
Oil Service -.04%
Other
Crude Oil 44.28 +.50%
Natural Gas 4.77 +.02%
Gold 408.20 +.05%
Base Metals 106.95 -1.14%
U.S. Dollar 88.93 -.08%
10-Yr. T-note Yield 4.21% +2.39%
VIX 14.28 -4.23%
Put/Call .93 -10.58%
NYSE Arms .46 -52.08%
After-hours Movers
INTC -7.63% after lowering 3Q revenue and gross margin forecasts.
*Semis and Semi-equipment down across the board on Intel report.
Recommendations
Goldman Sachs reiterated Outperform on CAL and PFE. Goldman reiterated Underperform on PSS. RAE Systems'(RAE) recent decline in its share price makes the stock an attractive buy, Business Week reported. Shares of Washington Mutual(WM) may jump 13% within 12 months as the company, whose mortgage business was cut by rising interest rates, reduces costs, Business Week reported. Chubb Corp.(CBB) shares are undervalued in spite of the risk to insurance stocks because of the hurricane season, Business Week reported.
After-hours News
U.S. stocks finished higher today as an afternoon decline in oil prices spurred investor optimism. After the close, Lehman Brothers Holdings offered to pay as much as $1.4 billion for Cazenove Group, the U.K.'s oldest independent broker, the Financial Times reported. For Allstate, Hartford Financial landfall of Hurricane Frances, billions of dollars in claims hang on a 50-mile shift in the storm's path, Bloomberg reported. President Bush tonight will call for changes in the nation's tax, health care, pension and job-training systems as he lays out a second-term agenda in which he pledges to make the country safer and help the economy, Bloomberg reported. Pfizer, the world's largest drug-maker said U.S. regulators requested more information before approving its pain and seizure drug Lyrica for three conditions and rejected the medicine for a fourth use, Bloomberg reported. Intel cut its forecasts for third-quarter revenue and profit margins as growth in personal computer sales slows, Bloomberg said. Pfizer said it sued 18 Internet sites for selling unapproved and illegal copies of its best-selling cholesterol drug Lipitor, Bloomberg reported. Chartered Semi Manufacturing, the world's third-largest provider of made-to-order semiconductors, stuck to its forecast for third-quarter earnings, Bloomberg reported. Low-carb diets as the one popularized by nutrition guru Robert Atkins lose their advantages over other diets within a year, a Lancet study said.
BOTTOM LINE: The Portfolio finished higher today on strength in my internet, healthcare and telecom equipment longs. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. The tone of the market was pretty good today, but not great. Considering the gains, I would have liked to see better volume and stronger breadth. Intel's report is being received more negatively than I anticipated after-hours. However, forward-looking investors will likely buy shares on the lower open tomorrow and push the stock higher throughout the day. The employment report will likely be better than last month, but fail to meet expectations due to Hurricane Charley. Most investors will view President Bush's speech favorably. I will wait until tomorrow afternoon to decide whether or not to cut back market exposure.
Thursday, September 02, 2004
Mid-day Update
S&P 500 1,107.75 +.16%
NASDAQ 1,854.74 +.23%
Leading Sectors
Retail +1.36%
Broadcasting +1.33%
Foods +.73%
Lagging Sectors
Restaurants -.55%
Semis -.59%
Homebuilders -.66%
Other
Crude Oil 45.0 +2.34%
Natural Gas 4.91 -1.01%
Gold 408.80 -.49%
Base Metals 106.95 -1.14%
U.S. Dollar 88.96 +.10%
10-Yr. T-note Yield 4.17% +1.45%
VIX 14.91 unch.
Put/Call 1.02 -1.92%
NYSE Arms .88 -8.33%
Market Movers
TASR +14.2% on short squeeze.
GPS +5.1% on better-than-expected same-store-sales for August.
CHS -6.2% after disappointing August sales and muted guidance.
PLCE +11.8% after strong August sales report.
AEOS +5.8% after strong August sales, boosting 3Q guidance and initiating dividend.
MLI +8.2% after saying it will pay a one-time dividend of $6.50 in cash and $8.50 in 6% bonds for each share.
STGS +5.4% after strong August sales report.
ROST +8.3% after better-than-expected August sales and positive guidance.
VTS -15.3% after saying it will delay reporting fourth-quarter earnings as it reviews whether depreciation of equipment was accounted for properly.
ARO -3.6% after August sales didn't meet optimistic expectations.
Economic Data
Final 2Q Non-farm Productivity rose 2.5% versus estimates of a 2.7% gain and a prior estimate of 2.9%.
Final 2Q Unit Labor Costs rose 1.8% versus estimates of a 2.0% rise and a prior estimate of 1.9%.
Initial Jobless Claims for last week were 362K versus estimates of 340K and 343K the prior week.
Continuing Claims were 2882K versus estimates of 2880K and a downwardly revised 2887K prior.
Factory Orders for July rose 1.3% versus estimates of a 1.1% increase and an upwardly revised 1.2% gain in June.
Recommendations
Goldman Sachs reiterated Underperform on DPH, VTS and GM. Goldman reiterated Outperform on BSX, WMT, BBY, WAG and CAL. Citi SmithBarney reiterated Buy on CSGS, target $18.50. Legg Mason raised MCBI to Buy, target $18. Thomas Weisel reiterated Outperform on AUXL, target $12. AEOS raised to Sector Outperform at CIBC, target $46. MRO raised to Outperform at Morgan Stanley. SLB raised to Outperform at CSFB, target $76. NE raised to Outperform at CSFB, target $53. FST raised to Outperform at CSFB, target $38. AHC raised to Outperform at CSFB, target $93. WYNN raised to Buy at Bank of America, target $48. PAS cut to Underweight at JP Morgan. MOGN raised to Outperform at Bear Stearns.
Mid-day News
U.S. stocks are modestly higher mid-day on a better-than-expected economic report and declining domestic terrorism fears. Online job postings, as measured by the Monster Employment Index, showed a healthy gain in August, reversing the modest month-to-month decline seen in July, Bloomberg reported. Retired Army General Tommy Franks, who was commander in chief of the U.S. Central Command during the invasions of Iraq and Afghanistan, endorsed President Bush for re-election, the Washington Post reported. France implemented its ban on the Islamic headscarf and other "conspicuous" signs of religious belief in state schools for the first time today as classes resumed for the academic year, Agence France-Presse reported. Bank of America CEO said the company will move one of its four main units to Boston, the Boston Globe reported. News Corp.'s Fox News Channel drew a bigger audience than any of the U.S. broadcast networks for the first time ever during Tuesday's coverage of the Republican Convention, the LA Times reported. California's Richmond City Council voted to proceed with plans to sell Point Molate to a casino developer, a move that enraged opponents including ChevronTexaco, the San Francisco Chronicle said. Hurricane Frances struck the southeast Bahamas today and moved closer to Florida as hundreds of thousands of residents along the state's coast prepared to evacuate their homes, Bloomberg said. Terrorists holding more than 300 hostages at a school in southern Russia released some women and children soon after talks to end the crisis resumed, the North Ossetian government said. Crude oil is rising for a second day on reports of a pipeline fire in Iraq and after Russia's largest oil exporter, OAO Yukos Oil, said it may cut output, Bloomberg reported. Nortel said it won't have financial statements for last year and the first half of 2004 ready until the end of October, a month later than planned, Bloomberg said. U.S. factory orders beat economists' expectations, rising in July by the most in four months, reflecting increased demand for commercial aircraft, appliances and business equipment, Bloomberg reported.
BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my healthcare, internet and alternative energy longs are being offset by declines in my retail and RFID-related longs. I have not traded today and the Portfolio is still 125% net long. I expect U.S. stocks to rise modestly into the close in anticipation of pro-business political rhetoric, subsiding terrorism fears and short-covering.
NASDAQ 1,854.74 +.23%
Leading Sectors
Retail +1.36%
Broadcasting +1.33%
Foods +.73%
Lagging Sectors
Restaurants -.55%
Semis -.59%
Homebuilders -.66%
Other
Crude Oil 45.0 +2.34%
Natural Gas 4.91 -1.01%
Gold 408.80 -.49%
Base Metals 106.95 -1.14%
U.S. Dollar 88.96 +.10%
10-Yr. T-note Yield 4.17% +1.45%
VIX 14.91 unch.
Put/Call 1.02 -1.92%
NYSE Arms .88 -8.33%
Market Movers
TASR +14.2% on short squeeze.
GPS +5.1% on better-than-expected same-store-sales for August.
CHS -6.2% after disappointing August sales and muted guidance.
PLCE +11.8% after strong August sales report.
AEOS +5.8% after strong August sales, boosting 3Q guidance and initiating dividend.
MLI +8.2% after saying it will pay a one-time dividend of $6.50 in cash and $8.50 in 6% bonds for each share.
STGS +5.4% after strong August sales report.
ROST +8.3% after better-than-expected August sales and positive guidance.
VTS -15.3% after saying it will delay reporting fourth-quarter earnings as it reviews whether depreciation of equipment was accounted for properly.
ARO -3.6% after August sales didn't meet optimistic expectations.
Economic Data
Final 2Q Non-farm Productivity rose 2.5% versus estimates of a 2.7% gain and a prior estimate of 2.9%.
Final 2Q Unit Labor Costs rose 1.8% versus estimates of a 2.0% rise and a prior estimate of 1.9%.
Initial Jobless Claims for last week were 362K versus estimates of 340K and 343K the prior week.
Continuing Claims were 2882K versus estimates of 2880K and a downwardly revised 2887K prior.
Factory Orders for July rose 1.3% versus estimates of a 1.1% increase and an upwardly revised 1.2% gain in June.
Recommendations
Goldman Sachs reiterated Underperform on DPH, VTS and GM. Goldman reiterated Outperform on BSX, WMT, BBY, WAG and CAL. Citi SmithBarney reiterated Buy on CSGS, target $18.50. Legg Mason raised MCBI to Buy, target $18. Thomas Weisel reiterated Outperform on AUXL, target $12. AEOS raised to Sector Outperform at CIBC, target $46. MRO raised to Outperform at Morgan Stanley. SLB raised to Outperform at CSFB, target $76. NE raised to Outperform at CSFB, target $53. FST raised to Outperform at CSFB, target $38. AHC raised to Outperform at CSFB, target $93. WYNN raised to Buy at Bank of America, target $48. PAS cut to Underweight at JP Morgan. MOGN raised to Outperform at Bear Stearns.
Mid-day News
U.S. stocks are modestly higher mid-day on a better-than-expected economic report and declining domestic terrorism fears. Online job postings, as measured by the Monster Employment Index, showed a healthy gain in August, reversing the modest month-to-month decline seen in July, Bloomberg reported. Retired Army General Tommy Franks, who was commander in chief of the U.S. Central Command during the invasions of Iraq and Afghanistan, endorsed President Bush for re-election, the Washington Post reported. France implemented its ban on the Islamic headscarf and other "conspicuous" signs of religious belief in state schools for the first time today as classes resumed for the academic year, Agence France-Presse reported. Bank of America CEO said the company will move one of its four main units to Boston, the Boston Globe reported. News Corp.'s Fox News Channel drew a bigger audience than any of the U.S. broadcast networks for the first time ever during Tuesday's coverage of the Republican Convention, the LA Times reported. California's Richmond City Council voted to proceed with plans to sell Point Molate to a casino developer, a move that enraged opponents including ChevronTexaco, the San Francisco Chronicle said. Hurricane Frances struck the southeast Bahamas today and moved closer to Florida as hundreds of thousands of residents along the state's coast prepared to evacuate their homes, Bloomberg said. Terrorists holding more than 300 hostages at a school in southern Russia released some women and children soon after talks to end the crisis resumed, the North Ossetian government said. Crude oil is rising for a second day on reports of a pipeline fire in Iraq and after Russia's largest oil exporter, OAO Yukos Oil, said it may cut output, Bloomberg reported. Nortel said it won't have financial statements for last year and the first half of 2004 ready until the end of October, a month later than planned, Bloomberg said. U.S. factory orders beat economists' expectations, rising in July by the most in four months, reflecting increased demand for commercial aircraft, appliances and business equipment, Bloomberg reported.
BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my healthcare, internet and alternative energy longs are being offset by declines in my retail and RFID-related longs. I have not traded today and the Portfolio is still 125% net long. I expect U.S. stocks to rise modestly into the close in anticipation of pro-business political rhetoric, subsiding terrorism fears and short-covering.
Thursday Watch
Earnings of Note
Company/Estimate
DLM/.05
ESL/.49
MBG/1.03
SHFL/.24
Splits
CHD 3-for-2
Economic Data
Final 2Q Non-farm Productivity estimated up 2.7% versus an increase of 2.9% prior.
Final 2Q Unit Labor Costs estimated up 2.0% versus a rise of 1.9% prior.
Initial Jobless Claims estimated at 340K versus 343K the prior week.
Continuing Claims estimated at 2880K versus 2897K prior.
Recommendations
Goldman Sachs reiterated Outperform on FS and HOT.
Late-Night News
Asian indices are mixed as auto shares are falling and technology stocks are rising in the region. South Korea may extend the deployment of its troops in Iraq until the end of 2005, the Hankyoreh newspaper said. Intel will ask Samsung Electronics and other South Korean mobile-phone makers to buy some of its chips, the Electronic Times reported. South Korean steelmaker Posco plans to spend $662 million in the next four years to develop facilities and products that will save energy and cut costs as oil prices reach record highs, Yonhap News said. The Russell 2000 Index climbed 2.8% in the first 10 minutes of trading today as a large buy program generated by Morgan Stanley pushed shares higher, Bloomberg said. President Vicente Fox said exploration efforts in the Gulf of Mexico may help double the proven oil reserves in Mexico, the world's fifth-largest crude producer, Bloomberg reported. Boeing CEO Stonecipher wants the European Union to end a 1992 agreement that allows Airbus SAS, the world's biggest plane-maker, to benefit from government aid, the Guardian reported. Enron Corp. will seek bankruptcy court approval for a joint venture of Southern Union and General Electric to buy its U.S. natural-gas pipelines for $2.45 billion, Bloomberg said. An armed group is holding 354 hostages at a school in southern Russia, Interfax reported.
Late-Night Trading
Asian Indices are -.50% to +.50% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated -.11%
BOTTOM LINE: I expect U.S. equities to open modestly lower and then rise on short-covering later in the day. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
DLM/.05
ESL/.49
MBG/1.03
SHFL/.24
Splits
CHD 3-for-2
Economic Data
Final 2Q Non-farm Productivity estimated up 2.7% versus an increase of 2.9% prior.
Final 2Q Unit Labor Costs estimated up 2.0% versus a rise of 1.9% prior.
Initial Jobless Claims estimated at 340K versus 343K the prior week.
Continuing Claims estimated at 2880K versus 2897K prior.
Recommendations
Goldman Sachs reiterated Outperform on FS and HOT.
Late-Night News
Asian indices are mixed as auto shares are falling and technology stocks are rising in the region. South Korea may extend the deployment of its troops in Iraq until the end of 2005, the Hankyoreh newspaper said. Intel will ask Samsung Electronics and other South Korean mobile-phone makers to buy some of its chips, the Electronic Times reported. South Korean steelmaker Posco plans to spend $662 million in the next four years to develop facilities and products that will save energy and cut costs as oil prices reach record highs, Yonhap News said. The Russell 2000 Index climbed 2.8% in the first 10 minutes of trading today as a large buy program generated by Morgan Stanley pushed shares higher, Bloomberg said. President Vicente Fox said exploration efforts in the Gulf of Mexico may help double the proven oil reserves in Mexico, the world's fifth-largest crude producer, Bloomberg reported. Boeing CEO Stonecipher wants the European Union to end a 1992 agreement that allows Airbus SAS, the world's biggest plane-maker, to benefit from government aid, the Guardian reported. Enron Corp. will seek bankruptcy court approval for a joint venture of Southern Union and General Electric to buy its U.S. natural-gas pipelines for $2.45 billion, Bloomberg said. An armed group is holding 354 hostages at a school in southern Russia, Interfax reported.
Late-Night Trading
Asian Indices are -.50% to +.50% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated -.11%
BOTTOM LINE: I expect U.S. equities to open modestly lower and then rise on short-covering later in the day. The Portfolio is 125% net long heading into tomorrow.
Wednesday, September 01, 2004
Wednesday Close
S&P 500 1,105.91 +.15%
NASDAQ 1,850.41 +.67%
Leading Sectors
Oil Service +2.29%
Biotech +1.47%
Homebuilders +1.44%
Lagging Sectors
Banks -.74%
Insurance -.92%
Airlines -1.99%
Other
Crude Oil 43.85 -.30%
Natural Gas 4.97 +.20%
Gold 410.40 -.10%
Base Metals 108.18 -.23%
U.S. Dollar 88.90 -.08%
10-Yr. T-note Yield 4.11% -.09%
VIX 14.91 -2.49%
Put/Call 1.04 +48.57%
NYSE Arms .96 -12.73%
After-hours Movers
AEOS +5.24% after reporting strong Aug. sales, raising 3Q forecast and initiating dividend.
ARO -6.95% after reporting disappointing Aug. sales.
VTS -16.65% after saying it will delay reporting fourth-quarter earnings as it reviews whether depreciation of equipment was accounted for properly.
Recommendations
Goldman Sachs reiterated Attractive view of Lodging sector. Goldman reiterated Outperform on BSX.
After-hours News
U.S. stocks finished mostly higher today as energy and interest-rate sensitive groups led stocks higher. After the close, crude-oil futures surged almost $2/bbl., the biggest increase in two months, after the Energy Department reported that U.S. oil supplies declined more than expected. Prosecutors will file a motion to dismiss sexual-assault charges against NBA All-Star Kobe Bryant later this afternoon, ABC News reported. Time Warner offered $4.5 billion to $4.6 billion in cash for MGM, the Wall Street Journal reported. U.S. textile makers are preparing to file dozens of trade complaints against China in a bid to cap imports of pants, shirts, towel and other items from the fastest growth apparel exporter, Bloomberg reported. President Bush's re-election campaign asked a federal court for help in shutting down independent groups that are raising unlimited funds to run political ads, Bloomberg reported. President Bush's job approval rating surveyed from Aug. 9-29 was 53%, compared with 50% in a July 5-25 survey, according to the National Annenberg Election Survey. Acclaim Entertainment filed for bankruptcy today and will liquidate its assets after it was unable to obtain a $30 million loan, Bloomberg said.
BOTTOM LINE: The Portfolio finished higher today as my alternative energy, homebuilding and internet longs rose more than my steel shorts. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. The market's overall tone today was pretty good as volume improved and breadth measures were positive. The spike in oil and terrorism scare in D.C. likely prevented a better showing. Intel's mid-quarter update, President Bush's speech and the employment report will likely increase volatility over the near-term. Intel's comments shouldn't negatively affect trading as most investors expect the company to slightly lower guidance. President Bush's speech will likely be received positively by most investors. Finally, the employment report will probably not meet expectations due to the effects of Hurricane Charley. I will closely monitor the market's reaction to all these events and decide whether or not to scale back market exposure.
NASDAQ 1,850.41 +.67%
Leading Sectors
Oil Service +2.29%
Biotech +1.47%
Homebuilders +1.44%
Lagging Sectors
Banks -.74%
Insurance -.92%
Airlines -1.99%
Other
Crude Oil 43.85 -.30%
Natural Gas 4.97 +.20%
Gold 410.40 -.10%
Base Metals 108.18 -.23%
U.S. Dollar 88.90 -.08%
10-Yr. T-note Yield 4.11% -.09%
VIX 14.91 -2.49%
Put/Call 1.04 +48.57%
NYSE Arms .96 -12.73%
After-hours Movers
AEOS +5.24% after reporting strong Aug. sales, raising 3Q forecast and initiating dividend.
ARO -6.95% after reporting disappointing Aug. sales.
VTS -16.65% after saying it will delay reporting fourth-quarter earnings as it reviews whether depreciation of equipment was accounted for properly.
Recommendations
Goldman Sachs reiterated Attractive view of Lodging sector. Goldman reiterated Outperform on BSX.
After-hours News
U.S. stocks finished mostly higher today as energy and interest-rate sensitive groups led stocks higher. After the close, crude-oil futures surged almost $2/bbl., the biggest increase in two months, after the Energy Department reported that U.S. oil supplies declined more than expected. Prosecutors will file a motion to dismiss sexual-assault charges against NBA All-Star Kobe Bryant later this afternoon, ABC News reported. Time Warner offered $4.5 billion to $4.6 billion in cash for MGM, the Wall Street Journal reported. U.S. textile makers are preparing to file dozens of trade complaints against China in a bid to cap imports of pants, shirts, towel and other items from the fastest growth apparel exporter, Bloomberg reported. President Bush's re-election campaign asked a federal court for help in shutting down independent groups that are raising unlimited funds to run political ads, Bloomberg reported. President Bush's job approval rating surveyed from Aug. 9-29 was 53%, compared with 50% in a July 5-25 survey, according to the National Annenberg Election Survey. Acclaim Entertainment filed for bankruptcy today and will liquidate its assets after it was unable to obtain a $30 million loan, Bloomberg said.
BOTTOM LINE: The Portfolio finished higher today as my alternative energy, homebuilding and internet longs rose more than my steel shorts. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. The market's overall tone today was pretty good as volume improved and breadth measures were positive. The spike in oil and terrorism scare in D.C. likely prevented a better showing. Intel's mid-quarter update, President Bush's speech and the employment report will likely increase volatility over the near-term. Intel's comments shouldn't negatively affect trading as most investors expect the company to slightly lower guidance. President Bush's speech will likely be received positively by most investors. Finally, the employment report will probably not meet expectations due to the effects of Hurricane Charley. I will closely monitor the market's reaction to all these events and decide whether or not to scale back market exposure.
Mid-day Update
S&P 500 1,102.69 -.14%
NASDAQ 1,840.82 +.15%
Leading Sectors
Oil Service +2.33%
Broadcasting +1.13%
Homebuilding +1.02%
Lagging Sectors
Banks -.91%
Insurance -1.05%
Airlines -1.25%
Other
Crude Oil 43.60 +3.51%
Natural Gas 5.08 +.12%
Gold 410.10 -.56%
Base Metals 108.18 -.23%
U.S. Dollar 88.93 -.01%
10-Yr. T-note Yield 4.12% unch.
VIX 15.29 +.26%
Put/Call .92 +31.43%
NYSE Arms .89 -19.09%
Market Movers
COCO +15.2% after beating 4Q estimates and raising 1Q guidance.
BSX +5.6% on bargain hunting after slightly lowering 3Q and 4Q estimates.
FRX -8.1% after the maker of the first medicine in the U.S. for severe Alzheimer's disease said a separate, experimental treatment for the memory-robbing disease wasn't effective.
OTEX -23.3% after missing 4Q estimates, lowering 1Q guidance and multiple downgrades.
MGPI +19.7% after Roth Capital rated it Strong Buy.
MOGN +12.65% after saying it agreed to license SuperGen's Dacogen treatment for bond marrow disorders for as much as $85 million.
COO +8.25% after beating 3Q estimates and giving strong outlook.
Economic Data
Construction Spending for July rose .4% versus estimates of a .4% gain and an upwardly revised .3% decline in June.
ISM Manufacturing for August was 59.0 versus estimates of 60.0 and 62.0 in July.
ISM Prices Paid for August was 81.5 versus estimates of 79.0 and 77.0 in July.
Recommendations
Goldman Sachs reiterated Outperform on BBY, GCI, ALL and AET. Goldman reiterated Underperform on FRX. Citi SmithBarney reiterated Buy on FLEX and JBL. Citi said to Buy INTC on weakness. Citi reiterated Buy on BLS, target $32. Citi reiterated Buy on VRTS, target $24. Citi reiterated Buy on PCG, target $33. Citi reiterated Buy on CHS, target $48. BUCY rate Buy at Legg Mason, target $35. APD raised to Buy at Bank of America, target $60.
Mid-day News
U.S. stocks are mixed mid-day on rising energy prices, terrorism concerns and short-covering. Video games sales are expected to stay at about $18.2 billion in 2004, the same as last year, because players are waiting for new consoles in 2005 and 2006, Reuters reported. Frontier Air's pilots agreed to be paid hourly rather than receiving a monthly salary, which may help the discount airline save millions of dollars a year, the Rocky Mountain News reported. Apple Computer expects a delivery bottleneck for the new version of its iMac computer because of high demand, Der Spiegel reported. A key cause of lagging U.S. job growth is higher productivity which is ultimately good and raises living standards in the long-run, said Washington Post columnist Robert Samuelson. Hurricane Frances was edging into the southeastern Bahamas today with winds of 140 mph and is poised to strike the Florida coast early Saturday, according to the National Hurricane Center. About 20 armed men and women wearing explosives seized a school in southern Russia and are holding at least 120 children hostage, the country's fourth terrorist attack in the past eight days, Bloomberg reported. California Governor Schwarzenegger's address to the Republican Convention may have drawn more tv viewers than Senator Kerry's acceptance speech, helping to boost support for President Bush among undecided voters, Bloomberg reported. The summer travel season, which comes to a close this weekend for many Americans, was the busiest for companies that own theme parks, resorts and cruise ships since the 9/11 terrorist attacks, Bloomberg said. Crude oil futures are rising after plunging from $49.40/bbl. on Aug. 20 on an Energy Department report that showed U.S. oil supplies declined more than expected, Bloomberg reported. New York police raised the arrest tally to more than 1,000 from marches and rallies held yesterday against President Bush, with more protests planned for today, Bloomberg reported.
BOTTOM LINE: The Portfolio is higher mid-day as my restaurant, alternative energy and technology longs are rising. I added a few new longs this morning, bringing the Portfolio's market exposure to 125% net long. One of my new longs is PSYS and I am using a $22.25 stop-loss on the position. Rising oil prices and terrorism fears are holding today's rally in check. The tone of the market is mostly positive and I expect stocks to trade modestly higher into the close as oil prices stabilize and terrorism fears subside.
NASDAQ 1,840.82 +.15%
Leading Sectors
Oil Service +2.33%
Broadcasting +1.13%
Homebuilding +1.02%
Lagging Sectors
Banks -.91%
Insurance -1.05%
Airlines -1.25%
Other
Crude Oil 43.60 +3.51%
Natural Gas 5.08 +.12%
Gold 410.10 -.56%
Base Metals 108.18 -.23%
U.S. Dollar 88.93 -.01%
10-Yr. T-note Yield 4.12% unch.
VIX 15.29 +.26%
Put/Call .92 +31.43%
NYSE Arms .89 -19.09%
Market Movers
COCO +15.2% after beating 4Q estimates and raising 1Q guidance.
BSX +5.6% on bargain hunting after slightly lowering 3Q and 4Q estimates.
FRX -8.1% after the maker of the first medicine in the U.S. for severe Alzheimer's disease said a separate, experimental treatment for the memory-robbing disease wasn't effective.
OTEX -23.3% after missing 4Q estimates, lowering 1Q guidance and multiple downgrades.
MGPI +19.7% after Roth Capital rated it Strong Buy.
MOGN +12.65% after saying it agreed to license SuperGen's Dacogen treatment for bond marrow disorders for as much as $85 million.
COO +8.25% after beating 3Q estimates and giving strong outlook.
Economic Data
Construction Spending for July rose .4% versus estimates of a .4% gain and an upwardly revised .3% decline in June.
ISM Manufacturing for August was 59.0 versus estimates of 60.0 and 62.0 in July.
ISM Prices Paid for August was 81.5 versus estimates of 79.0 and 77.0 in July.
Recommendations
Goldman Sachs reiterated Outperform on BBY, GCI, ALL and AET. Goldman reiterated Underperform on FRX. Citi SmithBarney reiterated Buy on FLEX and JBL. Citi said to Buy INTC on weakness. Citi reiterated Buy on BLS, target $32. Citi reiterated Buy on VRTS, target $24. Citi reiterated Buy on PCG, target $33. Citi reiterated Buy on CHS, target $48. BUCY rate Buy at Legg Mason, target $35. APD raised to Buy at Bank of America, target $60.
Mid-day News
U.S. stocks are mixed mid-day on rising energy prices, terrorism concerns and short-covering. Video games sales are expected to stay at about $18.2 billion in 2004, the same as last year, because players are waiting for new consoles in 2005 and 2006, Reuters reported. Frontier Air's pilots agreed to be paid hourly rather than receiving a monthly salary, which may help the discount airline save millions of dollars a year, the Rocky Mountain News reported. Apple Computer expects a delivery bottleneck for the new version of its iMac computer because of high demand, Der Spiegel reported. A key cause of lagging U.S. job growth is higher productivity which is ultimately good and raises living standards in the long-run, said Washington Post columnist Robert Samuelson. Hurricane Frances was edging into the southeastern Bahamas today with winds of 140 mph and is poised to strike the Florida coast early Saturday, according to the National Hurricane Center. About 20 armed men and women wearing explosives seized a school in southern Russia and are holding at least 120 children hostage, the country's fourth terrorist attack in the past eight days, Bloomberg reported. California Governor Schwarzenegger's address to the Republican Convention may have drawn more tv viewers than Senator Kerry's acceptance speech, helping to boost support for President Bush among undecided voters, Bloomberg reported. The summer travel season, which comes to a close this weekend for many Americans, was the busiest for companies that own theme parks, resorts and cruise ships since the 9/11 terrorist attacks, Bloomberg said. Crude oil futures are rising after plunging from $49.40/bbl. on Aug. 20 on an Energy Department report that showed U.S. oil supplies declined more than expected, Bloomberg reported. New York police raised the arrest tally to more than 1,000 from marches and rallies held yesterday against President Bush, with more protests planned for today, Bloomberg reported.
BOTTOM LINE: The Portfolio is higher mid-day as my restaurant, alternative energy and technology longs are rising. I added a few new longs this morning, bringing the Portfolio's market exposure to 125% net long. One of my new longs is PSYS and I am using a $22.25 stop-loss on the position. Rising oil prices and terrorism fears are holding today's rally in check. The tone of the market is mostly positive and I expect stocks to trade modestly higher into the close as oil prices stabilize and terrorism fears subside.
Wednesday Watch
Earnings of Note
Company/Estimate
COCO/.19
VTS/.26
Splits
None of note.
Economic Data
Construction Spending in July estimated up .4% versus a .3% fall in June.
ISM Manufacturing for August estimated at 60.0 versus 62.0 in July.
ISM Prices Paid for August estimated at 79.0 versus 77.0 in July.
Total Vehicle Sales for August estimated at 16.8M versus 17.3M in July.
Domestic Vehicle Sales for August estimated at 13.6M versus 14.1M in July.
Recommendations
Goldman Sachs reiterated Outperform on AET and GDT.
Late-Night News
Asian indices are higher on optimism over corporate earnings in the region. EachNet Inc., the Chinese unit of EBay Inc., expects a surge in the number of online sellers once it starts a service allowing them to trade directly with the U.S. auction site's worldwide membership, the Financial Times reported. Samsung Electronics, the world's largest maker of computer memory chips, expects prices of the product to rise in the fourth quarter, MoneyToday reported. U.S. companies are buying back their stock at almost double the pace they did last year, the Wall Street Journal reported. Asylum applications in industrialized countries fell in the second quarter to 86,800, the lowest level in 17 years, the Financial Times reported. Metro-Goldwyn-Mayer may announce as early as next week an agreement to be acquired for as much as $5 billion, Reuters reported. The Taiwan government may alter its polices toward China next near, the Economic Daily News reported, citing Joseph Wu, chairman of Taiwan's Mainland Affairs Council. The U.S. may have to drop 27% duties on $4.6 billion of Canadian lumber shipments after a trade tribunal ruled that the U.S. lumber industry isn't being harmed by imports from Canada, Bloomberg reported. Allstate said it expected to pay $425 million of claims from Hurricane Charley, Bloomberg said. Terrorist attacks in Russia that killed 99 people in the past week will strengthen joint efforts by the U.S. and Russian governments to fight the "scourge" of terrorism, the White House said. New York police arrested at least 550 people as protesters staged marches, rallies and street theater from Ground Zero to Sotheby's auction house on the Upper East Side to dramatize opposition to President Bush, Bloomberg reported. NYC Police Commissioner Raymond Kelly has said he expects a "major" unauthorized protest Thursday, Bloomberg said. Israeli Prime Minister Sharon will order a military offensive in the West Bank city of Hebron in response to two suicide bombings that killed at least 16 people in the Israeli city of Beersheba, Haaretz reported. Dow Chemical, the biggest U.S. chemical maker, forecast its China sales will grow 25% to exceed $2 billion this year, Bloomberg reported.
Late-Night Trading
Asian Indices are +.50% to +1.25% on average.
S&P 500 indicated +.10%.
NASDAQ 100 indicated +.07%
BOTTOM LINE: I expect U.S. equities to open higher in the morning on gains in Asia and a follow-through from today's strong close. The Portfolio is 100% net long. I will likely increase market exposure on any unexpected morning weakness related to economic reports.
Company/Estimate
COCO/.19
VTS/.26
Splits
None of note.
Economic Data
Construction Spending in July estimated up .4% versus a .3% fall in June.
ISM Manufacturing for August estimated at 60.0 versus 62.0 in July.
ISM Prices Paid for August estimated at 79.0 versus 77.0 in July.
Total Vehicle Sales for August estimated at 16.8M versus 17.3M in July.
Domestic Vehicle Sales for August estimated at 13.6M versus 14.1M in July.
Recommendations
Goldman Sachs reiterated Outperform on AET and GDT.
Late-Night News
Asian indices are higher on optimism over corporate earnings in the region. EachNet Inc., the Chinese unit of EBay Inc., expects a surge in the number of online sellers once it starts a service allowing them to trade directly with the U.S. auction site's worldwide membership, the Financial Times reported. Samsung Electronics, the world's largest maker of computer memory chips, expects prices of the product to rise in the fourth quarter, MoneyToday reported. U.S. companies are buying back their stock at almost double the pace they did last year, the Wall Street Journal reported. Asylum applications in industrialized countries fell in the second quarter to 86,800, the lowest level in 17 years, the Financial Times reported. Metro-Goldwyn-Mayer may announce as early as next week an agreement to be acquired for as much as $5 billion, Reuters reported. The Taiwan government may alter its polices toward China next near, the Economic Daily News reported, citing Joseph Wu, chairman of Taiwan's Mainland Affairs Council. The U.S. may have to drop 27% duties on $4.6 billion of Canadian lumber shipments after a trade tribunal ruled that the U.S. lumber industry isn't being harmed by imports from Canada, Bloomberg reported. Allstate said it expected to pay $425 million of claims from Hurricane Charley, Bloomberg said. Terrorist attacks in Russia that killed 99 people in the past week will strengthen joint efforts by the U.S. and Russian governments to fight the "scourge" of terrorism, the White House said. New York police arrested at least 550 people as protesters staged marches, rallies and street theater from Ground Zero to Sotheby's auction house on the Upper East Side to dramatize opposition to President Bush, Bloomberg reported. NYC Police Commissioner Raymond Kelly has said he expects a "major" unauthorized protest Thursday, Bloomberg said. Israeli Prime Minister Sharon will order a military offensive in the West Bank city of Hebron in response to two suicide bombings that killed at least 16 people in the Israeli city of Beersheba, Haaretz reported. Dow Chemical, the biggest U.S. chemical maker, forecast its China sales will grow 25% to exceed $2 billion this year, Bloomberg reported.
Late-Night Trading
Asian Indices are +.50% to +1.25% on average.
S&P 500 indicated +.10%.
NASDAQ 100 indicated +.07%
BOTTOM LINE: I expect U.S. equities to open higher in the morning on gains in Asia and a follow-through from today's strong close. The Portfolio is 100% net long. I will likely increase market exposure on any unexpected morning weakness related to economic reports.
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