Indices
S&P 500 1,123.92 +50%
Dow 10,313.07 +.22%
NASDAQ 1,894.31 +1.12%
Russell 2000 569.91 +1.81%
S&P Equity Long/Short Index 965.59 +.70%
Put/Call .83 -18.63%
NYSE Arms .74 +60.87%
Volatility(VIX) 13.76 -3.64%
AAII % Bulls 50.50 +21.66%
US Dollar 88.39 -.66%
CRB 271.61 -2.36%
Futures Spot Prices
Gold 403.80 -1.03%
Crude Oil 42.81 -2.84%
Unleaded Gasoline 116.42 -2.43%
Natural Gas 4.57 -4.13%
Base Metals 108.26 +2.55%
10-year US Treasury Yield 4.18% -2.79%
Average 30-year Mortgage Rate 5.83% +1.04%
Leading Sectors
Disk Drives +4.56%
Networking +4.37%
Iron/Steel +4.16%
Lagging Sectors
Hospitals -.47%
Drugs -1.12%
Papers -1.67%
*% Gain or loss for the week
Friday, September 10, 2004
Mid-day Update
S&P 500 1,118.32 -.01%
NASDAQ 1,880.47 +.59%
Leading Sectors
Software +2.72%
Semis +2.57%
Disk Drives +2.20%
Lagging Sectors
Homebuilders -.84%
Commodity -1.15%
Iron/Steel -1.31%
Other
Crude Oil 44.12 -1.08%
Natural Gas 4.64 -.39%
Gold 403.40 +.75%
Base Metals n/a
U.S. Dollar 88.28 -.62%
10-Yr. T-note Yield 4.17% -.69%
VIX 14.12 +.79%
Put/Call .78 -11.36%
NYSE Arms .93 -1.06%
Market Movers
PSFT +10.2% after saying Oracle won permission from a U.S. judge to proceed with its $7.7 billion hostile bid for it.
AA -7.9% after lowering 3Q estimates and Morgan Stanley downgrade to Equal-weight.
NTSL +21.6% after Cisco said it will buy the company for $128 million.
VLTR +18.4% after Goldman Sachs rated the company Outperform.
TTWO +5.0% after beating 3Q sales estimate and missing 3Q earnings estimate.
JOSB +6.6% after beating 2Q estimates.
CMO -10.6% after saying higher borrowing costs were dampening profits.
Economic Data
Producer Price Index for August fell .1% versus estimates of a .2% rise and a .1% increase in July.
PPI Ex Food & Energy for August declined .1% versus estimates of a .1% increase and a .1% rise in July.
Trade Balance for July fell to -$50.1B versus estimates of -$51.5B and -$55.0B in June.
Recommendations
Goldman Sachs reiterated Outperform on AA, VLTR and SUN. Goldman reiterated Underperform on NSM, S, MET, KSS, VC and ASH. Citi SmithBarney reiterated Buy on TXU, target $53. Citi reiterated Buy on CCE, target $25. Citi rated NUE Sell, target $74. Citi rated X Sell, target $34. Citi reiterated Buy on CWST, target $16.50. Citi reiterated Sell on COP, target $65. CCE cut to Reduce at UBS, target $36. VC cut to Underperform at CSFB. Merrill upgraded NUE to Buy, target $114. CPWM rated Sector Outperform at CIBC, target $42. KO raised to Buy at Legg Mason, target $52. GDW raised to Overweight at Morgan Stanley. PMI cut to Underweight at Morgan Stanley. APPB raised to Overweight at JP Morgan. AKS raised to Overweight at JP Morgan. MRVL rated Overweight at JP Morgan. IDIX rated Outperform at Bear Stearns.
Mid-day News
U.S. stocks are mixed mid-day as technology shares are rising and commodity-realted stocks are falling after a better-than-expected inflation report. Sharp, a Japanese electronics maker, will support its newest Aquos brand liquid-crystal-display flat-screen tv with a $60 million global ad campaign, the Wall Street Journal said. OAO Yukos Oil's largest oil pumping unit may lose all its field development licenses, Interfax reported. Four U.S. airports will begin testing a system that scans boarding passes to detect any residue that might indicate a passenger has recently handled explosive materials, the Washington Post reported. Vice-President Cheney said indicators measuring unemployment and other statistics miss 400,000 people who make money selling items on EBay, the AP reported. Michael Eisner will step down as CEO of Disney in 2006, Bloomberg reported. Texas Instruments CEO Templeton said he is optimistic about demand for the semiconductors that his company supplies for half the world's mobile phones, Bloomberg said. U.S. public-health advisers may recommend all Americans receive flu inoculations each year, expanding the potential market for vaccine makers Chiron and Sanofi-Aventis by almost two-thirds, Bloomberg reported. Hurricane Ivan, with winds of 145 mph, forced evacuations in Jamaica as it moved on a track toward Cuba and Florida, where residents braced for the third powerful storm to hit the state in a month, Bloomberg reported. U.S. Treasury notes are heading for their biggest weekly gain in five after prices paid to producers unexpectedly declined last month, the first measure of inflation for August, Bloomberg said.
BOTTOM LINE: The Portfolio is higher mid-day on strength in my software and semi-equipment longs. I have not traded today and the Portfolio is still 125% net long. It is another positive day for the Bulls as the market consolidates recent gains and most stocks are higher, notwithstanding terrorism fears and hurricane concerns. The fact that energy prices are falling in the face of likely disruptions in the Gulf and ongoing problems in Russia is a positive. The strength in the tech sector is also a positive for the overall market as it was the main weak link. A successful Oracle/PeopleSoft merger will likely lead to more consolidation in the sector. This is badly needed due to the lingering affects of overcapacity generated during the bubble. Too many crippled tech companies are still competing for the same dollars, thus hurting the stronger players. As well, the ECRI Weekly Leading Index turned up today and appears to have broken its recent downtrend, which bodes well for future economic growth. Finally, another government report showing that inflation is not a significant threat is resulting in another fall in long-term interest rates. On the negative side, measures of investor anxiety continue to fall. I expect U.S. stocks to rise modestly into the close on falling oil, declining interest rates, optimism over future economic growth, strength in the technology sector and short-covering.
NASDAQ 1,880.47 +.59%
Leading Sectors
Software +2.72%
Semis +2.57%
Disk Drives +2.20%
Lagging Sectors
Homebuilders -.84%
Commodity -1.15%
Iron/Steel -1.31%
Other
Crude Oil 44.12 -1.08%
Natural Gas 4.64 -.39%
Gold 403.40 +.75%
Base Metals n/a
U.S. Dollar 88.28 -.62%
10-Yr. T-note Yield 4.17% -.69%
VIX 14.12 +.79%
Put/Call .78 -11.36%
NYSE Arms .93 -1.06%
Market Movers
PSFT +10.2% after saying Oracle won permission from a U.S. judge to proceed with its $7.7 billion hostile bid for it.
AA -7.9% after lowering 3Q estimates and Morgan Stanley downgrade to Equal-weight.
NTSL +21.6% after Cisco said it will buy the company for $128 million.
VLTR +18.4% after Goldman Sachs rated the company Outperform.
TTWO +5.0% after beating 3Q sales estimate and missing 3Q earnings estimate.
JOSB +6.6% after beating 2Q estimates.
CMO -10.6% after saying higher borrowing costs were dampening profits.
Economic Data
Producer Price Index for August fell .1% versus estimates of a .2% rise and a .1% increase in July.
PPI Ex Food & Energy for August declined .1% versus estimates of a .1% increase and a .1% rise in July.
Trade Balance for July fell to -$50.1B versus estimates of -$51.5B and -$55.0B in June.
Recommendations
Goldman Sachs reiterated Outperform on AA, VLTR and SUN. Goldman reiterated Underperform on NSM, S, MET, KSS, VC and ASH. Citi SmithBarney reiterated Buy on TXU, target $53. Citi reiterated Buy on CCE, target $25. Citi rated NUE Sell, target $74. Citi rated X Sell, target $34. Citi reiterated Buy on CWST, target $16.50. Citi reiterated Sell on COP, target $65. CCE cut to Reduce at UBS, target $36. VC cut to Underperform at CSFB. Merrill upgraded NUE to Buy, target $114. CPWM rated Sector Outperform at CIBC, target $42. KO raised to Buy at Legg Mason, target $52. GDW raised to Overweight at Morgan Stanley. PMI cut to Underweight at Morgan Stanley. APPB raised to Overweight at JP Morgan. AKS raised to Overweight at JP Morgan. MRVL rated Overweight at JP Morgan. IDIX rated Outperform at Bear Stearns.
Mid-day News
U.S. stocks are mixed mid-day as technology shares are rising and commodity-realted stocks are falling after a better-than-expected inflation report. Sharp, a Japanese electronics maker, will support its newest Aquos brand liquid-crystal-display flat-screen tv with a $60 million global ad campaign, the Wall Street Journal said. OAO Yukos Oil's largest oil pumping unit may lose all its field development licenses, Interfax reported. Four U.S. airports will begin testing a system that scans boarding passes to detect any residue that might indicate a passenger has recently handled explosive materials, the Washington Post reported. Vice-President Cheney said indicators measuring unemployment and other statistics miss 400,000 people who make money selling items on EBay, the AP reported. Michael Eisner will step down as CEO of Disney in 2006, Bloomberg reported. Texas Instruments CEO Templeton said he is optimistic about demand for the semiconductors that his company supplies for half the world's mobile phones, Bloomberg said. U.S. public-health advisers may recommend all Americans receive flu inoculations each year, expanding the potential market for vaccine makers Chiron and Sanofi-Aventis by almost two-thirds, Bloomberg reported. Hurricane Ivan, with winds of 145 mph, forced evacuations in Jamaica as it moved on a track toward Cuba and Florida, where residents braced for the third powerful storm to hit the state in a month, Bloomberg reported. U.S. Treasury notes are heading for their biggest weekly gain in five after prices paid to producers unexpectedly declined last month, the first measure of inflation for August, Bloomberg said.
BOTTOM LINE: The Portfolio is higher mid-day on strength in my software and semi-equipment longs. I have not traded today and the Portfolio is still 125% net long. It is another positive day for the Bulls as the market consolidates recent gains and most stocks are higher, notwithstanding terrorism fears and hurricane concerns. The fact that energy prices are falling in the face of likely disruptions in the Gulf and ongoing problems in Russia is a positive. The strength in the tech sector is also a positive for the overall market as it was the main weak link. A successful Oracle/PeopleSoft merger will likely lead to more consolidation in the sector. This is badly needed due to the lingering affects of overcapacity generated during the bubble. Too many crippled tech companies are still competing for the same dollars, thus hurting the stronger players. As well, the ECRI Weekly Leading Index turned up today and appears to have broken its recent downtrend, which bodes well for future economic growth. Finally, another government report showing that inflation is not a significant threat is resulting in another fall in long-term interest rates. On the negative side, measures of investor anxiety continue to fall. I expect U.S. stocks to rise modestly into the close on falling oil, declining interest rates, optimism over future economic growth, strength in the technology sector and short-covering.
Friday Watch
Earnings of Note
Company/Estimate
None of note.
Splits
None of note.
Economic Data
Producer Price Index for August estimated to increase .2% versus a .1% increase in July.
PPI Ex Food & Energy for August estimated to rise .1% versus a .1% increase in July.
Trade Balance for July estimated at -$51.5B versus -$55.8B in June.
Recommendations
Goldman Sachs reiterated Underperform on VC and VTS. Goldman reiterated Outperform on HOT and FS. Shares of BEI Technologies(BEIQ) may surge about 45% as Ford Motor installs BEI products in its vehicles to prevent rollovers, Business Week reported. Mobius Management Systems(MOBI) might be a takeover target, Business Week reported.
Late-Night News
Asian indices are mixed on disappointment over Japanese growth and optimism over the rebound in U.S. technology shares. Mike Volpi, a senior vice president at Cisco Systems, has become an outside director of Skype Technologies, a Luxembourg-based provider of Internet telephone services, Business Week reported. Taiwan Semiconductor Manufacturing got its first order from a customer in China for advanced chips made with .13 micron technology, the Commercial Times reported. US Airways Group will probably file for bankruptcy protection Sunday if employee unions don't agree too further benefit cuts, the NY Times reported. Japan's economy grew at a 1.3% annual pace in the second quarter, less than expected, because companies cut inventories and capital spending grew less than predicted. U.S. officials visiting Beijing this weekend will press China to limit textile exports and crack down harder on piracy, Bloomberg reported. Crude oil may fall next week as rising production from OPEC helps replenish global inventories, according to a Bloomberg survey of traders and analysts. China's industrial production growth picked up in August for the first time in six months, suggesting government lending curbs aren't cooling the economy enough, Bloomberg said. Qwest Communications International agreed to pay $250 million to end a SEC investigation into transactions the telephone company used to inflate sales, Bloomberg reported. Novartis AG will concentrate on acquisitions of generic-drug makers instead of combinations with its biggest competitors as the $400 billion industry consolidates, Bloomberg reported.
Late-Night Trading
Asian Indices are -.50% to +.50% on average.
S&P 500 indicated -.19%.
NASDAQ 100 indicated -.29%
BOTTOM LINE: I expect U.S. equities to open modestly lower on weakness in Japan and weekend terrorism fears. However, stocks should rise later in the day on a continuing rebound in technology shares, optimism over future economic growth and short-covering. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
None of note.
Splits
None of note.
Economic Data
Producer Price Index for August estimated to increase .2% versus a .1% increase in July.
PPI Ex Food & Energy for August estimated to rise .1% versus a .1% increase in July.
Trade Balance for July estimated at -$51.5B versus -$55.8B in June.
Recommendations
Goldman Sachs reiterated Underperform on VC and VTS. Goldman reiterated Outperform on HOT and FS. Shares of BEI Technologies(BEIQ) may surge about 45% as Ford Motor installs BEI products in its vehicles to prevent rollovers, Business Week reported. Mobius Management Systems(MOBI) might be a takeover target, Business Week reported.
Late-Night News
Asian indices are mixed on disappointment over Japanese growth and optimism over the rebound in U.S. technology shares. Mike Volpi, a senior vice president at Cisco Systems, has become an outside director of Skype Technologies, a Luxembourg-based provider of Internet telephone services, Business Week reported. Taiwan Semiconductor Manufacturing got its first order from a customer in China for advanced chips made with .13 micron technology, the Commercial Times reported. US Airways Group will probably file for bankruptcy protection Sunday if employee unions don't agree too further benefit cuts, the NY Times reported. Japan's economy grew at a 1.3% annual pace in the second quarter, less than expected, because companies cut inventories and capital spending grew less than predicted. U.S. officials visiting Beijing this weekend will press China to limit textile exports and crack down harder on piracy, Bloomberg reported. Crude oil may fall next week as rising production from OPEC helps replenish global inventories, according to a Bloomberg survey of traders and analysts. China's industrial production growth picked up in August for the first time in six months, suggesting government lending curbs aren't cooling the economy enough, Bloomberg said. Qwest Communications International agreed to pay $250 million to end a SEC investigation into transactions the telephone company used to inflate sales, Bloomberg reported. Novartis AG will concentrate on acquisitions of generic-drug makers instead of combinations with its biggest competitors as the $400 billion industry consolidates, Bloomberg reported.
Late-Night Trading
Asian Indices are -.50% to +.50% on average.
S&P 500 indicated -.19%.
NASDAQ 100 indicated -.29%
BOTTOM LINE: I expect U.S. equities to open modestly lower on weakness in Japan and weekend terrorism fears. However, stocks should rise later in the day on a continuing rebound in technology shares, optimism over future economic growth and short-covering. The Portfolio is 125% net long heading into tomorrow.
Thursday, September 09, 2004
Thursday Close
S&P 500 1,1118.38 +.19%
NASDAQ 1,869.65 +1.03%
Leading Sectors
Semis +5.37%
Iron/Steel +3.70%
Networking +3.08%
Lagging Sectors
Drugs -.79%
Fashion -.86%
Retail -1.01%
Other
Crude Oil 44.80 +.43%
Natural Gas 4.73 +1.65%
Gold 401.40 +.25%
Base Metals 106.45 -.33%
U.S. Dollar 88.83 +.07%
10-Yr. T-note Yield 4.19% +.88%
VIX 14.01 -.36%
Put/Call .88 -16.19%
NYSE Arms .94 -28.79%
After-hours Movers
PSFT +13.65% after saying Oracle won permission from a U.S. judge to proceed with its $7.7 billion hostile bid for it.
ZQK +4.46% after beating 3Q estimates and maintaining 4Q outlook.
AA -5.65% after lowering 3Q estimates.
EAT -4.53% after lowering 1Q estimates on hurricanes and maintaining 05 outlook.
ISIL -3.71% after cutting 3Q forecast.
Recommendations
Goldman Sachs reiterated Outperform on STZ, DD, MON, PG, EMC and VZ. Goldman reiterated Underperform on POT. Rockwell Collins(COL), which makes cockpit instruments for Boeing, is expected to benefit from more spending on defense equipment, Business Week reported.
After-hours News
U.S. stocks were mixed today as a rebound in technology shares offset weakness related to rising oil prices. After the close, Advanced Micro Devices and contract manufacturers are working on a plan to sell an inexpensive, networked personal computer in India or China, Business Week said. Nestle SA, Sara Lee Corp., Kraft Foods and Tchibo Holding AG are backing an agreement to improve working conditions and environmental standards across the coffee industry, the Financial Times said. Goldman Sachs and Wal-Mart may offer to invest in struggling Japanese retailer Daiei, the Wall Street Journal. New York State, the U.S. state with the second-lowest debt rating after California, may have its credit rating raised by Moody's Investors Service as its economy improves and tax revenue increases, Bloomberg said. A coalition of U.S. labor unions said China's policy of setting the value of the yuan is hurting American businesses and asked the Bush administration to file a lawsuit at the WTO on their behalf, Bloomberg reported. DuPont agreed to pay $108 million to settle a class-action lawsuit that alleged a chemical used to make Teflon coatings polluted water supplies in West Virgina and Ohio, Bloomberg reported.
BOTTOM LINE: The Portfolio finished substantially higher today on strength in my healthcare, homebuilding, education and technology longs. I took profits in a few retail and internet longs in the afternoon and added some steel longs, thus leaving the Portfolio 125% net long. One of my new longs is AKS and I am using a $6.50 stop-loss on the position. Overall, today's action was very positive for the Bulls as the broad market consolidated recent gains and technology shares moved meaningfully higher. Besides rising energy prices, the only real negative I saw today was another fall in the measures of investor anxiety. The Oracle/PeopleSoft news after the close should help the technology sector move higher again tomorrow.
NASDAQ 1,869.65 +1.03%
Leading Sectors
Semis +5.37%
Iron/Steel +3.70%
Networking +3.08%
Lagging Sectors
Drugs -.79%
Fashion -.86%
Retail -1.01%
Other
Crude Oil 44.80 +.43%
Natural Gas 4.73 +1.65%
Gold 401.40 +.25%
Base Metals 106.45 -.33%
U.S. Dollar 88.83 +.07%
10-Yr. T-note Yield 4.19% +.88%
VIX 14.01 -.36%
Put/Call .88 -16.19%
NYSE Arms .94 -28.79%
After-hours Movers
PSFT +13.65% after saying Oracle won permission from a U.S. judge to proceed with its $7.7 billion hostile bid for it.
ZQK +4.46% after beating 3Q estimates and maintaining 4Q outlook.
AA -5.65% after lowering 3Q estimates.
EAT -4.53% after lowering 1Q estimates on hurricanes and maintaining 05 outlook.
ISIL -3.71% after cutting 3Q forecast.
Recommendations
Goldman Sachs reiterated Outperform on STZ, DD, MON, PG, EMC and VZ. Goldman reiterated Underperform on POT. Rockwell Collins(COL), which makes cockpit instruments for Boeing, is expected to benefit from more spending on defense equipment, Business Week reported.
After-hours News
U.S. stocks were mixed today as a rebound in technology shares offset weakness related to rising oil prices. After the close, Advanced Micro Devices and contract manufacturers are working on a plan to sell an inexpensive, networked personal computer in India or China, Business Week said. Nestle SA, Sara Lee Corp., Kraft Foods and Tchibo Holding AG are backing an agreement to improve working conditions and environmental standards across the coffee industry, the Financial Times said. Goldman Sachs and Wal-Mart may offer to invest in struggling Japanese retailer Daiei, the Wall Street Journal. New York State, the U.S. state with the second-lowest debt rating after California, may have its credit rating raised by Moody's Investors Service as its economy improves and tax revenue increases, Bloomberg said. A coalition of U.S. labor unions said China's policy of setting the value of the yuan is hurting American businesses and asked the Bush administration to file a lawsuit at the WTO on their behalf, Bloomberg reported. DuPont agreed to pay $108 million to settle a class-action lawsuit that alleged a chemical used to make Teflon coatings polluted water supplies in West Virgina and Ohio, Bloomberg reported.
BOTTOM LINE: The Portfolio finished substantially higher today on strength in my healthcare, homebuilding, education and technology longs. I took profits in a few retail and internet longs in the afternoon and added some steel longs, thus leaving the Portfolio 125% net long. One of my new longs is AKS and I am using a $6.50 stop-loss on the position. Overall, today's action was very positive for the Bulls as the broad market consolidated recent gains and technology shares moved meaningfully higher. Besides rising energy prices, the only real negative I saw today was another fall in the measures of investor anxiety. The Oracle/PeopleSoft news after the close should help the technology sector move higher again tomorrow.
Mid-day Update
S&P 500 1,118.50 +.20%
NASDAQ 1,865.69 +.82%
Leading Sectors
Semis +5.06%
Iron/Steel +3.23%
Networking +2.44%
Lagging Sectors
Drugs -.62%
Fashion -.83%
Retail -1.14%
Other
Crude Oil 44.40 +3.81%
Natural Gas 4.64 +.30%
Gold 400.40 -.25%
Base Metals 106.45 -.33%
U.S. Dollar 88.85 +.09%
10-Yr. T-note Yield 4.17% +.37%
VIX 13.92 -1.0%
Put/Call .98 -6.67%
NYSE Arms .88 -33.33%
Market Movers
TXN +6.8% after raising 3Q earnings forecast and lowering 3Q revenue outlook.
ICPT +6.0% after saying Fidelity National Financial(FNF) agreed to buy it for $408 million.
TZOO +12.85% on continuing short-squeeze.
DIOD +18.9% on positive 3Q guidance.
NUE +5.88% after boosting 3Q guidance substantially, announcing 2-for-1 split, boosting dividend and UBS upgrade to Buy.
CBRL +8.1% after saying it settle a lawsuit with the NAACP and making positive comments on 1Q.
RCII -14.2% after lowering 3Q/04 outlook.
*Steel stocks up across the board on NUE report.
*Semis up across the board on positive comments by NOK, MOT, TXN, NSM.
Economic Data
Import Price Index for August rose 1.7% versus estimates of a .6% increase and a .3% increase in July.
Initial Jobless Claims for last week were 319K versus estimates of 345K and 363K prior.
Continuing Claims were 2898K versus estimates of 2868K and 2878K prior.
Wholesale Inventories for July rose 1.3% versus estimates of a .6% increase and a 1.1% rise in June.
Recommendations
BLL cut to Underperform at CSFB, target $37.50. MRVL raised to Buy at UBS, target $30. TXN reiterated Sell at Merrill Lynch. NUE rated Buy at UBS, target $98. CMVT reiterated Buy at Merrill Lynch. ACDO raised to Outperform at CSFB, target $29. TIN downgraded to Underperform at CSFB, target $63. Goldman reiterated Outperform on DD, target $53. Goldman Reiterated Outperform on PFGC, AET, SANM, GLW and AMGN. Goldman reiterated Attractive view of metals, favorites are N, AA, AL, NEM and PDG. Citi SmithBarney downgraded REITs, sees 10-15% correction. Citi reiterated Buy on MATK, target $90. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on CSCO, target $30. Citi reiterated Buy on JNPR, target $32.50. Citi reiterated Sell on PGN, target $38.50. Citi reiterated Buy on NMG/A, target $68.
Mid-day News
U.S. stocks are mixed mid-day as strength in the technology sector is offsetting weakness related to energy oil prices. Long-term institutional investors such as pension funds, insurance companies and universities are investing twice as much in commodities as hedge funds, the Wall Street Journal reported. Electronic Arts and AOL have entered the video games market for fantasy sports leagues, the Wall Street Journal reported. Independent investment research executives are lobbying the SEC for the use of brokerage commissions to pay for independent research, the Wall Street Journal reported. New Jersey created three areas where technology start-up companies can qualify for tax credits and other assistance to bolster economic growth, the Star-Ledger reported. Ken Jennings, the "Jeopardy!" champion who won about $2.5 million, breaking records for the most money won on the TV quiz show, lost during his 75th appearance, Bloomberg reported. The International Energy Agency, the oil adviser to 26 industrialized nations, said prices might fall below $40/bbl. because consumers are "well supplied" with crude and inventories are rising, Bloomberg reported. Nokia boosted its forecasts for third-quarter earnings and sales as shipments of cellular phones exceeded expectations, Bloomberg reported. U.S. initial jobless claims plunged last week by the most since December 2001, reflecting a decline in the number of filings by Floridians in the aftermath of Hurricane Charley, Bloomberg reported. U.S. interest rates must rise to stay ahead of inflation and keep "unintended consequences" from creeping into an economy that's regaining momentum lost over the past few months, said Jack Guynn, president of the Federal Reserve Bank of Atlanta. National Semiconductor, which makes chips that boost battery life in mobile electronics, said first-quarter profit increased nearly 400% and sales rose, Bloomberg said. Crude oil in NY is rising after the Energy Department reported that U.S. inventories declined more than expected, Bloomberg reported. Hurricane Ivan, packing winds of 160 mph, moved across the Caribbean Sea toward Jamaica on a path that may make it the third hurricane to hit Florida in a month, prompting authorities to tell residents and tourists in the Keys to evacuate the island chain, Bloomberg reported.
BOTTOM LINE: The Portfolio is substantially higher mid-day as my homebuilding, internet, semi-equipment and education longs are rising. I added a few more technology longs this morning, bringing the Portfolio's market exposure to 125% net long. One of my new longs is BRCM and I am using a $26 stop-loss on this position. The market continues to consolidate recent gains in a very orderly fashion with a number of stocks making new highs and a healthy advance/decline line, notwithstanding a move higher in crude prices. It is also a big positive for the psychology of the market that the technology sector, specifically semis, seems to have stabilized. On the negative side, measures of investor anxiety are falling once again. I had hoped these indicators would move higher before the 9/11 anniversary. I expect U.S. stocks to rise modestly into the close on short-covering in the technology sector.
NASDAQ 1,865.69 +.82%
Leading Sectors
Semis +5.06%
Iron/Steel +3.23%
Networking +2.44%
Lagging Sectors
Drugs -.62%
Fashion -.83%
Retail -1.14%
Other
Crude Oil 44.40 +3.81%
Natural Gas 4.64 +.30%
Gold 400.40 -.25%
Base Metals 106.45 -.33%
U.S. Dollar 88.85 +.09%
10-Yr. T-note Yield 4.17% +.37%
VIX 13.92 -1.0%
Put/Call .98 -6.67%
NYSE Arms .88 -33.33%
Market Movers
TXN +6.8% after raising 3Q earnings forecast and lowering 3Q revenue outlook.
ICPT +6.0% after saying Fidelity National Financial(FNF) agreed to buy it for $408 million.
TZOO +12.85% on continuing short-squeeze.
DIOD +18.9% on positive 3Q guidance.
NUE +5.88% after boosting 3Q guidance substantially, announcing 2-for-1 split, boosting dividend and UBS upgrade to Buy.
CBRL +8.1% after saying it settle a lawsuit with the NAACP and making positive comments on 1Q.
RCII -14.2% after lowering 3Q/04 outlook.
*Steel stocks up across the board on NUE report.
*Semis up across the board on positive comments by NOK, MOT, TXN, NSM.
Economic Data
Import Price Index for August rose 1.7% versus estimates of a .6% increase and a .3% increase in July.
Initial Jobless Claims for last week were 319K versus estimates of 345K and 363K prior.
Continuing Claims were 2898K versus estimates of 2868K and 2878K prior.
Wholesale Inventories for July rose 1.3% versus estimates of a .6% increase and a 1.1% rise in June.
Recommendations
BLL cut to Underperform at CSFB, target $37.50. MRVL raised to Buy at UBS, target $30. TXN reiterated Sell at Merrill Lynch. NUE rated Buy at UBS, target $98. CMVT reiterated Buy at Merrill Lynch. ACDO raised to Outperform at CSFB, target $29. TIN downgraded to Underperform at CSFB, target $63. Goldman reiterated Outperform on DD, target $53. Goldman Reiterated Outperform on PFGC, AET, SANM, GLW and AMGN. Goldman reiterated Attractive view of metals, favorites are N, AA, AL, NEM and PDG. Citi SmithBarney downgraded REITs, sees 10-15% correction. Citi reiterated Buy on MATK, target $90. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on CSCO, target $30. Citi reiterated Buy on JNPR, target $32.50. Citi reiterated Sell on PGN, target $38.50. Citi reiterated Buy on NMG/A, target $68.
Mid-day News
U.S. stocks are mixed mid-day as strength in the technology sector is offsetting weakness related to energy oil prices. Long-term institutional investors such as pension funds, insurance companies and universities are investing twice as much in commodities as hedge funds, the Wall Street Journal reported. Electronic Arts and AOL have entered the video games market for fantasy sports leagues, the Wall Street Journal reported. Independent investment research executives are lobbying the SEC for the use of brokerage commissions to pay for independent research, the Wall Street Journal reported. New Jersey created three areas where technology start-up companies can qualify for tax credits and other assistance to bolster economic growth, the Star-Ledger reported. Ken Jennings, the "Jeopardy!" champion who won about $2.5 million, breaking records for the most money won on the TV quiz show, lost during his 75th appearance, Bloomberg reported. The International Energy Agency, the oil adviser to 26 industrialized nations, said prices might fall below $40/bbl. because consumers are "well supplied" with crude and inventories are rising, Bloomberg reported. Nokia boosted its forecasts for third-quarter earnings and sales as shipments of cellular phones exceeded expectations, Bloomberg reported. U.S. initial jobless claims plunged last week by the most since December 2001, reflecting a decline in the number of filings by Floridians in the aftermath of Hurricane Charley, Bloomberg reported. U.S. interest rates must rise to stay ahead of inflation and keep "unintended consequences" from creeping into an economy that's regaining momentum lost over the past few months, said Jack Guynn, president of the Federal Reserve Bank of Atlanta. National Semiconductor, which makes chips that boost battery life in mobile electronics, said first-quarter profit increased nearly 400% and sales rose, Bloomberg said. Crude oil in NY is rising after the Energy Department reported that U.S. inventories declined more than expected, Bloomberg reported. Hurricane Ivan, packing winds of 160 mph, moved across the Caribbean Sea toward Jamaica on a path that may make it the third hurricane to hit Florida in a month, prompting authorities to tell residents and tourists in the Keys to evacuate the island chain, Bloomberg reported.
BOTTOM LINE: The Portfolio is substantially higher mid-day as my homebuilding, internet, semi-equipment and education longs are rising. I added a few more technology longs this morning, bringing the Portfolio's market exposure to 125% net long. One of my new longs is BRCM and I am using a $26 stop-loss on this position. The market continues to consolidate recent gains in a very orderly fashion with a number of stocks making new highs and a healthy advance/decline line, notwithstanding a move higher in crude prices. It is also a big positive for the psychology of the market that the technology sector, specifically semis, seems to have stabilized. On the negative side, measures of investor anxiety are falling once again. I had hoped these indicators would move higher before the 9/11 anniversary. I expect U.S. stocks to rise modestly into the close on short-covering in the technology sector.
Thursday Watch
Earnings of Note
Company/Estimate
ASH/.18
CBRL/.66
JOSB/.24
NSM/.26
ZQK/.29
TTWO/-.30
Splits
None of note.
Economic Data
Import Price Index for August estimated to rise .6% versus a .2% rise in July.
Initial Jobless Claims for last week estimated at 345K versus 362K prior week.
Continuing Claims estimated at 2828K versus 2882K prior.
Wholesale Inventories for July estimated to increase .6% versus a 1.1% increase in June.
Recommendations
Goldman Sachs reiterated Outperform on INTC, CIT and FDC.
Late-Night News
Asian indices are mostly lower after a bomb near the Australian embassy in central Jakarta killed at least four people and injured 60. A human smuggling ring has been discovered in Detroit that allegedly brought more than 200 illegal Middle Eastern immigrants into the U.S., CNN reported. Saudi Prince Alwaleed bin Talal, the world's fourth-richest man, is in talks to buy a stake in central London's Savoy Hotel, the London-based Times reported. Taiwan Semiconductor Manufacturing will make chips for Intel that enable long-range wireless high-speed Internet surfing, DigiTimes reported. GlaxoSmithKline and AstraZeneca may withdraw funds for research and development in the U.K. if the government fails to clamp down on animal rights protesters, the London-based Times reported. WPP Group Plc, the world's second-largest advertising and marketing company, offered more than $1.25 billion to buy Grey Global Group, the Wall Street Journal reported. Molson's public shareholders may not support the beer brewer's proposed merger with Adolph Coors, the Wall Street Journal reported. DaimlerChrysler AG will raise its stake in Beijing Jeep, a Chinese maker of sport-utility vehicles, to 50% next month, the Beijing News reported. Japan's GDP probably rose at an annual 3.4% pace in the three months ended June 30, double economists' estimates, because companies increased capital spending more than predicted to meet higher demand for semiconductors and digital cameras, Bloomberg reported. Volkswagen AG, Europe's biggest carmaker, may shed as many as 30,000 jobs, or about 17% of its German workforce, if it can't get labor unions to agree to a wage freeze and other concessions in talks that start on Sept. 15, the Wall Street Journal reported. Wal-Mart is among companies whose shares may decline as S&P changes the calculation method for the S&P 500 to include only shares available for trading, Bloomberg reported. A large explosion rocked the Australian Embassy in central Jakarta, killing at least four people and injuring at least 60, Indonesian police said.
Late-Night Trading
Asian Indices are -.50% to +.25 on average.
S&P 500 indicated -.13%.
NASDAQ 100 indicated -.04%
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning on terrorism fears. However, shares should rise later in the day on falling energy prices and a rebound in technology stocks. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
ASH/.18
CBRL/.66
JOSB/.24
NSM/.26
ZQK/.29
TTWO/-.30
Splits
None of note.
Economic Data
Import Price Index for August estimated to rise .6% versus a .2% rise in July.
Initial Jobless Claims for last week estimated at 345K versus 362K prior week.
Continuing Claims estimated at 2828K versus 2882K prior.
Wholesale Inventories for July estimated to increase .6% versus a 1.1% increase in June.
Recommendations
Goldman Sachs reiterated Outperform on INTC, CIT and FDC.
Late-Night News
Asian indices are mostly lower after a bomb near the Australian embassy in central Jakarta killed at least four people and injured 60. A human smuggling ring has been discovered in Detroit that allegedly brought more than 200 illegal Middle Eastern immigrants into the U.S., CNN reported. Saudi Prince Alwaleed bin Talal, the world's fourth-richest man, is in talks to buy a stake in central London's Savoy Hotel, the London-based Times reported. Taiwan Semiconductor Manufacturing will make chips for Intel that enable long-range wireless high-speed Internet surfing, DigiTimes reported. GlaxoSmithKline and AstraZeneca may withdraw funds for research and development in the U.K. if the government fails to clamp down on animal rights protesters, the London-based Times reported. WPP Group Plc, the world's second-largest advertising and marketing company, offered more than $1.25 billion to buy Grey Global Group, the Wall Street Journal reported. Molson's public shareholders may not support the beer brewer's proposed merger with Adolph Coors, the Wall Street Journal reported. DaimlerChrysler AG will raise its stake in Beijing Jeep, a Chinese maker of sport-utility vehicles, to 50% next month, the Beijing News reported. Japan's GDP probably rose at an annual 3.4% pace in the three months ended June 30, double economists' estimates, because companies increased capital spending more than predicted to meet higher demand for semiconductors and digital cameras, Bloomberg reported. Volkswagen AG, Europe's biggest carmaker, may shed as many as 30,000 jobs, or about 17% of its German workforce, if it can't get labor unions to agree to a wage freeze and other concessions in talks that start on Sept. 15, the Wall Street Journal reported. Wal-Mart is among companies whose shares may decline as S&P changes the calculation method for the S&P 500 to include only shares available for trading, Bloomberg reported. A large explosion rocked the Australian Embassy in central Jakarta, killing at least four people and injuring at least 60, Indonesian police said.
Late-Night Trading
Asian Indices are -.50% to +.25 on average.
S&P 500 indicated -.13%.
NASDAQ 100 indicated -.04%
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning on terrorism fears. However, shares should rise later in the day on falling energy prices and a rebound in technology stocks. The Portfolio is 100% net long heading into tomorrow.
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