Earnings of Note
Company/Estimate
BSC/1.98
BBBY/.39
CAG/.26
DRI/.43
DBRN/.37
FDX/1.08
MWD/.95
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on PAYX and CSCO.
Late-Night News
Asian indices are mostly lower on weakness in the region's exporters. Analysts and brokers are bracing for fallout in Japan on Citigroup after regulators shut the bank's Tokyo-based private banking unit, the Wall Street Journal reported. South Korean researchers discovered a gene that may be responsible for obesity, which may lead to more effective drugs for overweight people, the Korea Herald reported. Vodafone Group is to start selling a range of mobile phones superior to those of its competitors as it seeks to enter the so-called third-generation market, the Financial Times reported. Broadcom is shifting orders to Shanghai-based Semiconductor Manufacturing Intl. from Taiwan Semiconductor Manufacturing to cut costs, the Commercial Times said. An Iraqi group led by wanted terrorist al-Zarqawi said it executed a second U.S. hostage, Bloomberg reported. McDonald's received government approval to start franchising its fast-food restaurants in China, a change that will boost profit in the world's most populous nation, Bloomberg reported. OAO Yukos Oil said the Russian government may be considering ways to settle a $7.5 billion tax bill without breaking up the company, Bloomberg said. Sales gains at U.S. retailers are expected to rise 4.5% this holiday season on demand for plasma televisions and new fashionable clothing, Bloomberg said.
Late-Night Trading
Asian Indices are -1.50% to unch. on average.
S&P 500 indicated -.29%.
NASDAQ 100 indicated -.31%
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning on concerns over the continuing rise in energy prices. However, better earnings and short-covering could push shares higher later in the day. The Portfolio is 100% net long heading into tomorrow.
Wednesday, September 22, 2004
Tuesday, September 21, 2004
Tuesday Close
S&P 500 1,129.30 +.63%
NASDAQ 1,921.18 +.69%
Leading Sectors
Homebuilders +3.75%
I-Banks +2.56%
Energy +2.53%
Lagging Sectors
Papers -.19%
Iron/Steel -.49%
Foods -.62%
Other
Crude Oil 46.82 +.13%
Natural Gas 5.64 +.57%
Gold 410.80 +.17%
Base Metals 113.98 +2.64%
U.S. Dollar 88.07 -.06%
10-Yr. T-note Yield 4.03% -.47%
VIX 13.66 -5.34%
Put/Call .69 -25.0%
NYSE Arms .85 -19.05%
After-hours Movers
JBL +7.08% after meeting 4Q estimates and raising 1Q forecast.
TIBX +3.20% after beating 3Q estimates and announcing a $50 million share buyback.
Recommendations
Goldman Sachs reiterated Outperform on AMGN and HOT.
After-hours News
U.S. stocks finished higher today on short-covering after a Fed rate hike and higher energy prices didn't send stocks lower. After the close, Comcast and the Atlanta Braves are jointly starting a channel devoted to 24-hour coverage of the baseball team, the Atlanta Journal-Constitution reported. China's central bank won't provide more financial support to state-owned commercial banks to help them reduce bad debts, People's Bank of China Governor Zhou Xiaochuan said. The elderly can cut their risk of dying by two-thirds over 10 years by exercising, eating fruits and vegetables, drinking moderately and not smoking, says a study in tomorrow's Journal of the American Medical Association, Bloomberg said. Paychex, which provides payroll services for small and medium-sized businesses, said fiscal first-quarter profit rose 9.2% because it added clients and increased prices, Bloomberg said. Federal Reserve policy makers raised the benchmark U.S. interest rate a quarter-point to 1.75% and restated a plan to carry out any further increases at a "measured" pace, Bloomberg reported.
BOTTOM LINE: The Portfolio finished slightly higher today on strength in my security, telecom equipment and homebuilding longs. I covered a few consumer-oriented shorts in the afternoon, thus leaving the Portfolio 100% net long. Today was another win for the Bulls as higher energy prices, violence in Iraq, earnings worries and a Fed rate-hike failed to send shares lower. It is also positive to see long-term interest rates continue to decline as they are now near levels where re-financings should accelerate. The strength in the I-banking stocks also bodes well for future gains. However, volume remained relatively weak today and measures of investor complacency rose.
NASDAQ 1,921.18 +.69%
Leading Sectors
Homebuilders +3.75%
I-Banks +2.56%
Energy +2.53%
Lagging Sectors
Papers -.19%
Iron/Steel -.49%
Foods -.62%
Other
Crude Oil 46.82 +.13%
Natural Gas 5.64 +.57%
Gold 410.80 +.17%
Base Metals 113.98 +2.64%
U.S. Dollar 88.07 -.06%
10-Yr. T-note Yield 4.03% -.47%
VIX 13.66 -5.34%
Put/Call .69 -25.0%
NYSE Arms .85 -19.05%
After-hours Movers
JBL +7.08% after meeting 4Q estimates and raising 1Q forecast.
TIBX +3.20% after beating 3Q estimates and announcing a $50 million share buyback.
Recommendations
Goldman Sachs reiterated Outperform on AMGN and HOT.
After-hours News
U.S. stocks finished higher today on short-covering after a Fed rate hike and higher energy prices didn't send stocks lower. After the close, Comcast and the Atlanta Braves are jointly starting a channel devoted to 24-hour coverage of the baseball team, the Atlanta Journal-Constitution reported. China's central bank won't provide more financial support to state-owned commercial banks to help them reduce bad debts, People's Bank of China Governor Zhou Xiaochuan said. The elderly can cut their risk of dying by two-thirds over 10 years by exercising, eating fruits and vegetables, drinking moderately and not smoking, says a study in tomorrow's Journal of the American Medical Association, Bloomberg said. Paychex, which provides payroll services for small and medium-sized businesses, said fiscal first-quarter profit rose 9.2% because it added clients and increased prices, Bloomberg said. Federal Reserve policy makers raised the benchmark U.S. interest rate a quarter-point to 1.75% and restated a plan to carry out any further increases at a "measured" pace, Bloomberg reported.
BOTTOM LINE: The Portfolio finished slightly higher today on strength in my security, telecom equipment and homebuilding longs. I covered a few consumer-oriented shorts in the afternoon, thus leaving the Portfolio 100% net long. Today was another win for the Bulls as higher energy prices, violence in Iraq, earnings worries and a Fed rate-hike failed to send shares lower. It is also positive to see long-term interest rates continue to decline as they are now near levels where re-financings should accelerate. The strength in the I-banking stocks also bodes well for future gains. However, volume remained relatively weak today and measures of investor complacency rose.
Mid-day Update
S&P 500 1,125.53 +.30%
NASDAQ 1,913.02 +.26%
Leading Sectors
Homebuilders +2.91%
Energy +2.0%
I-Banks +1.79%
Lagging Sectors
Tobacco -.28%
Iron/Steel -.47%
Foods -.93%
Other
Crude Oil 47.03 +1.47%
Natural Gas 5.43 +3.45%
Gold 411.00 +.98%
Base Metals 113.70 +2.39%
U.S. Dollar 88.39 -.67%
10-Yr. T-note Yield 4.07% +.33%
VIX 13.88 -3.81%
Put/Call .71 -22.83%
NYSE Arms .83 -20.95%
Market Movers
RHAT -14.0% after missing 2Q revenue estimates and lowering guidance.
PLMO -14.0% after substantially beating 1Q estimates, but giving conservative guidance on conference call.
TASR +4.0% after saying it received an order for 360 Taser X26 weapons from the U.S. Army National Guard.
TRMM +31.2% after saying it bought eFunds ATM portfolio for $150 million and Friedman, Billings rated it Outperform. EFD +14.8%.
RRGB +10.6% after boosting 3Q forecast substantially.
FDS +6.9% after beating 4Q estimates and raising 1Q outlook.
GLDB -11.1% after saying Silver Acquisition said it my cut its agreed purchase price significantly because of a reduction in GLDB's financial condition.
X -3.8% after Prudential downgrade to Neutral.
Economic Data
Housing Starts for August were 2000K versus estimates of 1930K and 1988K in July.
Building Permits for August were 1952K versus estimates of 1985K and 2066K in July.
Recommendations
Goldman Sachs reiterated Outperform on CVD, HOT and NKE. Goldman upgraded STR to Outperform. Citi SmithBarney reiterated Buy on TYC, ITT and MMM. Citi upgraded GRP to Buy, target $25. Citi upgraded BJS to Buy, target $62. Citi reiterated Buy on DOW, target $46. Citi reiterated Buy on JCP, target $50. Citi reiterated Buy on STZ, target $47. Citi reiterated Buy on VRTS, target $24. Citi reiterated Buy on KBH, target $111.00. HLT raised to Buy at Bank of America, target $23. HMT and HOT raised to Buy at Bank of America.
Mid-day News
U.S. equities are modestly higher mid-day on strength in homebuilding and investment-banking stocks. A U.S. panel might recommend this week that U.S. states expand their routine genetic screening of newborns to 30 diseases that are deemed treatable if detected early, the Wall Street Journal reported. Crude oil is rising to a one-month high of $47.18/bbl. on concern Russian exports will be disrupted after utilities cut some power supplies to OAO Yukos Oil, the country's top producer, Bloomberg reported. The Univ. of Michigan's business school is the preferred graduate business school in the U.S. among job recruiters, the Wall Street Journal reported. Senator John McCain is expected to propose a bill calling for broadcasters to only air digital television signals by 2009, Reuters reported. A new military headquarters in Washington will prepare for potential terrorist attacks in the U.S. capital and coordinate efforts of the area's military resources, the Washington Post said. P&G's application to sell a testosterone-laden skin patch, designed to boost the sex drives of women whose ovaries have been removed, was granted a priority review by the U.S. FDA, Bloomberg reported. Goldman Sachs said third-quarter profit rose 30%, buoyed by revenue from investment banking and debt trading, Bloomberg said. U.S. housing starts unexpectedly rose for a second month in August as mortgage rates near record lows attracted buyers, Bloomberg reported. American International Group said the SEC may sue the company's financial products division for violating U.S. securities laws, Bloomberg reported. Northrop Grumman won a $400 million award from the U.S. National Aeronautics and Space Administration to help design a nuclear-powered spacecraft to explore Jupiter's moons, Bloomberg said.
BOTTOM LINE: The Portfolio is unchanged mid-day as my security and software longs are rising and my steel and telecom longs are falling. I have not traded today and the Portfolio is still 75% net long. The tone of the market is pretty good today. Homebuilders are significantly outperforming. As well, i-banking stocks are under accumulation, which is positive for the broad market. However, measures of investor complacency and commodities prices are rising again. I expect the Fed to raise the Fed Funds' rate by 25 basis points this afternoon and say that diminishing inflation concerns will allow them to continue to raise rates at a measured pace. U.S. stocks should trade modestly higher into the afternoon on short-covering.
NASDAQ 1,913.02 +.26%
Leading Sectors
Homebuilders +2.91%
Energy +2.0%
I-Banks +1.79%
Lagging Sectors
Tobacco -.28%
Iron/Steel -.47%
Foods -.93%
Other
Crude Oil 47.03 +1.47%
Natural Gas 5.43 +3.45%
Gold 411.00 +.98%
Base Metals 113.70 +2.39%
U.S. Dollar 88.39 -.67%
10-Yr. T-note Yield 4.07% +.33%
VIX 13.88 -3.81%
Put/Call .71 -22.83%
NYSE Arms .83 -20.95%
Market Movers
RHAT -14.0% after missing 2Q revenue estimates and lowering guidance.
PLMO -14.0% after substantially beating 1Q estimates, but giving conservative guidance on conference call.
TASR +4.0% after saying it received an order for 360 Taser X26 weapons from the U.S. Army National Guard.
TRMM +31.2% after saying it bought eFunds ATM portfolio for $150 million and Friedman, Billings rated it Outperform. EFD +14.8%.
RRGB +10.6% after boosting 3Q forecast substantially.
FDS +6.9% after beating 4Q estimates and raising 1Q outlook.
GLDB -11.1% after saying Silver Acquisition said it my cut its agreed purchase price significantly because of a reduction in GLDB's financial condition.
X -3.8% after Prudential downgrade to Neutral.
Economic Data
Housing Starts for August were 2000K versus estimates of 1930K and 1988K in July.
Building Permits for August were 1952K versus estimates of 1985K and 2066K in July.
Recommendations
Goldman Sachs reiterated Outperform on CVD, HOT and NKE. Goldman upgraded STR to Outperform. Citi SmithBarney reiterated Buy on TYC, ITT and MMM. Citi upgraded GRP to Buy, target $25. Citi upgraded BJS to Buy, target $62. Citi reiterated Buy on DOW, target $46. Citi reiterated Buy on JCP, target $50. Citi reiterated Buy on STZ, target $47. Citi reiterated Buy on VRTS, target $24. Citi reiterated Buy on KBH, target $111.00. HLT raised to Buy at Bank of America, target $23. HMT and HOT raised to Buy at Bank of America.
Mid-day News
U.S. equities are modestly higher mid-day on strength in homebuilding and investment-banking stocks. A U.S. panel might recommend this week that U.S. states expand their routine genetic screening of newborns to 30 diseases that are deemed treatable if detected early, the Wall Street Journal reported. Crude oil is rising to a one-month high of $47.18/bbl. on concern Russian exports will be disrupted after utilities cut some power supplies to OAO Yukos Oil, the country's top producer, Bloomberg reported. The Univ. of Michigan's business school is the preferred graduate business school in the U.S. among job recruiters, the Wall Street Journal reported. Senator John McCain is expected to propose a bill calling for broadcasters to only air digital television signals by 2009, Reuters reported. A new military headquarters in Washington will prepare for potential terrorist attacks in the U.S. capital and coordinate efforts of the area's military resources, the Washington Post said. P&G's application to sell a testosterone-laden skin patch, designed to boost the sex drives of women whose ovaries have been removed, was granted a priority review by the U.S. FDA, Bloomberg reported. Goldman Sachs said third-quarter profit rose 30%, buoyed by revenue from investment banking and debt trading, Bloomberg said. U.S. housing starts unexpectedly rose for a second month in August as mortgage rates near record lows attracted buyers, Bloomberg reported. American International Group said the SEC may sue the company's financial products division for violating U.S. securities laws, Bloomberg reported. Northrop Grumman won a $400 million award from the U.S. National Aeronautics and Space Administration to help design a nuclear-powered spacecraft to explore Jupiter's moons, Bloomberg said.
BOTTOM LINE: The Portfolio is unchanged mid-day as my security and software longs are rising and my steel and telecom longs are falling. I have not traded today and the Portfolio is still 75% net long. The tone of the market is pretty good today. Homebuilders are significantly outperforming. As well, i-banking stocks are under accumulation, which is positive for the broad market. However, measures of investor complacency and commodities prices are rising again. I expect the Fed to raise the Fed Funds' rate by 25 basis points this afternoon and say that diminishing inflation concerns will allow them to continue to raise rates at a measured pace. U.S. stocks should trade modestly higher into the afternoon on short-covering.
Tuesday Watch
Earnings of Note
Company/Estimate
AZO/2.55
CEN/.19
CBK/.15
PAYX/.23
LEH/1.55
JBL/.26
GTK/.37
GS/1.43
GIS/.60
FDS/.46
SCHL/-1.27
SRR/.17
Splits
None of note.
Economic Data
Housing Starts for August estimated at 1930K versus 1978k in July.
Building Permits for August estimated at 1985K versus 2066K in July.
FOMC expected to raise the Fed Fund's rate to 1.75%.
Recommendations
Goldman reiterated Outperform on AMLN and ENH.
Late-Night News
Asian indices are mostly higher on strength in the region's technology shares. U.S. government officials told Japanese counterparts in informal talks that the U.S. is wiling to accept a condition set by Japan for removing the country's ban on U.S. beef, Kyodo News Service said. Japan plans to extend its troop deployment in Iraq for a year beyond its current commitment through Dec. 14, the Nihon Keizai reported. CBS News arranged for former Texas National Guard officer Bill Burkett to talk with Joe Lockhart, an aide to Senator Kerry, after Burkett gave the network fake documents on President Bush's military service, USA Today reported. Starwood Hotels & Resorts Worldwide will name Steven Heyer, former President and COO of Coca-Cola, as its CEO, the Wall Street Journal reported.
Late-Night Trading
Asian Indices are -.25% to +.75% on average.
S&P 500 indicated +.04%.
NASDAQ 100 indicated -.03%
BOTTOM LINE: I expect U.S. equities to open mixed in the morning as relative strength in technology shares is offset by earnings concerns. The Portfolio is 75% net long heading into tomorrow.
Company/Estimate
AZO/2.55
CEN/.19
CBK/.15
PAYX/.23
LEH/1.55
JBL/.26
GTK/.37
GS/1.43
GIS/.60
FDS/.46
SCHL/-1.27
SRR/.17
Splits
None of note.
Economic Data
Housing Starts for August estimated at 1930K versus 1978k in July.
Building Permits for August estimated at 1985K versus 2066K in July.
FOMC expected to raise the Fed Fund's rate to 1.75%.
Recommendations
Goldman reiterated Outperform on AMLN and ENH.
Late-Night News
Asian indices are mostly higher on strength in the region's technology shares. U.S. government officials told Japanese counterparts in informal talks that the U.S. is wiling to accept a condition set by Japan for removing the country's ban on U.S. beef, Kyodo News Service said. Japan plans to extend its troop deployment in Iraq for a year beyond its current commitment through Dec. 14, the Nihon Keizai reported. CBS News arranged for former Texas National Guard officer Bill Burkett to talk with Joe Lockhart, an aide to Senator Kerry, after Burkett gave the network fake documents on President Bush's military service, USA Today reported. Starwood Hotels & Resorts Worldwide will name Steven Heyer, former President and COO of Coca-Cola, as its CEO, the Wall Street Journal reported.
Late-Night Trading
Asian Indices are -.25% to +.75% on average.
S&P 500 indicated +.04%.
NASDAQ 100 indicated -.03%
BOTTOM LINE: I expect U.S. equities to open mixed in the morning as relative strength in technology shares is offset by earnings concerns. The Portfolio is 75% net long heading into tomorrow.
Monday, September 20, 2004
Monday Close
S&P 500 1,122.20 -.56%
NASDAQ 1,908.07 -.11%
Leading Sectors
Semis +2.93%
Gaming +.89%
Disk Drives +.79%
Lagging Sectors
Airlines -1.49%
Homebuilders -1.85%
Tobacco -1.98%
Other
Crude Oil 46.53 +.39%
Natural Gas 5.33 +1.54%
Gold 407.00 unch.
Base Metals 111.05 +1.35%
U.S. Dollar 88.99 +.09%
10-Yr. T-note Yield 4.05% -1.22%
VIX 14.43 +2.85%
Put/Call .92 +12.20%
NYSE Arms 1.05 +43.84%
After-hours Movers
ADBE +3.73% after beating 3Q estimates and raising 4Q guidance.
SSTI +5.26% on bargain-hunting after lowering 3Q forecast.
PLMO -9.9% after substantially beating 1Q estimates, but giving conservative guidance on conference call.
POWI -4.53% after cutting 3Q forecast.
Recommendations
Goldman Sachs reiterated Outperform on INTC, DNA and CCL. Goldman rated RIMM new Outperform, sees 15-20% upside.
After-hours News
U.S. stocks finished modestly lower today on profit-taking, earnings concerns and higher oil prices. After the close, a video posted on an Islamist Web site showed a man identified as American Eugene Armstrong being beheaded by his captors, the AP reported. Dow Chemical has been raising prices to pass on the higher costs of raw products to its customers, CEO Stavropoulos said. China tested an advanced land-attack cruise missile capable of accurately striking targets 932 miles away, the Financial Times reported. People who suffered heart attacks in the U.S. in the early 1990's were more likely to survive than victims in Canada because they underwent aggressive treatment, according to a study in Circulation: the Journal of the American Heart Association. AOL said it started an Internet shopping service, seeking to lure customers and advertising revenue from Yahoo! and Microsoft's MSN service. Adobe Systems, the world's largest maker of graphic-design software, said third-quarter profit rose to $104.5 million as higher spending on advertising fueled demand for design and publishing programs, Bloomberg said. Citigroup shares had their biggest one-day drop in 18 months after Merrill Lynch cut its rating on the stock because Japanese regulators shut the bank's Tokyo-based private banking unit, Bloomberg reported. Delta Air's pilots union leaders approved a contract exemption to help the carrier avoid a pilot shortage because of increased retirements and to fend off a bankruptcy filing, Bloomberg said. San Diego, the subject of a federal probe into pension-fund misstatements, became the largest city to lose its credit rating in more than two decades as S&P suspended its ranking on $580 million of bonds, Bloomberg reported.
BOTTOM LINE: The Portfolio finished lower today on weakness in my security, steel and education longs. I took profits in a couple of technology longs in the afternoon and added to a few of my existing steel and security longs, thus leaving the Portfolio 75% net long. The underlying tone of the market was pretty good today, notwithstanding modest declines in the major indices. However, energy prices need to head back down to prevent a correction in the near-term.
NASDAQ 1,908.07 -.11%
Leading Sectors
Semis +2.93%
Gaming +.89%
Disk Drives +.79%
Lagging Sectors
Airlines -1.49%
Homebuilders -1.85%
Tobacco -1.98%
Other
Crude Oil 46.53 +.39%
Natural Gas 5.33 +1.54%
Gold 407.00 unch.
Base Metals 111.05 +1.35%
U.S. Dollar 88.99 +.09%
10-Yr. T-note Yield 4.05% -1.22%
VIX 14.43 +2.85%
Put/Call .92 +12.20%
NYSE Arms 1.05 +43.84%
After-hours Movers
ADBE +3.73% after beating 3Q estimates and raising 4Q guidance.
SSTI +5.26% on bargain-hunting after lowering 3Q forecast.
PLMO -9.9% after substantially beating 1Q estimates, but giving conservative guidance on conference call.
POWI -4.53% after cutting 3Q forecast.
Recommendations
Goldman Sachs reiterated Outperform on INTC, DNA and CCL. Goldman rated RIMM new Outperform, sees 15-20% upside.
After-hours News
U.S. stocks finished modestly lower today on profit-taking, earnings concerns and higher oil prices. After the close, a video posted on an Islamist Web site showed a man identified as American Eugene Armstrong being beheaded by his captors, the AP reported. Dow Chemical has been raising prices to pass on the higher costs of raw products to its customers, CEO Stavropoulos said. China tested an advanced land-attack cruise missile capable of accurately striking targets 932 miles away, the Financial Times reported. People who suffered heart attacks in the U.S. in the early 1990's were more likely to survive than victims in Canada because they underwent aggressive treatment, according to a study in Circulation: the Journal of the American Heart Association. AOL said it started an Internet shopping service, seeking to lure customers and advertising revenue from Yahoo! and Microsoft's MSN service. Adobe Systems, the world's largest maker of graphic-design software, said third-quarter profit rose to $104.5 million as higher spending on advertising fueled demand for design and publishing programs, Bloomberg said. Citigroup shares had their biggest one-day drop in 18 months after Merrill Lynch cut its rating on the stock because Japanese regulators shut the bank's Tokyo-based private banking unit, Bloomberg reported. Delta Air's pilots union leaders approved a contract exemption to help the carrier avoid a pilot shortage because of increased retirements and to fend off a bankruptcy filing, Bloomberg said. San Diego, the subject of a federal probe into pension-fund misstatements, became the largest city to lose its credit rating in more than two decades as S&P suspended its ranking on $580 million of bonds, Bloomberg reported.
BOTTOM LINE: The Portfolio finished lower today on weakness in my security, steel and education longs. I took profits in a couple of technology longs in the afternoon and added to a few of my existing steel and security longs, thus leaving the Portfolio 75% net long. The underlying tone of the market was pretty good today, notwithstanding modest declines in the major indices. However, energy prices need to head back down to prevent a correction in the near-term.
Mid-day Update
S&P 500 1,123.12 -.48%
NASDAQ 1,908.91 -.06%
Leading Sectors
Semis +2.90%
Oil Service +.89%
Disk Drives +.88%
Lagging Sectors
Drugs -1.27%
Broadcasting -1.41%
Tobacco -1.54%
Other
Crude Oil 45.75 +.35%
Natural Gas 5.16 +1.12%
Gold 406.60 -.25%
Base Metals 111.05 +1.35%
U.S. Dollar 88.99 +.15%
10-Yr. T-note Yield 4.07% -.75%
VIX 14.44 +2.92%
Put/Call 1.02 +24.39%
NYSE Arms 1.03 +41.10%
Market Movers
UTSI -8.9% after lowering 3Q estimates significantly.
CL -10.5% after lowering 3Q/4Q forecasts.
OSIP +7.9% after saying that its experimental Tarceva drug combined with chemotherapy helped patients with pancreatic cancer live longer in a study.
SJH +7.4% after saying Fortress Investment Group agreed to acquire it for about $677 million in cash.
ACH +6.4% on speculation the Chinese economy would accelerate and the company is raising prices.
MOND +4.6% after saying it expects to raise $400 million to $500 million after taxes through sales of assets to focus on its premium labels.
WMGI -12.63% after it cut its 3Q/04 outlook, citing a recall on its metal acetabular hip cups.
ROG -12.2% after cutting 3Q forecast substantially.
TFX -8.7% after cutting 3Q and 04 outlook substantially.
UL -5.1% after reducing 04 forecast.
Economic Data
NAHB Housing Market Index fell to 68 in September versus estimates of 70 and a reading of 71 in August.
Recommendations
Goldman Sachs reiterated Underperform on CL, F and EK. Goldman reiterated Outperform on DNA, AMLN, ROH, ACS, CAN, PG, CTSH, IGT, SLR, FS and BAX. Citi SmithBarney reiterated Buy on CCL, target $54. Citi reiterated Buy on WMT, target $65. Citi rated ELOS Buy, target $21. AUDC cut to Reduce at UBS, target $10.50. PKY cut to Reduce at UBS, target $44. APOL cut to Reduce at UBS. CECO cut to Reduce at UBS, target $27. TRDO cut to Underweight at JP Morgan. NBP, MCIP, GGC, WLK rated Overweight at JP Morgan. ZMH raised to Outperform at Bear Stearns, target $93. WLK rated Buy at Bank of America, target $24.
Mid-day News
U.S. stocks are modestly lower mid-day on earnings worries and rising oil prices. America Online Vice Chairman Ted Leonsis told financial news network CNBC AOL might enhance its Web site to add to advertising sales, Bloomberg said. Reality tv producer Mark Burnett has discussed making changes with Martha Stewart about her tv show once her prison time and home confinement are completed, the NY Daily News reported. Google must expand outside the U.S. to succeed, particularly in Asia, where the potential for growth is the greatest, the San Francisco Chronicle reported. Nike said first-quarter earnings surged 25% as demand for Shox running shoes and Converse sneakers fueled the fastest U.S. sales gain in more than a year, Bloomberg reported. Iraq should go ahead with plans for an election in January to hand a "big defeat" to terrorists, who are trying to undermine the country's stability, Prime Minister Allawi told the U.K.'s GMTV. A U.S. judge struck down more than 12 of the government's current political fund-raising rules, because she said the regulations improperly weaken campaign finance law, the AP reported. Viacom's CBS said the tv network can't prove the authenticity of documents it had used to raise questions about President Bush's National Guard service and that using them was a "mistake", Bloomberg reported. Crude oil is rising to a four-week high after OAO Yukos Oil said it will halt shipments to China's biggest oil company because its bank accounts have been frozen by the Russian government, Bloomberg said.
BOTTOM LINE: The Portfolio is lower mid-day on declines in my security, education and homebuilding longs. I took profits in a few internet and education longs this morning, thus leaving the Portfolio 75% net long. While most stocks are lower today, it is a positive to see strength in technology shares and specifically the semiconductor sector. As well, measures of investor anxiety are climbing towards more healthy levels. I continue to expect stocks to consolidate recent gains through mid-October, setting the stage for a very good fourth quarter. I expect U.S. stocks to trade mixed into the afternoon.
NASDAQ 1,908.91 -.06%
Leading Sectors
Semis +2.90%
Oil Service +.89%
Disk Drives +.88%
Lagging Sectors
Drugs -1.27%
Broadcasting -1.41%
Tobacco -1.54%
Other
Crude Oil 45.75 +.35%
Natural Gas 5.16 +1.12%
Gold 406.60 -.25%
Base Metals 111.05 +1.35%
U.S. Dollar 88.99 +.15%
10-Yr. T-note Yield 4.07% -.75%
VIX 14.44 +2.92%
Put/Call 1.02 +24.39%
NYSE Arms 1.03 +41.10%
Market Movers
UTSI -8.9% after lowering 3Q estimates significantly.
CL -10.5% after lowering 3Q/4Q forecasts.
OSIP +7.9% after saying that its experimental Tarceva drug combined with chemotherapy helped patients with pancreatic cancer live longer in a study.
SJH +7.4% after saying Fortress Investment Group agreed to acquire it for about $677 million in cash.
ACH +6.4% on speculation the Chinese economy would accelerate and the company is raising prices.
MOND +4.6% after saying it expects to raise $400 million to $500 million after taxes through sales of assets to focus on its premium labels.
WMGI -12.63% after it cut its 3Q/04 outlook, citing a recall on its metal acetabular hip cups.
ROG -12.2% after cutting 3Q forecast substantially.
TFX -8.7% after cutting 3Q and 04 outlook substantially.
UL -5.1% after reducing 04 forecast.
Economic Data
NAHB Housing Market Index fell to 68 in September versus estimates of 70 and a reading of 71 in August.
Recommendations
Goldman Sachs reiterated Underperform on CL, F and EK. Goldman reiterated Outperform on DNA, AMLN, ROH, ACS, CAN, PG, CTSH, IGT, SLR, FS and BAX. Citi SmithBarney reiterated Buy on CCL, target $54. Citi reiterated Buy on WMT, target $65. Citi rated ELOS Buy, target $21. AUDC cut to Reduce at UBS, target $10.50. PKY cut to Reduce at UBS, target $44. APOL cut to Reduce at UBS. CECO cut to Reduce at UBS, target $27. TRDO cut to Underweight at JP Morgan. NBP, MCIP, GGC, WLK rated Overweight at JP Morgan. ZMH raised to Outperform at Bear Stearns, target $93. WLK rated Buy at Bank of America, target $24.
Mid-day News
U.S. stocks are modestly lower mid-day on earnings worries and rising oil prices. America Online Vice Chairman Ted Leonsis told financial news network CNBC AOL might enhance its Web site to add to advertising sales, Bloomberg said. Reality tv producer Mark Burnett has discussed making changes with Martha Stewart about her tv show once her prison time and home confinement are completed, the NY Daily News reported. Google must expand outside the U.S. to succeed, particularly in Asia, where the potential for growth is the greatest, the San Francisco Chronicle reported. Nike said first-quarter earnings surged 25% as demand for Shox running shoes and Converse sneakers fueled the fastest U.S. sales gain in more than a year, Bloomberg reported. Iraq should go ahead with plans for an election in January to hand a "big defeat" to terrorists, who are trying to undermine the country's stability, Prime Minister Allawi told the U.K.'s GMTV. A U.S. judge struck down more than 12 of the government's current political fund-raising rules, because she said the regulations improperly weaken campaign finance law, the AP reported. Viacom's CBS said the tv network can't prove the authenticity of documents it had used to raise questions about President Bush's National Guard service and that using them was a "mistake", Bloomberg reported. Crude oil is rising to a four-week high after OAO Yukos Oil said it will halt shipments to China's biggest oil company because its bank accounts have been frozen by the Russian government, Bloomberg said.
BOTTOM LINE: The Portfolio is lower mid-day on declines in my security, education and homebuilding longs. I took profits in a few internet and education longs this morning, thus leaving the Portfolio 75% net long. While most stocks are lower today, it is a positive to see strength in technology shares and specifically the semiconductor sector. As well, measures of investor anxiety are climbing towards more healthy levels. I continue to expect stocks to consolidate recent gains through mid-October, setting the stage for a very good fourth quarter. I expect U.S. stocks to trade mixed into the afternoon.
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