Wednesday, October 06, 2004
***Alert***
There will not be a mid-day update today due to a scheduling conflict. Sorry for the inconvenience. The Wednesday close will appear at its regular time. The Portfolio is up slightly today and I have not traded, leaving it 125% net long.
Wednesday Watch
Earnings of Note
Company/Estimate
DNA/.21
MON/.02
SCHN/.90
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on BBY, YHOO, KMI, GE, VNO and SRE.
Late-Night News
Asian indices are modestly higher on strength in commodity-related shares. China will ease controls on loans, property and investment amid concern that tough measures to cool the economy may lead to a "hard landing," the South China Morning Post reported. Pulte Homes CEO Dugas told CNBC that its new-home order growth in the third quarter, excluding Las Vegas, was 24%, Bloomberg reported. Adelphia Communications may refuse to allow Comcast and Time Warner to submit a joint offer to acquire the company, the Wall Street Journal said. US Airways' 3,200 pilots will vote on an agreement that would allow $1.85 billion in pay and benefit reductions over five years that the company said it needs to help avoid liquidating, Bloomberg reported. Electronic Arts said it will set up a development studio in China to tap the nation's growing online games market and earn more sales from Asia, Bloomberg said.
Late-Night Trading
Asian Indices are +.25% to +.50% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.10%
BOTTOM LINE: I expect U.S. equities to open modestly higher on gains in Asia, positive Fed comments and short-covering. However, the weekly government oil inventories report will likely dictate trading later in the day. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
DNA/.21
MON/.02
SCHN/.90
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on BBY, YHOO, KMI, GE, VNO and SRE.
Late-Night News
Asian indices are modestly higher on strength in commodity-related shares. China will ease controls on loans, property and investment amid concern that tough measures to cool the economy may lead to a "hard landing," the South China Morning Post reported. Pulte Homes CEO Dugas told CNBC that its new-home order growth in the third quarter, excluding Las Vegas, was 24%, Bloomberg reported. Adelphia Communications may refuse to allow Comcast and Time Warner to submit a joint offer to acquire the company, the Wall Street Journal said. US Airways' 3,200 pilots will vote on an agreement that would allow $1.85 billion in pay and benefit reductions over five years that the company said it needs to help avoid liquidating, Bloomberg reported. Electronic Arts said it will set up a development studio in China to tap the nation's growing online games market and earn more sales from Asia, Bloomberg said.
Late-Night Trading
Asian Indices are +.25% to +.50% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.10%
BOTTOM LINE: I expect U.S. equities to open modestly higher on gains in Asia, positive Fed comments and short-covering. However, the weekly government oil inventories report will likely dictate trading later in the day. The Portfolio is 125% net long heading into tomorrow.
Tuesday, October 05, 2004
Tuesday Close
S&P 500 1,134.48 -.06%
NASDAQ 1,955.50 +.16%
Leading Sectors
Energy +1.10%
Hospitals +.94%
Software +.75%
Lagging Sectors
Biotech -1.43%
Homebuilders -2.25%
Airlines -2.90%
Other
Crude Oil 51.10 +.02%
Natural Gas 7.11 -.75%
Gold 420.60 +.19%
Base Metals 120.36 +.28%
U.S. Dollar 88.17 -.24%
10-Yr. T-note Yield 4.17% +.23%
VIX 13.95 +4.03%
Put/Call .81 -2.41%
NYSE Arms 1.38 +97.14%
After-hours Movers
OTEX -17.7% after lowering 1Q estimates.
ZRAN -12.9% after lowering 3Q forecasts.
PRGO +3.9% after announcing that it has received approval from the U.S. FDA to market over-the-counter nicotine polacrilex gum and prescription ibuprofen oral suspension.
Recommendations
Goldman Sachs reiterated Underperform on ATI. Goldman reiterated Outperform on CSCO, PHCC and HEW.
After-hours News
U.S. stocks finished quietly mixed today as rising energy prices dampened optimism over better economic growth. After the close, News Corp. Chairman Murdoch offered to change the company's constitution to appease investors opposed to his plan to move the company to the U.S., the Australian Financial Review reported. Iran's missiles can reach as far as 1,243 miles and the country may continue to increase the range of the weapons, former President Rafsanjani said. Fannie Mae CEO Raines will defend the company's accounting practices at a congressional hearing tomorrow, the Financial Times reported. Yum! Brands, operator of the Taco Bell, Pizza Hut and KFC restaurant chains, said third-quarter earnings rose 13% and it would beat its annual forecast, boosted by higher sales in China, Bloomberg reported. Mutual fund manager Bill Miller disclosed that his Legg Mason Value Trust has acquired almost 6% of Google's common shares, Bloomberg said.
BOTTOM LINE: The Portfolio finished unchanged today as my rising steel and internet longs were offset by my falling biotech and retail longs. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. Considering another major U.S. company, Chiron(CHIR), took a significant hit and oil breached $51/bbl. today, U.S. stocks turned in a pretty good showing. Today's ISM Non-manufacturing report, while lower than expectations, showed another decline in inflationary pricing and an improving employment outlook. This is especially encouraging considering the affects the record-setting hurricanes had on the service industries in the South. I continue to believe the U.S. economy is accelerating from its 3.3% growth in the second quarter to around 4% in the third quarter and 5% in the fourth quarter. This should allow many companies to beat lowered 4Q estimates.
NASDAQ 1,955.50 +.16%
Leading Sectors
Energy +1.10%
Hospitals +.94%
Software +.75%
Lagging Sectors
Biotech -1.43%
Homebuilders -2.25%
Airlines -2.90%
Other
Crude Oil 51.10 +.02%
Natural Gas 7.11 -.75%
Gold 420.60 +.19%
Base Metals 120.36 +.28%
U.S. Dollar 88.17 -.24%
10-Yr. T-note Yield 4.17% +.23%
VIX 13.95 +4.03%
Put/Call .81 -2.41%
NYSE Arms 1.38 +97.14%
After-hours Movers
OTEX -17.7% after lowering 1Q estimates.
ZRAN -12.9% after lowering 3Q forecasts.
PRGO +3.9% after announcing that it has received approval from the U.S. FDA to market over-the-counter nicotine polacrilex gum and prescription ibuprofen oral suspension.
Recommendations
Goldman Sachs reiterated Underperform on ATI. Goldman reiterated Outperform on CSCO, PHCC and HEW.
After-hours News
U.S. stocks finished quietly mixed today as rising energy prices dampened optimism over better economic growth. After the close, News Corp. Chairman Murdoch offered to change the company's constitution to appease investors opposed to his plan to move the company to the U.S., the Australian Financial Review reported. Iran's missiles can reach as far as 1,243 miles and the country may continue to increase the range of the weapons, former President Rafsanjani said. Fannie Mae CEO Raines will defend the company's accounting practices at a congressional hearing tomorrow, the Financial Times reported. Yum! Brands, operator of the Taco Bell, Pizza Hut and KFC restaurant chains, said third-quarter earnings rose 13% and it would beat its annual forecast, boosted by higher sales in China, Bloomberg reported. Mutual fund manager Bill Miller disclosed that his Legg Mason Value Trust has acquired almost 6% of Google's common shares, Bloomberg said.
BOTTOM LINE: The Portfolio finished unchanged today as my rising steel and internet longs were offset by my falling biotech and retail longs. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. Considering another major U.S. company, Chiron(CHIR), took a significant hit and oil breached $51/bbl. today, U.S. stocks turned in a pretty good showing. Today's ISM Non-manufacturing report, while lower than expectations, showed another decline in inflationary pricing and an improving employment outlook. This is especially encouraging considering the affects the record-setting hurricanes had on the service industries in the South. I continue to believe the U.S. economy is accelerating from its 3.3% growth in the second quarter to around 4% in the third quarter and 5% in the fourth quarter. This should allow many companies to beat lowered 4Q estimates.
Mid-day Update
S&P 500 1,134.93 -.02%
NASDAQ 1,954.36 +.10%
Leading Sectors
Energy +1.45%
Oil Service +.87%
Hospitals +.75%
Lagging Sectors
Insurance -1.22%
Homebuilders -1.92%
Airlines -2.28%
Other
Crude Oil 50.73 +1.68%
Natural Gas 7.18 +6.69%
Gold 420.60 +1.20%
Base Metals 120.36 +.28%
U.S. Dollar 88.23 -.17%
10-Yr. T-note Yield 4.17% +.14%
VIX 14.06 +3.80%
Put/Call .88 +6.02%
NYSE Arms 1.17 +67.14%
Market Movers
NFLX +6.8% after beating 3Q estimates.
MEDI +5.4% after Chiron(CHIR) said it won't sell any flu shots in the U.S. this year.
DPMI +44.0% after Toppan Printing Co. said it agreed to acquire it for $641 million.
TXRH +25.8% on strong demand for its IPO.
SCUR +16.3% after boosting 3Q forecast.
FILE +16.6% after Robert Baird upgrade to Outperform and saying its new FileNet Records Manager suite has been certified compliant with the U.S. Dept. of Defense.
PETD +7.6% on rising energy prices.
FRX +5.3% after beating 2Q estimates and raising 3Q guidance.
TSO +7.7% on CSFB upgrade to Outperform.
NATI -14.2% after lowering 3Q estimates and Robert Baird downgrade to Neutral.
RI -14.5% after missing 1Q estimates and lowering 2Q outlook.
EPIX -11.7% after saying the FDA has extended the action date for completion of its review of MS-325.
PHM -7.4% after cutting 3Q/04 forecast slightly.
HSIC -6.6% and halted for news pending.
Economic Data
ISM Non-Manufacturing for September fell to 56.7 versus estimates of 59.0 and a reading of 58.2 in August.
Recommendations
Goldman Sachs reiterated Outperform on IGT, RE, DELL, WMT, DIS, ENH, SII, DNA, ITT, SYMC, MERQ, AMD, CTSH, INTC and CVD. Goldman reiterated Underperform on VRSN, MRO, SAY and FRX. Citi SmithBarney said to Buy CKFR, target $39. Citi reiterated Buy on PHM, target $83. Citi reiterated Buy on NFLX, target $26. Citi reiterated Buy on HYGS, target $7.50. Citi reiterated Buy on SEBL, target $12. Citi reiterated Buy on NPSP, target $30. Citi reiterated Buy on MXRE, target $24. Citi reiterated Sell on AMD, target $12. GLG raised to Sector Outperform at CIBC, target $24. BAC rated Outperform at CSFB, target $47.50. WFC rated Outperform at CSFB, target $70. NCC rated Underperform at CSFB, target $35. VLO raised to Outperform at CSFB, target $95. TSO raised to Outperform at CSFB, target $35. FTO cut to Underperform at CSFB, target $22. RI downgraded to Underperform at Raymond James.
Mid-day News
U.S. stocks are quietly mixed mid-day as rising energy prices dampen optimism. Merck's withdrawal of the painkiller Vioxx may prompt lawsuits that focus on a Sept. 2001 warning letter sent to the company by the FDA, the Wall Street Journal reported. Developers Mills and Mack-Cali Realty will pay $160 million for the right to build a $1.3 billion retail and entertainment center at the Meadowlands Sports Complex, the Star-Ledger reported. Intel's entertainment personal computer, or EPC, is scheduled to debut next week, along with models from Hewlett-Packard and Fujitsu, the LA Times reported. Best Buy will test a health, wellness and beauty store to tap the growing market for products and services for the aging baby boomers, the Star-Tribune reported. French Prime Minister Jean-Pierre Raffarin said efforts to gain the release of two French reporters abducted in Iraq six weeks ago are at a standstill after a private initiative by a member of parliament failed, Bloomberg said. The steam spewing from Washington's Mount St. Helens is a sign that magma is near the surface and the volcano may erupt at any time, scientists said. AT&T is testing Linux software as a replacement for Microsoft's Windows operating system, Bloomberg said. Chiron, the world's second-largest seller of influenza vaccines, had its manufacturing license in the U.K. suspended for three months and won't be able to ship any batches of the vaccine, Bloomberg reported. France expelled a Muslim cleric who said the Koran allows husbands to beat adulterous wives for the second time in six months, Bloomberg said. An index of the U.S. services economy fell in September, however within the index a measure of employment increased and prices paid decreased, Bloomberg reported. L. Paul Bremer, the former top American official in Iraq, said he believes the U.S. now has enough soldiers in the country, after telling an audience that inadequate security allowed street violence to take root following the fall of Baghdad, Bloomberg said. A crackdown on telemarketing fraud resulted in the arrest of more than 100 people in the U.S. and 35 suspects in other nations this year, the Justice Dept. said. Billionaire George Soros is handing greater control of his $12.8 billion money management firm to his sons, Bloomberg reported.
BOTTOM LINE: The Portfolio is slightly higher mid-day on strength in my steel, wireless and internet longs. I have not traded today and the Portfolio is still 125% net long. Rising energy prices will likely result in mixed-to-weaker trading into the afternoon.
NASDAQ 1,954.36 +.10%
Leading Sectors
Energy +1.45%
Oil Service +.87%
Hospitals +.75%
Lagging Sectors
Insurance -1.22%
Homebuilders -1.92%
Airlines -2.28%
Other
Crude Oil 50.73 +1.68%
Natural Gas 7.18 +6.69%
Gold 420.60 +1.20%
Base Metals 120.36 +.28%
U.S. Dollar 88.23 -.17%
10-Yr. T-note Yield 4.17% +.14%
VIX 14.06 +3.80%
Put/Call .88 +6.02%
NYSE Arms 1.17 +67.14%
Market Movers
NFLX +6.8% after beating 3Q estimates.
MEDI +5.4% after Chiron(CHIR) said it won't sell any flu shots in the U.S. this year.
DPMI +44.0% after Toppan Printing Co. said it agreed to acquire it for $641 million.
TXRH +25.8% on strong demand for its IPO.
SCUR +16.3% after boosting 3Q forecast.
FILE +16.6% after Robert Baird upgrade to Outperform and saying its new FileNet Records Manager suite has been certified compliant with the U.S. Dept. of Defense.
PETD +7.6% on rising energy prices.
FRX +5.3% after beating 2Q estimates and raising 3Q guidance.
TSO +7.7% on CSFB upgrade to Outperform.
NATI -14.2% after lowering 3Q estimates and Robert Baird downgrade to Neutral.
RI -14.5% after missing 1Q estimates and lowering 2Q outlook.
EPIX -11.7% after saying the FDA has extended the action date for completion of its review of MS-325.
PHM -7.4% after cutting 3Q/04 forecast slightly.
HSIC -6.6% and halted for news pending.
Economic Data
ISM Non-Manufacturing for September fell to 56.7 versus estimates of 59.0 and a reading of 58.2 in August.
Recommendations
Goldman Sachs reiterated Outperform on IGT, RE, DELL, WMT, DIS, ENH, SII, DNA, ITT, SYMC, MERQ, AMD, CTSH, INTC and CVD. Goldman reiterated Underperform on VRSN, MRO, SAY and FRX. Citi SmithBarney said to Buy CKFR, target $39. Citi reiterated Buy on PHM, target $83. Citi reiterated Buy on NFLX, target $26. Citi reiterated Buy on HYGS, target $7.50. Citi reiterated Buy on SEBL, target $12. Citi reiterated Buy on NPSP, target $30. Citi reiterated Buy on MXRE, target $24. Citi reiterated Sell on AMD, target $12. GLG raised to Sector Outperform at CIBC, target $24. BAC rated Outperform at CSFB, target $47.50. WFC rated Outperform at CSFB, target $70. NCC rated Underperform at CSFB, target $35. VLO raised to Outperform at CSFB, target $95. TSO raised to Outperform at CSFB, target $35. FTO cut to Underperform at CSFB, target $22. RI downgraded to Underperform at Raymond James.
Mid-day News
U.S. stocks are quietly mixed mid-day as rising energy prices dampen optimism. Merck's withdrawal of the painkiller Vioxx may prompt lawsuits that focus on a Sept. 2001 warning letter sent to the company by the FDA, the Wall Street Journal reported. Developers Mills and Mack-Cali Realty will pay $160 million for the right to build a $1.3 billion retail and entertainment center at the Meadowlands Sports Complex, the Star-Ledger reported. Intel's entertainment personal computer, or EPC, is scheduled to debut next week, along with models from Hewlett-Packard and Fujitsu, the LA Times reported. Best Buy will test a health, wellness and beauty store to tap the growing market for products and services for the aging baby boomers, the Star-Tribune reported. French Prime Minister Jean-Pierre Raffarin said efforts to gain the release of two French reporters abducted in Iraq six weeks ago are at a standstill after a private initiative by a member of parliament failed, Bloomberg said. The steam spewing from Washington's Mount St. Helens is a sign that magma is near the surface and the volcano may erupt at any time, scientists said. AT&T is testing Linux software as a replacement for Microsoft's Windows operating system, Bloomberg said. Chiron, the world's second-largest seller of influenza vaccines, had its manufacturing license in the U.K. suspended for three months and won't be able to ship any batches of the vaccine, Bloomberg reported. France expelled a Muslim cleric who said the Koran allows husbands to beat adulterous wives for the second time in six months, Bloomberg said. An index of the U.S. services economy fell in September, however within the index a measure of employment increased and prices paid decreased, Bloomberg reported. L. Paul Bremer, the former top American official in Iraq, said he believes the U.S. now has enough soldiers in the country, after telling an audience that inadequate security allowed street violence to take root following the fall of Baghdad, Bloomberg said. A crackdown on telemarketing fraud resulted in the arrest of more than 100 people in the U.S. and 35 suspects in other nations this year, the Justice Dept. said. Billionaire George Soros is handing greater control of his $12.8 billion money management firm to his sons, Bloomberg reported.
BOTTOM LINE: The Portfolio is slightly higher mid-day on strength in my steel, wireless and internet longs. I have not traded today and the Portfolio is still 125% net long. Rising energy prices will likely result in mixed-to-weaker trading into the afternoon.
Tuesday Watch
Earnings of Note
Company/Estimate
APOL/.48
Splits
ANSS 2-for-1
Economic Data
ISM Non-Manufacturing for September estimated at 59.0 versus 58.2 in August.
Recommendations
Goldman Sachs reiterated Outperform on CVD, AMD, XOM, DNA and ITT. Goldman reiterated Underperform on MRO and FRX. IBM raised to Overweight at JP Morgan.
Late-Night News
Asian indices are quietly mixed as rising oil prices are offsetting optimism over rebounding economic growth in the region. Adidas-Salomon AG, the world's second-largest sporting-goods maker, is to unveil a 10-year contract to sponsor Major League Soccer in the U.S., the Financial Times reported. Software for mobile phones is one area where Microsoft can grow in coming years, the Financial Times reported. China will be 17 million kilowatts short of power at the end of the year and into early 2005, which may cause blackouts as severe as those in summer, Xinhua news service reported. China's online game industry may grow seven-fold to $1.1 billion within the next two years as the market expands, Xinhua news agency reported. AMD said third-quarter sales missed its earlier forecast, Bloomberg said. Shipping cost increases for iron ore, coal and other dry-bulk goods may slow in the fourth quarter as more vessels come into service to help meet rising demand from China, analysts and brokers said. Genentech said it received a request for information for the U.S. attorney's office about its promotion of the cancer drug Rituxan, Bloomberg reported. ABC's "Desperate Housewives" attracted 21 million viewers Sunday night, more than any new show this season, making it the network's most successful new show since 1996, the NY Times said.
Late-Night Trading
Asian Indices are -.25% to +.25% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated -.03%
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning on rising oil prices and earnings jitters. However, stocks will likely rise later in the day on short-covering and continuing optimism over accelerating economic growth. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
APOL/.48
Splits
ANSS 2-for-1
Economic Data
ISM Non-Manufacturing for September estimated at 59.0 versus 58.2 in August.
Recommendations
Goldman Sachs reiterated Outperform on CVD, AMD, XOM, DNA and ITT. Goldman reiterated Underperform on MRO and FRX. IBM raised to Overweight at JP Morgan.
Late-Night News
Asian indices are quietly mixed as rising oil prices are offsetting optimism over rebounding economic growth in the region. Adidas-Salomon AG, the world's second-largest sporting-goods maker, is to unveil a 10-year contract to sponsor Major League Soccer in the U.S., the Financial Times reported. Software for mobile phones is one area where Microsoft can grow in coming years, the Financial Times reported. China will be 17 million kilowatts short of power at the end of the year and into early 2005, which may cause blackouts as severe as those in summer, Xinhua news service reported. China's online game industry may grow seven-fold to $1.1 billion within the next two years as the market expands, Xinhua news agency reported. AMD said third-quarter sales missed its earlier forecast, Bloomberg said. Shipping cost increases for iron ore, coal and other dry-bulk goods may slow in the fourth quarter as more vessels come into service to help meet rising demand from China, analysts and brokers said. Genentech said it received a request for information for the U.S. attorney's office about its promotion of the cancer drug Rituxan, Bloomberg reported. ABC's "Desperate Housewives" attracted 21 million viewers Sunday night, more than any new show this season, making it the network's most successful new show since 1996, the NY Times said.
Late-Night Trading
Asian Indices are -.25% to +.25% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated -.03%
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning on rising oil prices and earnings jitters. However, stocks will likely rise later in the day on short-covering and continuing optimism over accelerating economic growth. The Portfolio is 125% net long heading into tomorrow.
Monday, October 04, 2004
Monday Close
S&P 500 1,135.17 +.32%
NASDAQ 1,952.40 +.53%
Leading Sectors
Disk Drives +3.23%
Iron/Steel +2.69%
Airlines +2.05%
Lagging Sectors
Oil Service -.90%
Broadcasting -1.27%
Homebuilders -4.83%
Other
Crude Oil 49.93 +.04%
Natural Gas 6.72 unch.
Gold 416.20 +.14%
Base Metals 120.02 -.03%
U.S. Dollar 88.43 +.06%
10-Yr. T-note Yield 4.17% -.46%
VIX 13.41 +5.18%
Put/Call .83 -12.63%
NYSE Arms .70 +52.17%
After-hours Movers
NFLX +13.57% after beating 3Q estimates.
FRX +7.25% after beating 2Q estimates and raising 3Q guidance.
PHM -6.43% after cutting 3Q/04 forecast slightly.
NATI -14.97% after lowering 3Q estimates.
EPIX -8.35% after saying the FDA has extended the action date for completion of its review of MS-325.
Recommendations
Goldman Sachs reiterated Outperform on SII and WAG.
After-hours News
U.S. stocks finished modestly higher today, led by technology shares, on optimism over accelerating economic growth. After the close, U.S. Federal Communications Chairman Powell will recommend that Cingular Wireless be allowed to buy AT&T Wireless Services, Reuters reported. LG Electronic, the world's sixth largest cell-phone maker, expects mobile-phone sales to increase more than 50% next year, Reuters reported. Arcelor SA, the world's largest steelmaker, said it may stop supplying some of its biggest customers unless they accept price increases scheduled for next year, the Financial Times said. Treasury Secretary Snow said tax cuts signed into law by President Bush boosted the U.S. economy and should be made permanent, Bloomberg reported. Forest Labs, maker of the antidepressants Celexa and Lexapro, said fiscal second-quarter earnings rose more than analysts estimated, Bloomberg reported. Netflix said its subscribers increased 73% to 2.23 million from a year earlier and raised its third-quarter profit forecast, Bloomberg said. The average U.S. retail price for regular-grade gasoline was $1.94/gallon this past week, down from $2.06 in late May, Bloomberg reported. Wal-Mart plans to open as many as 295 stores in the U.S. in 2005, Bloomberg reported.
BOTTOM LINE: The Portfolio finished substantially higher today on strength in my steel, software, biotech and restaurant longs. I took profits in a homebuilding long in the afternoon and added ERES long, thus leaving the Portfolio 125% net long. I am using a stop-loss of $13.35 on this position. Notwithstanding the afternoon pullback, today's action was pretty good for the Bulls as most stocks advanced and volume increased. A period of consolidation to digest recent gains is warranted. As well, the CRB fell and most measures of investor anxiety rose. Homebuilders will likely continue today's sell-off in the short-run, however any pullback is likely a correction within a secular move upwards.
NASDAQ 1,952.40 +.53%
Leading Sectors
Disk Drives +3.23%
Iron/Steel +2.69%
Airlines +2.05%
Lagging Sectors
Oil Service -.90%
Broadcasting -1.27%
Homebuilders -4.83%
Other
Crude Oil 49.93 +.04%
Natural Gas 6.72 unch.
Gold 416.20 +.14%
Base Metals 120.02 -.03%
U.S. Dollar 88.43 +.06%
10-Yr. T-note Yield 4.17% -.46%
VIX 13.41 +5.18%
Put/Call .83 -12.63%
NYSE Arms .70 +52.17%
After-hours Movers
NFLX +13.57% after beating 3Q estimates.
FRX +7.25% after beating 2Q estimates and raising 3Q guidance.
PHM -6.43% after cutting 3Q/04 forecast slightly.
NATI -14.97% after lowering 3Q estimates.
EPIX -8.35% after saying the FDA has extended the action date for completion of its review of MS-325.
Recommendations
Goldman Sachs reiterated Outperform on SII and WAG.
After-hours News
U.S. stocks finished modestly higher today, led by technology shares, on optimism over accelerating economic growth. After the close, U.S. Federal Communications Chairman Powell will recommend that Cingular Wireless be allowed to buy AT&T Wireless Services, Reuters reported. LG Electronic, the world's sixth largest cell-phone maker, expects mobile-phone sales to increase more than 50% next year, Reuters reported. Arcelor SA, the world's largest steelmaker, said it may stop supplying some of its biggest customers unless they accept price increases scheduled for next year, the Financial Times said. Treasury Secretary Snow said tax cuts signed into law by President Bush boosted the U.S. economy and should be made permanent, Bloomberg reported. Forest Labs, maker of the antidepressants Celexa and Lexapro, said fiscal second-quarter earnings rose more than analysts estimated, Bloomberg reported. Netflix said its subscribers increased 73% to 2.23 million from a year earlier and raised its third-quarter profit forecast, Bloomberg said. The average U.S. retail price for regular-grade gasoline was $1.94/gallon this past week, down from $2.06 in late May, Bloomberg reported. Wal-Mart plans to open as many as 295 stores in the U.S. in 2005, Bloomberg reported.
BOTTOM LINE: The Portfolio finished substantially higher today on strength in my steel, software, biotech and restaurant longs. I took profits in a homebuilding long in the afternoon and added ERES long, thus leaving the Portfolio 125% net long. I am using a stop-loss of $13.35 on this position. Notwithstanding the afternoon pullback, today's action was pretty good for the Bulls as most stocks advanced and volume increased. A period of consolidation to digest recent gains is warranted. As well, the CRB fell and most measures of investor anxiety rose. Homebuilders will likely continue today's sell-off in the short-run, however any pullback is likely a correction within a secular move upwards.
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