Indices
S&P 500 1,095.74 -1.12%
Dow 9,757.81 -1.77%
NASDAQ 1,915.14 +.19%
Russell 2000 567.78 -.29%
S&P Equity Long/Short Index 971.14 +.02%
Put/Call .74 -15.91%
NYSE Arms 1.27 -9.29%
Volatility(VIX) 15.28 +1.60%
AAII % Bulls 42.48 -4.99%
US Dollar 85.87 -1.47%
CRB 286.55 +.34%
Futures Spot Prices
Gold 425.60 +1.29%
Crude Oil 55.17 +2.26%
Unleaded Gasoline 143.76 +1.89%
Natural Gas 8.11 +20.79%
Heating Oil 159.44 +3.0%
Base Metals 112.86 -1.46%
10-year US Treasury Yield 3.98% -1.95%
Average 30-year Mortgage Rate 5.74% -1.37%
Leading Sectors
Semis +3.62%
I-Banks +2.95%
Software +2.88%
Lagging Sectors
Telecom -3.81%
Iron/Steel -5.59%
HMOs -8.15%
*% Gain or loss for the week
Friday, October 22, 2004
Mid-day Update
S&P 500 1,104.43 -.19%
NASDAQ 1,937.20 -.84%
Leading Sectors
HMOs +1.65%
Hospitals +1.55%
Utilities +1.0%
Lagging Sectors
Computer Services -1.23%
Telecom -1.35%
Semis -2.16%
Other
Crude Oil 55.29 +1.52%
Natural Gas 8.07 +4.85%
Gold 425.80 +.05%
Base Metals 112.86 -.86%
U.S. Dollar 85.95 -.09%
10-Yr. T-note Yield 4.0% +.24%
VIX 14.43 -.89%
Put/Call .64 -17.95%
NYSE Arms .85 -23.21%
Market Movers
BRCM -12.0% after beating 3Q estimates, lowering 4Q guidance and multiple downgrades.
GOOG +16.9% after beating 3Q revenue estimates substantially.
AMZN -11.4% after missing 3Q estimates and lowering 05 outlook.
ERICY -8.5% after beating 3Q estimates and raising 4Q outlook.
GILD -6.5% after beating 3Q estimates, but missing optimistic estimates.
MMC +5.2% on speculation CEO Greenberg may be forced to quit, clearing the way for settlement talks with Spitzer.
XXIA +29.1% after beating 3Q estimates and Needham upgrade to Strong Buy.
APTM +17.9% on strong 3Q results.
AFCO +12.2% after beating 1Q estimates and raising 2Q guidance.
MCK +11.23% after beating 2Q estimates substantially and JP Morgan upgrade to Overweight.
SYNA +14.0% after beating 1Q estimates and raising 2Q outlook.
TRDO +13.5% after beating 3Q estimates substantially, reiterating 4Q outlook and Morgan Keegan upgrade to Outperform.
OSTK +18.2% after beating 3Q estimates, optimism over auction biz and short-squeeze.
KAR +10.1% after beating 3Q estimates.
WEBX -18.6% after meeting 3Q estimates and lowering 4Q guidance.
EYE -12.3% after missing 3Q estimates and lowering 4Q outlook.
IFIN -14.6% after lowering 04 guidance and Hibernia Southcoast downgrade to Sell.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Underperform on CR, T, FISV and Outperform on KLAC, GILD, AMGN, XRX, GDT, SBC, HOT, SPG, MSFT, BAX. Citi SmithBarney initiated UTSI with a Buy, target $26. Citi reiterated Buy on BLS, target $32. Citi reiterated Buy on VZ, target $43. Citi reiterated Buy on MSFT, target $33. Citi reiterated Buy on NT, target $5. Citi reiterated Buy on CEY, target $44. Citi reiterated Sell on MEDI, target $19. Citi reiterated Buy on FDRY, target $15. Citi reiterated Buy on TXT, target $78. Citi reiterated Buy on ITT, target $92. Citi reiterated Buy on ACS, target $70.
Mid-day News
U.S. stocks are modestly lower mid-day as the technology sector consolidates recent gains. The U.S. may seek to devalue the dollar against Asian currencies to ease trade deficits with China and other countries in the region, the NY Times reported. Iran's efforts to develop nuclear weapons and the capability of its missiles to reach Israel may prompt Israel to use preemptive military strikes, the LA Times said. Former U.S. President Bill Clinton wants to be secretary-general of the United Nations when Kofi Annan's term ends in 2006, UPI reported. President Bush is considering several changes to his cabinet if re-elected, including shifting National Security Adviser Condoleezza Rice to run the Defense Department, the Washington Post reported. Demand for homes prices at $1 million and above in the San Francisco Bay Area remained strong in the third quarter as people sold and traded up, the San Francisco Chronicle said. San Francisco city workers were forced to campaign for Gavin Newsom before he was elected mayor in 2003, and threatened with loss of pay if they didn't help, the San Francisco Chronicle reported. California received a shipment of 271,740 doses of flu vaccine yesterday and will begin distributing the new supply Monday to county health departments, the San Francisco Chronicle said. Nextel Communications said third-quarter sales rose 18% and it boosted its 2004 forecast, Bloomberg reported. HCA, the largest U.S. hospital chain, said third-quarter profit fell 26% as payment increases for each admission slowed and collections from uninsured patients declined, Bloomberg reported. Crude oil futures are rising in NY after the release of a report showing that the Chinese economy grew more than expected last quarter, Bloomberg said. Shares of Google surged as much as 26% after quarterly profit more than doubled and the company said the market for Internet advertising shows no signs of slowing, Bloomberg reported.
Bottom Line: The Portfolio is unchanged mid-day as significant strength in my internet and security longs is offsetting weakness in my semi and semi-equipment longs. I have not traded and the Portfolio remains 125% net long. While the tone of the market is slightly negative today, most sectors are higher outside of technology. Consolidation of recent gains in tech is warranted and healthy. As well, the action in shares of Google will likely generate more interest by the public in the overall market. Finally, it appears that investors are not as fixated on the rising price of oil which is a big positive. I expect U.S. stocks to trade mixed into the close as short-covering and bargain-hunting offset rising energy prices.
NASDAQ 1,937.20 -.84%
Leading Sectors
HMOs +1.65%
Hospitals +1.55%
Utilities +1.0%
Lagging Sectors
Computer Services -1.23%
Telecom -1.35%
Semis -2.16%
Other
Crude Oil 55.29 +1.52%
Natural Gas 8.07 +4.85%
Gold 425.80 +.05%
Base Metals 112.86 -.86%
U.S. Dollar 85.95 -.09%
10-Yr. T-note Yield 4.0% +.24%
VIX 14.43 -.89%
Put/Call .64 -17.95%
NYSE Arms .85 -23.21%
Market Movers
BRCM -12.0% after beating 3Q estimates, lowering 4Q guidance and multiple downgrades.
GOOG +16.9% after beating 3Q revenue estimates substantially.
AMZN -11.4% after missing 3Q estimates and lowering 05 outlook.
ERICY -8.5% after beating 3Q estimates and raising 4Q outlook.
GILD -6.5% after beating 3Q estimates, but missing optimistic estimates.
MMC +5.2% on speculation CEO Greenberg may be forced to quit, clearing the way for settlement talks with Spitzer.
XXIA +29.1% after beating 3Q estimates and Needham upgrade to Strong Buy.
APTM +17.9% on strong 3Q results.
AFCO +12.2% after beating 1Q estimates and raising 2Q guidance.
MCK +11.23% after beating 2Q estimates substantially and JP Morgan upgrade to Overweight.
SYNA +14.0% after beating 1Q estimates and raising 2Q outlook.
TRDO +13.5% after beating 3Q estimates substantially, reiterating 4Q outlook and Morgan Keegan upgrade to Outperform.
OSTK +18.2% after beating 3Q estimates, optimism over auction biz and short-squeeze.
KAR +10.1% after beating 3Q estimates.
WEBX -18.6% after meeting 3Q estimates and lowering 4Q guidance.
EYE -12.3% after missing 3Q estimates and lowering 4Q outlook.
IFIN -14.6% after lowering 04 guidance and Hibernia Southcoast downgrade to Sell.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Underperform on CR, T, FISV and Outperform on KLAC, GILD, AMGN, XRX, GDT, SBC, HOT, SPG, MSFT, BAX. Citi SmithBarney initiated UTSI with a Buy, target $26. Citi reiterated Buy on BLS, target $32. Citi reiterated Buy on VZ, target $43. Citi reiterated Buy on MSFT, target $33. Citi reiterated Buy on NT, target $5. Citi reiterated Buy on CEY, target $44. Citi reiterated Sell on MEDI, target $19. Citi reiterated Buy on FDRY, target $15. Citi reiterated Buy on TXT, target $78. Citi reiterated Buy on ITT, target $92. Citi reiterated Buy on ACS, target $70.
Mid-day News
U.S. stocks are modestly lower mid-day as the technology sector consolidates recent gains. The U.S. may seek to devalue the dollar against Asian currencies to ease trade deficits with China and other countries in the region, the NY Times reported. Iran's efforts to develop nuclear weapons and the capability of its missiles to reach Israel may prompt Israel to use preemptive military strikes, the LA Times said. Former U.S. President Bill Clinton wants to be secretary-general of the United Nations when Kofi Annan's term ends in 2006, UPI reported. President Bush is considering several changes to his cabinet if re-elected, including shifting National Security Adviser Condoleezza Rice to run the Defense Department, the Washington Post reported. Demand for homes prices at $1 million and above in the San Francisco Bay Area remained strong in the third quarter as people sold and traded up, the San Francisco Chronicle said. San Francisco city workers were forced to campaign for Gavin Newsom before he was elected mayor in 2003, and threatened with loss of pay if they didn't help, the San Francisco Chronicle reported. California received a shipment of 271,740 doses of flu vaccine yesterday and will begin distributing the new supply Monday to county health departments, the San Francisco Chronicle said. Nextel Communications said third-quarter sales rose 18% and it boosted its 2004 forecast, Bloomberg reported. HCA, the largest U.S. hospital chain, said third-quarter profit fell 26% as payment increases for each admission slowed and collections from uninsured patients declined, Bloomberg reported. Crude oil futures are rising in NY after the release of a report showing that the Chinese economy grew more than expected last quarter, Bloomberg said. Shares of Google surged as much as 26% after quarterly profit more than doubled and the company said the market for Internet advertising shows no signs of slowing, Bloomberg reported.
Bottom Line: The Portfolio is unchanged mid-day as significant strength in my internet and security longs is offsetting weakness in my semi and semi-equipment longs. I have not traded and the Portfolio remains 125% net long. While the tone of the market is slightly negative today, most sectors are higher outside of technology. Consolidation of recent gains in tech is warranted and healthy. As well, the action in shares of Google will likely generate more interest by the public in the overall market. Finally, it appears that investors are not as fixated on the rising price of oil which is a big positive. I expect U.S. stocks to trade mixed into the close as short-covering and bargain-hunting offset rising energy prices.
Friday Watch
Earnings of Note
Company/Estimate
AEE/1.29
BLC/.30
FO/1.18
HCA/.48
JBHT/.55
NTE/.26
NANO/.14
NXTL/.38
PLUG/-.16
SLB/.53
SUP/.20
WY/1.40
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on DHR, MCK, TPX, UPS, PFE, ACS and Underperform on ELX, EW.
Late-Night News
Asian indices are higher on optimism over economic reports from Japan and China. New York State Attorney General Eliot Spitzer is considering criminal charges against William Gilman and other insurance brokerage executives from Marsh & McLennan, Business Week reported. George Economou, a Greek shipowner, plans to sell shares in a company that owns 15 so-called dry-bulk carriers on Nasdaq, Lloyd's List reported. New York Attorney General Spitzer has served subpoenas on four record companies as part of a probe into practices that may influence what songs are played on public radio, the NY Times said. 12,000 people, .04% of the 25.4 million Iraqi population, are part of the hard-core resistance in Iraq, the NY Times reported. Japan's services industry activity expanded in August as corporations increased spending on software and computer systems, Bloomberg reported. More than 62% of the estimated 8 million votes have been counted in Afghanistan with President Hamid Karzai leading with 56% of the vote, according to the election web site. China's industrial production grew 17% in the first nine months of the year, the government said in Beijing. China's economy expanded 9.5% in the first nine months of the year, the government said in Beijing, as lending restrictions curbed investment, Bloomberg reported. John Kerry took time to hunt geese in Ohio yesterday, hoping to attract the vote of sportsmen in the state, Bloomberg reported. BHP Billiton, the world's largest mining company, said it expects demand from China and India to keep commodity prices relatively high in the coming months, Bloomberg reported.
Late-Night Trading
Asian Indices are +.25% to +.75% on average.
S&P 500 indicated unch.
NASDAQ 100 indicated -.20%
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning and then rise later in the day, led by technology shares, on short-covering, bargain-hunting and better earnings reports. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
AEE/1.29
BLC/.30
FO/1.18
HCA/.48
JBHT/.55
NTE/.26
NANO/.14
NXTL/.38
PLUG/-.16
SLB/.53
SUP/.20
WY/1.40
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on DHR, MCK, TPX, UPS, PFE, ACS and Underperform on ELX, EW.
Late-Night News
Asian indices are higher on optimism over economic reports from Japan and China. New York State Attorney General Eliot Spitzer is considering criminal charges against William Gilman and other insurance brokerage executives from Marsh & McLennan, Business Week reported. George Economou, a Greek shipowner, plans to sell shares in a company that owns 15 so-called dry-bulk carriers on Nasdaq, Lloyd's List reported. New York Attorney General Spitzer has served subpoenas on four record companies as part of a probe into practices that may influence what songs are played on public radio, the NY Times said. 12,000 people, .04% of the 25.4 million Iraqi population, are part of the hard-core resistance in Iraq, the NY Times reported. Japan's services industry activity expanded in August as corporations increased spending on software and computer systems, Bloomberg reported. More than 62% of the estimated 8 million votes have been counted in Afghanistan with President Hamid Karzai leading with 56% of the vote, according to the election web site. China's industrial production grew 17% in the first nine months of the year, the government said in Beijing. China's economy expanded 9.5% in the first nine months of the year, the government said in Beijing, as lending restrictions curbed investment, Bloomberg reported. John Kerry took time to hunt geese in Ohio yesterday, hoping to attract the vote of sportsmen in the state, Bloomberg reported. BHP Billiton, the world's largest mining company, said it expects demand from China and India to keep commodity prices relatively high in the coming months, Bloomberg reported.
Late-Night Trading
Asian Indices are +.25% to +.75% on average.
S&P 500 indicated unch.
NASDAQ 100 indicated -.20%
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning and then rise later in the day, led by technology shares, on short-covering, bargain-hunting and better earnings reports. The Portfolio is 125% net long heading into tomorrow.
Thursday, October 21, 2004
Thursday Close
S&P 500 1,106.49 +.26%
NASDAQ 1,953.62 +1.07%
Leading Sectors
Airlines +4.21%
Semis +3.97%
Internet +3.22%
Lagging Sectors
Telecom -1.06%
HMOs -2.0%
Disk Drives -2.03%
Other
Crude Oil 54.47 unch.
Natural Gas 7.70 unch.
Gold 425.60 unch.
Base Metals 113.84 +1.05%
U.S. Dollar 86.09 +.08%
10-Yr. T-note Yield 3.99% +.38%
VIX 14.54 -2.09%
Put/Call .78 -10.34%
NYSE Arms 1.12 +.90%
After-hours Movers
GOOG +7.98% after beating 3Q revenue estimates substantially.
NAV -4.97% after saying the SEC requested information on its pension-fund accounting.
AMZN -8.94% after missing 3Q estimates and lowering 05 outlook.
BRCM -4.33% after beating 3Q estimates and lowering 4Q guidance.
SYNA +9.85% after beating 1Q estimates and raising 2Q outlook.
MCK +4.87% after beating 2Q estimates substantially.
WEBX -10.49% after meeting 3Q estimates and lowering 4Q guidance.
Recommendations
Goldman Sachs reiterated Outperform on IR, GLK, ALK and CAT. Goldman reiterated Underperform on SGP. Shares of Sysco(SYY), North America's largest food-service distributor, may rise about 30% when the U.S. economy improves and oil prices decline, Business Week reported. Mine Safety Appliances(MSA), which makes and sells body-protection gear in 120 countries, is expected to further benefit from spending on security, Business Week reported. Transocean(RIG), which specializes in drilling for oil in deep water and harsh environments, may see a boost in business because of higher oil prices, Business Week reported.
After-hours News
U.S. stocks finished mostly higher today on continuing strength in the technology sector. After the close, Oregon and other U.S. states may establish new rules meant to force insurance brokers to disclose fees they get for selling policies, following a decision by California to do so, Dow Jones reported. Microsoft said first-quarter profit rose 11% as sales of Windows corporate network software increased, Bloomberg said. Boeing said it has received a request from the SEC related to the way it accounts for pension and other retirement-benefit plans, Bloomberg said. Google said net income more than doubles to $52 million after sales of Web advertising rose, Bloomberg said. Intel canceled plans to develop new chips for large, flat-panel televisions, Bloomberg reported. Amazon said 2005 sales will trail analyst estimates, sending its shares lower after-hours, Bloomberg said. MedImmune will deliver another 1 million doses of its FluMist nasal spray flu vaccine to help ease a U.S. shortage, after restarting a Philadelphia plant, Bloomberg reported. Lehman Brothers, the most accurate forecaster of exchange rates in the third quarter, predicts the dollar will decline to $1.32 per euro in a year from $1.26 today, Bloomberg said.
BOTTOM LINE: The Portfolio finished substantially higher today on strength in my internet, semiconductor and software longs. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. The tone of the market improved throughout the day as volume increased and the advance/decline finished at its daily highs. While trading over the near-term could be choppy, I continue to believe stocks will begin moving meaningfully higher before the election and longer-term investors should use any weakness to build positions in favorite longs. I also still believe technology stocks will outperform throughout the quarter.
NASDAQ 1,953.62 +1.07%
Leading Sectors
Airlines +4.21%
Semis +3.97%
Internet +3.22%
Lagging Sectors
Telecom -1.06%
HMOs -2.0%
Disk Drives -2.03%
Other
Crude Oil 54.47 unch.
Natural Gas 7.70 unch.
Gold 425.60 unch.
Base Metals 113.84 +1.05%
U.S. Dollar 86.09 +.08%
10-Yr. T-note Yield 3.99% +.38%
VIX 14.54 -2.09%
Put/Call .78 -10.34%
NYSE Arms 1.12 +.90%
After-hours Movers
GOOG +7.98% after beating 3Q revenue estimates substantially.
NAV -4.97% after saying the SEC requested information on its pension-fund accounting.
AMZN -8.94% after missing 3Q estimates and lowering 05 outlook.
BRCM -4.33% after beating 3Q estimates and lowering 4Q guidance.
SYNA +9.85% after beating 1Q estimates and raising 2Q outlook.
MCK +4.87% after beating 2Q estimates substantially.
WEBX -10.49% after meeting 3Q estimates and lowering 4Q guidance.
Recommendations
Goldman Sachs reiterated Outperform on IR, GLK, ALK and CAT. Goldman reiterated Underperform on SGP. Shares of Sysco(SYY), North America's largest food-service distributor, may rise about 30% when the U.S. economy improves and oil prices decline, Business Week reported. Mine Safety Appliances(MSA), which makes and sells body-protection gear in 120 countries, is expected to further benefit from spending on security, Business Week reported. Transocean(RIG), which specializes in drilling for oil in deep water and harsh environments, may see a boost in business because of higher oil prices, Business Week reported.
After-hours News
U.S. stocks finished mostly higher today on continuing strength in the technology sector. After the close, Oregon and other U.S. states may establish new rules meant to force insurance brokers to disclose fees they get for selling policies, following a decision by California to do so, Dow Jones reported. Microsoft said first-quarter profit rose 11% as sales of Windows corporate network software increased, Bloomberg said. Boeing said it has received a request from the SEC related to the way it accounts for pension and other retirement-benefit plans, Bloomberg said. Google said net income more than doubles to $52 million after sales of Web advertising rose, Bloomberg said. Intel canceled plans to develop new chips for large, flat-panel televisions, Bloomberg reported. Amazon said 2005 sales will trail analyst estimates, sending its shares lower after-hours, Bloomberg said. MedImmune will deliver another 1 million doses of its FluMist nasal spray flu vaccine to help ease a U.S. shortage, after restarting a Philadelphia plant, Bloomberg reported. Lehman Brothers, the most accurate forecaster of exchange rates in the third quarter, predicts the dollar will decline to $1.32 per euro in a year from $1.26 today, Bloomberg said.
BOTTOM LINE: The Portfolio finished substantially higher today on strength in my internet, semiconductor and software longs. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. The tone of the market improved throughout the day as volume increased and the advance/decline finished at its daily highs. While trading over the near-term could be choppy, I continue to believe stocks will begin moving meaningfully higher before the election and longer-term investors should use any weakness to build positions in favorite longs. I also still believe technology stocks will outperform throughout the quarter.
Mid-day Update
S&P 500 1,100.54 -.28%
NASDAQ 1,936.81 +.20%
Leading Sectors
Airlines +3.28%
Semis +2.48%
Software +2.25%
Lagging Sectors
Telecom -1.61%
HMOs -1.68%
Disk Drives -2.98%
Other
Crude Oil 54.40 -.02%
Natural Gas 7.82 +2.45%
Gold 424.90 +.02%
Base Metals 113.84 +1.05%
U.S. Dollar 85.97 -.44%
10-Yr. T-note Yield 3.98 -.05%
VIX 15.05 +1.28%
Put/Call .85 -2.30%
NYSE Arms 1.30 +17.12%
Market Movers
VRSN +18.7% after beating 3Q estimates, raising 4Q outlook and 05 guidance.
CTXS +12.9% after beating 3Q estimates and raising 4Q guidance.
ALTR +6.0% after beating 3Q estimates.
ALGN -32.0% after missing 3Q estimates.
EBAY +7.0% after beating 3Q estimates and giving positive guidance.
RST +23.7% after Blackstone Group LP agreed to buy it for about $1.25 billion.
AVCT +15.3% after beating 3Q estimates.
GOOG +4.7% on optimism over 3Q report after the close.
MHK +7.4% after beating 3Q estimates substantially and reiterating 4Q guidance.
LM +9.4% after beating 2Q estimates.
CAI +7.9% after beating 1Q estimates and raising 2Q outlook.
SYMC +7.5% after beating 2Q estimates, announcing 2-for-1 split and boosting stock buyback program.
MACR +12.7% after beating 2Q estimates and raising 3Q outlook.
CTXS +12.3% after beating 3Q estimates and raising 4Q guidance.
ALDN +12.8% after beating 3Q estimates and raising 4Q guidance.
WSH +7.3% after saying the company found no evidence of bid-rigging that rival Marsh & McLennan was accused of last week.
IMN -14.3% after missing 3Q estimates and lowering 4Q outlook.
DV -26.0% after missing 1Q estimates and multiple downgrades.
ADS -14.3% after missing 3Q estimates and lowering 04 outlook.
CDI -14.6% after missing 3Q estimates and multiple downgrades.
S -7.8% after missing 3Q estimates and lowering 04 outlook.
RARE -7.4% after meeting 3Q estimates and lowering 4Q and 1Q guidance.
Economic Data
Initial Jobless Claims for last week were 329K versus estimates of 345K and 354K the prior week.
Continuing Claims for last week were 2798K versus estimates of 2840K and 2806K prior.
Leading Indicators for September fell .1% versus estimates of a .1% decline and a .3% decrease in August.
Philly Fed. for October was XX.X versus estimates of 18.0 and a reading of 13.4 in September.
Recommendations
Goldman Sachs reiterated Outperform on AMGN, BAX, UST, UNH, UPS, CAT, SYMC, HOT, CIT, IR, SUN and Underperform on VRSN, S and SGP. Citi SmithBarney upgraded INTX to Buy, target $18. Citi upgraded EBAY to Buy, target $115. Citi reiterated Buy on AMGN, target $90. Citi reiterated Buy on BRCD, target $8.25. Citi reiterated Buy on EXTR, target $11. Citi reiterated Buy on PTV, target $27. Citi reiterated Buy on NWL, target $25. Citi reiterated Buy on DIS, target $30. Citi reiterated Buy on BG, target $50. Citi reiterated Buy on BK, target $37. Citi reiterated Buy on ACL, target $77. Citi reiterated Buy on JPM, target $46. Citi reiterated Buy on MOLXA, target $32. Citi reiterated Buy on TER, target $19. Citi reiterated Buy on RYL, target $125. STI raised to Buy at Bank of America, target $74. DVA rated Buy at Bank of America, target $38. RCI rated Buy at Bank of America, target $37. MNST raised to Overweight at Morgan Stanley. STZ raised to Buy at Legg Mason, target $46. CL raised to Buy at Merrill Lynch, target $50. TDS cut to Underweight at JP Morgan. USM cut to Underweight at JP Morgan. FSL rated Underweight at JP Morgan.
Mid-day News
U.S. stocks are quietly mixed mid-day as strength in the technology sector is being offset by continuing legal worries in the insurance industry. China's government is encouraging the country's companies to invest in Canada's resource industry to obtain raw materials needed to fuel its growth, the Globe and Mail reported. Wal-Mart Stores canceled an order for a book by Jon Stewart and the writers of "The Daily Show" after executives found it contained phony, naked pictures of U.S. Supreme Court justices, the AP reported. LA City Council approved an $11 billion proposal to update LA Intl. Airport by relocating runways, adding terminals and building a central passenger check-in facility, the LA Times said. Rents in San Francisco, which dropped for the past four years, are climbing as an improving job market boosts demand for apartments, the San Francisco Chronicle said. Massachusetts will add a type of hologram and other new features to driver licenses to thwart terrorists and identify theft, the Boston Globe reported. UPS, the world's largest package-delivery company, said third-third quarter net income rose 20% to $890 million, Bloomberg reported. U.K. Prime Minister Blair will redeploy 850 troops now in southern Iraq to a region controlled by U.S. forces, Bloomberg reported. Caterpillar said third-quarter net income more than doubled as global economic improvement helped sales of its mining trucks and excavators, Bloomberg reported. The number of Americans filing first-time jobless claims declined to the lowest level in six weeks, suggesting an improving labor market, Bloomberg said. Donald Trump's Trump Hotels & Casino Resorts said it will seek Chapter 11 bankruptcy protection as part of an agreement with bondholders to reduce debt by $400 million, Bloomberg reported. The Federal Reserve Bank of Philadelphia's gauge of manufacturing in the region rose to 28.5 in October, substantially above economists' expectations, from 13.4 the month before, Bloomberg reported.
Bottom Line: The Portfolio is higher mid-day on strength in my internet, software and semi longs. I have not traded today and the Portfolio is still 125% net long. The underlying tone of the market is positive today as most stocks are higher and volume is above average. As well, most measures of investor anxiety are rising, interest rates are falling and technology stocks continue to outperform. I continue to believe the recent consolidation in the major U.S. indices is a last chance for investors to acquire stocks at discount prices this year. Equities should begin to moving meaningfully higher next week and throughout the remainder of the quarter as investors begin to anticipate an acceleration of economic growth as a result of the conclusion of the election, diminishing domestic terrorism fears, corporate tax incentives, year-end budget flushes and low interest rates. These factors should allow most companies to substantially exceed recently lowered fourth quarter estimates.
NASDAQ 1,936.81 +.20%
Leading Sectors
Airlines +3.28%
Semis +2.48%
Software +2.25%
Lagging Sectors
Telecom -1.61%
HMOs -1.68%
Disk Drives -2.98%
Other
Crude Oil 54.40 -.02%
Natural Gas 7.82 +2.45%
Gold 424.90 +.02%
Base Metals 113.84 +1.05%
U.S. Dollar 85.97 -.44%
10-Yr. T-note Yield 3.98 -.05%
VIX 15.05 +1.28%
Put/Call .85 -2.30%
NYSE Arms 1.30 +17.12%
Market Movers
VRSN +18.7% after beating 3Q estimates, raising 4Q outlook and 05 guidance.
CTXS +12.9% after beating 3Q estimates and raising 4Q guidance.
ALTR +6.0% after beating 3Q estimates.
ALGN -32.0% after missing 3Q estimates.
EBAY +7.0% after beating 3Q estimates and giving positive guidance.
RST +23.7% after Blackstone Group LP agreed to buy it for about $1.25 billion.
AVCT +15.3% after beating 3Q estimates.
GOOG +4.7% on optimism over 3Q report after the close.
MHK +7.4% after beating 3Q estimates substantially and reiterating 4Q guidance.
LM +9.4% after beating 2Q estimates.
CAI +7.9% after beating 1Q estimates and raising 2Q outlook.
SYMC +7.5% after beating 2Q estimates, announcing 2-for-1 split and boosting stock buyback program.
MACR +12.7% after beating 2Q estimates and raising 3Q outlook.
CTXS +12.3% after beating 3Q estimates and raising 4Q guidance.
ALDN +12.8% after beating 3Q estimates and raising 4Q guidance.
WSH +7.3% after saying the company found no evidence of bid-rigging that rival Marsh & McLennan was accused of last week.
IMN -14.3% after missing 3Q estimates and lowering 4Q outlook.
DV -26.0% after missing 1Q estimates and multiple downgrades.
ADS -14.3% after missing 3Q estimates and lowering 04 outlook.
CDI -14.6% after missing 3Q estimates and multiple downgrades.
S -7.8% after missing 3Q estimates and lowering 04 outlook.
RARE -7.4% after meeting 3Q estimates and lowering 4Q and 1Q guidance.
Economic Data
Initial Jobless Claims for last week were 329K versus estimates of 345K and 354K the prior week.
Continuing Claims for last week were 2798K versus estimates of 2840K and 2806K prior.
Leading Indicators for September fell .1% versus estimates of a .1% decline and a .3% decrease in August.
Philly Fed. for October was XX.X versus estimates of 18.0 and a reading of 13.4 in September.
Recommendations
Goldman Sachs reiterated Outperform on AMGN, BAX, UST, UNH, UPS, CAT, SYMC, HOT, CIT, IR, SUN and Underperform on VRSN, S and SGP. Citi SmithBarney upgraded INTX to Buy, target $18. Citi upgraded EBAY to Buy, target $115. Citi reiterated Buy on AMGN, target $90. Citi reiterated Buy on BRCD, target $8.25. Citi reiterated Buy on EXTR, target $11. Citi reiterated Buy on PTV, target $27. Citi reiterated Buy on NWL, target $25. Citi reiterated Buy on DIS, target $30. Citi reiterated Buy on BG, target $50. Citi reiterated Buy on BK, target $37. Citi reiterated Buy on ACL, target $77. Citi reiterated Buy on JPM, target $46. Citi reiterated Buy on MOLXA, target $32. Citi reiterated Buy on TER, target $19. Citi reiterated Buy on RYL, target $125. STI raised to Buy at Bank of America, target $74. DVA rated Buy at Bank of America, target $38. RCI rated Buy at Bank of America, target $37. MNST raised to Overweight at Morgan Stanley. STZ raised to Buy at Legg Mason, target $46. CL raised to Buy at Merrill Lynch, target $50. TDS cut to Underweight at JP Morgan. USM cut to Underweight at JP Morgan. FSL rated Underweight at JP Morgan.
Mid-day News
U.S. stocks are quietly mixed mid-day as strength in the technology sector is being offset by continuing legal worries in the insurance industry. China's government is encouraging the country's companies to invest in Canada's resource industry to obtain raw materials needed to fuel its growth, the Globe and Mail reported. Wal-Mart Stores canceled an order for a book by Jon Stewart and the writers of "The Daily Show" after executives found it contained phony, naked pictures of U.S. Supreme Court justices, the AP reported. LA City Council approved an $11 billion proposal to update LA Intl. Airport by relocating runways, adding terminals and building a central passenger check-in facility, the LA Times said. Rents in San Francisco, which dropped for the past four years, are climbing as an improving job market boosts demand for apartments, the San Francisco Chronicle said. Massachusetts will add a type of hologram and other new features to driver licenses to thwart terrorists and identify theft, the Boston Globe reported. UPS, the world's largest package-delivery company, said third-third quarter net income rose 20% to $890 million, Bloomberg reported. U.K. Prime Minister Blair will redeploy 850 troops now in southern Iraq to a region controlled by U.S. forces, Bloomberg reported. Caterpillar said third-quarter net income more than doubled as global economic improvement helped sales of its mining trucks and excavators, Bloomberg reported. The number of Americans filing first-time jobless claims declined to the lowest level in six weeks, suggesting an improving labor market, Bloomberg said. Donald Trump's Trump Hotels & Casino Resorts said it will seek Chapter 11 bankruptcy protection as part of an agreement with bondholders to reduce debt by $400 million, Bloomberg reported. The Federal Reserve Bank of Philadelphia's gauge of manufacturing in the region rose to 28.5 in October, substantially above economists' expectations, from 13.4 the month before, Bloomberg reported.
Bottom Line: The Portfolio is higher mid-day on strength in my internet, software and semi longs. I have not traded today and the Portfolio is still 125% net long. The underlying tone of the market is positive today as most stocks are higher and volume is above average. As well, most measures of investor anxiety are rising, interest rates are falling and technology stocks continue to outperform. I continue to believe the recent consolidation in the major U.S. indices is a last chance for investors to acquire stocks at discount prices this year. Equities should begin to moving meaningfully higher next week and throughout the remainder of the quarter as investors begin to anticipate an acceleration of economic growth as a result of the conclusion of the election, diminishing domestic terrorism fears, corporate tax incentives, year-end budget flushes and low interest rates. These factors should allow most companies to substantially exceed recently lowered fourth quarter estimates.
Thursday Watch
Earnings of Note
Company/Estimate
ADVS/.02
AMZN/.17
AIG/.98
BRCM/.34
BEBE/.27
CAT/1.36
CLS/.08
CELG/.19
KO/.47
DECK/1.36
LLY/.68
GILD/.21
GOOG/.56
HYSL/.31
GDT/.60
IR/1.16
MSFT/.30
MCHP/.29
MYG/.18
KRB/.56
MRK/.71
MEDI/-0.21
MCK/.24
OSTK/-.20
PSFT/.14
TDW/.30
UPS/.72
XLNX/.23
Splits
None of note.
Economic Data
Initial Jobless Claims for last week estimated at 345K versus 352K the prior week.
Continuing Claims estimated at 2840K versus 2845K prior.
Leading Indicators for September estimated down .1% versus down .3% in August.
Philadelphia Fed. for October estimated at 18.0 versus 13.4 in September.
Recommendations
Goldman Sachs reiterated Outperform on ALL, FS, EBAY, HOT, MERQ, GLK, UTX and Underperform on OMI, RNWK, SLG, CVD, EK, AZR.
Late-Night News
Asian indices are mixed as strength in Taiwan is being offset by weakness in Japan. ID Biomedical said it is talking with the FDA about importing 1.2 million surplus doses of flu shots into the U.S. from Canada, Bloomberg reported. The U.K. will grant a U.S. request for 650 British troops to be redeployed in Iraq to an area south of Baghdad, the Financial Times reported. Donald Trump is planning to allow bondholders to take control of his Trump Hotels & Casino Resorts rather than take the private or seek investors, the Deal.com reported. STMicroelectronics NV, Europe's biggest semiconductor maker, said fourth-quarter sales may not rise from the third period, citing "uncertainty" in the market for mobile phones, Bloomberg said. Japanese exports accelerated in September, easing concern that record oil prices are curbing overseas demand for the nation's semiconductors, flat-panel screens and digital cameras, Bloomberg reported. Coca-Cola raised the average price of soft drinks last quarter, prompting consumers to switch to less costly PepsiCo drinks and store brands like Wal-Mart's Dr. Thunder, Bloomberg said.
Late-Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.28%
BOTTOM LINE: I expect U.S. equities to open higher in the morning, led by technology shares, on short-covering, bargain-hunting and better earnings reports. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
ADVS/.02
AMZN/.17
AIG/.98
BRCM/.34
BEBE/.27
CAT/1.36
CLS/.08
CELG/.19
KO/.47
DECK/1.36
LLY/.68
GILD/.21
GOOG/.56
HYSL/.31
GDT/.60
IR/1.16
MSFT/.30
MCHP/.29
MYG/.18
KRB/.56
MRK/.71
MEDI/-0.21
MCK/.24
OSTK/-.20
PSFT/.14
TDW/.30
UPS/.72
XLNX/.23
Splits
None of note.
Economic Data
Initial Jobless Claims for last week estimated at 345K versus 352K the prior week.
Continuing Claims estimated at 2840K versus 2845K prior.
Leading Indicators for September estimated down .1% versus down .3% in August.
Philadelphia Fed. for October estimated at 18.0 versus 13.4 in September.
Recommendations
Goldman Sachs reiterated Outperform on ALL, FS, EBAY, HOT, MERQ, GLK, UTX and Underperform on OMI, RNWK, SLG, CVD, EK, AZR.
Late-Night News
Asian indices are mixed as strength in Taiwan is being offset by weakness in Japan. ID Biomedical said it is talking with the FDA about importing 1.2 million surplus doses of flu shots into the U.S. from Canada, Bloomberg reported. The U.K. will grant a U.S. request for 650 British troops to be redeployed in Iraq to an area south of Baghdad, the Financial Times reported. Donald Trump is planning to allow bondholders to take control of his Trump Hotels & Casino Resorts rather than take the private or seek investors, the Deal.com reported. STMicroelectronics NV, Europe's biggest semiconductor maker, said fourth-quarter sales may not rise from the third period, citing "uncertainty" in the market for mobile phones, Bloomberg said. Japanese exports accelerated in September, easing concern that record oil prices are curbing overseas demand for the nation's semiconductors, flat-panel screens and digital cameras, Bloomberg reported. Coca-Cola raised the average price of soft drinks last quarter, prompting consumers to switch to less costly PepsiCo drinks and store brands like Wal-Mart's Dr. Thunder, Bloomberg said.
Late-Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.28%
BOTTOM LINE: I expect U.S. equities to open higher in the morning, led by technology shares, on short-covering, bargain-hunting and better earnings reports. The Portfolio is 125% net long heading into tomorrow.
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