Indices
S&P 500 1,186.19 -2.12%
Dow 10,603.96 -1.66%
NASDAQ 2,088.61 -3.99%
Russell 2000 613.21 -5.89%
DJ Wilshire 5000 11,629.17 -2.70%
S&P Equity Long/Short Index 1,007.81 -.79%
Morgan Stanley Consumer 583.13 -1.30%
MS Cyclical 762.97 -2.70%
MS Technology 484.65 -4.53%
Transports 171.42 -3.49%
Utilities 324.68 -3.07%
Put/Call .95 +53.23%
NYSE Arms 1.26 +5.0%
Volatility(VIX) 13.49 +1.51%
ISE Sentiment 160.00 -24.88%
AAII % Bulls 38.10 -33.92%
US Dollar 83.60 +3.39%
CRB 278.86 -1.79%
Futures Spot Prices
Gold 419.60 -4.29%
Crude Oil 45.43 +4.80%
Unleaded Gasoline 121.42 +7.83%
Natural Gas 6.00 -2.26%
Heating Oil 127.33 +1.70%
Base Metals 119.05 -5.26%
10-year US Treasury Yield 4.27% +1.18%
Average 30-year Mortgage Rate 5.77% -.69%
Leading Sectors
Insurance -.46%
HMOs -1.32%
Wireless -1.51%
Lagging Sectors
Networking -6.45%
Iron/Steel -7.06%
Airlines -13.98%
*% Gain or loss for the year
Friday, January 07, 2005
Mid-day Report
S&P 500 1,189.81 +.16%
NASDAQ 2,097.30 +.35%
Leading Sectors
Semis +1.90%
Boxmakers +1.19%
Internet +.73%
Lagging Sectors
Energy -.31%
Gaming -.63%
Oil Service -1.26%
Other
Crude Oil 45.75 +.42%
Natural Gas 6.02 -.48%
Gold 417.90 -.90%
Base Metals 119.05 +1.59%
U.S. Dollar 83.78 +.76%
10-Yr. T-note Yield 4.27% +.14%
VIX 13.27 -2.28%
Put/Call .67 -14.10%
NYSE Arms 1.02 +22.89%
ISE Sentiment 150.0 -32.43%
Market Movers
Economic Data
Unemployment Rate for December remained at 5.4% versus estimates of 5.4% and a prior reading of 5.4%.
Average Hourly Earnings for December rose .1% versus estimates of a .2% increase and a .1% rise in November.
Change in Non-farm Payrolls for December was 157K versus estimates of 175K and an upwardly revised 137K in November.
Change in Manufacturing Payrolls for December was 3K versus estimates of 0K and a downwardly revised -9K in November.
Average Weekly Hours for December was 33.8 versus estimates of 33.8 and 33.7 in November.
Recommendations
-Goldman Sachs: Reiterated Outperform on RIG, DO, SII, BHI, SLB, ROH, INTC, MRVL and LIZ. Downgraded BMC to Underperform.
-Citi SmithBarney: Said to Buy Chemicals on pullback, favorites are DOW, NCX and LYO. Remains bearish on commercial aerospace sector. Reiterated Sell on BA, target $40. Reiterated Buy on MSFT, target $32.
-CSFB: Rated AGU Outperform, target $18.
-JP Morgan: Rated LABS, PDLI and MEDX Overweight. Raised SHPGY, SYMC to Overeweight. Cut SUN to Underweight.
-Legg Mason: Rated WEN Buy, target $46.
-Banc of America: Rated HRB Sell, target $42.
-Bear Stearns: Downgraded DE to Underperform.
-Morgan Stanley: Downgraded OVNT, CNF to Underweight. Raised FDX, UPS to Overweight.
-Oppenheimer: Rated CAO Buy, target $18.50.
Mid-day News
U.S. stocks are modestly higher mid-day on strength in the semiconductor sector and a jobs report that met most expectations. US office vacancy rates dropped to 16.2% from 16.6% in the fourth quarter as more companies snapped up space, the Wall Street Journal reported. Rents were unchanged for the second quarter in a row at an annual $20.11 a square foot, the paper said. Scientists at Pfizer said they may have found a simple test to diagnose for Parkinson’s disease, the Wall Street Journal reported. A “sharp” increase in US government spending on military research programs is expected to boost total funding for research and development in the country this year, the Wall Street Journal reported. Burlington Resources CFO Shapiro told CNBC the price of crude oil may be $30-$40/bbl. by the end of the year, Bloomberg said. MedImmune has sold only about 1 million doses of its FluMist nasal spray after it increased the number of doses to 3 million amid reports of a shortage of flu vaccine, the AP reported. Crude oil prices may fall next week as warmer-than-normal weather in the eastern US cuts demand for heating fuel and refineries boost supplies, according to a survey by Bloomberg. Shares of Taser International are dropping after the company said the SEC is looking into its products’ safety and a recent order, Bloomberg reported. A growing number of Krispy Kreme shareholders are seeking the ouster of CEO Livengood, Bloomberg reported. President Bush picked former Senators Mack and Breaux to head a nine-member panel of former lawmakers, business owners and tax experts that will recommend ways to overhaul the US tax code, Bloomberg said. Tiffany & Co., the largest US luxury jewelry retailer, said holiday sales increased 12% as demand for diamond jewelry and watches rose, Bloomberg reported. The US dollar rose against the euro for a sixth straight day after Treasury Secretary Snow said members of the Bush administration “want to do things to sustain the strength” of the US currency, Bloomberg reported. US employers added 157,000 workers in December, capping the best year for job growth since before the stock market bubble burst and the economy began plunging into recession in 2000, Bloomberg reported.
NASDAQ 2,097.30 +.35%
Leading Sectors
Semis +1.90%
Boxmakers +1.19%
Internet +.73%
Lagging Sectors
Energy -.31%
Gaming -.63%
Oil Service -1.26%
Other
Crude Oil 45.75 +.42%
Natural Gas 6.02 -.48%
Gold 417.90 -.90%
Base Metals 119.05 +1.59%
U.S. Dollar 83.78 +.76%
10-Yr. T-note Yield 4.27% +.14%
VIX 13.27 -2.28%
Put/Call .67 -14.10%
NYSE Arms 1.02 +22.89%
ISE Sentiment 150.0 -32.43%
Market Movers
Economic Data
Unemployment Rate for December remained at 5.4% versus estimates of 5.4% and a prior reading of 5.4%.
Average Hourly Earnings for December rose .1% versus estimates of a .2% increase and a .1% rise in November.
Change in Non-farm Payrolls for December was 157K versus estimates of 175K and an upwardly revised 137K in November.
Change in Manufacturing Payrolls for December was 3K versus estimates of 0K and a downwardly revised -9K in November.
Average Weekly Hours for December was 33.8 versus estimates of 33.8 and 33.7 in November.
Recommendations
-Goldman Sachs: Reiterated Outperform on RIG, DO, SII, BHI, SLB, ROH, INTC, MRVL and LIZ. Downgraded BMC to Underperform.
-Citi SmithBarney: Said to Buy Chemicals on pullback, favorites are DOW, NCX and LYO. Remains bearish on commercial aerospace sector. Reiterated Sell on BA, target $40. Reiterated Buy on MSFT, target $32.
-CSFB: Rated AGU Outperform, target $18.
-JP Morgan: Rated LABS, PDLI and MEDX Overweight. Raised SHPGY, SYMC to Overeweight. Cut SUN to Underweight.
-Legg Mason: Rated WEN Buy, target $46.
-Banc of America: Rated HRB Sell, target $42.
-Bear Stearns: Downgraded DE to Underperform.
-Morgan Stanley: Downgraded OVNT, CNF to Underweight. Raised FDX, UPS to Overweight.
-Oppenheimer: Rated CAO Buy, target $18.50.
Mid-day News
U.S. stocks are modestly higher mid-day on strength in the semiconductor sector and a jobs report that met most expectations. US office vacancy rates dropped to 16.2% from 16.6% in the fourth quarter as more companies snapped up space, the Wall Street Journal reported. Rents were unchanged for the second quarter in a row at an annual $20.11 a square foot, the paper said. Scientists at Pfizer said they may have found a simple test to diagnose for Parkinson’s disease, the Wall Street Journal reported. A “sharp” increase in US government spending on military research programs is expected to boost total funding for research and development in the country this year, the Wall Street Journal reported. Burlington Resources CFO Shapiro told CNBC the price of crude oil may be $30-$40/bbl. by the end of the year, Bloomberg said. MedImmune has sold only about 1 million doses of its FluMist nasal spray after it increased the number of doses to 3 million amid reports of a shortage of flu vaccine, the AP reported. Crude oil prices may fall next week as warmer-than-normal weather in the eastern US cuts demand for heating fuel and refineries boost supplies, according to a survey by Bloomberg. Shares of Taser International are dropping after the company said the SEC is looking into its products’ safety and a recent order, Bloomberg reported. A growing number of Krispy Kreme shareholders are seeking the ouster of CEO Livengood, Bloomberg reported. President Bush picked former Senators Mack and Breaux to head a nine-member panel of former lawmakers, business owners and tax experts that will recommend ways to overhaul the US tax code, Bloomberg said. Tiffany & Co., the largest US luxury jewelry retailer, said holiday sales increased 12% as demand for diamond jewelry and watches rose, Bloomberg reported. The US dollar rose against the euro for a sixth straight day after Treasury Secretary Snow said members of the Bush administration “want to do things to sustain the strength” of the US currency, Bloomberg reported. US employers added 157,000 workers in December, capping the best year for job growth since before the stock market bubble burst and the economy began plunging into recession in 2000, Bloomberg reported.
Bottom Line: The Portfolio is slightly lower mid-day as losses in my security and homebuilding longs more than offset gains in my internet and networking longs. I added a few new technology longs this morning, thus bringing the Portfolio to 25% net long. One of my new longs is JNPR and I am keeping a tight stop-loss of $25.10 on this position. The tone of the market remains weak today as more stocks are declining than advancing as small-caps fall and a number of sectors are lower. However, it is a positive to see semiconductors outperform substantially. While the US dollar likely has further to go on the upside, I do not expect such a rally as to substantially damage multi-national corporate profits. I expect US stocks to rise modestly into the close on short-covering and bargain-hunting in the tech sector.
Friday Watch
Earnings of Note
Company/Estimate
BLUD/.11
SGR/.14
Splits
CCJ 3-for-1
Economic Data
Unemployment Rate for December estimated at 5.4% versus 5.4% in November.
Average Hourly Earnings for December estimated up .2% versus a .1% increase in November.
Change in Non-farm Payrolls for December estimated at 175K versus 112K in November.
Change in Manufacturing Payrolls for December estimated at 0K versus a loss of 5K in November.
Average Weekly Hours for December estimated at 33.8 versus 33.7 in November.
Consumer Credit for November estimated at $6.0B versus $7.7B in October.
Recommendations
Goldman Sachs reiterated Outperform on CZN, ACN, FORM, CSCO, GLW, MMM, MDT, DD, ROH, XOM, AHC, PFE, AGN and Underperform on DCLK, PSS, DDS, MAY, HBAN. Share of Marathon Oil(MRO) may rise more than 35% this year as the company is an attractive acquisition target for ChevronTexaco and Total SA and has "bright prospects" in Libya, Russia and West Africa, Business Week reported. Shares of Movado Group(MOV) may rise as the market for luxury goods expands, Business Week reported. Cornell Cos.(CRN) may be worth as much as $20 a share in a buyout, Business Week reported.
Late-Night News
Asian indices are mostly lower on weakness in electronics shares in the region. France may change its legal code to allow class-action lawsuits, the Financial Times reported. Boeing and Lockheed Martin rockets will be used to launch US government satellites at least through the end of the decade, the Wall Street Journal reported. Toyota Motor plans to assemble Camry sedans with gasoline-electric engines at its Kentucky plant starting in 2005, the Yomiuri newspaper reported. Adelphia Communications is unlikely to be sold in one piece to buyout firms, which may not want to pay the $17.5 billion sought by an Adelphia creditor, the Wall Street Journal reported. Avantest Corp., the world's biggest maker of gear used to test computer memory chips, received more orders in the fiscal third quarter than its $391 million forecast, CEO Oura said. The dollar headed for its biggest weekly gain against the euro in more than five months in Asia on optimism a jobs report today will bolster the case for higher interest rates, Bloomberg said. Unocal Corp. shares had their biggest gain in almost six years after the Financial Times said China National Offshore Oil Corp., China's third-biggest oil company, may bid more than $13 billion for the U.S. energy producer, Bloomberg reported. Greek shipping companies First Financial, Golden Energy Management SA, Drytank SA plan to sell shares to finance new vessels, betting that demand from China will boost freight rates after a slump since November, Bloomberg said. Oil & Natural Gas Corp., India's biggest oil explorer, is in talks to purchase assets of OAO Yukos Oil Co., Bloomberg said. GM, Ford, Toyota and other automakers recalled a record 30.7 million vehicles in the US last year, increasing costs and further diminishing public perception of auto quality, Bloomberg said. Sprint Corp. and Virgin Group Ltd. may sell shares of their Virgin Mobile USA joint venture, the Wall Street Journal reported.
Late-Night Trading
Asian Indices are -1.0% to +.50 on average.
S&P 500 indicated -.08%.
NASDAQ 100 indicated -.03%.
Company/Estimate
BLUD/.11
SGR/.14
Splits
CCJ 3-for-1
Economic Data
Unemployment Rate for December estimated at 5.4% versus 5.4% in November.
Average Hourly Earnings for December estimated up .2% versus a .1% increase in November.
Change in Non-farm Payrolls for December estimated at 175K versus 112K in November.
Change in Manufacturing Payrolls for December estimated at 0K versus a loss of 5K in November.
Average Weekly Hours for December estimated at 33.8 versus 33.7 in November.
Consumer Credit for November estimated at $6.0B versus $7.7B in October.
Recommendations
Goldman Sachs reiterated Outperform on CZN, ACN, FORM, CSCO, GLW, MMM, MDT, DD, ROH, XOM, AHC, PFE, AGN and Underperform on DCLK, PSS, DDS, MAY, HBAN. Share of Marathon Oil(MRO) may rise more than 35% this year as the company is an attractive acquisition target for ChevronTexaco and Total SA and has "bright prospects" in Libya, Russia and West Africa, Business Week reported. Shares of Movado Group(MOV) may rise as the market for luxury goods expands, Business Week reported. Cornell Cos.(CRN) may be worth as much as $20 a share in a buyout, Business Week reported.
Late-Night News
Asian indices are mostly lower on weakness in electronics shares in the region. France may change its legal code to allow class-action lawsuits, the Financial Times reported. Boeing and Lockheed Martin rockets will be used to launch US government satellites at least through the end of the decade, the Wall Street Journal reported. Toyota Motor plans to assemble Camry sedans with gasoline-electric engines at its Kentucky plant starting in 2005, the Yomiuri newspaper reported. Adelphia Communications is unlikely to be sold in one piece to buyout firms, which may not want to pay the $17.5 billion sought by an Adelphia creditor, the Wall Street Journal reported. Avantest Corp., the world's biggest maker of gear used to test computer memory chips, received more orders in the fiscal third quarter than its $391 million forecast, CEO Oura said. The dollar headed for its biggest weekly gain against the euro in more than five months in Asia on optimism a jobs report today will bolster the case for higher interest rates, Bloomberg said. Unocal Corp. shares had their biggest gain in almost six years after the Financial Times said China National Offshore Oil Corp., China's third-biggest oil company, may bid more than $13 billion for the U.S. energy producer, Bloomberg reported. Greek shipping companies First Financial, Golden Energy Management SA, Drytank SA plan to sell shares to finance new vessels, betting that demand from China will boost freight rates after a slump since November, Bloomberg said. Oil & Natural Gas Corp., India's biggest oil explorer, is in talks to purchase assets of OAO Yukos Oil Co., Bloomberg said. GM, Ford, Toyota and other automakers recalled a record 30.7 million vehicles in the US last year, increasing costs and further diminishing public perception of auto quality, Bloomberg said. Sprint Corp. and Virgin Group Ltd. may sell shares of their Virgin Mobile USA joint venture, the Wall Street Journal reported.
Late-Night Trading
Asian Indices are -1.0% to +.50 on average.
S&P 500 indicated -.08%.
NASDAQ 100 indicated -.03%.
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning as interest rates rise on a better-than-expected employment report or worries increase over slowing growth on a below-expectations report. However, a below-expectations report may spur a rally later in the day as interest rates fall. The Portfolio is market neutral heading into tomorrow.
Thursday, January 06, 2005
Thursday Close
S&P 500 1,187.89 +.35%
NASDAQ 2,090.00 -.06%
Leading Sectors
Gaming +1.98%
Oil Service +1.88%
Energy +1.80%
Lagging Sectors
Internet -.89%
Software -1.63%
Airlines -2.34%
Other
Crude Oil 45.35 -.46%
Natural Gas 6.03 -.31%
Gold 422.00 +.09%
Base Metals 117.19 -1.29%
U.S. Dollar 83.08 unch.
10-Yr. T-note Yield 4.26% unch.
VIX 13.58 -3.62%
Put/Call .78 -16.13%
NYSE Arms .83 -27.83%
ISE Sentiment 222.00 +11.56%
After-hours Movers
Recommendations
After-hours News
NASDAQ 2,090.00 -.06%
Leading Sectors
Gaming +1.98%
Oil Service +1.88%
Energy +1.80%
Lagging Sectors
Internet -.89%
Software -1.63%
Airlines -2.34%
Other
Crude Oil 45.35 -.46%
Natural Gas 6.03 -.31%
Gold 422.00 +.09%
Base Metals 117.19 -1.29%
U.S. Dollar 83.08 unch.
10-Yr. T-note Yield 4.26% unch.
VIX 13.58 -3.62%
Put/Call .78 -16.13%
NYSE Arms .83 -27.83%
ISE Sentiment 222.00 +11.56%
After-hours Movers
Recommendations
After-hours News
BOTTOM LINE: The Portfolio finished unchanged today as gains in my networking and homebuilding longs offset losses in my steel and software shorts. I added to a few of my existing longs and shorts in the afternoon, thus leaving the Portfolio market neutral. The tone of the market weakened again this afternoon on lighter volume. Most measures of investor anxiety remain low and technology shares underperformed substantially. I continue to believe any near-term rally will be short-lived until complacency falls.
Mid-day Report
S&P 500 1,188.13 +.37%
NASDAQ 2,094.29 +.20%
Leading Sectors
Energy +2.16%
Oil Service +2.01%
Biotech +1.48%
Lagging Sectors
Internet -.77%
Software -99%
Airlines -2.12%
Other
Crude Oil 45.25 +4.29%
Natural Gas 5.92 +1.49%
Gold 422.20 -1.19%
Base Metals 118.72 +1.32%
U.S. Dollar 83.11 +.68%
10-Yr. T-note Yield 4.27% -.18%
VIX 13.61 -3.69%
Put/Call .88 -5.38%
NYSE Arms .98 -13.91%
ISE Sentiment 226.0 +13.57%
Market Movers
SYMC -5.95% on multiple downgrades due to competition from MSFT.
WWCA +14.29% on speculation of buyout by Alltel(AT) -3.51%.
STIY +34.0% on optimism for its stun gun.
ANTP +14.96% on rebound from recent fall.
ANN +12.34% on optimism over Dec. same-store-sales and outlook.
CHS +11.1% after reporting strong Dec. same-store-sales and 2-for-1 split.
PNRA +15.4% on strong Dec. same-store-sales and Piper Jaffray upgrade to Outperform.
GTRC +9.9% after boosting 4Q forecast.
AEOS +6.0% on strong Dec. same-store-sales.
HELE +9.5% after beating 3Q estimates and affirming 4Q outlook.
BKST -15.63% on weak holiday same-store-sales and Southwest Securities downgrade to Neutral.
NWY -12.8% after cutting 4Q and 05 forecasts.
MSM -6.9% on profit-taking after meeting 1Q estimates and lowering 2Q outlook.
TGT -4.89% after cutting 4Q growth estimates.
ARO -7.07% on disappointing Dec. same-store-sales and multiple downgrades.
CPWM -7.6% after lowering 4Q guidance.
Economic Data
Initial Jobless Claims for last week were 364K versus estimates of 331K and a downwardly revised 321K the prior week.
Continuing Claims were 2840K versus 2779K prior.
Recommendations
-Goldman Sachs: Reiterated Outperform on CAT, IBM, IR, BBY, PFE, MDT, KSS, MSFT and Underperform on AG, CNH, IHR, MHX, MAY.
-Citi SmithBarney: Upgraded ELX to Buy, target $20.50. Said to Buy CPO now on weakness before earnings report, target $57. Reiterated Buy on EXTR, target $11. Reiterated Buy on FFIV, target $60. Reiterated Buy on FDRY, target $15. Reiterated Buy on RDWR, target $32. Reiterated Buy on JNPR, target $36. Reiterated Buy on AA, target $42. Reiterated Buy on SEBL, target $12.
-JP Morgan: Rated BK Overweight.
-Deutsche Bank: Rated POWI Buy, target $23.
-Morgan Stanley: Raised STN to Overweight, target $66. Rated CLF Overweight. Rated RSAS Overweight, target $21. Rated SYMC Underweight, target $22. Rated CHKP Underweight, target $17.
-Bear Stearns: Raised MDT Outperform.
-Banc of America: Raised IPXL to Buy, target $21.
-Oppenheimer: Rated WGII Buy. Raised CL to Buy, target $61.
Mid-day News
U.S. stocks are modestly higher mid-day on strength in energy-related stocks and lower interest rates. Apple Computer is being sued for allegedly violating antitrust laws with its iTunes online music store, which doesn’t work with digital music players other than the company’s iPod, Reuters reported. Audiovox Electronics, Pioneer Electronics and Alpine Electronics are among companies likely to benefit from increased demand for car navigation systems that help drivers avoid traffic congestion, the Wall Street Journal said. Investment returns on university and foundation endowments rose to 14.7% in the fiscal year ended June 2004, the best results in four years, the Wall Street Journal reported. Six Apart, which makes the Moveable Type software to publish Blogs, bought Danga Interactive, which publishes the LiveJournal.com Web log site, the NY Times reported. A joint session of the US Congress plans today to certify the presidential election results, and Senator Kerry said he would not participate in a possible protest by Democrats, the NY Times reported. Honeywell Intl. was sued by the state of Illinois for polluting the air after two accidental releases of toxic gas from a plant in southern Illinois, the AP reported. US Airways reached an agreement with its machinists union, which is expected to be ratified in the next few weeks, CNBC said. American Airlines and four other US carriers matched Delta Air Lines lower prices on some flights and dropped other restrictions, Bloomberg reported. US retailers including Wal-Mart and Saks posted the second-biggest holiday sales gain of the last five years after a late shopping surge lifted December sales, Bloomberg said. Microsoft released a free tool to erase spyware programs and will offer a virus-removal program, Bloomberg reported. Crude oil is rising after the Iranian and Qatari oil ministers signaled that OPEC may follow through on output cuts promised last month, Bloomberg said. The US dollar is rising against the euro for a fifth day, the longest rally in more than a year, on optimism faster US job growth will bolster the case for higher interest rates, Bloomberg reported.
NASDAQ 2,094.29 +.20%
Leading Sectors
Energy +2.16%
Oil Service +2.01%
Biotech +1.48%
Lagging Sectors
Internet -.77%
Software -99%
Airlines -2.12%
Other
Crude Oil 45.25 +4.29%
Natural Gas 5.92 +1.49%
Gold 422.20 -1.19%
Base Metals 118.72 +1.32%
U.S. Dollar 83.11 +.68%
10-Yr. T-note Yield 4.27% -.18%
VIX 13.61 -3.69%
Put/Call .88 -5.38%
NYSE Arms .98 -13.91%
ISE Sentiment 226.0 +13.57%
Market Movers
SYMC -5.95% on multiple downgrades due to competition from MSFT.
WWCA +14.29% on speculation of buyout by Alltel(AT) -3.51%.
STIY +34.0% on optimism for its stun gun.
ANTP +14.96% on rebound from recent fall.
ANN +12.34% on optimism over Dec. same-store-sales and outlook.
CHS +11.1% after reporting strong Dec. same-store-sales and 2-for-1 split.
PNRA +15.4% on strong Dec. same-store-sales and Piper Jaffray upgrade to Outperform.
GTRC +9.9% after boosting 4Q forecast.
AEOS +6.0% on strong Dec. same-store-sales.
HELE +9.5% after beating 3Q estimates and affirming 4Q outlook.
BKST -15.63% on weak holiday same-store-sales and Southwest Securities downgrade to Neutral.
NWY -12.8% after cutting 4Q and 05 forecasts.
MSM -6.9% on profit-taking after meeting 1Q estimates and lowering 2Q outlook.
TGT -4.89% after cutting 4Q growth estimates.
ARO -7.07% on disappointing Dec. same-store-sales and multiple downgrades.
CPWM -7.6% after lowering 4Q guidance.
Economic Data
Initial Jobless Claims for last week were 364K versus estimates of 331K and a downwardly revised 321K the prior week.
Continuing Claims were 2840K versus 2779K prior.
Recommendations
-Goldman Sachs: Reiterated Outperform on CAT, IBM, IR, BBY, PFE, MDT, KSS, MSFT and Underperform on AG, CNH, IHR, MHX, MAY.
-Citi SmithBarney: Upgraded ELX to Buy, target $20.50. Said to Buy CPO now on weakness before earnings report, target $57. Reiterated Buy on EXTR, target $11. Reiterated Buy on FFIV, target $60. Reiterated Buy on FDRY, target $15. Reiterated Buy on RDWR, target $32. Reiterated Buy on JNPR, target $36. Reiterated Buy on AA, target $42. Reiterated Buy on SEBL, target $12.
-JP Morgan: Rated BK Overweight.
-Deutsche Bank: Rated POWI Buy, target $23.
-Morgan Stanley: Raised STN to Overweight, target $66. Rated CLF Overweight. Rated RSAS Overweight, target $21. Rated SYMC Underweight, target $22. Rated CHKP Underweight, target $17.
-Bear Stearns: Raised MDT Outperform.
-Banc of America: Raised IPXL to Buy, target $21.
-Oppenheimer: Rated WGII Buy. Raised CL to Buy, target $61.
Mid-day News
U.S. stocks are modestly higher mid-day on strength in energy-related stocks and lower interest rates. Apple Computer is being sued for allegedly violating antitrust laws with its iTunes online music store, which doesn’t work with digital music players other than the company’s iPod, Reuters reported. Audiovox Electronics, Pioneer Electronics and Alpine Electronics are among companies likely to benefit from increased demand for car navigation systems that help drivers avoid traffic congestion, the Wall Street Journal said. Investment returns on university and foundation endowments rose to 14.7% in the fiscal year ended June 2004, the best results in four years, the Wall Street Journal reported. Six Apart, which makes the Moveable Type software to publish Blogs, bought Danga Interactive, which publishes the LiveJournal.com Web log site, the NY Times reported. A joint session of the US Congress plans today to certify the presidential election results, and Senator Kerry said he would not participate in a possible protest by Democrats, the NY Times reported. Honeywell Intl. was sued by the state of Illinois for polluting the air after two accidental releases of toxic gas from a plant in southern Illinois, the AP reported. US Airways reached an agreement with its machinists union, which is expected to be ratified in the next few weeks, CNBC said. American Airlines and four other US carriers matched Delta Air Lines lower prices on some flights and dropped other restrictions, Bloomberg reported. US retailers including Wal-Mart and Saks posted the second-biggest holiday sales gain of the last five years after a late shopping surge lifted December sales, Bloomberg said. Microsoft released a free tool to erase spyware programs and will offer a virus-removal program, Bloomberg reported. Crude oil is rising after the Iranian and Qatari oil ministers signaled that OPEC may follow through on output cuts promised last month, Bloomberg said. The US dollar is rising against the euro for a fifth day, the longest rally in more than a year, on optimism faster US job growth will bolster the case for higher interest rates, Bloomberg reported.
Bottom Line: The Portfolio is unchanged mid-day as gains in my internet and networking longs are offsetting losses in my software and steel shorts. I have not traded today and the Portfolio is still market neutral. The tone of the market is better, but not good. Advancers are outpacing decliners modestly and volume is lighter. Technology stocks are underperforming the broad market. Measures of investor anxiety are mostly lower today, however the AAII % Bulls plunged to 38.1% this week, which is a positive. I expect US stocks to trade modestly higher into the close on short-covering ahead of tomorrow’s employment report.
Thursday Watch
Earnings of Note
Company/Estimate
ACN/.31
STZ/.85
EMMS/.28
SCHN/1.30
Splits
None of note.
Economic Data
Initial Jobless Claims for last week estimated at 331K versus 326K the prior week.
Continuing Claims estimated at N/A versus 2732K prior.
Recommendations
Goldman Sachs reiterated Outperform on DHR, IBM, FS, HOT, ACH and MDT. Goldman reiterated Underperform on ELX.
Late-Night News
Asian indices are mostly lower on declines in technology shares in the region. Harrah's Entertainment's planned joint venture with Gala Group, Britain's largest bingo club owner, to build eight casinos in the UK has ended, the London-based Times said. Taiwan, aiming to prod the development of its semiconductor and flat-panel display industries, plans to cut taxes for companies that invest in more advanced-production technology, the Commercial Times reported. Taiwan plans to sell 130 million Taiwan Semiconductor Manufacturing shares in the US this year, the Commercial Times said. Drug industry associations in the US, Europe and Japan may today pledge to publish more data on clinical trial of their drugs on the Internet, the Financial Times said. Michael Newdow, an atheist who won a lawsuit challenging the phrase "under God" in the Pledge of Allegiance, filed a new lawsuit in California to stop public schools from making students recite the pledge, the AP reported. Saudi Television Manufacturing plans this month to start selling the first mobile telephone made in Saudi Arabia with features such as Muslim prayer times in more than 5,000 cities worldwide, Arab News reported. Lakshmi Mittal, one of Britain's richest men, may suffer from a fall in steel prices as he puts together the world's biggest steelmaker, the Wall Street Journal reported. Microsoft may supply television software to Bell South and will work with TiVo to play recorded TV on phones and portable devices, part of Microsoft's efforts to sell more programs for consumer electronics, Bloomberg said.
Late-Night Trading
Asian Indices are -1.25% to -.25% on average.
S&P 500 indicated +.11%
NASDAQ 100 indicated +.19%.
Company/Estimate
ACN/.31
STZ/.85
EMMS/.28
SCHN/1.30
Splits
None of note.
Economic Data
Initial Jobless Claims for last week estimated at 331K versus 326K the prior week.
Continuing Claims estimated at N/A versus 2732K prior.
Recommendations
Goldman Sachs reiterated Outperform on DHR, IBM, FS, HOT, ACH and MDT. Goldman reiterated Underperform on ELX.
Late-Night News
Asian indices are mostly lower on declines in technology shares in the region. Harrah's Entertainment's planned joint venture with Gala Group, Britain's largest bingo club owner, to build eight casinos in the UK has ended, the London-based Times said. Taiwan, aiming to prod the development of its semiconductor and flat-panel display industries, plans to cut taxes for companies that invest in more advanced-production technology, the Commercial Times reported. Taiwan plans to sell 130 million Taiwan Semiconductor Manufacturing shares in the US this year, the Commercial Times said. Drug industry associations in the US, Europe and Japan may today pledge to publish more data on clinical trial of their drugs on the Internet, the Financial Times said. Michael Newdow, an atheist who won a lawsuit challenging the phrase "under God" in the Pledge of Allegiance, filed a new lawsuit in California to stop public schools from making students recite the pledge, the AP reported. Saudi Television Manufacturing plans this month to start selling the first mobile telephone made in Saudi Arabia with features such as Muslim prayer times in more than 5,000 cities worldwide, Arab News reported. Lakshmi Mittal, one of Britain's richest men, may suffer from a fall in steel prices as he puts together the world's biggest steelmaker, the Wall Street Journal reported. Microsoft may supply television software to Bell South and will work with TiVo to play recorded TV on phones and portable devices, part of Microsoft's efforts to sell more programs for consumer electronics, Bloomberg said.
Late-Night Trading
Asian Indices are -1.25% to -.25% on average.
S&P 500 indicated +.11%
NASDAQ 100 indicated +.19%.
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning on weakness in Asia and continuing worries over slowing global growth. While a bounce could occur at any time, another push lower is likely before a solid trading bottom is in place. The Portfolio is market neutral heading into tomorrow.
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