Wednesday Watch

Late-Night News
Asian indices are mostly higher, led by gains in China. JP Morgan will hold an investors' meeting next week on its credit- and debit-card business, the Wall Street Journal reported. North Korea doesn't have the technology necessary to attach nuclear warheads to missiles, the Chosun Ilbo newspaper reported, citing South Korea's National Intelligence Service as telling a government committee. Below-average snowfall in the Pacific Northwest may lead to higher electricity prices later in the year, the Wall Street Journal reported. China's imports of steel products fell 41% to 1.92 million metric tons in January compared with a year earlier, the Beijing-based customs office said. Fidelity Management raised its stake in Infosys Technologies to 5.65% of the company's equity, the Hindu Business Line reported. Tractebel SA and Norwegian ship-owner Leif Hoegh ASA plan a $900 million project near Boston to import liquefied natural gas, Lloyd's List reported. South Korea's government won't agree to any significant economic initiatives with North Korea until the issue over its nuclear weapons is resolved, Bloomberg reported. Shares of Chartered Semiconductor Manufacturing Ltd. and STATS ChipPAC Ltd. rose in Singapore after Applied Materials said the outlook for the computer chip industry is improving, Bloomberg said. Doctors and scientists will probably tell the FDA this week that Pfizer's Celebrex painkiller needs to carry a tougher warning of a link to heart attacks and strokes, Bloomberg reported. Pfizer and Merck are among pharmaceutical companies that are likely to consider buying smaller competitors this year because of additional cash from a one-time tax break, the Wall Street Journal reported.

Late Recommendations
-Goldman Sachs: Reiterated Outperform on GE, PFE, SYK and BBBY.
-Banc of America: Upgraded DJ to Buy.

Night Trading
Asian Indices are unch. to +.50% on average.
S&P 500 indicated unch.
NASDAQ 100 indicated unch.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
CNBC Guest Schedule

Earnings of Note
Company/Estimate
AAP/.45
CMX/.43
KO/.40
GPRO/.20
HPQ/.34
IACI/.27
JNY/.29
MDT/.45
PNRA/.45
OSI/.57
MCO/.73
PFCB/.40
SNPS/.06
TK/2.94
WEN/.45

Splits
INT 2-for-1

Economic Data
-Housing Starts for January are estimated to fall to 1925K versus 2004K in December.
-Building Permits for January are estimated to fall to 2000K versus 2021K in December.
-Industrial Production for January is estimated to rise .3% versus a .8% increase in December.
-Capacity Utilization for January is estimated to rise to 79.3% versus 79.2% in December.
-Greenspan report on Economy and Fed Policy.

BOTTOM LINE: I expect US equities to open mixed in the morning and move higher later in the day on strong earnings reports, more constructive Fed comments, lower energy prices, rebounding tech shares and increasing fund inflows. The Portfolio is 100% net long heading into tomorrow. Voting for the 2005 Business Blogging Awards ends today at 3pm EST and it is still a very tight race. Please take a few seconds to vote here for Between the Hedges in the Best Financial Industry/Investment Blog category. Thank you very much.

Tuesday Close

Indices
S&P 500 1,210.12 +.33%
Dow 10,837.32 +.43%
NASDAQ 2,089.21 +.30%
Russell 2000 634.94 -.01%
DJ Wilshire 5000 11,911.18 +.27%
S&P Barra Growth 580.82 +.38%
S&P Barra Value 625.00 +.28%
Morgan Stanley Consumer 592.97 +.15%
Morgan Stanley Cyclical 767.39 +.34%
Morgan Stanley Technology 478.42 +.68%
Transports 3,615.16 +.72%
Utilities 353.88 -.54%
Put/Call .78 -10.34%
NYSE Arms .77 -25.96%
Volatility(VIX) 11.27 -2.17%
ISE Sentiment 174.00 -10.77%
US Dollar 83.59 -.44%
CRB 289.33 +.51%

Futures Spot Prices
Crude Oil 47.26 unch.
Unleaded Gasoline 125.41 -.18%
Natural Gas 6.19 +.24%
Heating Oil 129.30 +.13%
Gold 426.80 -.12%
Base Metals 123.27 +.19%
Copper 145.45 -.27%
10-year US Treasury Yield 4.09% +.66%

Leading Sectors
Gaming +2.08%
Computer Hardware +1.89%
Disk Drives +1.74%

Lagging Sectors
Iron/Steel -.37%
I-Banks -.47%
Utilities -.54%

After-hours Movers
ADBL -32.7% after missing 4Q revenue estimates, saying it expects higher costs and raising 05 revenue guidance.
NTAP -11.8% after beating 3Q estimates and lowering 4Q revenue guidance.
GPRO +3.73% after announcing that it has signed a supply and purchase agreement with F. Hoffmann-La Roche Ltd. and its affiliate Roche Molecular Systems.
INTL +4.21% after missing 4Q estimates slightly, announcing a $1.00/share special dividend and stock buyback of $75M.
PLAB +8.19% after beating 1Q estimates.
CSCD +4.26% after beating 4Q estimates, lowering 1Q guidance range and raising 1Q revenue guidance range.
LF -13.22% after substantially missing 4Q estimates and saying COO resigned.
EYET -7.36% after missing 4Q estimates and lowering 05 outlook.

Detailed Market Summary
Market Wrap CNBC Video(bottom right)
Futures Recap
NASDAQ 100 After-hours Indicator
Real-time/After-hours Stock Quote

Afternoon Recommendations
-Goldman Sachs: Reiterated Outperform on TYC, UNM and SAP. Reiterated Underperform on NAV.
-JP Morgan: Cut VAL to Underweight.

After-hours News
US stocks finished modestly higher today on gains in technology and gaming stocks. After the close, the FCC is leaning toward making AT&T pay certain fees over prepaid calling cards it has sold since 1999, Reuters reported. General Dynamics’ contract with the US Navy for the Multi-Purpose Processor submarine program more than doubled in value to $88.6 million with the addition of engineering and technical services, Bloomberg reported. A 15-year-old boy who said Pfizer’s Zoloft antidepressant drove him to fatally shoot his grandparents was found guilty of murder and sentenced to 30 years in prison, the AP reported. An Indonesian doctor has retracted claims that Newmont Mining harmed the health of villagers near its Minashasa gold mine, Dow Jones reported. Russia told N.Korea it should join the six-nation forum discussing dismantling N.Korea’s nuclear program as soon as possible, Interfax reported. Home Depot plans to create 20,000 new US jobs and recruit Hispanic, bilingual workers to fill them, CNN reported. Apple Computer may increase its purchases from Taiwan suppliers this year by a quarter to $5 billion as it boosts sales, the Commercial Times reported. Applied Materials said first quarter profit more than tripled, Bloomberg said. The seven-year-old Kyoto Protocol comes into force today, binding 35 nations and the European Union to cut their emissions of greenhouse gases, Bloomberg said. The yen fell from a one-week high against the US dollar as a report showed Japan’s economy fell into recession after it shrank in the final quarter of 2004, Bloomberg reported.

BOTTOM LINE: The Portfolio finished higher today on gains in my internet and software longs. I did not trade in the afternoon, thus leaving the Portfolio 100% net long. The tone of the market improved slightly into the close as the advance/decline line finished nearly unchanged, sector performance was modestly positive and technology stocks outperformed. On the negative side, small-caps and interest-rate sensitive sectors underperformed and measures of investor anxiety were mostly lower. I continue to expect US stocks to move modestly higher this week on more constructive comments from Greenspan, strong earnings reports, better fund inflows and short-covering. I will increase the Portfolio’s market exposure on a clear break above the 2100 level on the Nasdaq.

Mid-day Report

Indices
S&P 500 1,207.31 +.10%
Dow 10,809.61 +.17%
NASDAQ 2,085.06 +.10%
Russell 2000 633.53 -.23%
DJ Wilshire 5000 11,884.74 +.05%
S&P Barra Growth 580.68 +.35%
S&P Barra Value 624.72 +.24%
Morgan Stanley Consumer 592.93 +.14%
Morgan Stanley Cyclical 767.62 +.37%
Morgan Stanley Technology 477.97 +.58%
Transports 3,605.11 +.44%
Utilities 353.90 -.53%
Put/Call .73 -16.09%
NYSE Arms .84 -19.23%
Volatility(VIX) 11.64 +1.04%
ISE Sentiment 173.00 -11.28%
US Dollar 83.61 -.42%
CRB 289.19 +.46%

Futures Spot Prices
Crude Oil 47.57 +.27%
Unleaded Gasoline 127.00 -.63%
Natural Gas 6.14 +.77%
Heating Oil 130.30 +.66%
Gold 426.90 -.09%
Base Metals 123.27 +.19%
Copper 145.60 +1.15%
10-year US Treasury Yield 4.10% +.81%

Leading Sectors
Gaming +2.12%
Disk Drives +1.36%
Retail +1.18%

Lagging Sectors
Oil Service -.44%
Utilities -.60%
Homebuilders -.60%

Market Movers
AAPL +4.64% after Merrill Lynch raised price target to $102.
C +17.92% after receiving a $3.25 billion cash acquisition offer from its fifth largest shareholder, Highfields Capital Management.
ANR +18.05% on strong demand for IPO.
TEVA -5.43% on disappointing 4Q results and 05 guidance.
ANSS +9.71% after beating 4Q estimates and raising 05 outlook.
PFBC +10.78% on strong demand for IPO.
MFLX +12.66% on no news.
CRL +6.94% after beating 4Q estimates, maintaining 1Q outlook and 05 guidance.
FOXH +10.68% after beating 4Q estimates and raising 1Q outlook.
BYD +5.09% on no news.
PFGC -15.15% after saying it would delay filing fourth-quarter and year-end financial results to complete an investigation of its accounting practices and JP Morgan downgrade to Underweight from Overweight.
ROCK -11.1% after missing 4Q estimates and lowering 1Q outlook.
MOLXE -10.52% after missing 2Q estimates and lowering 3Q outlook substantially.
CTCO -4.92% after missing 4Q estimates and lowering 1Q/05 guidance.
BG -5.3% on comments by John Deere regarding slower purchases of farm equipment in Brazil due to low soybean prices.
KWK -4.1% on UBS downgrade to Neutral.
AXCA -9.1% on disappointing 1Q results.

Market Internals
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon

Economic Data
-Empire Manufacturing for February fell to 19.19 versus estimates of 20.0 and a reading of 20.08 in January.
-Advance Retail Sales for January fell .3% versus estimates of a .4% decline and a 1.1% increase in December.
-Retail Sales Less Autos for January rose .6% versus estimates of a .4% gain and a .3% increase in December.
-Net Foreign Security Purchases for December fell to $61.3B versus estimates of $58.5B and an upwardly revised $89.3B in November.
-Business Inventories for December rose .2% versus estimates of a .2% increase and a 1.1% gain in November.
-NAHB Housing Market Index fell to 68 in February versus estimates of 69 and a reading of 70 in January.

Recommendations
-Goldman Sachs: Reiterated Outperform on K, KRB, EBAY, CCL, HOT, MSFT and A. Reiterated Underperform on INFA, DE, RAI and FSS.
-Banc of America: Said investors in bonds of GM should buy the carmaker’s 30-year securities because their returns will be better than shorter-dated debt.
-Morgan Stanley: Raised MCO to Overweight, target $100.
-Oppenheimer: Raised FMBI to Buy.
-JP Morgan: Downgraded PFGC to Underweight.
-Legg Mason: Rated LEG Buy, target $34.
-UBS: Raised GG to Buy, target $16.

Mid-day News
US stocks are mixed mid-day as gains in technology shares are being offset by losses in interest-rate sensitive sectors. Debt levels among companies are too low and they have scope to increase their borrowing, according to a survey of investors by Merrill Lynch. Copper prices will average $1.20 a pound this year, Merrill Lynch said, revising a previous estimate 9.1% higher because of continuing growth in US and Chinese demand for the metal used in wiring and plumbing. The Baltic Exchange, the 260-year-old shipping organization in London, plans to set up a container ship freight-rate index that could be used for derivative trading, TradeWinds reported. Major League Baseball may today say it has reached agreement to purchase Tickets.com, an online provider of entertainment and sports tickets, for $66 million, the Wall Street Journal reported. Merck’s Vioxx and Pfizer’s Celebrex painkillers will face more scrutiny tomorrow when a FDA advisory panel hears about how the agency and Merck dealt with Vioxx’s recall, the NY Times reported. GM and other US companies are paying more for mail order generic drugs for their employees than individuals get buying the same drugs at retail pharmacies, the Wall Street Journal reported. The number of US households owning at least one individual retirement account in 2004 remained relatively unchanged at 40.4%, the Wall Street Journal reported. Federated Department Stores’ acquisition talks with May Department Stores halted last week after the two retailers couldn’t agree on price, the Wall Street Journal said. Verizon Communications’ planned purchase of MCI for $6.7 billion could mean US corporations will no longer see price wars for telephone and Internet services, the NY Times reported. Advanced Micro Devices cut prices on its existing Opteron server chips by as much as 35% after introducing higher-performing Opteron models, CNet News reported. Brazil plans to ask the WTO to investigate the legality of US government subsidies for soybean farmers, Bloomberg said. Privatizing part of Social Security has advantages and will help divide retirement saving from interest group politics, taxes and government spending, Gary Becker, a Nobel laureate in economics, wrote in the Wall Street Journal. European economic growth unexpectedly slowed in the fourth quarter as Germany and Italy, which account for half the region’s $10 trillion economy, contracted for the first time in more than a year, Bloomberg reported. The United Iraqi Alliance, which came first in the National Assembly elections, is meeting to choose between Ibrahim al-Jaafari, Ahmed Chalabi and Adel Abdel Mahdi, as a candidate for the job of Prime Minister, Bloomberg reported. Billionaire investors Warren Buffett and George Soros increased their holdings of US cable television companies, taking advantage of declines in stock prices to buy shares of the industry’s top two operators, Bloomberg said. The FDA will set up an independent drug safety oversight board to monitor medicines after they win approval, Bloomberg reported. Microsoft will release a new version of its Internet Explorer browser to fix security problems, Bloomberg said. Databases maintained by ChoicePoint, which sells personal information on people in the US to government agencies and businesses, have been accessed by criminals posing as legitimate businesses, MSNBC.com reported.

BOTTOM LINE: The Portfolio is higher mid-day on gains in my internet and software longs. I have not traded today, thus the Portfolio is still 100% net long. The tone of the market is mixed as the advance/decline line is slightly negative and most sectors are higher. As well, volume is better today and measures of investor anxiety are mixed. The Nasdaq is finding resistance at the key technical level of around 2100. I expect the Nasdaq to break above this level in the next few days on strong earnings reports, more constructive Fed comments, increasing fund inflows, short-covering and a decline in energy prices. I will increase market exposure on a clear break above this level. US stocks should trade modestly higher from current levels into the close.

Tuesday Watch

Late-Night News
Asian indices are mixed as rising technology shares are being offset by declining financial stocks in the region. Time Warner's America Online is in talks with Comcast Corp. and other cable groups over possible joint ventures to increase broadband customer figures, the Financial Times reported. China's central bank will encourage financial institutions to expand credit and spur industrial growth in the country's western provinces, state-run Xinhua news agency said. South Korea's government proposed military talks with North Korea as tensions mount over North Korea's announcement it has nuclear weapons, the AP reported. Warren Buffett's Berkshire Hathaway doubled its holdings of Comcast to 10 million shares in the fourth quarter, Bloomberg reported. Billionaire investor George Soros sold his stakes in Anheuser-Busch and Baxter International, while adding Altria Group, Applied Micro Circuits, Cisco Systems and Dupont to his holdings, Bloomberg said. Consumer satisfaction with Internet commerce sites including Amazon.com and EBay fell in the fourth quarter for the first time since measurements began being taken in 2000, Bloomberg reported. President Bush is beginning to make progress in convincing US textile makers to drop their opposition to a trade agreement with Central American nations, Bloomberg reported. US Senate investigators said today the former head of the UN/Iraqi oil-for-food program may have broken US criminal laws, and accused a UN contractor in Iraq of taking a bribe to circumvent the humanitarian effort, Bloomberg said. Newly obtained documents from the Iraqi government may show Saddam Hussein's regime gave Benon Sevan, the director of the UN program, about $1.2 million in oil vouchers, Bloomberg reported. Saudi Prince Alwaleed bin Talal, whose $13 billion stake in Citigroup suffered as the company lurched from scandal to scandal for three years, said Chairman Sanford Weill and CEO Charles Prince assured him the worst is over, Bloomberg said. Exxon Mobil, Royal Dutch Shell, ChevronTexaco and other oil companies are investing $20 billion to build a plant in Qatar that will turn natural gas into a cleaner-burning automotive fuel, the Wall Street Journal reported.

Late Recommendations
CSFB: Raised Japanese Technology stocks to Neutral from Underweight.

Night Trading
Asian Indices are -.25% to +.25% on average.
S&P 500 indicated -.01%.
NASDAQ 100 indicated unch.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
CNBC Guest Schedule

Earnings of Note
Company/Estimate
ANF/1.13
AMAT/.15
CECO/.66
ADBL/.03
CEPH/.74
DE/.89
N/.88
GET/-.25
FNF/.96
LH/.61
MHS/.56
MHK/1.53
NTAP/.16
JWN/1.02
SDS/.40
RIG/.05

Splits
None of note.

Economic Data
-Empire Manufacturing for February is estimated to fall to 20.0 versus a reading of 20.08 in January.
-Advance Retail Sales for January are estimated to fall .5% versus a rise of 1.2% in December.
-Retail Sales Less Autos for January are estimated to rise .4% versus a .3% increase in December.
-Net Foreign Security Purchases for December are estimated to fall to $60.0B versus $81.0B in November.
-Business Inventories for December are estimated to rise .2% versus a 1.0% gain in November.
-The NAHB Housing Market Index for February is estimated to fall to 69 versus a reading of 70 in January.

BOTTOM LINE: I expect US equities to open modestly higher in the morning on strong earnings reports, good economic reports and rebounding tech shares. The Portfolio is 100% net long heading into tomorrow.

Monday Close

Indices
S&P 500 1,206.14 +.07%
Dow 10,791.13 -.05%
NASDAQ 2,082.91 +.30%
Russell 2000 635.02 +.04%
DJ Wilshire 5000 11,878.65 +.08%
S&P Barra Growth 578.62 +.19%
S&P Barra Value 623.24 -.05%
Morgan Stanley Consumer 592.10 -.02%
Morgan Stanley Cyclical 759.77 +.54%
Morgan Stanley Technology 475.21 +.25%
Transports 3,589.31 -.66%
Utilities 355.79 +.82%
Put/Call .87 +4.82%
NYSE Arms 1.04 +73.33%
Volatility(VIX) 11.52 +.79%
ISE Sentiment 195.00 +51.16%
US Dollar 83.91 -.78%
CRB 287.87 +.59%

Futures Spot Prices
Crude Oil 47.41 -.06%
Unleaded Gasoline 127.80 unch.
Natural Gas 6.07 -.30%
Heating Oil 129.60 +.12%
Gold 426.50 -.19%
Base Metals 123.04 +.90%
Copper 143.95 unch.
10-year US Treasury Yield 4.07% -.28%

Leading Sectors
Computer Hardware +1.08%
Wireless +.97%
Internet +.88%

Lagging Sectors
Homebuilders -.69%
Insurance -.73%
Oil Service -1.33%

After-hours Movers
MOLXE -6.22% after missing 2Q estimates and lowering 3Q outlook substantially.
WCG -3.85% after beating 4Q estimates and lowering 1Q/05 outlooks.
FOXH +5.90% after beating 4Q estimates and raising 1Q outlook.
OMM +4.31% after beating 4Q estimates and raising 1Q outlook.

Detailed Market Summary
Market Wrap CNBC Video(bottom right)
Futures Recap
NASDAQ 100 After-hours Indicator
Real-time/After-hours Stock Quote

Afternoon Recommendations
-Goldman Sachs: Reiterated Outperform on MDT, HOT, SAP and AET. Reiterated Underperform on BA.

After-hours News
US stocks finished mostly higher today on optimism over merger activity and lower long-term interest rates. After the close, US companies’ internal auditors who assist external auditors in assessing internal controls against fraud could cut audit fees by as much as 50%, the Financial Times said. Wynn Resorts plans to submit a bid to build Singapore’s first casino, the Straits Times reported. Nippon Steel and JFE Holdings plan to reduce the use of coking coal to produce steel because of rising costs, the Nihon Keizai newspaper said. Flu vaccination may be less effective at preventing deaths of people older than 65 than previous research has shown, according to a study published in today’s edition of the Archives of Internal Medicine. The US dollar fell by the most in almost three weeks against the yen after a Japanese government report showed the country’s current-account surplus unexpectedly swelled in December, Bloomberg reported. Google shares rose 3% as the biggest and final restriction on insider stock sales expired today, Bloomberg reported. 3M Co. said it raised its quarterly dividend by almost 17% to 42 cents a share, Bloomberg reported. The California Public Employees’ Retirement System voted to put pressure on auto makers to design cleaner-burning vehicles, Bloomberg reported. Regency Centers and Macquarie CountryWide Trust said they’ve agreed to buy 101 retail centers from the California Public Employees’ Retirement System for about $2.74 billion, Bloomberg said.

BOTTOM LINE: The Portfolio finished substantially higher today on gains in my internet, networking and telecom longs. I did not trade in the afternoon, thus leaving the Portfolio 100% net long. The tone of the market improved into the close as the advance/decline line finished nearly unchanged and a number of sectors rose. Volume fell considerably and measures of investor anxiety were mostly higher. Cyclical shares outperformed and long-term interest rates fell again today. I expect US stocks to begin heading higher later this week on more constructive comments from Greenspan, strong earnings reports, better fund inflows and short-covering.

Mid-day Report

Indices
S&P 500 1,205.66 +.03%
Dow 10,789.14 -.07%
NASDAQ 2,080.44 +.18%
Russell 2000 634.60 -.03%
DJ Wilshire 5000 11,871.47 +.02%
S&P Barra Growth 578.35 +.14%
S&P Barra Value 622.93 -.10%
Morgan Stanley Consumer 591.72 -.09%
Morgan Stanley Cyclical 765.63 -.01%
Morgan Stanley Technology 474.86 +.17%
Transports 3,594.82 -.51%
Utilities 355.38 +.71%
Put/Call .92 +10.84%
NYSE Arms 1.03 +71.67%
Volatility(VIX) 11.58 +1.40%
ISE Sentiment 179.00 +38.76%
US Dollar 83.87 -.83%
CRB 287.13 +.33%

Futures Spot Prices
Crude Oil 47.23 +.15%
Unleaded Gasoline 129.00 +.49%
Natural Gas 6.05 -.71%
Heating Oil 129.80 -.60%
Gold 427.50 +1.30%
Base Metals 123.04 +.90%
Copper 143.90 +1.16%
10-year US Treasury Yield 4.06% -.47%

Leading Sectors
Wireless +.97%
Computer Hardware +.82%
Iron/Steel +.82%

Lagging Sectors
Airlines -.95%
Insurance -1.16%
Oil Service -1.74%

Market Movers
TASR +10.9% after saying it received four orders with a combined value of more than $675,000.
ENCY +12.27% after releasing clinical data for a pulmonary hypertension drug showing that patients receiving the drug could walk farther than those receiving a placebo and that it plans to file a new drug application with the FDA in April.
AIG -3.45% after receiving subpoenas from NY Attorney General Spitzer and the SEC seeking information on policies that may help companies smooth earnings.
ARBA +13.78% after agreeing to pay $37 million to settle litigation related to claims of infringement involving three patents that rival EPlus owns.
DSCO +13.47% after saying the FDA will approve its respiratory drug Surfaxin, without additional clinical trials, once the company finalizes labeling and corrects “previously reported manufacturing issues.”
BER +6.71% after beating 4Q estimates
REXI +6.88% on no news.
GRU +9.1% on short-covering.
NVEC -10.93% on no news.
CYBX -7.34% on insider selling.
AH -4.85% on Goldman Sachs downgrade to Underperform.
OMX -5.57% after saying CEO Milliken has resigned, one month after the departure of CFO Anderson.

Market Internals
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon

Economic Data
None of note.

Recommendations
-Goldman Sachs: Reiterated Outperform on AIG, FSL, BSX, ACS and ACN. Reiterated Underperform MHX. Downgraded AH to Underperform.
-Citi SmithBarney: Raised DUK to Buy, target $30. Reiterated Buy on GS, target $125. Reiterated Buy on MER, target $73. Reiterated Buy on MWD, target $74. Reiterated Buy on RSH, target $40. Reiterated Buy on PRU, target $70. Reiterated Buy on MERQ, target $58. Reiterated Buy on WMT, target $65. Reiterated Buy on Semi Equipment stocks, favorites are AMAT and LRCX.
-Banc of America: Upgraded EL to Buy, target $50. Raised WFC to Buy, target $67.
-CIBC: Raised GOOG to Sector Outperform, target $245. Raised RBAK to Sector Outperform, target $10.
-CSFB: Raised MNST to Outperform, target $36.

Mid-day News
US stocks are mildly weaker mid-day as shares consolidate after recent gains. Capital Research & Management, a unit of the third-biggest US mutual fund company, has boosted its holdings in Fannie Mae to 11%, the Wall Street Journal reported. Mahmoud Abbas, the new Palestinian leader, said the war with Israel is effectively over, the NY Times reported. Blockbuster faces opposition from the FTC to its hostile bid for Hollywood Entertainment, the Wall Street Journal reported. A highly drug-resistant strain of HIV has been found in NYC that is virtually impossible to treat and turns rapidly into AIDS, the Wall Street Journal reported. Man Group Plc, the UK hedge-fund operator, faces competition from new funds created by Wall Street brokerages just as its own performance slows, the Wall Street Journal reported. JC Penney plans to stick to its focus on the mid-prices retail market by strengthening apparel for women, the Wall Street Journal said. Programs in at least nine US states that offer Web sites designed to help residents purchase inexpensive prescription drugs from Canada have been ineffective, the Wall Street Journal reported. The NBA is partnering with Reebok International on its biggest advertising campaign to date for NBA licensed apparel as the league tries to boost merchandise sales amidst recent embarrassments, the NY Times reported. Democrats will hold hundreds of hometown events next week to counter President Bush’s campaign to promote private Social Security accounts, the Washington Post reported. The Feb. 11 resignation of Eason Jordan, chief news executive at Time Waner’s CNN, marks the second time in five months that Bloggers have driven out a high-profile media figure over inaccurate reporting, the NY Times reported. A UN-contracted inspector accepted bribes to help Iraq export more oil than was authorized under the UN-administered oil-for-food program, the NY Tiimes reported. Settlements of securities class-action lawsuits over losses in the stock market hit an all-time high in 2004, the NY Times said. The US State Department relaxed visa rules for foreign scientists and students working or studying in the US, the NY Times reported. Residential builders are pushing into Manhattan’s far west side and developers are buying up property in the area in what has been a gritty industrial neighborhood, the NY Times said. Rents for some office space in midtown Manhattan rose 5 to 10% in the last year, reversing four years of flat or falling prices, Crain’s NY Business reported. Motorola said the GSM Assoc. picked the company to supply 6 million low-cost handsets for a program to sell cell phones in developing countries, Bloomberg reported. BAE Systems Plc, Cobham Plc and Smiths Group Plc are among UK defense companies planning to acquire US military contractors, Bloomberg reported. Copper prices in NY rose to a two-week high on expectations that economic growth in the US will boost metals demand from manufacturers, Bloomberg reported. Nokia Oyj and Microsoft will cooperate in wireless music downloading to challenge Apple Computer and Motorola, Bloomberg said. MCI is worth more than the $6.7 billion Verizon Communications agreed to pay, said Leon Cooperman, CEO of Omega Advisors. President Bush nominated Lester Crawford as the next commissioner of the FDA, a job he has held on a temporary basis for almost a year, Bloomberg reported.

BOTTOM LINE: The Portfolio is substantially higher mid-day on gains in my internet, networking and telecom longs. I added a few new longs this morning and increased my GOOG long, thus bringing the Portfolio to 100% net long. GOOG is now my largest long position. The tone of the market is mixed today on a healthy consolidation of recent gains. Volume is light and the advance/decline line is slightly negative. Measures of investor anxiety are mostly higher, which is a positive. I expect US stocks to trade modestly higher from current levels into the close on lower interest rates, rebounding tech shares and short-covering.