IndicesS&P 500 1,191.08 +.25%
Dow 10,638.69 +.06%
NASDAQ 2,019.13 +.17%
Russell 2000 624.08 +.19%
DJ Wilshire 5000 11,744.06 +.26%
S&P Barra Growth 572.12 +.26%
S&P Barra Value 614.79 +.26%
Morgan Stanley Consumer 576.70 -.07%
Morgan Stanley Cyclical 769.51 +.48%
Morgan Stanley Technology 462.76 +.42%
Transports 3,780.43 +.62%
Utilities 359.39 +.79%
Put/Call 1.11 +6.73%
NYSE Arms .88 -15.39%
Volatility(VIX) 13.46 -.22%
ISE Sentiment 148.00 +8.82%
US Dollar 81.86 +.33%
CRB 320.75 -.52%
Futures Spot Prices Crude Oil 57.00 +.96%
Unleaded Gasoline 157.30 +1.60%
Natural Gas 7.30 +1.57%
Heating Oil 159.80 +.41%
Gold 439.30 -1.10%
Base Metals 130.00 -1.13%
Copper 150.40 -.13%
10-year US Treasury Yield 4.44% -1.47%
Leading Sectors Iron/Steel +2.19%
Energy +1.63%
Computer Hardware +1.12%
Lagging Sectors Disk Drives -.77%
Insurance -.89%
Homebuilders -1.12%
Market MoversTOY +5.4% after agreeing to be acquired for $6.6 billion by KKR, Bain Capital and Vornado Realty Trust.
RETK +10.84% after SAP AG raised its offer to buy Retek by 29% to $629 million, escalating a bidding war with Oracle.
SBLK +25.16% after Seacor Holdings agreed to buy it for about $532M in stock and cash.
DRIV +13.03% after saying 1Q sales and profit will be higher than it forecast in January.
NFI +10.2% after management reaffirmed forecast for 05 dividend.
ACI +4.77% on higher energy prices.
BID -11.73% on profit-taking after 4Q results.
DRL -14.0% on further weakness from Wachovia downgrade to Underperform.
WGO -7.77% after missing 2Q estimates substantially.
GTRC -5.39% after lowering 1Q forecast.
Mid-day OverviewMarket InternalsI-Watch Sector OverviewNYSE Unusual VolumeNASDAQ Unusual VolumeNASDAQ 100 HeatmapDJIA Quick ChartsChart ToppersHot SpotsOption DragonReal-time Intraday Chart/QuoteEconomic Data - Initial Jobless Claims for last week fell to 318K versus estimates of 315K and 328K the prior week.
- Continuing Claims fell to 2647K versus estimates of 2668K and 2695K prior.
- Leading Indicators for February rose .1% versus estimates of a .1% increase and a .3% decline in January.
- Philadelphia Fed. for March fell to 11.4 versus estimates of 20.0 and a reading of 23.9 in February.
Recommendations- Goldman Sachs: Reiterated Outperform on FSL, INTC, AVP, BSX and MRVL. Reiterated Underperform on HRB. Said unrecognized Employee Stock Option expense represented only about 5% of S&P 500 operating EPS in 2004 versus almost 15% in 2001.
- Smith Barney: Said to Buy NRG on weakness, target $45. Said to Buy RRI on weakness, target $15. Reiterated Buy on AMLN, target $31. Reiterated Buy on VECO, target $26. Upgraded RIMM to Buy, target $96. Reiterated Buy on BIIB, target $49. Reiterated Buy on AMGN, target $90. Reiterated Buy on JPM, target $46.
- Legg Mason: Raised VIA/B to Buy, target $46.
- CSFB: Raised KRI to Outperform.
- Prudential: Raised OATS to Overweight, target $12.
- CIBC: Rated AXP Sector Outperform, target $69.
- Bear Stearns: Cut CF to Underperform.
- CIBC: Raised MDCO to Sector Outperform, target $30.
- Well Fargo: Raised ATYT to Buy, target $23.
- Lehman Brothers: Cut GM to Underweight, target $25.
Mid-day News US stocks are mostly unchanged mid-day as falling interest rates are offsetting another rise in energy prices. The Syrian army completed the first stage of its withdrawal from Lebanon, a pullback of 8,000 soldiers to the east of the country, AFP reported. Midway Games will release a video game next week in which players can simulate taking drugs ranging from marijuana to crack, the NY Times reported. News Corp. plans to offer film clips of Paris Hilton’s reality tv series over Verizon Wireless cell phones to increase viewers, the Wall Street Journal reported. The armed Palestinian groups Hamas and Islamic Jihad rejected a complete stop of hostilities against Israel, shunning efforts by Palestinian Authority President Abbas to reach a lasting truce, Haaretz reported. The slide of GM bonds toward “junk” status may reflect GM’s specific troubles or signal that US companies in general have been paying unjustifiably low interest rates on their debt, the Wall Street Journal reported. Citigroup’s Citibank, HSBC Bank USA and Commerce Bank have extended opening hours at branches in the US to attract customers, the Wall Street Journal reported. Wal-Mart Stores and other US retailers are slashing prices for printing digital-photos in a bid to win market share from each other and from home-printer makers such as Hewlett-Packard, the Wall Street Journal reported. Napster’s “Napster to Go” offers a viable alternative to Apple’s iTunes online music-download store that now dominates that digital music market with 300 million songs sold, the Wall Street Journal said. Two California legislators seek to impose ethical and financial standards on the state’s new $3 billion stem-cell research institute, the Wall Street Journal reported. The FTC could begin regulating food advertisements aimed at children under a bill being introduced by Iowa Senator Tom Harkin, the NY Times reported. Equity Office Properties Trust purchased Verizon Communication’s 41-story building in NYC for more than $500 million, Dow Jones Newswires reported. Siemens AG plans to retreat from the US mobile-phone market as the company tries to cut costs at its unprofitable handset business, Manager Magazin reported. McDonald’s has amassed $115M worth of real estate assets in Russia, including restaurants, land and offices, the NY Times reported. OPEC may start talks next week on doubling yesterday’s 500,000 barrels-a-day increase in its production quota, seeking to halt a rally in prices to records and avoid slowing global economic growth, Bloomberg said. FedEx Corp. said third-quarter profit climbed 53% as shipments from Asia and Europe increased, Bloomberg said. Goldman Sachs said revenue from trading helped the firm beat analysts’ estimates and post a 17% rise in quarterly profit to the highest ever, Bloomberg reported. Crude oil is climbing to a record $57.50 a barrel in NY, and fuel prices touched records, amid speculation OPEC can’t produce enough to meet rising demand, Bloomberg said. US 10-year Treasury notes headed for their first two-day gain in more than a month as investors sought the safety of government debt amid declines in riskier investments such as emerging markets and corporate bonds, Bloomberg reported.
BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my Energy-related longs are offsetting losses in my Networking and Chinese ADR shorts. I took profits in a few Technology shorts this morning, thus leaving the Portfolio’s market exposure Market Neutral. The tone of the market is mixed today as the advance/decline line is slightly lower, sector performance is mixed and volume is decent. Measures of investor anxiety are mostly higher. Today’s overall market action is negative, considering the fall in long-term interest rates and recent losses. The unexpected sharp decline in the Philly Fed likely foreshadows the “soft spot” I have been expecting in US economic growth. As a result, long-term interest rates have likely peaked for the intermediate-term. I expect US stocks to trade mixed-to-lower into the close on worries over slowing economic growth and higher energy prices.
