Thursday Watch

Late-Night Headlines
Bloomberg:
- Democratic Senators Patty Murray and Hillary Clinton said they would block confirmation of Lester Crawford as FDA chief because of delays in approving over-the-counter sales of Barr Pharmaceuticals' Plan B contraceptive.
- The NBA signed a multiyear marketing and content supply agreement with China Mobile Communications, which owns the world's largest mobile phone operator by subscribers, extending the league's reach in the most populous nation.

Wall Street Journal:
- General Motors is pressuring its suppliers in the US to lower prices so they are more in line with auto-parts markers outside the US.

Washington Post:
- The US military has accelerated the hand-off of counterinsurgency operations to Iraqi security forces since the country's Jan. 30 elections at a much faster pace than previously acknowledged.

Legal Week:
- The 50 largest American law firms had 12.3% profit growth in 2004 on $33 billion in fees.

Commercial Times:
- Taiwan's five flat-panel display makers lifted output by a combined 22% to 7 million units in March from the previous month.

Xinhua News Agency:
- China's 39 major passenger car assemblers' sales fell 8% in the first quarter from a year earlier.

Financial Times:
- Advertisers will come to rely more on mobile telephones, laptops and other wireless communications to reach customers as technology now allows viewers to increasingly avoid commercials on television.

Chinese-language Financial News:
- Bank of China, the nation's second-biggest lender, said it's in talks with Bank of America and other lenders on the sale of a stake in itself as a prelude to going public.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on IBM, DELL, KRB and BBBY.

Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated -.03%.

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
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
ACN/.32
STZ/.58
KKD/-.03
PIR/.26
VIP/.67
UTIW/.51

Splits
None of note

Economic Releases
8:30 EST:
- Initial Jobless Claims for last week are estimated to fall to 330K versus 350K the prior week.
- Continuing Claims are estimated to rise to 2625K versus 2608K prior.

10:00 EST:
- Wholesale Inventories for February are estimated to rise .7% versus a 1.0% increase in January.

3:00 EST:
- Consumer Credit for February is estimated to rise to $11.5B versus $7.5B in January.

BOTTOM LINE: Asian indices are mostly higher, led by a bounce in Chinese shares. The Chinese central bank said it will allow three commercial lenders to set up fund management units, boosting optimism capital will flow into stocks. I expect US equities to open mixed on earnings reports, stubbornly high energy prices and lower long-term interest rates. The Portfolio is Market Neutral heading into tomorrow.

Wednesday Close

Indices
S&P 500 1,184.07 +.23%
DJIA 10,486.02 +.26%
NASDAQ 1,999.14 -.01%
Russell 2000 616.21 +.28%
DJ Wilshire 5000 11,670.94 +.23%
S&P Barra Growth 570.81 +.06%
S&P Barra Value 608.89 +.39%
Morgan Stanley Consumer 581.78 +.10%
Morgan Stanley Cyclical 745.74 +.25%
Morgan Stanley Technology 453.70 -.06%
Transports 3,713.66 -.20%
Utilities 362.35 -.35%
Put/Call .98 +13.95%
NYSE Arms 1.15%
Volatility(VIX) 13.15 -3.87%
ISE Sentiment 148.00 -20.0%
US Dollar 84.68 +.02%
CRB 308.07 -.23%

Futures Spot Prices
Crude Oil 55.91 +.11%
Unleaded Gasoline 165.81 -.07%
Natural Gas 7.53 -.37%
Heating Oil 158.58 +.11%
Gold 428.90 -.07%
Base Metals 129.08 +1.36%
Copper 150.50 -.23%
10-year US Treasury Yield 4.42% -.90%

Leading Sectors
Oil Service +1.99%
Energy +1.75%
Biotech +1.44%

Lagging Sectors
Iron/Steel -.71%
Internet -.87%
Homebuilders -1.06%

After-hours Movers
MW +3.5% on strong March same-store-sales.
BBBY +5.5% after beating 4Q estimates.

Evening Review
Detailed Market Summary
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
Futures Recap
S&P 500 Gallery View
Timely Economic Charts
PM Market Call
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on AIG and DELL.

Afternoon/Evening Headlines
Bloomberg:
- Goldman Sachs CEO Paulson said his analysts are “totally independent” from energy traders, responding to criticism about a Goldman oil report on the last day of the first quarter that helped send prices higher by suggesting crude may rise as high as $105/bbl.
- Shares of Archer Daniels Midland fell more than 12%, the biggest decline since 1987, on concern that a drop in the price of ethanol will erode the company’s earnings.
- Investors would be able to obtain the disciplinary history of stockbrokers on the Internet under legislation approved today by the US House of Representatives.
- Dell repeated its first-quarter profit and sales forecast and said it plans to spend $2 billion on a stock buyback this quarter.
- Bed Bath & Beyond, the largest US home-furnishing retailer, said fourth-quarter net income rose to $181 million, helped by new stores.
- Russia, which defaulted on $40 billion of domestic bonds in 1998, said it may pay back its entire $110 billion of foreign debt as soon as 2007 as record oil prices swell government revenue.

New York Post:
- New York City police issued 51% more tickets to drivers for talking on hand-held mobile phones in the first four months of fiscal 2005 than a year earlier.

BOTTOM LINE: US stocks finished most higher today as optimism over lower long-term interest rates more than offset worries over slowing growth. The Portfolio finished higher on gains in my Chinese ADR shorts, Computer longs, Retail longs and Energy longs. I took profits in a few trading longs in the afternoon and added a few new shorts, thus leaving the Portfolio market neutral. The tone of the market weakened into the afternoon as the advance/decline fell to its lows of the day, sector performance was mixed and volume was modest. Energy-related stocks outperformed into the afternoon, while Homebuilding shares underperformed and measures of investor anxiety were lower. Overall, today’s market action was slightly negative, considering the drop in long-term interest rates, stabilizing energy prices and the market’s oversold state. I plan to remain relatively conservative until the major indices break from the recent trading range. I suspect this will come during earnings season.

Mid-day Scoreboard

Indices
S&P 500 1,186.01 +.39%
DJIA 10,498.28 +.38%
NASDAQ 2,003.97 +.25%
Russell 2000 617.62 +.51%
DJ Wilshire 5000 11,683.94 +.33%
S&P Barra Growth 571.54 +.19%
S&P Barra Value 609.34 +.46%
Morgan Stanley Consumer 582.03 +.14%
Morgan Stanley Cyclical 746.73 +.39%
Morgan Stanley Technology 455.18 +.26%
Transports 3,721.89 +.02%
Utilities 362.69 -.25%
Put/Call .85 -1.16%
NYSE Arms .89 +2.63%
Volatility(VIX) 13.18 -3.58%
ISE Sentiment 134.00 -27.57%
US Dollar 84.68 +.02%
CRB 308.56 -.07%

Futures Spot Prices
Crude Oil 56.20 +.29%
Unleaded Gasoline 167.40 -.83%
Natural Gas 7.64 +.96%
Heating Oil 159.80 -1.42%
Gold 429.20 +.61%
Base Metals 129.08 +1.36%
Copper 150.80 +1.58%
10-year US Treasury Yield 4.42% -.95%

Leading Sectors
Biotech +1.71%
Oil Service +1.74%
Energy +1.62%

Lagging Sectors
Internet -.32%
Telecom -.51%
Homebuilders -.62%

BOTTOM LINE: US stocks are modestly higher mid-day on optimism over falling long-term interest rates. The Portfolio is higher on gains in my Chinese ADR shorts, Retail longs, Energy longs and Computer Longs. I exited a few trading longs into this morning’s strength, thus leaving the Portfolio’s market exposure at 25% net long. The tone of the market is modestly positive as the advance/decline line is higher, sector performance is mostly positive and volume is modest. Consumer stocks are underperforming, while Energy-related shares are outperforming and measures of investor anxiety are mixed. Today’s overall market action is mixed, considering another decline in long-term interest rates, the market’s oversold state and the stabilization of energy prices. I continue to believe the lows for the year will be made over the coming weeks, making for a much more positive second half in equities. I expect US stocks to trade mixed into the close as optimism over falling long-term interest rates is offset by concerns over slowing global growth and earnings.

Today's Headlines

Bloomberg:
- Hennes & Mauritz AB, Europe’s largest clothing chain, said fiscal first-quarter profit rose 29%, more than analysts expected, as textile prices fell following the end of quotas on exports from countries such as China.
- Global economic expansion is at a “turning point” with growth slowing to 3.1% this year after the fastest increases in four years.
- Iraq’s National Assembly today named Kurdish leader Jalal Talabani as the country’s first democratically elected president in more than 50 years.
- Fed Chairman Greenspan told Congress he supports a new regulator for Fannie Mae and Freddie Mac if it has the power to rein in the growth of the two mortgage lenders.
- The yen fell against the dollar, approaching a five-month low, on speculation Japanese investors are shifting funds toward higher-yielding bonds in the US and Europe at the start of their financial year.
- Fannie Mae staff falsified signatures and doctored figures that may have been used to improve earnings, the mortgage lender’s regulator Armando Falcon said today in testimony before Congress.
- The SEC passed a rule guaranteeing that all investors get the best price on all electronic stock trades.
- US 10-year T-notes rose for the first day this week after comments from Fed Chairman Greenspan reduced speculation the central bank may view rising energy prices as contributing to faster inflation.
- Crude oil is nearly unchanged today after the Energy Department said US refiners boosted stockpiles for an eighth week.

The Wall Street Journal:
- Allied Domecq Plc’s Dunkin’ Donuts and the Baskin Robbins ice-cream chain would be put up for sale if Pernod Ricard SA’s joint bid with Fortune Brands for Allied is successful.
- Google and Yahoo! are finding that a growing number of clicks on search-linked pop-up ads are being made to inflate a company’s advertising bills.
- Holdings of US growth and value funds show signs of overlap, citing a report by Merrill Lynch.
- Saudi Crown Prince Abdullah is expected to meet President Bush later this month to talk about various issues, which will probably include high energy prices and the war against terrorism.
- MBIA is being investigated over an agreement with a re-insurer separate from the one that triggered its earnings restatement.
- Nucor and other steel producers are supplying growing amounts of products for residential home construction that usually relies on wood frames.

LA Times:
- California’s growing problem with obesity may cost the state $28.7 billion this year in health-care costs and lost productivity, which is 32% more than five years ago.

Philadelphia Inquirer:
- Comcast Corp. has added a cable channel for gay and lesbian viewers as part of its video-on-demand services.

USA Today:
- High-speed Internet connections may become even faster with the adoption of technology that could boost speeds by as much as 16-fold.

AP:
- Voters in Kansas voted by a margin of 70% to 29% to approve an amendment to their state constitution to ban gay marriage and civil unions, joining 17 US states with similar bans.

Interfax:
- OAO Mobile Telesystems, Eastern Europe’s largest mobile-phone company, will invest $50 million in its Uzbek unit this year to broaden coverage in the Central Asian state.

Tex Report:
-Exports of stainless steel from Japan declined 8.5% in February from a year earlier to 113,555 metric tons.

Edaily:
- Posco and BHP Billiton may spend as much as $10 billion to build a steel mill and iron ore mine in India.

Links of Interest

Market Internals
Movers & Shakers
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon
Real-time Intraday Chart/Quote

Economic Releases

Summary of Weekly Petroleum Data for the Week Ending April 1, 2005.