Today's Headlines

Bloomberg:
- New money placed in hedge funds fell 60% in the second quarter as investment returns lagged the overall stock market, according to Hedge Fund Research.
- Italian Prime Minister Silvio Berlusconi said the euro has been a “ripoff” for consumers, sharpening his criticism of European policymakers.
- DaimlerChrysler AG CEO Schrempp will step down Dec. 31.
- NBC Universal may buy DreamWorks SKG.
- US Treasuries maturing in 10 years or more are rising on speculation yields near the high end of their three-month range are excessive given the outlook for tame inflation.
- The Irish Republican Army today said it will end its 36-year armed campaign and use political means to achieve the goal of a united Ireland.

Wall Street Journal:
- US and other overseas investors are pouring money into China, in the hope of capitalizing on Chinese demand for mobile phone-related and other products.
- The US energy bill nearing approval may spell goods news for the nuclear-power industry, as it contains $1.5 billion in subsidies for construction of nuclear plants.
- An Idaho county filed suit against several companies, claiming their hiring of illegal immigrants burdens the county’s social services system.
- The departure of two of the biggest unions from the AFL-CIO, the largest alliance of US labor unions, has left some members disillusioned with what they say is little difference between the leaders of the contending factions.

NY Post:
- Federated Department Stores may close as many as 65 stores to help win approval of its $11 billion purchase of May Department Stores, citing Banc of America.

Washington Post:
- US environmental regulators will be barred from using information that is gathered by exposing human volunteers to toxic chemicals until they come up with better practices.

Jobless Claims Remain Low

- Initial Jobless Claims for last week rose to 310K versus estimates of 318K and 305K the prior week.
- Continuing Claims rose to 2603K versus estimates of 2591K and 2571K prior.
- The Help Wanted Index for June rose to 38 versus estimates of 38 and a reading of 37 in May.

BOTTOM LINE: The number of Americans filing first-time claims for unemployment rose to 310,000, suggesting employers are adding workers as manufacturing rebounds and retail remains strong. The four-week moving-average of claims fell to 318,250 from 318,500. The insured unemployment rate, which tracks the US jobless rate, stayed at 2.0%. Payroll gains have averaged 181,330 this year versus 183,000 for all of 2004.

Links of Interest

Market Snapshot
Detailed Market Summary
Market Internals
Economic Commentary
Movers & Shakers
IBD New America
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
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NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote

Thursday Watch

Late-Night Headlines
Bloomberg:
- The US government announced it agreed on a "framework" for a partnership to address climate change with China, Australia and three other countries that will help companies find a "profitable way" to cut greenhouse gases.
- US negotiators will today begin drafting principles that may lead to an accord with North Korea over the destruction of the communist state's nuclear weapons, said a senior official.
- The US House of Representatives approved the Central American Free Trade Agreement, overcoming objections by unions, sugar producers and textiles makers in what became the most contentious trade fight in Congress in a decade.

London-based Times:
- A record number of hedge funds were started up in the first six months of 2005, attracting over $13 billion in new capital, citing a survey by data provider Eurohedge.
- Morgan Stanley CEO Mack plans to turn around the bank's Dean Witter brokerage arm by cutting jobs and pursuing wealthier clients.

Financial Times:
- Cnooc Ltd. is considering a pledge to sell all Unocal's US assets, including

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on MUR, DO, MCK, MWV, SBUX and WLP.
- Reiterated Underperform on GM and APU.

Night Trading
Asian Indices are unch. to +.75% on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated +.09%.

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

Earnings of Note
Company/EPS Estimate
ATVI/-.02
AET/1.08
AMT/-.08
ABX/.08
BZH/2.05
CELG/.14
DOW/1.22
XOM/1.24
KLAC/.48
MRO/1.57
MFE/.25
MERQ/.33
MGM/.43
NOC/.88
PD/4.25
SYMC/.25
WFMI/.57
XMSR/-.70

Upcoming Splits
None of note

Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 318K versus 303K the prior week.
- Continuing Claims are estimated to rise to 2591K versus 2577K prior.

10:00 am EST
-The Help Wanted Index for June is estimated to rise to 38 versus a reading of 37 in May.

BOTTOM LINE: Asian indices are higher on more earnings optimism in the region. I expect US equities to open modestly higher on gains in Asia and strong earnings reports. The Portfolio is 100% net long heading into the day.

Stocks Finish at Session Highs, Led Again by Tech

Indices
S&P 500 1,236.79 +.46%
DJIA 10,637.09 +.54%
NASDAQ 2,186.22 +.47%
Russell 2000 674.88 +.04%
DJ Wilshire 5000 12,334.91 +.40%
S&P Barra Growth 593.62 +.49%
S&P Barra Value 638.73 +.42%
Morgan Stanley Consumer 587.41 +.48%
Morgan Stanley Cyclical 760.52 +.47%
Morgan Stanley Technology 503.84 +.97%
Transports 3,761.69 +.54%
Utilities 393.94 +.43%
Put/Call .79 -5.95%
NYSE Arms .88 -14.27%
Volatility(VIX) 10.36 -5.73%
ISE Sentiment 178.00 -1.66%
US Dollar 89.73 -.30%
CRB 307.10 +.32%

Futures Spot Prices
Crude Oil 59.04 -.27%
Unleaded Gasoline 170.60 +.60%
Natural Gas 7.65 +2.99%
Heating Oil 161.35 +.61%
Gold 431.30 +.47%
Base Metals 125.49 +1.07%
Copper 162.65 +1.28%
10-year US Treasury Yield 4.25% +.70%

Leading Sectors
Internet +1.57%
Wireless +1.52%
Telecom +1.42%

Lagging Sectors
Disk Drives -1.27%
Restaurants -1.28%
Steel -1.40%

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

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on CL, K, BXP, HOT, AHC and STR.
- Reiterated Underperform on RAI and BA.

Afternoon/Evening Headlines
Bloomberg:
- GM will end on Aug. 1 a program that gives employee discounts to all US buyers as it clears out this year’s models and prepares to offer lower prices on their 2006 replacements.
- Citigroup’s Sanford Weil said he will complete his term as chairman of the biggest US financial-services company, ending his plans to leave early and start a buyout fund.

CNBC:
- Cnooc Ltd., which is competing with Chevron to acquire Unocal, may raise its bid.

BOTTOM LINE: The Portfolio finished substantially higher today on gains in my Medical, Biotechnology, Semiconductor and Retail longs and Oil Tanker shorts. I did not trade in the afternoon, thus leaving the Portfolio 75% net long. The tone of the market was slightly positive today as the advance/decline line finished modestly higher, most sectors rose and volume was slightly above average. Measures of investor anxiety were mostly lower into the close. Overall, today’s market action was positive. It appears as though the major averages will penetrate the upper end of their recent trading ranges imminently.

Stocks Higher Mid-day on "Goldilocks" Beige Book Report

Indices
S&P 500 1,237.07 +.40%
DJIA 10,630.16 +.47%
NASDAQ 2,183.91 +.36%
Russell 2000 672.91 -.25%
DJ Wilshire 5000 12,322.11 +.30%
S&P Barra Growth 593.46 +.46%
S&P Barra Value 638.16 +.33%
Morgan Stanley Consumer 587.56 +.50%
Morgan Stanley Cyclical 760.47 +.48%
Morgan Stanley Technology 503.50 +.90%
Transports 3,755.86 +.39%
Utilities 393.51 +.34%
Put/Call .79 -5.95%
NYSE Arms .84 -17.95%
Volatility(VIX) 10.52 -4.28%
ISE Sentiment 188.00 +3.87%
US Dollar 89.73 -.30%
CRB 307.28 +.38%

Futures Spot Prices
Crude Oil 59.40 +.34%
Unleaded Gasoline 172.00 +1.37%
Natural Gas 7.65 +3.03%
Heating Oil 161.70 +.83%
Gold 430.90 +.37%
Base Metals 125.49 +1.07%
Copper 162.45 +1.15%
10-year US Treasury Yield 4.26% +.84%

Leading Sectors
Wireless +1.35%
Telecom +1.35%
Drugs +1.33%

Lagging Sectors
Oil Tankers -1.16%
Steel -1.50%
Disk Drives -1.62%

BOTTOM LINE: The Portfolio is substantially higher mid-day on gains in my Semiconductor, Medical, Retail longs and Oil Tanker shorts. I added to a few existing longs and added MDRX long today, thus leaving the Portfolio 100% net long. I am using a stop-loss of $16 on this position. The tone of the market is slightly positive as the advance/decline line is about even, most sectors are higher and volume is about average. Measures of investor anxiety are lower. Today’s overall market action is positive considering the rise in long-term rates. It appears as though investors liked the Fed’s Beige Book report that portrayed a “Goldilocks” style US economy. I expect stocks to trade higher into the afternoon on short-covering.