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BOTTOM LINE: Due to a scheduling conflict I am posting an abbreviated Evening Review. I finished the day 25% net long by adding to existing shorts. I will post the Tuesday Watch later this evening.
Monday, August 08, 2005
Stocks Modestly Lower Mid-day Ahead of Fed
Indices
S&P 500 1,225.63 -.06%
DJIA 10,547.92 -.10%
NASDAQ 2,169.92 -.37%
Russell 2000 661.67 -.17%
DJ Wilshire 5000 12,214.98 -.14%
S&P Barra Growth 588.12 -.13%
S&P Barra Value 633.02 -.02%
Morgan Stanley Consumer 584.57 -.07%
Morgan Stanley Cyclical 753.46 +.10%
Morgan Stanley Technology 502.28 +.02%
Transports 3,733.26 +.04%
Utilities 391.77 -1.05%
Put/Call .82 -29.31%
NYSE Arms .84 -22.74%
Volatility(VIX) 13.18 +5.61%
ISE Sentiment 129.00 -37.38%
US Dollar 87.91 -.17%
CRB 317.86 +.39%
Futures Spot Prices
Crude Oil 63.55 +1.99%
Unleaded Gasoline 186.00 +1.52%
Natural Gas 8.61 -1.03%
Heating Oil 178.40 +3.05%
Gold 440.30 -.61%
Base Metals 127.23 -.53%
Copper 164.60 -.18%
10-year US Treasury Yield 4.40% +.46%
Leading Sectors
Steel +2.80%
Energy +2.11%
Oil Service +1.71%
Lagging Sectors
Biotech -1.60%
Broadcasting -1.93%
Homebuilders -2.19%
S&P 500 1,225.63 -.06%
DJIA 10,547.92 -.10%
NASDAQ 2,169.92 -.37%
Russell 2000 661.67 -.17%
DJ Wilshire 5000 12,214.98 -.14%
S&P Barra Growth 588.12 -.13%
S&P Barra Value 633.02 -.02%
Morgan Stanley Consumer 584.57 -.07%
Morgan Stanley Cyclical 753.46 +.10%
Morgan Stanley Technology 502.28 +.02%
Transports 3,733.26 +.04%
Utilities 391.77 -1.05%
Put/Call .82 -29.31%
NYSE Arms .84 -22.74%
Volatility(VIX) 13.18 +5.61%
ISE Sentiment 129.00 -37.38%
US Dollar 87.91 -.17%
CRB 317.86 +.39%
Futures Spot Prices
Crude Oil 63.55 +1.99%
Unleaded Gasoline 186.00 +1.52%
Natural Gas 8.61 -1.03%
Heating Oil 178.40 +3.05%
Gold 440.30 -.61%
Base Metals 127.23 -.53%
Copper 164.60 -.18%
10-year US Treasury Yield 4.40% +.46%
Leading Sectors
Steel +2.80%
Energy +2.11%
Oil Service +1.71%
Lagging Sectors
Biotech -1.60%
Broadcasting -1.93%
Homebuilders -2.19%
BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my Medical and Internet longs offset losses in my Semiconductor and Retail longs. I have not traded today, thus leaving the Portfolio 50% net long. The tone of the market is modestly negative as the advance/decline line is lower, most sectors are lower and volume is light. Measures of investor anxiety are mixed. Today’s overall market action is neutral considering the rise in rates/oil and recent gains. I like the announced acquisition of LabOne (LABS) by Quest Diagnostics (DGX). Both stocks are higher on the news. While a better entry point in Quest shares is likely in the near-term, long-term investors should consider the shares on any pullback. I expect US stocks to trade mixed-to-lower from current levels into the close on rising apprehension ahead of tomorrow's Fed decision.
Today's Headlines
Bloomberg:
- E*Trade Financial agreed to buy the online brokerage Harrisdirect from BMO Financial Group for $700 million in cash.
- Quest Diagnostics, the biggest US operator of medical-testing laboratories, said it will acquire LabOne in a cash transaction valued at $934 million.
- Whirlpool sweetened its offer for Maytag to $1.6 billion, topping a bid from Ripplewood Holdings for the third time.
- The UK today warned that terrorists in Saudi Arabia may be in the “final stages of planning attacks,” after the US closed its diplomatic missions in the capital, Riyadh, and in Jeddah and Dhahran.
- Crude oil in NY jumped to a record, approaching $64 a barrel, as a threat to the US embassy in Saudi Arabia heightened concern that supplies from the country could be jeopardized.
Wall Street Journal:
- Liberty Media Chairman John Malone said Rupert Murdoch’s News Corp. should increase returns to shareholders by buying back stock.
- Dell plans to sell a desktop computer for game playing using chips made by Nvidia.
- Benon Sevan, the official who ran the UN/Iraq oil-for-food program, resigned hours before the scheduled release of a UN report that’s expected to accuse him of taking kickbacks.
- Linux Corp. and other makers of “open source” software face demands from users for higher levels of service, support and software functions.
- US malls are turning to Israeli security specialists to devise programs to protect the some 1,200 US commercial shopping centers from possible terrorist attacks.
-An increasing number of research firms are being established in the US to collect information on companies by tapping their customers, suppliers, employees and competitors.
NY Times:
- Electronic Arts may be losing its creative edge as it plans to release 25 game sequels and one original game by the end of this year.
- Flights in the US have been so delayed that 2005 looks set to be worse for planes leaving late than any year since 2000; nearly 17% of flights left airports late in the year until June.
Financial News:
- Goldman Sachs has lost 146 of the firm’s 240 partners since its May 1999 IPO.
- E*Trade Financial agreed to buy the online brokerage Harrisdirect from BMO Financial Group for $700 million in cash.
- Quest Diagnostics, the biggest US operator of medical-testing laboratories, said it will acquire LabOne in a cash transaction valued at $934 million.
- Whirlpool sweetened its offer for Maytag to $1.6 billion, topping a bid from Ripplewood Holdings for the third time.
- The UK today warned that terrorists in Saudi Arabia may be in the “final stages of planning attacks,” after the US closed its diplomatic missions in the capital, Riyadh, and in Jeddah and Dhahran.
- Crude oil in NY jumped to a record, approaching $64 a barrel, as a threat to the US embassy in Saudi Arabia heightened concern that supplies from the country could be jeopardized.
Wall Street Journal:
- Liberty Media Chairman John Malone said Rupert Murdoch’s News Corp. should increase returns to shareholders by buying back stock.
- Dell plans to sell a desktop computer for game playing using chips made by Nvidia.
- Benon Sevan, the official who ran the UN/Iraq oil-for-food program, resigned hours before the scheduled release of a UN report that’s expected to accuse him of taking kickbacks.
- Linux Corp. and other makers of “open source” software face demands from users for higher levels of service, support and software functions.
- US malls are turning to Israeli security specialists to devise programs to protect the some 1,200 US commercial shopping centers from possible terrorist attacks.
-An increasing number of research firms are being established in the US to collect information on companies by tapping their customers, suppliers, employees and competitors.
NY Times:
- Electronic Arts may be losing its creative edge as it plans to release 25 game sequels and one original game by the end of this year.
- Flights in the US have been so delayed that 2005 looks set to be worse for planes leaving late than any year since 2000; nearly 17% of flights left airports late in the year until June.
Financial News:
- Goldman Sachs has lost 146 of the firm’s 240 partners since its May 1999 IPO.
Monday Watch
Weekend Headlines
Bloomberg:
- China, producer of 13% of the world’s refined copper, plans to slow the expansion of smaller copper smelters as part of wider efforts to cool its economy.
- Wal-Mart Stores said August sales at its US stores open at least a year are rising within its forecast range of 3-5%.
- President Bush urged Congress to make permanent the tax cuts enacted during his first term and draft legislation to bolster the Social Security program, after lawmakers return from their August break.
- Warren Buffett’s Berkshire Hathaway, under investigation for its role in improper reinsurance accounting at AIG, said the government is inquiring about its own books.
- Seven crew members of a Russian mini-sub trapped underwater off the country’s Pacific coast surfaced alive and well after a UK underwater robot cut the vessel free of entanglements.
- GM and Toyota Motor’s joint venture in California and its union reached a tentative four-year contract agreement yesterday, averting the first work stoppage in 11 years at the state’s sole auto factory.
Forbes:
- Yahoo! is in advanced talks to buy a 35% stake in Alibaba.com, China’s biggest home-grown e-commerce company, for almost $1 billion.
New York Times:
- The FDA, which was the target of criticism by Congress over recent drug withdrawals, has responded by being more cautious and issuing more warnings.
- Delta Air Lines’ low-fare unit Song plans to begin flights between Orlando, Florida, and San Francisco later this year, as well as expanding flights between the northeastern US and Florida.
- About a dozen shipping-industry IPOs are in the Wall Street pipeline, representing about 15 to 20% of the value of prospective NY listings.
NY Post:
- NY Attorney General Eliot Spitzer began an investigation of loans made by a Bronz social services agency to Air America radio.
Time magazine:
- The US CIA plans to create an office that will try to identify threats by combing research articles, Web sites, religious tracts and other publicly available information.
Financial Times:
- Cnooc Ltd. Never got “explicit approval” from China’s government to buy Unocal Corp., contributing to the collapse of the $18.5 billion bid.
- Bear Stearns plans to start a $450 million fund investing in hedge funds that specialize in Asian markets, as more US funds target Asia to make up for waning returns at home.
London-based Times:
- The euro’s future may be at risk if countries that share the currency fail to coordinate their tax and spending policies.
Guardian:
- UK manufacturing confidence has fallen in every region of the country for the first time in two years.
Independent on Sunday:
- News Corp. made a failed bid for Skype Tecnologies SA that may have valued the Internet phone company at almost $3 billion.
AFP:
- India and Pakistan have reached agreements to reduce the risk of an accidental nuclear war.
The Business:
- Cisco Systems is considering buying mobile phonemaker Nokia Oyj following the resignation of Nokia Chief Executive Jorma Ollila.
Business Standard:
- Lehman Brothers Holdings is in talks with India’s ICICI Bank Ltd’s investment-banking unit for an alliance.
Economic Observer:
- China is prepared to take measures aimed at slowing investment inflows driven by expectations that the yuan will appreciate further.
Weekend Recommendations
Bulls and Bears:
- Had guests that were positive on GERN, CELG, THE, N, SCHL and mixed on IBM, GENZ.
Forbes on Fox:
- Had guests that were positive on YHOO, DVY, KLA and mixed on HDI.
Cashin' In:
- Had guests that were positive on CC, STZ, TR, WEN, mixed on BBY, SONC, SBUX and negative on BUD.
Cavuto on Business:
- Had guests that were positive on CAT, BA and mixed JOE.
Barron's:
- Had positive comments on AA, RGC and DWSN.
- Had negative comments on WFMI, NTAP, VNO and SPG.
Goldman Sachs:
- Reiterated Outperform on WON and DNA.
- Reiterated Underperform on DRI and FSS.
Night Trading
Asian indices are -.50% to +.50% on average.
S&P 500 indicated +.06%.
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/Estimate
AL/.61
ACF/.46
CVTX/1.52
DPH/-.51
DYN/-.12
PCLN/.37
PCU/2.55
Upcoming Splits
HANS 2-for-1
Economic Releases
None of note
Bloomberg:
- China, producer of 13% of the world’s refined copper, plans to slow the expansion of smaller copper smelters as part of wider efforts to cool its economy.
- Wal-Mart Stores said August sales at its US stores open at least a year are rising within its forecast range of 3-5%.
- President Bush urged Congress to make permanent the tax cuts enacted during his first term and draft legislation to bolster the Social Security program, after lawmakers return from their August break.
- Warren Buffett’s Berkshire Hathaway, under investigation for its role in improper reinsurance accounting at AIG, said the government is inquiring about its own books.
- Seven crew members of a Russian mini-sub trapped underwater off the country’s Pacific coast surfaced alive and well after a UK underwater robot cut the vessel free of entanglements.
- GM and Toyota Motor’s joint venture in California and its union reached a tentative four-year contract agreement yesterday, averting the first work stoppage in 11 years at the state’s sole auto factory.
Forbes:
- Yahoo! is in advanced talks to buy a 35% stake in Alibaba.com, China’s biggest home-grown e-commerce company, for almost $1 billion.
New York Times:
- The FDA, which was the target of criticism by Congress over recent drug withdrawals, has responded by being more cautious and issuing more warnings.
- Delta Air Lines’ low-fare unit Song plans to begin flights between Orlando, Florida, and San Francisco later this year, as well as expanding flights between the northeastern US and Florida.
- About a dozen shipping-industry IPOs are in the Wall Street pipeline, representing about 15 to 20% of the value of prospective NY listings.
NY Post:
- NY Attorney General Eliot Spitzer began an investigation of loans made by a Bronz social services agency to Air America radio.
Time magazine:
- The US CIA plans to create an office that will try to identify threats by combing research articles, Web sites, religious tracts and other publicly available information.
Financial Times:
- Cnooc Ltd. Never got “explicit approval” from China’s government to buy Unocal Corp., contributing to the collapse of the $18.5 billion bid.
- Bear Stearns plans to start a $450 million fund investing in hedge funds that specialize in Asian markets, as more US funds target Asia to make up for waning returns at home.
London-based Times:
- The euro’s future may be at risk if countries that share the currency fail to coordinate their tax and spending policies.
Guardian:
- UK manufacturing confidence has fallen in every region of the country for the first time in two years.
Independent on Sunday:
- News Corp. made a failed bid for Skype Tecnologies SA that may have valued the Internet phone company at almost $3 billion.
AFP:
- India and Pakistan have reached agreements to reduce the risk of an accidental nuclear war.
The Business:
- Cisco Systems is considering buying mobile phonemaker Nokia Oyj following the resignation of Nokia Chief Executive Jorma Ollila.
Business Standard:
- Lehman Brothers Holdings is in talks with India’s ICICI Bank Ltd’s investment-banking unit for an alliance.
Economic Observer:
- China is prepared to take measures aimed at slowing investment inflows driven by expectations that the yuan will appreciate further.
Weekend Recommendations
Bulls and Bears:
- Had guests that were positive on GERN, CELG, THE, N, SCHL and mixed on IBM, GENZ.
Forbes on Fox:
- Had guests that were positive on YHOO, DVY, KLA and mixed on HDI.
Cashin' In:
- Had guests that were positive on CC, STZ, TR, WEN, mixed on BBY, SONC, SBUX and negative on BUD.
Cavuto on Business:
- Had guests that were positive on CAT, BA and mixed JOE.
Barron's:
- Had positive comments on AA, RGC and DWSN.
- Had negative comments on WFMI, NTAP, VNO and SPG.
Goldman Sachs:
- Reiterated Outperform on WON and DNA.
- Reiterated Underperform on DRI and FSS.
Night Trading
Asian indices are -.50% to +.50% on average.
S&P 500 indicated +.06%.
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/Estimate
AL/.61
ACF/.46
CVTX/1.52
DPH/-.51
DYN/-.12
PCLN/.37
PCU/2.55
Upcoming Splits
HANS 2-for-1
Economic Releases
None of note
BOTTOM LINE: Asian Indices are mixed as record energy prices are offsetting economic optimism in the region. I expect US stocks to open mixed ahead of the FOMC rate decision on Tuesday. The Portfolio is 50% net long heading into the week.
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