Stocks Slightly Higher Mid-day on Light Volume

Indices
S&P 500 1,210.75 +.10%
DJIA 10,435.51 unch.
NASDAQ 2,131.92 +.14%
Russell 2000 656.67 +.25%
DJ Wilshire 5000 12,087.81 +.11%
S&P Barra Growth 579.79 +.11%
S&P Barra Value 626.78 +.10%
Morgan Stanley Consumer 579.23 +.09%
Morgan Stanley Cyclical 732.16 +.31%
Morgan Stanley Technology 492.86 -.01%
Transports 3,687.41 +.58%
Utilities 400.72 +.83%
Put/Call .96 +5.49%
NYSE Arms 1.05 -22.63%
Volatility(VIX) 14.08 -.64%
ISE Sentiment 198.00 +65.0%
US Dollar 87.70 -24.24%
CRB 317.71 -.78%

Futures Spot Prices
Crude Oil 67.10 -.33%
Unleaded Gasoline 194.00 +.74%
Natural Gas 9.52 -4.65%
Heating Oil 185.40 -.61%
Gold 442.50 +.05%
Base Metals 129.04 -.72%
Copper 160.60 -1.11%
10-year US Treasury Yield 4.16% -.09%

Leading Sectors
Steel +1.93%
Gold & Silver +1.20%
Airlines +.76%

Lagging Sectors
Homebuilders -.36%
Telecom -.37%
Oil Tankers -1.47%

BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my Oil Tanker Shorts are offsetting losses in my Medical longs. I have not traded this morning, thus leaving the Portfolio 50% net long. The tone of the market is mildly positive as the advance/decline line is slightly higher, most sectors are gaining and volume is very light. Measures of investor anxiety are mostly lower. Today’s overall market action is neutral given another decline in long-term rates and bounce in energy prices from morning lows. The average 30-year mortgage rate fell to 5.77% this week from 5.80% the prior week. This is down from 6.04% on April 1 and only 56 basis points away from record lows set in June 2003. The Homebuilding Index is down .35% today, underperforming the market, even as the yield on the 10-year T-note is falling to 4.16%. I expect US stocks to trade mixed-to-lower from current levels into the close on continuing worries over energy prices.

Today's Headlines

Bloomberg:
- GM will extend its offer of employee discounts to all US buyers until the end of September as it tries to boost sales of its cars and trucks.
- Boeing’s machinists union, whose labor agreement expires Sept. 1, said the world’s top aircraft maker’s initial contract proposal was “an insult” and fell short of demands on health care and pensions.
- Crude oil and natural gas are falling from records in NY on forecasts that Tropical Storm Katrina will probably miss oil and gas fields in the Gulf of Mexico.

Wall Street Journal:
- US technology companies, such as Dell, Hewlett-Packard, EMC and Microsoft may benefit from plans to increase tech spending.
JetBlue Airways has been profitable for 18 consecutive quarters while bigger airlines have suffered losses totaling billions of dollars, but now it’s relaxing the formula that brought it success.
- US Internet-based phone providers may have to next week cut off tens of thousands of customers who haven’t formally acknowledged that they understand problems they may encounter in calling emergency services.
- Volkswagen AG, criticized recently for targeting luxury-car buyers instead of its core customers, is offering special lease deals on some new models to speed up the launch of its redesigned Jetta and Passat sedans.
- Subscribers to “third-generation” wireless services are increasing rapidly, thought they still account for only a fraction of mobile-phone users in Europe.
- Sports-equipment makers, such as Head NV, Wilson Sporting Goods, Prince Sports and Fischer GmbH, are targeting recreational players with rackets featuring nanotechnology, magnetic forces, aerodynamics and advanced physics principles.

NY Times:
- Guidant will face an extensive inspection of its manufacturing facilities by the FDA.
- US credit card companies have only just started to focus on protecting customers’ personal information following security breaches, as they realize it is putting their brands at risk.

NY Sun:
- NYU economics professor Thomas Sargent is living in a $5 million university-owned apartment overlooking Central Park in the five-star Pierre Hotel.

Daily Deal:
- Vonage Holdings, a closely held provider of Internet-based calling, plans to raise as much as $600 million in an IPO.

Washington Post:
- Hackers are using Chinese Web sites to breach US government computer networks.

Reuters:
- Microsoft will receive $5 million plus a percentage of ticket sales from a film to be made by Universal Pictures that’s based on the “Halo” space-based video games.

Jobless Claims Remain Low

- Initial Jobless Claims for last week fell to 315K versus estimates of 315K and 319K the prior week.
- Continuing Claims fell to 2578K versus estimates of 2575K and 2587K prior.

BOTTOM LINE: The number of Americans filing first-time claims for jobless benefits fell to 315,000 last week as companies held on to workers in an expanding economy, Bloomberg reported. The four-week moving-average rose to 315,000 from 313,750. However, the four-week moving-average of continuing claims was the lowest since March 2001. The insured employment rate, which tends to track the US unemployment rate, was unchanged at 2.0%. Recent jobless claims figures point to employment gains of about 200,000 in the upcoming employment report.

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
Hot Spots
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote

Thursday Watch

Late-Night Headlines
Bloomberg:
- Nokia Oyj and Motorola won bigger shares of the global market in the second quarter, widening their lead over competitors including Samsung Electronics and Siemens AG.

Wall Street Journal:
- India’s minister for petroleum and natural gas told the country’s oil companies to intensify efforts to buy overseas energy assets as Oil & Natural Gas Corp. considers making a counterbid for Canadian company PetroKazakhstan.

Financial Times:
- Nasdaq Stock Market may today say it will offer its users access to options trading, months ahead of the NYSE.

China Daily:
- 3M Co. plans to invest $300 million in China during the next five years.

Asian Wall Street Journal:
- News Corp’s plans to operate a prime-time television channel in China have unraveled amid a government crackdown on the media industry.
- Tropical Storm Katrina headed toward southeastern Florida, with maximum sustained winds of 50 mph and gusting higher, prompting officials to issue a hurricane warning for parts of the state’s Atlantic coast.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Underperform on GCO.

Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated +.11%.
NASDAQ 100 indicated +.16%.

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
CHS/.27
DG/.21
FRED/.09
JTX/-.31
NOVL/.02
OVTI/.26
PETC/.31
PDCO/.32
NX/1.62
SFD/.44
TOL/1.19

Upcoming Splits
None of note

Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated at 315K versus 316K the prior week.
- Continuing Claims are estimated at 2575K versus 2593K prior.

BOTTOM LINE: Asian indices are mixed, as gains in Hong Kong are being offset by losses in Australian shares. I expect US equities to open modestly lower on continuing energy fears. The Portfolio is 50% net long heading into the day.

Stocks Finish at Lows on Energy Concerns

Indices
S&P 500 1,209.59 -.66%
DJIA 10,434.87 -.81%
NASDAQ 2,128.91 -.39%
Russell 2000 655.01 -.07%
DJ Wilshire 5000 12,074.33 -.53%
S&P Barra Growth 579.15 -.64%
S&P Barra Value 626.18 -.67%
Morgan Stanley Consumer 578.72 -.81%
Morgan Stanley Cyclical 729.89 -.86%
Morgan Stanley Technology 492.96 -.75%
Transports 3,665.97 +.13%
Utilities 397.44 -.38%
Put/Call .91 -10.78%
NYSE Arms 1.37 +11.62%
Volatility(VIX) 14.17 +6.22%
ISE Sentiment 120.00 -38.14%
US Dollar 87.92 -.18%
CRB 320.02 +.77%

Futures Spot Prices
Crude Oil 67.75 +3.10%
Unleaded Gasoline 196.25 +5.62%
Natural Gas 10.00 +3.29%
Heating Oil 188.05 +3.36%
Gold 442.40 -.43%
Base Metals 129.98 -.75%
Copper 162.30 -1.22%
10-year US Treasury Yield 4.16% -.32%

Leading Sectors
Oil Tankers +4.24%
Oil Service +1.52%
Homebuilders +.86%

Lagging Sectors
Airlines -2.02%
Gold & Silver -2.11%
Steel -2.12%

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:
- None of note

Afternoon/Evening Headlines
Bloomberg:
- Former WorldCom CEO Bernard Ebbers must serve his 25-year sentence in a Louisiana medium security prison instead of a low-security prison near his Mississippi home.
- The Federal Reserve Bank of New York invited 14 of the “major participants” in the credit-derivatives market to a meeting next month amid concern the $8.4 trillion industry is rife with trades lacking key paperwork.
- GM and Ford Motor’s debt were lowered to junk by Moody’s Investors Service following two quarters of losses at both companies’ North American auto operations.
- Johnson Controls will buy York International for $2.4 billion to double its heating-and-cooling systems business.

BOTTOM LINE: The Portfolio finished slightly lower today on losses in my Oil Tanker shorts and Retail longs. I added back my IWM and QQQQ shorts in the afternoon, thus leaving the Portfolio 50% net long. The tone of the market was modestly negative today as the advance/decline line finished lower, most sectors fell and volume was average. Measures of investor anxiety were mostly higher into the close. Overall, today’s market action was slightly negative.