Friday Watch

Late-Night Headlines
Bloomberg:
- Canadian stocks rose to the highest in five years, led by dividend-paying companies such as Toronto-Dominion Bank and BCE Inc., after the government lowered taxes on the payouts and decided against taxing income trusts.
- Jordan’s King Abdullah II appointed a new prime minister and called on the government to undertake a war on terrorism in the wake of the hotel bombings Nov. 9 in the capital, Amman, that killed at least 57 people.
- Nokia Oyj said the company’s handset sales in the greater China region rose 77% in the first nine months compared with a year earlier on increasing demand.

Financial Times:
- The US newspaper industry is under threat as classified advertising moves onto the Internet and circulations continue to fall, citing News Corp. Chairman Rupert Murdoch.

Commercial Times:
- China Steel forecasts its first-quarter sales will fall by $90 million from the fourth quarter on declining product prices and the closure of one of its major plants for maintenance.

Late Buy/Sell Recommendations
Goldman Sachs:
- None of note

Night Trading
Asian Indices are -.25% to +.25% on average.
S&P 500 indicated -.13%.
NASDAQ 100 indicated -.15%.

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
- None of note

Upcoming Splits
- None of note

Economic Releases
- None of note

BOTTOM LINE: Asian indices are mixed as gains in Taiwan are offsetting losses in Japan. I expect US equities to trade mixed into the early close at 1 pm EST as short-covering offsets profit-taking. The Portfolio is 100% net long heading into the day.

***Alert***

I will be unable to post through Thanksgiving. I will resume posting on Friday. Have a safe and happy holiday and thanks for reading.

Stocks Higher Mid-day on Rising Optimism, Lower Energy Prices and Short-Covering

Indices
S&P 500 1,267.99 +.54%
DJIA 10,928.18 +.52%
NASDAQ 2,264.74 +.50%
Russell 2000 684.47 +.28%
DJ Wilshire 5000 12,672.98 +.51%
S&P Barra Growth 606.25 +.39%
S&P Barra Value 657.42 +.68%
Morgan Stanley Consumer 595.55 +.30%
Morgan Stanley Cyclical 777.36 +.55%
Morgan Stanley Technology 536.23 +.87%
Transports 4,182.99 +.07%
Utilities 401.30 +.70%
Put/Call .68 -29.90%
NYSE Arms .72 -1.97%
Volatility(VIX) 10.81 +1.89%
ISE Sentiment 174.00 -1.14%
US Dollar 91.48 -.02%
CRB 314.08 -.45%

Futures Spot Prices
Crude Oil 58.25 -1.0%
Unleaded Gasoline 146.10 -1.78%
Natural Gas 11.66 +.40%
Heating Oil 169.25 -2.51%
Gold 491.10 -.37%
Base Metals 139.70 -.32%
Copper 185.00 +.14%
10-year US Treasury Yield 4.46% +.97%

Leading Sectors
Steel +3.06%
Gaming +1.52%
Networking +1.47%

Lagging Sectors
Biotech -.71%
Oil Tankers -.72%
Gold & Silver -1.42%

BOTTOM LINE: The Portfolio is higher mid-day as gains in my Internet longs, Medical Information Systems longs, Semi longs, Computer longs and Retail longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is modestly higher, most sectors are rising and volume is about average. Measures of investor anxiety are mostly higher. Overall, today’s market action is slightly positive considering recent gains and the bounce in long-term rates. Here are some thoughts on the Xbox 360:
1. The improvement over prior gaming systems is significant.
2. Microsoft (MSFT) over-promised to retailers.
3. There is going to be a severe shortage for the holidays.
4. Stories of ridiculous auctions on eBay (EBAY) will be common, generating more buzz.
5. The Xbox will take more market share from Sony (SNE) than most expect.
6. High definition television and surround sound equipment sales will accelerate as a result.
7. Rumors of excessive crashing are likely over-hyped.

I expect US stocks to trade modestly higher from current levels into the close on short-covering, lower energy prices and more optimism.

Today's Headlines

Bloomberg:
- Worldwide server sales increased 8.1% in the third quarter, the 10th straight advance, as demand increased for computers that run corporate networks and Web sites, researcher IDC said.
- Research In Motion, maker of the BlackBerry e-mail pager, cut its forecast for signing up new clients because of delay in introducing products.
- Crude oil, heating oil and gasoline are falling after an Energy Department report showed that US fuel stockpiles rose and on forecasts for warmer weather in the US Northeast.
- US Treasuries are falling after the government’s auction of two-year notes drew less demand than some traders expected, a day after the Fed signaled it may be ready to slow the pace of interest-rate increases.

Wall Street Journal:
- Google’s expansion has sparked a hiring frenzy in Silicon Valley as Internet companies compete for qualified candidates.
- Neurointensive care is helping stroke patients once considered untreatable to recover from brain damage.
- Saks Fifth Avenue, Ralph Lauren, Bergdorf Goodman and other retailers are finding e-mail advertising is one of fashion’s most effective marketing methods.
- Verizon Communications and Cablevision Systems are fighting in NYC and other US communities as phone companies’ network upgrades push them into competition with cable companies.
- Loral Space & Communications may add as many as 600 employees at its satellite-making unit.
- The Motion Picture Association of America and Bram Cohen, creator of software used to download movies illegally over the Internet, reached an accord to remove links to copyrighted movies from Cohen’s search engine and Web site.
- The IRS plans more audits next year as agents examine more returns of US taxpayers with incomes of at least $100,000 for evidence of abusive shelters, offshore accounts or transactions designed to avoid paying taxes.

Washington Post:
- The Defense Department plans to cut the number of US troops in Iraq early next year by as many as three combat brigades, from 18 now, citing unidentified senior military officers.

Rocky Mountain News:
- Denver-area single-family homes sold for an average of $309,030 in November, down from $314,586 in October and $289,934 a year ago.

NY Times:
- The US energy-drinks market grew 61% to $3 billion this year, citing Beverage Digest.

AP:
- Iraqi Foreign Minister Zebari arrived in Tokyo today for a four-day visit to meet with Prime Minister Koizumi and Foreign Minister Aso to discuss Japan’s support for Iraq’s reconstruction.

Gazeta Wyborcza:
- An Iraqi government delegation will visit Poland on Dec. 6 to discuss the presence of Polish troops in Iraq and investment opportunities for Polish companies in the Middle Eastern country.

Jobless Claims Rise, Consumer Sentiment Improves

- Initial Jobless Claims for last week rose to 335K versus estimates of 312K and 305K the prior week.
- Continuing Claims rose to 2824K versus estimates of 2750K and 2765K prior.
- The Final Univ. of Mich. Consumer Confidence reading for November rose to 81.6 versus estimates of 81.0 and a prior estimate of 79.9.

BOTTOM LINE: The number of Americans filing first-time claims for unemployment benefits rose more than forecast last week, suggesting the Veteran’s Day holiday may have helped push filings down to a four-month low a week earlier, Bloomberg reported. The unemployment rate for people eligible for benefits, which tracks the US unemployment rate, stayed at 2.2%. The four-week moving-average of jobless claims rose to 323,250 from 322,000. I continue to believe the labor market will remain healthy, but fail to surpass pre-hurricane levels, which will help hold unit labor costs(the largest component of inflation) in check.

Confidence among US consumers rose this month, rebounding from its lowest level in 13 years as people paid less at the gas pump, Bloomberg said. Unleaded gas futures have now collapsed almost 50% from September highs. The current conditions component of the index, which measures Americans’ perceptions of their financial health and whether or not it’s a good time to buy big-ticket items like cars, jumped to 100.2 from 91.2 the prior month. With the economy in the middle of the longest 3%+ growth streak since 1986, I continue to believe the irrational pessimism that has permeated the consumer psyche will evaporate over the intermediate-term.

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