BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Medical longs, Semi longs and Energy-related shorts. I added back (IWM) and (QQQQ) shorts, thus leaving the Portfolio 75% net long. The tone of the market is slightly positive as the advance/decline line is modestly higher, most sectors are higher and volume is heavy. I expect US stocks to trade mixed-to-lower into the close from current levels as losses in commodity stocks and other momentum favorites more than offset lower energy prices and long-term rates.
Thursday, February 09, 2006
Stocks Mixed into Final Hour as More Weakness in Commodity Stocks Offsets Positives
Today's Headlines
Bloomberg:
- US cancer deaths fell in 2003, the first annual decline since record-keeping began in 1930.
- Consumers who flocked to auto dealers and shopping malls after the holidays helped the US economy grow 4% this quarter, snapping back from a slowdown during the fourth quarter, a Bloomberg survey shows.
- Google(GOOG) is offering a new version of its desktop software that lets users seek files on several personal computers and share Web content.
- Research In Motion(RIMM) has started testing new software that would run its BlackBerry e-mail devices without using contested patents, allowing the service to keep running if the company loses a legal battle.
- Best Buy(BBY) raised its fourth-quarter and annual earnings forecasts after strong holiday sales of flat-panel televisions and iPods extended into January.
- UN Secretary-General Kofi Annan said he will ask President Bush to contribute troops and equipment to a planned UN peacekeeping mission in the Darfur region of Sudan when they meet at the White House on Feb. 13.
- President Bush said in the months after the Sept. 11 terrorist attacks the US disrupted a plot to hijack a commercial jet and fly it into a skyscraper in LA.
- Oprah Winfrey signed a $55 million contract to start a channel on XM Satellite Radio(XMSR).
- US 30-year Treasuries surged after bidders including pension funds flocked to the government’s first sale of the securities since 2001.
- Microsoft(MSFT) plans a $1 billion expansion to its main campus, adding 14 new buildings in Redmond, Washington.
- Crude oil in NY was unchanged, close to a five-week low, amid higher US gasoline inventories and reduced refinery operating rates.
Wall Street Journal:
- Univision(UVN), which has put itself up for sale, is likely to seek a price of more than $40 a share.
NY Times:
- NYU plans to build a $200 million pediatric mental health center to treat thousands of children and train thousands of doctors.
Hollywood Reporter:
- Sony Corp.(SNE) said new movie DVDs using the Blu-ray format will sell for $23.45, as much as 20% more expensive that the first generation of DVDs when they were introduced.
AP:
- About 2,000 Muslims rallied today in the Bangladeshi capital, Dhaka, and burned a Danish flag.
Washington Post:
- Cell phones and Internet Web logs helped turn cartoons published in Denmark into a uniting cause for Islamic protesters worldwide in days or even hours.
- US cancer deaths fell in 2003, the first annual decline since record-keeping began in 1930.
- Consumers who flocked to auto dealers and shopping malls after the holidays helped the US economy grow 4% this quarter, snapping back from a slowdown during the fourth quarter, a Bloomberg survey shows.
- Google(GOOG) is offering a new version of its desktop software that lets users seek files on several personal computers and share Web content.
- Research In Motion(RIMM) has started testing new software that would run its BlackBerry e-mail devices without using contested patents, allowing the service to keep running if the company loses a legal battle.
- Best Buy(BBY) raised its fourth-quarter and annual earnings forecasts after strong holiday sales of flat-panel televisions and iPods extended into January.
- UN Secretary-General Kofi Annan said he will ask President Bush to contribute troops and equipment to a planned UN peacekeeping mission in the Darfur region of Sudan when they meet at the White House on Feb. 13.
- President Bush said in the months after the Sept. 11 terrorist attacks the US disrupted a plot to hijack a commercial jet and fly it into a skyscraper in LA.
- Oprah Winfrey signed a $55 million contract to start a channel on XM Satellite Radio(XMSR).
- US 30-year Treasuries surged after bidders including pension funds flocked to the government’s first sale of the securities since 2001.
- Microsoft(MSFT) plans a $1 billion expansion to its main campus, adding 14 new buildings in Redmond, Washington.
- Crude oil in NY was unchanged, close to a five-week low, amid higher US gasoline inventories and reduced refinery operating rates.
Wall Street Journal:
- Univision(UVN), which has put itself up for sale, is likely to seek a price of more than $40 a share.
NY Times:
- NYU plans to build a $200 million pediatric mental health center to treat thousands of children and train thousands of doctors.
Hollywood Reporter:
- Sony Corp.(SNE) said new movie DVDs using the Blu-ray format will sell for $23.45, as much as 20% more expensive that the first generation of DVDs when they were introduced.
AP:
- About 2,000 Muslims rallied today in the Bangladeshi capital, Dhaka, and burned a Danish flag.
Washington Post:
- Cell phones and Internet Web logs helped turn cartoons published in Denmark into a uniting cause for Islamic protesters worldwide in days or even hours.
Jobless Claims Fall Again, Wholesale Inventories Rise on Increased Confidence
- Initial Jobless Claims for last week rose to 277K versus estimates of 285K and 273K the prior week.
- Continuing Claims rose to 2557K versus estimates of 2518K and 2497K prior.
- Wholesale Inventories for December rose 1.0% versus estimates of a .5% gain and a .5% rise in November.
- Continuing Claims rose to 2557K versus estimates of 2518K and 2497K prior.
- Wholesale Inventories for December rose 1.0% versus estimates of a .5% gain and a .5% rise in November.
BOTTOM LINE: The number of Americans filing first-time claims for unemployment benefits rose less than forecast last week, more evidence of strength in the labor market, Bloomberg reported. The four-week moving average of 276,500 is the lowest since right after the stock market bubble burst in April 2000. The unemployment rate among those available to receive benefits, which tracks the US unemployment rate, rose to 2% from 1.9% the prior week. The labor market, while very healthy, is likely not quite as strong as recent data suggest. I continue to believe it will remain healthy over the intermediate-term without generating substantial unit labor costs increases.
Inventories at US wholesalers increased more than forecast in December as companies geared up for improving sales, Bloomberg said. Sales rose 1.0%, the most since September. The inventory-to-sales ratio remained at 1.15 months. I continue to believe inventory rebuilding will boost economic growth over the intermediate-term as executives gain more confidence in the durability of the current expansion and demand remains healthy.
Wednesday, February 08, 2006
Thursday Watch
Late-Night Headlines
Bloomberg:
- Yahoo!(YHOO) helped Chinese authorities convict a “cyber-dissident” for allegedly criticizing local officials over the Internet, human-rights group Reporters Without Borders said.
- The Bank of Japan will keep pumping cash into the economy and hold interest rates at almost zero as policy makers gather more evidence that deflation has ended.
- A “suspicious substance” found in the US Senate’s Russell Office Building in Washington late today was determined to be non-threatening, and workers were allowed to return to their non-threatening, and workers were allowed to return to their offices, Capitol Police said.
- SanDisk Corp.(SNDK) today announced that it intends to accelerate the expansion of the 300-millimeter wafer fabrication facility in Yokkaichi, Japan.
London-based Times:
- GlaxoSmithKline Plc(GSK) may receive a combined US tax bill of over $12 billion.
South China Morning Post:
- At least six Chinese Internet companies will hold IPOs overseas this year, raising as much as $1 billion.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on (UDR), (CRL), (LAD), (ACLS) and (IMCL).
- Reiterated Underperform on (RAI), (MAXY) and (EAT).
Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated unch.
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
(AET)/1.23
(AG)/.34
(AYE)/.20
(AMLN)/-.59
(AN)/.33
(BWA)/1.19
(BYD)/.61
(BCO)/.75
(BG)/.86
(CCE)/.14
(CVH)/.80
(MAR)/.98
(MLM)/.90
(MBI)/1.38
(MET)/1.01
(PNRA)/.51
(SKYW)/.63
(TBL)/.62
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 285K versus 273K the prior week.
- Continuing Claims are estimated to rise to 2518K versus 2509K prior.
10:00 am EST
- Wholesale Inventories for December are estimated to rise .5% versus a .4% increase in November.
Bloomberg:
- Yahoo!(YHOO) helped Chinese authorities convict a “cyber-dissident” for allegedly criticizing local officials over the Internet, human-rights group Reporters Without Borders said.
- The Bank of Japan will keep pumping cash into the economy and hold interest rates at almost zero as policy makers gather more evidence that deflation has ended.
- A “suspicious substance” found in the US Senate’s Russell Office Building in Washington late today was determined to be non-threatening, and workers were allowed to return to their non-threatening, and workers were allowed to return to their offices, Capitol Police said.
- SanDisk Corp.(SNDK) today announced that it intends to accelerate the expansion of the 300-millimeter wafer fabrication facility in Yokkaichi, Japan.
London-based Times:
- GlaxoSmithKline Plc(GSK) may receive a combined US tax bill of over $12 billion.
South China Morning Post:
- At least six Chinese Internet companies will hold IPOs overseas this year, raising as much as $1 billion.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on (UDR), (CRL), (LAD), (ACLS) and (IMCL).
- Reiterated Underperform on (RAI), (MAXY) and (EAT).
Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated unch.
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
(AET)/1.23
(AG)/.34
(AYE)/.20
(AMLN)/-.59
(AN)/.33
(BWA)/1.19
(BYD)/.61
(BCO)/.75
(BG)/.86
(CCE)/.14
(CVH)/.80
(MAR)/.98
(MLM)/.90
(MBI)/1.38
(MET)/1.01
(PNRA)/.51
(SKYW)/.63
(TBL)/.62
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 285K versus 273K the prior week.
- Continuing Claims are estimated to rise to 2518K versus 2509K prior.
10:00 am EST
- Wholesale Inventories for December are estimated to rise .5% versus a .4% increase in November.
BOTTOM LINE: Asian indices are higher, led by technology and financial stocks in the region. I expect US equities to open modestly higher and to build on gains into the afternoon. The Portfolio is 100% net long heading into the day.
Stocks Finish at Session Highs, Led by Strong Gains in the Tech Sector
Indices
S&P 500 1,265.65 +.87%
DJIA 10,858.62 +1.01%
NASDAQ 2,266.98 +.98%
Russell 2000 721.16 +.55%
S&P Barra Growth 606.23 +.98%
S&P Barra Value 659.48 +.75%
Morgan Stanley Consumer 593.00 +.72%
Morgan Stanley Cyclical 781.84 +.94%
Morgan Stanley Technology 533.67 +1.48%
Transports 4,278.81 +1.16%
Utilities 403.27 -.30%
Put/Call .78 -17.02%
NYSE Arms .76 -46.17%
Volatility(VIX) 12.83 -5.59%
ISE Sentiment 184.00 +20.26%
US Dollar 90.43 +.21%
CRB 336.07 -.11%
Futures Spot Prices
Crude Oil 62.54 -.02%
Unleaded Gasoline 154.75 -.04%
Natural Gas 7.73 unch.
Heating Oil 166.56 unch.
Gold 553.00 -.14%
Base Metals 172.34 -.36%
Copper 227.30 -.07%
10-year US Treasury Yield 4.58% +.44%
Leading Sectors
Networking +3.38%
Wireless +2.23%
Airlines +2.19%
Lagging Sectors
Broadcasting -.46%
Steel -.60%
Coal -1.18%
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 (UVN), (BAC), (ENH), (RNR) and (QSFT).
- Reiterated Underperform on (UNH).
Afternoon/Evening Headlines
Bloomberg:
- General Motors(GM) and Ford Motor(F) will join with energy companies to promote the use of ethanol as an alternate to gasoline in Illinois and Missouri.
- News Corp.(NWS/A), the media company run by Rupert Murdoch, said second-quarter profit almost tripled, buoyed by asset sales and higher sales at its cable television networks.
- President Bush said that making his first-term tax cuts permanent is critical to keeping the US competitive, especially the 15% rate on dividends and capital gains set to expire in 2008.
- Whole Foods Market(WFMI) said first-quarter profit rose on gains from new store openings and sales of prepared foods.
- Google(GOOG) hired Amazon.com’s(AMZN) top Internet search executive to join its engineering team as competition intensifies with Microsoft Corp.(MSFT) and Yahoo!(YHOO).
- Crude oil traded near a five-week low in NY after a US government report showed the nation’s gasoline supplies rose for a sixth straight week to an 11-month high.
AP:
- NY Democratic Attorney General Spitzer has subpoenaed at least eight radio station companies in his investigation of whether recording companies bribed radio stations to play songs.
Boston Globe:
- About a dozen Harvard Univ. professors yesterday confronted school President Lawrence Summers, and some demanded he resing.
S&P 500 1,265.65 +.87%
DJIA 10,858.62 +1.01%
NASDAQ 2,266.98 +.98%
Russell 2000 721.16 +.55%
S&P Barra Growth 606.23 +.98%
S&P Barra Value 659.48 +.75%
Morgan Stanley Consumer 593.00 +.72%
Morgan Stanley Cyclical 781.84 +.94%
Morgan Stanley Technology 533.67 +1.48%
Transports 4,278.81 +1.16%
Utilities 403.27 -.30%
Put/Call .78 -17.02%
NYSE Arms .76 -46.17%
Volatility(VIX) 12.83 -5.59%
ISE Sentiment 184.00 +20.26%
US Dollar 90.43 +.21%
CRB 336.07 -.11%
Futures Spot Prices
Crude Oil 62.54 -.02%
Unleaded Gasoline 154.75 -.04%
Natural Gas 7.73 unch.
Heating Oil 166.56 unch.
Gold 553.00 -.14%
Base Metals 172.34 -.36%
Copper 227.30 -.07%
10-year US Treasury Yield 4.58% +.44%
Leading Sectors
Networking +3.38%
Wireless +2.23%
Airlines +2.19%
Lagging Sectors
Broadcasting -.46%
Steel -.60%
Coal -1.18%
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 (UVN), (BAC), (ENH), (RNR) and (QSFT).
- Reiterated Underperform on (UNH).
Afternoon/Evening Headlines
Bloomberg:
- General Motors(GM) and Ford Motor(F) will join with energy companies to promote the use of ethanol as an alternate to gasoline in Illinois and Missouri.
- News Corp.(NWS/A), the media company run by Rupert Murdoch, said second-quarter profit almost tripled, buoyed by asset sales and higher sales at its cable television networks.
- President Bush said that making his first-term tax cuts permanent is critical to keeping the US competitive, especially the 15% rate on dividends and capital gains set to expire in 2008.
- Whole Foods Market(WFMI) said first-quarter profit rose on gains from new store openings and sales of prepared foods.
- Google(GOOG) hired Amazon.com’s(AMZN) top Internet search executive to join its engineering team as competition intensifies with Microsoft Corp.(MSFT) and Yahoo!(YHOO).
- Crude oil traded near a five-week low in NY after a US government report showed the nation’s gasoline supplies rose for a sixth straight week to an 11-month high.
AP:
- NY Democratic Attorney General Spitzer has subpoenaed at least eight radio station companies in his investigation of whether recording companies bribed radio stations to play songs.
Boston Globe:
- About a dozen Harvard Univ. professors yesterday confronted school President Lawrence Summers, and some demanded he resing.
BOTTOM LINE: The Portfolio finished higher today on gains in my Networking longs, Computer longs and Semi longs. I exited the remainder of my (IWM)/(QQQQ) shorts and added to my existing longs in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was positive today as the advance/decline line finished higher, most sectors rose and volume was heavy. Measures of investor anxiety were lower into the close. Overall, today’s market performance was positive. I would like to see better breadth on a follow-through move higher tomorrow. Technology shares outperformed substantially today, doubling gains in the broad market. This is a big positive, especially with commodity stock underperformance.
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