Wednesday, March 08, 2006
Tuesday, March 07, 2006
Wednesday Watch
Late-Night Headlines
Bloomberg:
- Merck Inc.(MRK) has cut the price for its Stocrin AIDS drug by 20% in developing countries.
- Pearson Plc’s Penguin Group purchased the rights to former Federal Reserve Chairman Alan Greenspan’s book on the world economy and its future for an undisclosed amount.
- Google Inc.(GOOG) said it mistakenly posted a revenue forecast in notes prepared ahead of a meeting last week. The estimate would trail some projections.
- Prudential Financial(PRU) may buy Allstate’s(ALL) variable annuities unit for as much as $750 million.
- Japan’s bank lending rose for the first time in more than nine years, adding to evidence that deflation is ending in the world’s second-biggest economy.
- The US House, by a vote of 280-138, passed a new version of the USA Patriot Act, removing the last barrier to renewal of the law that gave the FBI expanded powers to investigate terrorism after the Sept. 11 attacks.
- Namco Bandai Holdings, Japan’s second-biggest toys and game software maker, said Sony(SNE) won’t be able to release its PlayStation 3 console as scheduled this spring.
Financial Times:
- Gillette’s new Fusion razor, which went on sale four weeks ago, has accounted for 55% of new razor purchases.
Automotive News:
- Mississippi is offering $240 million in federal tax breaks for Kia Motors to build an assembly plant as the US state tries to lure investment after the ravage left by Hurricane Katrina.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on (STX), (SYMC) and (MRVL).
Night Trading
Asian Indices are -1.0% to -.50% on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated -.18%.
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
- (ASVI)/.24
- (CWTR)/.17
- (CMTL)/.33
- (DYN)/-.12
- (GMST)/-.05
- (HUG)/.46
- (L)/.04
- (MIK)/.85
- (REM)/.36
- (TECD)/.67
- (WIND)/.12
Upcoming Splits
- None of note
Economic Releases
- None of note
Bloomberg:
- Merck Inc.(MRK) has cut the price for its Stocrin AIDS drug by 20% in developing countries.
- Pearson Plc’s Penguin Group purchased the rights to former Federal Reserve Chairman Alan Greenspan’s book on the world economy and its future for an undisclosed amount.
- Google Inc.(GOOG) said it mistakenly posted a revenue forecast in notes prepared ahead of a meeting last week. The estimate would trail some projections.
- Prudential Financial(PRU) may buy Allstate’s(ALL) variable annuities unit for as much as $750 million.
- Japan’s bank lending rose for the first time in more than nine years, adding to evidence that deflation is ending in the world’s second-biggest economy.
- The US House, by a vote of 280-138, passed a new version of the USA Patriot Act, removing the last barrier to renewal of the law that gave the FBI expanded powers to investigate terrorism after the Sept. 11 attacks.
- Namco Bandai Holdings, Japan’s second-biggest toys and game software maker, said Sony(SNE) won’t be able to release its PlayStation 3 console as scheduled this spring.
Financial Times:
- Gillette’s new Fusion razor, which went on sale four weeks ago, has accounted for 55% of new razor purchases.
Automotive News:
- Mississippi is offering $240 million in federal tax breaks for Kia Motors to build an assembly plant as the US state tries to lure investment after the ravage left by Hurricane Katrina.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on (STX), (SYMC) and (MRVL).
Night Trading
Asian Indices are -1.0% to -.50% on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated -.18%.
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
- (ASVI)/.24
- (CWTR)/.17
- (CMTL)/.33
- (DYN)/-.12
- (GMST)/-.05
- (HUG)/.46
- (L)/.04
- (MIK)/.85
- (REM)/.36
- (TECD)/.67
- (WIND)/.12
Upcoming Splits
- None of note
Economic Releases
- None of note
BOTTOM LINE: Asian indices are lower, led down by technology and energy shares in the region. I expect US equities to open lower and to rally into the afternoon, finishing slightly lower. The Portfolio is 50% net long heading into the day.
Stocks Finish Mostly Lower on Weakness in Commodity and Tech Sectors
Indices
S&P 500 1,275.88 -.19%
DJIA 10,980.69 +.20%
NASDAQ 2,268.38 -.77%
Russell 2000 721.06 -1.38%
Wilshire 5000 12,835.58 -.41%
S&P Barra Growth 603.43 -.17%
S&P Barra Value 668.95 -.21%
Morgan Stanley Consumer 602.07 +.14%
Morgan Stanley Cyclical 778.92 -.43%
Morgan Stanley Technology 531.83 -.75%
Transports 4,434.62 -.80%
Utilities 399.30 -.40%
Put/Call 1.02 +13.33%
NYSE Arms .92 -4.28%
Volatility(VIX) 12.66 -.63%
ISE Sentiment 135.00 -6.25%
US Dollar 90.79 +1.0%
CRB 321.44 -1.17%
Futures Spot Prices
Crude Oil 61.50 -.13%
Unleaded Gasoline 162.57 -.47%
Natural Gas 6.73 +.84%
Heating Oil 171.60 -.36%
Gold 554.50 unch.
Base Metals 162.42 -2.94%
Copper 217.60 -.05%
10-year US Treasury Yield 4.72% -.51%
Leading Sectors
HMOs +.95%
Banks +.59%
Insurance +.41%
Lagging Sectors
Alternative Energy -2.83%
Disk Drives -3.08%
Steel -3.30%
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 (KR).
- Reiterated Underperform on (LSI).
Afternoon/Evening Headlines
Bloomberg:
- The US Navy has ended combat deployments for Northrop Grumman’s(NOC) F-14 Tomcat fighter-bomber, the plane glamorized in the movie “Top Gun.”
- The LA Times will shrink weekday listings of stock and mutual fund prices to a single page starting March 14 to cut costs and free up space for expanded coverage of Southern California.
- US Defense Secretary Rumsfeld today accused Iran of sending its Revolutionary Guards into Iraq to foment violence.
- Russia and Turkey led a slump in emerging stock markets worldwide on concern that rising US interest rates will slow the global economy.
- The US and Russia told Iran to obey international demands to limit its nuclear program, with VP Cheney pointing to “meaningful” consequences for defiance and a top Russian official saying his government has no new solutions to offer.
- The US dollar strengthened the most against the euro since December as expectations increased that the Fed will raise interest rates to slow brisk US growth and stem inflation.
- Oil fell almost $1/bbl. on speculation that OPEC will leave production targets unchanged at a meeting tomorrow.
Financial Times:
- The US risks “profound” consequences if it pursues a “crazy” protectionist policy over DP World’s $6.8 billion acquisition of Britain’s Peninsular & Oriental Steam Navigation, citing transportation industry leaders at the Trans-Pacific Maritime Conference.
AP:
- The US Homeland Security Dept. will keep close tabs on some cargo containers handled at Port Authority of NY and New Jersey facilities. “Black box” devices that can sense traces of radiation or carbon monoxide, as well as whether a door on the container has been opened, will be stowed in some containers.
S&P 500 1,275.88 -.19%
DJIA 10,980.69 +.20%
NASDAQ 2,268.38 -.77%
Russell 2000 721.06 -1.38%
Wilshire 5000 12,835.58 -.41%
S&P Barra Growth 603.43 -.17%
S&P Barra Value 668.95 -.21%
Morgan Stanley Consumer 602.07 +.14%
Morgan Stanley Cyclical 778.92 -.43%
Morgan Stanley Technology 531.83 -.75%
Transports 4,434.62 -.80%
Utilities 399.30 -.40%
Put/Call 1.02 +13.33%
NYSE Arms .92 -4.28%
Volatility(VIX) 12.66 -.63%
ISE Sentiment 135.00 -6.25%
US Dollar 90.79 +1.0%
CRB 321.44 -1.17%
Futures Spot Prices
Crude Oil 61.50 -.13%
Unleaded Gasoline 162.57 -.47%
Natural Gas 6.73 +.84%
Heating Oil 171.60 -.36%
Gold 554.50 unch.
Base Metals 162.42 -2.94%
Copper 217.60 -.05%
10-year US Treasury Yield 4.72% -.51%
Leading Sectors
HMOs +.95%
Banks +.59%
Insurance +.41%
Lagging Sectors
Alternative Energy -2.83%
Disk Drives -3.08%
Steel -3.30%
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 (KR).
- Reiterated Underperform on (LSI).
Afternoon/Evening Headlines
Bloomberg:
- The US Navy has ended combat deployments for Northrop Grumman’s(NOC) F-14 Tomcat fighter-bomber, the plane glamorized in the movie “Top Gun.”
- The LA Times will shrink weekday listings of stock and mutual fund prices to a single page starting March 14 to cut costs and free up space for expanded coverage of Southern California.
- US Defense Secretary Rumsfeld today accused Iran of sending its Revolutionary Guards into Iraq to foment violence.
- Russia and Turkey led a slump in emerging stock markets worldwide on concern that rising US interest rates will slow the global economy.
- The US and Russia told Iran to obey international demands to limit its nuclear program, with VP Cheney pointing to “meaningful” consequences for defiance and a top Russian official saying his government has no new solutions to offer.
- The US dollar strengthened the most against the euro since December as expectations increased that the Fed will raise interest rates to slow brisk US growth and stem inflation.
- Oil fell almost $1/bbl. on speculation that OPEC will leave production targets unchanged at a meeting tomorrow.
Financial Times:
- The US risks “profound” consequences if it pursues a “crazy” protectionist policy over DP World’s $6.8 billion acquisition of Britain’s Peninsular & Oriental Steam Navigation, citing transportation industry leaders at the Trans-Pacific Maritime Conference.
AP:
- The US Homeland Security Dept. will keep close tabs on some cargo containers handled at Port Authority of NY and New Jersey facilities. “Black box” devices that can sense traces of radiation or carbon monoxide, as well as whether a door on the container has been opened, will be stowed in some containers.
BOTTOM LINE: The Portfolio finished slightly lower today as losses in my technology longs more than offset gains in my energy-related shorts. I covered some of my (QQQQ) and (IWM) shorts in the final hour, thus leaving the Portfolio 50% net long. The tone of the market was negative today as the advance/decline line finished substantially lower, sector performance was mostly negative and volume was about average. Measures of investor anxiety were mixed into the close. Overall, today's market performance was bearish. A continuation of today’s rally in bonds should help equities rebound. The U.S. Dollar Index broke up through its recent downtrend line, which could further pressure commodities over the coming weeks.
Stocks Lower into Final Hour, Pressured by Energy and Tech Shares
BOTTOM LINE: The Portfolio is slightly lower into the final hour as losses in my technology longs are more than offsetting gains in my energy-related shorts. I added to my (IWM) and (QQQQ) shorts, thus leaving the Portfolio 25% net long. The tone of the market is negative as the advance/decline line is substantially lower, sector performance is mostly negative and volume is about average. It is short-term bearish that stocks have continued to weaken even as oil trades near session lows and the 10-year Treasury note yield has reversed 7 basis points lower. I expect US stocks to trade mixed-to-lower into the close from current levels on continuing weakness in energy and tech shares.
Today's Headlines
Bloomberg:
- OMV AG, central Europe’s biggest oil company, and Royal Dutch Shell Plc are among oil producers considering seeking licenses to explore for oil and gas off New Zealand’s southern-most coast.
- GM(GM), cutting costs after $8.55 billion in losses last year, will replace the current defined-benefits pension for many of its 36,000 US salaried workers with a less expensive defined-contribution plan starting next year.
- The US dollar strengthened the most against the euro in more than a month as expectations increased that the Fed will raise rate at least three more times.
- Gasoline futures fell for a second day on speculation that the number of refineries undergoing maintenance will begin to decrease around the middle of the month.
Wall Street Journal:
- AT&T’s(T) agreement to purchase BellSouth(BLS) poses a competitive threat to cable operators and may pressure them to cut high-speed Internet rates and slow price increases for television.
- Ford Motor(F) invested millions in marketing and incentives to sell more sport-utility vehicles with hybrid gas and electric engines, to compete with Toyota Motor(TM) and Honda Motor, which constitute 90% of the US hybrid market.
- US House opponents of Internet gambling are racing to co-sponsor a ban on Internet gambling after an earlier version failed following a campaign by lobbyist Jack Abramoff.
- The balance of power between Verizon Communications(VZ) and Vodafone Group(VOD) in their Verizon Wireless joint venture may have shifted in the British company’s favor as a result of AT&T’s(T) planned purchase of BellSouth(BLS).
- Researchers may be getting closer to developing effective treatments for type 1 diabetes, a disease that attacks insulin-producing cells and is fatal without regular insulin injections.
NY Post:
- Intercontinental Exchange(ICE) made a bid for a stake in the NYMEX last week, which might have scuttled plans by General Atlantic LLC to buy a 10% stake.
Broadcasting & Cable magazine:
- Walt Disney’s(DIS) Buena Vista Television unit is seeking to sell the cable television rights to its drama “Desperate Housewives” for as much as $1.2 million per episode.
NY Times:
- Whites may become a minority in the New York City metropolitan area within a few years, as non-Hispanic whites move to other US regions and amid an influx of immigrants, citing demographers.
Washington Post:
- Middle Eastern investment in the US has been growing since the Sept. 11 terrorist attacks, and while some transactions cause national security concerns, others are seen as a way to fuel the US economy.
Financial Times:
- Verizon Communications’(VZ) next moves in response to AT&T’s(T) plans to buy BellSouth Corp.(BLS) for $67 billion will highlight the differences between the two US phone companies.
- ASML Holding NV(ASML) is considering an expansion in semiconductor manufacturing and is weighing acquisitions, citing CEO Eric Meurice.
Arab News:
- Saudi Prince Alwaleed bin Talal, the world’s fifth-richest man, started a satellite tv channel designed to counter Middle East extremism by promoting more moderate Islam.
London-based Times:
- A Colorado High School geography teacher was suspended after a student recorded comments he made comparing President Bush with Adolf Hitler.
- OMV AG, central Europe’s biggest oil company, and Royal Dutch Shell Plc are among oil producers considering seeking licenses to explore for oil and gas off New Zealand’s southern-most coast.
- GM(GM), cutting costs after $8.55 billion in losses last year, will replace the current defined-benefits pension for many of its 36,000 US salaried workers with a less expensive defined-contribution plan starting next year.
- The US dollar strengthened the most against the euro in more than a month as expectations increased that the Fed will raise rate at least three more times.
- Gasoline futures fell for a second day on speculation that the number of refineries undergoing maintenance will begin to decrease around the middle of the month.
Wall Street Journal:
- AT&T’s(T) agreement to purchase BellSouth(BLS) poses a competitive threat to cable operators and may pressure them to cut high-speed Internet rates and slow price increases for television.
- Ford Motor(F) invested millions in marketing and incentives to sell more sport-utility vehicles with hybrid gas and electric engines, to compete with Toyota Motor(TM) and Honda Motor, which constitute 90% of the US hybrid market.
- US House opponents of Internet gambling are racing to co-sponsor a ban on Internet gambling after an earlier version failed following a campaign by lobbyist Jack Abramoff.
- The balance of power between Verizon Communications(VZ) and Vodafone Group(VOD) in their Verizon Wireless joint venture may have shifted in the British company’s favor as a result of AT&T’s(T) planned purchase of BellSouth(BLS).
- Researchers may be getting closer to developing effective treatments for type 1 diabetes, a disease that attacks insulin-producing cells and is fatal without regular insulin injections.
NY Post:
- Intercontinental Exchange(ICE) made a bid for a stake in the NYMEX last week, which might have scuttled plans by General Atlantic LLC to buy a 10% stake.
Broadcasting & Cable magazine:
- Walt Disney’s(DIS) Buena Vista Television unit is seeking to sell the cable television rights to its drama “Desperate Housewives” for as much as $1.2 million per episode.
NY Times:
- Whites may become a minority in the New York City metropolitan area within a few years, as non-Hispanic whites move to other US regions and amid an influx of immigrants, citing demographers.
Washington Post:
- Middle Eastern investment in the US has been growing since the Sept. 11 terrorist attacks, and while some transactions cause national security concerns, others are seen as a way to fuel the US economy.
Financial Times:
- Verizon Communications’(VZ) next moves in response to AT&T’s(T) plans to buy BellSouth Corp.(BLS) for $67 billion will highlight the differences between the two US phone companies.
- ASML Holding NV(ASML) is considering an expansion in semiconductor manufacturing and is weighing acquisitions, citing CEO Eric Meurice.
Arab News:
- Saudi Prince Alwaleed bin Talal, the world’s fifth-richest man, started a satellite tv channel designed to counter Middle East extremism by promoting more moderate Islam.
London-based Times:
- A Colorado High School geography teacher was suspended after a student recorded comments he made comparing President Bush with Adolf Hitler.
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