BOTTOM LINE: The Portfolio is substantially higher into the final hour on gains in my Semi longs, Internet longs, Networking longs and Computer longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is modestly lower, sector performance is mixed and volume is above average. Over the last couple of days, volume soared on Ciena (CIEN) as the stock corrected. I expect a lot of the weak hands were shaken out. I am still long Ciena and expect it to trade substantially higher by year-end. The pullback makes for a good long entry point, in my opinion. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, stabilizing long-term rates and optimism in the tech sector.
Thursday, April 06, 2006
Stocks Mostly Lower Heading into Final Hour as Oil and Rates Rise
Today's Headlines
Bloomberg:
- InfoSpace Inc.(INSP) CEO Jim Voelker said he expects growth in ring tone sales as more mobile-phone users buy new handsets and become interested in a broader range of music.
- Microsoft Corp.(MSFT) said it would add 15 games by summer to the 25 currently available for its Xbox 360 in Japan as it exploits the delayed debut of Sony’s(SNE) PlayStation 3 console.
- Cisco Systems(CSCO) CEO Chambers is taking aim at Internet-based television services.
- Oracle Corp.(ORCL) is starting to see the payoff from $18 billion in acquisitions because offering a wider variety of software is helping the company win customers, President Charles Phillips said.
- Retailers posted the worst sales gains of the year in March as cold weather, higher gas prices and a late Easter limited spending.
- Former NYC Mayor Rudolph Giuliani testified at Zacarias Moussaoui’s sentencing trial that he remembers every day the sight of two people jumping hand-in-hand form the World Trade Center after the Sept. 11 attacks.
- US Treasuries are falling on concern the Fed will keep raising interest rates amid robust employment growth and an increase in commodity prices.
Wall Street Journal:
- Venezuelan President Hugo Chavez probably isn’t headed towards outright nationalization of the oil industry.
- US regulators are close to the final stages of a crackdown on brokerages that allegedly collect improper payments to promote favored mutual funds.
- Shares of Celgene Corp.(CELG) have risen 200% in two years and may have trouble rising much higher.
- US office vacancy rates have fallen to the lowest in five years as improved demand boosts rents.
- Federated Dept. Stores(FD) will probably say today its Macy’s division will start an exclusive line of Martha Stewart-branded(MSO) home furnishings.
- Apple Computer(AAPL) personal computers that use software to enable them to run Microsoft’s(MSFT) Windows operating system function well and operate much faster, Walter Mossberg said.
USA Today:
- The number of teens in the US using drugs declined, with the Midwest and South showing the biggest decreases, citing a national survey on drug and alcohol use that’s to be released today.
NY Post:
- NYC’s pension funds sued Take-Two Interactive Software(TTWO) after the funds lost $3.2 million amid backlash against hidden pornographic images in the company’s “Grand Theft Auto: San Andreas” video game.
NY Times:
- Sales from Canadian online pharmacies to US consumers, considered by some a cheaper option than buying drugs within the country, have declined in the past year due in part to a new Medicare insurance plan.
- A US voucher program that promotes school choice by allowing children to opt for charter and private schools is winning the support of minority parents.
- The number of NYC residents collecting welfare benefits fell to 402,281 last month, the lowest number in more than 40 years, and down about 67% from the 1995 peak.
- US Senators Tom Harkin and Lisa Murkowski are among those in Congress who are expected to introduce legislation to ban the sale of fatty and sugary foods in schools.
CNBC:
- Citigroup(C) CEO Prince may consider buying Washington Mutual(WM) as part of his plan to add retail-banking operations in the western US.
- Motorola(MOT) is “close” to releasing its new Q handset, CEO Zander said.
San Jose Mercury News:
- California state senators will debate a proposal that would require schools to teach students about the contributions that lesbians and gays have made to society throughout history.
Business Week:
- Apple Computer(AAPL) incorporated a firm called Braeburn Capital in Nevada to handle investments.
Handelsblatt:
- ThyssenKrupp AG may build a new steel plant in the US to expand in North America after it failed to take over Canadian steelmaker Dofasco Inc.
- InfoSpace Inc.(INSP) CEO Jim Voelker said he expects growth in ring tone sales as more mobile-phone users buy new handsets and become interested in a broader range of music.
- Microsoft Corp.(MSFT) said it would add 15 games by summer to the 25 currently available for its Xbox 360 in Japan as it exploits the delayed debut of Sony’s(SNE) PlayStation 3 console.
- Cisco Systems(CSCO) CEO Chambers is taking aim at Internet-based television services.
- Oracle Corp.(ORCL) is starting to see the payoff from $18 billion in acquisitions because offering a wider variety of software is helping the company win customers, President Charles Phillips said.
- Retailers posted the worst sales gains of the year in March as cold weather, higher gas prices and a late Easter limited spending.
- Former NYC Mayor Rudolph Giuliani testified at Zacarias Moussaoui’s sentencing trial that he remembers every day the sight of two people jumping hand-in-hand form the World Trade Center after the Sept. 11 attacks.
- US Treasuries are falling on concern the Fed will keep raising interest rates amid robust employment growth and an increase in commodity prices.
Wall Street Journal:
- Venezuelan President Hugo Chavez probably isn’t headed towards outright nationalization of the oil industry.
- US regulators are close to the final stages of a crackdown on brokerages that allegedly collect improper payments to promote favored mutual funds.
- Shares of Celgene Corp.(CELG) have risen 200% in two years and may have trouble rising much higher.
- US office vacancy rates have fallen to the lowest in five years as improved demand boosts rents.
- Federated Dept. Stores(FD) will probably say today its Macy’s division will start an exclusive line of Martha Stewart-branded(MSO) home furnishings.
- Apple Computer(AAPL) personal computers that use software to enable them to run Microsoft’s(MSFT) Windows operating system function well and operate much faster, Walter Mossberg said.
USA Today:
- The number of teens in the US using drugs declined, with the Midwest and South showing the biggest decreases, citing a national survey on drug and alcohol use that’s to be released today.
NY Post:
- NYC’s pension funds sued Take-Two Interactive Software(TTWO) after the funds lost $3.2 million amid backlash against hidden pornographic images in the company’s “Grand Theft Auto: San Andreas” video game.
NY Times:
- Sales from Canadian online pharmacies to US consumers, considered by some a cheaper option than buying drugs within the country, have declined in the past year due in part to a new Medicare insurance plan.
- A US voucher program that promotes school choice by allowing children to opt for charter and private schools is winning the support of minority parents.
- The number of NYC residents collecting welfare benefits fell to 402,281 last month, the lowest number in more than 40 years, and down about 67% from the 1995 peak.
- US Senators Tom Harkin and Lisa Murkowski are among those in Congress who are expected to introduce legislation to ban the sale of fatty and sugary foods in schools.
CNBC:
- Citigroup(C) CEO Prince may consider buying Washington Mutual(WM) as part of his plan to add retail-banking operations in the western US.
- Motorola(MOT) is “close” to releasing its new Q handset, CEO Zander said.
San Jose Mercury News:
- California state senators will debate a proposal that would require schools to teach students about the contributions that lesbians and gays have made to society throughout history.
Business Week:
- Apple Computer(AAPL) incorporated a firm called Braeburn Capital in Nevada to handle investments.
Handelsblatt:
- ThyssenKrupp AG may build a new steel plant in the US to expand in North America after it failed to take over Canadian steelmaker Dofasco Inc.
Job Data Top Estimates
- Initial Jobless Claims for last week fell to 299K versus estimates of 305K and 304K the prior week.
- Continuing Claims fell to 2440K versus estimates of 2483K and 2462K prior.
- Continuing Claims fell to 2440K versus estimates of 2483K and 2462K prior.
BOTTOM LINE: First-time applications for unemployment insurance in the US unexpectedly dropped and the total number of people on benefit rolls fell to a five-year low, Bloomberg reported. The four-week moving average of claims dropped to 308,500 from 311,250 the prior week. The unemployment rate among people eligible for benefits, which tracks the US unemployment rate, remained at 1.9%. I continue to believe the job market will remain healthy over the intermediate-term without generating substantially unit labor cost increases. Tomorrow’s job report will likely exceed estimates.
Thursday Watch
Late-Night Headlines
Bloomberg:
- Nissan Motor, two years after rushing 200 engineers from Japan to fix problems at its newest US auto plant, says it has redoubled efforts to improve vehicle quality.
- The US House approved a measure aimed at banning multimillion-dollar contributions by wealthy supporters to independent political groups.
- City Council members approved a package of land use changes for the NY Yankees to build a new $800 million stadium in the South Bronx, across the street from where they’ve played baseball since 1923.
- Three New Jersey boys planning a “Columbine-like massacre” with a list of 25 students and teachers they were targeting have been locked up in Camden County Detention Center.
Wall Street Journal Asia:
- China’s three biggest personal computer makers have agreed to ship their products with Microsoft’s Windows operating system.
Reuters:
- Boeing(BA), Microsoft Corp.(MSFT), Motorola(MOT) and other US companies may sell $15 billion of products to China this month.
Financial Times:
- Prudential Plc’s former CEO Bloomer will join US hedge fund Cerberus Capital Management LP as an adviser.
Late Buy/Sell Recommendations
- None of note
Night Trading
Asian Indices are +.25% to +1.0% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated -.01%.
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
- (AM)/.46
- (CKR)/.18
- (STZ)/.36
- (PIR)/.01
- (RAD)/.02
- (SOSA)/.16
- (TEX)/.81
Upcoming Splits
- (NVDA) 2-for-1
- (RY) 2-for-1
Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 305K versus 302K the prior week.
- Continuing Claims are estimated at 2483K versus 2483K prior.
Bloomberg:
- Nissan Motor, two years after rushing 200 engineers from Japan to fix problems at its newest US auto plant, says it has redoubled efforts to improve vehicle quality.
- The US House approved a measure aimed at banning multimillion-dollar contributions by wealthy supporters to independent political groups.
- City Council members approved a package of land use changes for the NY Yankees to build a new $800 million stadium in the South Bronx, across the street from where they’ve played baseball since 1923.
- Three New Jersey boys planning a “Columbine-like massacre” with a list of 25 students and teachers they were targeting have been locked up in Camden County Detention Center.
Wall Street Journal Asia:
- China’s three biggest personal computer makers have agreed to ship their products with Microsoft’s Windows operating system.
Reuters:
- Boeing(BA), Microsoft Corp.(MSFT), Motorola(MOT) and other US companies may sell $15 billion of products to China this month.
Financial Times:
- Prudential Plc’s former CEO Bloomer will join US hedge fund Cerberus Capital Management LP as an adviser.
Late Buy/Sell Recommendations
- None of note
Night Trading
Asian Indices are +.25% to +1.0% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated -.01%.
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
- (AM)/.46
- (CKR)/.18
- (STZ)/.36
- (PIR)/.01
- (RAD)/.02
- (SOSA)/.16
- (TEX)/.81
Upcoming Splits
- (NVDA) 2-for-1
- (RY) 2-for-1
Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 305K versus 302K the prior week.
- Continuing Claims are estimated at 2483K versus 2483K prior.
BOTTOM LINE: Asian indices are higher, boosted by exporting stocks in the region after a US report showed a strong service sector. I expect US equities to open modestly higher and to maintain gains throughout the day. The Portfolio is 100% net long heading into the day.
Wednesday, April 05, 2006
Stocks Finish Near Session Highs, Led by Tech and Homebuilding Shares
Indices
S&P 500 1,311.56 +.43%
DJIA 11,239.55 +.32%
NASDAQ 2,359.75 +.61%
Russell 2000 766.26 +.52%
Wilshire 5000 13,262.75 +.45%
S&P Barra Growth 615.51 +.30%
S&P Barra Value 693.09 +.57%
Morgan Stanley Consumer 610.05 unch.
Morgan Stanley Cyclical 832.39 +.66%
Morgan Stanley Technology 557.64 +.75%
Transports 4,726.59 +.96%
Utilities 398.63 +.98%
Put/Call .84 +6.33%
NYSE Arms .81 +8.76%
Volatility(VIX) 11.13 -.09%
ISE Sentiment 167.00 +.60%
US Dollar 88.63 -.23%
CRB 336.12 +1.11%
Futures Spot Prices
Crude Oil 67.36 +.43%
Unleaded Gasoline 196.34 +.84%
Natural Gas 7.12 +.79%
Heating Oil 187.60 +.39%
Gold 593.60 +.19%
Base Metals 184.49 +2.69%
Copper 260.00 +.15%
10-year US Treasury Yield 4.84% -.42%
Leading Sectors
Homebuilders +2.91%
Semis +2.76%
Computer Hardware +2.33%
Lagging Sectors
Computer Services -.46%
Papers -.51%
Restaurants -.71%
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
UBS:
- Rated WBSN Buy, target $35.
- Rated CHKP Buy, target $23.
Afternoon/Evening Headlines
Bloomberg:
- Lawmakers critical of the Sarbanes-Oxley corporate governance law said small companies should be partially exempted from its audit requirement during the first hearing to consider revising the four-year-old statute.
- Bed Bath & Beyond(BBBY) said fourth-quarter profit rose 9.4% on sales of holiday gifts.
- Duke University men’s lacrosse coach Pressler resigned and the school canceled the team’s season amid allegations an exotic dancer was raped at a team party.
Real Estate Alert:
- A steady rise in cargo traffic at the Port Authority of NY and New Jersey has created a need for more storage space and increased property value in northern and central New Jersey by as much as 70%.
Australian Financial Review:
- Rio Tinto Group(RTP) CEO Clifford said the recent surge in uranium prices wasn’t sustainable.
S&P 500 1,311.56 +.43%
DJIA 11,239.55 +.32%
NASDAQ 2,359.75 +.61%
Russell 2000 766.26 +.52%
Wilshire 5000 13,262.75 +.45%
S&P Barra Growth 615.51 +.30%
S&P Barra Value 693.09 +.57%
Morgan Stanley Consumer 610.05 unch.
Morgan Stanley Cyclical 832.39 +.66%
Morgan Stanley Technology 557.64 +.75%
Transports 4,726.59 +.96%
Utilities 398.63 +.98%
Put/Call .84 +6.33%
NYSE Arms .81 +8.76%
Volatility(VIX) 11.13 -.09%
ISE Sentiment 167.00 +.60%
US Dollar 88.63 -.23%
CRB 336.12 +1.11%
Futures Spot Prices
Crude Oil 67.36 +.43%
Unleaded Gasoline 196.34 +.84%
Natural Gas 7.12 +.79%
Heating Oil 187.60 +.39%
Gold 593.60 +.19%
Base Metals 184.49 +2.69%
Copper 260.00 +.15%
10-year US Treasury Yield 4.84% -.42%
Leading Sectors
Homebuilders +2.91%
Semis +2.76%
Computer Hardware +2.33%
Lagging Sectors
Computer Services -.46%
Papers -.51%
Restaurants -.71%
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
UBS:
- Rated WBSN Buy, target $35.
- Rated CHKP Buy, target $23.
Afternoon/Evening Headlines
Bloomberg:
- Lawmakers critical of the Sarbanes-Oxley corporate governance law said small companies should be partially exempted from its audit requirement during the first hearing to consider revising the four-year-old statute.
- Bed Bath & Beyond(BBBY) said fourth-quarter profit rose 9.4% on sales of holiday gifts.
- Duke University men’s lacrosse coach Pressler resigned and the school canceled the team’s season amid allegations an exotic dancer was raped at a team party.
Real Estate Alert:
- A steady rise in cargo traffic at the Port Authority of NY and New Jersey has created a need for more storage space and increased property value in northern and central New Jersey by as much as 70%.
Australian Financial Review:
- Rio Tinto Group(RTP) CEO Clifford said the recent surge in uranium prices wasn’t sustainable.
BOTTOM LINE: The Portfolio finished higher today on gains in my Retail longs, Internet longs, Semi longs and Computer longs. I covered the remainder of my (IWM) and (QQQQ) shorts 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, sector performance was mostly positive and volume was above-average. Measures of investor anxiety were mixed into the close. Overall, today's market performance was mildly bullish. Homebuilding, technology and energy shares paced today's gainers. The 10-year yield finished near session lows at 4.83%, despite the market's advance, hints of a strong employment number on Friday and better-than-expected economic data today. The Nasdaq has almost all its leadership back, which bodes well for my prediction that it would substantially outperform the market during the second quarter.
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