Company/Estimate
CVNS/.12
SOL/.51
TTWO/-.14
Splits
ASD 3-for-1
ERES 3-for-2
KIND 2-for-1
Economic Data
Personal Income in April estimated +.5% versus +.4% in March.
Personal Spending in April estimated +.2% versus +.4% in March.
PCE Deflator (Y-O-Y) in April estimated +1.8% versus +1.6% in March.
University of Mich. Consumer Confidence Final May reading estimated at 94.2 versus 94.2 prior.
Chicago Purchasing Manager in May estimated at 62.0 versus 63.9 in April.
Recommendations
Goldman Sachs reiterated Outperform on BIIB, TYC and TPX. Goldman thinks FLEX will maintain upbeat tone on their mid-quarter update next Thur. TDW is undervalued at $27/share, Business Week reported. STJ shares may be poised to gain because the maker of cardiac devices could be a takeover target, Business Week reported. Napco Security's(NSSC) plan to provide a lock system to a unit of Tyco will help boost shares of the manufacturer of electronic security systems' shares, Business Week said.
Late-Night News
Asian indices are mostly higher as strength in Japanese shares boosts regional optimism. Japanese household spending rose a seasonally adjusted 9.3% from March, the largest increase since the survey began in 1975, as job growth sparked consumer spending, which makes up more than half the economy, Bloomberg reported. PETS, UTI, UOPX, MGAM and ARO topped Business Week's Hot Growth list for 2004, the magazine reported. Time Warner CEO Parsons refused to reduce stated revenue from a $400 million advertising contract with Bertelsmann AG unless outside auditors said the accounting was wrong, Business Week reported. Infineon Technologies AG may exit the computer memory-chip business to focus on making semiconductors for cars, mobile phones and other communications products, Silicon Strategies reported. Fighting in the Iraqi holy city of Najaf stopped after al-Sadr agreed with religious leaders to withdraw his militiamen, the AP reported. There have been 10 times the normal amount of tips reported to the FBI Web site since Wednesday's warning of a potential al-Qaeda attack on U.S. soil this summer, the AP reported. As many as 2,000 people may have been killed in floods and landslides caused by a week of rains in Haiti and the Dominican Republic, the AP reported. Riggs National, which was fined $25 million this month for allegedly failing to follow rules to stop money laundering, has put itself up for sale, Bloomberg reported. Exxon's purchase of Mobil and five other oil-company mergers since 1990 lifted U.S. gas prices an average of one or two cents a gallon, the U.S. General Accounting Office said. The average sale price for a home in the Hamptons rose 29% to an all-time high of $1.1 million in the first quarter as Wall Street bonuses rebound, Bloomberg reported.
Late-Night Trading
Asian Indices -.50% to +1.25% on average.
S&P 500 indicated -.02%.
NASDAQ indicated -.07%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on strength in Asia and U.S. semiconductor shares. I continue to believe that the economic news from Japan, the world's second largest economy, is very positive and underreported. The Iraq situation is getting a lot better, energy prices are dropping and interest rates are falling. These are all surprisingly positive recent developments which should provide the catalysts for the major U.S. indices to continue to rally in the near-term, barring a significant terrorist attack. The Portfolio is 125% net long heading into trading tomorrow.
Friday, May 28, 2004
Thursday, May 27, 2004
Thursday Close
S&P 500 1,121.26 +.57%
NASDAQ 1,984.50 +.42%
Leading Sectors
Iron/Steel +2.40%
Wireless +1.65%
Telecom +1.38%
Lagging Sectors
Gaming -.71%
Energy -1.40%
Oil Service -2.17%
Other
Crude Oil 39.12 -.81%
Natural Gas 6.52 -.75%
Gold 3395.50 +.15%
Base Metals 108.16 +1.36%
U.S. Dollar 88.64 -1.28%
10-Yr. T-note Yield 4.59% -1.22%
VIX 15.28 -4.32%
Put/Call .93 -7.0%
NYSE Arms .81 -27.68%
After-hours Movers
BCSI -17.9% after missing 4Q estimates and lowering 1Q forecast.
DITC +5.78% after beating 4Q estimates and raising 4Q guidance.
NVLS +4.0% after raising 2Q forecast substantially.
Recommendations
Jim Cramer, of TheStreet.com, thinks oil may sell-off hard as we are winning the war in Iraq. He says the sell-off in the Oil Service index(OSX) confirms this view.
After-hours News
U.S. stocks finished higher Thursday as declining energy prices and interest rates led to an afternoon rally. Stocks were also buoyed by a government report that showed the biggest increase in corporate profits in two decades and faster first-quarter U.S. economic growth than earlier reported. After the close, U.S. officials said they may have found two more shells armed with mustard gas in Iraq, CNN reported. National City is trying to sell its majority stake in a unit that processes credit and debit-card transactions, Bloomberg said. Bob Stansky, manager of the $65 billion Fidelity Magellan Fund, increased the fund's holdings of technology companies over the past six months, Bloomberg reported. The Fund took new positions in Apple Computer, Scientific Atlanta and SAP AG, Bloomberg said.
BOTTOM LINE: The Portfolio had a very good day today as a few of my internet and semiconductor long positions rose substantially in the afternoon. I did not trade today and the Portfolio is still 125% net long. Falling oil prices and interest rates, combined with a relatively high put/call ratio, should result in a better rally over the next few trading sessions, barring a significant terrorist attack over the weekend. The fact that U.S. corporate profits rose 31.6% in the first quarter, the best since 1984, bodes well for continued employment gains and thus corporate spending on technology. I continue to expect technology stocks to Outperform in the second half of the year.
NASDAQ 1,984.50 +.42%
Leading Sectors
Iron/Steel +2.40%
Wireless +1.65%
Telecom +1.38%
Lagging Sectors
Gaming -.71%
Energy -1.40%
Oil Service -2.17%
Other
Crude Oil 39.12 -.81%
Natural Gas 6.52 -.75%
Gold 3395.50 +.15%
Base Metals 108.16 +1.36%
U.S. Dollar 88.64 -1.28%
10-Yr. T-note Yield 4.59% -1.22%
VIX 15.28 -4.32%
Put/Call .93 -7.0%
NYSE Arms .81 -27.68%
After-hours Movers
BCSI -17.9% after missing 4Q estimates and lowering 1Q forecast.
DITC +5.78% after beating 4Q estimates and raising 4Q guidance.
NVLS +4.0% after raising 2Q forecast substantially.
Recommendations
Jim Cramer, of TheStreet.com, thinks oil may sell-off hard as we are winning the war in Iraq. He says the sell-off in the Oil Service index(OSX) confirms this view.
After-hours News
U.S. stocks finished higher Thursday as declining energy prices and interest rates led to an afternoon rally. Stocks were also buoyed by a government report that showed the biggest increase in corporate profits in two decades and faster first-quarter U.S. economic growth than earlier reported. After the close, U.S. officials said they may have found two more shells armed with mustard gas in Iraq, CNN reported. National City is trying to sell its majority stake in a unit that processes credit and debit-card transactions, Bloomberg said. Bob Stansky, manager of the $65 billion Fidelity Magellan Fund, increased the fund's holdings of technology companies over the past six months, Bloomberg reported. The Fund took new positions in Apple Computer, Scientific Atlanta and SAP AG, Bloomberg said.
BOTTOM LINE: The Portfolio had a very good day today as a few of my internet and semiconductor long positions rose substantially in the afternoon. I did not trade today and the Portfolio is still 125% net long. Falling oil prices and interest rates, combined with a relatively high put/call ratio, should result in a better rally over the next few trading sessions, barring a significant terrorist attack over the weekend. The fact that U.S. corporate profits rose 31.6% in the first quarter, the best since 1984, bodes well for continued employment gains and thus corporate spending on technology. I continue to expect technology stocks to Outperform in the second half of the year.
Mid-day Update
S&P 500 1,116.67 +.16%
NASDAQ 1,972.22 -.20%
Leading Sectors
Iron/Steel +1.38%
Wireless +1.09%
Fashion +.98%
Lagging Sectors
Disk Drives -1.04%
Energy -1.44%
Oil Service -2.22%
Other
Crude Oil 39.62 -2.65%
Natural Gas 6.59 -2.11%
Gold 394.50 +1.60%
Base Metals 107.60 +.83%
U.S. Dollar 88.74 -1.17%
10-Yr. T-note Yield 4.59% -1.31%
VIX 15.77 -1.25%
Put/Call .98 -2.0%
NYSE Arms .97 -13.39%
Market Movers
SEBL +7.83% on circulation of an IDC research report that says sales of CRM software subscriptions are expected to rise 16.6% annually through 2008.
NAVR +14.1% on strong 4Q results and 05 outlook.
MIK +8.8% after beating 1Q earnings estimates, raising 04 guidance and multiple upgrades.
TECD +10.2% after beating 1Q estimates substantially, raising 2Q guidance and Raymond James upgrade to Strong Buy.
DLTR +8.78% after beating 1Q estimate and re-affirming 2Q/04 forecast.
MANT -30.3% after lowering 2Q and 04 forecast.
STAR -12.4% after cutting 2Q forecast on higher boxed beef prices.
CAI -10.3% after disclosing the U.S. government is investigating whether its interrogators broke the rules in Iraq.
Economic Data
Preliminary 1Q GDP came in at 4.4% versus expectations of 4.5% and 4.2% prior.
Preliminary 1Q Personal Consumption was 3.9%, meeting expectations and up from 3.8% prior.
Preliminary 1Q GDP Price Deflator was 2.6% versus expectations of 2.5% and 2.5% prior.
Initial Jobless Claims for last week were 344K versus expectations of 335K and 347K prior week.
Continuing Claims 2948K versus 2923K estimate and 2929K prior.
Recommendations
KO raised to Buy at UBS. ATVI rated Buy at Wells Fargo. JDAS raised to Sector Outperform at CIBC, target $16. VAST cut to Sector Underperform at CIBC. AM rated Overweight at JP Morgan. PRU raised to Overweight at Morgan Stanley, target $52. CTS rated Outperform at Thomas Weisel. FRX raised to Outperform at Thomas Weisel. XPRT raised to Buy at Legg Mason, target $23. MLNM raised to Buy at Deutsche Bank. KSS raised to Buy at Bank of America, target $55. WDC rated Outperform at CSFB, target $12. BBT cut to Underperform at Bear Stearns. BCII rated Outperform at Bear Stearns. TECD raised to Strong Buy at Raymond James, target $48. Goldman reiterated Outperform on BSX, GDT, MDT, TYC, HOT, XOM and ENH. Citi SmithBarney said that managements from AV, JNPR and EXTR appeared confident about 2Q business on their West Coast Data Networking Bus Tour. Citi came away from TLAB investor day thinking the position of its core biz is not as tenuous as once believed and that its revenue and cost synergy guidance from the AFCI purchase was conservative across the board. Citi upgraded AZO to Buy, target $98. Citi reiterated Buy on MER, target $80. Citi reiterated Buy on CELG, target $75. Citi rated AMLN, target $31. Citi reiterated Buy on GTIV, target $22. Citi reiterated Buy on VIAB, target $54. Citi reiterated Buy on TLAB, target $11. Citi reiterated Sell on TECD, target $36.
Mid-day News
U.S. stocks are mixed mid-day as falling energy prices and interest rates are offset by terror concerns and weaker-than-expected economic data. Wall Street underwriters' price cuts on recent initial public share offerings reflect weakness in the IPO market, the Wall Street Journal reported. U.S. health insurance premiums may increase at a slower rate this year as few people are hospitalized or are prescribed expensive drugs, the New York Times said. An al-Qaeda leader in Saudi Arabia today called for a guerrilla war in the kingdom's cities as part of a campaign against the country's royal family, Reuters reported. Senator Kerry is being challenged by an increasing number of Democrats who are calling for the U.S. to set a deadline to withdraw troops from Iraq, the LA Times reported. California lawmakers have approved several bills this week that sanction importing drugs from Canada, the LA Times reported. Crude oil futures fell for a third day in London on expectations OPEC will raise production quotas next week to lower prices, Bloomberg said. The U.S. economy grew a brisk 4.4% in the first quarter as businesses replenished inventories, government spending rose and home construction accelerated. Corporate profits jumped 31.6% in the year ended in March, the biggest increase since the first quarter of 1984, Bloomberg reported. The personal consumption expenditures price index excluding food and energy, a favorite Greenspan inflation indicator, rose a less-than-expected 1.7%.
BOTTOM LINE: The Portfolio is down slightly today on weakness in my tech long positions. I have not traded and the Portfolio is still 125% net long. I expect stock gains to remain subdued today, as nervousness over a weekend terror attack persists. I believe the recent fall in interest rates and oil will provide the catalysts for another upward move in the major U.S. indices next week. As investors focus more on skyrocketing corporate profits and less on inflation, stocks should benefit.
NASDAQ 1,972.22 -.20%
Leading Sectors
Iron/Steel +1.38%
Wireless +1.09%
Fashion +.98%
Lagging Sectors
Disk Drives -1.04%
Energy -1.44%
Oil Service -2.22%
Other
Crude Oil 39.62 -2.65%
Natural Gas 6.59 -2.11%
Gold 394.50 +1.60%
Base Metals 107.60 +.83%
U.S. Dollar 88.74 -1.17%
10-Yr. T-note Yield 4.59% -1.31%
VIX 15.77 -1.25%
Put/Call .98 -2.0%
NYSE Arms .97 -13.39%
Market Movers
SEBL +7.83% on circulation of an IDC research report that says sales of CRM software subscriptions are expected to rise 16.6% annually through 2008.
NAVR +14.1% on strong 4Q results and 05 outlook.
MIK +8.8% after beating 1Q earnings estimates, raising 04 guidance and multiple upgrades.
TECD +10.2% after beating 1Q estimates substantially, raising 2Q guidance and Raymond James upgrade to Strong Buy.
DLTR +8.78% after beating 1Q estimate and re-affirming 2Q/04 forecast.
MANT -30.3% after lowering 2Q and 04 forecast.
STAR -12.4% after cutting 2Q forecast on higher boxed beef prices.
CAI -10.3% after disclosing the U.S. government is investigating whether its interrogators broke the rules in Iraq.
Economic Data
Preliminary 1Q GDP came in at 4.4% versus expectations of 4.5% and 4.2% prior.
Preliminary 1Q Personal Consumption was 3.9%, meeting expectations and up from 3.8% prior.
Preliminary 1Q GDP Price Deflator was 2.6% versus expectations of 2.5% and 2.5% prior.
Initial Jobless Claims for last week were 344K versus expectations of 335K and 347K prior week.
Continuing Claims 2948K versus 2923K estimate and 2929K prior.
Recommendations
KO raised to Buy at UBS. ATVI rated Buy at Wells Fargo. JDAS raised to Sector Outperform at CIBC, target $16. VAST cut to Sector Underperform at CIBC. AM rated Overweight at JP Morgan. PRU raised to Overweight at Morgan Stanley, target $52. CTS rated Outperform at Thomas Weisel. FRX raised to Outperform at Thomas Weisel. XPRT raised to Buy at Legg Mason, target $23. MLNM raised to Buy at Deutsche Bank. KSS raised to Buy at Bank of America, target $55. WDC rated Outperform at CSFB, target $12. BBT cut to Underperform at Bear Stearns. BCII rated Outperform at Bear Stearns. TECD raised to Strong Buy at Raymond James, target $48. Goldman reiterated Outperform on BSX, GDT, MDT, TYC, HOT, XOM and ENH. Citi SmithBarney said that managements from AV, JNPR and EXTR appeared confident about 2Q business on their West Coast Data Networking Bus Tour. Citi came away from TLAB investor day thinking the position of its core biz is not as tenuous as once believed and that its revenue and cost synergy guidance from the AFCI purchase was conservative across the board. Citi upgraded AZO to Buy, target $98. Citi reiterated Buy on MER, target $80. Citi reiterated Buy on CELG, target $75. Citi rated AMLN, target $31. Citi reiterated Buy on GTIV, target $22. Citi reiterated Buy on VIAB, target $54. Citi reiterated Buy on TLAB, target $11. Citi reiterated Sell on TECD, target $36.
Mid-day News
U.S. stocks are mixed mid-day as falling energy prices and interest rates are offset by terror concerns and weaker-than-expected economic data. Wall Street underwriters' price cuts on recent initial public share offerings reflect weakness in the IPO market, the Wall Street Journal reported. U.S. health insurance premiums may increase at a slower rate this year as few people are hospitalized or are prescribed expensive drugs, the New York Times said. An al-Qaeda leader in Saudi Arabia today called for a guerrilla war in the kingdom's cities as part of a campaign against the country's royal family, Reuters reported. Senator Kerry is being challenged by an increasing number of Democrats who are calling for the U.S. to set a deadline to withdraw troops from Iraq, the LA Times reported. California lawmakers have approved several bills this week that sanction importing drugs from Canada, the LA Times reported. Crude oil futures fell for a third day in London on expectations OPEC will raise production quotas next week to lower prices, Bloomberg said. The U.S. economy grew a brisk 4.4% in the first quarter as businesses replenished inventories, government spending rose and home construction accelerated. Corporate profits jumped 31.6% in the year ended in March, the biggest increase since the first quarter of 1984, Bloomberg reported. The personal consumption expenditures price index excluding food and energy, a favorite Greenspan inflation indicator, rose a less-than-expected 1.7%.
BOTTOM LINE: The Portfolio is down slightly today on weakness in my tech long positions. I have not traded and the Portfolio is still 125% net long. I expect stock gains to remain subdued today, as nervousness over a weekend terror attack persists. I believe the recent fall in interest rates and oil will provide the catalysts for another upward move in the major U.S. indices next week. As investors focus more on skyrocketing corporate profits and less on inflation, stocks should benefit.
Wednesday, May 26, 2004
Thursday Watch
Earnings of Note
Company/Estimate
BCSI/.23
CHS/.39
DITC/.20
DG/.20
QSII/.40
SHFL/.19
Splits
ANN 3-for-2
Economic Data
Preliminary Gross Domestic Product for 1Q estimated at 4.5% versus 4.2% prior.
Preliminary Personal Consumption for 1Q estimated at 3.9% versus 3.8% prior.
Preliminary GDP Price Deflator for 1Q estimated at 2.5% versus 2.5% prior.
Initial Jobless Claims for last week estimated at 335K versus 345K prior week.
Continuing Claims estimated at 2925K versus 2943K prior.
Help Wanted Index for April estimated at 41 versus 39 in March.
Recommendations
Goldman Sachs reiterated Outperform on CYT, TYC, HD and BBY. Goldman reiterated Outperform on Lodging sector. Goldman reiterated Underperform on PSSI.
Late-Night News
Asian indices are mostly on strength in Hong Kong and Korea. Airbus SAS forecasts the number of daily flight and aircraft in Asia-Pacific will double in the next two decades, propelling the region past the U.S. as the world's busiest, the Australian newspaper reported. Disney may abandon the sale of its European retail stores, worth $181.24 million, after talks with 2 bidders collapsed, the London-based Times said. Greece will shoot down any aircraft trying to target the Olympic Games being held in Athens in August, the BBC said. al-Sadr offered to withdraw his forces from Najaf and hand the holy city over to Iraqi police, the AP reported. Nokia may get a $250 million order from Bharti Tele-Ventures to operate and maintain some cellular phone networks, the Economic Times reported. Shanghai, China's largest city, is replacing hundreds of thousands of iron manhole covers with concrete and plastic ones after a 57% rise in scrap steel prices encouraged thieves to steal about 1,800 of the lids, Bloomberg reported.
Late-Night Trading
Asian Indices -.25% to +2.0% on average.
S&P 500 indicated -.04%.
NASDAQ indicated -.03%.
BOTTOM LINE: I expect U.S. stocks to open lower after stronger-than-expected GDP and Price Deflator reports send interest rates higher. However, stocks should firm up later in the day on weakening oil prices and short-covering. I do not expect another significant rally until after the holiday weekend. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
BCSI/.23
CHS/.39
DITC/.20
DG/.20
QSII/.40
SHFL/.19
Splits
ANN 3-for-2
Economic Data
Preliminary Gross Domestic Product for 1Q estimated at 4.5% versus 4.2% prior.
Preliminary Personal Consumption for 1Q estimated at 3.9% versus 3.8% prior.
Preliminary GDP Price Deflator for 1Q estimated at 2.5% versus 2.5% prior.
Initial Jobless Claims for last week estimated at 335K versus 345K prior week.
Continuing Claims estimated at 2925K versus 2943K prior.
Help Wanted Index for April estimated at 41 versus 39 in March.
Recommendations
Goldman Sachs reiterated Outperform on CYT, TYC, HD and BBY. Goldman reiterated Outperform on Lodging sector. Goldman reiterated Underperform on PSSI.
Late-Night News
Asian indices are mostly on strength in Hong Kong and Korea. Airbus SAS forecasts the number of daily flight and aircraft in Asia-Pacific will double in the next two decades, propelling the region past the U.S. as the world's busiest, the Australian newspaper reported. Disney may abandon the sale of its European retail stores, worth $181.24 million, after talks with 2 bidders collapsed, the London-based Times said. Greece will shoot down any aircraft trying to target the Olympic Games being held in Athens in August, the BBC said. al-Sadr offered to withdraw his forces from Najaf and hand the holy city over to Iraqi police, the AP reported. Nokia may get a $250 million order from Bharti Tele-Ventures to operate and maintain some cellular phone networks, the Economic Times reported. Shanghai, China's largest city, is replacing hundreds of thousands of iron manhole covers with concrete and plastic ones after a 57% rise in scrap steel prices encouraged thieves to steal about 1,800 of the lids, Bloomberg reported.
Late-Night Trading
Asian Indices -.25% to +2.0% on average.
S&P 500 indicated -.04%.
NASDAQ indicated -.03%.
BOTTOM LINE: I expect U.S. stocks to open lower after stronger-than-expected GDP and Price Deflator reports send interest rates higher. However, stocks should firm up later in the day on weakening oil prices and short-covering. I do not expect another significant rally until after the holiday weekend. The Portfolio is 125% net long heading into tomorrow.
Wednesday Close
S&P 500 1,114.94 +.17%
NASDAQ 1,976.15 +.59%
Leading Sectors
Disk Drives +1.65%
Networking +1.47%
Biotech +1.35%
Lagging Sectors
Homebuilders -1.16%
Telecom -1.54%
Oil Service -1.73%
Other
Crude Oil 40.57 -.32%
Natural Gas 6.70 -.48%
Gold 388.40 +.03%
Base Metals 106.71 +1.09%
U.S. Dollar 89.79 -.04%
10-Yr. T-note Yield 4.65% -1.38%
VIX 15.97 +.06%
Put/Call 1.00 +16.28%
NYSE Arms 1.12 +88.67%
After-hours Movers
TECD +6.21% after beating 1Q estimates substantially and raising 2Q guidance.
DLTR +5.80% after beating 1Q estimate and re-affirming 2Q/04 forecast.
Recommendations
Goldman Sachs said day 2 of Steel Conference solidified positive outlook for the sector, favorite is NUE. Goldman reiterated Outperform on AMLN.
After-hours News
U.S. stocks finished mostly higher Wednesday as falling oil prices and interest rates offset terrorism concerns and weaker-than-expected economic reports. After the close, U.S. Senator Feinstein asked for a safety review of a malaria drug made by Roche Holding AG after six American soldiers who were given the medicine suffered brain damage, UPI reported. Softbank tentatively agreed to buy a controlling stake in Japan Telecom for $2.68 billion from Ripplewood Holdings, a NY-based investment firm, Nikkei News reported. The Sudanese government signed a series of agreements with the country's main rebel group aimed at ending more than two decades of civil war that has killed more than 1.5 million people, Bloomberg said. Fox Broadcasting may take in about $40 million in advertising sales from tonight's two-hour finale of "American Idol," Bloomberg reported. Thousands of men over age 60 who are told that they don't have prostate cancer based on blood tests may have undetected diseases, including advanced tumors, according to a study in the May 27 New England Journal of Medicine, Bloomberg reported. Senator Kerry will accept his party's nomination in July in Boston rather than wait in order to avoid federal election spending limits, Bloomberg reported.
BOTTOM LINE: The Portfolio had a good day today and I made a few changes in the afternoon. I took substantial profits in a few of my internet and Chinese ADR longs. I then added several telecom equipment and biotech longs, leaving the Portfolio with 125% net long market exposure. ARRS is one of my new longs and I am using a $5.00 stop-loss on the position. I expect stocks to continue to consolidate recent gains in the very near-term on higher-than-expected inflation data, however the rally should resume on Tuesday barring any significant terror acts over the holiday weekend.
NASDAQ 1,976.15 +.59%
Leading Sectors
Disk Drives +1.65%
Networking +1.47%
Biotech +1.35%
Lagging Sectors
Homebuilders -1.16%
Telecom -1.54%
Oil Service -1.73%
Other
Crude Oil 40.57 -.32%
Natural Gas 6.70 -.48%
Gold 388.40 +.03%
Base Metals 106.71 +1.09%
U.S. Dollar 89.79 -.04%
10-Yr. T-note Yield 4.65% -1.38%
VIX 15.97 +.06%
Put/Call 1.00 +16.28%
NYSE Arms 1.12 +88.67%
After-hours Movers
TECD +6.21% after beating 1Q estimates substantially and raising 2Q guidance.
DLTR +5.80% after beating 1Q estimate and re-affirming 2Q/04 forecast.
Recommendations
Goldman Sachs said day 2 of Steel Conference solidified positive outlook for the sector, favorite is NUE. Goldman reiterated Outperform on AMLN.
After-hours News
U.S. stocks finished mostly higher Wednesday as falling oil prices and interest rates offset terrorism concerns and weaker-than-expected economic reports. After the close, U.S. Senator Feinstein asked for a safety review of a malaria drug made by Roche Holding AG after six American soldiers who were given the medicine suffered brain damage, UPI reported. Softbank tentatively agreed to buy a controlling stake in Japan Telecom for $2.68 billion from Ripplewood Holdings, a NY-based investment firm, Nikkei News reported. The Sudanese government signed a series of agreements with the country's main rebel group aimed at ending more than two decades of civil war that has killed more than 1.5 million people, Bloomberg said. Fox Broadcasting may take in about $40 million in advertising sales from tonight's two-hour finale of "American Idol," Bloomberg reported. Thousands of men over age 60 who are told that they don't have prostate cancer based on blood tests may have undetected diseases, including advanced tumors, according to a study in the May 27 New England Journal of Medicine, Bloomberg reported. Senator Kerry will accept his party's nomination in July in Boston rather than wait in order to avoid federal election spending limits, Bloomberg reported.
BOTTOM LINE: The Portfolio had a good day today and I made a few changes in the afternoon. I took substantial profits in a few of my internet and Chinese ADR longs. I then added several telecom equipment and biotech longs, leaving the Portfolio with 125% net long market exposure. ARRS is one of my new longs and I am using a $5.00 stop-loss on the position. I expect stocks to continue to consolidate recent gains in the very near-term on higher-than-expected inflation data, however the rally should resume on Tuesday barring any significant terror acts over the holiday weekend.
Mid-day Update
S&P 500 1,114.11 +.10%
NASDAQ 1,969.28 +.24%
Leading Sectors
Disk Drives +1.48%
Networking +1.17%
Biotech +1.05%
Lagging Sectors
Telecom -1.24%
Oil Service -1.29%
Homebuilders -1.30%
Other
Crude Oil 41.20 +.15%
Natural Gas 6.66 -.36%
Gold 388.00 -.13%
Base Metals 106.71 +1.09%
U.S. Dollar 89.79 -.04%
10-Yr. T-note Yield 4.68% -.67%
VIX 15.92 -.25%
Put/Call .95 +10.47%
NYSE Arms 1.01 +68.33%
Market Movers
TIVO +5.42% after beating 1Q estimates and raising 2Q guidance.
BSX +5.8% after announcing more positive data from its Taxus VI clinical trial.
MAGS +20.25% on continued optimism over a Homeland Security contract.
CPRT +18.58% after beating 3Q estimates substantially.
EYET +15.57% after saying the FDA scheduled a meeting in August to discuss its Macugen treatment for age-related macular degeneration.
FNF +6.96% after saying it filed with the SEC to sell shares of its mortgage-processing and data-services unit to the public and spin it off.
SNIC +10.31% after saying that Toshiba had chosen it to bundle RecordNow! with its entire line of PCs worldwide and to include PrimeTime DVD burning in all of its Windows XP Media Center edition PCs.
APSG +9.69% after beating 2Q estimates substantially.
TSA -4.71% after missing 1Q estimates, but boosting 04 guidance.
DRIV -5.89% after announcing $175 million convertible senior note offering.
Economic Data
Durable Goods Orders for April -2.9% versus expectations of -.9% and +5.7% in March.
Durable Goods Less Transportation for April -2.1% versus expectations of -1.0% and +6.3% in March.
New Home Sales in April were 1093K versus expectations of 1200K and 1239K in March.
Recommendations
BOW raised to Buy at UBS, target $52. AMSG raised to Buy at UBS, target $30. USPI rated Buy at UBS. QLTY raised to Buy at Legg Mason, target $14. UHS rated Outperform at Bear Stearns. Goldman Sachs reiterated Outperform on CLX, IP, WFC, AIG, GDT and EMC. Goldman said cell-tower stocks should continue to move higher as it is becoming increasingly clear that carriers are going to move more aggressively to 3G. Goldman still positive on Gold, target $445/oz next 12 months. Goldman reiterated Underperform on F and VTS. Citi SmithBarney said to Buy YHOO, target $33, ahead of quarterly reported. Citi upgraded LLY to Buy, target $82. Citi reiterated Buy on LXK, target $110. Citi reiterated Buy on CSCO, target $34. Citi reiterated Buy on BEAS, target $13. Citi reiterated Buy on TGT, target $50. Jim Cramer, of TheStreet.com, has a positive column on cable stocks, saying VOIP will make them huge winners.
Mid-day News
U.S. stocks are mixed mid-day as falling interest rates and stabilizing energy prices boost some shares, offsetting fears over holiday terrorism and weaker-than-expected economic reports. Optimism among German exporters rose to the highest since January 2001 in May as growth in the U.S., Asia and Europe boosts foreign demand and a weaker euro makes their goods cheaper abroad, according to a survey by the Ifo economic institute. The U.S. will outline anti-terrorism measures the government is planning after intelligence reports said al-Qaeda may attack on U.S. soil in coming months, Bloomberg reported. GM has added Caterpillar to the list of companies that may buy its locomotive-manufacturing division, the Detroit Free Press reported. Harvey Pitt, former chairman of the SEC, told CNBC that New York Attorney General Eliot Spitzer's lawsuit against Grasso isn't an "effective use of anyone's time," Bloomberg reported. A unit of PetroChina, China's biggest oil producer, found more than 400 million metric tons of crude oil in a deposit in the country's northwestern province of Gansu, China Central TV reported. U.K. Prime Minister Tony Blair said he and U.S. President Bush are "absolutely agreed" that sovereignty in Iraq will be transferred to a new government and coalition troops will remain under U.S. Command, Bloomberg said. U.S. sales of new houses fell 11.8% in April, the biggest monthly drop in more than a decade, as mortgage rates rose and prices soared to a record, Bloomberg reported. Comcast plans to offer digital phone service to almost all its customers by the end of 2006, CEO Brian Roberts said.
BOTTOM LINE: The Portfolio is having a good day today and I have not traded, leaving market exposure at 125% net long. I expect stocks to rise slightly after Ashcroft's speech at 2 est. However, some profit-taking could occur later on before the holiday weekend on terrorism fears. The market is holding up very well today considering the news and yesterday's large gain. I would not want to be short on Tue., barring any significant terror act. Biotechs look like they could outperform over the next week as a major cancer meeting(ASCO) begins June 4th and lasts through June 8th. Positive news should benefit DNA, OSIP, AMGN and ABGX. BBH is a conservative way to play the sector.
NASDAQ 1,969.28 +.24%
Leading Sectors
Disk Drives +1.48%
Networking +1.17%
Biotech +1.05%
Lagging Sectors
Telecom -1.24%
Oil Service -1.29%
Homebuilders -1.30%
Other
Crude Oil 41.20 +.15%
Natural Gas 6.66 -.36%
Gold 388.00 -.13%
Base Metals 106.71 +1.09%
U.S. Dollar 89.79 -.04%
10-Yr. T-note Yield 4.68% -.67%
VIX 15.92 -.25%
Put/Call .95 +10.47%
NYSE Arms 1.01 +68.33%
Market Movers
TIVO +5.42% after beating 1Q estimates and raising 2Q guidance.
BSX +5.8% after announcing more positive data from its Taxus VI clinical trial.
MAGS +20.25% on continued optimism over a Homeland Security contract.
CPRT +18.58% after beating 3Q estimates substantially.
EYET +15.57% after saying the FDA scheduled a meeting in August to discuss its Macugen treatment for age-related macular degeneration.
FNF +6.96% after saying it filed with the SEC to sell shares of its mortgage-processing and data-services unit to the public and spin it off.
SNIC +10.31% after saying that Toshiba had chosen it to bundle RecordNow! with its entire line of PCs worldwide and to include PrimeTime DVD burning in all of its Windows XP Media Center edition PCs.
APSG +9.69% after beating 2Q estimates substantially.
TSA -4.71% after missing 1Q estimates, but boosting 04 guidance.
DRIV -5.89% after announcing $175 million convertible senior note offering.
Economic Data
Durable Goods Orders for April -2.9% versus expectations of -.9% and +5.7% in March.
Durable Goods Less Transportation for April -2.1% versus expectations of -1.0% and +6.3% in March.
New Home Sales in April were 1093K versus expectations of 1200K and 1239K in March.
Recommendations
BOW raised to Buy at UBS, target $52. AMSG raised to Buy at UBS, target $30. USPI rated Buy at UBS. QLTY raised to Buy at Legg Mason, target $14. UHS rated Outperform at Bear Stearns. Goldman Sachs reiterated Outperform on CLX, IP, WFC, AIG, GDT and EMC. Goldman said cell-tower stocks should continue to move higher as it is becoming increasingly clear that carriers are going to move more aggressively to 3G. Goldman still positive on Gold, target $445/oz next 12 months. Goldman reiterated Underperform on F and VTS. Citi SmithBarney said to Buy YHOO, target $33, ahead of quarterly reported. Citi upgraded LLY to Buy, target $82. Citi reiterated Buy on LXK, target $110. Citi reiterated Buy on CSCO, target $34. Citi reiterated Buy on BEAS, target $13. Citi reiterated Buy on TGT, target $50. Jim Cramer, of TheStreet.com, has a positive column on cable stocks, saying VOIP will make them huge winners.
Mid-day News
U.S. stocks are mixed mid-day as falling interest rates and stabilizing energy prices boost some shares, offsetting fears over holiday terrorism and weaker-than-expected economic reports. Optimism among German exporters rose to the highest since January 2001 in May as growth in the U.S., Asia and Europe boosts foreign demand and a weaker euro makes their goods cheaper abroad, according to a survey by the Ifo economic institute. The U.S. will outline anti-terrorism measures the government is planning after intelligence reports said al-Qaeda may attack on U.S. soil in coming months, Bloomberg reported. GM has added Caterpillar to the list of companies that may buy its locomotive-manufacturing division, the Detroit Free Press reported. Harvey Pitt, former chairman of the SEC, told CNBC that New York Attorney General Eliot Spitzer's lawsuit against Grasso isn't an "effective use of anyone's time," Bloomberg reported. A unit of PetroChina, China's biggest oil producer, found more than 400 million metric tons of crude oil in a deposit in the country's northwestern province of Gansu, China Central TV reported. U.K. Prime Minister Tony Blair said he and U.S. President Bush are "absolutely agreed" that sovereignty in Iraq will be transferred to a new government and coalition troops will remain under U.S. Command, Bloomberg said. U.S. sales of new houses fell 11.8% in April, the biggest monthly drop in more than a decade, as mortgage rates rose and prices soared to a record, Bloomberg reported. Comcast plans to offer digital phone service to almost all its customers by the end of 2006, CEO Brian Roberts said.
BOTTOM LINE: The Portfolio is having a good day today and I have not traded, leaving market exposure at 125% net long. I expect stocks to rise slightly after Ashcroft's speech at 2 est. However, some profit-taking could occur later on before the holiday weekend on terrorism fears. The market is holding up very well today considering the news and yesterday's large gain. I would not want to be short on Tue., barring any significant terror act. Biotechs look like they could outperform over the next week as a major cancer meeting(ASCO) begins June 4th and lasts through June 8th. Positive news should benefit DNA, OSIP, AMGN and ABGX. BBH is a conservative way to play the sector.
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