S&P 500 1,121.55 -.60%
NASDAQ 1,895.79 -1.02%
Leading Sectors
Oil Service +1.39%
HMO's +.78%
Broadcasting +.40%
Lagging Sectors
Telecom -1.70%
Networking -2.72%
Semis -3.15%
Other
Crude Oil 44.83 +.99%
Natural Gas 4.86 -1.38%
Gold 406.50 -.25%
Base Metals 108.78 +.58%
U.S. Dollar 89.24 +.88%
10-Yr. T-note Yield 4.15% +.70%
VIX 14.46 +6.64%
Put/Call 1.0 +26.58%
NYSE Arms 1.65 +96.43%
Market Movers
TASR +19.0% after U.K./Wales approval of its stun gun for police use and the availability on its web site of the consumer version.
KO -4.33% after lowering 2nd-Half forecast.
XLNX -6.06% after cutting 2Q forecast and Wachovia downgrade to Market Perform.
AMZ +37.3% after PacifiCare Health Systems(PHS) said it agreed to buy it for $502 million. PHS +5.3%.
CYBX +23.2% after Advanced Neuromodulation Systems(ANSI) said it is prepared to offer $520 million in cash and stock to buy the company.
BBY +5.09% after meeting 2Q estimates and re-affirming 05 outlook.
CLS -12.4% after cutting 3Q estimates and multiple downgrades.
BHE -8.56% on CLS news.
Economic Data
Empire Manufacturing for September rose to 28.34 versus estimates of 20.0 and a reading of 13.22 in August.
Business Inventories for July rose .9% versus estimates of a .8% increase and a 1.1% gain in June.
Industrial Production for August rose .1% versus estimates of a .5% gain and a .6% increase in July.
Capacity Utilization for August was 77.3% versus estimates of 77.4% and 77.3% in July.
Recommendations
Goldman Sachs reiterated Outperform on SYMC, DELL, EMC, DD, HD, YHOO, INTC, AMD, BBY, COH, LIZ, FCE, KO, KRB, GDT and IBM. Goldman reiterated Underperform on RAI, RNWK, FRX and PSS. Goldman lowered Computer Hardware and Software industries to Neutral from Attractive. Citi SmithBarney reiterated Buy on AFC, target $36. NVDA cut to Reduce at UBS, target $11. ADTN rated Buy at Deutsche Bank, target $30. FFIV rated Buy at Deutsche Bank, target $33. SONC rated Sector Outperform at CIBC, target $28. RFMD rated Underperform at CSFB, target $5.0. UTX raised to Overweight at JP Morgan. TSO raised to Overweight at Prudential, target $25. LABS rated Buy at Bank of America, target $35. PSUN raised to Buy at Bank of America, target $26. MIL rated Buy at Bank of America, target $57. Morgan Stanley lowered Auto and Auto Parts industries to Cautious from In-Line. STLD rated Buy at Merrill, target $45. KIND rated Buy at Merrill Lynch, target $31.
Mid-day News
U.S. stocks are lower mid-day as technology stocks give back some of their recent gains. CBS News, a unit of Viacom, may damage its credibility if documents it used in a report related to President Bush's National Guard service prove to be forgeries, the Wall Street Journal said. China's government will crack down harder on corruption and abuse of power among government officials, China Central tv said. Gander Mountain executives and directors have bought shares of the sporting-goods retailer following the company's IPO in April, the Wall Street Journal reported. Amazon.com is developing a search engine the company says will be more sophisticated than Google's, the NY Times reported. The number of Sudanese dying in the country's Darfur region from disease and violence is between 6,000 and 10,000 a month, the Washington Post reported. The median price of a home in Los Angeles County rose 20.4% from a year earlier, the LA Times reported. Tommy Hilfiger plans to snap up as many as five European brands to fuel growth in the region, Handelsblatt reported. A federal appeals court yesterday rejected a motion by the plaintiff in the Supreme Court's 1973 Roe v. Wade case to overturn the landmark ruling that legalized abortion in the U.S., the Dallas Morning News said. OPEC plans to boost quotas by 3.8% in a bid to lower near-record prices, said oil officials from Kuwait and Qatar, Bloomberg reported. Manufacturing in New York state grew at a faster-than-expected pace this month as rising orders and sales led to more hiring, Bloomberg reported. National Hockey League owners meet in New York today and may authorize a lockout of players if the parties fail to reach a new labor agreement before midnight, Bloomberg said. U.S. industrial production rose less-than-expected in August as the manufacture of business equipment slipped, mining output dropped, and utility production fell "significantly," Bloomberg reported. Jacob Goldfield, CIO for George Soros's flagship $8.3 billion hedge fund, resigned to start his own money management group, Bloomberg reported. The growth of Linux is being threatened by a $50 billion lawsuit against IBM, Bloomberg said. Six percent of adults with health insurance have bought low-cost drugs from Canada, according to a poll from the Civil Society Institute. Taser International said their weapons have been approved for use by police in England and Wales, Bloomberg reported. Martha Stewart asked a federal judge to let her begin serving her five-month prison term as soon as possible, while she appeals her conviction for obstructing justice, Bloomberg reported. Mobile, Alabama, residents made final preparations to face the most-powerful hurricane in 25 years as Hurricane Ivan takes aim at the city, Bloomberg said.
BOTTOM LINE: The Portfolio is higher mid-day as substantial gains in my security and internet longs and my declining consumer shorts are more than offsetting losses in other longs. I have not traded today and the Portfolio is still 100% net long. Measures of investor anxiety are climbing today which is a positive. While most stocks are lower, a number of market leaders are gaining. More bullish news for energy could not push prices substantially higher. I continue to believe oil will head towards $35/bbl. during the fourth quarter. U.S. stocks should trade mixed-to-higher into the afternoon on profit-taking and short-covering.
Wednesday, September 15, 2004
Wednesday Watch
Earnings of Note
Company/Estimate
BBY/.52
MLHR/.20
Splits
None of note.
Economic Data
Empire Manufacturing for September estimated at 20.0 versus 12.57 in August.
Business Inventories for July estimated to rise .8% versus a .9% increase in June.
Industrial Production for August estimated to increase .5% versus a .4% rise in July.
Capacity Utilization for August estimated at 77.4% versus 77.1% in July.
Recommendations
Goldman Sachs reiterated Outperform on YHOO, RE, NKE, PMMAY, DNA, COH, LIZ and ENH. Goldman reiterated Underperform on PSS. NOK raised to Buy at UBS.
Late-Night News
Asian indices are mixed on strength in China and weakness in Japan. Taiwan's AU Optronics will delay indefinitely construction of a new plan to make liquid-crystal displays for televisions because of overcapacity, the Commercial Times said. China Central Television has arranged to have Chinese channels carried in the U.S. by the EchoStar satellite network, the South China Morning Post said. Apple Computer's iTunes music download service may be investigated by the U.K.'s Office of Fair Trading on concern it's charging U.K. customers more than French and German customers to buy tracks, the FT said. The U.S. is preparing to ask the UN for sanctions against Iran, aimed at halting its suspected nuclear weapons program, the Financial Times reported. Crude oil rose for a third day as Hurricane Ivan prompted Gulf of Mexico producers such as Royal Dutch/Shell Group to evacuate and shut platforms in the biggest disruptions of the region's output in at least two years, Bloomberg reported. Interest in the presidential election among the nation's youth is near the highest level since 18-to-20 year olds were given the right to vote in 1972, the NY Times said.
Late-Night Trading
Asian Indices are -.50% to +.25% on average, however China is rising 4.0%.
S&P 500 indicated -.14%.
NASDAQ 100 indicated -.38%
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning on rising energy prices, worries over damage from Hurricane Ivan and weakness in semiconductor shares. While stocks may come under slight pressure tomorrow, I do not expect a sharp decline. Software and internet shares should outperform in the technology sector. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
BBY/.52
MLHR/.20
Splits
None of note.
Economic Data
Empire Manufacturing for September estimated at 20.0 versus 12.57 in August.
Business Inventories for July estimated to rise .8% versus a .9% increase in June.
Industrial Production for August estimated to increase .5% versus a .4% rise in July.
Capacity Utilization for August estimated at 77.4% versus 77.1% in July.
Recommendations
Goldman Sachs reiterated Outperform on YHOO, RE, NKE, PMMAY, DNA, COH, LIZ and ENH. Goldman reiterated Underperform on PSS. NOK raised to Buy at UBS.
Late-Night News
Asian indices are mixed on strength in China and weakness in Japan. Taiwan's AU Optronics will delay indefinitely construction of a new plan to make liquid-crystal displays for televisions because of overcapacity, the Commercial Times said. China Central Television has arranged to have Chinese channels carried in the U.S. by the EchoStar satellite network, the South China Morning Post said. Apple Computer's iTunes music download service may be investigated by the U.K.'s Office of Fair Trading on concern it's charging U.K. customers more than French and German customers to buy tracks, the FT said. The U.S. is preparing to ask the UN for sanctions against Iran, aimed at halting its suspected nuclear weapons program, the Financial Times reported. Crude oil rose for a third day as Hurricane Ivan prompted Gulf of Mexico producers such as Royal Dutch/Shell Group to evacuate and shut platforms in the biggest disruptions of the region's output in at least two years, Bloomberg reported. Interest in the presidential election among the nation's youth is near the highest level since 18-to-20 year olds were given the right to vote in 1972, the NY Times said.
Late-Night Trading
Asian Indices are -.50% to +.25% on average, however China is rising 4.0%.
S&P 500 indicated -.14%.
NASDAQ 100 indicated -.38%
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning on rising energy prices, worries over damage from Hurricane Ivan and weakness in semiconductor shares. While stocks may come under slight pressure tomorrow, I do not expect a sharp decline. Software and internet shares should outperform in the technology sector. The Portfolio is 100% net long heading into tomorrow.
Tuesday, September 14, 2004
Tuesday Close
S&P 500 1,128.33 +.22%
NASDAQ 1,915.40 +.26%
Leading Sectors
Internet +1.59%
Restaurants +.84%
Drugs +.75%
Lagging Sectors
Iron/Steel -.29%
Fashion -.30%
Hospitals -.40%
Other
Crude Oil 44.55 +.36%
Natural Gas 4.99 +1.22%
Gold 407.40 -.02%
Base Metals 108.15 -.01%
U.S. Dollar 88.46 -.09%
10-Yr. T-note Yield 4.12% -.28%
VIX 13.56 +2.96%
Put/Call .79 +17.91%
NYSE Arms .84 -1.18%
After-hours Movers
ORCL +3.79% after meeting 1Q estimates.
CPRT +4.73% after beating 4Q estimates.
CPTS +11.6% after announcing Humana has approved Essure for reimbursement.
CLS -10.78% after cutting 3Q estimates.
XLNX -3.83% after cutting 2Q forecast.
Recommendations
Goldman reiterated Outperform on ISG, MO, HOT, SBC and DEX. Goldman reiterated Underperform on AZR.
After-hours News
U.S. stocks finished slightly higher today, as gains in internet stocks offset weakness related to rising energy prices. Arab League Secretary-General Amr Mussa called on the 22-member body to re-establish full diplomatic ties with Iraq, Agence France-Presse reported. News Corp. is expected to release details today of the company's plan to shift to the U.S., the Australian Financial Review reported. Brazil has become the global capital for computer hacking and Internet fraud, the BBC reported. The U.S. House of Representatives passed a bill requiring judges to impose fines on attorneys who file lawsuits dismissed as frivolous, Bloomberg said. Makers of antidepressants including Pfizer, Wyeth and GlaxoSmithKline should be required to put stronger warning labels on their drugs, a U.S. advisory panel said. The U.S. Senate leaders agreed to legislation excluding companies based in overseas tax havens from bidding for billions of dollars in homeland security contracts. The provision, if it becomes law, may shut out Tyco, Ingersoll-Rand and other companies from more than $8 billion in contracts over the next fiscal year, Bloomberg reported. Oracle reported a 16% gain in first-quarter profit on rising demand for database software, Bloomberg said. Xilinx said second-quarter sales will miss its forecast because customers have too much inventory, Bloomberg reported. Lockheed Martin and General Dynamics will stop competing and instead work together on a $12 billion program to design a communications network for the U.S. Army under a plan to speed development, Bloomberg reported. Goldman Sachs donated 1,000 square miles of virgin forest in Chile to the Wildlife Conservation Society, creating a preserve the size of Rhode Island from land the firm acquired as collateral for bad loans, Bloomberg said.
BOTTOM LINE: The Portfolio finished modestly higher today as gains in my security, internet and software longs more than offset losses in my steel longs. I added a few internet longs in the afternoon, bringing the Portfolio's market exposure to 100% net long. One of my new longs is CHINA and I am using a $4.95 stop-loss on this position. The overall tone was mixed today as the market consolidated recent gains. Volume was lackluster and more stocks fell than rose. The fact that oil is not rising more in the face of current and potentially large disruptions in the Gulf is a positive.
NASDAQ 1,915.40 +.26%
Leading Sectors
Internet +1.59%
Restaurants +.84%
Drugs +.75%
Lagging Sectors
Iron/Steel -.29%
Fashion -.30%
Hospitals -.40%
Other
Crude Oil 44.55 +.36%
Natural Gas 4.99 +1.22%
Gold 407.40 -.02%
Base Metals 108.15 -.01%
U.S. Dollar 88.46 -.09%
10-Yr. T-note Yield 4.12% -.28%
VIX 13.56 +2.96%
Put/Call .79 +17.91%
NYSE Arms .84 -1.18%
After-hours Movers
ORCL +3.79% after meeting 1Q estimates.
CPRT +4.73% after beating 4Q estimates.
CPTS +11.6% after announcing Humana has approved Essure for reimbursement.
CLS -10.78% after cutting 3Q estimates.
XLNX -3.83% after cutting 2Q forecast.
Recommendations
Goldman reiterated Outperform on ISG, MO, HOT, SBC and DEX. Goldman reiterated Underperform on AZR.
After-hours News
U.S. stocks finished slightly higher today, as gains in internet stocks offset weakness related to rising energy prices. Arab League Secretary-General Amr Mussa called on the 22-member body to re-establish full diplomatic ties with Iraq, Agence France-Presse reported. News Corp. is expected to release details today of the company's plan to shift to the U.S., the Australian Financial Review reported. Brazil has become the global capital for computer hacking and Internet fraud, the BBC reported. The U.S. House of Representatives passed a bill requiring judges to impose fines on attorneys who file lawsuits dismissed as frivolous, Bloomberg said. Makers of antidepressants including Pfizer, Wyeth and GlaxoSmithKline should be required to put stronger warning labels on their drugs, a U.S. advisory panel said. The U.S. Senate leaders agreed to legislation excluding companies based in overseas tax havens from bidding for billions of dollars in homeland security contracts. The provision, if it becomes law, may shut out Tyco, Ingersoll-Rand and other companies from more than $8 billion in contracts over the next fiscal year, Bloomberg reported. Oracle reported a 16% gain in first-quarter profit on rising demand for database software, Bloomberg said. Xilinx said second-quarter sales will miss its forecast because customers have too much inventory, Bloomberg reported. Lockheed Martin and General Dynamics will stop competing and instead work together on a $12 billion program to design a communications network for the U.S. Army under a plan to speed development, Bloomberg reported. Goldman Sachs donated 1,000 square miles of virgin forest in Chile to the Wildlife Conservation Society, creating a preserve the size of Rhode Island from land the firm acquired as collateral for bad loans, Bloomberg said.
BOTTOM LINE: The Portfolio finished modestly higher today as gains in my security, internet and software longs more than offset losses in my steel longs. I added a few internet longs in the afternoon, bringing the Portfolio's market exposure to 100% net long. One of my new longs is CHINA and I am using a $4.95 stop-loss on this position. The overall tone was mixed today as the market consolidated recent gains. Volume was lackluster and more stocks fell than rose. The fact that oil is not rising more in the face of current and potentially large disruptions in the Gulf is a positive.
Mid-day Update
S&P 500 1,129.03 +.29%
NASDAQ 1,917.02 +.35%
Leading Sectors
Internet +1.44%
Restaurants +1.18%
Biotech +.77%
Lagging Sectors
Fashion -.30%
Iron/Steel -.31%
Disk Drives -.40%
Other
Crude Oil 44.55 +1.55%
Natural Gas 4.96 +2.27%
Gold 408.00 +.49%
Base Metals 108.11 -.05%
U.S. Dollar 88.38 -.18%
10-Yr. T-note Yield 4.14% +.05%
VIX 13.64 +3.57%
Put/Call .80 +19.40%
NYSE Arms .81 -4.71%
Market Movers
CAH +4.22% on bargain-hunting after saying it will restate three years of financial results and delay its report for the fiscal quarter by an additional 15 days.
ERES +9.1% after saying that it had been awarded approximately $4.1 million in cardiac safety monitoring and services from an emerging West Coast pharmaceutical organization.
PGR +6.0% after saying it plans to buy back as many as 17.1 million shares. The purchase will be structured like a Dutch auction in which shareholders can tender their shares at any price between $78 and $88 a share.
KMRT +4.92% after UBS raised price target to $101 from $85.
VOL +7.7% after beating 3Q estimates substantially.
AOS -12.8% after lowering 3Q/04 estimates on high steel prices.
MGLN -5.0% after disappointing 05 outlook.
OS -8.9% after announcing a 7.5 million share common stock offering.
Economic Data
2Q Current Account Balance -$166.2B versus estimates of -$158.3B and -$147.2B prior.
Advance Retail Sales for August fell .3% versus estimates of a .1% decline and a .8% rise in July.
Retail Sales Less Autos for August rose .2% versus estimates of a .2% increase and a .3% rise in July.
Recommendations
HET and MUR raised to Overweight at JP Morgan. MBG lowered to Underweight at JP Morgan. FLEX raised to Buy at CSFB, target $16. UTHR raised to Buy at Deutsche Bank, target $40. TMO rated Buy at Deutsche Bank, target $32. TYC rated Buy at Deutsche Bank, target $37. ROK rated Buy at Deutsche Bank, target $45. CPB raised to Overweight at JP Morgan. EMR rated Buy at Deutsche Bank, target $80. HON rated Buy at Deutsche Bank, target $42. DHR rated Buy at Deutsche Bank, target $60. VIP rated Outperform at Bear Stearns. PFGC raised to Buy at UBS, target $28. Goldman reiterated Outperform on MDT, EBAY, CCL, RCL, BBY, FD, GDT. Goldman reiterated Underperform on HC, LSI and KZL. Goldman upgraded RIG and DO to Outperform. Citi SmithBarney riterated Buy on AFC, target $36. Citi reiterated Buy on ACS, target $70. Citi reiterated Buy on ITT, target $92. Goldman reiterated Outperform on MUR and SBC.
Mid-day News
U.S. stocks are modestly higher mid-day as the broad market consolidates after recent gains. The U.S. Congress is expected to recommend tougher laws to stop marketing practices that allow hospitals to overcharge for medical supplies, the NY Times reported. Ericsson AB is starting to benefit from its spending on 3G equipment which allows cell phones to carry video pictures and other multimedia, the Wall Street Journal reported. The Bush administration is proposing to cancel billions of dollars in debt owed by poor nations, the Washington Post reported. A federal appeals court in NY is reviewing a decision that may lead to the largest-ever ruling of punitive damages against the tobacco industry, the NY Times reported. The U.S. Nuclear Regulatory Commission has concluded a terrorist attack that crashes a jetliner into a nuclear plant probably wouldn't release significant amounts of radiation, the AP reported. Three French paparazzi who took pictures of Princess Diana and Dodi Fayed the night they died in a Paris car crash in August 1997 were acquitted of invasion of privacy, Agence France-Presse reported. The U.S.'s global plan to fight AIDS has helped at least 25,000 people with the disease receive antiretroviral therapy since a program began distributing money to 15 countries in February, the Washington Post reported. Yahoo! said it plans to buy closely held Musicmatch for $160 million to add online music services, Bloomberg said. Global fund managers' optimism about earning growth gained this month for the first time in 2004, a Merrill Lynch survey showed. Iraqi President al-Yawar said 55,000 members of a planned 80,000-strong Iraqi security force have already been recruited, Bloomberg reported. U.S. retail sales excluding autos rose for a fourth month in August, suggesting consumer spending will help the economy expand this quarter, Bloomberg said. McDonald's raised its annual dividend 38% to 55 cents a share from 40 cents, Bloomberg reported. Crude oil rose for a second day on concern that Hurricane Ivan will slash U.S. offshore production in the Gulf of Mexico by the biggest amount in two years, Bloomberg reported. The European Union said the U.S. would have to cut subsides to Boeing to win a reduction in aid to Airbus SAS as both sides prepared for talks this week on revising aircraft-support restrictions, Bloomberg said.
BOTTOM LINE: The Portfolio is slightly higher mid-day as my declining consumer-oriented shorts are more than offsetting my falling steel longs. I have not traded today and the Portfolio is still 75% net long. The market's resilience in the face of Hurricane Ivan, rising energy prices and a few earnings shortfalls is impressive. I expect U.S. stocks to trade mixed into the close as short-covering offsets the market's overbought technical condition.
NASDAQ 1,917.02 +.35%
Leading Sectors
Internet +1.44%
Restaurants +1.18%
Biotech +.77%
Lagging Sectors
Fashion -.30%
Iron/Steel -.31%
Disk Drives -.40%
Other
Crude Oil 44.55 +1.55%
Natural Gas 4.96 +2.27%
Gold 408.00 +.49%
Base Metals 108.11 -.05%
U.S. Dollar 88.38 -.18%
10-Yr. T-note Yield 4.14% +.05%
VIX 13.64 +3.57%
Put/Call .80 +19.40%
NYSE Arms .81 -4.71%
Market Movers
CAH +4.22% on bargain-hunting after saying it will restate three years of financial results and delay its report for the fiscal quarter by an additional 15 days.
ERES +9.1% after saying that it had been awarded approximately $4.1 million in cardiac safety monitoring and services from an emerging West Coast pharmaceutical organization.
PGR +6.0% after saying it plans to buy back as many as 17.1 million shares. The purchase will be structured like a Dutch auction in which shareholders can tender their shares at any price between $78 and $88 a share.
KMRT +4.92% after UBS raised price target to $101 from $85.
VOL +7.7% after beating 3Q estimates substantially.
AOS -12.8% after lowering 3Q/04 estimates on high steel prices.
MGLN -5.0% after disappointing 05 outlook.
OS -8.9% after announcing a 7.5 million share common stock offering.
Economic Data
2Q Current Account Balance -$166.2B versus estimates of -$158.3B and -$147.2B prior.
Advance Retail Sales for August fell .3% versus estimates of a .1% decline and a .8% rise in July.
Retail Sales Less Autos for August rose .2% versus estimates of a .2% increase and a .3% rise in July.
Recommendations
HET and MUR raised to Overweight at JP Morgan. MBG lowered to Underweight at JP Morgan. FLEX raised to Buy at CSFB, target $16. UTHR raised to Buy at Deutsche Bank, target $40. TMO rated Buy at Deutsche Bank, target $32. TYC rated Buy at Deutsche Bank, target $37. ROK rated Buy at Deutsche Bank, target $45. CPB raised to Overweight at JP Morgan. EMR rated Buy at Deutsche Bank, target $80. HON rated Buy at Deutsche Bank, target $42. DHR rated Buy at Deutsche Bank, target $60. VIP rated Outperform at Bear Stearns. PFGC raised to Buy at UBS, target $28. Goldman reiterated Outperform on MDT, EBAY, CCL, RCL, BBY, FD, GDT. Goldman reiterated Underperform on HC, LSI and KZL. Goldman upgraded RIG and DO to Outperform. Citi SmithBarney riterated Buy on AFC, target $36. Citi reiterated Buy on ACS, target $70. Citi reiterated Buy on ITT, target $92. Goldman reiterated Outperform on MUR and SBC.
Mid-day News
U.S. stocks are modestly higher mid-day as the broad market consolidates after recent gains. The U.S. Congress is expected to recommend tougher laws to stop marketing practices that allow hospitals to overcharge for medical supplies, the NY Times reported. Ericsson AB is starting to benefit from its spending on 3G equipment which allows cell phones to carry video pictures and other multimedia, the Wall Street Journal reported. The Bush administration is proposing to cancel billions of dollars in debt owed by poor nations, the Washington Post reported. A federal appeals court in NY is reviewing a decision that may lead to the largest-ever ruling of punitive damages against the tobacco industry, the NY Times reported. The U.S. Nuclear Regulatory Commission has concluded a terrorist attack that crashes a jetliner into a nuclear plant probably wouldn't release significant amounts of radiation, the AP reported. Three French paparazzi who took pictures of Princess Diana and Dodi Fayed the night they died in a Paris car crash in August 1997 were acquitted of invasion of privacy, Agence France-Presse reported. The U.S.'s global plan to fight AIDS has helped at least 25,000 people with the disease receive antiretroviral therapy since a program began distributing money to 15 countries in February, the Washington Post reported. Yahoo! said it plans to buy closely held Musicmatch for $160 million to add online music services, Bloomberg said. Global fund managers' optimism about earning growth gained this month for the first time in 2004, a Merrill Lynch survey showed. Iraqi President al-Yawar said 55,000 members of a planned 80,000-strong Iraqi security force have already been recruited, Bloomberg reported. U.S. retail sales excluding autos rose for a fourth month in August, suggesting consumer spending will help the economy expand this quarter, Bloomberg said. McDonald's raised its annual dividend 38% to 55 cents a share from 40 cents, Bloomberg reported. Crude oil rose for a second day on concern that Hurricane Ivan will slash U.S. offshore production in the Gulf of Mexico by the biggest amount in two years, Bloomberg reported. The European Union said the U.S. would have to cut subsides to Boeing to win a reduction in aid to Airbus SAS as both sides prepared for talks this week on revising aircraft-support restrictions, Bloomberg said.
BOTTOM LINE: The Portfolio is slightly higher mid-day as my declining consumer-oriented shorts are more than offsetting my falling steel longs. I have not traded today and the Portfolio is still 75% net long. The market's resilience in the face of Hurricane Ivan, rising energy prices and a few earnings shortfalls is impressive. I expect U.S. stocks to trade mixed into the close as short-covering offsets the market's overbought technical condition.
Tuesday Watch
Earnings of Note
Company/Estimate
CPRT/.19
ORCL/.09
PIR/.11
Splits
None of note.
Economic Data
2Q Current Account Balance estimated at -$153.3B versus -$144.9B prior.
Advance Retail Sales for August estimated -.1% versus a .7% rise in July.
Retail Sales Less Autos for August estimated to rise .2% versus a .2% increase in July.
Recommendations
Goldman Sachs reiterated Outperform on FD, GILD, BBY and EBAY. Goldman reiterated Underperform on SGP, KZL and LSI.
Late-Night News
Asian indices are mostly higher on gains in technology stocks in the region. AES Corp., General Electric and American International Group may bid for InterGen's power plants should the venture decide to sell assets, the Australian Financial Review said. Samsung next year will boost its rivalry with Taiwan Semiconductor Manufacturing by adding new production capacity, the Commercial Times reported. Aluminum Corp. of China, parent of China's largest aluminum maker, may buy an 87% stake in copper producer Daye Nonferrous, Sing Tao Daily reported. Cardinal Health said it will restate at least three years of financial results and delay its report for the fiscal quarter by an additional 15 days, Bloomberg reported. MGM agreed in principle to be bought by an investor group led by Sony Corp. for $12 per share, or about $2.9 billion, plus assumed debt, Bloomberg said. Hurricane Ivan skirted the western tip of Cuba this evening on a track that will bring it ashore in the southeastern U.S. as early as Wednesday morning, Bloomberg said.
Late-Night Trading
Asian Indices are unch. to +.50% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated -.07%
BOTTOM LINE: I expect U.S. equities to open modestly higher on stabilizing energy prices, gains in Asia and short-covering. However, shares may trade mixed-to-weaker later in the day on profit-taking as the broad market works off its overbought condition. The Portfolio is 75% net long heading into tomorrow.
Company/Estimate
CPRT/.19
ORCL/.09
PIR/.11
Splits
None of note.
Economic Data
2Q Current Account Balance estimated at -$153.3B versus -$144.9B prior.
Advance Retail Sales for August estimated -.1% versus a .7% rise in July.
Retail Sales Less Autos for August estimated to rise .2% versus a .2% increase in July.
Recommendations
Goldman Sachs reiterated Outperform on FD, GILD, BBY and EBAY. Goldman reiterated Underperform on SGP, KZL and LSI.
Late-Night News
Asian indices are mostly higher on gains in technology stocks in the region. AES Corp., General Electric and American International Group may bid for InterGen's power plants should the venture decide to sell assets, the Australian Financial Review said. Samsung next year will boost its rivalry with Taiwan Semiconductor Manufacturing by adding new production capacity, the Commercial Times reported. Aluminum Corp. of China, parent of China's largest aluminum maker, may buy an 87% stake in copper producer Daye Nonferrous, Sing Tao Daily reported. Cardinal Health said it will restate at least three years of financial results and delay its report for the fiscal quarter by an additional 15 days, Bloomberg reported. MGM agreed in principle to be bought by an investor group led by Sony Corp. for $12 per share, or about $2.9 billion, plus assumed debt, Bloomberg said. Hurricane Ivan skirted the western tip of Cuba this evening on a track that will bring it ashore in the southeastern U.S. as early as Wednesday morning, Bloomberg said.
Late-Night Trading
Asian Indices are unch. to +.50% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated -.07%
BOTTOM LINE: I expect U.S. equities to open modestly higher on stabilizing energy prices, gains in Asia and short-covering. However, shares may trade mixed-to-weaker later in the day on profit-taking as the broad market works off its overbought condition. The Portfolio is 75% net long heading into tomorrow.
Monday, September 13, 2004
Monday Close
S&P 500 1,125.82 +.17%
NASDAQ 1,910.38 +.85%
Leading Sectors
Semis +2.47%
Fashion +1.69%
Disk Drives +1.53%
Lagging Sectors
Banks -.27%
Utilities -.64%
Tobacco -.76%
Other
Crude Oil 43.73 -.32%
Natural Gas 4.84 -.21%
Gold 405.80 -.05%
Base Metals 108.16 -.09%
U.S. Dollar 88.54 +.17%
10-Yr. T-note Yield 4.15% -.92%
VIX 13.17 -4.29%
Put/Call .67 -19.28%
NYSE Arms .85 +14.86%
After-hours Movers
PGR +4.23% after saying it plans to buy back as many as 17.1 million shares. The purchase will be structured like a Dutch auction in which shareholders can tender their shares at any price between $78 and $88 a share.
LSI -6.29% after lowering 3Q forecast.
Recommendations
Goldman reiterated Attractive View of Energy sector.
After-hours News
U.S. stocks finished higher today, notwithstanding afternoon profit-taking, boosted by optimism over future economic growth, falling interest rates and diminishing terrorism fears. After the close, about 84% of registered Wisconsin voters said they have given "quite a lot of thought" to the presidential election, compared with about 76% in a similar survey taken two weeks ago, CNN reported. Douglas Parker, CEO of America West doesn't expect large carriers that have filed for bankruptcy protection to liquidate, Bloomberg reported. Hurricane Ivan devastated the Caymans, tearing off roofs and washing away parts of houses and apartment buildings on the tiny islands know for international banking, Bloomberg said. Bondholders of Trump Hotels & Casino Resorts requested $39 million more for their debt than Trump's company offered last month, Bloomberg reported. The U.S. had a $41.1 billion budget deficit in August, smaller than the same month a year earlier, as tax receipts increased with a strengthening economy, Bloomberg said. Orange-juice prices in New York fell the most in six weeks on speculation that most citrus groves in Florida will escape damage from Hurricane Ivan, Bloomberg reported. Federated Department Stores will change the names of all 184 of its regional department stores to Macy's, dropping such brands as Rich's and Burdines, to expand the chain nationally, Bloomberg said.
BOTTOM LINE: The Portfolio finished substantially higher today on strength in my software, semi/semi-equipment and internet longs. I took profits in a few semi/semi-equipment longs and added some consumer-oriented shorts, leaving the Portfolio 75% net long. One of my new shorts is ERTS and I am using a $49.75 stop-loss on this position. The Portfolio is substantially higher for the year and near highs set a few months ago, thus I am locking in some gains. While U.S. stocks may head marginally higher over the next 10 days, measures of investor complacency reached levels today normally associated with short-term tops. My trading model is still giving buy signals but has deteriorated recently. I will likely stay a little more conservatively positioned over the next month as earnings pre-announcement season begins.
NASDAQ 1,910.38 +.85%
Leading Sectors
Semis +2.47%
Fashion +1.69%
Disk Drives +1.53%
Lagging Sectors
Banks -.27%
Utilities -.64%
Tobacco -.76%
Other
Crude Oil 43.73 -.32%
Natural Gas 4.84 -.21%
Gold 405.80 -.05%
Base Metals 108.16 -.09%
U.S. Dollar 88.54 +.17%
10-Yr. T-note Yield 4.15% -.92%
VIX 13.17 -4.29%
Put/Call .67 -19.28%
NYSE Arms .85 +14.86%
After-hours Movers
PGR +4.23% after saying it plans to buy back as many as 17.1 million shares. The purchase will be structured like a Dutch auction in which shareholders can tender their shares at any price between $78 and $88 a share.
LSI -6.29% after lowering 3Q forecast.
Recommendations
Goldman reiterated Attractive View of Energy sector.
After-hours News
U.S. stocks finished higher today, notwithstanding afternoon profit-taking, boosted by optimism over future economic growth, falling interest rates and diminishing terrorism fears. After the close, about 84% of registered Wisconsin voters said they have given "quite a lot of thought" to the presidential election, compared with about 76% in a similar survey taken two weeks ago, CNN reported. Douglas Parker, CEO of America West doesn't expect large carriers that have filed for bankruptcy protection to liquidate, Bloomberg reported. Hurricane Ivan devastated the Caymans, tearing off roofs and washing away parts of houses and apartment buildings on the tiny islands know for international banking, Bloomberg said. Bondholders of Trump Hotels & Casino Resorts requested $39 million more for their debt than Trump's company offered last month, Bloomberg reported. The U.S. had a $41.1 billion budget deficit in August, smaller than the same month a year earlier, as tax receipts increased with a strengthening economy, Bloomberg said. Orange-juice prices in New York fell the most in six weeks on speculation that most citrus groves in Florida will escape damage from Hurricane Ivan, Bloomberg reported. Federated Department Stores will change the names of all 184 of its regional department stores to Macy's, dropping such brands as Rich's and Burdines, to expand the chain nationally, Bloomberg said.
BOTTOM LINE: The Portfolio finished substantially higher today on strength in my software, semi/semi-equipment and internet longs. I took profits in a few semi/semi-equipment longs and added some consumer-oriented shorts, leaving the Portfolio 75% net long. One of my new shorts is ERTS and I am using a $49.75 stop-loss on this position. The Portfolio is substantially higher for the year and near highs set a few months ago, thus I am locking in some gains. While U.S. stocks may head marginally higher over the next 10 days, measures of investor complacency reached levels today normally associated with short-term tops. My trading model is still giving buy signals but has deteriorated recently. I will likely stay a little more conservatively positioned over the next month as earnings pre-announcement season begins.
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