S&P 500 1,111.01 +.24%
NASDAQ 1,884.52 -.10%
Leading Sectors
Oil Service +2.02%
Restaurants +1.23%
Energy +1.23%
Lagging Sectors
Disk Drives -1.79%
Airlines -2.72%
Semis -2.88%
Other
Crude Oil 48.43 -.12%
Natural Gas 5.40 -2.95%
Gold 409.80 -.68%
Base Metals 116.36 +.11%
U.S. Dollar 88.44 unch.
10-Yr. T-note Yield 4.04 +.81%
VIX 14.32 -3.24%
Put/Call 1.0 +8.70%
NYSE Arms 1.08 -32.05%
Market Movers
COGT +47.5% on strong demand for IPO.
MSO +7.7% on continuing optimism over recent events.
ECSI +16.0% after agreeing to be bought by STJ for $11.75/share.
AH +4.1% after saying it won a $23 million contract from the U.S. Army.
JLG +11.9% after beating 4Q estimates and making positive comments.
ESIO -19.3% after missing 1Q estimates and lowering 2Q outlook.
PSRC -17.2% after beating 1Q forecast, but lowering 2Q estimates.
Economic Data
Durable Goods Orders for August fell .5% versus estimates of a .3% decline and an upwardly revised 1.8% increase in July.
Durable Goods Less Transportation for August rose 2.3% versus estimates of a .8% increase and an upwardly revised 0.0% in July.
Existing Home Sales for August were 6.54M versus estimates of 6.63M and 6.72M in July.
Recommendations
Goldman Sachs reiterated Outperform on MER, BPO and VNO. Citi SmithBarney upgraded MRO to Buy, target $45. Citi reiterated Buy on BK, target $37. Citi reiterated Buy on DOW, target $50. Citi reiterated Sell on PGL, target $36. Citi reiterated Buy on FLEX, target $22. Citi reiterated Buy on PRU, target $55. MDCO rated Reduce at UBS, target $25. NTMD rated Buy at UBS, target $32. APC, KMG, XTO raised to Buy at Citi. NTMD rated Overweight at JP Morgan. DTE raised to Overweight at Morgan Stanley. ARO raised to Buy at Deutsche Bank, target $33. Lehman says US Dollar will decline as interest rates fall.
Mid-day News
U.S. stocks are mixed mid-day on conflicting economic data, weakness in technology stocks and stabilizing energy prices. Hollywood directors will get at least $40 million in increased payments to their health-care plan under a proposed three-year contract agreement they reached with producers, the NY Times reported. NYC said it created a communications system to get emergency information to the public quickly over television and radio, the NY Times reported. IBM plans to open an office in Fairfax County, Virginia, that will created 1,200 government-contracting jobs, the Washington Post reported. California Governor Schwarzenegger signed into law bills intended to protect the environment, including measures to protect the Sierra Nevada mountain range and decrease cruise ship pollution, the LA Times reported. Two California ballot propositions aimed at expanding slot-machine gambling in the state are failing among likely voters, less that six weeks before the election, the LA Times said. Oil-tanker rates from the Persian Gulf to the U.S. and Asia surged to seven-month highs as refiners scoured the market for ships to haul October cargoes, preparing to meet increased heating demand, Bloomberg said. Russian President Putin said state-run companies may bid for OAO Yukos assets in any sales to collect back taxes, Bloomberg reported. Hurricane Jeanne is heading for the U.S. and may reach Florida's east coast this weekend, making it the first time the state has been hit by four hurricanes in one season, Bloomberg reported.
BOTTOM LINE: The Portfolio is unchanged again mid-day and I have not traded, thus leaving my market neutral stance in tact. The tone of the market is decidedly mixed today. However, the weakness in technology stocks will likely spill over into the rest of the market this afternoon, leaving the major U.S. indices modestly lower on the day.
Friday, September 24, 2004
Friday Watch
Earnings of Note
Company/Estimate
None of note.
Splits
None of note.
Economic Data
Durable Goods Orders for August estimated -.3% versus a 1.6% rise in July.
Durable Goods Less Transportation for August estimated +.8% versus a -.2% decline in July.
Existing Home Sales for August estimated at 6.63M versus 6.72M in July.
Recommendations
Goldman Sachs reiterated Outperform on MDT and WAG. Goldman reiterated Underperform on SCS and AMCC. Goldman reiterated Attractive view of Steel sector, favorites are ISG and STLD. Shares of Alliance Gaming are expected to rise as demand for gambling devices picks up in 2005, Business Week reported.
Late-Night News
Asian indices are mixed as strength in China is being offset by weakness in Japan. Matsushita Electric plans to begin supplying tv set-top boxes and software to Comcast, the largest U.S. cable tv operator, Nikkei English News reported. Taser International pitched its weapons to the San Francisco Police Dept. and used a stun gun on an officer to demonstrate its effectiveness, the San Francisco Chronicle said. While the dept. hasn't formerly asked the San Francisco Police Commission to adopt the device, Police Chief Heather Fong wants every officer in the 2,200-member force to be armed with the device, the paper reported. California regulators are expected to boost the fee rival telephone companies pay SBC Communications for access to copper lines linking homes and businesses to the phone network, the LA Times said. Boeing, IBM and Microsoft are among 28 companies that on Sept. 28 will announce a consortium dedicated to technology standardization for a military network, Business Week said. Google may be planning to offer Internet browser software, News.com reported. The European Commission will probably clear Oracle's $7.7 billion bid for PeopleSoft, the Financial Times said. Citigroup officials are being investigated by U.S. regulators for failing to supervise analysts and investment bankers and preventing conflicts of interest, Business Week reported. FedEx has applied for six weekly flights to the southern Chinese city of Guangzhou in 2006, the South China Morning Post reported. The U.S. Congress approved $146 billion in tax cuts for middle-income families and businesses, Bloomberg reported. Royal Philips Electronic, Europe's third-largest maker of semiconductors, reduced its third-quarter chip sales forecast as demand wanes, Bloomberg reported.
Late-Night Trading
Asian Indices are -1.0% to +.50% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated unch.
BOTTOM LINE: I expect U.S. equities to open mixed in the morning as better economic numbers and declining energy prices offset weakness in Asia. The Portfolio is market neutral heading into tomorrow.
Company/Estimate
None of note.
Splits
None of note.
Economic Data
Durable Goods Orders for August estimated -.3% versus a 1.6% rise in July.
Durable Goods Less Transportation for August estimated +.8% versus a -.2% decline in July.
Existing Home Sales for August estimated at 6.63M versus 6.72M in July.
Recommendations
Goldman Sachs reiterated Outperform on MDT and WAG. Goldman reiterated Underperform on SCS and AMCC. Goldman reiterated Attractive view of Steel sector, favorites are ISG and STLD. Shares of Alliance Gaming are expected to rise as demand for gambling devices picks up in 2005, Business Week reported.
Late-Night News
Asian indices are mixed as strength in China is being offset by weakness in Japan. Matsushita Electric plans to begin supplying tv set-top boxes and software to Comcast, the largest U.S. cable tv operator, Nikkei English News reported. Taser International pitched its weapons to the San Francisco Police Dept. and used a stun gun on an officer to demonstrate its effectiveness, the San Francisco Chronicle said. While the dept. hasn't formerly asked the San Francisco Police Commission to adopt the device, Police Chief Heather Fong wants every officer in the 2,200-member force to be armed with the device, the paper reported. California regulators are expected to boost the fee rival telephone companies pay SBC Communications for access to copper lines linking homes and businesses to the phone network, the LA Times said. Boeing, IBM and Microsoft are among 28 companies that on Sept. 28 will announce a consortium dedicated to technology standardization for a military network, Business Week said. Google may be planning to offer Internet browser software, News.com reported. The European Commission will probably clear Oracle's $7.7 billion bid for PeopleSoft, the Financial Times said. Citigroup officials are being investigated by U.S. regulators for failing to supervise analysts and investment bankers and preventing conflicts of interest, Business Week reported. FedEx has applied for six weekly flights to the southern Chinese city of Guangzhou in 2006, the South China Morning Post reported. The U.S. Congress approved $146 billion in tax cuts for middle-income families and businesses, Bloomberg reported. Royal Philips Electronic, Europe's third-largest maker of semiconductors, reduced its third-quarter chip sales forecast as demand wanes, Bloomberg reported.
Late-Night Trading
Asian Indices are -1.0% to +.50% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated unch.
BOTTOM LINE: I expect U.S. equities to open mixed in the morning as better economic numbers and declining energy prices offset weakness in Asia. The Portfolio is market neutral heading into tomorrow.
Thursday, September 23, 2004
Thursday Close
S&P 500 1,108.36 -.47%
NASDAQ 1,886.43 +.04%
Leading Sectors
Semis +.52%
Wireless +.51%
Internet +.44%
Lagging Sectors
Iron/Steel -1.07%
Fashion -1.49%
Airlines -2.84%
Other
Crude Oil 48.28 -.14%
Natural Gas 5.48 -2.65%
Gold 411.50 -.27%
Base Metals 116.23 +.82%
U.S. Dollar 88.44 -.08%
10-Yr. T-note Yield 4.02% +.96%
VIX 14.80 +.41%
Put/Call .92 -16.36%
NYSE Arms 1.60 -32.20%
After-hours Movers
ESIO -11.99% after missing 1Q estimates and lowering 2Q outlook.
FINL -3.09% after missing 2Q estimates.
Recommendations
Goldman Sachs reiterated Outperform on WMT.
After-hours News
U.S. stocks finished mixed today as worries that high energy prices would stall the economy were offset by optimism in the technology sector. After the close, China is cracking down on unauthorized steel plants as it tries to deflate the country's steel boom, and reduce shortages of power, coal and transport that threaten the economy, the Financial Times reported. Federal Reserve policy makers said the slowing in economic growth in the second quarter would be "short-lived" as they voted unanimously on Aug. 10 to raise interest rates, minutes of the meeting showed, Bloomberg said. Northern Trust may be fired tomorrow as custodian and index fund manager for the Illinois State Board of Investment, a 20-year client that overseas $10.4 billion for three of the state's five pension systems, Bloomberg reported. California Governor Schwarzenegger signed a law opening up car-pool lanes on highways to the most fuel-efficient gas-electric hybrid cars, a potential boost to Honda Motor and Toyota Motor in the largest U.S. auto market, Bloomberg said. Martha Stewart Living entered a five-year employment contract with its founder that will pay her a base salary of $900,000 annually and make her eligible to receive a bonus of as much as $1.35 million per year, Bloomberg said. Delta Air agreed to sell eight planes and four spare engines to FedEx as part of a plan to cut costs by eliminating some aircraft types, Bloomberg reported. Viacom is expanding its presence in China, including its second production venture in the country, Viacom CEO Redstone said.
BOTTOM LINE: The Portfolio finished unchanged today as weakness in my homebuilding and security longs was offset by my falling retail and software shorts. I did not trade in the afternoon, thus the Portfolio is still market neutral. I continue to believe the major U.S. indices will consolidate recent gains over the near-term before another move higher beginning in the latter part of October. A sharp decline in energy prices, while unlikely, could result in the rally beginning sooner than I currently anticipate.
NASDAQ 1,886.43 +.04%
Leading Sectors
Semis +.52%
Wireless +.51%
Internet +.44%
Lagging Sectors
Iron/Steel -1.07%
Fashion -1.49%
Airlines -2.84%
Other
Crude Oil 48.28 -.14%
Natural Gas 5.48 -2.65%
Gold 411.50 -.27%
Base Metals 116.23 +.82%
U.S. Dollar 88.44 -.08%
10-Yr. T-note Yield 4.02% +.96%
VIX 14.80 +.41%
Put/Call .92 -16.36%
NYSE Arms 1.60 -32.20%
After-hours Movers
ESIO -11.99% after missing 1Q estimates and lowering 2Q outlook.
FINL -3.09% after missing 2Q estimates.
Recommendations
Goldman Sachs reiterated Outperform on WMT.
After-hours News
U.S. stocks finished mixed today as worries that high energy prices would stall the economy were offset by optimism in the technology sector. After the close, China is cracking down on unauthorized steel plants as it tries to deflate the country's steel boom, and reduce shortages of power, coal and transport that threaten the economy, the Financial Times reported. Federal Reserve policy makers said the slowing in economic growth in the second quarter would be "short-lived" as they voted unanimously on Aug. 10 to raise interest rates, minutes of the meeting showed, Bloomberg said. Northern Trust may be fired tomorrow as custodian and index fund manager for the Illinois State Board of Investment, a 20-year client that overseas $10.4 billion for three of the state's five pension systems, Bloomberg reported. California Governor Schwarzenegger signed a law opening up car-pool lanes on highways to the most fuel-efficient gas-electric hybrid cars, a potential boost to Honda Motor and Toyota Motor in the largest U.S. auto market, Bloomberg said. Martha Stewart Living entered a five-year employment contract with its founder that will pay her a base salary of $900,000 annually and make her eligible to receive a bonus of as much as $1.35 million per year, Bloomberg said. Delta Air agreed to sell eight planes and four spare engines to FedEx as part of a plan to cut costs by eliminating some aircraft types, Bloomberg reported. Viacom is expanding its presence in China, including its second production venture in the country, Viacom CEO Redstone said.
BOTTOM LINE: The Portfolio finished unchanged today as weakness in my homebuilding and security longs was offset by my falling retail and software shorts. I did not trade in the afternoon, thus the Portfolio is still market neutral. I continue to believe the major U.S. indices will consolidate recent gains over the near-term before another move higher beginning in the latter part of October. A sharp decline in energy prices, while unlikely, could result in the rally beginning sooner than I currently anticipate.
Mid-day Update
S&P 500 1,110.14 -.31%
NASDAQ 1,888.05 +.12%
Leading Sectors
Tobacco +1.45%
Restaurants +.83%
Wireless +.62%
Lagging Sectors
Homebuilders -1.31%
Fashion -1.47%
Airlines -1.56%
Other
Crude Oil 48.00 -.72%
Natural Gas 5.42 -3.62%
Gold 412.40 +.83%
Base Metals 115.22 -.05%
U.S. Dollar 88.27 -.27%
10-Yr. T-note Yield 3.99% +.29%
VIX 14.85 +.75%
Put/Call .71 -35.45%
NYSE Arms 1.43 -39.41%
Market Movers
FNM -3.91% after multiple downgrades.
CYBX +4.0% said the FDA approved its device for testing on life-threatening treatment-resistant depression.
MSO +14.2% after it said it agreed to work with tv producer Mark Burnett, who created the popular "Survivor" series.
IMGC +10.9% after beating 1Q estimates, reiterating 2Q outlook and Needham upgrade to Strong Buy.
GPN +11.3% after beating 1Q estimates and raising 05 outlook.
DRI +6.3% after beating 1Q estimates.
CVS +4.44% after Matrix rated it Strong Buy.
STMP -12.2% after canceling appearance at ThinkEquity Conference.
APPX -9.5% after the Wall Street Journal reported that the SEC is investigating the company on suspicion that it may have misled investors on progress made with a cancer drug.
DECK -6.2% after RBC Capital cut it to Sector Perform.
Economic Data
Initial Jobless Claims for last week were 350K versus estimates of 335K and 336K prior.
Continuing Claims were 2883K versus estimates of 2880K and 2878K prior.
Leading Indicators fell .3% versus estimates of a .2% decline and a .3% decrease in July.
Recommendations
Goldman Sachs reiterated Outperform on AMR, SMP, CLX, BIIB, PFE, AMGN, FS, HOT, TPX and BC. Goldman reiterated Underperform on MKL, RAI, BSC and EK. Citi SmithBarney reiterated Buy on FNM, target $86. Citi reiterated Buy on COGN, target $44. Citi reiterated Buy on GPN, target $55. Citi reiterated Buy on MWD, target $72. Citi reiterated Buy on TGT, target $50. Citi said to Buy MSTR as strength at COGN will also benefit it, target $59.
Mid-day News
U.S. stocks are mixed mid-day on continuing worries that high energy prices are leading to slower economic growth. The International Accounting Standards Board plans to overhaul the rules on accounting for leased assets, the Wall Street Journal reported. U.S. government agencies such as the FBI and private groups such as the Search for International Terrorist Entities Institute monitor hundreds of suspected terrorist Web sites on the Internet and sometimes track users, the NY Times reported. U.S. President Bush lead Senator Kerry 49% to 41% among registered voters in Florida, a Quinnipiac University poll found. WebMD promoted Kevin Cameron to CEO and said the company may spin off or sell shares in its WebMD Health unit. Halliburton said it may sell its KBR unit, which is being investigated, to boost its share price, Bloomberg said. Iraqi interim Prime Minister Allawi said the conflict in his country is part of a global terrorist threat, pledging to defeat foreign fighters and hold elections on time in January, Bloomberg reported. Florida residents were advised to prepare for their fourth hurricane strike this season as Jeanne headed westward through the Bahamas on a path that may take the storm up the state's east coast as soon as Sunday, Bloomberg said. Crude oil is falling from a one-month high after a White House spokesman said the U.S. may loan oil to refiners from the Strategic Petroleum Reserve to make up for supply disruptions caused by Hurricane Ivan, Bloomberg reported. The average rate on a benchmark 30-year fixed mortgage in the U.S. fell to 5.7%, the lowest since early April, from 5.75% last week, Bloomberg reported.
BOTTOM LINE: The Portfolio is unchanged mid-day as my declining steel and security longs are being offset by my falling software and retail shorts. I have not traded today and the Portfolio is still market neutral. The tone of the market is relatively weak. Most measures of investor complacency are rising. The weekly reading from the AAII shows the % Bulls actually jumped 12.7% to 51.22%. As well, talk of tapping the strategic petroleum reserve is not sending oil prices lower, which is a negative. I expect stocks to decline modestly into the close.
NASDAQ 1,888.05 +.12%
Leading Sectors
Tobacco +1.45%
Restaurants +.83%
Wireless +.62%
Lagging Sectors
Homebuilders -1.31%
Fashion -1.47%
Airlines -1.56%
Other
Crude Oil 48.00 -.72%
Natural Gas 5.42 -3.62%
Gold 412.40 +.83%
Base Metals 115.22 -.05%
U.S. Dollar 88.27 -.27%
10-Yr. T-note Yield 3.99% +.29%
VIX 14.85 +.75%
Put/Call .71 -35.45%
NYSE Arms 1.43 -39.41%
Market Movers
FNM -3.91% after multiple downgrades.
CYBX +4.0% said the FDA approved its device for testing on life-threatening treatment-resistant depression.
MSO +14.2% after it said it agreed to work with tv producer Mark Burnett, who created the popular "Survivor" series.
IMGC +10.9% after beating 1Q estimates, reiterating 2Q outlook and Needham upgrade to Strong Buy.
GPN +11.3% after beating 1Q estimates and raising 05 outlook.
DRI +6.3% after beating 1Q estimates.
CVS +4.44% after Matrix rated it Strong Buy.
STMP -12.2% after canceling appearance at ThinkEquity Conference.
APPX -9.5% after the Wall Street Journal reported that the SEC is investigating the company on suspicion that it may have misled investors on progress made with a cancer drug.
DECK -6.2% after RBC Capital cut it to Sector Perform.
Economic Data
Initial Jobless Claims for last week were 350K versus estimates of 335K and 336K prior.
Continuing Claims were 2883K versus estimates of 2880K and 2878K prior.
Leading Indicators fell .3% versus estimates of a .2% decline and a .3% decrease in July.
Recommendations
Goldman Sachs reiterated Outperform on AMR, SMP, CLX, BIIB, PFE, AMGN, FS, HOT, TPX and BC. Goldman reiterated Underperform on MKL, RAI, BSC and EK. Citi SmithBarney reiterated Buy on FNM, target $86. Citi reiterated Buy on COGN, target $44. Citi reiterated Buy on GPN, target $55. Citi reiterated Buy on MWD, target $72. Citi reiterated Buy on TGT, target $50. Citi said to Buy MSTR as strength at COGN will also benefit it, target $59.
Mid-day News
U.S. stocks are mixed mid-day on continuing worries that high energy prices are leading to slower economic growth. The International Accounting Standards Board plans to overhaul the rules on accounting for leased assets, the Wall Street Journal reported. U.S. government agencies such as the FBI and private groups such as the Search for International Terrorist Entities Institute monitor hundreds of suspected terrorist Web sites on the Internet and sometimes track users, the NY Times reported. U.S. President Bush lead Senator Kerry 49% to 41% among registered voters in Florida, a Quinnipiac University poll found. WebMD promoted Kevin Cameron to CEO and said the company may spin off or sell shares in its WebMD Health unit. Halliburton said it may sell its KBR unit, which is being investigated, to boost its share price, Bloomberg said. Iraqi interim Prime Minister Allawi said the conflict in his country is part of a global terrorist threat, pledging to defeat foreign fighters and hold elections on time in January, Bloomberg reported. Florida residents were advised to prepare for their fourth hurricane strike this season as Jeanne headed westward through the Bahamas on a path that may take the storm up the state's east coast as soon as Sunday, Bloomberg said. Crude oil is falling from a one-month high after a White House spokesman said the U.S. may loan oil to refiners from the Strategic Petroleum Reserve to make up for supply disruptions caused by Hurricane Ivan, Bloomberg reported. The average rate on a benchmark 30-year fixed mortgage in the U.S. fell to 5.7%, the lowest since early April, from 5.75% last week, Bloomberg reported.
BOTTOM LINE: The Portfolio is unchanged mid-day as my declining steel and security longs are being offset by my falling software and retail shorts. I have not traded today and the Portfolio is still market neutral. The tone of the market is relatively weak. Most measures of investor complacency are rising. The weekly reading from the AAII shows the % Bulls actually jumped 12.7% to 51.22%. As well, talk of tapping the strategic petroleum reserve is not sending oil prices lower, which is a negative. I expect stocks to decline modestly into the close.
Thursday Watch
Earnings of Note
Company/Estimate
AGE/.55
FINL/.87
PSRC/-.02
SCS/.01
Splits
HUG 2-for-1
Economic Data
Initial Jobless Claims for last week are estimated at 335K versus 333K the prior week.
Continuing Claims are estimated at 2880K versus 2882K prior.
Leading Indicators for Aug. estimated -.2% versus -.3% in July.
Minutes of Aug. 10 FOMC Meeting.
Recommendations
Goldman reiterated Underperform on EK.
Late-Night News
Asian indices are lower following weakness in the U.S. over rising energy prices. IBM Japan and Cisco Systems are jointly developing and marketing a product to protect corporate networks from damage when virus-infected computers are linked to the system, the Nihon Keizai newspaper reported. Singapore's Straits Times Index may reach 2,300 in the next 12 months, boosted by companies moving to combine their businesses, the Straits Times said. China's consumer-price inflation will ease for the rest of the year as improving harvests reduce pressure on food costs to rise, Wen Wei Po reported. Australian police are investigating a potentially explosive device that was found in the cargo hold of a Virgin Blue Holdings plane at Sydney airport, Bloomberg said. Taiwan Semiconductor Manufacturing said its factory use will decline from its peak of 106% in the last quarter because customers are cutting inventory, Bloomberg said. China will attend talks of the G7 industrialized countries for the first time next week, reflecting the emerging importance of the world's biggest developing nation to the global economy, Bloomberg reported. Crude oil futures are falling tonight, snapping an 11% gain in the past week, as concern eased that disruptions at Russia's biggest oil exporter and hurricane damage in the Gulf will further cut supply, Bloomberg said. Donald Trump's Trump Hotels & Casino Resorts said it has ended talks with a CSFB investment unit, which had planned to invest $400 million in Trump Hotels and become the majority shareholder, Bloomberg reported. Fannie Mae CFO Howard is to blame for violating accounting rules that have potentially large financial consequences, said federal regulators. Lehman Brothers agreed to pay $222.5 million to resolve a suit filed by investors over the bank's role as underwrite for Enron, the bankrupt energy trader, Bloomberg reported. U.S. automakers are boosting advertising for passenger cars in an effort to regain market share from Japanese competitors such as Toyota Motor and Honda Motor, the Washington Post reported.
Late-Night Trading
Asian Indices are -.75% to -.25% on average.
S&P 500 indicated +.10%.
NASDAQ 100 indicated +.07%
BOTTOM LINE: I expect U.S. equities to open modestly higher in the morning on stabilizing energy prices and better economic reports. However, shares may come under pressure later in the day on a continuation of today's sell-off. The Portfolio is market neutral heading into tomorrow.
Company/Estimate
AGE/.55
FINL/.87
PSRC/-.02
SCS/.01
Splits
HUG 2-for-1
Economic Data
Initial Jobless Claims for last week are estimated at 335K versus 333K the prior week.
Continuing Claims are estimated at 2880K versus 2882K prior.
Leading Indicators for Aug. estimated -.2% versus -.3% in July.
Minutes of Aug. 10 FOMC Meeting.
Recommendations
Goldman reiterated Underperform on EK.
Late-Night News
Asian indices are lower following weakness in the U.S. over rising energy prices. IBM Japan and Cisco Systems are jointly developing and marketing a product to protect corporate networks from damage when virus-infected computers are linked to the system, the Nihon Keizai newspaper reported. Singapore's Straits Times Index may reach 2,300 in the next 12 months, boosted by companies moving to combine their businesses, the Straits Times said. China's consumer-price inflation will ease for the rest of the year as improving harvests reduce pressure on food costs to rise, Wen Wei Po reported. Australian police are investigating a potentially explosive device that was found in the cargo hold of a Virgin Blue Holdings plane at Sydney airport, Bloomberg said. Taiwan Semiconductor Manufacturing said its factory use will decline from its peak of 106% in the last quarter because customers are cutting inventory, Bloomberg said. China will attend talks of the G7 industrialized countries for the first time next week, reflecting the emerging importance of the world's biggest developing nation to the global economy, Bloomberg reported. Crude oil futures are falling tonight, snapping an 11% gain in the past week, as concern eased that disruptions at Russia's biggest oil exporter and hurricane damage in the Gulf will further cut supply, Bloomberg said. Donald Trump's Trump Hotels & Casino Resorts said it has ended talks with a CSFB investment unit, which had planned to invest $400 million in Trump Hotels and become the majority shareholder, Bloomberg reported. Fannie Mae CFO Howard is to blame for violating accounting rules that have potentially large financial consequences, said federal regulators. Lehman Brothers agreed to pay $222.5 million to resolve a suit filed by investors over the bank's role as underwrite for Enron, the bankrupt energy trader, Bloomberg reported. U.S. automakers are boosting advertising for passenger cars in an effort to regain market share from Japanese competitors such as Toyota Motor and Honda Motor, the Washington Post reported.
Late-Night Trading
Asian Indices are -.75% to -.25% on average.
S&P 500 indicated +.10%.
NASDAQ 100 indicated +.07%
BOTTOM LINE: I expect U.S. equities to open modestly higher in the morning on stabilizing energy prices and better economic reports. However, shares may come under pressure later in the day on a continuation of today's sell-off. The Portfolio is market neutral heading into tomorrow.
Wednesday, September 22, 2004
Wednesday Close
S&P 500 1,113.56 -1.39%
NASDAQ 1,885.71 -1.85%
Leading Sectors
Broadcasting +.84%
Homebuilders +.36%
Oil Service -.11%
Lagging Sectors
Networking -2.89%
Semis -2.97%
I-Banks -3.30%
Other
Crude Oil 47.95 -.83%
Natural Gas 5.63 unch.
Gold 409.10 +.02%
Base Metals 115.28 +1.14%
U.S. Dollar 88.49 +.41%
10-Yr. T-note Yield 3.98% -1.42%
VIX 14.74 +7.91%
Put/Call 1.10 +59.42%
NYSE Arms 2.36 +177.65%
After-hours Movers
MERX +5.96% after beating 1Q estimates and raising 2Q guidance.
MSO +9.81% after saying it agreed to work with television producer Mark Burnett to create a primetime TV series featuring Martha Stewart.
COGN +3.12% after beating 2Q estimates and giving positive outlook.
BBBY -3.41% after beating 2Q estimates, but giving conservative 3Q guidance.
Recommendations
Goldman Sachs reiterated Outperform on CLX.
After-hours News
U.S. stocks fell today on profit-taking, worries over slowing earnings growth and rising energy prices. After the close, NATO allies are expected to send about 300 officers to Iraq to establish and operated a military academy outside Baghdad, the AP reported. Oil refiners asked to borrow crude oil from the U.S. Strategic Petroleum Reserve as they seek to recover from losses related to Hurricane Ivan, Dow Jones Newswires reported. Bed Bath & Beyond said second-quarter net income rose to $120 million, meeting analysts' estimates, Bloomberg reported. The U.S. Senate approved Porter Goss, a Republican congressman, to be director of the CIA, confirming President Bush's nominee to lead the agency through a reorganization recommended by the 9/11 commission, Bloomberg reported. US Airways will seek court permission Friday to impose new labor contract terms to reduce costs if tentative agreements with unions can't be reached, Bloomberg said.
BOTTOM LINE: The Portfolio finished lower today on declines in my Chinese ADR, internet and telecom-related longs. I exited a few more longs in the afternoon and added some new shorts in various sectors, thus leaving the Portfolio market neutral(longs-shorts=0% market exposure). One of my new shorts is SYMC and I am using a $52.60 stop-loss on this position. The tone of the market worsened into the afternoon as energy prices continued to rise. I do not expect this correction to bring stocks substantially lower. U.S. equities will likely trade weaker-to-neutral through mid-October before another upwards thrust in stock prices commences and lasts through year-end. The likely weakness over the next few weeks should be used by longer-term investors to build positions in favorite longs.
NASDAQ 1,885.71 -1.85%
Leading Sectors
Broadcasting +.84%
Homebuilders +.36%
Oil Service -.11%
Lagging Sectors
Networking -2.89%
Semis -2.97%
I-Banks -3.30%
Other
Crude Oil 47.95 -.83%
Natural Gas 5.63 unch.
Gold 409.10 +.02%
Base Metals 115.28 +1.14%
U.S. Dollar 88.49 +.41%
10-Yr. T-note Yield 3.98% -1.42%
VIX 14.74 +7.91%
Put/Call 1.10 +59.42%
NYSE Arms 2.36 +177.65%
After-hours Movers
MERX +5.96% after beating 1Q estimates and raising 2Q guidance.
MSO +9.81% after saying it agreed to work with television producer Mark Burnett to create a primetime TV series featuring Martha Stewart.
COGN +3.12% after beating 2Q estimates and giving positive outlook.
BBBY -3.41% after beating 2Q estimates, but giving conservative 3Q guidance.
Recommendations
Goldman Sachs reiterated Outperform on CLX.
After-hours News
U.S. stocks fell today on profit-taking, worries over slowing earnings growth and rising energy prices. After the close, NATO allies are expected to send about 300 officers to Iraq to establish and operated a military academy outside Baghdad, the AP reported. Oil refiners asked to borrow crude oil from the U.S. Strategic Petroleum Reserve as they seek to recover from losses related to Hurricane Ivan, Dow Jones Newswires reported. Bed Bath & Beyond said second-quarter net income rose to $120 million, meeting analysts' estimates, Bloomberg reported. The U.S. Senate approved Porter Goss, a Republican congressman, to be director of the CIA, confirming President Bush's nominee to lead the agency through a reorganization recommended by the 9/11 commission, Bloomberg reported. US Airways will seek court permission Friday to impose new labor contract terms to reduce costs if tentative agreements with unions can't be reached, Bloomberg said.
BOTTOM LINE: The Portfolio finished lower today on declines in my Chinese ADR, internet and telecom-related longs. I exited a few more longs in the afternoon and added some new shorts in various sectors, thus leaving the Portfolio market neutral(longs-shorts=0% market exposure). One of my new shorts is SYMC and I am using a $52.60 stop-loss on this position. The tone of the market worsened into the afternoon as energy prices continued to rise. I do not expect this correction to bring stocks substantially lower. U.S. equities will likely trade weaker-to-neutral through mid-October before another upwards thrust in stock prices commences and lasts through year-end. The likely weakness over the next few weeks should be used by longer-term investors to build positions in favorite longs.
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