S&P 500 1,135.17 +.32%
NASDAQ 1,952.40 +.53%
Leading Sectors
Disk Drives +3.23%
Iron/Steel +2.69%
Airlines +2.05%
Lagging Sectors
Oil Service -.90%
Broadcasting -1.27%
Homebuilders -4.83%
Other
Crude Oil 49.93 +.04%
Natural Gas 6.72 unch.
Gold 416.20 +.14%
Base Metals 120.02 -.03%
U.S. Dollar 88.43 +.06%
10-Yr. T-note Yield 4.17% -.46%
VIX 13.41 +5.18%
Put/Call .83 -12.63%
NYSE Arms .70 +52.17%
After-hours Movers
NFLX +13.57% after beating 3Q estimates.
FRX +7.25% after beating 2Q estimates and raising 3Q guidance.
PHM -6.43% after cutting 3Q/04 forecast slightly.
NATI -14.97% after lowering 3Q estimates.
EPIX -8.35% after saying the FDA has extended the action date for completion of its review of MS-325.
Recommendations
Goldman Sachs reiterated Outperform on SII and WAG.
After-hours News
U.S. stocks finished modestly higher today, led by technology shares, on optimism over accelerating economic growth. After the close, U.S. Federal Communications Chairman Powell will recommend that Cingular Wireless be allowed to buy AT&T Wireless Services, Reuters reported. LG Electronic, the world's sixth largest cell-phone maker, expects mobile-phone sales to increase more than 50% next year, Reuters reported. Arcelor SA, the world's largest steelmaker, said it may stop supplying some of its biggest customers unless they accept price increases scheduled for next year, the Financial Times said. Treasury Secretary Snow said tax cuts signed into law by President Bush boosted the U.S. economy and should be made permanent, Bloomberg reported. Forest Labs, maker of the antidepressants Celexa and Lexapro, said fiscal second-quarter earnings rose more than analysts estimated, Bloomberg reported. Netflix said its subscribers increased 73% to 2.23 million from a year earlier and raised its third-quarter profit forecast, Bloomberg said. The average U.S. retail price for regular-grade gasoline was $1.94/gallon this past week, down from $2.06 in late May, Bloomberg reported. Wal-Mart plans to open as many as 295 stores in the U.S. in 2005, Bloomberg reported.
BOTTOM LINE: The Portfolio finished substantially higher today on strength in my steel, software, biotech and restaurant longs. I took profits in a homebuilding long in the afternoon and added ERES long, thus leaving the Portfolio 125% net long. I am using a stop-loss of $13.35 on this position. Notwithstanding the afternoon pullback, today's action was pretty good for the Bulls as most stocks advanced and volume increased. A period of consolidation to digest recent gains is warranted. As well, the CRB fell and most measures of investor anxiety rose. Homebuilders will likely continue today's sell-off in the short-run, however any pullback is likely a correction within a secular move upwards.
Monday, October 04, 2004
Mid-day Update
S&P 500 1,137.14 +.50%
NASDAQ 1,957.38 +.78%
Leading Sectors
Disk Drives +3.0%
Iron/Steel +2.42%
Computer Services +2.07%
Lagging Sectors
Papers -.33%
Oil Service -.67%
Homebuilders -2.50%
Other
Crude Oil 49.85 -.54%
Natural Gas 6.74 -.47%
Gold 415.20 -1.42%
Base Metals 120.02 -.03%
U.S. Dollar 88.48 +.98%
10-Yr. T-note Yield 4.19% +.14%
VIX 13.37 +4.86%
Put/Call .80 -15.79%
NYSE Arms .57 +23.91%
Market Movers
SEBL+15.0% after raising 3Q guidance.
BRCM +3.5% after announcing a new family of system-on-a-chip processors targeted at data networking and communications applications.
VAR +19.2% after saying net orders in its oncology systems business grew more than 20% in 4Q.
HTCH +14.2% after raising 4Q guidance substantially.
AKS +15.8% after it said it would increase prices on "nearly all" its contracts and JP Moran added it to their "equity focus list."
NUE +4.4% on AKS news.
TZOO +8.5% on short-squeeze.
MSTR +7.5% on SEBL news.
PRAA +12.5% after acquiring the assets of IGS Nevada and saying it will increase 05 earnings.
SDS +12.1% after saying it will spin off its division that helps customers keep access to their information and reiterating 04 outlook.
HYSL +6.85% after saying Olympus is using its software to increase profitability and build more accurate forecasts.
NTY +10.8% beating 4Q outlook substantially.
NUS -26.9% after lowering 3Q/4Q guidance.
CECO -5.6% on Bank of America downgrade to Neutral.
Economic Data
Factory Orders for August fell .1% versus estimates of a .1% gain and an upwardly revised 1.7% increase in July.
Recommendations
Goldman Sachs reiterated Outperform on AMGN, BBY, KRB, PAYX, AA, HOT, FS, IGT, STN, AET, INTC, AMD, MSFT, CZN, FON, CAL, WMT, FD, ADP, CEN, DEX, N, Goldman reiterated Underperform on DJ, LVLT and MKL. Citi SmithBarney said to Buy GP, LPX and WY. Citi reiterated Buy on ETR, target $65. Citi reiterated Buy on WMT, target $65. Citi reiterated Buy on HCA, target $48. Citi reiterated Buy on AMT, target $19. Citi reiterated Buy on SSI, target $54. ALV raised to Overweight at Morgan Stanley, target $45. GG cut to Sector Underperform at CIBC, target $14. PHRM rated Buy at Bank of America, target $74. MCRL cut to Sell at Deutsche Bank, target $8. WON raised to Outperform at Thomas Weisel. LPNT raised to Buy at Oppenheimer, target $40.
Mid-day News
U.S. stocks are higher mid-day on optimism over an accelerating U.S. economy. IBM updated one of its mainframe software engines, used by airlines and credit-card brands including Visa International, with the help of the Linux operating system, the NY Times said. GM plans to put $3 billion of its information technology contracts up for bid for the first time in two decades, the AP said. AtheroGenics's study showing an experimental drug significantly reduced the amount of fatty plaque that clogs blood vessels was released too early, Barron's reported. Halsey Minor, who founded Cnet Networks, plans to invest $50 million of his own money in promising technology startups, the NY Times reported. California's air quality improved this year, reversing three years of worsening pollution, the LA Times said. Members of the U.S. military favor President Bush over Senator Kerry by a 4-to-1 ratio, USA Today said, citing a survey conducted by Amy Times Publishing. Citigroup Senior Vice Chairman Rhodes, who recently returned from meetings with China's premier and central bank governor, told CNBC that the government there is committed "over time" to floating its currency. Office Depot said Chairman and CEO Nelson resigned after four years of struggles to boost sales, Bloomberg reported. Oil futures are falling on expectations U.S. refiners will increase oil inventories amid rising imports and a cease-fire by Nigerian rebels who threatened to disrupt shipments from Africa's largest crude producer, Bloomberg reported. The U.S. Supreme Court, turning away an appeal by a telemarketing trade group, refused to question the national "do not call" registry that bars unsolicited sales calls to more than 63 million phone numbers, Bloomberg reported. The rocket plane SpaceShipOne won the $10 million competition aimed at creating a space tourism industry, flying 100 kilometers to the edge of space, Bloomberg said. Factory orders fell slightly in August on lower demand for aircraft, however bookings rose for a range of consumer products such as automobiles and appliances, suggesting the U.S. economy strengthened in the third quarter, Bloomberg reported.
BOTTOM LINE: The Portfolio is substantially higher mid-day on strength in my steel, semiconductor, software and alternative energy longs. I have not traded today, thus leaving the Portfolio 125% net long. The tone of the market is relatively good today and technology stocks are retaining their leadership role. I suspect this rally has a bit further to go as shorts with large gains from the third quarter continue to take profits and longs with lagging performance put money to work before they fall too far behind to catch up.
NASDAQ 1,957.38 +.78%
Leading Sectors
Disk Drives +3.0%
Iron/Steel +2.42%
Computer Services +2.07%
Lagging Sectors
Papers -.33%
Oil Service -.67%
Homebuilders -2.50%
Other
Crude Oil 49.85 -.54%
Natural Gas 6.74 -.47%
Gold 415.20 -1.42%
Base Metals 120.02 -.03%
U.S. Dollar 88.48 +.98%
10-Yr. T-note Yield 4.19% +.14%
VIX 13.37 +4.86%
Put/Call .80 -15.79%
NYSE Arms .57 +23.91%
Market Movers
SEBL+15.0% after raising 3Q guidance.
BRCM +3.5% after announcing a new family of system-on-a-chip processors targeted at data networking and communications applications.
VAR +19.2% after saying net orders in its oncology systems business grew more than 20% in 4Q.
HTCH +14.2% after raising 4Q guidance substantially.
AKS +15.8% after it said it would increase prices on "nearly all" its contracts and JP Moran added it to their "equity focus list."
NUE +4.4% on AKS news.
TZOO +8.5% on short-squeeze.
MSTR +7.5% on SEBL news.
PRAA +12.5% after acquiring the assets of IGS Nevada and saying it will increase 05 earnings.
SDS +12.1% after saying it will spin off its division that helps customers keep access to their information and reiterating 04 outlook.
HYSL +6.85% after saying Olympus is using its software to increase profitability and build more accurate forecasts.
NTY +10.8% beating 4Q outlook substantially.
NUS -26.9% after lowering 3Q/4Q guidance.
CECO -5.6% on Bank of America downgrade to Neutral.
Economic Data
Factory Orders for August fell .1% versus estimates of a .1% gain and an upwardly revised 1.7% increase in July.
Recommendations
Goldman Sachs reiterated Outperform on AMGN, BBY, KRB, PAYX, AA, HOT, FS, IGT, STN, AET, INTC, AMD, MSFT, CZN, FON, CAL, WMT, FD, ADP, CEN, DEX, N, Goldman reiterated Underperform on DJ, LVLT and MKL. Citi SmithBarney said to Buy GP, LPX and WY. Citi reiterated Buy on ETR, target $65. Citi reiterated Buy on WMT, target $65. Citi reiterated Buy on HCA, target $48. Citi reiterated Buy on AMT, target $19. Citi reiterated Buy on SSI, target $54. ALV raised to Overweight at Morgan Stanley, target $45. GG cut to Sector Underperform at CIBC, target $14. PHRM rated Buy at Bank of America, target $74. MCRL cut to Sell at Deutsche Bank, target $8. WON raised to Outperform at Thomas Weisel. LPNT raised to Buy at Oppenheimer, target $40.
Mid-day News
U.S. stocks are higher mid-day on optimism over an accelerating U.S. economy. IBM updated one of its mainframe software engines, used by airlines and credit-card brands including Visa International, with the help of the Linux operating system, the NY Times said. GM plans to put $3 billion of its information technology contracts up for bid for the first time in two decades, the AP said. AtheroGenics's study showing an experimental drug significantly reduced the amount of fatty plaque that clogs blood vessels was released too early, Barron's reported. Halsey Minor, who founded Cnet Networks, plans to invest $50 million of his own money in promising technology startups, the NY Times reported. California's air quality improved this year, reversing three years of worsening pollution, the LA Times said. Members of the U.S. military favor President Bush over Senator Kerry by a 4-to-1 ratio, USA Today said, citing a survey conducted by Amy Times Publishing. Citigroup Senior Vice Chairman Rhodes, who recently returned from meetings with China's premier and central bank governor, told CNBC that the government there is committed "over time" to floating its currency. Office Depot said Chairman and CEO Nelson resigned after four years of struggles to boost sales, Bloomberg reported. Oil futures are falling on expectations U.S. refiners will increase oil inventories amid rising imports and a cease-fire by Nigerian rebels who threatened to disrupt shipments from Africa's largest crude producer, Bloomberg reported. The U.S. Supreme Court, turning away an appeal by a telemarketing trade group, refused to question the national "do not call" registry that bars unsolicited sales calls to more than 63 million phone numbers, Bloomberg reported. The rocket plane SpaceShipOne won the $10 million competition aimed at creating a space tourism industry, flying 100 kilometers to the edge of space, Bloomberg said. Factory orders fell slightly in August on lower demand for aircraft, however bookings rose for a range of consumer products such as automobiles and appliances, suggesting the U.S. economy strengthened in the third quarter, Bloomberg reported.
BOTTOM LINE: The Portfolio is substantially higher mid-day on strength in my steel, semiconductor, software and alternative energy longs. I have not traded today, thus leaving the Portfolio 125% net long. The tone of the market is relatively good today and technology stocks are retaining their leadership role. I suspect this rally has a bit further to go as shorts with large gains from the third quarter continue to take profits and longs with lagging performance put money to work before they fall too far behind to catch up.
Monday Watch
Earnings of Note
Company/Estimate
NFLX/.18
RI/.44
Splits
None of note.
Economic Data
Factory Orders for August estimated to rise .1% versus a 1.3% increase in July.
Weekend Recommendations
Louis Rukeyser's Wall Street had guests that were positive on WFC, PEP, PFE, GD, RIG, UNH, CD, PGR, EBAY, SBUX, QCOM and YHOO. Bulls and Bears had guests that were positive on PGH, SPN, WON, CSCO, BAC, C, TEVA and mixed on PFE, HRB, MRK. Forbes on Fox had guests that were mixed on MCD and LTD. Cashin' In had guests that were positive on BHI and PTR. Barron's had positive comments on NEM. Goldman Sachs reiterated Outperform on FON, AET, PFE, RE, VLTR and CZN. Goldman reiterated Underperform on CYT, DQE, MKL and LVLT.
Weekend News
Bruce Springsteen, R.E.M., Dave Mathews, the Dixie Chicks and other musicians began a series of concerts called the "Vote for Change" tour in order to persuade young adults to vote for Senator Kerry, the NY Times reported. The concerts are presented by MoveOn.org, the political action committee backed by billionaire hedge fund manager George Soros, the paper said. Merck & Co. may face a legal bill of as much as $10 billion after the global withdrawal of its painkiller drug Vioxx due to a potential link to heart attacks and strokes, the Financial Times reported. New York & Co.'s IPO may net $180 million for Bear Stearns Merchant Banking, which bought the women's clothing retailer in 2002, Barron's said. China's central bank doesn't plan to raise interest rates, Chinanews' Web site said. Kohlberg Kravis Roberts joined a group led by Goldman Sachs to bid $2.7 billion for drugmaker Warner Chilcott Plc, the Sunday Times reported. Kuwait plans to buy 10 more F-18 fighter jets from the U.S., adding to 40 bought in 1992, Gulf Business magazine reported. Citigroup is targeting Barclays Plc and Lloyds TSB Group Plc among possible acquisitions as it seeks to expand in U.K. consumer banking, Bloomberg reported. The U.S. presidential candidates are expected to spend 60% more on tv ads in Philadelphia than in the 2000 election, representing a windfall for local tv stations in Pennsylvania, the Philadelphia Inquirer reported. Christie's International and Sotheby's Holdings plan to sell hundreds of millions of dollars worth of art in November in New York, the highest value in almost 15 years, the NY Times said. East New York, once plagued by run-down homes, drug markets and soaring crime, is being spruced up with new two-and three-family row houses, the NY Times reported. Merrill Lynch, after years of cutbacks, has started acquiring companies and recently added almost 1,200 employees and top-level executives in its electronic stock trading and hedge-fund brokerage units, Crain's New York Business reports. Viacom plans to soon purchase electronic-game company Midway Games, the New York Post said. "We are at the early stages of a fairly prolonged global expansion of mining capacity, said Caterpillar CEO Owens. The North Korean military has 500 to 600 computer hackers capable of conducting cyber war against the U.S. and its allies, including South Korea and Japan, the Yonhap News agency said. 3,000 U.S. and 2,000 Iraqi troops have retaken the insurgent-controlled city of Samarra in the so-called Sunni triangle west of Baghdad after a three-day fight, the NY Times said. Wal-Mart estimated September sales at U.S. stores open at least a year rose 2.3% as shoppers bought more bedding and electronics, Bloomberg reported. U.S. President Bush said an election-year bill renewing $146 billion in tax cuts will benefit families and keep the economy on the path of recovery, Bloomberg said. Crude oil futures may fall today after a cease-fire in Nigeria held and rebel leaders said they have no quarrel with international oil companies operating in Africa's biggest oil-producing state, Bloomberg said. The Montreal Expos, who have had the worst attendance in the major leagues for seven straight years, may fetch $300 million to $400 million after they move to Washington, triple what baseball owners paid for the franchise two years ago, Bloomberg reported.
Late-Night Trading
Asian indices are sharply higher, +1.5% to +2.75% on average.
S&P 500 indicated +.34%.
NASDAQ indicated +.62%
BOTTOM LINE: I expect U.S. stocks to open higher in the morning on strength in Asia, optimism over accelerating economic growth, short-covering and declining energy prices. The Portfolio is 125% net long heading into the week.
Company/Estimate
NFLX/.18
RI/.44
Splits
None of note.
Economic Data
Factory Orders for August estimated to rise .1% versus a 1.3% increase in July.
Weekend Recommendations
Louis Rukeyser's Wall Street had guests that were positive on WFC, PEP, PFE, GD, RIG, UNH, CD, PGR, EBAY, SBUX, QCOM and YHOO. Bulls and Bears had guests that were positive on PGH, SPN, WON, CSCO, BAC, C, TEVA and mixed on PFE, HRB, MRK. Forbes on Fox had guests that were mixed on MCD and LTD. Cashin' In had guests that were positive on BHI and PTR. Barron's had positive comments on NEM. Goldman Sachs reiterated Outperform on FON, AET, PFE, RE, VLTR and CZN. Goldman reiterated Underperform on CYT, DQE, MKL and LVLT.
Weekend News
Bruce Springsteen, R.E.M., Dave Mathews, the Dixie Chicks and other musicians began a series of concerts called the "Vote for Change" tour in order to persuade young adults to vote for Senator Kerry, the NY Times reported. The concerts are presented by MoveOn.org, the political action committee backed by billionaire hedge fund manager George Soros, the paper said. Merck & Co. may face a legal bill of as much as $10 billion after the global withdrawal of its painkiller drug Vioxx due to a potential link to heart attacks and strokes, the Financial Times reported. New York & Co.'s IPO may net $180 million for Bear Stearns Merchant Banking, which bought the women's clothing retailer in 2002, Barron's said. China's central bank doesn't plan to raise interest rates, Chinanews' Web site said. Kohlberg Kravis Roberts joined a group led by Goldman Sachs to bid $2.7 billion for drugmaker Warner Chilcott Plc, the Sunday Times reported. Kuwait plans to buy 10 more F-18 fighter jets from the U.S., adding to 40 bought in 1992, Gulf Business magazine reported. Citigroup is targeting Barclays Plc and Lloyds TSB Group Plc among possible acquisitions as it seeks to expand in U.K. consumer banking, Bloomberg reported. The U.S. presidential candidates are expected to spend 60% more on tv ads in Philadelphia than in the 2000 election, representing a windfall for local tv stations in Pennsylvania, the Philadelphia Inquirer reported. Christie's International and Sotheby's Holdings plan to sell hundreds of millions of dollars worth of art in November in New York, the highest value in almost 15 years, the NY Times said. East New York, once plagued by run-down homes, drug markets and soaring crime, is being spruced up with new two-and three-family row houses, the NY Times reported. Merrill Lynch, after years of cutbacks, has started acquiring companies and recently added almost 1,200 employees and top-level executives in its electronic stock trading and hedge-fund brokerage units, Crain's New York Business reports. Viacom plans to soon purchase electronic-game company Midway Games, the New York Post said. "We are at the early stages of a fairly prolonged global expansion of mining capacity, said Caterpillar CEO Owens. The North Korean military has 500 to 600 computer hackers capable of conducting cyber war against the U.S. and its allies, including South Korea and Japan, the Yonhap News agency said. 3,000 U.S. and 2,000 Iraqi troops have retaken the insurgent-controlled city of Samarra in the so-called Sunni triangle west of Baghdad after a three-day fight, the NY Times said. Wal-Mart estimated September sales at U.S. stores open at least a year rose 2.3% as shoppers bought more bedding and electronics, Bloomberg reported. U.S. President Bush said an election-year bill renewing $146 billion in tax cuts will benefit families and keep the economy on the path of recovery, Bloomberg said. Crude oil futures may fall today after a cease-fire in Nigeria held and rebel leaders said they have no quarrel with international oil companies operating in Africa's biggest oil-producing state, Bloomberg said. The Montreal Expos, who have had the worst attendance in the major leagues for seven straight years, may fetch $300 million to $400 million after they move to Washington, triple what baseball owners paid for the franchise two years ago, Bloomberg reported.
Late-Night Trading
Asian indices are sharply higher, +1.5% to +2.75% on average.
S&P 500 indicated +.34%.
NASDAQ indicated +.62%
BOTTOM LINE: I expect U.S. stocks to open higher in the morning on strength in Asia, optimism over accelerating economic growth, short-covering and declining energy prices. The Portfolio is 125% net long heading into the week.
Sunday, October 03, 2004
Chart of the Week
S&P 500 Index
Bottom Line: The S&P 500 is very close to breaking above its 9-month downtrend line. I expect this to happen in the very near future. Upon breaking this key resistance level, the benchmark index should gain traction on the upside, making a new high for the year during the month of November.
Bottom Line: The S&P 500 is very close to breaking above its 9-month downtrend line. I expect this to happen in the very near future. Upon breaking this key resistance level, the benchmark index should gain traction on the upside, making a new high for the year during the month of November.
Weekly Outlook
There are a few important economic reports and some significant corporate earnings reports scheduled for release this week. Economic reports include Factory Orders, ISM Non-Manufacturing, Initial Jobless Claims, Consumer Credit, Unemployment Rate, Average Hourly Earnings, Change in Non-farm Payrolls, Average Weekly Hours and Wholesale Inventories. ISM Non-Manufacturing and the Change in Non-farm Payrolls both have market-moving potential.
Apollo Group(APOL), Genentech(DNA), Monsanto(MON), Alcoa(AA), Costco(COST), Accenture(ACN) and General Electric(GE) are some of the more important companies that release quarterly earnings this week. There are also a number of other events that have market-moving potential. Multiple Federal Reserve Member speeches, the JP Morgan Asia Pacific Conference, Goldman Sachs Communacopia Conference, CSFB Medtech Conference, Vice-Presidential Debate, Merrill Lynch India Investor Forum and Chain Store Comp Sales Releases could also impact trading this week.
Bottom Line: I expect U.S. stocks to finish the week modestly higher on continued optimism over accelerating economic growth, diminishing domestic terrorism fears and short-covering. Investor complacency and the market's technically overbought state will likely hold gains in check. A further rise by Senator Kerry in the polls or another spike in oil prices would likely send stocks lower for the week. My short-term trading indicators are giving Buy signals and the Portfolio is 125% net long heading into the week.
Apollo Group(APOL), Genentech(DNA), Monsanto(MON), Alcoa(AA), Costco(COST), Accenture(ACN) and General Electric(GE) are some of the more important companies that release quarterly earnings this week. There are also a number of other events that have market-moving potential. Multiple Federal Reserve Member speeches, the JP Morgan Asia Pacific Conference, Goldman Sachs Communacopia Conference, CSFB Medtech Conference, Vice-Presidential Debate, Merrill Lynch India Investor Forum and Chain Store Comp Sales Releases could also impact trading this week.
Bottom Line: I expect U.S. stocks to finish the week modestly higher on continued optimism over accelerating economic growth, diminishing domestic terrorism fears and short-covering. Investor complacency and the market's technically overbought state will likely hold gains in check. A further rise by Senator Kerry in the polls or another spike in oil prices would likely send stocks lower for the week. My short-term trading indicators are giving Buy signals and the Portfolio is 125% net long heading into the week.
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