Earnings of Note
Company/Estimate
AVP/.34
ADM/.27
BMY/.39
CCU/.43
CVX/1.37
OS/1.60
Splits
None of note.
Economic Data
3Q Actual GDP estimated up 4.3% versus 3.3% in 2Q.
3Q Actual Personal Consumption estimated up 4.6% versus a 1.6% rise in 2Q.
3Q Actual GDP Price Deflator estimated up 1.6% versus a 3.2% gain in 2Q.
3Q Employment Cost Index estimated up 1.0% versus a .9% increase in 2Q.
Final Univ. of Mich. Consumer Confidence for October estimated at 88.0 versus a prior estimate of 87.5.
Chicago Purchasing Manager Index for October estimated at 59.0 versus 61.9 in September.
Recommendations
Goldman Sachs reiterated Outperform on AET, PHCC, PXD, SPG, LIZ, AMT, BHI and Underperform on UAL, CAN, DCLK, XOM. California Coastal Communities(CALC) shares are expected to rise as investors are attracted by land and properties owned by the builder and developer, Business Week reported. Wild Oats Markets(OATS), whose shares have dropped 55% this year, may be an acquisition target for a larger rival, Business Week said. NCR Corp.(NCR) shares my rise as high as $65 in twelve months, citing KeyBanc Capital analyst Matt Summerville, Business Week reported.
Late-Night News
Asian indices are modestly lower on concerns over slowing demand from China. A man identifying himself as an American member of al-Qaeda and speaking in English threatened new attacks that he said will cause U.S. streets to "run red with blood," in a videotape ABC News reported. Talk-show host Bill O'Reilly and Andrea Mackris, a Fox News producer, settled a complaint filed by O'Reilly accusing her and her lawyer of trying to extort $60 million from him and Fox before filing her lawsuit. All parties have agreed that there was no wrongdoing by O'Reilly, Mackris or her lawyer, CNN reported. AOL, Microsoft, Earthlink and Yahoo! sued dozens of junk e-mail senders in a second wave of lawsuits under a new U.S. law designed to curb spam, Bloomberg reported. China's first interest rate increase in nine years may cool its economy without damaging global growth, economists and international policy makers said.
Late-Night Trading
Asian Indices are -.75% to unch. on average.
S&P 500 indicated unch.
NASDAQ 100 indicated -.07%
BOTTOM LINE: I expect U.S. equities to open mixed in the morning and head modestly higher into the afternoon on a strong GDP report, better earnings and lower oil prices. However, the tightening of the election polls and terrorism fears before the weekend may stifle gains. The Portfolio is 100% net long heading into tomorrow.
Friday, October 29, 2004
Thursday, October 28, 2004
Thursday Close
S&P 500 1,127.44 +.18%
NASDAQ 1,975.74 +.29%
Leading Sectors
Airlines +4.25%
Retail +1.12%
Insurance +.98%
Lagging Sectors
Energy -1.74%
Oil Service -2.32%
Iron/Steel -2.50%
Other
Crude Oil 50.99 +.14%
Natural Gas 7.-.62%
Gold 425.40 -.16%
Base Metals 112.06 -.71%
U.S. Dollar 85.23 -.23%
10-Yr. T-note Yield 4.06% -.57%
VIX 15.39 -2.10%
Put/Call .68 unch.
NYSE Arms .97 +27.63%
After-hours Movers
CSTR +7.08% after beating 3Q estimates raising 4Q guidance.
APCC +20.0% after exceeding 3Q estimates.
OTEX +8.7% after beating 1Q estimates and raising 2Q/05 outlooks.
MFE +9.2% after beating 3Q estimates and raising 4Q oulook.
USPI -6.4% after meeting 3Q estimates and cutting 04/05 outlooks.
Recommendations
Goldman reiterated Outperform on UPS, SBC and Underperform on TSG, MKL, FRX.
After-hours News
U.S. stocks finished slightly higher today on optimism over lower oil prices, diminishing terrorism fears and better earnings reports. After the close, France said Yasser Arafat is expected to arrive in Paris tomorrow for medical treatment, Bloomberg reported. Crude oil futures had the biggest two-day decline in 19 months as Chinas' first interest-rate increase in nine years may reduce growth in fuel consumption, Bloomberg said. The race between President Bush and Senator Kerry may draw the largest turnout of any US presidential contest since 1968, according to a study of vote registrations, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly lower today on declines in my steel and security longs. I did not trade in the afternoon and the Portfolio is still 100% net longs. The tone of the market was relatively positive today and action appeared to me to be a healthy consolidation after recent gains. The CRB Index and oil futures closed near their lows for the day which bode well for future declines. I continue to expect U.S. stocks to trade mixed tomorrow morning and begin moving higher later in the day.
NASDAQ 1,975.74 +.29%
Leading Sectors
Airlines +4.25%
Retail +1.12%
Insurance +.98%
Lagging Sectors
Energy -1.74%
Oil Service -2.32%
Iron/Steel -2.50%
Other
Crude Oil 50.99 +.14%
Natural Gas 7.-.62%
Gold 425.40 -.16%
Base Metals 112.06 -.71%
U.S. Dollar 85.23 -.23%
10-Yr. T-note Yield 4.06% -.57%
VIX 15.39 -2.10%
Put/Call .68 unch.
NYSE Arms .97 +27.63%
After-hours Movers
CSTR +7.08% after beating 3Q estimates raising 4Q guidance.
APCC +20.0% after exceeding 3Q estimates.
OTEX +8.7% after beating 1Q estimates and raising 2Q/05 outlooks.
MFE +9.2% after beating 3Q estimates and raising 4Q oulook.
USPI -6.4% after meeting 3Q estimates and cutting 04/05 outlooks.
Recommendations
Goldman reiterated Outperform on UPS, SBC and Underperform on TSG, MKL, FRX.
After-hours News
U.S. stocks finished slightly higher today on optimism over lower oil prices, diminishing terrorism fears and better earnings reports. After the close, France said Yasser Arafat is expected to arrive in Paris tomorrow for medical treatment, Bloomberg reported. Crude oil futures had the biggest two-day decline in 19 months as Chinas' first interest-rate increase in nine years may reduce growth in fuel consumption, Bloomberg said. The race between President Bush and Senator Kerry may draw the largest turnout of any US presidential contest since 1968, according to a study of vote registrations, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly lower today on declines in my steel and security longs. I did not trade in the afternoon and the Portfolio is still 100% net longs. The tone of the market was relatively positive today and action appeared to me to be a healthy consolidation after recent gains. The CRB Index and oil futures closed near their lows for the day which bode well for future declines. I continue to expect U.S. stocks to trade mixed tomorrow morning and begin moving higher later in the day.
Mid-day Update
S&P 500 1,127.71 +.21%
NASDAQ 1,972.64 +.13%
Leading Sectors
Airlines +2.75%
Insurance +1.17%
Retail +.77%
Lagging Sectors
Commodity -1.10%
Hospitals -1.38%
Iron/Steel -2.16%
Other
Crude Oil 52.32 -.27%
Natural Gas 8.88 +1.20%
Gold 426.70 +.23%
Base Metals 112.06 -.71%
U.S. Dollar 85.14 -.37%
10-Yr. T-note Yield 4.07% -.33%
VIX 15.62 -.64%
Put/Call .71 +4.41%
NYSE Arms .88 +15.79%
Market Movers
ASKJ -26.9% after meeting 3Q estimates, lowering 4Q revenue estimate slightly and multiple downgrades.
DWA +35.5% on strong demand for IPO.
DNDN +23.1% after the company said a prostate-cancer drug that had failed to prove a benefit for patients in an earlier study helped patients live longer in a follow-up analysis.
IMCL -9.3% after missing optimistic 3Q estimates.
CLMS +5.6% on strong demand for IPO.
FOXH +50.5% on strong demand for IPO.
BBW +28.3% on strong demand for IPO.
ARBA +24.4% after beating 4Q estimates, RBC Capital upgrade to Top Pick and announcing a large sale to PD.
CCMP +15.1% after beating 4Q estimates.
LONG +16.3% on strong demand for IPO.
KOMG +12.0% after beating 3Q estimates and raising 4Q outlook.
KSWS +12.2% after beating 3Q estimates, raising 4Q guidance and announcing 5M share increase in stock buyback.
SRCL +7.3% after beating 3Q estimates.
PLB -18.0% after lowering 4Q/05 outlooks.
PNRA -10.2% after meeting 3Q estimates, lowering 05 guidance and JP Morgan downgrade to Neutral.
INGR -10.7% after missing 3Q estimates.
FBN -13.3% after meeting 3Q estimates, but lowering 4Q forecast.
TEX -8.7% after beating 3Q estimates, raising 4Q forecast and Robert Baird downgrade to Neutral.
Economic Data
Initial Jobless Claims for last week were 350K versus estimates of 335K and 330K the prior week.
Continuing Claims were 2823K versus estimates of 2818K and 2785K prior.
Help Wanted Index for September was 36 versus estimates of 37 and 37 in August.
Recommendations
-Goldman Sachs reiterated Outperform on MDT, AET, PFE, NBP, SYMC, AMT. Goldman reiterated Underperform on LVLT, LSI. Goldman said to Buy steel stocks on weakness from Chinese interest rate hike announcement, favorites are STLD, NUE, X and CMC. Goldman downgraded CI to Underperform.
-Citi SmithBarney said to Buy BEAS ahead of quarter, target $11.50. Citi reiterated Buy on JCP, target $50. Citi reiterated Buy on CMCSK, target $34. Citi reiterated Buy on IRF, target $50. Citi reiterated Buy on QSFT, target $17. Citi reiterated Buy on PRE, target $69. Citi reiterated Sell on BA, target $40. Citi reiterated Buy on PHM, target $86. Citi reiterated Sell on COP, target $76. Citi reiterated Buy on EEFT, target $27. Citi reiterated Buy on TEX, target $52. Citi reiterated Buy on CTX, target $85. Citi reiterated Buy on MSFT, target $33. Citi reiterated Buy on ATH, target $116.
-UBS cut LPNT to Reduce, target $28.
-Legg Mason raised QSFT to Buy, target $18.
-JP Morgan raised PECS to Overweight.
Mid-day News
U.S. stocks are modestly higher mid-day as declining oil prices, soaring IPOs, diminishing domestic terrorism fears and earnings optimism are offsetting concerns over slowing demand from China. Ford Motor may expand production of its gas-electric hybrid Ford Escape sport-utility vehicles, as the company anticipates strong demand, the Wall Street Journal reported. BellSouth is expected to announce an agreement today to help sell ad packages on Google's Web sites, the Wall Street Journal reported. OAO Yukos Oil CFO Misamore said bankruptcy is "perhaps the best solution" for handling its tax debts from the Russian government, according to Le Monde. China raised its benchmark lending rate, for the first time in nine years, to 5.58%, Bloomberg reported. U.S. shares of raw-material producers are falling, led by Alcoa, on concern demand for commodities will slacken after China raised its benchmark lending rate, Bloomberg said. Crude oil futures fell to a three-week low in NY on speculation demand from China will slow, Bloomberg reported. Palestinian leader Yasser Arafat may be moved to a hospital in Ramallah or abroad as his deteriorating health raised the prospect of a power vacuum in the Palestinian Authority, Bloomberg said. United Nations records suggest Iraqi officials overstated the amount of explosives missing from a weapons depot and that 138 tons of the munitions may have disappeared before the U.S.-led coalition liberated Iraq, ABC News reported. The U.S.-led coalition has already found and is in the process of destroying more than 400,000 tons of explosives and weapons in Iraq, ABC said.
Bottom Line: The Portfolio is slightly higher mid-day on gains in my internet and retail longs. I have not traded today and the Portfolio is still 100% net long. Market action today is good considering recent gains. Most measures of investor anxiety are rising, the CRB is falling and interest rates are declining which are all positives. As well, the market's strength in the face of so much new supply, in the form of IPOs, is also impressive. Finally, China's move to hike rates is a positive. Increasing commodity prices have been the only real source of inflation and this should quell those fears to an extent. Commodity prices will remain high, but have likely peaked for the intermediate-term. Commodity-related companies will still find the environment very profitable. I expect U.S. stocks to move modestly higher into the close on declining energy prices and short-covering.
NASDAQ 1,972.64 +.13%
Leading Sectors
Airlines +2.75%
Insurance +1.17%
Retail +.77%
Lagging Sectors
Commodity -1.10%
Hospitals -1.38%
Iron/Steel -2.16%
Other
Crude Oil 52.32 -.27%
Natural Gas 8.88 +1.20%
Gold 426.70 +.23%
Base Metals 112.06 -.71%
U.S. Dollar 85.14 -.37%
10-Yr. T-note Yield 4.07% -.33%
VIX 15.62 -.64%
Put/Call .71 +4.41%
NYSE Arms .88 +15.79%
Market Movers
ASKJ -26.9% after meeting 3Q estimates, lowering 4Q revenue estimate slightly and multiple downgrades.
DWA +35.5% on strong demand for IPO.
DNDN +23.1% after the company said a prostate-cancer drug that had failed to prove a benefit for patients in an earlier study helped patients live longer in a follow-up analysis.
IMCL -9.3% after missing optimistic 3Q estimates.
CLMS +5.6% on strong demand for IPO.
FOXH +50.5% on strong demand for IPO.
BBW +28.3% on strong demand for IPO.
ARBA +24.4% after beating 4Q estimates, RBC Capital upgrade to Top Pick and announcing a large sale to PD.
CCMP +15.1% after beating 4Q estimates.
LONG +16.3% on strong demand for IPO.
KOMG +12.0% after beating 3Q estimates and raising 4Q outlook.
KSWS +12.2% after beating 3Q estimates, raising 4Q guidance and announcing 5M share increase in stock buyback.
SRCL +7.3% after beating 3Q estimates.
PLB -18.0% after lowering 4Q/05 outlooks.
PNRA -10.2% after meeting 3Q estimates, lowering 05 guidance and JP Morgan downgrade to Neutral.
INGR -10.7% after missing 3Q estimates.
FBN -13.3% after meeting 3Q estimates, but lowering 4Q forecast.
TEX -8.7% after beating 3Q estimates, raising 4Q forecast and Robert Baird downgrade to Neutral.
Economic Data
Initial Jobless Claims for last week were 350K versus estimates of 335K and 330K the prior week.
Continuing Claims were 2823K versus estimates of 2818K and 2785K prior.
Help Wanted Index for September was 36 versus estimates of 37 and 37 in August.
Recommendations
-Goldman Sachs reiterated Outperform on MDT, AET, PFE, NBP, SYMC, AMT. Goldman reiterated Underperform on LVLT, LSI. Goldman said to Buy steel stocks on weakness from Chinese interest rate hike announcement, favorites are STLD, NUE, X and CMC. Goldman downgraded CI to Underperform.
-Citi SmithBarney said to Buy BEAS ahead of quarter, target $11.50. Citi reiterated Buy on JCP, target $50. Citi reiterated Buy on CMCSK, target $34. Citi reiterated Buy on IRF, target $50. Citi reiterated Buy on QSFT, target $17. Citi reiterated Buy on PRE, target $69. Citi reiterated Sell on BA, target $40. Citi reiterated Buy on PHM, target $86. Citi reiterated Sell on COP, target $76. Citi reiterated Buy on EEFT, target $27. Citi reiterated Buy on TEX, target $52. Citi reiterated Buy on CTX, target $85. Citi reiterated Buy on MSFT, target $33. Citi reiterated Buy on ATH, target $116.
-UBS cut LPNT to Reduce, target $28.
-Legg Mason raised QSFT to Buy, target $18.
-JP Morgan raised PECS to Overweight.
Mid-day News
U.S. stocks are modestly higher mid-day as declining oil prices, soaring IPOs, diminishing domestic terrorism fears and earnings optimism are offsetting concerns over slowing demand from China. Ford Motor may expand production of its gas-electric hybrid Ford Escape sport-utility vehicles, as the company anticipates strong demand, the Wall Street Journal reported. BellSouth is expected to announce an agreement today to help sell ad packages on Google's Web sites, the Wall Street Journal reported. OAO Yukos Oil CFO Misamore said bankruptcy is "perhaps the best solution" for handling its tax debts from the Russian government, according to Le Monde. China raised its benchmark lending rate, for the first time in nine years, to 5.58%, Bloomberg reported. U.S. shares of raw-material producers are falling, led by Alcoa, on concern demand for commodities will slacken after China raised its benchmark lending rate, Bloomberg said. Crude oil futures fell to a three-week low in NY on speculation demand from China will slow, Bloomberg reported. Palestinian leader Yasser Arafat may be moved to a hospital in Ramallah or abroad as his deteriorating health raised the prospect of a power vacuum in the Palestinian Authority, Bloomberg said. United Nations records suggest Iraqi officials overstated the amount of explosives missing from a weapons depot and that 138 tons of the munitions may have disappeared before the U.S.-led coalition liberated Iraq, ABC News reported. The U.S.-led coalition has already found and is in the process of destroying more than 400,000 tons of explosives and weapons in Iraq, ABC said.
Bottom Line: The Portfolio is slightly higher mid-day on gains in my internet and retail longs. I have not traded today and the Portfolio is still 100% net long. Market action today is good considering recent gains. Most measures of investor anxiety are rising, the CRB is falling and interest rates are declining which are all positives. As well, the market's strength in the face of so much new supply, in the form of IPOs, is also impressive. Finally, China's move to hike rates is a positive. Increasing commodity prices have been the only real source of inflation and this should quell those fears to an extent. Commodity prices will remain high, but have likely peaked for the intermediate-term. Commodity-related companies will still find the environment very profitable. I expect U.S. stocks to move modestly higher into the close on declining energy prices and short-covering.
Thursday Watch
Earnings of Note
Company/Estimate
AET/1.73
ANDW/.05
BHI/.39
CELL/.29
DOW/.62
CSX/.52
XOM/.87
G/.43
GP/.84
IMCL/.33
IM/.18
JBLU/.10
LIZ/1.01
MSO/-.47
MFE/.12
MHS/.52
PNRA/.28
PD/2.71
PTEN/.17
SOHU/.22
VZ/.64
VIA/.41
Splits
None of note.
Economic Data
Initial Jobless Claims for last week are estimated at 335K versus 329K the prior week.
Continuing Claims are estimated at 2818K versus 2798K prior.
Help Wanted Index for September estimated at 37 versus 37 in August.
Recommendations
Goldman Sachs reiterated Outperform on GILD, NEM, AHC, ROH, MET, ENH, MUR, BIIB and Underperform on VRTX, PYX, GSIC, MKL, NFX, KMG.
Late-Night News
Asian indices are sharply higher on optimism over falling oil prices and gains in the U.S. Delta Air Lines reached a tentative agreement with its pilots on pay reductions, averting a bankruptcy filing, the Wall Street Journal reported. Russian troops may have been responsible for taking 350 tons of explosives and munitions from Iraq on the eve of hostilities with the U.S.-led coalition, the Financial Times reported. London's Mittal family, days after agreeing to buy the U.S.-based International Steel Group for $4.5 billion, say they are interested in buying a steel company in Turkey, the Wall Street Journal reported. A videotape, purportedly from an American al-Qaeda operative, threatens a terrorist attack in the U.S. that would "dwarf" the Sept. 11, 2001, attacks, Fox News reported. DreamWorks Animation SKG, the creator of the "Shrek" and "Shark Tale" animated films, raised $812 million in an IPO to pay debt and to fund more movie making, Bloomberg reported. The Boston Red Sox won their first World Series title in 86 years, completing a four-game sweep of the St. Louis Cardinals with a 3-0 victory at Busch Stadium, Bloomberg said. President Bush plans three Michigan visits in the final six days of his campaign, trying to wrest the state from John Kerry, Bloomberg reported.
Late-Night Trading
Asian Indices are +1.0% to +2.0% on average.
S&P 500 indicated +.04%.
NASDAQ 100 indicated +.17%
BOTTOM LINE: I expect U.S. equities to open modestly higher in the morning on a continuing fall in oil prices and gains in Asia. Stocks will likely trade mixed through the rest of the day as apprehensions rise ahead of the election. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
AET/1.73
ANDW/.05
BHI/.39
CELL/.29
DOW/.62
CSX/.52
XOM/.87
G/.43
GP/.84
IMCL/.33
IM/.18
JBLU/.10
LIZ/1.01
MSO/-.47
MFE/.12
MHS/.52
PNRA/.28
PD/2.71
PTEN/.17
SOHU/.22
VZ/.64
VIA/.41
Splits
None of note.
Economic Data
Initial Jobless Claims for last week are estimated at 335K versus 329K the prior week.
Continuing Claims are estimated at 2818K versus 2798K prior.
Help Wanted Index for September estimated at 37 versus 37 in August.
Recommendations
Goldman Sachs reiterated Outperform on GILD, NEM, AHC, ROH, MET, ENH, MUR, BIIB and Underperform on VRTX, PYX, GSIC, MKL, NFX, KMG.
Late-Night News
Asian indices are sharply higher on optimism over falling oil prices and gains in the U.S. Delta Air Lines reached a tentative agreement with its pilots on pay reductions, averting a bankruptcy filing, the Wall Street Journal reported. Russian troops may have been responsible for taking 350 tons of explosives and munitions from Iraq on the eve of hostilities with the U.S.-led coalition, the Financial Times reported. London's Mittal family, days after agreeing to buy the U.S.-based International Steel Group for $4.5 billion, say they are interested in buying a steel company in Turkey, the Wall Street Journal reported. A videotape, purportedly from an American al-Qaeda operative, threatens a terrorist attack in the U.S. that would "dwarf" the Sept. 11, 2001, attacks, Fox News reported. DreamWorks Animation SKG, the creator of the "Shrek" and "Shark Tale" animated films, raised $812 million in an IPO to pay debt and to fund more movie making, Bloomberg reported. The Boston Red Sox won their first World Series title in 86 years, completing a four-game sweep of the St. Louis Cardinals with a 3-0 victory at Busch Stadium, Bloomberg said. President Bush plans three Michigan visits in the final six days of his campaign, trying to wrest the state from John Kerry, Bloomberg reported.
Late-Night Trading
Asian Indices are +1.0% to +2.0% on average.
S&P 500 indicated +.04%.
NASDAQ 100 indicated +.17%
BOTTOM LINE: I expect U.S. equities to open modestly higher in the morning on a continuing fall in oil prices and gains in Asia. Stocks will likely trade mixed through the rest of the day as apprehensions rise ahead of the election. The Portfolio is 100% net long heading into tomorrow.
Wednesday, October 27, 2004
Wednesday Close
S&P 500 1,125.40 +1.29%
NASDAQ 1,969.99 +2.14%
Leading Sectors
Airlines +5.0%
I-Banks +3.86%
Semis +3.56%
Lagging Sectors
Commodity -1.52%
Energy -1.97%
Oil Service -3.0%
Other
Crude Oil 52.15 -.59%
Natural Gas 7.62 -9.24%
Gold 425.00 -.14%
Base Metals 112.86 +1.50%
U.S. Dollar 85.45 +.28%
10-Yr. T-note Yield 4.08% +2.07%
VIX 15.72 -4.09%
Put/Call .68 -8.11%
NYSE Arms .76 +35.71%
After-hours Movers
KOMG +12.0% after beating 3Q estimates and raising 4Q outlook.
SWIR +4.8% after beating 3Q estimates and raising 4Q outlook.
SRCL +4.1% after beating 3Q estimates.
ASKJ -17.8% after meeting 3Q estimates and lowering 4Q revenue estimate slightly.
AKAM -7.5% on disappointing 3Q results.
FWHT -6.7% on ASKJ report.
PHTN -5.8% after beating 4Q estimate, but disappointing 1Q guidance.
APPB -5.0% after meeting 3Q estimates and lowering 4Q outlook.
Recommendations
Goldman Sachs reiterated Outperform on SYMC. Goldman reiterated Underperform on AG, FLYI and BA.
After-hours News
U.S. stocks fininish sharply higher today as oil prices fell and optimism over economic growth increased. After the close, over 60% of the world's largest 2,000 companies will begin to adopt so-called voice over internet protocol, or VOIP, in the next 2 years, the Financial Times reported. Yasser Arafat is unconscious and in "serious" condition at his compound in the West Bank town of Ramallah, CNN reported. Crude oil futures plunged almost 5% in NY, the biggest decline in five months, after an Energy Department report showed that U.S. inventories rose more than expected, Bloomberg said. Marsh & McLennan's former chief executive officer, Jeffrey Greenberg, exercised options to buy $15.5 million worth of stock on the day he resigned under pressure from NY Attorney General Eliot Spitzer.
BOTTOM LINE: The Portfolio finished substantially higher today, led by my wireless, Chinese/Russian ADR and internet longs. I exited an internet long in the afternoon as it hit my stop-loss and added CTRP long, thus leaving the Portfolio 100% net long. I am using $39.75 stop-loss on this position. Today was a very good day for the Bulls as volume rose and the advance/decline line finished at its highs for the day. It appears to me the market is beginning to anticipate the acceleration in U.S. economic growth during the fourth quarter I forecast a couple of months ago. Falling oil prices only add to my conviction. I expect stocks to consolidate recent gains over the next couple of days before moving modestly higher Friday afternoon. Monday and Tuesday should see further gains on a substantial decrease in domestic terrorism fears. Finally, stocks will likely see another substantial move upwards next Wed. and Thur. on an end to the negative Presidential campaign without terrorism. I do not expect a delay in the election outcome. I anticipate the popular vote will be relatively close, however the electoral gap will be such that impending lawsuits and accusations will look petty and ridiculous. It will be clear who won the Presidency by next Tues. night.
NASDAQ 1,969.99 +2.14%
Leading Sectors
Airlines +5.0%
I-Banks +3.86%
Semis +3.56%
Lagging Sectors
Commodity -1.52%
Energy -1.97%
Oil Service -3.0%
Other
Crude Oil 52.15 -.59%
Natural Gas 7.62 -9.24%
Gold 425.00 -.14%
Base Metals 112.86 +1.50%
U.S. Dollar 85.45 +.28%
10-Yr. T-note Yield 4.08% +2.07%
VIX 15.72 -4.09%
Put/Call .68 -8.11%
NYSE Arms .76 +35.71%
After-hours Movers
KOMG +12.0% after beating 3Q estimates and raising 4Q outlook.
SWIR +4.8% after beating 3Q estimates and raising 4Q outlook.
SRCL +4.1% after beating 3Q estimates.
ASKJ -17.8% after meeting 3Q estimates and lowering 4Q revenue estimate slightly.
AKAM -7.5% on disappointing 3Q results.
FWHT -6.7% on ASKJ report.
PHTN -5.8% after beating 4Q estimate, but disappointing 1Q guidance.
APPB -5.0% after meeting 3Q estimates and lowering 4Q outlook.
Recommendations
Goldman Sachs reiterated Outperform on SYMC. Goldman reiterated Underperform on AG, FLYI and BA.
After-hours News
U.S. stocks fininish sharply higher today as oil prices fell and optimism over economic growth increased. After the close, over 60% of the world's largest 2,000 companies will begin to adopt so-called voice over internet protocol, or VOIP, in the next 2 years, the Financial Times reported. Yasser Arafat is unconscious and in "serious" condition at his compound in the West Bank town of Ramallah, CNN reported. Crude oil futures plunged almost 5% in NY, the biggest decline in five months, after an Energy Department report showed that U.S. inventories rose more than expected, Bloomberg said. Marsh & McLennan's former chief executive officer, Jeffrey Greenberg, exercised options to buy $15.5 million worth of stock on the day he resigned under pressure from NY Attorney General Eliot Spitzer.
BOTTOM LINE: The Portfolio finished substantially higher today, led by my wireless, Chinese/Russian ADR and internet longs. I exited an internet long in the afternoon as it hit my stop-loss and added CTRP long, thus leaving the Portfolio 100% net long. I am using $39.75 stop-loss on this position. Today was a very good day for the Bulls as volume rose and the advance/decline line finished at its highs for the day. It appears to me the market is beginning to anticipate the acceleration in U.S. economic growth during the fourth quarter I forecast a couple of months ago. Falling oil prices only add to my conviction. I expect stocks to consolidate recent gains over the next couple of days before moving modestly higher Friday afternoon. Monday and Tuesday should see further gains on a substantial decrease in domestic terrorism fears. Finally, stocks will likely see another substantial move upwards next Wed. and Thur. on an end to the negative Presidential campaign without terrorism. I do not expect a delay in the election outcome. I anticipate the popular vote will be relatively close, however the electoral gap will be such that impending lawsuits and accusations will look petty and ridiculous. It will be clear who won the Presidency by next Tues. night.
Mid-day Update
S&P 500 1,122.30 +1.01%
NASDAQ 1,964.08 +1.82%
Leading Sectors
Airlines +4.14%
Semis +2.95%
I-Banks +2.83%
Lagging Sectors
Commodity -1.40%
Energy -2.09%
Oil Service -3.14%
Other
Crude Oil 53.75 -2.66%
Natural Gas 8.12 -3.36%
Gold 425.60 -.44%
Base Metals 112.86 +1.50%
U.S. Dollar 85.33 +.14%
10-Yr. T-note Yield 4.05% +1.30%
VIX 16.02 -2.26%
Put/Call .71 -4.05
NYSE Arms .92 +64.29%
Market Movers
SINA +26.1% after beating 3Q estimates, raising 4Q guidance and multiple upgrades.
CAH +23.1% on better-than-expected 4Q earnings.
AAPL +4.1% on continued optimism over new iPod Photo.
QCOM +4.0% on optimism over upcoming earnings release.
MSTR +29.1% after substantially beating 3Q estimates, raising 4Q/05 outlooks.
LSCP +28.4% after beating 3Q estimates and raising 04/05 outlooks.
SYNT +22.2% after beating 3Q estimates substantially and raising 04 guidance.
FFIV +19.3% after beating 4Q estimates and raising 1Q guidance.
SHOP +14.9% on continuing strong demand for IPO.
TRMB +10.9% after beating 3Q estimates, lowering 4Q outlook and raising 04 guidance.
ISRG +17.2% on strong 3Q report.
ZMH +5.0% after beating 3Q estimates, raising 4Q guidance and reiterating 05 outlook.
CECO +14.5% after beating 3Q estimates and raising 4Q guidance.
AVID +7.6% on strong 3Q report.
LPNT +10.5% on strong 3Q report.
NLS -15.9% after meeting 3Q estimates and lowering 4Q guidance.
SKX -15.0% after beating 3Q estimates and lowering 4Q outlook.
NILE -17.1% after beating 3Q estimates and widening 4Q outlook.
ZBRA -9.1% after beating 3Q estimates and widening 4Q outlook.
FLS -11.9% after delaying its third-quarter results and downgrade to Sell by Hibernia Southcoast.
AFL -5.9% after meeting 3Q estimates and lowering 4Q outlook.
Economic Data
Durable Goods Orders rose .2% in September versus estimates of a .5% rise and a .3% decline in August.
Durable Goods Less Transportation rose 1.7% versus estimates of a .3% increase and a 2.8% gain in August.
New Home Sales for September were 1206K versus estimates of 1150K and 1165K in August.
Recommendations
-Goldman Sachs reiterated Outperform on AMGN, MDT, ATYT, COH, PG, NEM, AHC and GE. Goldman reiterated Underperform on FSS and AG. Goldman upgraded TMK to Outperform.
-Citi SmithBarney initiated FST with a Buy, target $38. Citi reiterated Buy on AAPL, target $60. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on AV, target $20. Citi reiterated Buy on UTSI, target $26. Citi reiterated Buy on EOG, target $78. Citi reiterated Buyon BWA, target $50. Citi reiterated Buy on TLAB, target $11. Citi reiterated Buy on WFR, target $13. Citi reiterated Buy on FD, target $58. Citi reiterated Sell on AFL, target $40. Citi reiterated Buy on BNI, target $44.50. Citi reiterated Buy on GE, target $38. Citi reiterated Buy on PNR, target $43. Citi reiterated Buy on MRO, target $45. Citi reiterated Buy on MSTR, target $64. Citi reiterated Buy on VRTS, target $26. Citi reiterated Buy on TGT, target $50. Citi reiterated Buy on CHE, target $72. Citi reiterated Buy on AAI, target $13.
-Legg Mason raised CBMD to Buy, target $35.
-Bank of America raised GLW to Buy, target $15. Bank of America raised ZMH to Buy, target $84.
-Bear Stearns raised PHRM to Outperform.
Mid-day News
U.S. stocks are sharply higher mid-day on optimism over falling oil prices, better economic reports, stronger earnings reports, short-covering, diminishing terrorism fears and bargain-hunting. The U.S. craze for low-carb foods seems to be fading, the Wall Street Journal reported. Some Iraqi insurgents say recent anti-U.S. violence has been aimed at helping Senator Kerry defeat President Bush, in the belief that the U.S. will then lose its will to fight, the Washington Times reported. Pathmark, which operates supermarkets in New York, New Jersey and Pennsylvania, has begun talking with financial firms and competitors about a possible sale, the Deal.com reported. Rain in California has rotted some of the state's tomato crop, worsening a nationwide shortage brought about by hurricanes in Florida and a pest outbreak in Mexico, the AP reported. Red Herring magazine plans to publish twice-monthly issues in November and introduce a weekly edition by January, the San Francisco Chronicle reported. A group led by JP Morgan Chase agreed to buy U.K. drugmaker Warner Chilcott Plc for $3 billion, outbidding two other private equity firms, Bloomberg reported. Comcast reported a third-quarter profit as it added a record 549,000 high-speed Internet access customers, Bloomberg reported. U.S. orders for durable goods rose in September for the third time in four months, driven by demand for military equipment and computers, Bloomberg reported. U.S. new home sales unexpectedly rose in September to the third highest total on record, bolstered by lower mortgage rates and suggesting housing is helping spurt the economy, Bloomberg said. Crude oil futures are falling after an Energy Dept. report showed that U.S. stockpiles rose more than expected, Bloomberg reported.
Bottom Line: The Portfolio is substantially higher mid-day, at its highs for the year, on strength in my wireless, internet and Chinese ADR longs. I have not traded today and the Portfolio is still 100% net long. I do believe the strong rally I forecasted for the fourth quarter has begun and that the lows for the year are in place. Technology is outperforming again today and should continue to strengthen into year-end. Many of these stocks are trading at very depressed levels after substantial declines in the 3rd quarter. Year-end budget flushes, capital equipment tax incentives, better-than-expected holiday sales and strengthening demand in China should also boost tech shares. Barring another significant decline in oil prices tomorrow, I expect U.S. stocks to trade mixed this afternoon and through tomorrow as apprehension increases ahead of the election. Another move higher will likely commence on Friday, spurred by a good GDP report and short-covering.
NASDAQ 1,964.08 +1.82%
Leading Sectors
Airlines +4.14%
Semis +2.95%
I-Banks +2.83%
Lagging Sectors
Commodity -1.40%
Energy -2.09%
Oil Service -3.14%
Other
Crude Oil 53.75 -2.66%
Natural Gas 8.12 -3.36%
Gold 425.60 -.44%
Base Metals 112.86 +1.50%
U.S. Dollar 85.33 +.14%
10-Yr. T-note Yield 4.05% +1.30%
VIX 16.02 -2.26%
Put/Call .71 -4.05
NYSE Arms .92 +64.29%
Market Movers
SINA +26.1% after beating 3Q estimates, raising 4Q guidance and multiple upgrades.
CAH +23.1% on better-than-expected 4Q earnings.
AAPL +4.1% on continued optimism over new iPod Photo.
QCOM +4.0% on optimism over upcoming earnings release.
MSTR +29.1% after substantially beating 3Q estimates, raising 4Q/05 outlooks.
LSCP +28.4% after beating 3Q estimates and raising 04/05 outlooks.
SYNT +22.2% after beating 3Q estimates substantially and raising 04 guidance.
FFIV +19.3% after beating 4Q estimates and raising 1Q guidance.
SHOP +14.9% on continuing strong demand for IPO.
TRMB +10.9% after beating 3Q estimates, lowering 4Q outlook and raising 04 guidance.
ISRG +17.2% on strong 3Q report.
ZMH +5.0% after beating 3Q estimates, raising 4Q guidance and reiterating 05 outlook.
CECO +14.5% after beating 3Q estimates and raising 4Q guidance.
AVID +7.6% on strong 3Q report.
LPNT +10.5% on strong 3Q report.
NLS -15.9% after meeting 3Q estimates and lowering 4Q guidance.
SKX -15.0% after beating 3Q estimates and lowering 4Q outlook.
NILE -17.1% after beating 3Q estimates and widening 4Q outlook.
ZBRA -9.1% after beating 3Q estimates and widening 4Q outlook.
FLS -11.9% after delaying its third-quarter results and downgrade to Sell by Hibernia Southcoast.
AFL -5.9% after meeting 3Q estimates and lowering 4Q outlook.
Economic Data
Durable Goods Orders rose .2% in September versus estimates of a .5% rise and a .3% decline in August.
Durable Goods Less Transportation rose 1.7% versus estimates of a .3% increase and a 2.8% gain in August.
New Home Sales for September were 1206K versus estimates of 1150K and 1165K in August.
Recommendations
-Goldman Sachs reiterated Outperform on AMGN, MDT, ATYT, COH, PG, NEM, AHC and GE. Goldman reiterated Underperform on FSS and AG. Goldman upgraded TMK to Outperform.
-Citi SmithBarney initiated FST with a Buy, target $38. Citi reiterated Buy on AAPL, target $60. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on AV, target $20. Citi reiterated Buy on UTSI, target $26. Citi reiterated Buy on EOG, target $78. Citi reiterated Buyon BWA, target $50. Citi reiterated Buy on TLAB, target $11. Citi reiterated Buy on WFR, target $13. Citi reiterated Buy on FD, target $58. Citi reiterated Sell on AFL, target $40. Citi reiterated Buy on BNI, target $44.50. Citi reiterated Buy on GE, target $38. Citi reiterated Buy on PNR, target $43. Citi reiterated Buy on MRO, target $45. Citi reiterated Buy on MSTR, target $64. Citi reiterated Buy on VRTS, target $26. Citi reiterated Buy on TGT, target $50. Citi reiterated Buy on CHE, target $72. Citi reiterated Buy on AAI, target $13.
-Legg Mason raised CBMD to Buy, target $35.
-Bank of America raised GLW to Buy, target $15. Bank of America raised ZMH to Buy, target $84.
-Bear Stearns raised PHRM to Outperform.
Mid-day News
U.S. stocks are sharply higher mid-day on optimism over falling oil prices, better economic reports, stronger earnings reports, short-covering, diminishing terrorism fears and bargain-hunting. The U.S. craze for low-carb foods seems to be fading, the Wall Street Journal reported. Some Iraqi insurgents say recent anti-U.S. violence has been aimed at helping Senator Kerry defeat President Bush, in the belief that the U.S. will then lose its will to fight, the Washington Times reported. Pathmark, which operates supermarkets in New York, New Jersey and Pennsylvania, has begun talking with financial firms and competitors about a possible sale, the Deal.com reported. Rain in California has rotted some of the state's tomato crop, worsening a nationwide shortage brought about by hurricanes in Florida and a pest outbreak in Mexico, the AP reported. Red Herring magazine plans to publish twice-monthly issues in November and introduce a weekly edition by January, the San Francisco Chronicle reported. A group led by JP Morgan Chase agreed to buy U.K. drugmaker Warner Chilcott Plc for $3 billion, outbidding two other private equity firms, Bloomberg reported. Comcast reported a third-quarter profit as it added a record 549,000 high-speed Internet access customers, Bloomberg reported. U.S. orders for durable goods rose in September for the third time in four months, driven by demand for military equipment and computers, Bloomberg reported. U.S. new home sales unexpectedly rose in September to the third highest total on record, bolstered by lower mortgage rates and suggesting housing is helping spurt the economy, Bloomberg said. Crude oil futures are falling after an Energy Dept. report showed that U.S. stockpiles rose more than expected, Bloomberg reported.
Bottom Line: The Portfolio is substantially higher mid-day, at its highs for the year, on strength in my wireless, internet and Chinese ADR longs. I have not traded today and the Portfolio is still 100% net long. I do believe the strong rally I forecasted for the fourth quarter has begun and that the lows for the year are in place. Technology is outperforming again today and should continue to strengthen into year-end. Many of these stocks are trading at very depressed levels after substantial declines in the 3rd quarter. Year-end budget flushes, capital equipment tax incentives, better-than-expected holiday sales and strengthening demand in China should also boost tech shares. Barring another significant decline in oil prices tomorrow, I expect U.S. stocks to trade mixed this afternoon and through tomorrow as apprehension increases ahead of the election. Another move higher will likely commence on Friday, spurred by a good GDP report and short-covering.
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