Mid-day Report

Indices
S&P 500 1,201.38 +.05%
Dow 10,757.07 +.02%
NASDAQ 2,060.88 -.02%
Russell 2000 629.15 -.32%
DJ Wilshire 5000 11,826.68 -.02%
S&P Barra Growth 578.07 +.17%
S&P Barra Value 618.72 -.10%
Morgan Stanley Consumer 589.18 +.19%
Morgan Stanley Cyclical 766.79 +.36
Morgan Stanley Technology 469.36 +.01%
Transports 3,621.74 +.48%
Utilities 352.39 -1.07%
Put/Call 1.03 +15.73%
NYSE Arms .65 -48.80%
Volatility(VIX) 11.62 -1.36%
ISE Sentiment 124.00 -25.30%
US Dollar 83.52 +.05%
CRB 290.50 +.18%

Futures Spot Prices
Crude Oil 48.20 +1.39%
Unleaded Gasoline 125.00 +1.09%
Natural Gas 5.93 +.12%
Heating Oil 134.50 +2.45%
Gold 428.40 -.05%
Base Metals 126.99 +1.59%
Copper 148.50 -.07%
10-year US Treasury Yield 4.25% +1.82%

Leading Sectors
Energy +2.37%
Oil Service +1.61%
Commodity +1.53%

Lagging Sectors
Utilities -1.08%
I-Banks -1.62%
Disk Drives -2.0%

Market Movers
MCIP +5.95% after Qwest Communications said it plans to sweeten its takeover offer in an effort to derail MCI’s agreement with Verizon Communications.
FNM -3.42% after Fed Chairman Greenspan urged Congress to require it to shrink its $905 billion portfolio.
AKAM +14.59% after beating 4Q revenue estimates.
MRK +3.8% after the president of its research labs, declined to rule out returning Vioxx to the market should a US government advisory panel determine that all drugs in the same class have a similar hear risk.
NVDA +8.43% after beating 4Q estimates, raising 1Q guidance and multiple upgrades.
CRM +14.61% after beating 4Q estimates, raising 1Q outlook and Merrill Lynch upgrade to Buy.
ZLC +12.47% after beating 2Q earnings estimates and KeyBanc upgrade to Hold.
MDRX +12.42% after meeting 4Q earnings estimates, but saying bookings were very strong.
CRYP +9.72% on strong 4Q results.
TIN +4.43% after saying billionaire investor Carl Icahn plans to nominate candidates for its board to challenge the re-election of three current directors and CSFB upgrade to Buy.
UNP +4.87% on Morgan Stanley upgrade to Overweight.
NTGR -15.6% after missing 4Q revenue estimates and widening 1Q revenue estimates.
MALL -16.88% after disappointing 4Q results.

Market Internals
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon

Economic Data
-Producer Price Index for January rose .3% versus estimates of a .3% increase and a .3% decline in December.
-PPI Ex Food & Energy for January rose .8% versus estimates of a .2% increase and a .2% gain in December.
-Preliminary Univ. of Mich. Consumer Confidence for February fell to 94.2 versus estimates of 95.5 and a reading of 95.5 in January.

Recommendations
-Goldman Sachs: Reiterated Outperform on WGR.
-Smith Barney: Upgraded NBR to Buy, target $68. Upgraded PTEN to Buy, target $29. Downgraded ITU to Sell. Downgraded BBD to Sell.
-JP Morgan: Downgraded WWY to Underweight. Raised WCN to Overweight.
-Thomas Weisel Partners: Rated QCCO Outperform.
-Bear Stearns: Raised STX to Outperform. Downgraded ADIC to Underperform. Cut CMI to Underperform.
-Oppenheimer: Raised AEIS to Sector Outperform, target $12.
-Deutsche Bank: Downgraded CSGP to Sell, target $33.
-CSFB: Rated CBI Outperform, target $51. Rated FLR Underperform, target $53.
-Morgan Stanley: Rated ARW Underweight. Raised UNP to Overweight, target $70. Cut IO to Underweight. Rated AVT Underweight.
-Raymond James: Cut AX to Underperform. Raised REM to Strong Buy, target $36.

Mid-day News
US stocks are mixed mid-day as worries over rising long-term interest rates are offsetting optimism over increased merger activity. China’s coal companies produced 33% more coal in the first 46 days of this year to meet rising demand, China Coal News said. Federated Department Stores’ acquisition talks with May Department Stores resumed by phone this week, and may be coming closer to a resolution, the Wall Street Journal said. Iraq’s elections last month show President Bush’s policy is working and the administration should now set a timetable for withdrawing US forces, the Wall Street Journal said, citing a WSJ/NBC poll. Bertelsmann’s Random House said yesterday it bought a portion of Vocel, a company that provides educational content through cellular phones for a monthly fee, the NY Times reported. Orange County, California, which underwent the largest US municipal bankruptcy ever in 1994, may refinance its debt and pay it off 11 years ahead of schedule, the LA Times reported. The number of default notices on homes in the San Francisco Bay area declined 21% last year from 2003, and was the lowest number since at least 1992, the San Francisco Chronicle reported. Citigroup and Nordea Bank AB are arranging $2 billion of loans for European shipping companies this week as tanker and cargo vessel owners take advantage of booming demand to buy ships and expand their businesses, Bloomberg reported. Russia said it will cooperate with Iran in the nuclear energy field, even after US and European Union concerns over Iran’s possible plans to produce nuclear weapons, Bloomberg said. Deloitte Touche Tohmatsu, the world’s second-largest accounting firm by revenue, asked the SEC to add oil and gas reserves to company data requiring stricter financial oversight, Bloomberg said. US consumer confidence unexpectedly fell for the second straight month in February, Bloomberg reported. Crude oil rose above $48/bbl. in NY as lower-than-normal temperatures in the US Northeast may boost consumption of heating oil, Bloomberg reported. Time Warner will stop giving stock options to all of its 80,000 employees because it has become “prohibitively” expensive, Bloomberg reported. Exxon Mobil overtook GE as the world’s biggest company by market value, Bloomberg said. President Bush signed a bill to curb multi-state class-action lawsuits by shifting most of them from state to federal courts, Bloomberg reported. US Treasury notes are falling, pushing the yield on the 10-year note to its biggest weekly decline since October, after a government report showed a measure of wholesale prices rose more than forecast, Bloomberg reported. Pfizer’s Celebrex painkiller should stay on the US market because its benefits outweigh its cardiovascular risks, US government advisers ruled today.

BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my steel and alternative energy longs are offsetting losses in my homebuilding and medical information longs. I added a few new longs this morning, thus bringing the Portfolio’s market exposure to 75% net long. One of my new longs is PFE and I am using a $25 stop-loss on this position. The tone of the market is mildly weaker as the advance/decline line is modestly negative and sector performance is mixed. As well, volume is light and measures of investor anxiety are mixed. Commodity-related stocks are outperforming and interest-rate sensitive shares and small-caps are underperforming. I expect US stocks to trade mixed-to-lower into the close on worries over higher interest rates and energy prices.

Friday Watch

Late-Night News
Asian indices are mostly higher, led by the region's retailing stocks. China FAW Group, Shanghai Automotive Industry and 11 other Chinese automakers posted a 16% drop in combines 2004 profit as price cuts on passenger cars eroded earnings, Chinanews reported. The US and China share the same view on the N.Korean nuclear issue and will work together to persuade N.Korea to return to talks to dismantle its weapons program, Yonhap News said. Marsh & McLennan may be planning as many as 7,000 job cuts worldwide after profit plunged to a seven-year low, the Independent reported. Yahoo! is in talks with Bennett, Coleman to buy a minority stake in India's biggest media group's Internet service, Indiatimes, the Financial Times reported. Europe has become a recruiting ground for Iraqi insurgents, the Washington Post reported. The SEC is asking oil companies to disclose more about exploratory drilling and other operation in their accounting, the Wall Street Journal reported. Japan on Saturday will join the US in identifying security in the Taiwan Strait as a "common strategic objective," a move that may anger China, the Washington Post said. China's industrial production rose in January at the slowest pace in three years, reflecting a government clampdown on investment by state-owned companies, Bloomberg reported. Australia's central bank Governor Macfarlane said economic growth has slowed to around 2%, almost half the pace he earlier forecast, Bloomberg reported.

Late Recommendations
-Goldman Sachs: Reiterated Outperform on JNPR, PFE, TMK, BHI and TRI. Reiterated Underperform on CVC, AEIS and THC.
-Business Week: Shares of May Department Stores(MAY) may fall as much as 20% because Federated Department Stores reported talks to buy the owner of Lord & Taylor and Marshall Field's have stopped. Ikon Office Solutions(IKN), which distributes copiers and printers, has had a 5.4% take acquired by Steel Partners, which has a history of buying big stakes in companies. Animas Corp.(PUMP), which make glucose pumps for diabetics, may get a buyout offer from Johnson & Johnson before the end of the year.

Night Trading
Asian Indices are unch. to +.75% on average.
S&P 500 indicated +.07%.
NASDAQ 100 indicated +.13%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
CNBC Guest Schedule

Earnings of Note
Company/Estimate
CPB/.59
CEN/.24
HC/-.09
ZLC/1.89

Splits
None of note.

Economic Data
-Producer Price Index for January is estimated to rise .3% versus a .3% decline in December.
-PPI Ex Food & Energy for January is estimated to rise .2% versus a .2% increase in December.
-Preliminary Univ. of Mich. Consumer Confidence for February is estimated at 95.5 versus a reading of 95.5 in January.

BOTTOM LINE: I expect US equities to open modestly higher in the morning on a bounce in tech shares, good economic reports and increasing fund inflows. Consumer Confidence should exceed expectations as stocks rebounded from January lows, mortgage rates declined, Iraqi elections were successful and Unemployment fell to a 4-year low. The Portfolio is 50% net long heading into tomorrow.

Thursday Close

Indices
S&P 500 1,200.75 -.79%
Dow 10,754.26 -.74%
NASDAQ 2,061.34 -1.25%
Russell 2000 631.14 -1.21%
DJ Wilshire 5000 11,828.40 -.79%
S&P Barra Growth 577.06 -.74%
S&P Barra Value 619.37 -.85%
Morgan Stanley Consumer 588.07 -.49%
Morgan Stanley Cyclical 764.01 -.72%
Morgan Stanley Technology 469.29 -1.32%
Transports 3,604.19 -.51%
Utilities 356.20 -.14%
Put/Call .89 +25.35%
NYSE Arms 1.25 +15.74%
Volatility(VIX) 11.77 +6.04%
ISE Sentiment 166.00 +5.73%
US Dollar 83.48 -.23%
CRB 289.99 +.49%

Futures Spot Prices
Crude Oil 47.55 +.02%
Unleaded Gasoline 123.65 unch.
Natural Gas 5.92 +.03%
Heating Oil 131.25 -.02%
Gold 428.60 unch.
Base Metals 125.00 +1.36%
Copper 149.35 unch.
10-year US Treasury Yield 4.18% +.66%

Leading Sectors
Papers +.56%
Homebuilders +.37%
Gaming -.01%

Lagging Sectors
Networking -1.67%
Computer Hardware -1.80%
Disk Drives -1.96%

After-hours Movers
ARBX +11.4% after beating 4Q estimates and raising 05 outlook.
AKAM +9.67% after beating 4Q revenue estimates.
NVDA +9.2% after beating 4Q estimates and raising 1Q guidance.
CRM +7.1% after beating 4Q estimates and raising 1Q outlook.
MCIP +4.3% after Qwest Communications said it plans to sweeten its takeover offer in an effort to derail MCI’s agreement with Verizon Communications.
TKLC +5.89% after announcing that it has concluded its discussions with the SEC regarding the accounting for the acquisition of the Company’s majority interest in its Santera subsidiary.
VCLK +5.51% after substantially beating 4Q estimates and raising 1Q revenue outlook.
NTGR -13.2% after missing 4Q revenue estimates and widening 1Q revenue estimates.
AMMD -4.03% after beating 4Q estimates and lowering 1Q revenue guidance.

Detailed Market Summary
Market Wrap CNBC Video(bottom right)
Futures Recap
NASDAQ 100 After-hours Indicator
Real-time/After-hours Stock Quote

Afternoon Recommendations
-Goldman Sachs: Reiterated Outperform on AAP. Rated Restaurant Industry Attractive. Rated YUM and CAKE Outperform. Rated DRI Underperform.
-JP Morgan: Upgraded XMSR to Overweight. Upgraded GPRO to Overweight. Reiterated Overweight on AKS, target $21.
-Deutsche Bank: Upgraded QGENF to Buy, target $14.
-Raymond James: Reiterated Strong Buy on CMX. Reiterated Strong Buy on CPSI target $30.

After-hours News
US stocks finished lower today after disappointing commentary from Fed Chairman Greenspan with respect to interest rates. SBC Communications may make a defense of its merger plan with AT&T Corp. in regulatory filings to the Department of Justice and the FCC next week, the Financial Times said. BHP Billiton may spend $2.3 billion to expand its iron ore production in Western Australia to meet demand from steelmakers, the Wall Street Journal reported. China’s government is considering raising electricity rates as early as March to help power producers cope with increases in the cost of coal, the China Daily reported. Mitsubishi Motors has been discussing a sale of its US plant and North American sales company with potential investors including Ripplewood Holdings LLC, the Wall Street Journal reported. Mergers and acquisitions will probably increase in Asia as companies in Japan, South Korea and Taiwan seek to expand, the Wall Street Journal reported. Emmis Communications, which owns radio stations in NY, LA and Chicago, is bidding for a radio license in Manchester, north England, as part of its “bullish” aim to enter the UK market, the Guardian said. Brazil’s Bovespa rose 2.7% to a record, the best performing of the world’s primary equity indices, on optimism the central bank will reverse course and cut interest rates this year, Bloomberg reported. President Bush will emphasize the importance of the US-European cooperation in confronting the challenges of terrorism and nuclear proliferation during his trip next week to meet with allied leaders, Bloomberg reported. US 10-year T-notes fell after Fed Chairman Greenspan reiterated that interest rates are low, a signal that the central bank may continue to raise its benchmark lending rates, Bloomberg said. Harvard University President Lawrence Summers, facing a vote of no-confidence by faculty members, today released a transcript of his remarks on the ability of women scholars, Bloomberg said. Afghanistan has disarmed 80% of its estimated 50,000 militiamen under a joint program with the UN, Bloomberg reported. New York Times Co. will buy Primedia’s About.com consumer information Web site for $410 million in cash to boost its presence on the Internet, Bloomberg reported. Oskkosh B’Gosh said it has asked longtime financial adviser Goldman Sachs to explore alternatives for the company, including a possible sale, Bloomberg said.

BOTTOM LINE: The Portfolio finished lower today on losses in my networking, software and internet longs. I exited a number of longs in the afternoon as they hit stop-losses, thus bringing the Portfolio to 50% net long. The tone of the market turned decidedly weaker in the afternoon as the advance/decline line finished at its lows, volume accelerated and almost every sector fell. As well, technology and small-cap stocks significantly underperformed. On the positive side, most measures of investor anxiety rose and energy prices fell. The AAII % Bulls fell 16.89% this week to 36.36%. In my opinion, investors were very disappointed that Greenspan didn’t hint at a slowing in the pace of rate hikes. I expect long-term rates to move a bit higher before heading back down again. After-hours action appears more constructive for equities.

Mid-day Report

Indices
S&P 500 1,206.38 -.33%
Dow 10,804.94 -.27%
NASDAQ 2,076.42 -.53%
Russell 2000 636.78 -.32%
DJ Wilshire 5000 11,890.36 -.27%
S&P Barra Growth 579.78 -.26%
S&P Barra Value 622.34 -.37%
Morgan Stanley Consumer 589.54 -.24%
Morgan Stanley Cyclical 769.57 unch.
Morgan Stanley Technology 472.04 -.74%
Transports 3,637.82 +.42%
Utilities 356.93 +.07%
Put/Call .78 +9.86%
NYSE Arms 1.12 +3.70%
Volatility(VIX) 11.62 +4.50%
ISE Sentiment 191.00 +21.66%
US Dollar 83.43 -.29%
CRB 289.91 +.46%

Futures Spot Prices
Crude Oil 48.25 -.17%
Unleaded Gasoline 126.50 -1.39%
Natural Gas 5.99 -1.95%
Heating Oil 133.60 -.45%
Gold 428.40 +.35%
Base Metals 125.00 +1.36%
Copper 146.50 +1.17%
10-year US Treasury Yield 4.17% +.52%

Leading Sectors
Homebuilders +.89%
Papers +.89%
Gaming +.74%

Lagging Sectors
Telecom -.91%
Software -.92%
Disk Drives -1.18%

Market Movers
DLB +37.9% on strong demand for IPO.
SEPR +9.5% after hiring Morgan Stanley to advise on options that may include a sale.
STMP +12.4% after beating 4Q estimates and raising 05 guidance.
AAP +13.7% after beating 4Q estimates and raising 1Q, 2Q and 05 guidance.
PNRA +9.72% after boosting 1Q and 05 guidance.
TZOO +8.82% on short-covering after speculation the SEC will have positive results from its investigation into trading irregularities of its shares.
RS +10.13% after substantially beating 4Q estimates and raising 1Q outlook.
CCRT +5.76% on strong 4Q results.
GPRO +5.38% after beating 4Q estimates and raising 05 guidance.
APPX +6.49% after beating 4Q estimates and raising 05 guidance.
BRW -13.55% after disappointing 4Q results and multiple downgrades.
ANSI -12.63% after missing 4Q estimates and lowering 1Q outlook.
RSH -9.58% after missing 4Q estimates and lowering 05 guidance.
GVHR -11.09% after beating 4Q estimates and lowering 05 outlook.

Market Internals
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon

Economic Data
-Import Price Index for January rose .9% versus estimates of a .6% increase and a 1.4% fall in December.
-Initial Jobless Claims for last week fell to 302K versus estimates of 315K and a 304K the prior week.
-Continuing Claims fell to 2717K versus estimates of 2710K and 2731K prior.
-Leading Indicators for January fell .3% versus estimates of a .2% drop and a .3% rise in December.
-Philadelphia Fed. for February rose to 23.9 versus estimates of 17.0 and a reading of 13.2 in January.

Recommendations
-Goldman Sachs: Reiterated Outperform on BHI, HD, FSH, ENH and MDT. Reiterated Underperform on GSIC and MHX. Upgraded LRY, TRZ and BXP to Outperform.
-Smith Barney: Cut LTXX to Sell. Raised UMC to Buy, target $27.
-CSFB: Raised VRC to Outperform.
-JP Morgan: Raised GPRO to Overweight. Raised XMSR to Overweight.
-UBS: Rated ARRY Buy, target $12.
-Bear Stearns: Rated SHW Underperform.
-Morgan Stanley: Raised CNA to Overweight, target $35.
-Legg Mason: Rated HYSL Buy, target $58.
-Deutsche Bank: Raised QGEN to Buy.
-Merrill Lynch: Named HET to Focus 1 List.

Mid-day News
US stocks are modestly lower mid-day on weakness in technology shares and rising long-term interest rates. Japanese shipbuilders are facing delays of 20 days for steel plates amid high prices for the metal, Lloyd’s List reported. Mattel and closely held MGA Entertainment plan to pit rival dolls against each other with new products that cast the characters as rock stars or actresses, the Wall Street Journal said. New England Lobsters may soon become a rarity on dinner plates after the species was hit by a shell-rotting disease, the AP said. Thomas Weisel Partners LLC, a closely held San Francisco-based investment banking firm, is preparing an IPO, the NY Post reported. Eastman Kodak and French cell-phone company SFR reached an agreement to enable SFR users to print photos from their wireless phones beginning in May, Reuters reported. Dendreon Corp.’s Provenge prostate cancer vaccine showed promise in a recent late-stage clinical study, including 34% of men using the vaccine living three years with the cancer, the NY Times reported. OAO Yukos Oil may close down its three main divisions on May 3 to protect the company from tax and legal authorities, Interfax said. Amgen’s experimental drug helped patients with Parkinson’s disease enrolled in a University of Kentucky study, the LA Times reported. Harvard University’s embryonic stem cell research and the school’s plans to create cloned human embryos didn’t violate state law, the Boston Globe reported. Wynn Resorts Chairman Wynn has bought 4% of the shares of slot-machine maker WMS Industries because he likes the company’s products, the Las Vegas Sun reported. Wal-Mart Stores said fourth-quarter profit rose 16% on fewer holiday discounts and lower merchandise costs, Bloomberg reported. Members of the United Iraqi Alliance debated their choice for the next prime minister as Iraq’s electoral commission certified the results of the Jan. 30 poll for a National Assembly that gave the Shiite Muslim coalition nearly half of the votes, Bloomberg said. The number of Americans filing first-time claims for unemployment insurance unexpectedly declined last week to the lowest level in more than four years, Bloomberg reported. Pfizer’s Celebrex painkiller probably poses risk of heart attacks at high doses, said FDA reviewer David Graham at a hearing today on the safety of pain medicines, Bloomberg reported. The index of leading US economic indicators declined .3% in January, the first drop in three months, as consumer confidence lagged and stock prices slumped, Bloomberg said. Manufacturing in the Philadelphia area expanded at a quicker-than-expected pace this month, Bloomberg reported.

BOTTOM LINE: The Portfolio is lower mid-day on losses in my internet, software and RFID longs. I have not traded today, thus the Portfolio remains 100% net long. The tone of the market is weaker as the advance/decline line is negative and most sectors are lower. However, volume is relatively light and measures of investor anxiety are mostly higher. Cyclicals are outperforming and technology stocks are underperforming. Greenspan’s testimony mainly centered around Social Security reform and gave little insight into current US economic conditions. I expect US stocks to trade mixed-to-higher from current levels into the close on good earnings reports, lower energy prices, strong economic reports and short-covering.

Thursday Watch

Late-Night News
Asian indices are mostly lower on declines in technology shares in the region and worries over higher energy prices. Matlin Patterson Global Advisers LLC, a US-based buyer of distressed assets, agreed to buy South Korea's Orion Electric for $117 million, Maeil Business Newspaper reported. United Microelectronics shares fell after a report said Vice Chairman John Hsuan must remain in Taiwan for a government probe into the world's second-largest made-to-order chip supplier's ties to a Chinese company, Bloomberg reported. An Israeli military committee has recommended ending the policy of demolishing Palestinian homes used by suspected terrorists, Haaretz reported. US negotiator Chris Hill will visit China this week amid attempts to persuade North Korea to return to six-party talks on dismantling the nation's nuclear weapons program, Xinhua news agency reported. China's influence over N. Korea will be the key to quickly restarting talks on dismantling the communist nation's nuclear weapons program, Japan's Foreign Minister said. Philadelphia officials have proposed giving every resident high-speed Internet access by turning the city into a wireless hot spot, the NY Times said. Domino's Pizza is focusing on hiring better store managers and giving them stock options and promotions to help reduce turnover, the Wall Street Journal reported. Dolby Laboratories raised $495 million in an IPO, making founder Ray Dolby a billionaire, Bloomberg reported. Quadrangle Group LLC, the buyout firm founded by former Lazard LLC partners including Steven Rattner, is seeking to raise about $1.3 billion for its second media and communications fund, Bloomberg said. Sepracor, which developed the Lunesta sleeping pill approved by the FDA in December, hired Morgan Stanley to advise it on "strategic options" that may include a sale, Bloomberg reported.

Late Recommendations
-Goldman Sachs: Reiterated Attractive view of Tobacco sector. Reiterated Outperform on MO and AAP. Reiterated Underperform on RAI and BE.
-Morgan Stanley: Made negative comments on PD, saying the price of molybdenum, a copper byproduct used to make stainless steel, may fall to $10/pound from $33/pound in January. About 28% of the increase in PD's sales during the fourth quarter came from higher prices and sales of molybdenum.

Night Trading
Asian Indices are -.75% to +.25% on average.
S&P 500 indicated unch.
NASDAQ 100 indicated unch.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
CNBC Guest Schedule

Earnings of Note
Company/Estimate
BHI/.46
ABX/.07
BBI/.04
CCE/.13
GENZ/.47
INTU/.76
IVGN/.77
NXTL/.39
NVDA/.23
PTEN/.22
PCLN/.16
RSH/.83
TGT/.89
WMT/.74
VCLK/.10

Splits
EBAY 2-for-1

Economic Data
-The Import Price Index for January is estimated to rise .6% versus a 1.3% fall in December.
-Initial Jobless Claims for last week are estimated to rise to 315K versus 303K the prior week.
-Continuing Claims are estimated to fall to 2718K versus 2737K prior.
-Leading Indicators for January are estimated to fall .2% versus a .2% increase in December.
-Philadelphia Fed. for February is estimated to rise to 17.3 versus a reading of 13.2 in January.

BOTTOM LINE: I expect US equities to open mixed in the morning and move modestly higher later in the day on strong earnings reports, good economic reports and increasing fund inflows. The Portfolio is 100% net long heading into tomorrow.

Wednesday Close

Indices
S&P 500 1,210.34 +.02%
Dow 10,834.88 -.02%
NASDAQ 2,087.43 -.09%
Russell 2000 638.85 +.62%
DJ Wilshire 5000 11,922.72 +.10%
S&P Barra Growth 581.34 +.09%
S&P Barra Value 624.66 -.05%
Morgan Stanley Consumer 590.96 -.34%
Morgan Stanley Cyclical 769.57 +.28%
Morgan Stanley Technology 475.58 -.59%
Transports 3,622.68 +.21%
Utilities 356.69 +.79%
Put/Call .71 -8.97%
NYSE Arms 1.08 +40.26%
Volatility(VIX) 11.10 -1.51%
ISE Sentiment 157.00 -9.77%
US Dollar 83.74 +.18%
CRB 288.57 -.26%

Futures Spot Prices
Crude Oil 48.47 +.29%
Unleaded Gasoline 128.43 +.12%
Natural Gas 6.11 +.02%
Heating Oil 134.25 +.04%
Gold 426.40 -.12%
Base Metals 123.32 +.04%
Copper 144.50 -.21%
10-year US Treasury Yield 4.15% +1.37%

Leading Sectors
Iron/Steel +3.69%
Energy +2.76%
Oil Service +2.60%

Lagging Sectors
Insurance -.87%
Airlines -1.16%
Restaurants -1.18%

After-hours Movers
APPX +4.04% after beating 4Q estimates and raising 05 guidance.
BWNG +10.18% after beating 4Q estimates.
ECST -10.5% beating 4Q revenue estimates, but missing earnings estimates.
HPQ +3.51% after beating 1Q estimates and widening 2Q outlook.

Detailed Market Summary
Market Wrap CNBC Video(bottom right)
Futures Recap
NASDAQ 100 After-hours Indicator
Real-time/After-hours Stock Quote

Afternoon Recommendations
-Goldman Sachs: Reiterated Underperform on RAI.
-Merrill Lynch: Reiterated Buy on MACR, target $45. Reiterated Buy on DD, target $58. Reiterated Buy on ROV, target $51. Reiterated Buy on JCP, target $55.
-Banc of America: Reiterated Buy on ESRX, target $92.
-Raymond James: Reiterated Strong Buy on HCC, target $44.

After-hours News
US stocks finished mostly unchanged today as rising energy prices and interest rates offset more optimism over US economic growth. After the close, Microsoft released an update of its Windows Media Player that it says will protect computers from a known spyware infection, eWeek reported. Ukraine’s new government plans to review the privatization of 3,000 companies by the previous administration, Bloomberg reported. Pennsylvania Senator Arlen Specter, the Republican chairman of the Senate Judiciary Committee, has Hodgkin’s Disease, a cancer of the lymph system, Fox News reported. Federal Reserve Chairman Alan Greenspan said today that he supports creating private Social Security accounts if they are gradually phased in to gauge the financial markets’ reaction, Bloomberg said. MGM Mirage, the casino operator controlled by billionaire Kirk Kerkorian, won US antitrust clearance to acquire Mandalay Resort Group for $4.8 billion without having to sell any Las Vegas casinos, Bloomberg reported. The US House of Representatives passed a bill to raise the maximum fines against broadcasters that air indecent material to as much as $500,000 for each violation, Bloomberg reported. Hewlett-Packard, a week after ousting CEO Fiorina for failing to produce the results she promised, said first-quarter profit was little changed as sliding printer income offset rising personal computer earnings, Bloomberg said. A ruling that barred the US from seeking $280 billion in past profits from the tobacco industry will be appealed to the full membership of a federal appeals court, the Justice Dept. said.

BOTTOM LINE: The Portfolio finished higher today on gains in my semi/software longs and internet shorts. I exited a tech long in the afternoon and added ZEUS long, thus leaving the Portfolio 100% net long. I am using a $22 stop-loss on this new position. The tone of the market improved slightly into the close as the advance/decline line finished nearly unchanged, sector performance was mixed and small-cap stocks were mostly higher. On the negative side, technology stocks underperformed and measures of investor anxiety were mostly mixed. The fact that the major indices didn’t fall today despite worries over relations with Iran, rising interest rates, increasing energy prices and tech stock earnings is a psychological positive. I still plan to increase the Portfolio’s market exposure on a clear break above the 2100 level on the Nasdaq, which I expect in the near future.