Initial Jobless Claims Fall by Most in Almost 3 Years, Leading Indicators Rise More Than Expectations

- Initial Jobless Claims for last week fell to 303K versus estimates of 325K and 337K the prior week.
- Continuing Claims fell to 2577K versus estimates of 2589K and 2618K prior.
- Leading Indicators for June rose .9% versus estimates of a .5% rise and an upwardly revised 0.0% reading in May.

BOTTOM LINE: The number of US workers filing first-time applications for state jobless benefits fell to 303,000 last week, the lowest level since April, as automakers completed factory retooling more quickly than government statisticians expected, Bloomberg reported. The decline was the largest since December 2002. The four-week moving-average of claims fell to 318,000 from 321,250. The insured employment rate, which tracks the US unemployment rate, fell to 2.0% from 2.1%.

The Leading Indicators report shows the first major revision in how the index is compiled since 1996. Higher consumer confidence, building permits and stock prices spurred gains in the index.

Links of Interest

Market Snapshot
Detailed Market Summary
Market Internals
Economic Commentary
Movers & Shakers
IBD New America
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote

Thursday Watch

Late-Night Headlines
Bloomberg:
- JP Morgan Chase is joining dollar bulls Morgan Stanley and Barclays Plc in predicting a third consecutive quarterly gain in the currency.
- Cnooc Ltd. may abandon its effort to buy Unocal Corp. and instead seek other US oil producers, such as Marathon Oil Corp., Amerada Hess or Murphy Oil, investors and analysts said.
- Crude oil prices are falling tonight in NY for a second day after a US Energy Department report yesterday showed stockpiles declined less than analysts forecast and supplies of heating oil and other distillate fuels rose.
- Liberal groups and their Democratic Senate allies, facing an uphill task to stop the confirmation of John G. Roberts to the US Supreme Court, plan to press hard for information about his views on legal issues as they try to muster opposition to the nomination.

NY Times:
- Sprint and Cingular Wireless were accused in complaints filed with California state regulators of improperly charging cell-phone users.

Financial Times:
- Iran has agreed to extend a $1 billion credit facility to Iraq.

AP:
- Canada today made gay marriages legal, becoming the world's fourth nation to give same-sex couples full legal rights and benefits.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on EBAY, PFE, AMLN, IDIX, DOX, COF, FORM and CVD.
- Reiterated Underperform on NFB, OMI, UIS, VRTX and KEA.

Night Trading
Asian Indices are unch. to +.25% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.19%.

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

Earnings of Note
Company/EPS Estimate
ABC/.86
AVID/.42
BAX/.44
BRCM/.25
CAT/1.00
DHI/1.09
EMC/.12
LLY/.66
GOOG/1.21
GDT/.65
IR/1.62
MCD/.42
MRK/.62
MSFT/.31
NXTL/.44
NUE/1.96
ODP/.24
PMCS/.03
RBK/.58
SGP/.05
SFA/.41
SIRI/-.15
UPS/.85
XLNX/.21

Upcoming Splits
None of note

Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to fall to 325K versus 336K the prior week.
- Continuing Claims are estimated to fall to 2589K versus 2617K prior.

10:00 am EST
- Leading Indicators for June are estimated to rise .5% versus a .5% decline in May.

12:00 am EST
- Philadelphia Fed. for July is estimated to rise to 10.0 versus -2.2 in June.

2:00 pm EST
- Minutes of June 30 FOMC Meeting

BOTTOM LINE: Asian indices are mostly higher, led by automaker and technology stocks in the region. I expect US equities to open modestly higher, spurred by tech shares. The Portfolio is 100% net long heading into the day.

Stocks Reverse Higher on Good Volume

Indices
S&P 500 1,235.20 +.48%
DJIA 10,689.15 +.40%
NASDAQ 2,188.57 +.71%
Russell 2000 677.56 +1.30%
DJ Wilshire 5000 12,327.32 +.54%
S&P Barra Growth 592.89 +.50%
S&P Barra Value 637.89 +.45%
Morgan Stanley Consumer 587.18 +.43%
Morgan Stanley Cyclical 763.25 +1.36%
Morgan Stanley Technology 504.40 -.21%
Transports 3,769.46 +3.64%
Utilities 395.98 +.56%
Put/Call .89 +17.11%
NYSE Arms 1.17 +6.45%
Volatility(VIX) 10.23 -2.11%
ISE Sentiment 152.00 -7.32%
US Dollar 89.35 +.01%
CRB 303.37 -.47%

Futures Spot Prices
Crude Oil 57.85 -.29%
Unleaded Gasoline 167.25 -.21%
Natural Gas 7.55 +.07%
Heating Oil 159.65 -.08%
Gold 423.20 +.26%
Base Metals 124.31 +1.20%
Copper 159.10 -.03%
10-year US Treasury Yield 4.16 -.42%

Leading Sectors
Biotech +4.55%
Steel +4.33%
Airlines +2.50%

Lagging Sectors
Networking -.72%
HMOs -1.07%
Internet -1.23%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on MO, UTX, EBAY, GD, DOX and ALL.
- Reiterated Underperform on TER, HBAN and THC.

Afternoon/Evening Headlines
Bloomberg:
- The president of OPEC said the oil market is well supplied as prices fall below $60/bbl.
- The Federal Trade Commission took action against eight companies it said failed to put required labels warning of sexually explicit content on e-mails.
- India Prime Minister Manmohan Singh is trying to persuade communists in his coalition government to open India’s $200 billion retail market to foreign investment, a move sought by Western companies including Wal-Mart Stores.

BOTTOM LINE: The Portfolio finished higher today on gains in my Internet, Biotech, Computer and Medical longs. I did not trade in the afternoon, thus leaving the Portfolio 100% net long. The tone of the market was positive today as the advance/decline line finished higher, most sectors rose and volume was above average. Measures of investor anxiety were mostly higher into the close. Overall, today’s market action was very positive. I would expect to see more short-covering, especially in tech, tomorrow. The European Commission recently published a report concluding that Europe is becoming a less attractive place to carry out research and development. This is more evidence of growing problems in Europe.

Stocks Continue to Display Resilence, Energy Prices Falling

Indices
S&P 500 1,234.00 +.38%
DJIA 10,669.57 +.24%
NASDAQ 2,180.80 +.35%
Russell 2000 675.21 +.95%
DJ Wilshire 5000 12,315.56 +.44%
S&P Barra Growth 591.67 +.30%
S&P Barra Value 638.40 +.53%
Morgan Stanley Consumer 586.78 +.34%
Morgan Stanley Cyclical 760.32 +.97%
Morgan Stanley Technology 502.49 -.60%
Transports 3,731.01 +2.58%
Utilities 394.25 +.12%
Put/Call .86 +13.16%
NYSE Arms 1.02 -7.33%
Volatility(VIX) 10.02 -4.11%
ISE Sentiment 156.00 -4.88%
US Dollar 89.95 +.12%
CRB 303.62 -.40%

Futures Spot Prices
Crude Oil 56.85 -1.06%
Unleaded Gasoline 169.00 +.99%
Natural Gas 7.56 -.28%
Heating Oil 161.90 -.68%
Gold 422.40 +.52%
Base Metals 124.31 +1.20%
Copper 159.10 +.28%
10-year US Treasury Yield 4.18% +.09%

Leading Sectors
Biotech +4.04%
Steel +3.86%
Homebuilders +1.73%

Lagging Sectors
HMOs -1.09%
Networking -1.29%
Internet -1.57%

BOTTOM LINE: The Portfolio is slightly lower mid-day on losses in my Internet and Networking longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly positive as the advance/decline line is higher, most sectors are rising and volume is above average. Measures of investor anxiety are mostly higher. Today’s overall market action is positive. The fact that Yahoo! (YHOO), Intel (INTC) and Juniper Networks (JNPR) are down on volume and the Nasdaq is slightly higher is a positive. Breadth on the Naz is also positive and is at session highs. Small-caps are outperforming again. The top insider buys remain concentrated in small-caps, as well. I expect stocks to trade modestly higher into the afternoon on short-covering, a pullback in long-term rates from morning highs and declining energy prices.

Today's Headlines

Bloomberg:
- The father of Sept. 11 hijacker Mohammed Atta praised the recent bombings in London and said they are part of a 50-year religious war.
- Boeing may win its first customer for an updated 747 jumbo jet as Luxembourg’s Cargolux Airlines International SA plans to award a contract later today.
- In John G. Roberts Jr., President Bush found a Supreme Court nominee who pleases Republicans yet will probably avoid a divisive fight with Senate Democrats.
- President Bush’s tax advisory panel will recommend repealing the Alternative Minimum Tax, a levy originally intended for the wealthiest Americans that is increasingly affecting middle-income families.
- US Treasury notes are falling after Fed Chairman Greenspan said the US economy is in a “sustained” expansion that will prompt the Fed to continue raising interest rates.
- Crude oil prices are falling to the lowest this month, erasing earlier gains, after a government report said US stockpiles declined less than analysts forecast even with the effects from Hurricane Dennis.
Wall Street Journal:
- Latin American immigrants to the US are closing the educational gap with longtime residents, as children of immigrant families acquire college degrees and better paid jobs.
- The US warned its citizens in Saudi Arabia of a possible terrorist attack in the kingdom.

NY Times:
- US federal prosecutors may be investigating three law firms representing plaintiffs in asbestos cases.

AP:
- China is intent on “developing in a peaceful way,” Foreign Minister Li Zhaoxing said in a meeting with a visiting International Red Cross official.

al-Hayat:
- Iraq plans to export 1.8 million barrels of oil a day next year as the country seeks to boost its main source of revenue.

Tehran Times:
- Iran plans to renovate Iraq’s Najaf airport at the request of the Iraqis.