Monday, February 23, 2004

Monday Close

S&P 500 1,140.99 -.27%
NASDAQ 2,007.52 -1.49%


Leading Sectors
Fashion +.78%
Energy +.6%
Restaurants +.58%

Lagging Sectors
Broadcasting -2.23%
Semis -2.74%
Disk Drives -3.27%

Other
Crude Oil 34.40 +.15%
Natural Gas 5.14 +.16%
Gold 399.00 -.08%
Base Metals 110.16 -1.66%
U.S. Dollar 86.94 -.34%
10-Yr. Long-Bond Yield 4.03% -1.51%
VIX 16.29 +1.56%
Put/Call .61 -29.07%
NYSE Arms 1.22 -18.12%

After-hours Movers
NOVL +3.48% after reporting in-line 1Q and slight revenue shortfall.
ZRAN +5.6% after missing 4Q estimates and lowering 1Q guidance.
SNPS -10.1% after beating 1Q estimates, but lowering 04 guidance and announcing 2 acquisitions.
ODSY -13.0% after meeting 4Q estimates, but lowering 04 guidance.

After-hours News
U.S. stocks fell for the 4th straight day on light volume, led by computer related companies as investors shifted out of last year's best performers and into consumer cyclicals. After the bell, Libya said it is dismantling its weapons program and helping experts determine if more technology and expertise has been trafficked, the AP reported. Atlanta-based Delta said it created 1,000 call-center jobs last year in India, saving $25M in 03, thus allowing it to hire 1,200 more U.S. employees in reservations and sales. Moody's said it lowered its rating on $350M of debt of LaBranche & Co., the biggest specialist on the NYSE, to junk status to reflect the costs of its pending $63.5M settlement with regulators. Deutshe Bank is hiring 10 senior investment bankers from CSFB to beef up its technology i-banking practice. Goldman Sachs is saying DELL remains positive on overall IT spending and its growth opportunities. James Cramer of TheStreet.com is saying it is too late to sell tech and is slowly starting to make some selective buys.

BOTTOM LINE: It was a bad day for the NASDAQ and technology shares, however volume was light and areas such as retail, restaurants, financials and energy showed relative strength. In the later part of the day, I increased the Portfolio's market exposure to 20% net long by covering a few of my winning semi shorts. My short-term indicators are still giving sell-signals, however overbought/oversold readings are leading me to anticipate an oversold bounce in tech. Moreover, the MSH index is down 6.2% from its high and right around the 50-day moving avg. where it has found support 3 other times in the last year.

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