Monday, March 08, 2004

Mid-day Update

S&P 500 1,156.78 -.01%
NASDAQ 2,040.92 -.33%

Leading Sectors
Oil Service +.82%
Gaming +.77%
Iron/Steel +.72%

Lagging Sectors
Defense -.64%
Airlines -.78%
Semis -1.28%

Crude Oil 37.15 -.30%
Natural Gas 5.47 +.4%
Gold 400.90 -.15%
Base Metals 108.99 -.80%
U.S. Dollar 88.19 +.03%
10-Yr. Long-Bond Yield 3.79% -1.47%
VIX 14.59 +.76%
Put/Call .74 -5.13%
NYSE Arms 1.07 -21.90%

Market Movers
MAMA +12.8% after significant pullback last 3 days.
TASR +17% after the company announced completion of a test for a new weapon that shoots charges at least 30 feet.
IMC +26% on purchase by Smucker.
ESA +23.2% on purchase by Blackstone Group.
EVOL -24.6% on disappointing 4Q and lowered guidance.
SGMA -21.6% on disappointing 3Q.

Economic Data
None of note.

SFA raised to Buy 2 at UBS. ACS raised to Buy at Deutshe Bank. STM raised to Buy at Legg Mason. CYTC raised to Outperform by Thomas Weisel. SYK raised to Buy at Bank of America. Morgan Stanley cut CNC to Underweight. Bank One raised to Outperform at Keefe, Bruyette. SAP raised to Overweight at Prudential. Goldman Sachs says their CIO survey points to accelerated spending by financial services, communications and manufacturing companies on tech equipment. GS also said CIOs are indicating long-term tech spending growth could stabilize at just below 6%, representing a jump of 110 basis points from the last survey, the largest positive survey-to-survey change they have seen. Citi Smith Barney says results from March's semi purchasing manager survey are most positive for NSM and TXN. Citi thinks semis will start moving up again soon. Citi also saying that recent strong retailing trends are less related to tax refunds than people think. Gary B. Smith, technical analyst for thinks market will break to the up-side soon. Cramer, of says JPM going higher and investors sticking with the old tech leaders will continue to underperform.

Mid-day News
U.S. stocks are quietly mixed mid-day as strength in energy-related stocks is being offset by continued weakness in semiconductors. Alcoa(AA) plans to double its alumina output at its refineries in Suriname and Jamaica to meet surging demand, Reuters reported. J.M. Smucker agreed to purchase Intl. Multifoods Corp. for $840M. Iraq's governing council today signed an interim constitution aimed at preparing the country for the planned handover of power by the U.S.-led coalition on June 30. Telefonica agreed to buy Bellsouth's wireless operations in Latin America for $5.85B.

BOTTOM LINE: The Portfolio is down slightly on the day. No changes have been made yet. I will likely switch around a few positions later in the day, maintaining 100% net long exposure. Semis continue to underperform. It looks like it may take next quarter's earnings reports and guidance to get them going again, both of which I expect to be very good.

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