Tuesday, March 09, 2004

Mid-day Update

S&P 500 1,141.11 -.53%
NASDAQ 2,001.20 -.40%

Leading Sectors
Tobacco unch.
Foods unch.
Semis -.05%

Lagging Sectors
I-Banking -1.29%
Oil Service -1.80%
Networking -1.89%

Crude Oil 36.60 +.08%
Natural Gas 5.42 +.41%
Gold 405.40 +1.12%
Base Metals 106.85 -1.96%
U.S. Dollar 88.01 +.11%
10-Yr. Long-Bond Yield 3.71% -1.49%
VIX 16.31 +3.29%
Put/Call 1.08 +35.0%
NYSE Arms 2.35 +37.43%

Market Movers
FDRY -9.0% on comments from CFO about 1Q.
LSTR +7.3% on comments made during conference call and multiple upgrades.
WYPT +10.0% on acquisition by SOV.
NDN +9.0% after SEC said it didn't need to restate previous quarters.
KIND -16.0% on disappointing 4Q earnings.
GI -14.0% on disappointing 4Q earnings.

Economic Data
None of Note

Goldman reiterating Outperform on KO, PEP, CCE, AMLN, GDT, MDT, PFE and SYMC. Citi Smith Barney says TQNT raising guidance bodes well for largest customer, MOT. Citi is reiterating its Buy ratings on FLEX and JBL. Citi is adding ETR and removing BLC from their recommended list. NOK raised to Overweight at Morgan Stanley. Lehman raised A to Overweight. VRSN raised to Outperform at Raymond James. Jim Cramer, of TheStreet.com says we are getting very close to a great buying opportunity in the market.

Mid-day News
U.S. stocks are down across the board on Tuesday. However, semiconductors, a source of weakness recently are outperforming on very positive comments by Texas Instruments after Monday's close. Sony Ericsson Mobile raised its mobile-phone market forecast, saying industry sales will grow "more than" 10%. Cymer's management said high levels of utilization show "no sign of slowing." Sovereign Bancorp said it agreed to buy Waypoint Financial for $980M. Argentina said it may miss a $3.1B loan payment to the IMF today in an attempt to force the lender to back the gov. stance on restructuring $99B of defaulted bonds. The U.S. economy is now expected to grow 4.5% in this year's first half, faster than the 4.2% predicted a month ago. Economists also expect 4%+ growth every quarter this year, something that hasn't happened since the early 80's.

BOTTOM LINE: With very high readings from the Arms Index and Put/call ratio, it is likely stocks will bounce this afternoon. The NASDAQ is holding 2000, an important technical level, and the SOX is outperforming today. I haven't made any trades and the Portfolio is still 50% net long. The Portfolio is up slightly on the day as a few of my long positions are up enough to offset losses elsewhere. If the NASDAQ holds 2000 and semis continue to improve I may add some tech exposure. However, if 2000 breaks convincingly and the overall market continues to weaken I will likely add some shorts.

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