Wednesday, March 17, 2004

Mid-day Update

S&P 500 1,122.47 +1.06%
NASDAQ 1,971.94 +1.48%

Leading Sectors
Iron/Steel +3.72%
Airlines +2.86%
Internet +2.46%

Lagging Sectors
HMO's -.03%
Drugs -.76%
Homebuilders -1.97%

Crude Oil 38.07 +1.52%
Natural Gas 5.73 +.74%
Gold 404.10 +.37%
Base Metals 112.09 +.56%
U.S. Dollar 88.71 +.14%
10-Yr. Long-Bond Yield 3.70% +.61%
VIX 18.48 -9.14%
Put/Call .89 -14.42%
NYSE Arms .72 -2.70%

Market Movers
MAMA +9.1% after First Berlin rated it Strong Buy with $12 target.
AOT +4.3% on $3.7B acquisition by FSH.
YHOO +4.3% after multiple analyst upgrades.
NVTL +17.3% on order from O2 Germany for its pc card modems.
PNR +6.4% after boosting 1Q and 04 estimates.
FDX +4.6% after reporting better-than-expected 3Q estimates.
SCHL -8.2% after missing 3Q estimates and lowering guidance.
CENF -29% after significantly lowering 1Q forecast.
CANI -19.9% after disappointing 4Q report.

Economic Data
Consumer Price Index for Feb. rose .3%, meeting expectations.
CPI Ex Food & Energy for Feb. rose .2% vs. expectations of a .1% rise.

YHOO raised to Buy at Citi Smith Barney. MMM raised to Buy at Citi, $88 target. WY raised to Buy at Citi, $71 target. Citi says KSS mgmt. most upbeat in a long time, reiterating 1M rating and $60 target. Citi raised LEH estimates and price target to $99. PLXS raised to Buy 2 at UBS. CYT raised to Buy at Deutshe Bank, $42 target. GCI raised to Overweight at Morgan Stanley, target $98. TXU raised to Buy at Merrill, $32 target. SMBI rated Buy at Merrill, $22 target. MTLG raised to Outperform at Raymond James, $28 target. Goldman Sachs reiterated Outperform on GDT. GS rated TRW Outperform, $28 target. GS reiterates Outperform on PEP.

Mid-day News
U.S. stocks are rallying mid-day as the CPI showed no signs of inflation and FedEx reported better-than-expected earnings. reports that venture capitalists are pouring more money into late-stage investments, companies that are near an initial public offering, than at any time since the mid-80's. also saying that the Put/Call ratio has had readings above 1.0 for 4 consecutive days, the first time this has happened since last May. Cisco CEO Chambers said CSCO will probably pay a dividend at some point. Goldman Sachs says a recent survey shows WalMart's food is 13% cheaper than 4 other major supermarket chains. John Ryding, chief market economist at Bear Stearns, and Paul McCulley, of PIMCO, told CNBC that the Fed is waiting for sustained improvement in job growth before considering a move to raise interest rates.

BOTTOM LINE: The Portfolio is up today as my shorts are even and my longs are up. I added a few tech longs this morning, bringing market exposure to 50%. I will likely add another 25% to long exposure this afternoon on any strength into the close. The market's action is impressive in the face of higher crude prices and a hotel bombing in Baghdad. If you haven't already glanced at the most comprehensive Iraqi poll to date, mentioned in last night's post, I would highly recommend it.

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