Thursday, March 18, 2004

Mid-day Update

S&P 500 1,119.15 -.41%
NASDAQ 1,957.80 -.96%

Leading Sectors
Oil Service +.68%
Energy +.64%
Insurance +.21%

Lagging Sectors
Disk Drives -1.66%
Restaurants -1.88%
Airlines -2.70%

Crude Oil 37.75 -1.13%
Natural Gas 5.66 -1.08%
Gold 413.50 +1.57%
Base Metals 112.72 +.56%
U.S. Dollar 87.50 -1.31%
10-Yr. Long-Bond Yield 3.73% +.55%
VIX 18.98 +4.80%
Put/Call .97 +21.25%
NYSE Arms 1.21 +80.60%

Market Movers
TASR +5.6% after announcing it is moving from the NASDAQ Small-cap Market to the NASDAQ.
DJO +9.1% after W.R. Hambrecht raised it to Buy, $27.50 target.
CSGS +16.2% after announcing new contract with Comcast and multiple upgrades.
NEM +4.0% on rising gold futures.
PLNR -18.7% after lowering 2Q forecast.
WGO -11.7% after just meeting 2Q estimates.
MLHR -7.5% after meeting 3Q and lowering 4Q estimates.

Economic Data
Producer Price Index up .6% in January, above expectations of a .4% rise.
PPI Ex Food & Energy up .3% in January, above expectations of a .1% rise.
Leading Indicators for Feb. unch. vs. expectations of a .1% rise.
Philadelphia Fed. for March 24.2 vs. expectations of 29.0.

Goldman Sachs projecting oil to fall under $30/bbl this spring resulting in a 10-15% correction in the integrated oil stocks. GS worried about the effects the Medicare Trustees' report will have on pharmaceutical stocks early next week. Citi Smith Barney raising JCP estimates, target $46. Citi recommending to buy homebuilders on weakness, favorites are CTX and LEN. TLAB, AVCI cut to Underweight at Morgan Stanley. MS bullish on semis and semi-equipment, favorites are INTC, BRCM, NVDA and NSM. MS raised MCHP to Overweight. JBL raised to Sector Outperform at CIBC. CSGS raised to Buy at Deutsche Bank. WAT raised to Buy at Merrill. FedEx raised to Overweight at Prudential. VSH raised to Strong Buy at Raymond James.

Mid-day News
U.S. stocks are weaker mid-day on disappointing economic data and Microsoft's problems with the European Union. Minnesota Governor Tim Pawlenty told CNBC his state wants drug companies to reduce prices because they aren't fair. Amerco CEO Schoen told CNBC the company's U-Haul truck-rental business should have a record year and is hiring across the country. Microsoft and EU regulators failed to agree on an antitrust settlement, opening the way for restrictions on its Windows product. The death toll from yesterday's hotel bombing in Baghdad was lowered to 7 from initial reports of 27. Pakistan President Musharraf said a "high-value" al-Qaeda target is surrounded at the border, CNN reported.

BOTTOM LINE: The Portfolio, which is currently positioned 100% net long, is down today as weakness in U.S. stocks is broad-based. I have not made any trades today. I will likely sell some longs in the afternoon on a break of today's lows. If the lows hold and the indices rally into the close, I will likely maintain 100% long exposure.

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