Friday, March 26, 2004

Mid-day Update

S&P 500 1,112.37 +.29%
NASDAQ 1,970.44 +.17%

Leading Sectors
Airlines +2.95%
I-Banks +1.46%
Oil Service +1.42%

Lagging Sectors
Restaurants -.45%
Hospitals -.50%
Wireless -.70%

Crude Oil 35.33 -.51%
Natural Gas 5.35 +.07%
Gold 420.80 +.91%
Base Metals 112.11 +1.52%
U.S. Dollar 89.00 +.11%
10-Yr. Long-Bond Yield 3.81% +1.97%
VIX 16.85 -5.76%
Put/Call .77 +11.59%
NYSE Arms .65 +45.45%

Market Movers
GE +3.2% on addition to Focus 1 list by Merrill Lynch.
SWBD +26.9% on $160M acquisition by INSP.
SINT +26.8% after announcing a contract renewal with the U.S. government for as much as $800M.
INSP +14.2% after saying acquisition of SWBD will add $10-14M revenues in 2H.
RECN +14.5% after upgrade to Outperform at JMP Securities.
ATRS +11.1% after Pacific Crest raised it to Strong Buy.
CAH +4.2% after Goldman upgrade to Outperform.
MYOG -39.2% after saying its experimental Enoximone drug failed to meet the main goal of an advanced study. Multiple downgrades.

Economic Data
Personal Income for February +.4% vs. +.3% expectations.
Personal Spending for February +.2% vs. +.4% expectations.
Univ. of Mich. Consumer Confidence final reading for March 95.8 vs. estimates of 93.7.

CAH and MCK upgraded to Outperform at Goldman Sachs. GS reiterates bullish view on newspaper stocks, favorites are GCI and TRB. GS reiterated Outperform on KRB, SPLS, YHOO and AMT. Citi Smith Barney upgraded BBY to Buy, $62 target. Citi reiterated Buy on LPX and EEFT. Citi would Buy SEBL ahead of quarterly report on recent weakness. Citi made positive comments on UTSI and MOT after CTIA conference. Citi would Buy VZ and BLS at current levels. HLT and TV raised to Overweight at Morgan Stanley. MSPD rated Outperform at Thomas Weisel. GE added to Focus 1 list at Merrill Lynch. DRL rated Buy at Merrill. DUK rated Sector Outperform at CIBC. ET, NITE and AMTD raised to Strong Buy at Raymond James. NWL raised to Overweight at JP Morgan. had a guest that was positive on ADI and TXN. TSC also has a positive column on UTX.

Mid-day News
U.S. stocks are modestly higher mid-day on continued strength in airlines and an upgrade of GE by Merrill Lynch. Russian President Putin said it was unacceptable that terrorists believed their bombings in Madrid defeated Spain's ruling party, and he urged the international community to unite, Interfax reported. Twaiwan's parliament failed to agree on a recount in the disputed presidential election and riot police clashed with protesters trying to block final certification of President Chen Shui-bian's victory. Continental Air raised fares for the second time in a month to help cover rising fuel costs, Bloomberg reported. A stretch of I-95 near Bridgeport, Connecticut may be closed for as long as 2 weeks because of structural damage caused by an oil tanker truck that collided with a car and caught fire last night. El Paso Corp. said it has been notified that the SEC is conducting a formal investigation of the 41% reduction in the company's oil and gas reserves, Bloomberg reported. U.S. personal spending rose .2% in February and consumer confidence unexpectedly climbed this month, suggesting the economy is maintaining strength, Bloomberg reported.

BOTTOM LINE: The Portfolio is up today as strength in my airline and select technology positions offset rising shorts. I have not traded today and the Portfolio is still 125% net long. I expect the market will either maintain current levels or sell-off a bit later in the day on rising interest rates, weekend terror fears and profit-taking. However, I expect the rally to regain momentum early next week.

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