Tuesday, March 02, 2004

Tuesday Close

S&P 500 1,149.10 -.59%
NASDAQ 2,039.65 -.88%

Leading Sectors
Telecom +2.13%
Fashion +.40%
Oil Service +.31%

Lagging Sectors
Commodities -1.32%
Internet -1.67%
Airlines -2.88%

Crude Oil 36.66 unch.
Natural Gas 5.56 unch.
Gold 393.70 -.03%
Base Metals 114.35 -.88%
U.S. Dollar 88.90 +1.58%
10-Yr. Long-Bond Yield 4.04% +1.74%
VIX 14.86 +2.91%
Put/Call .70 -5.41%
NYSE Arms 1.36 +97.10%

After-hours Movers
COO +5.64% on exceeding 1Q estimates and raising 2Q and 04/05 guidance.
ADEX +11% after significantly beating 3Q estimates and raising 4Q guidance.
AVNC +16.7% after announcing partnership with Par Pharma. to collaborate on development and marketing of new branded version of amoxicillin; Product could be introduced as soon as 06.
SEAC -9.6% after beating 4Q estimates and leaving guidance unchanged; Also, a jury threw out claims by SEAC against CCUR; CCUR unch.
XLNX -3% on profit-taking after raising 4Q guidance.

Economic Data
Total Vehicle Sales for Feb. were 16.4M vs. expectations of 16.6M.
Domestic Vehicle Sales were 13.2M vs. expectations of 13.3M.

Goldman says lower tier auto suppliers VC and DPH are vulnerable to earnings disappointments. GS reiterates Outperform on WAG, its favorite drug retailer. GS also saying that MERQ continues to be a favorite and that accounting rumor has no basis.

After-hours News
U.S. stocks fell today as interest rate jitters, a rising U.S. dollar and middle-eastern violence led to profit-taking in a broad array of sectors. However, the big local phone companies surged in late trading after a judge struck down a costly line-sharing rule. The federal appeals court's move means the Bells may not have to share their networks with rivals at cut-rate prices, TheStreet.com reported. After the close, TheStreet.com said same-store-sales at retailers are expected to rise 6-7%, blowing away the previous year's results, when they report on Thur. The NRF said customer traffic soared in Feb. at most mall retailers, reported TheStreet.com. Europe is failing to assert itself against the U.S. economy because Europeans are more afraid to start their own businesses, the Financial Times reported. Comcast won't support re-election of Disney's Eisner, FT said. Alberto-Culver may be purchased by L'Oreal, BuinessWeek says. The U.S. tells Haitian rebels to disarm, as intl. peacekeeper force grows.

BOTTOM LINE: The Portfolio had a good day today, notwithstanding the weakness in most stocks. I did not sell into the weakness in the late afternoon, thus leaving the Portfolio 75% net long. The market's reaction to a 2% increase in the U.S. dollar and interest rates seemed overdone by late afternoon. I may trim exposure if the weakness continues on the open tomorrow. While I think there is a good chance Friday's employment numbers will meet or slightly exceed expectations, I do not think it will be the type of blow-out report that would panic the bond and currency markets. If weakness in U.S. stocks continues through Thur., I would expect to see a rally on the news Fri.

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