Monday, April 05, 2004

Mid-day Update

S&P 500 1,143.66 +.16%
NASDAQ 2,062.51 +.26%


Leading Sectors
HMO's +4.09%
Nanotechnology +2.78%
Gaming +2.20%

Lagging Sectors
Oil Service -.53%
I-Banks -.80%
Homebuilders -2.64%

Other
Crude Oil 34.23 -.47%
Natural Gas 5.86 +.83%
Gold 417.00 -1.30%
Base Metals 1112.73 -1.78%
U.S. Dollar 89.30 +.89%
10-Yr. Long-Bond Yield 4.22 +1.85%
VIX 15.54 -.64%
Put/Call .73 +10.61%
NYSE Arms .65 +30.0%

Market Movers
NT -4.45% after saying the SEC issued formal order of investigation related to previous restatement.
CI +13.2% after significantly raising 1Q and 04 estimates.
OHP +10.14% after Wall Street Journal reported that it may be acquired by WC.
CVS +6.67% after announcing solid same-store-sales for March and the acquisition of 1,260 Eckerd drugstores from J.C. Penney, making it the number 1 drugstore operator in the U.S.
CCRD -20.2% after lowering 1Q and 2Q estimates, multiple downgrades.
Homebuilders and Mortgage providers are falling across the board again on interest rate fears.

Economic Data
ISM Non-Manufacturing for March 65.8 vs. expectations of 61.5.

Recommendations
Goldman Sachs reiterated Outperform on EMC, SAP, VLO, UNH and MO. Citi Smith Barney raised estimates and reiterated Buy on DNA ahead of earnings. Citi says their top software picks are MSFT, SEBL and INFA. Citi expects BAC, BK, JPM, NCC, ONE, WFC to post strong quarters and BBT, MTB, PNC, TCB and UPC to miss estimates. KCI and AMTD rated Overweight at JP Morgan. ORCL raised to Sector Outperform at CIBC. SE raised to Buy at Merrill. CAM raised to Buy at Jefferies. KMX and TKLC raised to Strong Buy at Raymond James. TheStreet.com has a negative article on QCOM, saying tech firms ranging from INTC to CSCO are bankrolling rivals to its CDMA wireless standard. Cramer, of TheStreet.com, says oil will fall more than investors expect, giving a big boost to the economy and stock market. He also says the longer the Fed waits to raise rates the less he likes stocks.

Mid-day News
U.S. stocks are mostly higher mid-day on positive earnings news and a very strong ISM Non-manufacturing report. JetBlue was ranked the best U.S. airline in quality last year, with the second-best on-time performance and the second-lowest number of complaints, the AP said. Pakistan offered to host nuclear disarmament talks with India, Agence France-Presse reported. Philip Morris International offered to pay about $1B over 12 years to settle European Union charges it aids cigarette smuggling that cost governments billions of euros in lost tax revenue. The ISM Non-manufacturing Index, a gauge of U.S. service industries which make up the largest share of the U.S. economy, jumped in March to an all-time record as orders and employment climbed. Tax refunds and mortgage refinancing have helped lift consumer demand, reported Bloomberg. The survey's index of prices paid rose to 65.7 from 57.3 in February.

BOTTOM LINE: The Portfolio is having a good day today as a few of my tech longs are up substantially and my shorts are down. I have not traded and the Portfolio's market exposure is still 100% net long. The markets are quietly consolidating after their recent run-up. I would view any advance today as a big positive, considering the violence in Iraq over the weekend and a continued rise in interest rates. I may take some profits later in the day as I have a few positions that are up substantially over the last 10 days.

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