Monday, April 12, 2004

Mid-day Update

S&P 500 1,143.67 +.39%
NASDAQ 2,062.61 +.48%


Leading Sectors
Nanotechnology +2.99%
Oil Service +1.91%
Energy +1.85%

Lagging Sectors
Airlines -.55%
Utilities -1.37%
Homebuilders -1.86%

Other
Crude Oil 37.82 +1.83%
Natural Gas 6.02 +1.25%
Gold 420.20 -.12%
Base Metals 111.52 unch.
U.S. Dollar 88.98 +.01%
10-Yr. Long-Bond Yield 4.24% +1.13%
VIX 15.29 -5.97%
Put/Call .56 -21.13%
NYSE Arms .83 unch.

Market Movers
CMCSA +3.8% after Bank of America upgraded to Buy.
PLB -9.95% after lowering 2Q sales and profit forecasts and Wachovia downgrade to Market Perform.
OSTK +12.53% on short-covering.
DECK +13.09% on short-covering.
VMSI +7.13% on Wachovia upgrade to Buy.
NFI -23.59% on negative WSJ article.
CDCY -21.53% on lowering 1Q forecast and multiple downgrades.
Small/Mid-cap security-related stocks up strongly across the board on terrorism/war fears.

Economic Data
None of note.

Recommendations
Goldman Sachs reiterated Outperform on GE, ACS, MO, INTC and SNDK. GS thinks SYMC and MERQ, in the software sector, have the best chance to show revenue upside in their upcoming quarterly reports. GS raised 04 copper forecast by $.05 to $1.23/lb. GS rated NFP and BAC Outperform. Citi Smith Barney said to swap out of DAL and into AMR. Citi says CMA, MTB and TCB are banks best positioned for a rise in rates, CF, HBAN, NCF and NFB are worst positioned. Citi says proprietary 1Q construction equipment dealer survey very positive as demand is outstripping supply, providing strong backlog heading into spring/summer. Citi reiterated Buy on GE, $36 target. Citi raised estimates for 1Q and 04 on IR as they expect it to beat pre-announced upside. JP Morgan cut ABT to Underweight. CFSB rated G Underperform. CMCSA raised to Buy at Bank of America. FLEX raised to Strong Buy at Raymond James, CVG and INTC rated Outperform. DOX rated Overweight at Morgan Stanley.

Mid-day News
U.S. stocks are higher mid-day on strong corporate earnings reports and no acts of terrorism over the religious holiday weekend. Medicare plans to publish comparative price listings for prescription drugs on its Web site later this month, giving consumers more insight into what pharmacies charge, the NY Times reported. Washington, D.C. tourism is rebounding, after more than 2 years of declines amid a slower economy and terrorism fears following the Sept. 11 attacks, the Washington Post reported. Silicon Valley technology executives who traditionally back Democratic political candidates are wavering over supporting John Kerry because they oppose his positions on job outsourcing, the NY Times reported. Iraqi insurgents freed 12 hostages today and more are expected to be freed later in the day, Reuters reported. Japan's government will likely boost its assessment of the nation's economy in its April outlook report to be released Friday, Kyodo News reported. New York gasoline futures rose to an all-time high after the IEA raised its forecast for global oil demand on strong economic growth in the U.S. and Asia. U.S. Treasury notes fell after San Francisco Fed President Parry said the Fed's key interest rate has the potential to rise to about 3.5% if inflation averages 1-2%.

BOTTOM LINE: The Portfolio is having a good day as my shorts are down and a few of my tech longs are up substantially. I have not traded yet and the Portfolio is still 75% net long. I am a little disappointed with the breadth of today's rally. I think comments made by the Fed's Parry and energy prices are weighing on the market. I will make a determination on whether or not to change market exposure this afternoon.

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