S&P 500 1,084.61 -1.01%
NASDAQ 1,876.35 -1.47%
Leading Sectors
Oil Service +.57%
Energy -.14%
Drugs -.19%
Lagging Sectors
Iron/Steel -2.20%
Networking -2.56%
Nanotechnology -2.65%
Other
Crude Oil 41.15 -.58%
Natural Gas 6.42 +.30%
Gold 380.10 +.80%
Base Metals 99.92 -2.06%
U.S. Dollar 90.81 -.93%
10-Yr. Long-Bond Yield 4.70% -1.29%
VIX 19.88 +7.63%
Put/Call .73 -23.96%
NYSE Arms 2.48 +75.69%
Market Movers
NEB +31.2% after saying Deluxe Corp. would acquire it for $586.8M.
FFHH +21.24% after saying it will be acquired by MidCountry Financial for $83.4M.
SJH +7.82% after saying it is in merger discussions with OMI Corp.
KMRT +6.48% after substantially beating 1Q estimates by selling assets.
ESMC -12.15% after reporting 3Q that disappointed some.
Economic Data
Empire Manufacturing for May came in at 30.21 versus expectations of 34.0 and 34.03 in April.
Recommendations
NE raised to Overweight at JP Morgan. CNO rated Buy at Deutsche Bank, target $22. IBPI rated Buy at Deutsche Bank, target $18. MBG rated Outperform at CSFB, target $62. MERX cut to Underperform at CSFB, target $12. BJS raised to Strong Buy at Raymond James, target $55. Goldman Sachs reiterated Outperform on CAH and GILD. GS reiterated Outperform on IBM, target $106. Goldman said tech stocks now more attractively valued relative to market than in March 03, favorites are MSFT, CSCO and DELL. GS said Consumer Discretionary stocks are most overvalued. GS thinks HPQ report will be positive for SANM on commercial PC strength. GS raised AMD to Outperform. GS reiterated Outperform on MRVL ahead of quarter. Citi SmithBarney upgraded CTSH to Buy, target $56. Citi said results of its affluent investor survey indicate that 80% of affluent investors plan to allocate new money to stocks over the next year, reiterated Buy on MER and MWD. Citi reiterated bullish stance on security software stocks, favorite is RSAS. Citi reiterated Buy on FNM, target $86. Citi reiterated Buy on BJ, target $30. Citi reiterated Sell on EK, target $23. Goldman reiterated Outperform on ACS, STZ and KRB.
Mid-day News
U.S. stocks are lower mid-day on violence in Iraq and concerns over slowing growth in Asia. Shares of Lucent are dropping after the Wall Street Journal reported the SEC will file civil fraud charges against the company. Paul Allen may buy more cable assets to expand Charter Communications, the LA Times reported. Iraqi Council members want to supervise an investigation into the UN oil-for-food scandal and asked accounting firm KPMG to gather evidence of kickbacks and bribes paid under the program, the New York Times reported. Vonage will announce today that it will cut the price for unlimited Internet calling by 14%, the Wall Street Journal reported. The Arab Resistance Movement claimed responsibility today for killing Izzedine Salim, president of the Iraqi Governing Council, the AP reported. Fluor, the largest U.S. engineering and construction company, wants a long-term presence in Iraq, Reuters reported. Tennessee Governor Bredesen signed a law last week that makes that state the nation's first to give incentives to businesses that don't send data-entry and call-center jobs overseas, AP reported. An older shell containing Sarin nerve gas was discovered and partly detonated in Iraq today, Bloomberg reported. Saddam Hussein's regime declared all its Sarin nerve gas rounds destroyed before the 1991 Gulf War, Bloomberg said.
BOTTOM LINE: The Portfolio is down today as my tech and basic materials longs are falling. I added a new short and long, leaving the Portfolio 100% net long. I took a long position in YZC this morning. I am using a $34.75 stop-loss on the position. Volume in the major averages is light today, interest rates are falling, the ARMs and VIX are spiking and the selling is much less than I expected, considering recent news. This is a very good for the Bulls and I still believe last Wednesday marked at least a short-term bottom for most U.S. stocks. I expect a rally to materialize at some point this afternoon.
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