Thursday, May 06, 2004

Thursday Close

S&P 500 1,113.99 -.67%
NASDAQ 1,937.74 -1.00%


Leading Sectors
Broadcasting +.70%
Utilities +.22%
Foods +.13%

Lagging Sectors
Retail -2.35%
Nanotechnology -2.69%
Airlines -3.28%

Other
Crude Oil 39.42 +.13%
Natural Gas 6.22 +.10%
Gold 388.00 -.10%
Base Metals 105.68 +.46%
U.S. Dollar 89.89 +.64%
10-Yr. Long-Bond Yield 4.60% +.41%
VIX 17.05 +8.12%
Put/Call 1.26 +48.24%
NYSE Arms .95 +23.38%

After-hours Movers
FARO +11.41% after beating 1Q estimates and reaffirming 04 forecast.
NPSP +5.40% after beating 1Q estimates.
CAMD -3.97% after beating 1Q estimates, but disappointing guidance.

Recommendations
WERN raised to Buy at UBS, target $24. Goldman Sachs reiterated Underperform on VRSN. GS reiterated Outperform on ARG, CMX and CLX.

After-hours News
U.S. stocks finished lower Thursday as better-than-expected reports on jobs and wages fueled inflation fears ahead of tomorrow's important employment numbers. After the close, the AP reported that a Web site statement attributed to Osama bin Laden offered a reward of $125,00 in gold bullion to anyone who kills the top U.S. civilian official in Iraq, Paul Bremer, "or the American chief commander or his deputy in Iraq." Univision, the largest U.S. Spanish-language tv and radio broadcaster, said first-quarter profit more than doubled to $31.6 million, Bloomberg reported. Fannie Mae improperly accounted for some manufactured housing and aircraft lease securities, and must further write down the value of the securities, Bloomberg reported. Emerging-market bonds had their biggest decline in almost 2 years on worries over rising world interest rates, JP Morgan said. The U.S. Senate confirmed John Negroponte as the first U.S. ambassador to Iraq since the 1991 Gulf War, Bloomberg reported.

BOTTOM LINE: The Portfolio rose today as my tech and retail shorts fell and my healthcare and energy longs were mixed. I added to one of my retail shorts in the afternoon and initiated a new long position in MSFT. I am keeping a close below $26 stop-loss on this position. These new trades leave the Portfolio at a market neutral(shorts-longs=0) position. U.S. stocks could rally on a weaker-than-expected jobs report tomorrow or an unexpected bond rally. However, I expect Non-farm payrolls to come in above expectations of 170K and interest rates to move higher. This will likely pressure stocks on the open. I continue to feel there is too much investor complacency for a meaningful bottom in this recent correction. However, a counter-trend trading rally could occur at anytime from current oversold levels.

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