Thursday, May 20, 2004

Thursday Close

S&P 500 1,089.19 +.05%
NASDAQ 1,896.59 -.08%


Leading Sectors
Airlines +2.78%
Broadcasting +.77%
Defense +.66%

Lagging Sectors
Restaurants -1.08%
Networking -1.22%
Disk Drives -1.64%

Other
Crude Oil 40.61 -.47%
Natural Gas 6.31 -.22%
Gold 379.50 +.26%
Base Metals 102.54 -.13%
U.S. Dollar 90.93 +.44%
10-Yr. T-note Yield 4.70% -1.49%
VIX 18.67 -1.37%
Put/Call 1.20 +50.00%
NYSE Arms 1.77 +63.89%

After-hours Movers
MRVL +2.94% after beating 1Q estimates.
SRNA +14.72% after beating 1Q estimates and raising 2Q guidance.
JWN +4.08% after beating 1Q estimates and raising 2Q guidance.

Recommendations
BEC and GPRO rated new Buys by UBS.

After-hours News
U.S. stocks finished nearly unchanged Thursday after economic reports gave conflicting messages and interest rates dropped. After the close, the Financial Times said the U.S. may have to import an average of 10.4 million barrels of oil a day throughout the summer to avoid dipping into its reserves. Federal Reserve Bank of Dallas President McTeer told CNBC that a "bad inflation report" is the only thing that could "legitimately" prompt a Fed meeting before June 29. Bonds rallied today after Fed Governor Bernanke said inflation "appears likely to remain in the zone of price stability" this year and into 05, Bloomberg reported. Draining the U.S. Strategic Petroleum Reserve to lower energy prices in the short-term would encourage terrorists who might be trying to disrupt energy supplies and the economy, President Bush told CNBC. The contest between President Bush and Senator Kerry may push spending for the presidential and congressional election campaigns to a record $3 billion this year, Bloomberg reported. Nordstrom said profits soared 140% and sales at stores open more than a year rose 13%, the most in more than a decade, Bloomberg reported.

BOTTOM LINE: The Portfolio had a good day today and I took profits in a couple of tech longs and homebuilding shorts and added a few airline and paper longs, leaving the Portfolio with 100% net long market exposure. One of my new longs is GP and I am keeping a $32.50 stop-loss on the position. With interest rates falling, oil stabilizing and the Put/Call ratio and ARMs index soaring, I expect U.S. stocks to make another rally attempt in the next couple of days.

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