Thursday, May 27, 2004

Thursday Close

S&P 500 1,121.26 +.57%
NASDAQ 1,984.50 +.42%


Leading Sectors
Iron/Steel +2.40%
Wireless +1.65%
Telecom +1.38%

Lagging Sectors
Gaming -.71%
Energy -1.40%
Oil Service -2.17%

Other
Crude Oil 39.12 -.81%
Natural Gas 6.52 -.75%
Gold 3395.50 +.15%
Base Metals 108.16 +1.36%
U.S. Dollar 88.64 -1.28%
10-Yr. T-note Yield 4.59% -1.22%
VIX 15.28 -4.32%
Put/Call .93 -7.0%
NYSE Arms .81 -27.68%

After-hours Movers
BCSI -17.9% after missing 4Q estimates and lowering 1Q forecast.
DITC +5.78% after beating 4Q estimates and raising 4Q guidance.
NVLS +4.0% after raising 2Q forecast substantially.

Recommendations
Jim Cramer, of TheStreet.com, thinks oil may sell-off hard as we are winning the war in Iraq. He says the sell-off in the Oil Service index(OSX) confirms this view.

After-hours News
U.S. stocks finished higher Thursday as declining energy prices and interest rates led to an afternoon rally. Stocks were also buoyed by a government report that showed the biggest increase in corporate profits in two decades and faster first-quarter U.S. economic growth than earlier reported. After the close, U.S. officials said they may have found two more shells armed with mustard gas in Iraq, CNN reported. National City is trying to sell its majority stake in a unit that processes credit and debit-card transactions, Bloomberg said. Bob Stansky, manager of the $65 billion Fidelity Magellan Fund, increased the fund's holdings of technology companies over the past six months, Bloomberg reported. The Fund took new positions in Apple Computer, Scientific Atlanta and SAP AG, Bloomberg said.

BOTTOM LINE: The Portfolio had a very good day today as a few of my internet and semiconductor long positions rose substantially in the afternoon. I did not trade today and the Portfolio is still 125% net long. Falling oil prices and interest rates, combined with a relatively high put/call ratio, should result in a better rally over the next few trading sessions, barring a significant terrorist attack over the weekend. The fact that U.S. corporate profits rose 31.6% in the first quarter, the best since 1984, bodes well for continued employment gains and thus corporate spending on technology. I continue to expect technology stocks to Outperform in the second half of the year.

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