Tuesday, May 25, 2004

Tuesday Close

S&P 500 1,113.05 +1.61%
NASDAQ 1,964.65 +2.17%


Leading Sectors
Homebuilders +4.88%
Nanotechnology +4.02%
Disk Drives +3.53%

Lagging Sectors
Broadcasting +.87%
Telecom +.04%
Fashion -.81%

Other
Crude Oil 41.01 -.32%
Natural Gas 6.63 -.58%
Gold 388.50 +.03%
Base Metals 105.56 -.68%
U.S. Dollar 89.84 -.78%
10-Yr. T-note Yield 4.72% -.25%
VIX 15.96 -11.73%
Put/Call .86 +13.16%
NYSE Arms .60 -49.19%

After-hours Movers
APSG +8.48% after beating 2Q estimates substantially.
SEAC +6.58 after beating 1Q estimates and raising 2Q forecast.
CA -3.11% after missing 4Q estimates and lowering 1Q guidance.

Recommendations
Goldman Sachs reiterated Underperform on DO. Goldman reiterated Outperform on PPL. TheStreet.com has a positive column on IVII. TheStreet.com also has a positive column on the tech sector, saying it should outperform the rest of the year.

After-hours News
U.S. stocks finished sharply higher Tuesday as oil and interest rates declined and most sectors rose. After the close, the U.S. and the UN are close to an agreement on selecting Shiite Hussain Shahristani, a nuclear scientist imprisoned by Saddam Hussein, to serve as prime minister in the new Iraqi government, the Washington Post reported. An aspirin a day may cut a woman's risk of developing breast cancer by more than 20%, according to a study in tomorrow's Journal of the AMA. Computer Associates said 4th quarter sales rose 10%, below estimates, and lowered 1st quarter guidance. Defense Secretary Rumsfeld has decided to defer until at least November a decision on signing a contract with Boeing for aerial refueling tankers worth as much as $23 billion.

BOTTOM LINE: The Portfolio had a very good day today as a few of my biotech, semiconductor and internet longs rose substantially. I took profits in one of my basic materials longs and added CHINA. I am using a stop-loss of $6.75 on this position. The Portfolio is still 125% net long. Very good day for the Bulls as volume swelled into the afternoon rally. Breadth was good and almost all sectors participated. As well, all major U.S. indices are now above their 200-day moving-averages and small-caps continue to outperform. Finally, the news wasn't even that good today, however the market's reaction was significant. A positive shift in investor psychology seems to finally be at hand. This has been the market's main problem lately as the underlying fundamentals are excellent.

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