Wednesday, July 07, 2004

Wednesday Close

S&P 500 1,118.33 +.19%
NASDAQ 1,966.08 +.13%


Leading Sectors
HMO's +1.39%
Iron/Steel +1.30%
Restaurants +1.29%

Lagging Sectors
Airlines -1.01%
Nanotechnology -1.54%
I-Banks -2.04%

Other
Crude Oil 39.22 +.36%
Natural Gas 6.36 -.16%
Gold 402.10 -.15%
Base Metals 112.74 +1.83%
U.S. Dollar 87.65 -.53%
10-Yr. T-note Yield 4.47% unch.
VIX 15.81 -2.71%
Put/Call .98 -9.26%
NYSE Arms 1.12 -48.39%

After-hours Movers
YHOO -11.8% after meeting 2Q estimates and guiding lower for 3Q.
SEBL -15.64% after cutting 2Q forecast.
CKFR +3.3% after announcing it signed a five-year contract extension with Wachovia to provide fully outsourced electronic billing and payment services to its customers.
SCHN -7.68% after beating 3Q estimates and giving weaker 4Q forecast.
BMC -7.62% after cutting 1Q estimates.
*Internet Stocks – down across the board on YHOO report.

Recommendations
Goldman Sachs reiterated Outperform on YHOO, ACN and DNA.

After-hours News
U.S. stocks finished mildly higher today on falling oil prices, a bounce in technology shares and strength in cyclicals. After the close, Kenneth Lay, former chief executive of Enron, was indicted in Houston on criminal charges related to the company's collapse, CNBC reported. The FBI waned guards at the Canadian and Mexican borders last month that al-Qaeda agents may try to cross into the U.S. to launch terrorist attacks in coming months, the National Post reported. Three dead bodies were found on the Hondo, New Mexico ranch of ABC tv newsman Sam Donaldson, the AP reported. Wholesales prices for pork in Japan are rising as demand increases for alternatives to beef and chicken on concern over mad cow and bird flu outbreaks, the Nihon Keizai reported. Michael Dell's investment firm bought the Four Seasons Resort Maui at Wailea in Hawaii as part of a plan to spend more than $1 billion on real estate, Bloomberg reported. Phillip Morris and other U.S. tobacco companies can't use a 1998 settlement with the states to shield them from a U.S. Justice Department suit seeking $280 billion, Bloomberg said. Citigroup and ABN Amro are among banks boosting loans to Russian companies, betting economic won't be derailed by the potential bankruptcy of OAO Yukos Oil, Bloomberg reported.

BOTTOM LINE: The Portfolio finished modestly higher today. I added a few new technology shorts in the afternoon, leaving the Portfolio with 25% net long market exposure. One of my new shorts is ERES and I am keeping a $28.50 stop-loss on this position. It looks as though technology stocks will take another hit tomorrow. Longer-term investors should not bottom-fish yet as there are still too many negative catalysts on the near-term horizon.

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