Wednesday, December 29, 2004

Mid-day Report

S&P 500 1,212.20 -.11%
NASDAQ 2,175.81 -.06%

Leading Sectors
Oil Service +1.02%
Semis +.82%
Disk Drives +.61%

Lagging Sectors
Wireless -.62%
Gaming -.72%
Defense -1.63%

Crude Oil 42.00 +.55%
Natural Gas 6.38 +.54%
Gold 436.00 -2.09%
Base Metals 123.48 +.78%
U.S. Dollar 81.10 +.47%
10-Yr. T-note Yield 4.32% +.59%
VIX 11.77 -1.92%
Put/Call 1.36 +100%
NYSE Arms .90 +47.54%

Market Movers
TASR +4.1% on positive comments from President yesterday.
BIVN +9.8% after US regulators approved a cancer drug the company licensed to Genzyme, the first new medicine for children with leukemia in more than a decade.
CSPI +27.5% after reporting strong 4Q results.
SNDA +7.0% on no news.
PKZ +8.6% on bargain-hunting after saying oil production at Turgai Petroleum was curtailed by a dispute over marketing.
VIP +7.4% after the company received a 2002 tax claim that was less than analysts expected.
VSAT +8.5% after saying it won an order from the Space and Naval Warfare Systems Command expected to be valued at about $60 million.
REY +6.0% after raising its 1Q profit forecast because of stronger cost management and foreign exchange gains.
MSO -6.2% after reporting top shareholders have sold 4 million shares since mid-November.
*Oil Tanker stocks down across the board after supertanker rates fell to their lowest in more than three months, pushing shipowner's earnings below the $100,000/day mark.

Economic Data
Existing Home Sales for November rose to 6.94M versus estimates of 6.75M and 6.76M in October.

None of note.

Mid-day News
U.S. stocks are quietly lower mid-day on a slight rise in energy prices and interest rates. Lockheed Martin faces cuts in the production of F/A-22 Raptor stealth fighter-bombers as the Dept. of Defense seeks to lower costs, the NY Times reported. Manhattan District Attorney Morgenthau's office created a unit to target identity theft last month, Dow Jones Newswires reported. A US court upheld a ruling that barred Minnesota from regulating Internet-based phone calls, the NY Times reported. Resource Connection has gained from demand by companies seeking to comply with US accounting governance laws, the Wall Street Journal reported. Nucor may offer to buy Vitkovice Steel from the Czech government, Reuters reported. Ukrainian Prime Minister Yanukovych appealed his loss to rival Yushchenko in the Dec. 26 presidential election, as the winner met advisers for the first time to discuss forming a new government, Bloomberg reported. Oracle has taken control of PeopleSoft, ending an 18-month fight and making Oracle the world's No. 2 maker of business-management software, Bloomberg said. Time Warner's cable-tv unit said it may start offering mobile phone service through an agreement with Sprint, Bloomberg reported. Fannie Mae is considering two sales of preferred stock totaling up to $4 billion, Bloomberg said. Gold prices in New York fell the most in three weeks as a gain in the dollar's value against the euro eroded the appeal of the precious metal as an alternative to US stocks and bonds, Bloomberg reported. Relief agencies struggled to combat disease and homelessness as the death toll from the weekend's earthquake and tsunamis in Asia approached 80,000, Bloomberg reported. Crude oil is rising modestly after the Energy Dept. reported that US inventories of distillate fuels fell last week, Bloomberg said. US sales of previously owned homes rose to a record in November, buoyed by job and income growth, making 2004 the best year ever for the industry, Bloomberg reported.

Bottom Line: The Portfolio is unchanged mid-day as gains in my security and semi longs are offsetting losses in my internet and software longs. I took profits in a few longs from various sectors this morning, thus leaving the Portfolio 100% net long. The overall tone is a bit weaker today, however mild losses appear to be the result of a lack of buyers rather than significant selling. The Put/Call and Arms readings are spiking. The better-than-expected existing home sales report should put to rest the notion of an imminent decline in the housing market. I expect US stocks to trade modestly higher into the close.

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