Wednesday, December 01, 2004

Wednesday Close

S&P 500 1,191.37 +1.50%
NASDAQ 2,138.23 +1.98%

Leading Sectors
Airlines +5.60%
Disk Drives +5.08%
Semis +3.83%

Lagging Sectors
Utilities -1.28%
Energy -2.28%
Oil Service -3.85%

Crude Oil 45.60 +.24%
Natural Gas 7.44 +.42%
Gold 456.50 +.13%
Base Metals 120.79 +.03%
U.S. Dollar 81.56 -.32%
10-Yr. T-note Yield 4.36% +.32%
VIX 12.97 -2.04%
Put/Call .80 -8.05%
NYSE Arms .61 -38.38%

After-hours Movers
CMOS +9.3% after beating 4Q estimates and raising 1Q guidance.
ARO +5.4% after reporting better-than-expected November same-store-sales.
SBUX +3.0% after reporting 13% November same-store-sales, the fastest in 9 months.

Goldman Sachs reiterated Outperform on GDT, VZ and JTX.

After-hours News
U.S. stocks finished sharply higher today on a substantial decline in energy prices, strong economic reports and short-covering. After the close, the Massachusetts economy grew at an annual rate of 4.6% in October, the highest since February 2000, the Boston Globe reported. The chief executives of Esmark LLC and Olympic Steel, both of which process and distribute the metal, said they expect demand for steel will keep prices rising into next year, American Metal Market reported. Japan and officials from countries that share the euro have discussed possible joint action in the currency market if the yen and the euro continue to strengthen against the dollar, the Financial Times said. Eric Topol, the chairman of cardiology at the Cleveland Clinic, served on a board of a hedge fund that was short-selling Merck shares while he was criticizing the company's Vioxx drug, Fortune magazine reported. Crude oil tumbles more than $3, its biggest decline in three years, after a government report showing an increase in U.S. heating oil inventories spurred expectations of adequate supplies this winter, Bloomberg said. Disney said its board of directors raised the annual cash dividend by 14%, Bloomberg reported. Sales at U.S. Internet retailers jumped 36% last week as people used faster online connections to shop for holiday items on Thanksgiving Day, Bloomberg reported. Neiman Marcus said first-quarter earnings rose 14%, boosted by demand for designer handbag and lizard-skin shoes, Bloomberg said. Alliant Techsystems got an Army contract worth as much as $140 billion to develop a laser-guided mortar, defeating a protest by Lockheed Martin, Bloomberg reported. A John Singer Sargent painting sold today for $23.5 million, setting a record for the U.S. artist at auction, Bloomberg said.

BOTTOM LINE: The Portfolio finished substantially higher today on gains in my internet, telecom equipment, semi, Chinese ADR and retail longs. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. The tone of the market was exceptional today as volume rose substantially, most sectors posted significant gains and the major US indices finished at their highs for the day. Moreover, the outsized decline in energy prices, combined with a slight drop in interest rates is also a big positive for equities. Shorts are likely seeing their substantial gains for the year wiped out in a very short period of time, which should lead to further short covering. As well, further declines in energy prices and better job prospects should boost consumer sentiment and spending into year-end which should also help propel shares higher.

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