Wednesday, February 02, 2005

Mid-day Report

S&P 500 1,191.66 +.19%
Dow 10,580..68 +.27%
NASDAQ 2,071.03 +.11%
Russell 2000 628.91 +.12%
DJ Wilshire 5000 11,731.26 +.19%
S&P Barra Growth 573.27 +.31%
S&P Barra Value 614.08 +.08%
Morgan Stanley Consumer 587.36 +.35%
Morgan Stanley Cyclical 761.43 +.15%
Morgan Stanley Technology 474.16 -.23%
Transports 3,600.96 -.13%
Utilities 348.27 +.83%
Put/Call .87 -3.33%
NYSE Arms .81 -15.62%
Volatility(VIX) 11.66 -3.08%
ISE Sentiment 124.00 -31.49%
US Dollar 83.68 +.28%
CRB 282.89 -.37%

Futures Spot Prices
Crude Oil 46.92 -.36%
Unleaded Gasoline 129.50 -1.48%
Natural Gas 6.39 +1.33%
Heating Oil 130.00 -1.06%
Gold 422.00 -.21%
Base Metals 120.92 -.49%
Copper 139.00 -1.84%
10-year US Treasury Yield 4.15% +.42%

Leading Sectors
Airlines +1.59%
Oil Service +1.30%
Gaming +1.20%

Lagging Sectors
I-Banks -.64%
Restaurants -.71%
HMOs -1.02%

Market Movers
GOOG +11.4% after substantially beating 4Q estimates and multiple upgrades.
THQI +21.1% after substantially beating 3Q estimates, reiterating 4Q outlook and raising 05 guidance.
CFC -4.44% after missing 4Q estimates, reiterating 05 outlook and boosting dividend.
MFLX +16.98% after beating 1Q estimates, raising 2Q outlook and Needham Buy rating.
PACR +13.61% after beating 4Q estimates and Morgan Keegan upgrade to Outperform.
GHCI +10.68% after beating 1Q estimates and FBR upgrade to Outperform.
VLO +5.26% on continuing optimism over 4Q report.
HYDL +5.1% after beating 4Q estimates.
ROH +6.81% after beating 4Q estimates raising 05 guidance and Fulcrum upgrade to Buy.
ATMI +11.2% after beating 4Q estimates and raising 1Q guidance.
BBOX -12.1% after missing 3Q estimates.
TEX -8.9% after making cautious comments at Lehman dinner.

Market Internals
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon

Economic Data
None of note.

-Goldman Sachs: Reiterated Outperform on WAG, ROH, HOT, BBG, EMC, GOOG, DKS, TYC and BSX.
-Citi SmithBarney: Reiterated Buy on CMCSK, target $34. Reiterated Buy on MXIM, target $52. Downgraded TIVO to Sell, target $3.50. Reiterated Buy on NT, target $5. Reiterated Buy on EXTR, target $11. Reiterated Buy on BJS, target $62. Reiterated Buy on TYC, target $40. Reiterated Buy on ASD, target $50.
-UBS: Raised TICC to Buy, target $17.
-Deutsche Bank: Raised KRC to Buy, target $45. Rated SINA Buy, target $40. Rated NTES Buy, target $66.
-Banc of America: Raised ALNY to Buy, target $9.50. Raised LAD to Buy, target $32.
-Prudential: Raised UPCS to Buy, target $9. Rated APCS Overweight, target $16. Rated UNWR Overweight, target $6.
-Merrill Lynch: Raised FDO to Buy, target $39.

Mid-day News
US stocks are slightly higher mid-day on gains in commodity-related stocks and strong earnings reports. The SEC has adopted a more aggressive approach to potential stock fraud, stopping trading of shares where it suspects manipulation, the Wall Street Journal reported. The worlds needs new tools to fight a growing nuclear black market and stop countries developing nuclear weapons technology, said Mohamed ElBaradei, director-general of the IAEA. Cuba signed an agreement with China Petrochemical, also known as Sinopec Group, to develop potential oil deposits surrounding the island nation, AP reported. US companies may have been defrauded by thousands of people who sued over claims that they were sickened by exposure to asbestos or silica or both, the NY Times reported. The NFL and Shanghai Media Group may announce today a five-year agreement to air live broadcasts of the Super Bowl on China’s Dragon TV and 12 local networks, the Wall Street Journal reported. The Reverend Al Sharpton today will begin working with PETA to promote a boycott against Yum! Brands’ KFC so the restaurant chain will make its chicken suppliers adopt tougher treatment standards, the NY Times said. Tower Automotive, the world’s largest maker of vehicle frames, will seek Chapter 11 bankruptcy protection as soon as today, the Wall Street Journal reported. The US Social Security system’s problems are a small part of the larger challenge of coping with an aging population, as programs for the elderly such as health care, housing and heating assistance have proliferated, the Washington Post reported. The US Coast Guard is developing a new soar device and underwater weapons in order to protect American ports from an underwater attack, the NY Times said. US Customs and Border Protection Commissioner Bonner proposed using wireless sensors inside cargo containers, which would monitor for tampering and speed processing, the LA Times reported. Global travel may increase as much as 32% in five years, with Asian nations as the most popular destinations, Bloomberg reported. Egyptian President Mubarak has invited Israeli Prime Minister Sharon and Palestinian leader Abbas to hold talks in Egypt next week, Bloomberg reported. Russia’s economy grew 7.1% last year because of rising oil, gas and metals prices, Bloomberg said. Crude oil is falling modestly for a second day after an Energy Dept. report showed an unexpected rise in US gasoline stockpiles, Bloomberg said. The German adjusted unemployment rate jumped to 11.4%, a seven-year high, and the unadjusted rated surged to the highest level since World War II, Bloomberg reported.

BOTTOM LINE: The Portfolio is higher mid-day on gains in my internet, steel and computer longs. I have not traded today and the Portfolio remains 100% net long. The tone of the market is weaker, notwithstanding gains in the major indices. The advance/decline line is slightly negative, sector performance in mixed and volume is light. Measures of investor anxiety are mostly lower, however the ISE Sentiment Index is falling significantly today. I would like to see this index fall below 100. I expect US stocks to rise modestly into the close on more optimism for US reforms, low long-term interest rates, more dovish Fed comments, strong earnings reports, short-covering and bargain-hunting.

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