Thursday, February 10, 2005

Mid-day Report

S&P 500 1,196.33 +.36%
Dow 10,733.87 +.65%
NASDAQ 2,054.43 +.09%
Russell 2000 626.60 +.14%
DJ Wilshire 5000 11,771.46 +.31%
S&P Barra Growth 573.45 +.33%
S&P Barra Value 618.57 +.38%
Morgan Stanley Consumer 587.87 +.19%
Morgan Stanley Cyclical 759.71 +.54%
Morgan Stanley Technology 468.42 -.07%
Transports 3,577.88 +.19%
Utilities 352.64 +.22%
Put/Call .90 -3.23%
NYSE Arms 1.00 -37.11%
Volatility(VIX) 11.81 +1.81%
ISE Sentiment 124.00 -4.62%
US Dollar 85.46 -.53%
CRB 284.85 +1.42%

Futures Spot Prices
Crude Oil 46.90 +3.17%
Unleaded Gasoline 128.80 +4.09%
Natural Gas 6.17 +.16%
Heating Oil 131.15 +3.74%
Gold 419.30 +1.21%
Base Metals 122.07 +1.64%
Copper 142.40 +2.67%
10-year US Treasury Yield 4.06% +2.04%

Leading Sectors
Oil Service +2.55%
Energy +2.42%
Commodity +2.17%

Lagging Sectors
Networking -67%
Software -.73%
Airlines -.73%

Market Movers
ATVI -12.3% after saying some executives sold 7.1 million shares late yesterday.
ERICY -9.14% after missing 4Q estimates.
SYNA -16.53% on multiple downgrades.
PBH +10.0% on strong demand for IPO.
HLND +28.44% on strong demand for IPO.
UNTD +18.35% on strong 4Q results.
ERES +18.37% after meeting 4Q estimates and reiterating 1Q guidance.
CTSH +16.4% after beating 4Q estimates and raising 1Q outlook.
AUGT +13.94% after KLA-Tencor(KLAC) offered to buy it for $11.50 a share in cash.
WFMI +6.6% after beating 4Q estimates and reiterating 05 outlook.
NFX +6.03% after beating 4Q estimates.
BYD +8.34% after beating 4Q estimates.
NVT +9.48% after beating 4Q revenue estimates and raising 05 guidance.
PLAY -10.7% on no news.
ILSE -7.96% after missing 4Q estimates and raising 05 outlook.
SHPGY -8.86% after Canada ordered the withdrawal of its best-selling product, Adderall XR, after it was linked to at least 20 deaths.
SEH -9.85% after lowering 1Q estimates and announcing plant closures.
NBIX -5.56% on worries over 4Q report.

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

Economic Data
-The Trade Balance for Dec. came in at -$56.4B versus estimates of -$57.0B and -$59.3B in November.
-Initial Jobless Claims for last week fell to 303K versus estimates of 325K and 316K the prior week.
-Continuing Claims rose to 2737K versus estimates of 2700K and 2690K prior.

-Goldman Sachs: Reiterated Outperform on DO, AET, FSH and AGN. Reiterated Underperform on VRTX. Raised PKG to Outperform.
-Citi SmithBarney: Reiterated Sell on TMK, target $55. Reiterated Buy on MPG, target $28.00. Reiterated Sell on CIEN, target $2.40. Reiterated Buy on CAM, target $70. Reiterated Buy on AAP, target $48. Reiterated Buy on SRCL, target $56.
-Banc of America: Upgraded Semiconductor Sector to Neutral. Upgraded ADI to Buy, target $44. Upgraded MXIM to Buy, target $50. Upgraded XLNX to Buy, target $33. Upgraded POWI to Buy, target $23.50.
-JP Morgan: Raised YCC to Overweight, target $38. Raised CATT to Overweight. Raised GKIS to Overweight. Rated BBW Overweight, target $38.
-CIBC: Raised BYD to Outperform, target $52.
-Merrill Lynch: Added HCA to Focus 1 list. Rated STX Buy, target $65.
-Legg Mason: Raised STFC to Buy, target $30.
-Lehman Brothers: Raised VRC to Overweight, target $36.
-CSFB: Raised MKTX to Outperform, target $17.
-Deutsche Bank: Rated TS Buy, target $63.
-Prudential: Cut HPQ to Underweight, target $26. Rated WPI Underweight, target $26. Rated IVX Overweight, target $20. Rated TEVA Overweight, target $33. Rated NVL Underweight, target $17.

Mid-day News
US stocks are higher mid-day on gains in commodity-related stocks and optimism over an improving labor market. Verizon Communications made an informal stock and cash offer for MCI and talks between the two companies have intensified, the Wall Street Journal said. US auto-insurance rates this year are expected to rise 1.5%, their smallest increase since 2001, the Wall Street Journal reported. Nissan Motor is achieving strong sales figures in the US, Japan and Europe, even beating Toyota Motor and Honda Motor by some measures, the Wall Street Journal reported. Toyota Motor introduced its FJ Cruiser, as automakers gear up to sell smaller-sized, yet military-style, versions of the sport-utility vehicle to American consumers, the Wall Street Journal said. Sirius Satellite Radio and Apple Computer have held talks about a possible partnership using the iPod digital music player to carry radio, the NY Daily News said. The median price for a condominium last year surpassed that of a single-family home for the first time since such figures were tracked in the early 1980s, the Wall Street Journal reported. The US Army said it won’t rely so much on National Guard soldiers and reservists in Iraq because they impose strains on the troops, the AP reported. The US Environmental Protection Agency and UPS are expected to announce a test project today to demonstrate a transmission that uses less fuel and emits fewer pollutants, the NY Times reported. Louisiana Energy Services is trying to build a uranium enrichment plant in the dessert town of Hobbs, New Mexico, just west of the Texas border, in what would be the largest commercial nuclear project in the country in more than three decades, the NY Times reported. Russia will ban foreign companies from bidding for large deposits of oil and metals, including the Sakhalin-3 oil field and the Sukhoi Log gold deposit, Interfax reported. Palestinian Authority President Abbas fired his security commanders in the Gaza Strip after mortars were fired today at a Jewish settlement, the AP reported. US state governments’ finances have improved enough for Moody’s Investors Service to change its credit outlook on the group to stable, saying their budgets have rebounded from the recession, Bloomberg said. The US FCC today may begin dismantling rules that force Verizon Communications and other phone companies to pay $37 billion a year in call-connection fees to competitors, Bloomberg reported. The number of Americans filing first-time claims for unemployment insurance unexpectedly fell 13,000 last week to the lowest level in more than four years, Bloomberg reported. The US trade gap narrowed 4.9% in December as the price of foreign oil sank and exports jumped, Bloomberg said. Pfizer and Microsoft filed lawsuits against two Internet pharmacies and sought to seize the domain names of more than a dozen others to stop the sale of counterfeit Viagra, the top-selling male impotence drug, Bloomberg reported. North Korea said it has produced nuclear bombs and is pulling out of negotiations with the US and four other nations to abandon the weapons program, Bloomberg reported. Riggs National agreed to a reduced takeover bid from PNC Financial, Bloomberg said. The benchmark US 10-year T-note fell for the first day this week, pushing its yield back above 4%, after jobless claims unexpectedly fell and exports rose, Bloomberg reported. Oil is rising more than $1/bbl. after the IEA said global demand is increasing faster than expected, Bloomberg reported.

BOTTOM LINE: The Portfolio is slightly lower mid-day on losses in my oil service shorts. I exited a few of these shorts as they hit stop-losses and added some new technology shorts, thus leaving the Portfolio 25% net long. One of my new shorts is ADBL and I am using a stop-loss of $27.85 on this position. The tone of the market is mixed, notwithstanding gains in the Dow. The advance/decline line is nearly unchanged, technology stocks are underperforming, a number of sectors are lower and volume is decent. As well, measures of investor anxiety are mostly lower and commodity prices are rising across the board. I continue to expect weakness to resurface over the next few days, however I expect US stocks to trade mixed into the close.

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