Monday, February 14, 2005

Mid-day Report

S&P 500 1,205.66 +.03%
Dow 10,789.14 -.07%
NASDAQ 2,080.44 +.18%
Russell 2000 634.60 -.03%
DJ Wilshire 5000 11,871.47 +.02%
S&P Barra Growth 578.35 +.14%
S&P Barra Value 622.93 -.10%
Morgan Stanley Consumer 591.72 -.09%
Morgan Stanley Cyclical 765.63 -.01%
Morgan Stanley Technology 474.86 +.17%
Transports 3,594.82 -.51%
Utilities 355.38 +.71%
Put/Call .92 +10.84%
NYSE Arms 1.03 +71.67%
Volatility(VIX) 11.58 +1.40%
ISE Sentiment 179.00 +38.76%
US Dollar 83.87 -.83%
CRB 287.13 +.33%

Futures Spot Prices
Crude Oil 47.23 +.15%
Unleaded Gasoline 129.00 +.49%
Natural Gas 6.05 -.71%
Heating Oil 129.80 -.60%
Gold 427.50 +1.30%
Base Metals 123.04 +.90%
Copper 143.90 +1.16%
10-year US Treasury Yield 4.06% -.47%

Leading Sectors
Wireless +.97%
Computer Hardware +.82%
Iron/Steel +.82%

Lagging Sectors
Airlines -.95%
Insurance -1.16%
Oil Service -1.74%

Market Movers
TASR +10.9% after saying it received four orders with a combined value of more than $675,000.
ENCY +12.27% after releasing clinical data for a pulmonary hypertension drug showing that patients receiving the drug could walk farther than those receiving a placebo and that it plans to file a new drug application with the FDA in April.
AIG -3.45% after receiving subpoenas from NY Attorney General Spitzer and the SEC seeking information on policies that may help companies smooth earnings.
ARBA +13.78% after agreeing to pay $37 million to settle litigation related to claims of infringement involving three patents that rival EPlus owns.
DSCO +13.47% after saying the FDA will approve its respiratory drug Surfaxin, without additional clinical trials, once the company finalizes labeling and corrects “previously reported manufacturing issues.”
BER +6.71% after beating 4Q estimates
REXI +6.88% on no news.
GRU +9.1% on short-covering.
NVEC -10.93% on no news.
CYBX -7.34% on insider selling.
AH -4.85% on Goldman Sachs downgrade to Underperform.
OMX -5.57% after saying CEO Milliken has resigned, one month after the departure of CFO Anderson.

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 AIG, FSL, BSX, ACS and ACN. Reiterated Underperform MHX. Downgraded AH to Underperform.
-Citi SmithBarney: Raised DUK to Buy, target $30. Reiterated Buy on GS, target $125. Reiterated Buy on MER, target $73. Reiterated Buy on MWD, target $74. Reiterated Buy on RSH, target $40. Reiterated Buy on PRU, target $70. Reiterated Buy on MERQ, target $58. Reiterated Buy on WMT, target $65. Reiterated Buy on Semi Equipment stocks, favorites are AMAT and LRCX.
-Banc of America: Upgraded EL to Buy, target $50. Raised WFC to Buy, target $67.
-CIBC: Raised GOOG to Sector Outperform, target $245. Raised RBAK to Sector Outperform, target $10.
-CSFB: Raised MNST to Outperform, target $36.

Mid-day News
US stocks are mildly weaker mid-day as shares consolidate after recent gains. Capital Research & Management, a unit of the third-biggest US mutual fund company, has boosted its holdings in Fannie Mae to 11%, the Wall Street Journal reported. Mahmoud Abbas, the new Palestinian leader, said the war with Israel is effectively over, the NY Times reported. Blockbuster faces opposition from the FTC to its hostile bid for Hollywood Entertainment, the Wall Street Journal reported. A highly drug-resistant strain of HIV has been found in NYC that is virtually impossible to treat and turns rapidly into AIDS, the Wall Street Journal reported. Man Group Plc, the UK hedge-fund operator, faces competition from new funds created by Wall Street brokerages just as its own performance slows, the Wall Street Journal reported. JC Penney plans to stick to its focus on the mid-prices retail market by strengthening apparel for women, the Wall Street Journal said. Programs in at least nine US states that offer Web sites designed to help residents purchase inexpensive prescription drugs from Canada have been ineffective, the Wall Street Journal reported. The NBA is partnering with Reebok International on its biggest advertising campaign to date for NBA licensed apparel as the league tries to boost merchandise sales amidst recent embarrassments, the NY Times reported. Democrats will hold hundreds of hometown events next week to counter President Bush’s campaign to promote private Social Security accounts, the Washington Post reported. The Feb. 11 resignation of Eason Jordan, chief news executive at Time Waner’s CNN, marks the second time in five months that Bloggers have driven out a high-profile media figure over inaccurate reporting, the NY Times reported. A UN-contracted inspector accepted bribes to help Iraq export more oil than was authorized under the UN-administered oil-for-food program, the NY Tiimes reported. Settlements of securities class-action lawsuits over losses in the stock market hit an all-time high in 2004, the NY Times said. The US State Department relaxed visa rules for foreign scientists and students working or studying in the US, the NY Times reported. Residential builders are pushing into Manhattan’s far west side and developers are buying up property in the area in what has been a gritty industrial neighborhood, the NY Times said. Rents for some office space in midtown Manhattan rose 5 to 10% in the last year, reversing four years of flat or falling prices, Crain’s NY Business reported. Motorola said the GSM Assoc. picked the company to supply 6 million low-cost handsets for a program to sell cell phones in developing countries, Bloomberg reported. BAE Systems Plc, Cobham Plc and Smiths Group Plc are among UK defense companies planning to acquire US military contractors, Bloomberg reported. Copper prices in NY rose to a two-week high on expectations that economic growth in the US will boost metals demand from manufacturers, Bloomberg reported. Nokia Oyj and Microsoft will cooperate in wireless music downloading to challenge Apple Computer and Motorola, Bloomberg said. MCI is worth more than the $6.7 billion Verizon Communications agreed to pay, said Leon Cooperman, CEO of Omega Advisors. President Bush nominated Lester Crawford as the next commissioner of the FDA, a job he has held on a temporary basis for almost a year, Bloomberg reported.

BOTTOM LINE: The Portfolio is substantially higher mid-day on gains in my internet, networking and telecom longs. I added a few new longs this morning and increased my GOOG long, thus bringing the Portfolio to 100% net long. GOOG is now my largest long position. The tone of the market is mixed today on a healthy consolidation of recent gains. Volume is light and the advance/decline line is slightly negative. Measures of investor anxiety are mostly higher, which is a positive. I expect US stocks to trade modestly higher from current levels into the close on lower interest rates, rebounding tech shares and short-covering.

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