Thursday, February 17, 2005

Mid-day Report

S&P 500 1,206.38 -.33%
Dow 10,804.94 -.27%
NASDAQ 2,076.42 -.53%
Russell 2000 636.78 -.32%
DJ Wilshire 5000 11,890.36 -.27%
S&P Barra Growth 579.78 -.26%
S&P Barra Value 622.34 -.37%
Morgan Stanley Consumer 589.54 -.24%
Morgan Stanley Cyclical 769.57 unch.
Morgan Stanley Technology 472.04 -.74%
Transports 3,637.82 +.42%
Utilities 356.93 +.07%
Put/Call .78 +9.86%
NYSE Arms 1.12 +3.70%
Volatility(VIX) 11.62 +4.50%
ISE Sentiment 191.00 +21.66%
US Dollar 83.43 -.29%
CRB 289.91 +.46%

Futures Spot Prices
Crude Oil 48.25 -.17%
Unleaded Gasoline 126.50 -1.39%
Natural Gas 5.99 -1.95%
Heating Oil 133.60 -.45%
Gold 428.40 +.35%
Base Metals 125.00 +1.36%
Copper 146.50 +1.17%
10-year US Treasury Yield 4.17% +.52%

Leading Sectors
Homebuilders +.89%
Papers +.89%
Gaming +.74%

Lagging Sectors
Telecom -.91%
Software -.92%
Disk Drives -1.18%

Market Movers
DLB +37.9% on strong demand for IPO.
SEPR +9.5% after hiring Morgan Stanley to advise on options that may include a sale.
STMP +12.4% after beating 4Q estimates and raising 05 guidance.
AAP +13.7% after beating 4Q estimates and raising 1Q, 2Q and 05 guidance.
PNRA +9.72% after boosting 1Q and 05 guidance.
TZOO +8.82% on short-covering after speculation the SEC will have positive results from its investigation into trading irregularities of its shares.
RS +10.13% after substantially beating 4Q estimates and raising 1Q outlook.
CCRT +5.76% on strong 4Q results.
GPRO +5.38% after beating 4Q estimates and raising 05 guidance.
APPX +6.49% after beating 4Q estimates and raising 05 guidance.
BRW -13.55% after disappointing 4Q results and multiple downgrades.
ANSI -12.63% after missing 4Q estimates and lowering 1Q outlook.
RSH -9.58% after missing 4Q estimates and lowering 05 guidance.
GVHR -11.09% after beating 4Q estimates and lowering 05 outlook.

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

Economic Data
-Import Price Index for January rose .9% versus estimates of a .6% increase and a 1.4% fall in December.
-Initial Jobless Claims for last week fell to 302K versus estimates of 315K and a 304K the prior week.
-Continuing Claims fell to 2717K versus estimates of 2710K and 2731K prior.
-Leading Indicators for January fell .3% versus estimates of a .2% drop and a .3% rise in December.
-Philadelphia Fed. for February rose to 23.9 versus estimates of 17.0 and a reading of 13.2 in January.

-Goldman Sachs: Reiterated Outperform on BHI, HD, FSH, ENH and MDT. Reiterated Underperform on GSIC and MHX. Upgraded LRY, TRZ and BXP to Outperform.
-Smith Barney: Cut LTXX to Sell. Raised UMC to Buy, target $27.
-CSFB: Raised VRC to Outperform.
-JP Morgan: Raised GPRO to Overweight. Raised XMSR to Overweight.
-UBS: Rated ARRY Buy, target $12.
-Bear Stearns: Rated SHW Underperform.
-Morgan Stanley: Raised CNA to Overweight, target $35.
-Legg Mason: Rated HYSL Buy, target $58.
-Deutsche Bank: Raised QGEN to Buy.
-Merrill Lynch: Named HET to Focus 1 List.

Mid-day News
US stocks are modestly lower mid-day on weakness in technology shares and rising long-term interest rates. Japanese shipbuilders are facing delays of 20 days for steel plates amid high prices for the metal, Lloyd’s List reported. Mattel and closely held MGA Entertainment plan to pit rival dolls against each other with new products that cast the characters as rock stars or actresses, the Wall Street Journal said. New England Lobsters may soon become a rarity on dinner plates after the species was hit by a shell-rotting disease, the AP said. Thomas Weisel Partners LLC, a closely held San Francisco-based investment banking firm, is preparing an IPO, the NY Post reported. Eastman Kodak and French cell-phone company SFR reached an agreement to enable SFR users to print photos from their wireless phones beginning in May, Reuters reported. Dendreon Corp.’s Provenge prostate cancer vaccine showed promise in a recent late-stage clinical study, including 34% of men using the vaccine living three years with the cancer, the NY Times reported. OAO Yukos Oil may close down its three main divisions on May 3 to protect the company from tax and legal authorities, Interfax said. Amgen’s experimental drug helped patients with Parkinson’s disease enrolled in a University of Kentucky study, the LA Times reported. Harvard University’s embryonic stem cell research and the school’s plans to create cloned human embryos didn’t violate state law, the Boston Globe reported. Wynn Resorts Chairman Wynn has bought 4% of the shares of slot-machine maker WMS Industries because he likes the company’s products, the Las Vegas Sun reported. Wal-Mart Stores said fourth-quarter profit rose 16% on fewer holiday discounts and lower merchandise costs, Bloomberg reported. Members of the United Iraqi Alliance debated their choice for the next prime minister as Iraq’s electoral commission certified the results of the Jan. 30 poll for a National Assembly that gave the Shiite Muslim coalition nearly half of the votes, Bloomberg said. The number of Americans filing first-time claims for unemployment insurance unexpectedly declined last week to the lowest level in more than four years, Bloomberg reported. Pfizer’s Celebrex painkiller probably poses risk of heart attacks at high doses, said FDA reviewer David Graham at a hearing today on the safety of pain medicines, Bloomberg reported. The index of leading US economic indicators declined .3% in January, the first drop in three months, as consumer confidence lagged and stock prices slumped, Bloomberg said. Manufacturing in the Philadelphia area expanded at a quicker-than-expected pace this month, Bloomberg reported.

BOTTOM LINE: The Portfolio is lower mid-day on losses in my internet, software and RFID longs. I have not traded today, thus the Portfolio remains 100% net long. The tone of the market is weaker as the advance/decline line is negative and most sectors are lower. However, volume is relatively light and measures of investor anxiety are mostly higher. Cyclicals are outperforming and technology stocks are underperforming. Greenspan’s testimony mainly centered around Social Security reform and gave little insight into current US economic conditions. I expect US stocks to trade mixed-to-higher from current levels into the close on good earnings reports, lower energy prices, strong economic reports and short-covering.

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