Thursday, February 24, 2005

Thursday Close

S&P 500 1,200.20 +.79%
Dow 10,748.79 +.70%
NASDAQ 2,051.70 +1.01%
Russell 2000 627.56 +1.13%
DJ Wilshire 5000 11,814.51 +.82%
S&P Barra Growth 577.95 +.96%
S&P Barra Value 617.85 +.62%
Morgan Stanley Consumer 586.95 +.75%
Morgan Stanley Cyclical 767.54 +1.12%
Morgan Stanley Technology 468.55 +1.22%
Transports 3,680.25 +1.90%
Utilities 349.06 +1.07%
Put/Call .94 +9.30%
NYSE Arms .77 +2.67%
Volatility(VIX) 11.57 -6.62%
ISE Sentiment 179.00 +20.13%
US Dollar 82.90 +.27%
CRB 298.04 -.37%

Futures Spot Prices
Crude Oil 51.40 +.02%
Unleaded Gasoline 127.95 -.33%
Natural Gas 6.30 -.11%
Heating Oil 146.40 -.07%
Gold 435.00 -.16%
Base Metals 127.28 -1.03%
Copper 148.00 unch.
10-year US Treasury Yield 4.28% +.51%

Leading Sectors
Homebuilders +3.57%
Iron/Steel +3.09%
Semis +2.39%

Lagging Sectors
Insurance +.24%
Drugs +.21%
Internet -.18%

After-hours Movers
GPS +4.65% after beating 4Q estimates and boosting dividend.
HRB +6.51% after beating 3Q estimates.
NDAQ +5.91% after beating 4Q estimates.
SRNA -7.02% after meeting 4Q estimates and lowering 1Q guidance.
BCSI -6.33% after meeting 3Q estimates and lowering 4Q guidance.
MRVL +3.62% after beating 4Q estimates.

Detailed Market Summary
Market Wrap CNBC Video(bottom right)
Futures Recap
NASDAQ 100 After-hours Indicator
Real-time/After-hours Stock Quote

Afternoon Recommendations
- Goldman Sachs: Reiterated Underperform on RAI, HMT, AG, DE and CNH. Reiterated Outperform on FS, HOT, MO, A and SYK.
- Merrill Lynch: Raised AV to Buy, target $17.50.
- Deutsche Bank: Downgraded AFR to Sell, target $12.
- UBS: Rated GENZ Buy, target $67.
- Business Week: Anadarko Petroleum(APC) may be acquired by a larger oil company, citing Oppenheimer analyst Fadel Gheit.

After-hours News
US stocks finished higher today on optimism over President Bush’s trip to Europe and short-covering in the homebuilding and steel sectors. After the close, China’s population will be overtaken by that of India “without a doubt” before 2030, five years earlier than predicted, as China’s fertility rates decline, the Financial Times reported. IBM reduced it 2004 revenue by $260 million after discovering some employees in Japan booked sales improperly, Bloomberg reported. A US government agency recommended that the Air Force hold a competition for a portion of a Boeing contract valued at as much as $4 billion to upgrade avionics on C-130 transport planes, Bloomberg said. Gap Inc., the largest US clothing chain, said fiscal fourth-quarter earnings rose 3.9% amid better-than-expected holiday sales at its Gap, Old Navy and Banana Republic stores, Bloomberg said. Qwest Communications, seeking to outbid Verizon Communications for MCI, sweetened its $8 billion cash-and-stock offer by giving MCI shareholders a hedge against falling share prices, Bloomberg reported. North Korea must return to six-nation negotiations over the communist nation’s nuclear weapons program in order to fulfill is request for direct talks with the US, South Korea’s foreign minister said. Microsoft hired the creator of the top-selling “Final Fantasy” series for Sony’s PlayStation device to develop games for the next version of Xbox, Bloomberg said. IBM may repatriate as much as $8 billion in foreign earnings, taking advantage of a US law that gives companies a year to bring back profits earned in other countries at a lower tax rate, Bloomberg reported. Japan’s consumer prices fell in January, extending more than six years of deflation and making it difficult for the central bank to end its zero-rate policy anytime soon, Bloomberg said. A federal judge in Houston ruled that OAO Yukos Oil is not entitled to remain under the protection of US bankruptcy laws while it fights the Russian government, Bloomberg said.

BOTTOM LINE: The Portfolio finished slightly lower today as losses in my computer hardware and steel shorts more than offset gains in my alternative energy and semi equipment longs. I added a few new longs in the afternoon, thus leaving the Portfolio 75% net long. One of my new longs is AMAT and I am using a $16.50 stop-loss on this position. The tone of the market strengthened into the afternoon as the advance/decline line finished near its daily highs, volume rose and almost every sector gained. Technology, small-caps and cyclicals led the way and measures of investor anxiety remained mixed. As well, Homebuilding stocks outperformed substantially on positive guidance from PHM. The Housing Sector Index(HGX) may consolidate over the next few days on a modest rise in long-term interest rates, however it should see all-time highs over the coming weeks as fundamentals remain strong, valuations are reasonable and shorts cover.

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