Thursday, February 17, 2005

Thursday Close

S&P 500 1,200.75 -.79%
Dow 10,754.26 -.74%
NASDAQ 2,061.34 -1.25%
Russell 2000 631.14 -1.21%
DJ Wilshire 5000 11,828.40 -.79%
S&P Barra Growth 577.06 -.74%
S&P Barra Value 619.37 -.85%
Morgan Stanley Consumer 588.07 -.49%
Morgan Stanley Cyclical 764.01 -.72%
Morgan Stanley Technology 469.29 -1.32%
Transports 3,604.19 -.51%
Utilities 356.20 -.14%
Put/Call .89 +25.35%
NYSE Arms 1.25 +15.74%
Volatility(VIX) 11.77 +6.04%
ISE Sentiment 166.00 +5.73%
US Dollar 83.48 -.23%
CRB 289.99 +.49%

Futures Spot Prices
Crude Oil 47.55 +.02%
Unleaded Gasoline 123.65 unch.
Natural Gas 5.92 +.03%
Heating Oil 131.25 -.02%
Gold 428.60 unch.
Base Metals 125.00 +1.36%
Copper 149.35 unch.
10-year US Treasury Yield 4.18% +.66%

Leading Sectors
Papers +.56%
Homebuilders +.37%
Gaming -.01%

Lagging Sectors
Networking -1.67%
Computer Hardware -1.80%
Disk Drives -1.96%

After-hours Movers
ARBX +11.4% after beating 4Q estimates and raising 05 outlook.
AKAM +9.67% after beating 4Q revenue estimates.
NVDA +9.2% after beating 4Q estimates and raising 1Q guidance.
CRM +7.1% after beating 4Q estimates and raising 1Q outlook.
MCIP +4.3% after Qwest Communications said it plans to sweeten its takeover offer in an effort to derail MCI’s agreement with Verizon Communications.
TKLC +5.89% after announcing that it has concluded its discussions with the SEC regarding the accounting for the acquisition of the Company’s majority interest in its Santera subsidiary.
VCLK +5.51% after substantially beating 4Q estimates and raising 1Q revenue outlook.
NTGR -13.2% after missing 4Q revenue estimates and widening 1Q revenue estimates.
AMMD -4.03% after beating 4Q estimates and lowering 1Q revenue guidance.

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 Outperform on AAP. Rated Restaurant Industry Attractive. Rated YUM and CAKE Outperform. Rated DRI Underperform.
-JP Morgan: Upgraded XMSR to Overweight. Upgraded GPRO to Overweight. Reiterated Overweight on AKS, target $21.
-Deutsche Bank: Upgraded QGENF to Buy, target $14.
-Raymond James: Reiterated Strong Buy on CMX. Reiterated Strong Buy on CPSI target $30.

After-hours News
US stocks finished lower today after disappointing commentary from Fed Chairman Greenspan with respect to interest rates. SBC Communications may make a defense of its merger plan with AT&T Corp. in regulatory filings to the Department of Justice and the FCC next week, the Financial Times said. BHP Billiton may spend $2.3 billion to expand its iron ore production in Western Australia to meet demand from steelmakers, the Wall Street Journal reported. China’s government is considering raising electricity rates as early as March to help power producers cope with increases in the cost of coal, the China Daily reported. Mitsubishi Motors has been discussing a sale of its US plant and North American sales company with potential investors including Ripplewood Holdings LLC, the Wall Street Journal reported. Mergers and acquisitions will probably increase in Asia as companies in Japan, South Korea and Taiwan seek to expand, the Wall Street Journal reported. Emmis Communications, which owns radio stations in NY, LA and Chicago, is bidding for a radio license in Manchester, north England, as part of its “bullish” aim to enter the UK market, the Guardian said. Brazil’s Bovespa rose 2.7% to a record, the best performing of the world’s primary equity indices, on optimism the central bank will reverse course and cut interest rates this year, Bloomberg reported. President Bush will emphasize the importance of the US-European cooperation in confronting the challenges of terrorism and nuclear proliferation during his trip next week to meet with allied leaders, Bloomberg reported. US 10-year T-notes fell after Fed Chairman Greenspan reiterated that interest rates are low, a signal that the central bank may continue to raise its benchmark lending rates, Bloomberg said. Harvard University President Lawrence Summers, facing a vote of no-confidence by faculty members, today released a transcript of his remarks on the ability of women scholars, Bloomberg said. Afghanistan has disarmed 80% of its estimated 50,000 militiamen under a joint program with the UN, Bloomberg reported. New York Times Co. will buy Primedia’s consumer information Web site for $410 million in cash to boost its presence on the Internet, Bloomberg reported. Oskkosh B’Gosh said it has asked longtime financial adviser Goldman Sachs to explore alternatives for the company, including a possible sale, Bloomberg said.

BOTTOM LINE: The Portfolio finished lower today on losses in my networking, software and internet longs. I exited a number of longs in the afternoon as they hit stop-losses, thus bringing the Portfolio to 50% net long. The tone of the market turned decidedly weaker in the afternoon as the advance/decline line finished at its lows, volume accelerated and almost every sector fell. As well, technology and small-cap stocks significantly underperformed. On the positive side, most measures of investor anxiety rose and energy prices fell. The AAII % Bulls fell 16.89% this week to 36.36%. In my opinion, investors were very disappointed that Greenspan didn’t hint at a slowing in the pace of rate hikes. I expect long-term rates to move a bit higher before heading back down again. After-hours action appears more constructive for equities.

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