Tuesday, February 22, 2005

Tuesday Close

S&P 500 1,184.16 -1.45%
Dow 10,611.20 -1.61%
NASDAQ 2,030.32 -1.37%
Russell 2000 617.93 -1.94%
DJ Wilshire 5000 11,655.73 -1.49%
S&P Barra Growth 569.70 -1.49%
S&P Barra Value 610.15 -1.42%
Morgan Stanley Consumer 578.74 -1.94%
Morgan Stanley Cyclical 752.82 -1.87%
Morgan Stanley Technology 463.73 -.81%
Transports 3,540.15 -2.20%
Utilities 342.91 -2.68%
Put/Call .76 -9.52%
NYSE Arms 1.47 +145.00%
Volatility(VIX) 13.14 +17.53%
ISE Sentiment 142.00 -14.46%
US Dollar 82.41 -1.33%
CRB 297.66 +2.41%

Futures Spot Prices
Crude Oil 51.15 -.53%
Unleaded Gasoline 130.80 -.07%
Natural Gas 6.07 -.46%
Heating Oil 143.20 -.57%
Gold 437.00 +.28%
Base Metals 128.78 +1.58%
Copper 148.90 unch.
10-year US Treasury Yield 4.28% +.55%

Leading Sectors
Drugs -.14%
Networking -.22%
Semis -.45%

Lagging Sectors
Utilities -2.68%
Homebuilding -2.79%
HMOs -2.95%

After-hours Movers
NVEC +6.68% after announcing that it has been awarded a one-year contract for approximately $400,000 by the Defense Advanced Research Projects Agency to develop ultra-sensitive spin-dependent tunneling sensor systems.
MTLG +6.67% after beating 4Q estimates.
NOVL -3.43% on profit-taking after beating 1Q estimates.
APSG -20.06% after missing 1Q estimates substantially.

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 INFA, AG, CVH and THC. Reiterated Outperform on HD and RIO.

After-hours News
US stocks finished sharply lower today on continuing worries over rising commodity prices, slowing global growth and higher interest rates. After the close, Vivendi Universal’s mobile phone unit, Universal Mobile, expects the value of content sold via cell phones to jump as much as threefold to $15.9 billion over the next five years, the Financial Times reported. Sony Corp. will fully withdraw from the PDA business by ending production for the Japanese market as early as July, the Nihon Keizai reported. Taiwan Semiconductor Manufacturing plans to more-than triple its cash dividend payment this year in a move that signals Asian companies are more willing to share cash with shareholders, the Wall Street Journal reported. Sina Corp., which operates China’s No.1 Internet search engine, has introduced a shareholder rights plan that may help rebuff a takeover attempt by Shanda Interactive Entertainment, the Financial Times reported. Beijing’s city government bought Microsoft software after canceling a $3.5 million order for the company’s Office product and Windows operating system last year, the Financial Times reported. China’s passenger car prices may fall by as much as 8% this year from a year earlier because of oversupply, Xinhua News Agency reported. California Insurance Commissioner Garamendi said he is “actively investigating” title insurers Fidelity National Financial and LandAmerica Financial as part of a probe into hidden payments with developers, Bloomberg reported. United Technologies’ Pratt & Whitney unit agreed to buy Boeing’s Rocketdyne rocket engine unit, which makes the reusable main rockets used by the space shuttle, for $700 million in cash to bolster its sales to NASA, Bloomberg said. BHP Billiton and Rio Tinto may have their profit estimates raised by analysts should the two companies obtain the same iron ore price increase as rival Cia. Vale do Rio Doce, Bloomberg reported. Crude oil traded above $51/bbl. in NY, close to its highest price in almost four months, as colder-than-normal weather in the US and Europe raised demand, Bloomberg said.

BOTTOM LINE: The Portfolio finished slightly lower today on losses in my homebuilding, steel and medical information systems longs. I added a few new consumer-oriented shorts in the afternoon, thus leaving the Portfolio market neutral. One of my new shorts is ERTS and I am using a $66 stop-loss on this position. The tone of the market weakened further into the afternoon as the advance/decline line finished at its daily lows, volume accelerated and every major sector fell. The US dollar declined and the CRB made new highs, further stoking inflation fears. Interest-rate/energy sensitive sectors and small-cap stocks significantly underperformed throughout the day. On the positive side, most measures of investor anxiety rose and technology stocks outperformed. I expect US stocks to test their January lows over the coming weeks.

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