Wednesday, February 16, 2005

Wednesday Close

Indices
S&P 500 1,210.34 +.02%
Dow 10,834.88 -.02%
NASDAQ 2,087.43 -.09%
Russell 2000 638.85 +.62%
DJ Wilshire 5000 11,922.72 +.10%
S&P Barra Growth 581.34 +.09%
S&P Barra Value 624.66 -.05%
Morgan Stanley Consumer 590.96 -.34%
Morgan Stanley Cyclical 769.57 +.28%
Morgan Stanley Technology 475.58 -.59%
Transports 3,622.68 +.21%
Utilities 356.69 +.79%
Put/Call .71 -8.97%
NYSE Arms 1.08 +40.26%
Volatility(VIX) 11.10 -1.51%
ISE Sentiment 157.00 -9.77%
US Dollar 83.74 +.18%
CRB 288.57 -.26%

Futures Spot Prices
Crude Oil 48.47 +.29%
Unleaded Gasoline 128.43 +.12%
Natural Gas 6.11 +.02%
Heating Oil 134.25 +.04%
Gold 426.40 -.12%
Base Metals 123.32 +.04%
Copper 144.50 -.21%
10-year US Treasury Yield 4.15% +1.37%

Leading Sectors
Iron/Steel +3.69%
Energy +2.76%
Oil Service +2.60%

Lagging Sectors
Insurance -.87%
Airlines -1.16%
Restaurants -1.18%

After-hours Movers
APPX +4.04% after beating 4Q estimates and raising 05 guidance.
BWNG +10.18% after beating 4Q estimates.
ECST -10.5% beating 4Q revenue estimates, but missing earnings estimates.
HPQ +3.51% after beating 1Q estimates and widening 2Q outlook.

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.
-Merrill Lynch: Reiterated Buy on MACR, target $45. Reiterated Buy on DD, target $58. Reiterated Buy on ROV, target $51. Reiterated Buy on JCP, target $55.
-Banc of America: Reiterated Buy on ESRX, target $92.
-Raymond James: Reiterated Strong Buy on HCC, target $44.

After-hours News
US stocks finished mostly unchanged today as rising energy prices and interest rates offset more optimism over US economic growth. After the close, Microsoft released an update of its Windows Media Player that it says will protect computers from a known spyware infection, eWeek reported. Ukraine’s new government plans to review the privatization of 3,000 companies by the previous administration, Bloomberg reported. Pennsylvania Senator Arlen Specter, the Republican chairman of the Senate Judiciary Committee, has Hodgkin’s Disease, a cancer of the lymph system, Fox News reported. Federal Reserve Chairman Alan Greenspan said today that he supports creating private Social Security accounts if they are gradually phased in to gauge the financial markets’ reaction, Bloomberg said. MGM Mirage, the casino operator controlled by billionaire Kirk Kerkorian, won US antitrust clearance to acquire Mandalay Resort Group for $4.8 billion without having to sell any Las Vegas casinos, Bloomberg reported. The US House of Representatives passed a bill to raise the maximum fines against broadcasters that air indecent material to as much as $500,000 for each violation, Bloomberg reported. Hewlett-Packard, a week after ousting CEO Fiorina for failing to produce the results she promised, said first-quarter profit was little changed as sliding printer income offset rising personal computer earnings, Bloomberg said. A ruling that barred the US from seeking $280 billion in past profits from the tobacco industry will be appealed to the full membership of a federal appeals court, the Justice Dept. said.

BOTTOM LINE: The Portfolio finished higher today on gains in my semi/software longs and internet shorts. I exited a tech long in the afternoon and added ZEUS long, thus leaving the Portfolio 100% net long. I am using a $22 stop-loss on this new position. The tone of the market improved slightly into the close as the advance/decline line finished nearly unchanged, sector performance was mixed and small-cap stocks were mostly higher. On the negative side, technology stocks underperformed and measures of investor anxiety were mostly mixed. The fact that the major indices didn’t fall today despite worries over relations with Iran, rising interest rates, increasing energy prices and tech stock earnings is a psychological positive. I still plan to increase the Portfolio’s market exposure on a clear break above the 2100 level on the Nasdaq, which I expect in the near future.

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