Wednesday, February 09, 2005

Wednesday Watch

Late-Night News
Asian indices are mixed as gains in India are being offset by losses in Australia. KPMG Intl., Ernst & Young Intl., PricewaterhouseCoopers LLP and Deloitte & Touche LLP have doubled their audit fees with US clients due to the requirements of Sarbanes-Oxley legislation, the Financial Times said. The outlook for the US economy this quarter improved on signs of faster income growth and more corporate investment in equipment, according to results form a monthly survey by Bloomberg. The economy is projected to expand at a 3.6% annual pace from January through March, according to the median estimate of 74 economists surveyed. Profits at US companies, including ConocoPhillips and US Steel, climbed 18% in the fourth quarter, capping the biggest annual rise in a decade, Bloomberg reported. Earnings increased about 19.5% in all of 2004, based on results from the 384 member companies of the S&P 500 that have reported so far, Bloomberg said. DaimlerChrysler AG is finding that growth at the company's Chrysler unit is being set back by a slump in profit in sales by Mercedes, the Wall Street Journal reported. ING Groep NV is promoting its Internet-only bank, ING Direct, as the best way of expanding in a fragmented European banking market without mergers and acquisitions, the Wall Street Journal reported. Israeli Defense Minister Shaul Mofaz approved an easing of restrictions on Palestinians after a truce was declared by the two parties in a summit held in an Egyptian resort, Haaretz reported.

Late Recommendations
-Goldman Sachs: Reiterated Outperform on GNW and HEW. Reiterated Underperform on NFS, PPS and TCO.

Night Trading
Asian Indices are -.25% to +.25% on average.
S&P 500 indicated +.07%.
NASDAQ 100 indicated +.10%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
CNBC Guest Schedule

Earnings of Note

None of note.

Economic Data
Wholesale Inventories for December are estimated to rise .9% versus a 1.1% increase in November.

BOTTOM LINE: I expect US equities to open slightly lower in the morning on mild weakness in technology shares. However, stocks may rise later in the day on optimism over declining energy prices, low interest rates, increasing fund flows and short-covering. The Portfolio is 125% net long heading into tomorrow.

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