S&P 500 1,126.34 -1.03%
NASDAQ 2,001.72 -1.52%
Leading Sectors
Restaurants +.77%
Utilities +.03%
Semis -.15%
Lagging Sectors
Biotech -2.33%
Nanotechnology -2.75%
Papers -2.83%
Other
Crude Oil 37.83 +.80%
Natural Gas 5.86 -.24%
Gold 386.00 -3.31%
Base Metals 102.86 -4.18%
U.S. Dollar 91.15 +.83%
10-Yr. Long-Bond Yield 4.45% +1.71%
VIX 16.15 +7.17%
Put/Call .86 +21.13%
NYSE Arms 1.87 +59.83%
Market Movers
NT -26.0% after saying it fired its CEO, former CFO an controller, all for cause. Also said it would restate three year's worth of financial results covering 2000-2003 and delay 1Q results.
SINA -13.0% on Chinese economic concerns after beating 1Q estimate and raising 2Q guidance.
FLEX -7.0% on NT concerns after beating 1Q estimate and raising 04 forecast.
NET -11.60% after missing 1Q estimates and lowering 2Q forecast substantially.
OSIP -10.0% on profit-taking.
CELG -11.16% after stopping a test of its Revlimid medicine after early results failed to show it helped skin-cancer patients live longer.
FTFC +22.69% after announcing it will be acquired by ASBC for $26.79/share.
ECLP +16.65% after meeting 1Q estimates.
GTRC +12.29% after beating 1Q estimate and raising 2Q forecast.
PLT +17.02% after beating 4Q estimate and raising 1Q forecast.
KSWS -20.14% after beating 1Q estimates and substantially lowering 2Q/04 forecast.
MAGS -20.4% after disappointing 1Q results.
INTL -16.14% after missing 1Q estimates.
COCO -12.0% after beating 3Q estimate and lowering 4Q guidance.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on AGR/A, CBL, NEM, CCE, AMLN, AHC, BSX, AL, STLD, PDG, X, HD, PETC, BHI and WON. GS raised NUE to Outperform. GS reiterated Underperform on F, BMY, HMT, ASH and RKY. Citi SmithBarney downgraded MU from Buy to Sell. Citi said to Buy APCC ahead of quarterly report, target $31. Citi upgraded MHP from Sell to Buy, target $90. Citi reiterated Buy on RCI, raised earning and target to $61. Citi reiterated Buy on BC, target $49. Citi rated AXL Buy, target $48. Citi rated BWA Buy, target $108. Citi rated MGA Buy, target $105. Citi rated SUP Sell, target $30. QLTI cut to Reduce at UBS. CIT raised to Buy at Legg Mason, target $44. ELX raised to Buy, target $20.50. CMCSA raised to Buy at Merrill, target $46. COL raised to Overweight at Morgan Stanley. CSGS raised to Raymond James, target $21. AXCA and Q removed from Focus List at JP Morgan. ETN raised to Outperform at Bear Stearns.
Mid-day News
U.S. stocks are sharply lower mid-day on concerns over the Chinese economy, rising interest rates and the continuing scandal at Nortel. VaxGen said it submitted a plan to the U.S. government to make 75 million doses of an experimental anthrax vaccine for a national stockpile. President Bush has approved measures to enhance the country's defenses against a biological weapons attack, including the creation of a surveillance system to track threats, the NY Times reported. IBM announced today it plans to build new server computers that act more like mainframes, the NY Times reported. Viacom's CBS was sued by Mohamed al-Fayed, the father of the man killed with Princess Diana in a 97 crash, for airing pictures of a dying Diana, Reuters reported. Comcast withdrew its $54.1 billion unsolicited bid for Walt Disney, Bloomberg reported. Boeing boosted its 2004-2005 profit forecasts because of better margins and higher-than-expected commercial-aircraft deliveries next year. Hilton Hotels first-quarter profit rose 400% because of increased business travel, Bloomberg reported. Copper futures fell to a 12-week low as some Chinese banks halted new loans in a government bid to slow the economy, signaling an erosion in demand for metal used in buildings, appliances and automobiles, Bloomberg reported.
BOTTOM LINE: The Portfolio is down slightly today on declines in technology and energy-related long positions. I trimmed a few more longs, leaving the Portfolio with 25% net long market exposure. Interest rates are increasing in anticipation of tomorrow's GDP report. If rates make new near-term lows tomorrow U.S. stocks will likely continue their recent sell-off. However, if rates fall on tomorrow's strong economic report, it may provide the catalyst for another upward thrust. There are two positives I see from today's mostly negative action. In a little over a month the CRB Index has now fallen over 5% as China's government continues to make comments about trying to slow recent torrid growth. Most of the Bear's inflation arguments revolve around rising commodity prices. A rising dollar and decelerating Chinese demand should continue to pressure commodity prices in the near-term. As well, it is positive that semiconductors are mostly unchanged today as the rest of tech is falling. Semis usually lead tech and this may be a sign that tech is trying to find a bottom. I expect stocks to remain under pressure in the afternoon as investors worry about the bond market's reaction to tomorrow's GDP report.
Wednesday, April 28, 2004
Wednesday Watch
Earnings Announcements
Company/Estimate
AFCI/.08
BMY/.39
CMCSA/.06
EL/.35
FEIC/.08
HAL/.30
HLT/.06
INSP/.16
MGAM/.26
NEM/.34
PD/1.81
QLGC/.36
SOHU/.27
SWKS/.04
SYMC/.34
TWX/.09
ZBRA/.52
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on BHI, BSX, MUR, MMP and AFL. GS says to Buy ROH ahead of quarterly report.
Late-Night News
Asian indices are mixed on strength in Hong Kong/Australia and weakness in Taiwan/Korea. The European Central Bank signaled yesterday that the 10 countries which are about to join the European Union may have to wait years before they can adopt the euro, the Wall Street Journal reported. Sony fell as much as 3.3% after the company said it may post a weaker-than-expected 13% rise in net income this year. China's efforts to cool expansion in its steel, cement and other heavy industries are working, a central bank official said, suggesting interest rates may remain where they are unless inflation accelerates, Bloomberg reported.
Late-Night Trading
Asian Indices -1.25% to +.50%.
S&P 500 indicated -.06%.
NASDAQ indicated -.13%.
BOTTOM LINE: I expect U.S. stocks to remain mixed to lower tomorrow ahead of Thursday's 1st Quarter GDP report. My short-term trading indicators are giving conflicting signals and the tone of the market has not been good the last couple of days. The Portfolio is 50% net long heading into trading tomorrow.
Company/Estimate
AFCI/.08
BMY/.39
CMCSA/.06
EL/.35
FEIC/.08
HAL/.30
HLT/.06
INSP/.16
MGAM/.26
NEM/.34
PD/1.81
QLGC/.36
SOHU/.27
SWKS/.04
SYMC/.34
TWX/.09
ZBRA/.52
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on BHI, BSX, MUR, MMP and AFL. GS says to Buy ROH ahead of quarterly report.
Late-Night News
Asian indices are mixed on strength in Hong Kong/Australia and weakness in Taiwan/Korea. The European Central Bank signaled yesterday that the 10 countries which are about to join the European Union may have to wait years before they can adopt the euro, the Wall Street Journal reported. Sony fell as much as 3.3% after the company said it may post a weaker-than-expected 13% rise in net income this year. China's efforts to cool expansion in its steel, cement and other heavy industries are working, a central bank official said, suggesting interest rates may remain where they are unless inflation accelerates, Bloomberg reported.
Late-Night Trading
Asian Indices -1.25% to +.50%.
S&P 500 indicated -.06%.
NASDAQ indicated -.13%.
BOTTOM LINE: I expect U.S. stocks to remain mixed to lower tomorrow ahead of Thursday's 1st Quarter GDP report. My short-term trading indicators are giving conflicting signals and the tone of the market has not been good the last couple of days. The Portfolio is 50% net long heading into trading tomorrow.
Tuesday, April 27, 2004
Tuesday Close
S&P 500 1,138.15 +.23%
NASDAQ 2,032.53 -.21%
Leading Sectors
Oil Service +3.17%
Homebuilders +2.14%
Energy +1.86%
Lagging Sectors
Semis -1.35%
Networking -1.58%
Nanotechnology -2.59%
Other
Crude Oil 37.54 +.03%
Natural Gas 5.86 -.15%
Gold 399.80 +.18%
Base Metals 107.35 -.14%
U.S. Dollar 90.40 -.24%
10-Yr. Long-Bond Yield 4.39% -.82%
VIX 15.07 +2.03%
Put/Call .71 +9.23%
NYSE Arms 1.17 +10.38%
After-hours Movers
SNCI +13.59% after beating 1Q estimates.
MSTR +8.91% after beating 1Q estimates, lowering 2Q guidance, maintaining 04 forecast.
GTRC +6.49% after beating 1Q estimates and raising 2Q forecast.
ACLS +6.32% after beating 1Q estimates and raising 2Q forecast.
PLT +6.22% after beating 4Q estimates and raising 1Q guidance.
LPNT +4.29% after beating 1Q estimates.
NET -8.84% after missing 1Q estimates and lowering 2Q forecast.
NTIQ -7.87% after beating 3Q estimates and lowering 4Q guidance.
ZRAN -7.8% after beating 1Q estimates, lowering 2Q guidance and raising 04 forecast.
QSFT -7.65% after beating 1Q estimates and lowering 2Q forecast.
MNST -6.06% after beating 1Q estimates and leaving 2Q forecast unchanged.
Recommendations
Goldman Sachs reiterated Outperform on HD and BC.
After-hours News
U.S. stocks finished mixed Tuesday as better-than-expected economic numbers, falling interest rates and violence in the Middle East created above average volatility. After the close, Gillette said it may sign a $71.6 million advertising deal with Real Madrid and England soccer player David Beckham, the London-based Times said. The leaders of an interim government in Iraq, chosen by Iraqis, should be name by the end of May, and should use the time before they assume control of the government June 30 to define their relationship with U.S. military forces, said Brahimi, the United Nations' top envoy to Iraq. China Life Insurance said it received an "informal inquiry" from the SEC, Bloomberg reported.
BOTTOM LINE: The Portfolio fell slightly today and I exited some technology positions in the afternoon, bringing the Portfolio's market exposure to 50% net long. Today's breadth was disappointing, as well as the performance of the technology sector. However, the bond market's reaction to better-than-expected economic reports was a positive. If the GDP report Thur. is as strong as I expect(near 6%) and bonds don't fall much or rally, it could provide the catalyst for another upward thrust in stocks. A move substantially lower in bonds on a very strong number would likely signal that the major U.S. indices are still stuck in their recent trading range.
NASDAQ 2,032.53 -.21%
Leading Sectors
Oil Service +3.17%
Homebuilders +2.14%
Energy +1.86%
Lagging Sectors
Semis -1.35%
Networking -1.58%
Nanotechnology -2.59%
Other
Crude Oil 37.54 +.03%
Natural Gas 5.86 -.15%
Gold 399.80 +.18%
Base Metals 107.35 -.14%
U.S. Dollar 90.40 -.24%
10-Yr. Long-Bond Yield 4.39% -.82%
VIX 15.07 +2.03%
Put/Call .71 +9.23%
NYSE Arms 1.17 +10.38%
After-hours Movers
SNCI +13.59% after beating 1Q estimates.
MSTR +8.91% after beating 1Q estimates, lowering 2Q guidance, maintaining 04 forecast.
GTRC +6.49% after beating 1Q estimates and raising 2Q forecast.
ACLS +6.32% after beating 1Q estimates and raising 2Q forecast.
PLT +6.22% after beating 4Q estimates and raising 1Q guidance.
LPNT +4.29% after beating 1Q estimates.
NET -8.84% after missing 1Q estimates and lowering 2Q forecast.
NTIQ -7.87% after beating 3Q estimates and lowering 4Q guidance.
ZRAN -7.8% after beating 1Q estimates, lowering 2Q guidance and raising 04 forecast.
QSFT -7.65% after beating 1Q estimates and lowering 2Q forecast.
MNST -6.06% after beating 1Q estimates and leaving 2Q forecast unchanged.
Recommendations
Goldman Sachs reiterated Outperform on HD and BC.
After-hours News
U.S. stocks finished mixed Tuesday as better-than-expected economic numbers, falling interest rates and violence in the Middle East created above average volatility. After the close, Gillette said it may sign a $71.6 million advertising deal with Real Madrid and England soccer player David Beckham, the London-based Times said. The leaders of an interim government in Iraq, chosen by Iraqis, should be name by the end of May, and should use the time before they assume control of the government June 30 to define their relationship with U.S. military forces, said Brahimi, the United Nations' top envoy to Iraq. China Life Insurance said it received an "informal inquiry" from the SEC, Bloomberg reported.
BOTTOM LINE: The Portfolio fell slightly today and I exited some technology positions in the afternoon, bringing the Portfolio's market exposure to 50% net long. Today's breadth was disappointing, as well as the performance of the technology sector. However, the bond market's reaction to better-than-expected economic reports was a positive. If the GDP report Thur. is as strong as I expect(near 6%) and bonds don't fall much or rally, it could provide the catalyst for another upward thrust in stocks. A move substantially lower in bonds on a very strong number would likely signal that the major U.S. indices are still stuck in their recent trading range.
Mid-day Update
S&P 500 1,144.40 +.78%
NASDAQ 2,042.87 +.30%
Leading Sectors
Oil Service +3.79%
Energy +2.36%
Homebuilders +2.43%
Lagging Sectors
Networking -.68%
Nanotechnology -1.24%
Iron/Steel -1.43%
Other
Crude Oil 37.50 +1.38%
Natural Gas 5.83 +1.23%
Gold 399.20 +.66%
Base Metals 107.35 -.14%
U.S. Dollar 90.58 -.06%
10-Yr. Long-Bond Yield 4.43% -.09%
VIX 14.55 -1.49%
Put/Call .61 -6.15%
NYSE Arms .72 -32.08%
Market Movers
OSTK +11.0% on short-squeeze, optimism over Google IPO.
NGPS +38.77% after beating 1Q estimate and raising 04 forecast substantially.
VANS +28.27% after announcing purchase by VFC for $20.55/share.
BLUD +25.6% after FDA cleared its Galileo product for use in the U.S.
ISPH +19.8% after reporting positive results from Cystic Fibrosis Drug Study.
CVNS +22.5% after announcing purchase by FNF of 29% stake for $131M.
KRON +15.9% after beating 2Q estimates and raising 3Q guidance.
RNT +13.12% after beating 1Q estimates and raising 2Q forecast.
GLBC -22.4% after saying it is conducting a review of previous financial statements for 02 and 03 and expects to restate some results.
PIR -12.22% after saying April sales were below expectations.
CAMP -27.0% after beating 1Q estimates, but announcing it was being served with complaint alleging certain violations of California's labor code.
Economic Data
Consumer Confidence for April 92.9 versus expectations of 88.5 and 88.5 in March.
Existing Home Sales for March 6.48M versus expectations of 6.20M and 6.13M in April.
Recommendations
Goldman Sachs reiterated Underperform on EDS and RKY. GS reiterated Outperform on EMC, BC, ENH, AXP, X, MET, ADP, CEN, PAYX, LEA, ATYT and PETC. Citi SmithBarney says to swap out of EMN and into NCX. Citi rated CMLS Buy, target $27. Citi added CKFR to Small/Mid-Cap Focus List, replacing FIC. CVS and WAG rated Buy at Deutsche Bank, targets $47 and $37 repectively. NRMX rated Sector Outperform at CIBC, target $33. RTEC cut to Underperform at CIBC. TSA rated Buy at Merrill, target $48. MEE raised to Outperform at CSFB, target $32. CB and WRI raised to Buy at Legg Mason. R cut to Underperform at Bear Stearns. Jim Cramer, of TheStreet.com, thinks UNH purchase of OHP is very good strategic move, target $100 on UNH. TheStreet.com has a positive column on MSFT, target mid-30's.
Mid-day News
U.S. stocks are higher mid-day on a better-than-expected Consumer Confidence report, falling interest rates and strong corporate earnings. Yum! Brands's KFC will start selling oven-roasted chicken, part of an attempt to attract more health-conscious consumers wary of the fast-food chain's fried food, USA Today reported. Interpublic Group won an advertising contract to help promote Verizon Wireless, the Wall Street Journal reported. OPEC may boost its target crude price by 30%, Bloomberg reported. Janus Capital may pay about $200M, including fee reductions, to settle allegations that it allowed clients to engage in improper mutual-fund trading, Bloomberg reported. "Housing sales are likely to remain very strong, even with higher rates, because of a strong economy and a rebounding labor market," said Steven Wood, chief economist at Insight Economics. Confidence in the U.S. economy rose more than expected this month as strong job growth boosted sentiment about current conditions to the highest in almost 2 years, Bloomberg reported. General Motors, Ford, DaimlerChrysler and more than 100 companies and universities will get a share of $350M in grants to design autos that run on hydrogen, U.S. Energy Secretary Spencer Abraham said.
BOTTOM LINE: The Portfolio is down slightly today as one of my biotech longs is falling and other longs are mixed. I am disappointed in the breadth of today's rally and continued relative weakness in technology shares. However, the bond market's reaction to very positive economic reports the last 2 days is a big positive. I took profits in a few long positions this morning, bringing the Portfolio's market exposure to 75% net long.
NASDAQ 2,042.87 +.30%
Leading Sectors
Oil Service +3.79%
Energy +2.36%
Homebuilders +2.43%
Lagging Sectors
Networking -.68%
Nanotechnology -1.24%
Iron/Steel -1.43%
Other
Crude Oil 37.50 +1.38%
Natural Gas 5.83 +1.23%
Gold 399.20 +.66%
Base Metals 107.35 -.14%
U.S. Dollar 90.58 -.06%
10-Yr. Long-Bond Yield 4.43% -.09%
VIX 14.55 -1.49%
Put/Call .61 -6.15%
NYSE Arms .72 -32.08%
Market Movers
OSTK +11.0% on short-squeeze, optimism over Google IPO.
NGPS +38.77% after beating 1Q estimate and raising 04 forecast substantially.
VANS +28.27% after announcing purchase by VFC for $20.55/share.
BLUD +25.6% after FDA cleared its Galileo product for use in the U.S.
ISPH +19.8% after reporting positive results from Cystic Fibrosis Drug Study.
CVNS +22.5% after announcing purchase by FNF of 29% stake for $131M.
KRON +15.9% after beating 2Q estimates and raising 3Q guidance.
RNT +13.12% after beating 1Q estimates and raising 2Q forecast.
GLBC -22.4% after saying it is conducting a review of previous financial statements for 02 and 03 and expects to restate some results.
PIR -12.22% after saying April sales were below expectations.
CAMP -27.0% after beating 1Q estimates, but announcing it was being served with complaint alleging certain violations of California's labor code.
Economic Data
Consumer Confidence for April 92.9 versus expectations of 88.5 and 88.5 in March.
Existing Home Sales for March 6.48M versus expectations of 6.20M and 6.13M in April.
Recommendations
Goldman Sachs reiterated Underperform on EDS and RKY. GS reiterated Outperform on EMC, BC, ENH, AXP, X, MET, ADP, CEN, PAYX, LEA, ATYT and PETC. Citi SmithBarney says to swap out of EMN and into NCX. Citi rated CMLS Buy, target $27. Citi added CKFR to Small/Mid-Cap Focus List, replacing FIC. CVS and WAG rated Buy at Deutsche Bank, targets $47 and $37 repectively. NRMX rated Sector Outperform at CIBC, target $33. RTEC cut to Underperform at CIBC. TSA rated Buy at Merrill, target $48. MEE raised to Outperform at CSFB, target $32. CB and WRI raised to Buy at Legg Mason. R cut to Underperform at Bear Stearns. Jim Cramer, of TheStreet.com, thinks UNH purchase of OHP is very good strategic move, target $100 on UNH. TheStreet.com has a positive column on MSFT, target mid-30's.
Mid-day News
U.S. stocks are higher mid-day on a better-than-expected Consumer Confidence report, falling interest rates and strong corporate earnings. Yum! Brands's KFC will start selling oven-roasted chicken, part of an attempt to attract more health-conscious consumers wary of the fast-food chain's fried food, USA Today reported. Interpublic Group won an advertising contract to help promote Verizon Wireless, the Wall Street Journal reported. OPEC may boost its target crude price by 30%, Bloomberg reported. Janus Capital may pay about $200M, including fee reductions, to settle allegations that it allowed clients to engage in improper mutual-fund trading, Bloomberg reported. "Housing sales are likely to remain very strong, even with higher rates, because of a strong economy and a rebounding labor market," said Steven Wood, chief economist at Insight Economics. Confidence in the U.S. economy rose more than expected this month as strong job growth boosted sentiment about current conditions to the highest in almost 2 years, Bloomberg reported. General Motors, Ford, DaimlerChrysler and more than 100 companies and universities will get a share of $350M in grants to design autos that run on hydrogen, U.S. Energy Secretary Spencer Abraham said.
BOTTOM LINE: The Portfolio is down slightly today as one of my biotech longs is falling and other longs are mixed. I am disappointed in the breadth of today's rally and continued relative weakness in technology shares. However, the bond market's reaction to very positive economic reports the last 2 days is a big positive. I took profits in a few long positions this morning, bringing the Portfolio's market exposure to 75% net long.
Tuesday Watch
Earnings Announcements
Company/Estimate
ABGX/-.50
AGR/A/.01
AMT/-.16
ABI/.21
AGI/.48
AV/.07
BHI/.25
BJS/.41
COHR/.06
FLEX/.10
IMCL/.16
LLL/.64
LMT/.53
MXIM/.31
MNST/.10
MSTR/.29
NET/.11
RFMD/.04
SINA/.27
SONS/.01
VZ/.57
UTSI/.39
Splits
ARO 3-for-2
BKST 3-for-2
Economic Data
Consumer Confidence for April estimated at 88.5 versus 88.3 in March.
Existing Home Sales for March estimated at 6.2M versus 6.12M in February.
Recommendations
Goldman Sachs reiterated Underperform on SMP, VRTX and T. GS reiterated Outperform on ENH, DNA and SBC.
Late-Night News
Asian indices are mixed as strength in Hong Kong is being offset by weakness in Taiwan. Starbucks Chairman Howard Schultz said the largest U.S. coffee-shop chain by market value doesn't plan to increase drink prices even as the cost of coffee and milk rises, CNBC reported. China may take more steps to try to curb Shanghai's real estate prices by forcing developers to keep prices stable for large lots of property put up for sale, the Financial Times reported. A foiled chemical attack in Jordan, linked to al-Qaeda, could have killed 80,000. The chemical explosives were 20 times more powerful than the bomb used in Oklahoma City, ABC News reported.
Late-Night Trading
Asian Indices -1.25% to +1.25%.
S&P 500 indicated +.04%.
NASDAQ indicated unch.
BOTTOM LINE: I expect U.S. stocks to open higher tomorrow on a better-than-expected Consumer Confidence report and strong corporate earnings reports. The Portfolio is 100% net long and I will look to add select tech long positions on any unexpected morning weakness.
Company/Estimate
ABGX/-.50
AGR/A/.01
AMT/-.16
ABI/.21
AGI/.48
AV/.07
BHI/.25
BJS/.41
COHR/.06
FLEX/.10
IMCL/.16
LLL/.64
LMT/.53
MXIM/.31
MNST/.10
MSTR/.29
NET/.11
RFMD/.04
SINA/.27
SONS/.01
VZ/.57
UTSI/.39
Splits
ARO 3-for-2
BKST 3-for-2
Economic Data
Consumer Confidence for April estimated at 88.5 versus 88.3 in March.
Existing Home Sales for March estimated at 6.2M versus 6.12M in February.
Recommendations
Goldman Sachs reiterated Underperform on SMP, VRTX and T. GS reiterated Outperform on ENH, DNA and SBC.
Late-Night News
Asian indices are mixed as strength in Hong Kong is being offset by weakness in Taiwan. Starbucks Chairman Howard Schultz said the largest U.S. coffee-shop chain by market value doesn't plan to increase drink prices even as the cost of coffee and milk rises, CNBC reported. China may take more steps to try to curb Shanghai's real estate prices by forcing developers to keep prices stable for large lots of property put up for sale, the Financial Times reported. A foiled chemical attack in Jordan, linked to al-Qaeda, could have killed 80,000. The chemical explosives were 20 times more powerful than the bomb used in Oklahoma City, ABC News reported.
Late-Night Trading
Asian Indices -1.25% to +1.25%.
S&P 500 indicated +.04%.
NASDAQ indicated unch.
BOTTOM LINE: I expect U.S. stocks to open higher tomorrow on a better-than-expected Consumer Confidence report and strong corporate earnings reports. The Portfolio is 100% net long and I will look to add select tech long positions on any unexpected morning weakness.
Monday, April 26, 2004
Monday Close
S&P 500 1,135.53 -.44%
NASDAQ 2,036.77 -.63%
Leading Sectors
Biotechnology +3.25%
Utilities +1.01%
Energy +.55%
Lagging Sectors
Iron/Steel -1.43%
Networking -1.49%
Semis -2.71%
Other
Crude Oil 36.94 -.08%
Natural Gas 5.75 -.24%
Gold 396.90 +.08%
Base Metals 107.50 +.14%
U.S. Dollar 90.62 -.51%
10-Yr. Long-Bond Yield 4.43% -.54%
VIX 14.77 +5.42%
Put/Call .65 -2.99%
NYSE Arms 1.06 +32.50%
After-hours Movers
FWHT +20.1% after beating 1Q estimates and raising 2Q/04 guidance.
BLUD +10.4% after announcing that the FDA has cleared Galileo for marketing in the U.S.
PHM +3.5% after beating 1Q estimates and raising 04 forecast.
SLAB -4.86% on profit-taking after beating 1Q estimates and raising 2Q guidance.
CAMP-29.9% after beating 1Q estimates, but announcing it was being served with complaint alleging certain violations of California's labor code.
CNXT -3.29% after beating 2Q estimates and lowering 3Q guidance.
Recommendations
Goldman Sachs reiterated Underperform on GBTVK and Outperform on PMMAY.
After-hours News
U.S. stocks finished lower Monday as weak technology shares overshadowed soaring biotechnology stocks. After the close, the Wall Street Journal reported that UnitedHealth Group(UNH) is purchasing Oxford Health Plans(OHP) for about $4.9B. Oxford stockholders will receive .6357 UnitedHealth shares and $16.17 in cash for each share they own or about $56.79/share. Verizon probably added 1.1M subscribers in the first quarter after winning business from AT&T Wireless and local carriers including its parent, Bloomberg reported. Iraq's Governing Council, the U.S. and the U.N. will set up an electoral commission before the end of May to organize national elections that art to be held in Iraq by Jan. 31, 2005, Bloomberg reported. At least $1.1 billion in "commissions" were paid directly into U.N. coffers, supposedly to cover the cost of administering the $67 billion Iraqi oil for food scheme, while Saddam diverted funds intended for the poor and sick of Iraq to bribe foreign governments and prominent overseas supporters of his regime, London's Telegraph reported.
BOTTOM LINE: The Portfolio rose slightly today and I did not make any changes on the close, thus leaving market exposure at 100% net long. The Biotechnology Index confirmed its March 5 breakout today on good volume. The BBH, Biotech HOLDRs Trust, is a good way to play the long side of this risky sector without the volatility associated with an individual stock, as one of our readers mentioned earlier in the day. I think one of the main things weighing on U.S. shares today was China. Chinese ADRs fell across the board on concerns that the economy is in for a hard landing and that SARS may become a problem again. I do not believe either of these views will prove to be correct, however I am closely monitoring the situation.
NASDAQ 2,036.77 -.63%
Leading Sectors
Biotechnology +3.25%
Utilities +1.01%
Energy +.55%
Lagging Sectors
Iron/Steel -1.43%
Networking -1.49%
Semis -2.71%
Other
Crude Oil 36.94 -.08%
Natural Gas 5.75 -.24%
Gold 396.90 +.08%
Base Metals 107.50 +.14%
U.S. Dollar 90.62 -.51%
10-Yr. Long-Bond Yield 4.43% -.54%
VIX 14.77 +5.42%
Put/Call .65 -2.99%
NYSE Arms 1.06 +32.50%
After-hours Movers
FWHT +20.1% after beating 1Q estimates and raising 2Q/04 guidance.
BLUD +10.4% after announcing that the FDA has cleared Galileo for marketing in the U.S.
PHM +3.5% after beating 1Q estimates and raising 04 forecast.
SLAB -4.86% on profit-taking after beating 1Q estimates and raising 2Q guidance.
CAMP-29.9% after beating 1Q estimates, but announcing it was being served with complaint alleging certain violations of California's labor code.
CNXT -3.29% after beating 2Q estimates and lowering 3Q guidance.
Recommendations
Goldman Sachs reiterated Underperform on GBTVK and Outperform on PMMAY.
After-hours News
U.S. stocks finished lower Monday as weak technology shares overshadowed soaring biotechnology stocks. After the close, the Wall Street Journal reported that UnitedHealth Group(UNH) is purchasing Oxford Health Plans(OHP) for about $4.9B. Oxford stockholders will receive .6357 UnitedHealth shares and $16.17 in cash for each share they own or about $56.79/share. Verizon probably added 1.1M subscribers in the first quarter after winning business from AT&T Wireless and local carriers including its parent, Bloomberg reported. Iraq's Governing Council, the U.S. and the U.N. will set up an electoral commission before the end of May to organize national elections that art to be held in Iraq by Jan. 31, 2005, Bloomberg reported. At least $1.1 billion in "commissions" were paid directly into U.N. coffers, supposedly to cover the cost of administering the $67 billion Iraqi oil for food scheme, while Saddam diverted funds intended for the poor and sick of Iraq to bribe foreign governments and prominent overseas supporters of his regime, London's Telegraph reported.
BOTTOM LINE: The Portfolio rose slightly today and I did not make any changes on the close, thus leaving market exposure at 100% net long. The Biotechnology Index confirmed its March 5 breakout today on good volume. The BBH, Biotech HOLDRs Trust, is a good way to play the long side of this risky sector without the volatility associated with an individual stock, as one of our readers mentioned earlier in the day. I think one of the main things weighing on U.S. shares today was China. Chinese ADRs fell across the board on concerns that the economy is in for a hard landing and that SARS may become a problem again. I do not believe either of these views will prove to be correct, however I am closely monitoring the situation.
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