Company/Estimate
CPST/.14
FCEL/-.34
COO/.59
MBG/1.12
Splits
None of note.
Economic Data
Final Non-farm Productivity reading for 1Q is estimated +3.7% versus +3.5% prior.
Final Unit Labor Costs for 1Q estimated +.4% versus +.5% prior.
Initial Jobless Claims for last week estimated at 335K versus 344K prior week.
Continuing Claims estimated at 2925K versus 2948K prior.
Factory Orders for April estimated -1.4% versus +4.3% in March.
ISM Non-Manufacturing for May estimated at 66.0 versus 68.4 in April.
Recommendations
Goldman Sachs reiterated Outperform on NFP, TRMS and ITT. Goldman reiterated Outperform on STN and IGT ahead of June 9th Gaming Conference in NYC, favorite is IGT.
Late-Night News
Asian indices are lower on concerns over Intel's mid-quarter update and another rise in oil prices. Viacom Entertainment said its Group Chairman Jonathan Dolgen resigned after a decade of leading Paramount Pictures, the Wall Street Journal reported. Serono SA, one of Europe's biggest biotechnology companies, may relocate its Swiss-based headquarters to the U.S. if industry conditions in Europe continue to worsen, the Wall Street Journal said. India will start work late this year to build a strategic oil reserve scheduled for completion by late 2007, the Asian Wall Street Journal reported. Japanese companies increased capital spending 10.2% in the first quarter from a year earlier, the fastest since 1997, as companies including Sharp invested rising earnings on expansion, Bloomberg reported. Crude oil futures are rising tonight as hedge funds and speculators bet increased production by OPEC will take several weeks to reach markets and ease concern about fuel shortages, Bloomberg said.
Late-Night Trading
Asian Indices -2.5% to unch. on average.
S&P 500 indicated -.44%.
NASDAQ indicated -.61%.
BOTTOM LINE: I expect U.S. stocks to open modestly lower on weakness in Asia and rising oil prices. I will decide whether or not to change the Portfolio's market exposure after evaluating the many economic reports and the market's reaction to them. While I do not have a position in Intel, I believe that fears over its mid-quarter update are overdone. It is unlikely the market will mount any serious rally ahead of Intel's comments, the jobs report and Bush's Rome trip. The Portfolio is 100% long heading into tomorrow.
Thursday, June 03, 2004
Wednesday, June 02, 2004
Wednesday Close
S&P 500 1,124.99 +.34%
NASDAQ 1,988.98 -.09%
Leading Sectors
Airlines +4.28%
Fashion +1.10%
Transports +1.07%
Lagging Sectors
Disk Drives -.98%
Nanotechnology -1.07%
Semis -2.26%
Other
Crude Oil 39.87 -.23%
Natural Gas 6.52 +.06%
Gold 392.00 -.13%
Base Metals 108.43 -1.80%
U.S. Dollar 88.84 -.05%
10-Yr. T-note Yield 4.73% +.67%
VIX 16.08 -1.35%
Put/Call .94 -1.05%
NYSE Arms 1.12 +.90%
After-hours Movers
ARO +6.13% after May same-store sales beat estimates substantially.
CMVT +4.36% after beating 1Q estimates and raising 2Q and 05 forecasts.
CVTX +5.60% after saying it has reached an agreement with the FDA on a protocol for a clinical trial of Ranexa, a treatment for chronic angina.
Recommendations
Goldman Sachs reiterated Outperform on CSCO, HD, WAG, NT, EPD and GTM. Goldman reiterated Underperform on HRB.
After-hours News
U.S. stocks finished mostly higher Wednesday as falling energy prices propelled airline and consumer discretionary shares higher. After the close, General Motors and DaimlerChrysler said sales in May rose as higher gasoline prices failed to curb demand for trucks, Bloomberg reported. Tyson Foods workers in Nebraska said they are preparing for a possible strike at the company's largest beef plant later this month unless a new contract is approved, the Omaha World-Herald reported. OPEC ministers said they will increase oil production, allowing members to pump at will and bypass the quota system that has governed supplier for most of the last two decades, Bloomberg said. Osama bin Laden and other leaders of al-Qaeda were close to being captured in Afghanistan on at least 2 separate occasions since 2002, Agence France-Presse reported. China is set to raise interest rates and electricity prices in a continuing effort to cool an overheating economy, the South China Morning Post reported.
BOTTOM LINE: The Portfolio fell slightly today on weakness in a few of my internet and security long positions. I took profits in some of my internet longs in the afternoon, leaving the Portfolio with 100% net long market exposure. I was a little disappointed in today's action, considering the fall in oil. However, I am trying not to read too much into it at this point as I think Intel's mid-quarter update, Bush's trip to Rome and the employment numbers on Friday are leaving traders and investors a bit hesitant.
NASDAQ 1,988.98 -.09%
Leading Sectors
Airlines +4.28%
Fashion +1.10%
Transports +1.07%
Lagging Sectors
Disk Drives -.98%
Nanotechnology -1.07%
Semis -2.26%
Other
Crude Oil 39.87 -.23%
Natural Gas 6.52 +.06%
Gold 392.00 -.13%
Base Metals 108.43 -1.80%
U.S. Dollar 88.84 -.05%
10-Yr. T-note Yield 4.73% +.67%
VIX 16.08 -1.35%
Put/Call .94 -1.05%
NYSE Arms 1.12 +.90%
After-hours Movers
ARO +6.13% after May same-store sales beat estimates substantially.
CMVT +4.36% after beating 1Q estimates and raising 2Q and 05 forecasts.
CVTX +5.60% after saying it has reached an agreement with the FDA on a protocol for a clinical trial of Ranexa, a treatment for chronic angina.
Recommendations
Goldman Sachs reiterated Outperform on CSCO, HD, WAG, NT, EPD and GTM. Goldman reiterated Underperform on HRB.
After-hours News
U.S. stocks finished mostly higher Wednesday as falling energy prices propelled airline and consumer discretionary shares higher. After the close, General Motors and DaimlerChrysler said sales in May rose as higher gasoline prices failed to curb demand for trucks, Bloomberg reported. Tyson Foods workers in Nebraska said they are preparing for a possible strike at the company's largest beef plant later this month unless a new contract is approved, the Omaha World-Herald reported. OPEC ministers said they will increase oil production, allowing members to pump at will and bypass the quota system that has governed supplier for most of the last two decades, Bloomberg said. Osama bin Laden and other leaders of al-Qaeda were close to being captured in Afghanistan on at least 2 separate occasions since 2002, Agence France-Presse reported. China is set to raise interest rates and electricity prices in a continuing effort to cool an overheating economy, the South China Morning Post reported.
BOTTOM LINE: The Portfolio fell slightly today on weakness in a few of my internet and security long positions. I took profits in some of my internet longs in the afternoon, leaving the Portfolio with 100% net long market exposure. I was a little disappointed in today's action, considering the fall in oil. However, I am trying not to read too much into it at this point as I think Intel's mid-quarter update, Bush's trip to Rome and the employment numbers on Friday are leaving traders and investors a bit hesitant.
Mid-day Update
S&P 500 1,120.17 -.09%
NASDAQ 1,982.88 -.40%
Leading Sectors
Fashion +1.08%
Telecom +.68%
Hospitals +.65%
Lagging Sectors
Oil Service -1.16%
Iron/Steel -1.36%
Semis -2.38%
Other
Crude Oil 41.57 -1.84%
Natural Gas 6.63 -.76%
Gold 392.50 -.66%
Base Metals 110.69 +.24%
U.S. Dollar 88.69 -.21%
10-Yr. T-note Yield 4.70% +.08%
VIX 16.44 +.80%
Put/Call .80 -15.79%
NYSE Arms 1.37 +23.42%
Market Movers
SOHU +5.7% on a continued rebound in Chinese internet stocks.
XLNX -4.57% on profit-taking after raising 2Q forecast.
BGG +6.93% after acquiring Simplicity Manufacturing for $277.5M, purchase will boost 05 earnings .35-.40/share.
RECN +6.98% on optimism over U.S. job growth.
FCS -9.49% after reiterating 2Q forecast, but warning "backlog volatility" could be a problem.
Economic Data
None of note.
Recommendations
NVDA raised to Buy at UBS, target $28. MEDI raised to Overweight, target $32. BIIB raised to Overweight at Morgan Stanley, target $77. PCAR rated Outperform at CSFB, target $77. OSI raised to Overweight at Prudential, target $49. Goldman Sachs reiterated Outperform on TIF, IR, BSX, AMGN, HD, DNA and PG. Goldman remains cautious on brokerage stocks ahead of quarterly reports. Citi SmithBarney reiterated Buy on DPMI, target $30. Citi reiterated Sell on BRKS, target $17. TER reiterated Sell at Citi, target $20. Citi reiterated Buy on LRCX, target $35. Citi reiterated Buy on WFR, target $14. Citi reiterated Buy on INTC, target $33. Citi reiterated positive view on lodging sector, reiterated Buy ratings on HOT, HLT and MAR, top pick is MAR. Citi said average wait time at PFCB up 41% year-over-year.
Mid-day News
U.S. stocks are mixed mid-day as falling oil prices cannot offset weakness in technology shares. New York Mets owner Fred Wilpon and financial supporters have approached Time Warner about forming a new sports network in the New York area, the New York Post reported. Recently released price measures have made Alfred Broaddus, the retiring president of the Federal Reserve Bank of Richmond, "even more comfortable" about the outlook for inflation, Market News International reported. Pfizer CEO McKinnell told CNBC that the U.S. labor market is the best in over 3 years, as 38% of chief executives surveyed by the Business Roundtable expect to add employees in the next six months. As well, the survey found that 44% of CEOs plan to raise capital spending, Bloomberg reported. Goldman Sachs hired three companies, including Standard & Poor's, to provide its clients with independent research as part of the bank's settlement with U.S. regulators about biased stock advice, Bloomberg said. OPEC should pump oil at will in the next few months, Qatar's energy minister said as the group's president called for efforts to cause a "significant" drop in oil prices, Bloomberg said. General Motors is offering rebates of as much as $5,000 on most 04 models to customers who have bought the company's vehicles before, Bloomberg reported. New York Attorney General Eliot Spitzer filed a lawsuit against GlaxoSmithKline, accusing it of hiding negative information about the effects of its anti-depression drug Paxil when prescribed for children, Bloomberg said. Saudi Arabia will consolidate all its charities into one entity in an effort to put a stop to the funding of terrorism, Bloomberg reported.
BOTTOM LINE: The Portfolio is down slightly today on weakness in a few of my internet and telecom equipment longs that are pulling back after recent gains. I have not traded today and the Portfolio is still 125% net long. There in trader nervousness ahead of Bush's trip to Rome, Friday's jobs report and tomorrow's OPEC meeting. I expect U.S. stocks to remain neutral to higher through this afternoon's close.
NASDAQ 1,982.88 -.40%
Leading Sectors
Fashion +1.08%
Telecom +.68%
Hospitals +.65%
Lagging Sectors
Oil Service -1.16%
Iron/Steel -1.36%
Semis -2.38%
Other
Crude Oil 41.57 -1.84%
Natural Gas 6.63 -.76%
Gold 392.50 -.66%
Base Metals 110.69 +.24%
U.S. Dollar 88.69 -.21%
10-Yr. T-note Yield 4.70% +.08%
VIX 16.44 +.80%
Put/Call .80 -15.79%
NYSE Arms 1.37 +23.42%
Market Movers
SOHU +5.7% on a continued rebound in Chinese internet stocks.
XLNX -4.57% on profit-taking after raising 2Q forecast.
BGG +6.93% after acquiring Simplicity Manufacturing for $277.5M, purchase will boost 05 earnings .35-.40/share.
RECN +6.98% on optimism over U.S. job growth.
FCS -9.49% after reiterating 2Q forecast, but warning "backlog volatility" could be a problem.
Economic Data
None of note.
Recommendations
NVDA raised to Buy at UBS, target $28. MEDI raised to Overweight, target $32. BIIB raised to Overweight at Morgan Stanley, target $77. PCAR rated Outperform at CSFB, target $77. OSI raised to Overweight at Prudential, target $49. Goldman Sachs reiterated Outperform on TIF, IR, BSX, AMGN, HD, DNA and PG. Goldman remains cautious on brokerage stocks ahead of quarterly reports. Citi SmithBarney reiterated Buy on DPMI, target $30. Citi reiterated Sell on BRKS, target $17. TER reiterated Sell at Citi, target $20. Citi reiterated Buy on LRCX, target $35. Citi reiterated Buy on WFR, target $14. Citi reiterated Buy on INTC, target $33. Citi reiterated positive view on lodging sector, reiterated Buy ratings on HOT, HLT and MAR, top pick is MAR. Citi said average wait time at PFCB up 41% year-over-year.
Mid-day News
U.S. stocks are mixed mid-day as falling oil prices cannot offset weakness in technology shares. New York Mets owner Fred Wilpon and financial supporters have approached Time Warner about forming a new sports network in the New York area, the New York Post reported. Recently released price measures have made Alfred Broaddus, the retiring president of the Federal Reserve Bank of Richmond, "even more comfortable" about the outlook for inflation, Market News International reported. Pfizer CEO McKinnell told CNBC that the U.S. labor market is the best in over 3 years, as 38% of chief executives surveyed by the Business Roundtable expect to add employees in the next six months. As well, the survey found that 44% of CEOs plan to raise capital spending, Bloomberg reported. Goldman Sachs hired three companies, including Standard & Poor's, to provide its clients with independent research as part of the bank's settlement with U.S. regulators about biased stock advice, Bloomberg said. OPEC should pump oil at will in the next few months, Qatar's energy minister said as the group's president called for efforts to cause a "significant" drop in oil prices, Bloomberg said. General Motors is offering rebates of as much as $5,000 on most 04 models to customers who have bought the company's vehicles before, Bloomberg reported. New York Attorney General Eliot Spitzer filed a lawsuit against GlaxoSmithKline, accusing it of hiding negative information about the effects of its anti-depression drug Paxil when prescribed for children, Bloomberg said. Saudi Arabia will consolidate all its charities into one entity in an effort to put a stop to the funding of terrorism, Bloomberg reported.
BOTTOM LINE: The Portfolio is down slightly today on weakness in a few of my internet and telecom equipment longs that are pulling back after recent gains. I have not traded today and the Portfolio is still 125% net long. There in trader nervousness ahead of Bush's trip to Rome, Friday's jobs report and tomorrow's OPEC meeting. I expect U.S. stocks to remain neutral to higher through this afternoon's close.
Wednesday Watch
Company/Estimate
ABS/.11
CMVT/.02
HOV/1.03
NMG/A/1.39
VRNT/.18
Splits
BNN 3-for-2
BR 2-for-1
ELAB 2-for-1
Economic Data
Total Vehicle Sales for May estimated at 16.8M versus 16.4M in April.
Domestic Vehicle Sales for May estimated at 13.4M versus 13.1M in April.
Recommendations
Goldman Sachs thinks ATYT will gain market share in 2H 2004 with OEMs on the back of the PCI Express transition. Goldman reiterated Outperform on DOW, DNA, CAL and CIT. Goldman reiterated Underperform on CMOS.
Late-Night News
Asian indices are mixed as strength in India and Hong Kong is being offset by weakness in Taiwan and Korea. The FBI issued a nationwide alert for two stolen propane tanker trucks, Reuters reported. China's economy will probably grow 11.4% in the second quarter, accelerating from a revised 9.8% pace in the first three months, the Beijing News reported. China's trials on high-speed mobile phone services reveal its networks are failing to transmit images and voices accurately, the South China Morning Post reported. The U.S. and five Central Asian nations signed an agreement to establish a trade council and strengthen U.S. ties to the region, the AP reported. Toyota Motor, the first automaker to sell cars powered by hybrid gasoline-electric engines, expanded annual production of its Prius hybrid sedan by as much as 44% to build as many as 130,000 units a year.
Late-Night Trading
Asian Indices -1.25% to +1.0% on average.
S&P 500 indicated +.11%.
NASDAQ indicated -.03%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on a fall in oil prices and carryover from today's afternoon rally. I would expect to see more investor complacency before the current rally runs its course. The Portfolio is 125% net long heading into trading tomorrow.
ABS/.11
CMVT/.02
HOV/1.03
NMG/A/1.39
VRNT/.18
Splits
BNN 3-for-2
BR 2-for-1
ELAB 2-for-1
Economic Data
Total Vehicle Sales for May estimated at 16.8M versus 16.4M in April.
Domestic Vehicle Sales for May estimated at 13.4M versus 13.1M in April.
Recommendations
Goldman Sachs thinks ATYT will gain market share in 2H 2004 with OEMs on the back of the PCI Express transition. Goldman reiterated Outperform on DOW, DNA, CAL and CIT. Goldman reiterated Underperform on CMOS.
Late-Night News
Asian indices are mixed as strength in India and Hong Kong is being offset by weakness in Taiwan and Korea. The FBI issued a nationwide alert for two stolen propane tanker trucks, Reuters reported. China's economy will probably grow 11.4% in the second quarter, accelerating from a revised 9.8% pace in the first three months, the Beijing News reported. China's trials on high-speed mobile phone services reveal its networks are failing to transmit images and voices accurately, the South China Morning Post reported. The U.S. and five Central Asian nations signed an agreement to establish a trade council and strengthen U.S. ties to the region, the AP reported. Toyota Motor, the first automaker to sell cars powered by hybrid gasoline-electric engines, expanded annual production of its Prius hybrid sedan by as much as 44% to build as many as 130,000 units a year.
Late-Night Trading
Asian Indices -1.25% to +1.0% on average.
S&P 500 indicated +.11%.
NASDAQ indicated -.03%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on a fall in oil prices and carryover from today's afternoon rally. I would expect to see more investor complacency before the current rally runs its course. The Portfolio is 125% net long heading into trading tomorrow.
Tuesday, June 01, 2004
Tuesday Close
S&P 500 1,121.20 +.05%
NASDAQ 1,990.77 +.20%
Leading Sectors
Hospitals +1.71%
Energy +1.42%
HMO's +1.26%
Lagging Sectors
Fashion -1.37%
Disk Drives -1.57%
Airlines -1.66%
Other
Crude Oil 42.45 +.28%
Natural Gas 6.69 +.21%
Gold 395.80 +.08%
Base Metals 110.42 +1.48%
U.S. Dollar 88.88 -.02%
10-Yr. T-note Yield 4.70% +1.15%
VIX 16.30 +5.16%
Put/Call .95 -8.65%
NYSE Arms 1.11 -2.63%
After-hours Movers
ALKS -3.54% after revising its financial expectations downwards for the fiscal year 05 in connection with the decision to discontinue commercialization of Nutropin Depot.
Recommendations
Goldman Sachs reiterated Outperform on ACN, IGT, FS, BNS, ENH and MDT.
After-hours News
U.S. stocks finished modestly higher Monday on strength in healthcare and energy shares, notwithstanding rising interest rates. China is succeeding in reducing the symptoms of an overheating economy, which may delay their need to raise interest rates, the Asian Wall Street Journal reported. Shipping companies keep launching new versions of "the world's largest container ship" as they try to outdo one another amid a global trade boom, straining transport facilities in the process, the LA Times said. Disney plans to start three of is own tv channels in India helped by a joint venture with a local company, Handelsblatt said. Three terrorists who escaped capture after taking hostages in a Saudi housing compound Saturday bluffed authorities into believing accomplices were ready to blow up buildings unless they were allowed to leave, Reuters reported.
BOTTOM LINE: The Portfolio had a good day today as a few of my internet, basic material and telecom equipment long positions rose substantially in the afternoon. I did not trade today and the Portfolio is still 125% net long. Today's modest gains were a big positive for the Bulls as a substantial rise in oil prices and interest rates could not send stocks lower. The market's tone was constructive most of the day and small-caps continue to outperform. I expect U.S. stocks to build on last week's rally as the week progresses.
NASDAQ 1,990.77 +.20%
Leading Sectors
Hospitals +1.71%
Energy +1.42%
HMO's +1.26%
Lagging Sectors
Fashion -1.37%
Disk Drives -1.57%
Airlines -1.66%
Other
Crude Oil 42.45 +.28%
Natural Gas 6.69 +.21%
Gold 395.80 +.08%
Base Metals 110.42 +1.48%
U.S. Dollar 88.88 -.02%
10-Yr. T-note Yield 4.70% +1.15%
VIX 16.30 +5.16%
Put/Call .95 -8.65%
NYSE Arms 1.11 -2.63%
After-hours Movers
ALKS -3.54% after revising its financial expectations downwards for the fiscal year 05 in connection with the decision to discontinue commercialization of Nutropin Depot.
Recommendations
Goldman Sachs reiterated Outperform on ACN, IGT, FS, BNS, ENH and MDT.
After-hours News
U.S. stocks finished modestly higher Monday on strength in healthcare and energy shares, notwithstanding rising interest rates. China is succeeding in reducing the symptoms of an overheating economy, which may delay their need to raise interest rates, the Asian Wall Street Journal reported. Shipping companies keep launching new versions of "the world's largest container ship" as they try to outdo one another amid a global trade boom, straining transport facilities in the process, the LA Times said. Disney plans to start three of is own tv channels in India helped by a joint venture with a local company, Handelsblatt said. Three terrorists who escaped capture after taking hostages in a Saudi housing compound Saturday bluffed authorities into believing accomplices were ready to blow up buildings unless they were allowed to leave, Reuters reported.
BOTTOM LINE: The Portfolio had a good day today as a few of my internet, basic material and telecom equipment long positions rose substantially in the afternoon. I did not trade today and the Portfolio is still 125% net long. Today's modest gains were a big positive for the Bulls as a substantial rise in oil prices and interest rates could not send stocks lower. The market's tone was constructive most of the day and small-caps continue to outperform. I expect U.S. stocks to build on last week's rally as the week progresses.
Mid-day Update
S&P 500 1,116.21 -.40%
NASDAQ 1,977.02 -.51%
Leading Sectors
Hospitals +1.38%
Energy +1.02%
HMO's +.84%
Lagging Sectors
I- Banks -1.50%
Disk Drives -2.56%
Airlines -2.58%
Other
Crude Oil 41.91 +5.09%
Natural Gas 6.68 +3.69%
Gold 395.50 +.15%
Base Metals 110.42 +1.48%
U.S. Dollar 88.81 -.10%
10-Yr. T-note Yield 4.71% +1.36%
VIX 16.80 +8.39%
Put/Call 1.05 +.96%
NYSE Arms 1.39 +21.93%
Market Movers
BHAG +15.53% after saying GE Energy will acquire it for $260 million.
NILE +8.65% on continued strength from IPO.
OSG +7.34% after JP Moran upgrade to Overweight on increased tanker rates and business from Saudi Arabia.
SRX +8.53% on speculation that it won part of the $10 billion homeland security IT contract.
CME -5.2% after Merrill downgrade to Neutral on potential share sales when limits on selling by members end on Friday.
Economic Data
Construction Spending for April rose 1.3% versus estimates of a .4% increase and a revised 2.4% rise in March.
ISM Manufacturing for May came in at 62.8 versus estimates of 61.5 and 62.4 in April.
ISM Prices Paid for May fell to 86.0 versus estimates of 89.3 and 88.0 in April.
Recommendations
Goldman Sachs reiterated Outperform on AMGN, ENH, VIA/B and MDT. Citi SmithBarney reiterated Buy on MTB, target $102. Citi reiterated Buy on NSM, target $24. Citi thinks TLAB won a sizable contract from Verizon and will announce it at Supercomm in late June, reiterated Buy, target $11. OSG raised to Overweight at JP Morgan. SJH cut to Underweight at JP Morgan. MDP raised to Buy at UBS, target $63. GMTN rated new Buy at Bank of America, target $28. USFC raised to Outperform at Bear Stearns, target $38. BE rated Overweight at JP Morgan.
Mid-day News
U.S. stocks are modestly lower mid-day as another strong economic report and violence in Saudi Arabia over the weekend push energy prices and interest rates higher. Merrill Lynch lowered its second-quarter earnings forecast for Intel to .26 and its revenue forecast to less than $8 billion, CNBC reported. The Chinese government's efforts to slow investment in industries such as steel, aluminum and cement are working, state-owned CCTV said. California Governor Schwarzenegger and four Indian tribes reached a tentative agreement on a plan to share casino revenue with the state, LA Daily News reported. Boston Scientific agreed to buy closely held Advanced Bionics for about $740 million in cash to add products that treat neurological disorders, Bloomberg reported. U.S. construction spending rose 1.3% in April to a record annual pace of $970.4 billion, led by work on housing and highways, Bloomberg said. Drugmakers including Eli Lilly, Merck and Novartis are competing to offer the elderly discounts of 12% to 50% on prescriptions under a U.S. government-sponsored Medicare plan that began today, Bloomberg reported. A group led by Accenture won a contract worth up to $10 billion over 10 years to develop a system for tracking visitors to the U.S., the Dept. of Homeland Security said. Crude oil futures surges to a record in New York after the killing of 22 people in a key Saudi Arabian oil-producing region Saturday raised concern that attacks might disrupt shipments, Bloomberg reported. A gauge of U.S. manufacturing unexpectedly rose last month to the highest in almost two decades as increased demand prompted more factories to hire than at any time in 31 years, Bloomberg reported.
BOTTOM LINE: The Portfolio is up slightly today and I have not traded. Thus, market exposure is still 125% net long. It is disappointing that oil is having such an adverse reaction to the weekend's violence. However, stocks are relatively strong considering the rise in oil and interest rates. Small-caps are actually up on the day. As well, the continued significant improvement in manufacturing and creation of jobs are very positive developments. I expect U.S. shares to strengthen into the close on afternoon short-covering, leaving the major indices down modestly on the day.
NASDAQ 1,977.02 -.51%
Leading Sectors
Hospitals +1.38%
Energy +1.02%
HMO's +.84%
Lagging Sectors
I- Banks -1.50%
Disk Drives -2.56%
Airlines -2.58%
Other
Crude Oil 41.91 +5.09%
Natural Gas 6.68 +3.69%
Gold 395.50 +.15%
Base Metals 110.42 +1.48%
U.S. Dollar 88.81 -.10%
10-Yr. T-note Yield 4.71% +1.36%
VIX 16.80 +8.39%
Put/Call 1.05 +.96%
NYSE Arms 1.39 +21.93%
Market Movers
BHAG +15.53% after saying GE Energy will acquire it for $260 million.
NILE +8.65% on continued strength from IPO.
OSG +7.34% after JP Moran upgrade to Overweight on increased tanker rates and business from Saudi Arabia.
SRX +8.53% on speculation that it won part of the $10 billion homeland security IT contract.
CME -5.2% after Merrill downgrade to Neutral on potential share sales when limits on selling by members end on Friday.
Economic Data
Construction Spending for April rose 1.3% versus estimates of a .4% increase and a revised 2.4% rise in March.
ISM Manufacturing for May came in at 62.8 versus estimates of 61.5 and 62.4 in April.
ISM Prices Paid for May fell to 86.0 versus estimates of 89.3 and 88.0 in April.
Recommendations
Goldman Sachs reiterated Outperform on AMGN, ENH, VIA/B and MDT. Citi SmithBarney reiterated Buy on MTB, target $102. Citi reiterated Buy on NSM, target $24. Citi thinks TLAB won a sizable contract from Verizon and will announce it at Supercomm in late June, reiterated Buy, target $11. OSG raised to Overweight at JP Morgan. SJH cut to Underweight at JP Morgan. MDP raised to Buy at UBS, target $63. GMTN rated new Buy at Bank of America, target $28. USFC raised to Outperform at Bear Stearns, target $38. BE rated Overweight at JP Morgan.
Mid-day News
U.S. stocks are modestly lower mid-day as another strong economic report and violence in Saudi Arabia over the weekend push energy prices and interest rates higher. Merrill Lynch lowered its second-quarter earnings forecast for Intel to .26 and its revenue forecast to less than $8 billion, CNBC reported. The Chinese government's efforts to slow investment in industries such as steel, aluminum and cement are working, state-owned CCTV said. California Governor Schwarzenegger and four Indian tribes reached a tentative agreement on a plan to share casino revenue with the state, LA Daily News reported. Boston Scientific agreed to buy closely held Advanced Bionics for about $740 million in cash to add products that treat neurological disorders, Bloomberg reported. U.S. construction spending rose 1.3% in April to a record annual pace of $970.4 billion, led by work on housing and highways, Bloomberg said. Drugmakers including Eli Lilly, Merck and Novartis are competing to offer the elderly discounts of 12% to 50% on prescriptions under a U.S. government-sponsored Medicare plan that began today, Bloomberg reported. A group led by Accenture won a contract worth up to $10 billion over 10 years to develop a system for tracking visitors to the U.S., the Dept. of Homeland Security said. Crude oil futures surges to a record in New York after the killing of 22 people in a key Saudi Arabian oil-producing region Saturday raised concern that attacks might disrupt shipments, Bloomberg reported. A gauge of U.S. manufacturing unexpectedly rose last month to the highest in almost two decades as increased demand prompted more factories to hire than at any time in 31 years, Bloomberg reported.
BOTTOM LINE: The Portfolio is up slightly today and I have not traded. Thus, market exposure is still 125% net long. It is disappointing that oil is having such an adverse reaction to the weekend's violence. However, stocks are relatively strong considering the rise in oil and interest rates. Small-caps are actually up on the day. As well, the continued significant improvement in manufacturing and creation of jobs are very positive developments. I expect U.S. shares to strengthen into the close on afternoon short-covering, leaving the major indices down modestly on the day.
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