Indices
S&P 500 1,134.43 -.05%
Dow 10,371.84 -.43%
NASDAQ 2,025.47 +1.95%
Russell 2000 587.70 +3.0%
Volatility(VIX) 15.19 +1.33%
AAII % Bulls 56.41 +36.22%
US Dollar 88.88 -.20%
CRB 272.25 +.89%
Futures Spot Prices
Gold 403.20 +1.87%
Crude Oil 37.55 -3.59%
Natural Gas 6.35 -2.49%
Base Metals 109.49 +.15%
10-year US Treasury Yield 4.65% -1.27%
Average 30-year Mortgage Rate 6.25% -1.11%
Leading Sectors
Nanotechnology +9.41%
Disk Drives +8.01%
Networking +7.07%
Lagging Sectors
HMO's -2.43%
Drugs -2.57%
Broadcasting -3.76%
*% Gain or loss for the week
Friday, June 25, 2004
Mid-day Update
S&P 500 1,141.17 +.05%
NASDAQ 2,026.89 +.56%
Leading Sectors
Airlines +1.66%
Networking +1.53%
Semis +1.20%
Lagging Sectors
Fashion -.77%
Drugs -.94%
Defense -1.22%
Other
Crude Oil 37.20 -1.92%
Natural Gas 6.29 -2.93%
Gold 402.90 -.15%
Base Metals 109.49 -.52%
U.S. Dollar 89.0 +.34%
10-Yr. T-note Yield 4.66% +.25%
VIX 14.79 -.14%
Put/Call .63 -4.55%
NYSE Arms 1.0 -28.06%
Market Movers
TTN -21.6% after saying it wouldn't be able to settle a criminal probe by today's deadline and LMT won't extend its buyout offer again.
PAYX -6.3% after meeting 4Q estimates and lowering 05 guidance slightly.
CAB +32.5% on strong demand for IPO.
TASR +12.5% on continuing rumors of imminent deal to sell personal version of stun gun through Sharper Image stores and short squeeze.
SIMG +16.79% after raising 2Q guidance and Thomas Weisel upgrade to Outperform.
NKE +4.2% after beating 4Q estimates and announcing $1.5 billion share buy-back.
TEK +6.9% after beating 4Q estimates substantially and raising 1Q guidance.
MSA +7.9% on successful 2.63m share secondary.
REY -20.5% after lowering 3Q and 4Q forecasts.
SOL -12.68% after saying it is hiring consultants and adding staff members to address weakness in its internal accounting controls.
TTEK -12.9% after lowering 3Q and 4Q forecasts substantially and Robert Baird downgrade to Underperform.
ARB -6.1% after cutting 04 forecast.
Economic Data
Final 1Q GDP was +3.9% versus estimates of +4.4% and +4.4% prior.
Final 1Q personal Consumption was +3.8% versus estimates of +3.9% and 3.9% prior.
Final 1Q GDP Price Deflator was +2.9% versus 2.6% estimate and 2.6% prior.
Final U. of Mich. Consumer Confidence for June was 95.6 versus estimates of 95.0 and a reading of 95.2 prior.
Existing Home Sales for May were 6.80M versus estimates of 6.50M and 6.63M in April.
Recommendations
FTI rated Overweight at JP Morgan. CCUR cut to Sector Underperform at CIBC. HCA raised to Overweight at Morgan Stanley, target $49. ACH reiterated Overweight by Morgan Stanley. SIMG raised to Outperform at Thomas Weisel. DCN cut to Underweight at Prudential, target $15. JPM rated Outperform at Bear Stearns, target $45. FS raised to Outperform at Bear, target $71. DLM cut to Underperform at Bear. LYO raised to Buy at Merrill Lynch, target $20. Goldman Sachs reiterated Outperform on GCI, NKE, CLX, TYC, PAYX, MMP, N, AMGN and TRB. Goldman said to Buy INTC for potential upside to earnings estimates in second half. Goldman downgraded FRX to Underperform. ROH upgraded to Buy at Citi SmithBarney, target $47. Citi reiterated Buy on MAS, target $37. Citi reiterated Sell on BA, target $36. Citi reiterated Buy on ASD, target $46.
Mid-day News
U.S. stocks are slightly higher mid-day, led by technology, as energy prices fall and interest rates stabilize at lower levels. Iraqis, by a 2-to-1 margin, said they have confidence in the new interim government that will take over on June 30, citing a recent poll, the Washington Post reported. Pennsylvania soon might have more slot machines than New Jersey, cutting as much as 10% from Atlantic City's $4.5 billion gambling market, the Star-Ledger reported. New Jersey companies leased more office space in the second quarter than they vacated for the first time since the stock market bubble burst and economic growth plunged in 2000, the Star-Ledger reported. Celgene, which makes a drug aimed at lessening the severity of a blood cancer, could benefit from a pilot project by the U.S. government to reimburse patients for the cost of the drug, the Star-Ledger reported. Norway's government intervened for the second time in four years to end a labor strike that has threatened to halt all oil and gas production, Bloomberg reported. Pfizer will pay $620 million to acquire rights to Aventis SA's cancer drug, Bloomberg said. U.S. sales of previously owned homes rose to a record 6.8 million annual pace in May. The economy has created 1.2 million jobs so far this year and incomes are up 5.7% in 12 months, the most since 2000, which is underpinning housing demand as interest rates rise, Bloomberg reported. UN Secretary-General Annan said he and Colin Powell will demand that Sudan's government stop the killing in the Darfur region of the country, or face possible military intervention, Bloomberg reported. For the first time since former Federal Reserve Chairman Paul Volcker began his investigation into the Iraqi Oil-for-food program, the man charged with getting to the bottom of the scandal says he has uncovered "serious problems" with the program, Fox News reported.
BOTTOM LINE: The Portfolio up substantially today as my security, internet and telecom equipment longs are rising significantly. I have not traded today and the Portfolio is still 150% net long. Oil is headed for a test of its recent low of $36.80/bbl. I believe it will take out this low next week. U.S. stocks will likely remain mixed until the final hour. I then expect a modest rally as sellers finish ahead of a possible violent weekend in Iraq. The tone of the market is still very good, led by technology, as the advance/decline line continues to improve.
NASDAQ 2,026.89 +.56%
Leading Sectors
Airlines +1.66%
Networking +1.53%
Semis +1.20%
Lagging Sectors
Fashion -.77%
Drugs -.94%
Defense -1.22%
Other
Crude Oil 37.20 -1.92%
Natural Gas 6.29 -2.93%
Gold 402.90 -.15%
Base Metals 109.49 -.52%
U.S. Dollar 89.0 +.34%
10-Yr. T-note Yield 4.66% +.25%
VIX 14.79 -.14%
Put/Call .63 -4.55%
NYSE Arms 1.0 -28.06%
Market Movers
TTN -21.6% after saying it wouldn't be able to settle a criminal probe by today's deadline and LMT won't extend its buyout offer again.
PAYX -6.3% after meeting 4Q estimates and lowering 05 guidance slightly.
CAB +32.5% on strong demand for IPO.
TASR +12.5% on continuing rumors of imminent deal to sell personal version of stun gun through Sharper Image stores and short squeeze.
SIMG +16.79% after raising 2Q guidance and Thomas Weisel upgrade to Outperform.
NKE +4.2% after beating 4Q estimates and announcing $1.5 billion share buy-back.
TEK +6.9% after beating 4Q estimates substantially and raising 1Q guidance.
MSA +7.9% on successful 2.63m share secondary.
REY -20.5% after lowering 3Q and 4Q forecasts.
SOL -12.68% after saying it is hiring consultants and adding staff members to address weakness in its internal accounting controls.
TTEK -12.9% after lowering 3Q and 4Q forecasts substantially and Robert Baird downgrade to Underperform.
ARB -6.1% after cutting 04 forecast.
Economic Data
Final 1Q GDP was +3.9% versus estimates of +4.4% and +4.4% prior.
Final 1Q personal Consumption was +3.8% versus estimates of +3.9% and 3.9% prior.
Final 1Q GDP Price Deflator was +2.9% versus 2.6% estimate and 2.6% prior.
Final U. of Mich. Consumer Confidence for June was 95.6 versus estimates of 95.0 and a reading of 95.2 prior.
Existing Home Sales for May were 6.80M versus estimates of 6.50M and 6.63M in April.
Recommendations
FTI rated Overweight at JP Morgan. CCUR cut to Sector Underperform at CIBC. HCA raised to Overweight at Morgan Stanley, target $49. ACH reiterated Overweight by Morgan Stanley. SIMG raised to Outperform at Thomas Weisel. DCN cut to Underweight at Prudential, target $15. JPM rated Outperform at Bear Stearns, target $45. FS raised to Outperform at Bear, target $71. DLM cut to Underperform at Bear. LYO raised to Buy at Merrill Lynch, target $20. Goldman Sachs reiterated Outperform on GCI, NKE, CLX, TYC, PAYX, MMP, N, AMGN and TRB. Goldman said to Buy INTC for potential upside to earnings estimates in second half. Goldman downgraded FRX to Underperform. ROH upgraded to Buy at Citi SmithBarney, target $47. Citi reiterated Buy on MAS, target $37. Citi reiterated Sell on BA, target $36. Citi reiterated Buy on ASD, target $46.
Mid-day News
U.S. stocks are slightly higher mid-day, led by technology, as energy prices fall and interest rates stabilize at lower levels. Iraqis, by a 2-to-1 margin, said they have confidence in the new interim government that will take over on June 30, citing a recent poll, the Washington Post reported. Pennsylvania soon might have more slot machines than New Jersey, cutting as much as 10% from Atlantic City's $4.5 billion gambling market, the Star-Ledger reported. New Jersey companies leased more office space in the second quarter than they vacated for the first time since the stock market bubble burst and economic growth plunged in 2000, the Star-Ledger reported. Celgene, which makes a drug aimed at lessening the severity of a blood cancer, could benefit from a pilot project by the U.S. government to reimburse patients for the cost of the drug, the Star-Ledger reported. Norway's government intervened for the second time in four years to end a labor strike that has threatened to halt all oil and gas production, Bloomberg reported. Pfizer will pay $620 million to acquire rights to Aventis SA's cancer drug, Bloomberg said. U.S. sales of previously owned homes rose to a record 6.8 million annual pace in May. The economy has created 1.2 million jobs so far this year and incomes are up 5.7% in 12 months, the most since 2000, which is underpinning housing demand as interest rates rise, Bloomberg reported. UN Secretary-General Annan said he and Colin Powell will demand that Sudan's government stop the killing in the Darfur region of the country, or face possible military intervention, Bloomberg reported. For the first time since former Federal Reserve Chairman Paul Volcker began his investigation into the Iraqi Oil-for-food program, the man charged with getting to the bottom of the scandal says he has uncovered "serious problems" with the program, Fox News reported.
BOTTOM LINE: The Portfolio up substantially today as my security, internet and telecom equipment longs are rising significantly. I have not traded today and the Portfolio is still 150% net long. Oil is headed for a test of its recent low of $36.80/bbl. I believe it will take out this low next week. U.S. stocks will likely remain mixed until the final hour. I then expect a modest rally as sellers finish ahead of a possible violent weekend in Iraq. The tone of the market is still very good, led by technology, as the advance/decline line continues to improve.
Friday Watch
Earnings of Note
Company/Estimate
None of note.
Splits
WCN 3-for-2
Economic Data
Final Gross Domestic Product for 1Q estimated +4.4% versus +4.4% prior.
Final Univ. of Mich. Consumer Confidence reading for June estimated at 95.0 versus 95.2 prior.
Existing Home Sales for May estimated at 6.5M versus 6.64M in April.
Recommendations
Goldman Sachs reiterated Outperform on BSX, PAYX, IR, ETN, AMGN and TYC. Goldman reiterated Underperform on DCLK. ASH shares may benefit from the sale of the company's stake in Marathon Ashland Petroleum, Business Week reported. ACAP's business is improving as the insurer raises premiums and its underwriting losses are falling, Business Week reported.
Late-Night News
Asian indices are mostly higher, led by Korean cyclicals after the country's largest steelmaker said it is raising prices. Iraqi intelligence agents sought al-Qaeda's help against Saudi Arabia in the mid-90's, the NY Times reported. Three unidentified gunmen shot dead Air France's top executive in Haiti, Agence France-Presse said. R.H. Donnelley(RHD), which publishes Yellow Pages directories, may grow by acting as a local advertising sales agent for large online companies, Business Week reported. Avon Products forecasts its sales in China will rise by half this year as the government lifts its ban on direct selling, the China Daily reported. California may face another energy crisis this summer when temperatures rise as new power-plant construction slows, older plants are shut down and electricity demand accelerates as the economy recovers, Business Week said. New shipping security rules due to be implemented next week could disrupt world trade as many ships and ports still haven't complied with the regulation, the Financial Times reported. AU Optronics plans to increase monthly capacity at a so-called "sixth-generation" plant in the central Taiwan city of Taichung to 200,000 sheets from 150,000 sheets, the Commercial Times reported today. Gold prices, down 7% from a 15-year high in April, may be little changed during the next six months because of rising U.S. interest rates and gains in the dollar, a survey of traders, analysts and investors showed. President Bush will nominate U.S. Representative Porter Goss, a former intelligence officer, as the new head of the CIA, Bloomberg reported. Lockheed Martin's planned $1.65 billion purchase of Titan Corp. has probably been derailed by a U.S. Justice Dept. probe into allegations that Titan consultants bribed foreign officials, Bloomberg said. Tokyo's core consumer prices unexpectedly fell in June, suggesting the central bank will keep interest rates close to zero for longer than economists predicted as it seeks to stamp out six years of deflation, Bloomberg reported. Bill Gross, of PIMCO, said the rise in debt yields over the last three months has made U.S. Treasuries "the market where our money is," Bloomberg reported. BellSouth will begin testing a broadband-on-demand service next month that will allow customers to boost their Internet connection, Business Week said.
Late-Night Trading
Asian Indices are unch. to +1.25% on average.
S&P 500 indicated +.07%.
NASDAQ 100 indicated +.07%.
BOTTOM LINE: I expect U.S. stocks to open modestly lower in the morning and rise later in the day, barring any significant terrorist actions in the Middle East. My short-term trading indicators are still giving buy signals and the Portfolio is 150% net long heading into tomorrow.
Company/Estimate
None of note.
Splits
WCN 3-for-2
Economic Data
Final Gross Domestic Product for 1Q estimated +4.4% versus +4.4% prior.
Final Univ. of Mich. Consumer Confidence reading for June estimated at 95.0 versus 95.2 prior.
Existing Home Sales for May estimated at 6.5M versus 6.64M in April.
Recommendations
Goldman Sachs reiterated Outperform on BSX, PAYX, IR, ETN, AMGN and TYC. Goldman reiterated Underperform on DCLK. ASH shares may benefit from the sale of the company's stake in Marathon Ashland Petroleum, Business Week reported. ACAP's business is improving as the insurer raises premiums and its underwriting losses are falling, Business Week reported.
Late-Night News
Asian indices are mostly higher, led by Korean cyclicals after the country's largest steelmaker said it is raising prices. Iraqi intelligence agents sought al-Qaeda's help against Saudi Arabia in the mid-90's, the NY Times reported. Three unidentified gunmen shot dead Air France's top executive in Haiti, Agence France-Presse said. R.H. Donnelley(RHD), which publishes Yellow Pages directories, may grow by acting as a local advertising sales agent for large online companies, Business Week reported. Avon Products forecasts its sales in China will rise by half this year as the government lifts its ban on direct selling, the China Daily reported. California may face another energy crisis this summer when temperatures rise as new power-plant construction slows, older plants are shut down and electricity demand accelerates as the economy recovers, Business Week said. New shipping security rules due to be implemented next week could disrupt world trade as many ships and ports still haven't complied with the regulation, the Financial Times reported. AU Optronics plans to increase monthly capacity at a so-called "sixth-generation" plant in the central Taiwan city of Taichung to 200,000 sheets from 150,000 sheets, the Commercial Times reported today. Gold prices, down 7% from a 15-year high in April, may be little changed during the next six months because of rising U.S. interest rates and gains in the dollar, a survey of traders, analysts and investors showed. President Bush will nominate U.S. Representative Porter Goss, a former intelligence officer, as the new head of the CIA, Bloomberg reported. Lockheed Martin's planned $1.65 billion purchase of Titan Corp. has probably been derailed by a U.S. Justice Dept. probe into allegations that Titan consultants bribed foreign officials, Bloomberg said. Tokyo's core consumer prices unexpectedly fell in June, suggesting the central bank will keep interest rates close to zero for longer than economists predicted as it seeks to stamp out six years of deflation, Bloomberg reported. Bill Gross, of PIMCO, said the rise in debt yields over the last three months has made U.S. Treasuries "the market where our money is," Bloomberg reported. BellSouth will begin testing a broadband-on-demand service next month that will allow customers to boost their Internet connection, Business Week said.
Late-Night Trading
Asian Indices are unch. to +1.25% on average.
S&P 500 indicated +.07%.
NASDAQ 100 indicated +.07%.
BOTTOM LINE: I expect U.S. stocks to open modestly lower in the morning and rise later in the day, barring any significant terrorist actions in the Middle East. My short-term trading indicators are still giving buy signals and the Portfolio is 150% net long heading into tomorrow.
Thursday, June 24, 2004
Thursday Close
S&P 500 1,140.62 -.30%
NASDAQ 2,015.57 -.27%
Leading Sectors
Fashion +2.13%
Homebuilders +1.83%
Nanotechnology +1.35%
Lagging Sectors
Telecom -1.30%
Broadcasting -1.30%
Oil Service -1.41%
Other
Crude Oil 37.87 +.80%
Natural Gas 6.46 +.78%
Gold 402.70 +1.82%
Base Metals 110.06 +1.80%
U.S. Dollar 88.69 -.82%
10-Yr. T-note Yield 4.64% -1.06%
VIX 14.81 +5.94%
Put/Call .66 -19.51%
NYSE Arms 1.39 +131.67%
After-hours Movers
SIMG +14.75% after raising 2Q guidance.
NKE +2.27% after beating 4Q estimates and announcing $1.5 billion share buy-back.
REY -10.14% after lowering 3Q and 4Q forecasts.
PSRC -4.95% after missing 4Q estimates and lowering 1Q forecast.
VRTY -4.0% after beating 4Q estimates, lowering 1Q forecast and announcing additional $50 share buy-back.
PAYX -3.54% after meeting 4Q estimates and lowering 05 guidance slightly.
Recommendations
Goldman Sachs reiterated Outperform on ATYT, BBY, HD, VIA/B, FS, AMD and UPS. Tom Kurlak made positive comments on semis on CNBC, saying they have a lot further to go.
After-hours News
U.S. stocks finished slightly lower today as violence in the Middle East increased investor jitters ahead of the June 30 handover of power to Iraq. After the close, the militia of Moqtada al-Sadr announced a truce in Baghdad and said they would protect important sites from attacks by terrorists, Agence France-Presse reported. John Mack, co-CEO of CSFB is leaving the company, the Wall Street Journal reported. ITV, the UK's largest commercial tv network, has secured what it says is a world exclusive interview with Monica Lewinsky in response to former President Clinton's version of events, the Guardian reported. Shares of International Game Technology, WMS Industries, Alliance Gaming and Penn National Gaming rose after Pennsylvania legislators and Governor Ed Rendell reached a tentative agreement on allowing slot-machine gambling in the state, Bloomberg reported. Nike said fourth-quarter earnings increased 24% as demand for products including Shox running shoes and Huarache 2K4 basketball sneakers bolstered sales in the U.S. and Asia, Bloomberg said. U.S. President Bush will appeal to NATO to take on a broader security role for Iraq and prod Europeans to reduce much of the country's $120 billion in debt, Bloomberg said.
BOTTOM LINE: The Portfolio finished substantially higher today as my Chinese ADR, security and RFID-related longs rose substantially and my oil-service shorts fell. I did not trade and the Portfolio is still 150% net long. It was a positive for the bulls today that significant violence in the Middle East could not take stocks substantially lower or move oil prices much higher. As well, the bears are losing their main source of pessimism as interest rates continue to fall. It was also good to see the ARMS index rise substantially, however I would also like to see the Put/Call and VIX readings rise more ahead of June 30. I continue to believe the market will consolidate recent gains before a gap up within the next 10 days.
NASDAQ 2,015.57 -.27%
Leading Sectors
Fashion +2.13%
Homebuilders +1.83%
Nanotechnology +1.35%
Lagging Sectors
Telecom -1.30%
Broadcasting -1.30%
Oil Service -1.41%
Other
Crude Oil 37.87 +.80%
Natural Gas 6.46 +.78%
Gold 402.70 +1.82%
Base Metals 110.06 +1.80%
U.S. Dollar 88.69 -.82%
10-Yr. T-note Yield 4.64% -1.06%
VIX 14.81 +5.94%
Put/Call .66 -19.51%
NYSE Arms 1.39 +131.67%
After-hours Movers
SIMG +14.75% after raising 2Q guidance.
NKE +2.27% after beating 4Q estimates and announcing $1.5 billion share buy-back.
REY -10.14% after lowering 3Q and 4Q forecasts.
PSRC -4.95% after missing 4Q estimates and lowering 1Q forecast.
VRTY -4.0% after beating 4Q estimates, lowering 1Q forecast and announcing additional $50 share buy-back.
PAYX -3.54% after meeting 4Q estimates and lowering 05 guidance slightly.
Recommendations
Goldman Sachs reiterated Outperform on ATYT, BBY, HD, VIA/B, FS, AMD and UPS. Tom Kurlak made positive comments on semis on CNBC, saying they have a lot further to go.
After-hours News
U.S. stocks finished slightly lower today as violence in the Middle East increased investor jitters ahead of the June 30 handover of power to Iraq. After the close, the militia of Moqtada al-Sadr announced a truce in Baghdad and said they would protect important sites from attacks by terrorists, Agence France-Presse reported. John Mack, co-CEO of CSFB is leaving the company, the Wall Street Journal reported. ITV, the UK's largest commercial tv network, has secured what it says is a world exclusive interview with Monica Lewinsky in response to former President Clinton's version of events, the Guardian reported. Shares of International Game Technology, WMS Industries, Alliance Gaming and Penn National Gaming rose after Pennsylvania legislators and Governor Ed Rendell reached a tentative agreement on allowing slot-machine gambling in the state, Bloomberg reported. Nike said fourth-quarter earnings increased 24% as demand for products including Shox running shoes and Huarache 2K4 basketball sneakers bolstered sales in the U.S. and Asia, Bloomberg said. U.S. President Bush will appeal to NATO to take on a broader security role for Iraq and prod Europeans to reduce much of the country's $120 billion in debt, Bloomberg said.
BOTTOM LINE: The Portfolio finished substantially higher today as my Chinese ADR, security and RFID-related longs rose substantially and my oil-service shorts fell. I did not trade and the Portfolio is still 150% net long. It was a positive for the bulls today that significant violence in the Middle East could not take stocks substantially lower or move oil prices much higher. As well, the bears are losing their main source of pessimism as interest rates continue to fall. It was also good to see the ARMS index rise substantially, however I would also like to see the Put/Call and VIX readings rise more ahead of June 30. I continue to believe the market will consolidate recent gains before a gap up within the next 10 days.
Mid-day Update
S&P 500 1,143.90 -.02%
NASDAQ 2,024.05 +.15%
Leading Sectors
Homebuilders +3.80%
Fashion +2.13%
Nanotechnology +1.89%
Lagging Sectors
Oil Service -.72%
Broadcasting -.73%
Telecom -1.45%
Other
Crude Oil 37.73 +.43%
Natural Gas 6.47 +.94%
Gold 402.50 +1.72%
Base Metals 110.06 +1.80%
U.S. Dollar 88.69 -.82%
10-Yr. T-note Yield 4.65% -.97%
VIX 14.49 +3.65%
Put/Call .58 -29.27%
NYSE Arms 1.10 +83.33%
Market Movers
T -9.32% after lowering 04 forecast and multiple downgrades.
ATYT +8.7% after beating 3Q estimates and raising 4Q forecast.
TASR +8.8% on continued speculation over Sharper Image deal and short squeeze.
OVTI +9.3% after beating 4Q estimates, restating 1-3 quarters.
UNTD -16.92% after comments by Schwab that competition is heating up and co. will cut prices and miss quarter.
ALD -11.3% after saying it's under investigation by the SEC.
DLM -9.0% after missing 1Q estimates and lowering 4Q/05 forecast.
*Education companies are down across the board after U.S. regulators raised their probe of CECO to a formal inquiry and a newspaper reported COCO may have helped students file fraudulent loan applications.
*Homebuilders up across the board on a fall in interest rates, strong new home sales and positive comments by TOL CFO.
Economic Data
Durable Goods Orders for May fell 1.6% versus expectations of a 1.5% rise and a 2.6% fall in April.
Durable Goods Orders Less Transportation for May fell .7% versus expectations of a 1.3% rise and a 1.7% fall in April.
Initial Jobless Claims for last week were 349K versus a 340K estimate and 336K prior week.
Continuing Claims were 2967K versus estimates of 2875K and 2892K prior.
New Home Sales for May were 1369K versus estimates of 1125K and 1192K in April.
Help Wanted Index for May was 39 versus estimates of 39 and 38 in April.
Recommendations
Goldman Sachs reiterated Attractive view of steel sector, favorites are NUE and ISG. Goldman reiterated Outperform on BBY, UPS and BSX. Goldman reiterated Underperform on T and SGP. Citi SmithBarney says to Buy BJ ahead of same-store-sales release, target $30. Citi said to Buy LPX and WY on weakness. Citi reiterating Sell on MU, target $12. Citi reiterated Buy on GIS, target $51.50. Citi reiterated Sell on T, target $14. Citi reiterated Buy on CVH, target $58. Citi reiterated Buy on COGN, target $41. Morgan Stanley raised USFC to Overweight, target $40. SGP raised to Overweight at Morgan Stanley, target $25. MCIA cut to Underperform at CSFB, target $10. XMSR rated Buy at Legg Mason, target $35. TSA rated Overweight at JP Morgan. MSFT raised to Buy at Bank of America, target $35.
Mid-day News
U.S. stocks are mixed today as falling interest rates and stable energy prices are offsetting Middle-eastern violence and mixed economic reports. The eight UK servicemen who were seized by Iran have arrived at the British Embassy in Tehran and appear to be in good condition, Bloomberg reported. Washington Mutual obtained the first-ever patent for a bank branch, the NY Daily News reported. The average tuition increase at state colleges and universities is expected to be 9% as the U.S. economy improves, down from the average of 14% in 03, the Wall Street Journal reported. One in three Americans would exclusively use a mobile phone rather than a fixed line, the NY Times reported. A group backed by veteran Democrats and vital to Senator Kerry's presidential bid employed felons to conduct door-to-door voter registration campaign in at least three key states, the AP reported. LA-area hotels and the hotel workers' union have halted negotiations after the hotels rejected a union call for contract expiration dates that could lead to a nationwide strike, the LA Times reported. Office vacancy rates in the Boston area are declining after about three years of increases, the Boston Herald reported. "All of the demographic groups we sell to are increasing in both size and affluence," Toll Brothers' CFO told CNBC. Violence erupted today in Iraq, with insurgents targeting Iraqi police forces, killing 66 Iraqis and 3 U.S. soldiers, Bloomberg said. France's economy will probably grow 2.3% this year, the fastest pace since 2000, as demand from China and the U.S. boosts exports and encourages investment, Bloomberg reported. Time Warner's AOL unit agreed to buy closely held Advertising.com for $435 million in cash to offer more customized services such as tracking responses to marketing campaigns, Bloomberg reported. U.S. new home sales surged 14.8% in May to a record, boosted by job and income gains this year that have offset a rise in mortgage rates, Bloomberg reported. Fifteen U.S. cities will get federal assistance in identifying and arresting their most violent criminals, the Justice Department said. The U.S. House Energy and Commerce Committee approved a measure designed to ban "spyware" computer programs that install themselves and monitor users' Web-surfing habits without their knowledge, Bloomberg said. NATO leaders may agree to help train Iraqi security forces, as requested by the country's interim prime minister, when they meet in Turkey next week, Bloomberg reported. The dollar and interest rates are falling today after U.S. orders for durable goods unexpectedly declined and bombs exploded in Turkey and Iraq, Bloomberg reported.
BOTTOM LINE: The Portfolio is having another very good day today as my Chinese ADR, security and RFID-related longs are rising substantially. I have not traded today and the Portfolio is still 150% net long. I expect U.S. stocks to rise modestly into the close as falling interest rates, a rising ARMS reading, short-covering and strength in technology shares offset Middle-east violence, mixed economic reports and a low Put/Call ratio.
NASDAQ 2,024.05 +.15%
Leading Sectors
Homebuilders +3.80%
Fashion +2.13%
Nanotechnology +1.89%
Lagging Sectors
Oil Service -.72%
Broadcasting -.73%
Telecom -1.45%
Other
Crude Oil 37.73 +.43%
Natural Gas 6.47 +.94%
Gold 402.50 +1.72%
Base Metals 110.06 +1.80%
U.S. Dollar 88.69 -.82%
10-Yr. T-note Yield 4.65% -.97%
VIX 14.49 +3.65%
Put/Call .58 -29.27%
NYSE Arms 1.10 +83.33%
Market Movers
T -9.32% after lowering 04 forecast and multiple downgrades.
ATYT +8.7% after beating 3Q estimates and raising 4Q forecast.
TASR +8.8% on continued speculation over Sharper Image deal and short squeeze.
OVTI +9.3% after beating 4Q estimates, restating 1-3 quarters.
UNTD -16.92% after comments by Schwab that competition is heating up and co. will cut prices and miss quarter.
ALD -11.3% after saying it's under investigation by the SEC.
DLM -9.0% after missing 1Q estimates and lowering 4Q/05 forecast.
*Education companies are down across the board after U.S. regulators raised their probe of CECO to a formal inquiry and a newspaper reported COCO may have helped students file fraudulent loan applications.
*Homebuilders up across the board on a fall in interest rates, strong new home sales and positive comments by TOL CFO.
Economic Data
Durable Goods Orders for May fell 1.6% versus expectations of a 1.5% rise and a 2.6% fall in April.
Durable Goods Orders Less Transportation for May fell .7% versus expectations of a 1.3% rise and a 1.7% fall in April.
Initial Jobless Claims for last week were 349K versus a 340K estimate and 336K prior week.
Continuing Claims were 2967K versus estimates of 2875K and 2892K prior.
New Home Sales for May were 1369K versus estimates of 1125K and 1192K in April.
Help Wanted Index for May was 39 versus estimates of 39 and 38 in April.
Recommendations
Goldman Sachs reiterated Attractive view of steel sector, favorites are NUE and ISG. Goldman reiterated Outperform on BBY, UPS and BSX. Goldman reiterated Underperform on T and SGP. Citi SmithBarney says to Buy BJ ahead of same-store-sales release, target $30. Citi said to Buy LPX and WY on weakness. Citi reiterating Sell on MU, target $12. Citi reiterated Buy on GIS, target $51.50. Citi reiterated Sell on T, target $14. Citi reiterated Buy on CVH, target $58. Citi reiterated Buy on COGN, target $41. Morgan Stanley raised USFC to Overweight, target $40. SGP raised to Overweight at Morgan Stanley, target $25. MCIA cut to Underperform at CSFB, target $10. XMSR rated Buy at Legg Mason, target $35. TSA rated Overweight at JP Morgan. MSFT raised to Buy at Bank of America, target $35.
Mid-day News
U.S. stocks are mixed today as falling interest rates and stable energy prices are offsetting Middle-eastern violence and mixed economic reports. The eight UK servicemen who were seized by Iran have arrived at the British Embassy in Tehran and appear to be in good condition, Bloomberg reported. Washington Mutual obtained the first-ever patent for a bank branch, the NY Daily News reported. The average tuition increase at state colleges and universities is expected to be 9% as the U.S. economy improves, down from the average of 14% in 03, the Wall Street Journal reported. One in three Americans would exclusively use a mobile phone rather than a fixed line, the NY Times reported. A group backed by veteran Democrats and vital to Senator Kerry's presidential bid employed felons to conduct door-to-door voter registration campaign in at least three key states, the AP reported. LA-area hotels and the hotel workers' union have halted negotiations after the hotels rejected a union call for contract expiration dates that could lead to a nationwide strike, the LA Times reported. Office vacancy rates in the Boston area are declining after about three years of increases, the Boston Herald reported. "All of the demographic groups we sell to are increasing in both size and affluence," Toll Brothers' CFO told CNBC. Violence erupted today in Iraq, with insurgents targeting Iraqi police forces, killing 66 Iraqis and 3 U.S. soldiers, Bloomberg said. France's economy will probably grow 2.3% this year, the fastest pace since 2000, as demand from China and the U.S. boosts exports and encourages investment, Bloomberg reported. Time Warner's AOL unit agreed to buy closely held Advertising.com for $435 million in cash to offer more customized services such as tracking responses to marketing campaigns, Bloomberg reported. U.S. new home sales surged 14.8% in May to a record, boosted by job and income gains this year that have offset a rise in mortgage rates, Bloomberg reported. Fifteen U.S. cities will get federal assistance in identifying and arresting their most violent criminals, the Justice Department said. The U.S. House Energy and Commerce Committee approved a measure designed to ban "spyware" computer programs that install themselves and monitor users' Web-surfing habits without their knowledge, Bloomberg said. NATO leaders may agree to help train Iraqi security forces, as requested by the country's interim prime minister, when they meet in Turkey next week, Bloomberg reported. The dollar and interest rates are falling today after U.S. orders for durable goods unexpectedly declined and bombs exploded in Turkey and Iraq, Bloomberg reported.
BOTTOM LINE: The Portfolio is having another very good day today as my Chinese ADR, security and RFID-related longs are rising substantially. I have not traded today and the Portfolio is still 150% net long. I expect U.S. stocks to rise modestly into the close as falling interest rates, a rising ARMS reading, short-covering and strength in technology shares offset Middle-east violence, mixed economic reports and a low Put/Call ratio.
Thursday Watch
Earnings of Note
Company/Estimate
AGE/.65
APOL/.51
DLM/.33
FDO/.43
NKE/1.08
PAYX/.21
RAD/.05
VRTY/.12
Splits
None of note.
Economic Data
Durable Goods Orders for May estimated +1.5% versus -3.2% in April.
Durable Goods Less Transportation estimated +1.3% versus -2.6% in April.
Initial Jobless Claims for last week estimated at 340K versus 336K prior week.
Continuing Claims estimated at 1125K versus 1093K prior.
Help Wanted Index for May estimated at 39 versus 38 in April.
Recommendations
Goldman Sachs reiterated Outperform on BSX, remains a favorite idea. Goldman reiterated Outperform on TRB and AGR/A. Goldman reiterated Underperform on SGP and DJ. The Street.com has a positive column on JDSU, AVNX and MTZ, saying they will benefit from FTTP build-out.
Late-Night News
Asian indices are higher as investors in Japan, Hong Kong and Korea boosted shares of financial and technology companies. Asian companies, led by technology businesses, have raised $2.5 billion of equity capital in the U.S. this year, a fivefold increase from a year earlier, the Financial Times reported. Samsung Electronics has cut prices of LCD display televisions by as much as 20% because sales in the U.S. have lagged expectations, the DigiTimes Web site reported. Porsche AG plans to increase annual production by 33%, the Financial Times said. News Corp. is in talks with the owner of the biggest city daily newspaper in China's western region as it seeks to expand into the nation's print business, the China Securities Journal reported. British diplomats met eight UK servicemen held in Iran as talks take place to try to secure their release today, the BBC reported. Japanese service industries expanded in April and a survey showed confidence among corporate executives is higher this quarter, adding to optimism that the world's second largest economy will extend its longest recovery since 1997, Bloomberg reported. The U.S. Senate approved a $447.2 billion Defense Department authorization bill for the next fiscal year that preserves $13.9 billion for missile defense, raises military pay and increases the active duty army by 20,000 troops, Bloomberg reported.
Late-Night Trading
Asian Indices are unch. to +2.0% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated -.17%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on strength in Asia and a continuation of the technology stock rally. While the current rally may last a couple of days, a consolidation is likely before June 30. However, after this brief pause, I expect the current rally to resume for a few more weeks as U.S. stocks test the highs set in the first quarter. The Portfolio is 150% net long heading into tomorrow.
Company/Estimate
AGE/.65
APOL/.51
DLM/.33
FDO/.43
NKE/1.08
PAYX/.21
RAD/.05
VRTY/.12
Splits
None of note.
Economic Data
Durable Goods Orders for May estimated +1.5% versus -3.2% in April.
Durable Goods Less Transportation estimated +1.3% versus -2.6% in April.
Initial Jobless Claims for last week estimated at 340K versus 336K prior week.
Continuing Claims estimated at 1125K versus 1093K prior.
Help Wanted Index for May estimated at 39 versus 38 in April.
Recommendations
Goldman Sachs reiterated Outperform on BSX, remains a favorite idea. Goldman reiterated Outperform on TRB and AGR/A. Goldman reiterated Underperform on SGP and DJ. The Street.com has a positive column on JDSU, AVNX and MTZ, saying they will benefit from FTTP build-out.
Late-Night News
Asian indices are higher as investors in Japan, Hong Kong and Korea boosted shares of financial and technology companies. Asian companies, led by technology businesses, have raised $2.5 billion of equity capital in the U.S. this year, a fivefold increase from a year earlier, the Financial Times reported. Samsung Electronics has cut prices of LCD display televisions by as much as 20% because sales in the U.S. have lagged expectations, the DigiTimes Web site reported. Porsche AG plans to increase annual production by 33%, the Financial Times said. News Corp. is in talks with the owner of the biggest city daily newspaper in China's western region as it seeks to expand into the nation's print business, the China Securities Journal reported. British diplomats met eight UK servicemen held in Iran as talks take place to try to secure their release today, the BBC reported. Japanese service industries expanded in April and a survey showed confidence among corporate executives is higher this quarter, adding to optimism that the world's second largest economy will extend its longest recovery since 1997, Bloomberg reported. The U.S. Senate approved a $447.2 billion Defense Department authorization bill for the next fiscal year that preserves $13.9 billion for missile defense, raises military pay and increases the active duty army by 20,000 troops, Bloomberg reported.
Late-Night Trading
Asian Indices are unch. to +2.0% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated -.17%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on strength in Asia and a continuation of the technology stock rally. While the current rally may last a couple of days, a consolidation is likely before June 30. However, after this brief pause, I expect the current rally to resume for a few more weeks as U.S. stocks test the highs set in the first quarter. The Portfolio is 150% net long heading into tomorrow.
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