Earnings of Note
Company/Estimate
VOXX/.09
STZ/.49
EMMS/.07
FRE/1.61
GIS/.72
MERX/-.02
MON/.85
Splits
None of note.
Economic Data
Chicago Purchasing Manager for June estimated at 65.0 versus 68.0 in May.
The Fed is expected to raise the Fed Funds Rate by 25 basis points.
Recommendations
Goldman Sachs reiterated Underperform on VTS and Outperform on MUR. Goldman sees another strong quarter for MOT and increased estimates.
Late-Night News
Asian indices are higher, led by exporters, after a better-than-expected consumer confidence report in the U.S. OPEC President Yusgiantoro said oil prices should continue to ease back to the organization's $22-$28 target band, the Financial Times said. Disney's ESPN is in talks with British Sky Broadcasting to start a 24-hour sports channel in the U.K., the London-based Times said. General Motors Vice Chairman Lutz said Western Europe may be discouraging investment in manufacturing through high labor and regulatory costs, the Financial Times said. Passive smoking may be more dangerous than previously thought, raising the risk of heart disease among non-smokers by as much as 60%, Bloomberg reported. The U.S. Department of Agriculture reported its second possible case of made cow disease in less than a week as part of a screening program that the government expanded following a confirmed case in December, Bloomberg reported.
Late-Night Trading
Asian Indices are +.25 to +1.25% on average.
S&P 500 indicated +.07%.
NASDAQ 100 indicated +.13%.
BOTTOM LINE: I expect U.S. stocks to open higher in the morning, led by technology and cyclical shares. The Chicago Purchasing Manager report will probably meet or fall slightly below expectations. I also expect the Fed to raise rates by 25 basis points and to keep the word "measured" in their policy statement with respect to the pace of future rate hikes. The extent of tomorrow's rally will likely be determined by the bond market's reaction to the rate increase and Fed statements. An increase in volatility and volume should be expected. Since May 17, the S&P 500 is up 5.0% and the Morgan Stanley Technology Index is up 10.3%. I continue to expect the rally will accelerate by no later than next Tuesday. However, if this does not occur I will have to re-think the current environment and the extent to which "irrational pessimism" is dominating investor psychology, thus leading to a continuation of the P/E multiple contractions that began in March of 2002. The Portfolio is 150% net long heading into tomorrow.
Wednesday, June 30, 2004
Tuesday, June 29, 2004
Tuesday Close
S&P 500 1,136.23 +.25%
NASDAQ 2,034.93 +.75%
Leading Sectors
Broadband +2.76%
Disk Drives +2.56%
Iron/Steel +2.31%
Lagging Sectors
Utilities -.92%
Homebuilders -.98%
Retail -2.09%
Other
Crude Oil 35.60 -.17%
Natural Gas 6.11 -.05%
Gold 392.80 unch.
Base Metals 107.87 -1.41%
U.S. Dollar 89.42 +.79%
10-Yr. T-note Yield 4.68% -1.14%
VIX 15.48 -3.67%
Put/Call .92 +53.33%
NYSE Arms .84 -23.64%
After-hours Movers
ESIO +22.04% after beating 4Q estimates substantially and raising 1Q guidance significantly.
QTWW +10.78% after beating 4Q estimates.
RIMM +6.85% after beating 1Q estimates and raising 2Q/3Q guidance.
Recommendations
Goldman Sachs reiterated Outperform on CTSH and Underperform on ATI.
After-hours News
U.S. stocks finished higher today on falling oil prices, declining interest rates and a strong consumer confidence report. After the close, Bank of America said it bought about 160,000 DaimlerChrysler AG credit-card accounts for an undisclosed price, Bloomberg reported. Former President Clinton's memoir has sold almost 1 million copies, CNN reported. Carlyle Group and Providence Equity Partners will each buy a 27% stake in PanAmSat for about $953 million, or a total of $1.9 billion, Bloomberg said. The U.S. will begin talks tomorrow at the UN on a resolution to disarm the Arab Janjaweed militias accused of atrocities against black Africans in Sudan's Darfur region, Bloomberg reported. Crude oil in New York fell to the lowest price in almost three months on optimism over Iraq and increasing production for OPEC, Bloomberg reported. Research In Motion, the maker of BlackBerry e-mail pagers, reported sales more than doubled to $269 million form $104.5 million, topping estimates, Bloomberg said. The U.S. Financial Accounting Standards Board may consider delaying for as much as a year a rule requiring stock options to be expensed, Bloomberg reported.
BOTTOM LINE: The Portfolio finished higher today and I added a few new technology longs in the afternoon, leaving the Portfolio with 150% net long market exposure. One of my new longs is MOT and I am using a stop-loss of $17.75 on this position. The fact that interest rates fell on a much better-than-expected consumer confidence reading is very positive. Moreover, crude oil has fallen 14% from its recent highs in a very short period of time. Finally, stocks are responding very well to good news as evidenced by the after-hours action in ESIO and RIMM. I continue to expect a move higher in the major U.S. indices by week's end on an increase in volume.
NASDAQ 2,034.93 +.75%
Leading Sectors
Broadband +2.76%
Disk Drives +2.56%
Iron/Steel +2.31%
Lagging Sectors
Utilities -.92%
Homebuilders -.98%
Retail -2.09%
Other
Crude Oil 35.60 -.17%
Natural Gas 6.11 -.05%
Gold 392.80 unch.
Base Metals 107.87 -1.41%
U.S. Dollar 89.42 +.79%
10-Yr. T-note Yield 4.68% -1.14%
VIX 15.48 -3.67%
Put/Call .92 +53.33%
NYSE Arms .84 -23.64%
After-hours Movers
ESIO +22.04% after beating 4Q estimates substantially and raising 1Q guidance significantly.
QTWW +10.78% after beating 4Q estimates.
RIMM +6.85% after beating 1Q estimates and raising 2Q/3Q guidance.
Recommendations
Goldman Sachs reiterated Outperform on CTSH and Underperform on ATI.
After-hours News
U.S. stocks finished higher today on falling oil prices, declining interest rates and a strong consumer confidence report. After the close, Bank of America said it bought about 160,000 DaimlerChrysler AG credit-card accounts for an undisclosed price, Bloomberg reported. Former President Clinton's memoir has sold almost 1 million copies, CNN reported. Carlyle Group and Providence Equity Partners will each buy a 27% stake in PanAmSat for about $953 million, or a total of $1.9 billion, Bloomberg said. The U.S. will begin talks tomorrow at the UN on a resolution to disarm the Arab Janjaweed militias accused of atrocities against black Africans in Sudan's Darfur region, Bloomberg reported. Crude oil in New York fell to the lowest price in almost three months on optimism over Iraq and increasing production for OPEC, Bloomberg reported. Research In Motion, the maker of BlackBerry e-mail pagers, reported sales more than doubled to $269 million form $104.5 million, topping estimates, Bloomberg said. The U.S. Financial Accounting Standards Board may consider delaying for as much as a year a rule requiring stock options to be expensed, Bloomberg reported.
BOTTOM LINE: The Portfolio finished higher today and I added a few new technology longs in the afternoon, leaving the Portfolio with 150% net long market exposure. One of my new longs is MOT and I am using a stop-loss of $17.75 on this position. The fact that interest rates fell on a much better-than-expected consumer confidence reading is very positive. Moreover, crude oil has fallen 14% from its recent highs in a very short period of time. Finally, stocks are responding very well to good news as evidenced by the after-hours action in ESIO and RIMM. I continue to expect a move higher in the major U.S. indices by week's end on an increase in volume.
Mid-day Update
S&P 500 1,136.38 +.27%
NASDAQ 2,031.00 +.55%
Leading Sectors
Broadband +2.0%
Iron/Steel +1.75%
Disk Drives +1.74%
Lagging Sectors
Homebuilders -.51%
Utilities -.69%
Retail -2.17%
Other
Crude Oil 36.01 -.63%
Natural Gas 6.12 -1.14%
Gold 392.60 -2.14%
Base Metals 108.90 -.47%
U.S. Dollar 89.23 +.56%
10-Yr. T-note Yield 4.70% -.63%
VIX 15.63 -2.74%
Put/Call .92 +53.33%
NYSE Arms .82 -25.45%
Market Movers
WM -7.07% after lowering 04 earnings forecast substantially on rising mortgage rates.
TGT -4.2% after saying June sales will be "well below" its estimates.
QCOM +4.2% on technical break-out.
AIRT +16.99% after reporting strong 4Q earnings reports.
TZOO +15.0% after saying that its recently launched Newsflash e-mail alert service has proven to be a resounding success with travel providers.
JEC -13.6% after warning of lower-than-expected third-quarter and full-year profits.
Economic Data
Consumer Confidence for June came in at 101.9 versus estimates of 95.0 and a reading of 93.1 in May.
Recommendations
AJG cut to Underweight at JP Morgan. AHC raised to Buy at Deutsche Bank, target $90. PWAV rated Underperform at CSFB, target $7.50. WFII rated Outperform at CSFB, target $11. ATI raised to Sector Outperform at CIBC, target $22. Nile rated Outperform at Thomas Weisel. Goldman Sachs reiterated Outperform on MER, ACS, IP, CAN, AMT, IGT, PG and WFC. Goldman downgraded WM to Underperform. Goldman reiterated Underperform on F. Goldman reiterated Outperform on AV, saying it should be $18 now after NT news. Citi SmithBarney said it is cautious on AAPL near-term, would be buyers under $30.
Mid-day News
U.S. stocks are higher mid-day on a strong consumer sentiment report, declining interest rates and falling oil prices. Consumer confidence in the U.S. economy surged in June to the highest level in 2 years, spurred by the addition of 1.2 million new jobs this year, rising incomes and falling gasoline prices, Bloomberg reported. Microsoft will offer a streamlined version of its database and developer tools in a bid to attract nonprofessional software developers, the NY Times reported. Repairing botched cosmetic dentistry is a $10 billion industry in the U.S. the Wall Street Journal reported. New York City education officials said they removed 45 school principals for poor performance during the past academic year, the NY Times reported. Frontier Air and Northwest Air are ending intrusions into each other's flight routes, the Rocky Mountain News reported. Democratic Governor McGreevey yesterday signed into law a bill that imposes a 41% tax increase on income exceeding $500,000, affecting about 35,000 residents, the Star-Ledger reported. California Governor Schwarzenegger is expected to announce a contract agreement with the prison guards' union that would save the state $100 million during the next 2 years, the San Jose Mercury News reported. Bonds of Tyson Foods and other U.S. beef processors are weakening after the U.S. said yesterday a mad-cow screening test was positive and may indicate the second case since December, Bloomberg said. Crude oil futures tumbles to a nine-week low in London on indications supplies from OPEC are growing as Iraq takes control of its oil, easing concern pipelines there will be attacked, Bloomberg reported. Iraq's new government said it will get legal custody of Saddam Hussein tomorrow, Bloomberg said. Nortel said Flextronics agreed to buy its factories in Canada and Brazil for about $675 million to $725 million in cash, Bloomberg reported. The U.S. Supreme Court suspended enforcement of a federal criminal law that would bar commercial Web sites from making pornography available to children, Bloomberg reported. Siebel Systems faces a lawsuit by the SEC who says executives violated Red FD, Bloomberg reported.
BOTTOM LINE: The Portfolio is having a good day today as my internet and telecom equipment longs are rising substantially. I added a few new gaming, semi equipment, manufacturing and machinery longs this morning, leaving the Portfolio with 125% net long market exposure. One of my new longs is FLEX and I am using a stop-loss of $15.25 on the position. It is good to see that the very good news on the U.S. economy is finally starting to gain recognition with consumers, notwithstanding the media's intense focus on negativity. As well, it is positive that the Put/Call ratio is rising substantially today ahead of tomorrow's rate-hike. I expect U.S. stocks to rise modestly into the close on short-covering, falling interest rates and quarter-end repositioning.
NASDAQ 2,031.00 +.55%
Leading Sectors
Broadband +2.0%
Iron/Steel +1.75%
Disk Drives +1.74%
Lagging Sectors
Homebuilders -.51%
Utilities -.69%
Retail -2.17%
Other
Crude Oil 36.01 -.63%
Natural Gas 6.12 -1.14%
Gold 392.60 -2.14%
Base Metals 108.90 -.47%
U.S. Dollar 89.23 +.56%
10-Yr. T-note Yield 4.70% -.63%
VIX 15.63 -2.74%
Put/Call .92 +53.33%
NYSE Arms .82 -25.45%
Market Movers
WM -7.07% after lowering 04 earnings forecast substantially on rising mortgage rates.
TGT -4.2% after saying June sales will be "well below" its estimates.
QCOM +4.2% on technical break-out.
AIRT +16.99% after reporting strong 4Q earnings reports.
TZOO +15.0% after saying that its recently launched Newsflash e-mail alert service has proven to be a resounding success with travel providers.
JEC -13.6% after warning of lower-than-expected third-quarter and full-year profits.
Economic Data
Consumer Confidence for June came in at 101.9 versus estimates of 95.0 and a reading of 93.1 in May.
Recommendations
AJG cut to Underweight at JP Morgan. AHC raised to Buy at Deutsche Bank, target $90. PWAV rated Underperform at CSFB, target $7.50. WFII rated Outperform at CSFB, target $11. ATI raised to Sector Outperform at CIBC, target $22. Nile rated Outperform at Thomas Weisel. Goldman Sachs reiterated Outperform on MER, ACS, IP, CAN, AMT, IGT, PG and WFC. Goldman downgraded WM to Underperform. Goldman reiterated Underperform on F. Goldman reiterated Outperform on AV, saying it should be $18 now after NT news. Citi SmithBarney said it is cautious on AAPL near-term, would be buyers under $30.
Mid-day News
U.S. stocks are higher mid-day on a strong consumer sentiment report, declining interest rates and falling oil prices. Consumer confidence in the U.S. economy surged in June to the highest level in 2 years, spurred by the addition of 1.2 million new jobs this year, rising incomes and falling gasoline prices, Bloomberg reported. Microsoft will offer a streamlined version of its database and developer tools in a bid to attract nonprofessional software developers, the NY Times reported. Repairing botched cosmetic dentistry is a $10 billion industry in the U.S. the Wall Street Journal reported. New York City education officials said they removed 45 school principals for poor performance during the past academic year, the NY Times reported. Frontier Air and Northwest Air are ending intrusions into each other's flight routes, the Rocky Mountain News reported. Democratic Governor McGreevey yesterday signed into law a bill that imposes a 41% tax increase on income exceeding $500,000, affecting about 35,000 residents, the Star-Ledger reported. California Governor Schwarzenegger is expected to announce a contract agreement with the prison guards' union that would save the state $100 million during the next 2 years, the San Jose Mercury News reported. Bonds of Tyson Foods and other U.S. beef processors are weakening after the U.S. said yesterday a mad-cow screening test was positive and may indicate the second case since December, Bloomberg said. Crude oil futures tumbles to a nine-week low in London on indications supplies from OPEC are growing as Iraq takes control of its oil, easing concern pipelines there will be attacked, Bloomberg reported. Iraq's new government said it will get legal custody of Saddam Hussein tomorrow, Bloomberg said. Nortel said Flextronics agreed to buy its factories in Canada and Brazil for about $675 million to $725 million in cash, Bloomberg reported. The U.S. Supreme Court suspended enforcement of a federal criminal law that would bar commercial Web sites from making pornography available to children, Bloomberg reported. Siebel Systems faces a lawsuit by the SEC who says executives violated Red FD, Bloomberg reported.
BOTTOM LINE: The Portfolio is having a good day today as my internet and telecom equipment longs are rising substantially. I added a few new gaming, semi equipment, manufacturing and machinery longs this morning, leaving the Portfolio with 125% net long market exposure. One of my new longs is FLEX and I am using a stop-loss of $15.25 on the position. It is good to see that the very good news on the U.S. economy is finally starting to gain recognition with consumers, notwithstanding the media's intense focus on negativity. As well, it is positive that the Put/Call ratio is rising substantially today ahead of tomorrow's rate-hike. I expect U.S. stocks to rise modestly into the close on short-covering, falling interest rates and quarter-end repositioning.
Tuesday Watch
Earnings of Note
Company/Estimate
AM/.33
ESIO/.19
MKC/.29
Splits
None of note.
Economic Data
Consumer Confidence for June estimated at 95.0 versus 93.2 in May.
Recommendations
Goldman Sachs made positive comments on Lodging sector, saying current trends suggest Europe is beginning to recover and will act as a 'turbocharger' to the incredible strength in the U.S, favorites are HOT, FS and MAR. Goldman reiterated Buy on ITT, GDT, INTC, KO and STZ. Goldman reiterated Underperform on PBG and RKY.
Late-Night News
Asian indices are quietly mixed as strength in Korea is being offset by weakness in Hong Kong. Infineon Technologies AG and Nanya Technology are building the world's largest semiconductor plant that makes chips on 12-inch silicon wafers, the Economic Daily News reported. Grey Global might be an attractive takeover target for France's Publicis Groupe, the Wall Street Journal reported. General Electric is negotiating with Chinese suppliers to build locomotives in the country, China Daily reported. The Bush administration resumed direct diplomatic relations with Libya, ending 24 years of estrangement, Bloomberg said. Softbank, Japan's second-largest provider of high-speed Internet service, is starting a $250 million venture capital fund that will invest in similar companies based in the U.S. Hong Kong had its long-term debt rating outlook raised to stable from negative by S&P's Ratings Services, which cited improved prospects for the city to overcome its budget deficits. Gross revenue at the top 100 U.S. law firms rose 9.5% to $41.7 billion, aided by lawsuits, corporate work, increased billing rates and overhead management, the Wall Street Journal said.
Late-Night Trading
Asian Indices are -.50 to +.25% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated +.17%.
BOTTOM LINE: I expect U.S. stocks to open mixed on falling oil prices and interest rate worries. It is unlikely the market will move substantially tomorrow ahead of events later in the week. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
AM/.33
ESIO/.19
MKC/.29
Splits
None of note.
Economic Data
Consumer Confidence for June estimated at 95.0 versus 93.2 in May.
Recommendations
Goldman Sachs made positive comments on Lodging sector, saying current trends suggest Europe is beginning to recover and will act as a 'turbocharger' to the incredible strength in the U.S, favorites are HOT, FS and MAR. Goldman reiterated Buy on ITT, GDT, INTC, KO and STZ. Goldman reiterated Underperform on PBG and RKY.
Late-Night News
Asian indices are quietly mixed as strength in Korea is being offset by weakness in Hong Kong. Infineon Technologies AG and Nanya Technology are building the world's largest semiconductor plant that makes chips on 12-inch silicon wafers, the Economic Daily News reported. Grey Global might be an attractive takeover target for France's Publicis Groupe, the Wall Street Journal reported. General Electric is negotiating with Chinese suppliers to build locomotives in the country, China Daily reported. The Bush administration resumed direct diplomatic relations with Libya, ending 24 years of estrangement, Bloomberg said. Softbank, Japan's second-largest provider of high-speed Internet service, is starting a $250 million venture capital fund that will invest in similar companies based in the U.S. Hong Kong had its long-term debt rating outlook raised to stable from negative by S&P's Ratings Services, which cited improved prospects for the city to overcome its budget deficits. Gross revenue at the top 100 U.S. law firms rose 9.5% to $41.7 billion, aided by lawsuits, corporate work, increased billing rates and overhead management, the Wall Street Journal said.
Late-Night Trading
Asian Indices are -.50 to +.25% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated +.17%.
BOTTOM LINE: I expect U.S. stocks to open mixed on falling oil prices and interest rate worries. It is unlikely the market will move substantially tomorrow ahead of events later in the week. The Portfolio is 100% net long heading into tomorrow.
Monday, June 28, 2004
Monday Close
S&P 500 1,133.52 -.08%
NASDAQ 2,019.82 -.28%
Leading Sectors
Broadcasting +1.82%
Fashion +.96%
Airlines +.68%
Lagging Sectors
Oil Service -2.16%
Disk Drives -2.41%
Homebuilders -2.94%
Other
Crude Oil 36.19 -.14%
Natural Gas 6.22 +.39%
Gold 401.60 +.07%
Base Metals 109.41 -.07%
U.S. Dollar 88.70 -.19%
10-Yr. T-note Yield 4.74% +2.10%
VIX 16.07 +5.79%
Put/Call .60 -9.09%
NYSE Arms 1.10 -14.06%
After-hours Movers
NYB +7.07% on speculation over Citigroup takeover.
WM -9.9% after lowering 04 earnings forecast substantially on rising mortgage rates.
Recommendations
Goldman Sachs reiterated Underperform on FRX. Goldman reiterated Outperform on FS and IGT. A recent survey by Bank of America showed spending for business application software will increase over the next 6-12 months.
After-hours News
U.S. stocks finished slightly lower today on profit-taking after an early handover of power to Iraq and rising interest rates. After the close, New York Community Bancorp is close to an agreement to sell itself for around $6 billion, CNBC reported. General Motors said its U.S. sales this month are falling short of its expectations because of lagging customer demand, Bloomberg said. U.S regulators approved leeches for restoring circulation in blocked veins by removing pooled blood, the first FDA sanction for a treatment used for thousands of years, Bloomberg said. T-Mobile has asked mobile operators and handset manufactures to adopt a standard platform for the mobile music market, the Financial Times said. Target says its same-store-sales for June will come in well below its 5-7% forecast, Bloomberg reported.
BOTTOM LINE: The Portfolio finished substantially higher today and I took more profits in the afternoon and added to my oil service shorts, leaving the Portfolio with 100% net long market exposure. I added to my PTEN short and I am maintaining a $33.80 stop-loss on this position. The action in the bond market was disappointing today, however I do not expect a substantial rise in yields for the remainder of the week. I continue to expect a strong finish to the week for U.S. stocks on the Fed rate-hike, declining energy prices, quarter-end repositioning and positive economic reports.
NASDAQ 2,019.82 -.28%
Leading Sectors
Broadcasting +1.82%
Fashion +.96%
Airlines +.68%
Lagging Sectors
Oil Service -2.16%
Disk Drives -2.41%
Homebuilders -2.94%
Other
Crude Oil 36.19 -.14%
Natural Gas 6.22 +.39%
Gold 401.60 +.07%
Base Metals 109.41 -.07%
U.S. Dollar 88.70 -.19%
10-Yr. T-note Yield 4.74% +2.10%
VIX 16.07 +5.79%
Put/Call .60 -9.09%
NYSE Arms 1.10 -14.06%
After-hours Movers
NYB +7.07% on speculation over Citigroup takeover.
WM -9.9% after lowering 04 earnings forecast substantially on rising mortgage rates.
Recommendations
Goldman Sachs reiterated Underperform on FRX. Goldman reiterated Outperform on FS and IGT. A recent survey by Bank of America showed spending for business application software will increase over the next 6-12 months.
After-hours News
U.S. stocks finished slightly lower today on profit-taking after an early handover of power to Iraq and rising interest rates. After the close, New York Community Bancorp is close to an agreement to sell itself for around $6 billion, CNBC reported. General Motors said its U.S. sales this month are falling short of its expectations because of lagging customer demand, Bloomberg said. U.S regulators approved leeches for restoring circulation in blocked veins by removing pooled blood, the first FDA sanction for a treatment used for thousands of years, Bloomberg said. T-Mobile has asked mobile operators and handset manufactures to adopt a standard platform for the mobile music market, the Financial Times said. Target says its same-store-sales for June will come in well below its 5-7% forecast, Bloomberg reported.
BOTTOM LINE: The Portfolio finished substantially higher today and I took more profits in the afternoon and added to my oil service shorts, leaving the Portfolio with 100% net long market exposure. I added to my PTEN short and I am maintaining a $33.80 stop-loss on this position. The action in the bond market was disappointing today, however I do not expect a substantial rise in yields for the remainder of the week. I continue to expect a strong finish to the week for U.S. stocks on the Fed rate-hike, declining energy prices, quarter-end repositioning and positive economic reports.
Mid-day Update
S&P 500 1,141.52 +.64%
NASDAQ 2,037.69 +.61%
Leading Sectors
Airlines +3.05%
Broadcasting +1.92%
Internet +1.47%
Lagging Sectors
Homebuilders -1.34%
Disk Drives -1.44%
Oil Service -1.85%
Other
Crude Oil 36.18 -3.65%
Natural Gas 6.20 -2.41%
Gold 400.30 -.74%
Base Metals 109.41 -.07%
U.S. Dollar 88.83 -.05%
10-Yr. T-note Yield 4.71% +1.45%
VIX 15.21 +.13%
Put/Call .53 -19.70%
NYSE Arms .80 -37.50%
Market Movers
TASR +12.2% after saying the Dayton, Ohio Police placed a $436,000 order for the company's stun gun.
WPI -15.3% after cutting second-quarter sales and profit estimates after prices fell and a new birth-control pill was delayed and multiple downgrades.
MO +5.3% after a federal judge cleared the way for major U.S. cigarette makers to file a pre-trial appeal aimed at blocking a $280 billion fraud claim by the U.S. Department of Justice.
CCI -9.7% after saying National Grid Transco, Britain's power grid manager, agreed to buy the U.K. transmission towers of CCI for $2.04 billion.
TZOO +23.2% on short-covering and strength in Internet shares.
ATI +11.9% after saying it will have its first profit in more than two years, helped by a drop in retiree benefit costs and higher demand for flat-rolled stainless steel.
Economic Data
Personal Income rose .6% in May versus estimates of a .5% rise and a .6% increase in April.
Personal Spending rose 1.0% in May versus estimates of a .8% rise and a .2% increase in April.
PCE Deflator (YOY) for May rose 2.5% versus estimates of a 2.2% rise and a 2.0% increase in April.
Recommendations
ELP cut to Underweight at Morgan Stanley. WFMI rated Outperform at Prudential, target $105. TQNT cut to Underweight at Lehman, target $4. GENZ raised to Overweight at Lehman, target $54. FOX raised to Buy at Oppenheimer, target $32. WPI cut to Underweight at JP Morgan. Citi SmithBarney says to Buy JCP today, target $50. Citi also said to Buy IR, target $83. Citi reiterated Buy on CEY, target $44. Citi reiterated Sell on GDT, target $53. Goldman Sachs reiterated Outperform on BIIB, MUR, PXD, AMT and PPL.
Mid-day News
U.S. stocks are higher mid-day as falling oil prices and developments in Iraq boost investor spirits. The U.S.-led coalition formally ended its occupation of Iraq today by handing sovereignty to an interim Iraqi government ahead of schedule, Bloomberg reported. U.S. personal spending rose 1.0% in May, the biggest increase since 2001, as purchases of automobiles and other durable goods accelerated. A measure of prices tied to spending increased the most since 1990, reflecting higher fuel costs, Bloomberg reported. U.S. college students at public universities are spending almost a third less on tuition than they did in 1998, as new federal tax breaks and an increase in state and federal grants help ease education costs, USA Today reported. OAO Lukoil, Russia's biggest oil producer, plans to start crude-oil production in Iraq in 2005, Interfax news service reported. U.S. cable companies are developing new systems that ultimately may enable national television broadcasts to include different commercials aimed at varying audience groups, the NY Times reported. Sun Microsystems will unveil partnerships today meant to bolster the company's position in the mobile Internet business, the NY Times said. AOL won a patent for software that allows people to send instant messages or enter chat rooms while watching TV, the NY Times reported. Governor Schwarzenegger struck a deal with the California State Employees Association that would let the sate borrow almost $1 billion to balance the state's budget, the LA Times reported. Crude oil futures plunged to a two-month low after the U.S.-led coalition handed sovereignty to Iraq ahead of schedule, tempering concern that terrorists would disrupt the country's petroleum operations, Bloomberg reported. Wal-Mart said June sales will increase 2-4%, less than its original forecast, Bloomberg said. United Airlines was turned down for a federal loan guarantee and told it can't reapply, Bloomberg said. Cattle futures plunged the maximum allowed by the CME after the U.S. said a mad-cow screening test was positive, Bloomberg reported.
BOTTOM LINE: The Portfolio is having a very good day today as my security, internet and biotech longs are rising substantially and my oil service shorts are falling. I took profits in a few stocks from various sectors this morning, leaving the Portfolio with 125% net long market exposure. I expect U.S. equities to trade neutral to higher before a more substantial upwards move begins later in the week. Oil should continue to fall throughout the week and interest rates will likely rise modestly on more strong economic reports.
NASDAQ 2,037.69 +.61%
Leading Sectors
Airlines +3.05%
Broadcasting +1.92%
Internet +1.47%
Lagging Sectors
Homebuilders -1.34%
Disk Drives -1.44%
Oil Service -1.85%
Other
Crude Oil 36.18 -3.65%
Natural Gas 6.20 -2.41%
Gold 400.30 -.74%
Base Metals 109.41 -.07%
U.S. Dollar 88.83 -.05%
10-Yr. T-note Yield 4.71% +1.45%
VIX 15.21 +.13%
Put/Call .53 -19.70%
NYSE Arms .80 -37.50%
Market Movers
TASR +12.2% after saying the Dayton, Ohio Police placed a $436,000 order for the company's stun gun.
WPI -15.3% after cutting second-quarter sales and profit estimates after prices fell and a new birth-control pill was delayed and multiple downgrades.
MO +5.3% after a federal judge cleared the way for major U.S. cigarette makers to file a pre-trial appeal aimed at blocking a $280 billion fraud claim by the U.S. Department of Justice.
CCI -9.7% after saying National Grid Transco, Britain's power grid manager, agreed to buy the U.K. transmission towers of CCI for $2.04 billion.
TZOO +23.2% on short-covering and strength in Internet shares.
ATI +11.9% after saying it will have its first profit in more than two years, helped by a drop in retiree benefit costs and higher demand for flat-rolled stainless steel.
Economic Data
Personal Income rose .6% in May versus estimates of a .5% rise and a .6% increase in April.
Personal Spending rose 1.0% in May versus estimates of a .8% rise and a .2% increase in April.
PCE Deflator (YOY) for May rose 2.5% versus estimates of a 2.2% rise and a 2.0% increase in April.
Recommendations
ELP cut to Underweight at Morgan Stanley. WFMI rated Outperform at Prudential, target $105. TQNT cut to Underweight at Lehman, target $4. GENZ raised to Overweight at Lehman, target $54. FOX raised to Buy at Oppenheimer, target $32. WPI cut to Underweight at JP Morgan. Citi SmithBarney says to Buy JCP today, target $50. Citi also said to Buy IR, target $83. Citi reiterated Buy on CEY, target $44. Citi reiterated Sell on GDT, target $53. Goldman Sachs reiterated Outperform on BIIB, MUR, PXD, AMT and PPL.
Mid-day News
U.S. stocks are higher mid-day as falling oil prices and developments in Iraq boost investor spirits. The U.S.-led coalition formally ended its occupation of Iraq today by handing sovereignty to an interim Iraqi government ahead of schedule, Bloomberg reported. U.S. personal spending rose 1.0% in May, the biggest increase since 2001, as purchases of automobiles and other durable goods accelerated. A measure of prices tied to spending increased the most since 1990, reflecting higher fuel costs, Bloomberg reported. U.S. college students at public universities are spending almost a third less on tuition than they did in 1998, as new federal tax breaks and an increase in state and federal grants help ease education costs, USA Today reported. OAO Lukoil, Russia's biggest oil producer, plans to start crude-oil production in Iraq in 2005, Interfax news service reported. U.S. cable companies are developing new systems that ultimately may enable national television broadcasts to include different commercials aimed at varying audience groups, the NY Times reported. Sun Microsystems will unveil partnerships today meant to bolster the company's position in the mobile Internet business, the NY Times said. AOL won a patent for software that allows people to send instant messages or enter chat rooms while watching TV, the NY Times reported. Governor Schwarzenegger struck a deal with the California State Employees Association that would let the sate borrow almost $1 billion to balance the state's budget, the LA Times reported. Crude oil futures plunged to a two-month low after the U.S.-led coalition handed sovereignty to Iraq ahead of schedule, tempering concern that terrorists would disrupt the country's petroleum operations, Bloomberg reported. Wal-Mart said June sales will increase 2-4%, less than its original forecast, Bloomberg said. United Airlines was turned down for a federal loan guarantee and told it can't reapply, Bloomberg said. Cattle futures plunged the maximum allowed by the CME after the U.S. said a mad-cow screening test was positive, Bloomberg reported.
BOTTOM LINE: The Portfolio is having a very good day today as my security, internet and biotech longs are rising substantially and my oil service shorts are falling. I took profits in a few stocks from various sectors this morning, leaving the Portfolio with 125% net long market exposure. I expect U.S. equities to trade neutral to higher before a more substantial upwards move begins later in the week. Oil should continue to fall throughout the week and interest rates will likely rise modestly on more strong economic reports.
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