Earnings of Note
Company/Estimate
PTNX/.09
FLE/.06
LI/.24
Splits
None of note.
Economic Data
Initial Jobless Claims for last week estimated at 341K versus 351K prior week.
Continuing Claims estimated at 2950K versus 2966K prior.
Consumer Credit for May estimated at $7.5B versus $3.9B in April.
Recommendations
Goldman Sachs reiterated Outperform on MDT, DNA, AA and FDC.
Late-Night News
Asian indices are mostly lower on weak after-hours technology reports in the U.S. China's passenger car sales in June grew at their slowest pace since 02 as government restrictions on bank loans sapped demand, the Shanghai Daily said. Iraq's finance ministry will auction $100 million of treasury bills on July 18 to start a bond market and "to recover the economy," the Financial Times said. U.S. lawmakers received a briefing by the FBI and CIA on the threat posed by al-Qaeda of a pre-election attack to try and influence the outcome, the AP reported. National Security Adviser Condoleezza Rice said the U.S. must bolster cooperation with China on a range of issues through "high-level dialogue," Bloomberg reported. U.S. trade officials plan to ask China to reverse a decision revoking a patent held by Pfizer, Bloomberg said. Japan's ruling Party faces a loss of seats in parliament's upper house elections this Sunday, posing a threat to stocks and the yen, Bloomberg reported.
Late-Night Trading
Asian Indices are -1.0% to unch. on average.
S&P 500 indicated -.52%.
NASDAQ 100 indicated -1.03%.
BOTTOM LINE: I expect U.S. stocks to open lower in the morning on weakness in software and internet shares. Weakness will likely persist throughout the day. The Portfolio is 25% net long heading into tomorrow.
Thursday, July 08, 2004
Wednesday, July 07, 2004
Wednesday Close
S&P 500 1,118.33 +.19%
NASDAQ 1,966.08 +.13%
Leading Sectors
HMO's +1.39%
Iron/Steel +1.30%
Restaurants +1.29%
Lagging Sectors
Airlines -1.01%
Nanotechnology -1.54%
I-Banks -2.04%
Other
Crude Oil 39.22 +.36%
Natural Gas 6.36 -.16%
Gold 402.10 -.15%
Base Metals 112.74 +1.83%
U.S. Dollar 87.65 -.53%
10-Yr. T-note Yield 4.47% unch.
VIX 15.81 -2.71%
Put/Call .98 -9.26%
NYSE Arms 1.12 -48.39%
After-hours Movers
YHOO -11.8% after meeting 2Q estimates and guiding lower for 3Q.
SEBL -15.64% after cutting 2Q forecast.
CKFR +3.3% after announcing it signed a five-year contract extension with Wachovia to provide fully outsourced electronic billing and payment services to its customers.
SCHN -7.68% after beating 3Q estimates and giving weaker 4Q forecast.
BMC -7.62% after cutting 1Q estimates.
*Internet Stocks – down across the board on YHOO report.
Recommendations
Goldman Sachs reiterated Outperform on YHOO, ACN and DNA.
After-hours News
U.S. stocks finished mildly higher today on falling oil prices, a bounce in technology shares and strength in cyclicals. After the close, Kenneth Lay, former chief executive of Enron, was indicted in Houston on criminal charges related to the company's collapse, CNBC reported. The FBI waned guards at the Canadian and Mexican borders last month that al-Qaeda agents may try to cross into the U.S. to launch terrorist attacks in coming months, the National Post reported. Three dead bodies were found on the Hondo, New Mexico ranch of ABC tv newsman Sam Donaldson, the AP reported. Wholesales prices for pork in Japan are rising as demand increases for alternatives to beef and chicken on concern over mad cow and bird flu outbreaks, the Nihon Keizai reported. Michael Dell's investment firm bought the Four Seasons Resort Maui at Wailea in Hawaii as part of a plan to spend more than $1 billion on real estate, Bloomberg reported. Phillip Morris and other U.S. tobacco companies can't use a 1998 settlement with the states to shield them from a U.S. Justice Department suit seeking $280 billion, Bloomberg said. Citigroup and ABN Amro are among banks boosting loans to Russian companies, betting economic won't be derailed by the potential bankruptcy of OAO Yukos Oil, Bloomberg reported.
BOTTOM LINE: The Portfolio finished modestly higher today. I added a few new technology shorts in the afternoon, leaving the Portfolio with 25% net long market exposure. One of my new shorts is ERES and I am keeping a $28.50 stop-loss on this position. It looks as though technology stocks will take another hit tomorrow. Longer-term investors should not bottom-fish yet as there are still too many negative catalysts on the near-term horizon.
NASDAQ 1,966.08 +.13%
Leading Sectors
HMO's +1.39%
Iron/Steel +1.30%
Restaurants +1.29%
Lagging Sectors
Airlines -1.01%
Nanotechnology -1.54%
I-Banks -2.04%
Other
Crude Oil 39.22 +.36%
Natural Gas 6.36 -.16%
Gold 402.10 -.15%
Base Metals 112.74 +1.83%
U.S. Dollar 87.65 -.53%
10-Yr. T-note Yield 4.47% unch.
VIX 15.81 -2.71%
Put/Call .98 -9.26%
NYSE Arms 1.12 -48.39%
After-hours Movers
YHOO -11.8% after meeting 2Q estimates and guiding lower for 3Q.
SEBL -15.64% after cutting 2Q forecast.
CKFR +3.3% after announcing it signed a five-year contract extension with Wachovia to provide fully outsourced electronic billing and payment services to its customers.
SCHN -7.68% after beating 3Q estimates and giving weaker 4Q forecast.
BMC -7.62% after cutting 1Q estimates.
*Internet Stocks – down across the board on YHOO report.
Recommendations
Goldman Sachs reiterated Outperform on YHOO, ACN and DNA.
After-hours News
U.S. stocks finished mildly higher today on falling oil prices, a bounce in technology shares and strength in cyclicals. After the close, Kenneth Lay, former chief executive of Enron, was indicted in Houston on criminal charges related to the company's collapse, CNBC reported. The FBI waned guards at the Canadian and Mexican borders last month that al-Qaeda agents may try to cross into the U.S. to launch terrorist attacks in coming months, the National Post reported. Three dead bodies were found on the Hondo, New Mexico ranch of ABC tv newsman Sam Donaldson, the AP reported. Wholesales prices for pork in Japan are rising as demand increases for alternatives to beef and chicken on concern over mad cow and bird flu outbreaks, the Nihon Keizai reported. Michael Dell's investment firm bought the Four Seasons Resort Maui at Wailea in Hawaii as part of a plan to spend more than $1 billion on real estate, Bloomberg reported. Phillip Morris and other U.S. tobacco companies can't use a 1998 settlement with the states to shield them from a U.S. Justice Department suit seeking $280 billion, Bloomberg said. Citigroup and ABN Amro are among banks boosting loans to Russian companies, betting economic won't be derailed by the potential bankruptcy of OAO Yukos Oil, Bloomberg reported.
BOTTOM LINE: The Portfolio finished modestly higher today. I added a few new technology shorts in the afternoon, leaving the Portfolio with 25% net long market exposure. One of my new shorts is ERES and I am keeping a $28.50 stop-loss on this position. It looks as though technology stocks will take another hit tomorrow. Longer-term investors should not bottom-fish yet as there are still too many negative catalysts on the near-term horizon.
Mid-day Update
S&P 500 1,119.51 +.30%
NASDAQ 1,970.24 +.35%
Leading Sectors
Restaurants +1.46%
Semis +1.35%
HMO's +1.30%
Lagging Sectors
Airlines -.72%
Nanotechnology -.77%
I-Banks -1.80%
Other
Crude Oil 39.07 -1.59%
Natural Gas 6.36 -1.0%
Gold 403.30 +2.62%
Base Metals 112.74 +1.83%
U.S. Dollar 87.61 -.57%
10-Yr. T-note Yield 4.47% +.04%
VIX 16.03 -1.35%
Put/Call 1.05 -2.78%
NYSE Arms 1.20 -44.70%
Market Movers
FILE -19.4% after saying second-quarter profit was less than analysts expected.
MSGI +57.5% after announcing a strategic alliance with the SYTEX Group to deliver homeland security products.
ISSC +19.1% after saying that the FAA awarded the company a TSO certification for their Large Flat Panel display and upgrade to Buy at Friedman Billings.
ARO +7.9% after saying it will be added to the S&P Mid-cap 400 Index.
APPB +7.4% after reiterating 2Q and 04 forecasts.
NTES -16.7% after lowering 2Q forecast.
ASCL -15.4% after cutting 2Q and 3Q forecast.
LWAY -10.9% after announcing the acquisition of a closely held Philly-area cream cheese producer.
Economic Data
None of note.
Recommendations
SVU and LLL cut to Underweight at JP Morgan. DYAX rated Buy at Deutsche Bank, target $18. PDLI rated Buy at Deutsche Bank, target $30. CHIR rated Buy at Deutsche Bank, target $60. ENCY rated Buy at Deutsche Bank, target $16. DNA rated Buy at Deutsche Bank, target $68. BIIB rated Buy at Deutsche Bank, target $72. TKTX rated Buy at Deutsche Bank, target $28. MAT cut to Sell at Bank of America, target $13. AVP rated Overweight at Morgan Stanley, target $54. Goldman reiterated Outperform on AUO, AMGN, DNA, GCI and MSFT. Goldman reiterated Underperform on DJ. Citi SmithBarney said to Buy SSI ahead of tomorrow's FCC meeting. Citi says to Buy PLUG, as many catalysts are on the horizon. Citi reiterated Buy on JNPR, target $32.50. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on FDRY, target $15. Citi reiterated Buy on ETS, target $4. Citi reiterated Buy on RDWR, target $25. Citi reiterated Buy on EXTR, target $11. Citi reiterated Buy on QSFT, target $16. Citi reiterated Buy on VRTS, target $22. Citi reiterated Buy on ASCL, target $18. Citi reiterated Buy on SLM, target $46.
Mid-day News
U.S. stocks are quietly higher mid-day as a declining U.S. dollar and crude oil prices boost cyclical shares. Deutsche Telekom AG's T-Systems International unit is seeking to link 10,000 wireless computer-access locations into one network to make it more convenient for mobile users, Reuters reported. Boston school bus drivers and monitors say they will picket the Democratic Convention, causing a potential problem for Senator Kerry, who said he wouldn't cross a picket line, the Boston Globe reported. It takes the average U.S. worker 189 days of work just to pay off his or her share of federal, state and local taxes, the Washington Post reported. The U.S. Senate version of a six-year transportation bill calls for states to levy tolls on existing interstate highways to raise funds for road building and to ease congestion, the Washington Post reported. Phoenix and surrounding parts of Arizona face power shortages and blackouts after a fire damaged a power substation near Sun City, the Arizona Republic reported. Pfizer said Chinese authorities overturned the company's patent for Viagra, Dow Jones reported. Paul McCulley, a PIMCO managing director, told CNBC that a "great deal" of the bear market for bonds has passed and that the Fed can raise rates at a measured pace. U.S. mortgage applications surged last week by the most in more than three months as mortgage rates fell below 6% for the first time since April, Bloomberg reported. AT&T may lose its investment-grade credit ratings because of plunging profit, bond prices show. General Motors increased rebates to $5,000 on most sport-utility vehicles and Ford boosted offers on several models, Bloomberg said. Pfizer is expanding its drug-discount programs to allow 43 million uninsured Americans to buy medicines such as its Lipitor cholesterol treatment at a lower cost. Boeing won orders worth $1.2 billion for 10 7E7 airliners from Britain's First Choice Holidays and Italy's Blue Panorama, the first European customers for the aircraft, Bloomberg reported. 9 in 10 people in France favor loosening the 35-hour maximum work week limit, saying they want to be able to increase their earnings, Bloomberg reported. Crude oil prices are declining after the Saudi Oil Minister said the kingdom is committed to boosting OPEC output quotas August 1, Bloomberg reported.
BOTTOM LINE: The Portfolio is modestly higher today on strength in my telecom equipment, gold and internet longs and weakness in my oil service shorts. I have not traded today and the Portfolio is still 50% net long. I expect stocks to rise modestly into the close on declining oil prices and strength in basic materials/ technology shares.
NASDAQ 1,970.24 +.35%
Leading Sectors
Restaurants +1.46%
Semis +1.35%
HMO's +1.30%
Lagging Sectors
Airlines -.72%
Nanotechnology -.77%
I-Banks -1.80%
Other
Crude Oil 39.07 -1.59%
Natural Gas 6.36 -1.0%
Gold 403.30 +2.62%
Base Metals 112.74 +1.83%
U.S. Dollar 87.61 -.57%
10-Yr. T-note Yield 4.47% +.04%
VIX 16.03 -1.35%
Put/Call 1.05 -2.78%
NYSE Arms 1.20 -44.70%
Market Movers
FILE -19.4% after saying second-quarter profit was less than analysts expected.
MSGI +57.5% after announcing a strategic alliance with the SYTEX Group to deliver homeland security products.
ISSC +19.1% after saying that the FAA awarded the company a TSO certification for their Large Flat Panel display and upgrade to Buy at Friedman Billings.
ARO +7.9% after saying it will be added to the S&P Mid-cap 400 Index.
APPB +7.4% after reiterating 2Q and 04 forecasts.
NTES -16.7% after lowering 2Q forecast.
ASCL -15.4% after cutting 2Q and 3Q forecast.
LWAY -10.9% after announcing the acquisition of a closely held Philly-area cream cheese producer.
Economic Data
None of note.
Recommendations
SVU and LLL cut to Underweight at JP Morgan. DYAX rated Buy at Deutsche Bank, target $18. PDLI rated Buy at Deutsche Bank, target $30. CHIR rated Buy at Deutsche Bank, target $60. ENCY rated Buy at Deutsche Bank, target $16. DNA rated Buy at Deutsche Bank, target $68. BIIB rated Buy at Deutsche Bank, target $72. TKTX rated Buy at Deutsche Bank, target $28. MAT cut to Sell at Bank of America, target $13. AVP rated Overweight at Morgan Stanley, target $54. Goldman reiterated Outperform on AUO, AMGN, DNA, GCI and MSFT. Goldman reiterated Underperform on DJ. Citi SmithBarney said to Buy SSI ahead of tomorrow's FCC meeting. Citi says to Buy PLUG, as many catalysts are on the horizon. Citi reiterated Buy on JNPR, target $32.50. Citi reiterated Buy on FFIV, target $45. Citi reiterated Buy on FDRY, target $15. Citi reiterated Buy on ETS, target $4. Citi reiterated Buy on RDWR, target $25. Citi reiterated Buy on EXTR, target $11. Citi reiterated Buy on QSFT, target $16. Citi reiterated Buy on VRTS, target $22. Citi reiterated Buy on ASCL, target $18. Citi reiterated Buy on SLM, target $46.
Mid-day News
U.S. stocks are quietly higher mid-day as a declining U.S. dollar and crude oil prices boost cyclical shares. Deutsche Telekom AG's T-Systems International unit is seeking to link 10,000 wireless computer-access locations into one network to make it more convenient for mobile users, Reuters reported. Boston school bus drivers and monitors say they will picket the Democratic Convention, causing a potential problem for Senator Kerry, who said he wouldn't cross a picket line, the Boston Globe reported. It takes the average U.S. worker 189 days of work just to pay off his or her share of federal, state and local taxes, the Washington Post reported. The U.S. Senate version of a six-year transportation bill calls for states to levy tolls on existing interstate highways to raise funds for road building and to ease congestion, the Washington Post reported. Phoenix and surrounding parts of Arizona face power shortages and blackouts after a fire damaged a power substation near Sun City, the Arizona Republic reported. Pfizer said Chinese authorities overturned the company's patent for Viagra, Dow Jones reported. Paul McCulley, a PIMCO managing director, told CNBC that a "great deal" of the bear market for bonds has passed and that the Fed can raise rates at a measured pace. U.S. mortgage applications surged last week by the most in more than three months as mortgage rates fell below 6% for the first time since April, Bloomberg reported. AT&T may lose its investment-grade credit ratings because of plunging profit, bond prices show. General Motors increased rebates to $5,000 on most sport-utility vehicles and Ford boosted offers on several models, Bloomberg said. Pfizer is expanding its drug-discount programs to allow 43 million uninsured Americans to buy medicines such as its Lipitor cholesterol treatment at a lower cost. Boeing won orders worth $1.2 billion for 10 7E7 airliners from Britain's First Choice Holidays and Italy's Blue Panorama, the first European customers for the aircraft, Bloomberg reported. 9 in 10 people in France favor loosening the 35-hour maximum work week limit, saying they want to be able to increase their earnings, Bloomberg reported. Crude oil prices are declining after the Saudi Oil Minister said the kingdom is committed to boosting OPEC output quotas August 1, Bloomberg reported.
BOTTOM LINE: The Portfolio is modestly higher today on strength in my telecom equipment, gold and internet longs and weakness in my oil service shorts. I have not traded today and the Portfolio is still 50% net long. I expect stocks to rise modestly into the close on declining oil prices and strength in basic materials/ technology shares.
Tuesday, July 06, 2004
Wednesday Watch
Earnings of Note
Company/Estimate
ACN/.37
AA/.47
DNA/.19
ISCB/.32
STAR/.24
SCHN/1.25
YHOO/.08
Splits
INFY 2-for-1
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on PFE, VZ and Underperform on TFX.
Late-Night News
Asian indices are mostly lower on weakness in U.S. technology shares. Symbian Ltd. may Wednesday say most of its owners have agreed to increase their stakes in the company, blocking an attempt by Nokia to increase its stake to more than 50%, the Financial Times said. Volkswagen AG is offering "zero percent loans" to U.S. customers, the Financial Times said. China's economy may grow at least 10% in the first half of this year, Wen Wei Po reported. Virgin Blue Holdings, Australia's second-largest carrier, is considering adding flights to the U.S., competing on some of the most profitable routes of larger rival Qantas Airways, Bloomberg reported. Police in Jordan arrested the brother-in-law of al-Zarqawi, a Jordanian linked to al-Qaeda and accused of organizing terrorist attacks in Iraq, Agence France-Presse reported. Pakistan's President Musharraf said his country will rid itself completely of al-Qaeda terrorists, Agence France-Presse reported. American International Group and Morgan Stanley are among six bidders seeking to buy three Tokyo buildings worth $1.1 billion, in what may be the largest single property purchase by a foreign investor since Japan's bubble economy burst in 1990, Bloomberg said.
Late-Night Trading
Asian Indices are -.75% to +.25% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.17%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning as several short-term indicators are reaching oversold levels. The Portfolio is 50% net long heading into tomorrow.
Company/Estimate
ACN/.37
AA/.47
DNA/.19
ISCB/.32
STAR/.24
SCHN/1.25
YHOO/.08
Splits
INFY 2-for-1
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on PFE, VZ and Underperform on TFX.
Late-Night News
Asian indices are mostly lower on weakness in U.S. technology shares. Symbian Ltd. may Wednesday say most of its owners have agreed to increase their stakes in the company, blocking an attempt by Nokia to increase its stake to more than 50%, the Financial Times said. Volkswagen AG is offering "zero percent loans" to U.S. customers, the Financial Times said. China's economy may grow at least 10% in the first half of this year, Wen Wei Po reported. Virgin Blue Holdings, Australia's second-largest carrier, is considering adding flights to the U.S., competing on some of the most profitable routes of larger rival Qantas Airways, Bloomberg reported. Police in Jordan arrested the brother-in-law of al-Zarqawi, a Jordanian linked to al-Qaeda and accused of organizing terrorist attacks in Iraq, Agence France-Presse reported. Pakistan's President Musharraf said his country will rid itself completely of al-Qaeda terrorists, Agence France-Presse reported. American International Group and Morgan Stanley are among six bidders seeking to buy three Tokyo buildings worth $1.1 billion, in what may be the largest single property purchase by a foreign investor since Japan's bubble economy burst in 1990, Bloomberg said.
Late-Night Trading
Asian Indices are -.75% to +.25% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.17%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning as several short-term indicators are reaching oversold levels. The Portfolio is 50% net long heading into tomorrow.
Tuesday Close
S&P 500 1,116.19 -.82%
NASDAQ 1,963.43 -2.15%
Leading Sectors
Energy +.45%
Iron/Steel +.37%
Foods +.10%
Lagging Sectors
Disk Drives -4.20%
Software -5.05%
Computer Boxmakers -5.23%
Other
Crude Oil 39.53 -.30%
Natural Gas 6.40 -.30%
Gold 393.00 unch.
Base Metals 110.71 +.70%
U.S. Dollar 88.21 -.02%
10-Yr. T-note Yield 4.48% +.48%
VIX 16.25 +7.76%
Put/Call 1.08 +33.33%
NYSE Arms 2.17 -25.43%
After-hours Movers
APPB +4.21% after reiterating 2Q and 04 forecast.
ASCL -21.54% after cutting 2Q and 3Q forecast.
JDAS -19.83% after lowering 2Q forecast.
Recommendations
TheStreet.com says that general public short-selling is at an all-time high which bodes well for the second half of the year as this group of investors has a bad track record.
After-hours News
U.S. stocks finished lower today on rising oil prices, political worries and earnings disappointments in the technology sector. After the close, Starwood Hotels said it will open its first "W" hotel in Europe, the Financial Times reported. Drinking milk and taking calcium supplements daily may help prevent colon cancer, according to a study in tomorrow's Journal of the National Cancer Institute. The U.S. Commerce Department imposed duties of as much as 113% on imported shrimp from China and up to 93% on those from Vietnam, in a preliminary decision on a complaint by U.S. harvesters and processors, Bloomberg reported.
BOTTOM LINE: The Portfolio finished lower today on weakness in my technology long positions. I did not trade in the afternoon, thus leaving the Portfolio with 50% net long market exposure. Today was disappointing for the bulls, as the NASDAQ fell back below its 200-day moving average and through the 2000 level. Once again, the overcapacity generated during the technology bubble of the late 90's is disrupting technology stock fundamentals. Too many technology companies are still competing for the same business, thus any slight decline in demand results in outsized earnings shortfalls. I now expect the major U.S. indices to explore the lower end of their trading ranges at some point during the next month on concerns over the tech sector and anti-business political rhetoric.
NASDAQ 1,963.43 -2.15%
Leading Sectors
Energy +.45%
Iron/Steel +.37%
Foods +.10%
Lagging Sectors
Disk Drives -4.20%
Software -5.05%
Computer Boxmakers -5.23%
Other
Crude Oil 39.53 -.30%
Natural Gas 6.40 -.30%
Gold 393.00 unch.
Base Metals 110.71 +.70%
U.S. Dollar 88.21 -.02%
10-Yr. T-note Yield 4.48% +.48%
VIX 16.25 +7.76%
Put/Call 1.08 +33.33%
NYSE Arms 2.17 -25.43%
After-hours Movers
APPB +4.21% after reiterating 2Q and 04 forecast.
ASCL -21.54% after cutting 2Q and 3Q forecast.
JDAS -19.83% after lowering 2Q forecast.
Recommendations
TheStreet.com says that general public short-selling is at an all-time high which bodes well for the second half of the year as this group of investors has a bad track record.
After-hours News
U.S. stocks finished lower today on rising oil prices, political worries and earnings disappointments in the technology sector. After the close, Starwood Hotels said it will open its first "W" hotel in Europe, the Financial Times reported. Drinking milk and taking calcium supplements daily may help prevent colon cancer, according to a study in tomorrow's Journal of the National Cancer Institute. The U.S. Commerce Department imposed duties of as much as 113% on imported shrimp from China and up to 93% on those from Vietnam, in a preliminary decision on a complaint by U.S. harvesters and processors, Bloomberg reported.
BOTTOM LINE: The Portfolio finished lower today on weakness in my technology long positions. I did not trade in the afternoon, thus leaving the Portfolio with 50% net long market exposure. Today was disappointing for the bulls, as the NASDAQ fell back below its 200-day moving average and through the 2000 level. Once again, the overcapacity generated during the technology bubble of the late 90's is disrupting technology stock fundamentals. Too many technology companies are still competing for the same business, thus any slight decline in demand results in outsized earnings shortfalls. I now expect the major U.S. indices to explore the lower end of their trading ranges at some point during the next month on concerns over the tech sector and anti-business political rhetoric.
Mid-day Update
S&P 500 1,115.72 -.86%
NASDAQ 1,965.28 -2.06%
Leading Sectors
Iron/Steel +.98%
Energy +.36%
Foods unch.
Lagging Sectors
Semis -4.12%
Software -4.81%
Computer Boxmakers -5.20%
Other
Crude Oil 39.55 +3.0%
Natural Gas 6.43 +4.51%
Gold 392.60 -1.56%
Base Metals 110.71 +.70%
U.S. Dollar 88.14 -.10%
10-Yr. T-note Yield 4.47% +.43%
VIX 16.58 +10.08%
Put/Call 1.17 +44.44%
NYSE Arms 2.35 -19.34%
Market Movers
VRTS -36.0% after cutting 2Q estimates and JP Morgan downgrade to Neutral.
BRCM -8.83% on CNXT shortfall.
NNI +14.2% on CSFB upgrade to Outperform, target $26.
KVHI -19.0% after lowering 2Q estimates.
ESPD -10.45% on continued fall after announcing disappointing 2Q.
UNFI -10.0% after lowering 05 forecast.
Economic Data
ISM Non-Manufacturing for June came in at 59.9 versus expectations of 63.0 and 65.2 in May.
Recommendations
Goldman Sachs reiterated Outperform on VOD, KO, IACI, YHOO, EBAY, NFP, BSX, INTC, AMD, AMX, SAP, FS and IGT. Goldman reiterated Underperform on UNM. Citi SmithBarney reiterated Buy on IGT, target $50. Citi reiterated Buy on INFA, target $10.50. BOBJ cut to Underweight at JP Morgan. KTO raised to Overweight and JP Morgan. GENZ raised to Outperform at CSFB, target $58. NNI raised to Outperform at CSFB, target $26. GNW rated Buy at UBS. STLD raised to Overweight at Morgan Stanley, target $40. VRC raised to Overweight at Morgan Stanley, target $29. GT raised to Overweight at JP Morgan. VRNT cut to Reduce at UBS, target $31.50. IFS rated Overweight at Lehman, target $17.
Mid-day News
U.S. stocks are lower mid-day on earnings shortfalls, political worries and higher energy prices. Senator Kerry has chosen North Carolina Senator John Edwards as his vice-presidential running mate, NBC News reported. Tradesports.com is showing the chances of President Bush being re-elected falling 3 points to 54%. As well, Bush's chances of winning Edward's home state of North Carolina are falling 14 points to 62%. Iraqi oil exports, cut by half since Saturday because of damage to a pipeline in the south of the country, will return to normal tomorrow after repairs are completed, Al Arabiya tv news reported. General Motors may produce a hybrid gas-electric sport utility vehicle in China to compete with Japanese rivals, the Detroit News reported. Jeff Schwartz, CEO of Autobytel, told CNBC that a recent round of consumer surveys show sales of sports-utility vehicles have dropped 20-30% while smaller, fuel-efficient vehicles, particularly hybrids, are up 20-30%, Bloomberg reported.
BOTTOM LINE: The Portfolio is lower today on weakness in my technology longs. I took profits in a number of long positions and added a few new shorts this morning, bringing the Portfolio's market exposure to 50% net long. One of my new shorts is SWIR and I am using a $38.25 stop-loss on the position. The market is falling today on concerns over technology sector earnings, future anti-business political rhetoric and rising oil prices. While it does appear that the fundamentals in the tech sector have deteriorated a bit recently, I continue to expect a pick-up later this quarter. Anti-business political rhetoric will likely accelerate as the party conventions approach. Finally, I expect oil to begin to decline before week's end. Overall, it now appears the recent trading range will continue to hold until later in the year.
NASDAQ 1,965.28 -2.06%
Leading Sectors
Iron/Steel +.98%
Energy +.36%
Foods unch.
Lagging Sectors
Semis -4.12%
Software -4.81%
Computer Boxmakers -5.20%
Other
Crude Oil 39.55 +3.0%
Natural Gas 6.43 +4.51%
Gold 392.60 -1.56%
Base Metals 110.71 +.70%
U.S. Dollar 88.14 -.10%
10-Yr. T-note Yield 4.47% +.43%
VIX 16.58 +10.08%
Put/Call 1.17 +44.44%
NYSE Arms 2.35 -19.34%
Market Movers
VRTS -36.0% after cutting 2Q estimates and JP Morgan downgrade to Neutral.
BRCM -8.83% on CNXT shortfall.
NNI +14.2% on CSFB upgrade to Outperform, target $26.
KVHI -19.0% after lowering 2Q estimates.
ESPD -10.45% on continued fall after announcing disappointing 2Q.
UNFI -10.0% after lowering 05 forecast.
Economic Data
ISM Non-Manufacturing for June came in at 59.9 versus expectations of 63.0 and 65.2 in May.
Recommendations
Goldman Sachs reiterated Outperform on VOD, KO, IACI, YHOO, EBAY, NFP, BSX, INTC, AMD, AMX, SAP, FS and IGT. Goldman reiterated Underperform on UNM. Citi SmithBarney reiterated Buy on IGT, target $50. Citi reiterated Buy on INFA, target $10.50. BOBJ cut to Underweight at JP Morgan. KTO raised to Overweight and JP Morgan. GENZ raised to Outperform at CSFB, target $58. NNI raised to Outperform at CSFB, target $26. GNW rated Buy at UBS. STLD raised to Overweight at Morgan Stanley, target $40. VRC raised to Overweight at Morgan Stanley, target $29. GT raised to Overweight at JP Morgan. VRNT cut to Reduce at UBS, target $31.50. IFS rated Overweight at Lehman, target $17.
Mid-day News
U.S. stocks are lower mid-day on earnings shortfalls, political worries and higher energy prices. Senator Kerry has chosen North Carolina Senator John Edwards as his vice-presidential running mate, NBC News reported. Tradesports.com is showing the chances of President Bush being re-elected falling 3 points to 54%. As well, Bush's chances of winning Edward's home state of North Carolina are falling 14 points to 62%. Iraqi oil exports, cut by half since Saturday because of damage to a pipeline in the south of the country, will return to normal tomorrow after repairs are completed, Al Arabiya tv news reported. General Motors may produce a hybrid gas-electric sport utility vehicle in China to compete with Japanese rivals, the Detroit News reported. Jeff Schwartz, CEO of Autobytel, told CNBC that a recent round of consumer surveys show sales of sports-utility vehicles have dropped 20-30% while smaller, fuel-efficient vehicles, particularly hybrids, are up 20-30%, Bloomberg reported.
BOTTOM LINE: The Portfolio is lower today on weakness in my technology longs. I took profits in a number of long positions and added a few new shorts this morning, bringing the Portfolio's market exposure to 50% net long. One of my new shorts is SWIR and I am using a $38.25 stop-loss on the position. The market is falling today on concerns over technology sector earnings, future anti-business political rhetoric and rising oil prices. While it does appear that the fundamentals in the tech sector have deteriorated a bit recently, I continue to expect a pick-up later this quarter. Anti-business political rhetoric will likely accelerate as the party conventions approach. Finally, I expect oil to begin to decline before week's end. Overall, it now appears the recent trading range will continue to hold until later in the year.
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