Earnings of Note
Company/Estimate
VOXX/.16
SCH/.08
CVTX/-1.16
FNM/1.88
WB/.99
WMAR/.32
Splits
None of note.
Economic Data
Producer Price Index for September estimated up .1% versus a .1% decline in August.
PPI Ex Food & Energy for September estimated up .2% versus a .1% decrease in August.
Advance Retail Sales for September estimated up .7% versus a .3% decline in August.
Retail Sales Less Autos for September estimated up .3% versus a .2% decrease in August.
Empire Manufacturing for October estimated at 25.0 versus 28.3 in September.
Industrial Production for September estimated up .3% versus a .1% increase in August.
Capacity Utilization for September estimated at 77.5% versus 77.3% in August.
Preliminary Univ. of Mich. Consumer Confidence reading for October estimated at 94.0 versus 94.2 in September.
Business Inventories for August estimated up .6% versus a .9% increase in July.
Recommendations
Goldman Sachs reiterated Outperform on IGT, STN, UNH and Underperform on AZR, DJ, KZL, UIS, CNET. Par Pharmaceutical(PPX), a generic drugmaker whose shares have dropped 47% this year, may see its stock recover as more of its drugs receive regulatory approval next year, Business Week said. Shares of OmniVision Technologies, which makes digital-camera chips, may rise as sales of mobile-phone cameras with OmniVision chips surge this year, Business Week reported. Blue Nile(NILE) has been "highly profitable at the early stages of growth," Business Week reported, citing analyst Anne-Marie Peterson of Thomas Weisel Partners.
Late-Night News
Asian indices are mostly lower, led by weakness in China. The Russian government may sell OAO Yukos Oil Co.'s largest unit for as little as $4 billion, the Financial Times reported. Starbucks will publish a children's book next month as part of a new publishing venture, Business Week said. Cisco Systems seized more than $20 million of counterfeit products in a raid in China, the South China Morning Post said. Global demand for thin-film transistor liquid crystal displays is expected to "explode" around the end of the year, the Commercial Times reported. Taiwan Semiconductor Manufacturing is using more than 96% of its factory capacity in the current quarter, exceeding analysts' estimates of 80%, the Economic Daily News reported. The company is receiving last-minute orders from customers such as Nvidia, ATI Technologies and Qualcomm, the Taipei-based paper said. Time Warner's Warner Bros. is setting up its first film production venture in China with China Film Group and Hengdian Group as partners, the South China Morning Post said. BHP Billiton, Jiangxi Copper and Wuhan Steel Processing said China's rising usage of copper, nickel and other metals may leave producers unable to meet demand, indicating prices may rebound from declines this week, Bloomberg said. Afghan President Karzai won almost 60% of the vote in early counting from the Oct. 9 presidential election, according to the election Web site.
Late-Night Trading
Asian Indices are -.75% to unch. on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated unch.
BOTTOM LINE: I expect U.S. equities to open modestly lower in the morning on energy, political and earnings' worries, however stocks should rise later in the day on better economic reports and short-covering. The Portfolio is 75% net long heading into tomorrow.
Friday, October 15, 2004
Thursday, October 14, 2004
Thursday Close
S&P 500 1,103.29 -.93%
NASDAQ 1,903.02 -.91%
Leading Sectors
Airlines +2.68%
Oil Service +1.82%
Energy +.95%
Lagging Sectors
Semis -3.22%
Disk Drives -4.75%
Insurance -6.50%
Other
Crude Oil 54.51 -.46%
Natural Gas 6.71 -1.34%
Gold 419.00 -.12%
Base Metals 112.89 -.48%
U.S. Dollar 87.62 -.30%
10-Yr. T-note Yield 4.02% -.90%
VIX 16.43 +6.55%
Put/Call 1.07 +.94%
NYSE Arms 1.64 +20.59%
After-hours Movers
JNPR -6.31% on profit-taking after beating 3Q estimates and raising 4Q guidance.
RMBS +4.62% after beating 3Q estimates.
MGAM -12.89% after cutting 4Q estimates.
PHTN -8.52% after cutting 4Q forecast.
SUNW +4.03% after beating 1Q estimates.
CVH +8.47% on rebound after sell-off related to FHCC acquisition.
CREE -4.02% after missing 1Q estimates and lowering 2Q guidance.
NFLX -34.14% after missing 3Q estimates substantially and saying AMZN will start video service.
CNET -11.99% after meeting 3Q estimates and lowering outlook.
Recommendations
Goldman reiterated Underperform on CNET and Outperform on SVU.
After-hours News
U.S. stocks finished lower today on concerns over lawsuits, energy prices and political worries. After the close, Todd Thomson, CFO of Citigroup, said he expects credit quality to stay strong, though he doesn't expect it to improve enough to warrant another large release of reserves, CNBC reported. President Bush and Senator Kerry's third tv debate last night drew 51.2 million viewers, Nielsen Media Research said. Google introduced software that lets users search for files from their own computers, as well as the Web, entering a new area of competition with Microsoft, Bloomberg reported. The U.S. budget deficit rose to $412.6 billion, below mid-year estimates of $445 billion, in the year ended Sept. 30 as tax receipts rose more than expected on faster U.S. economic growth, Bloomberg said. The budget deficit is now 3.75% of U.S. GDP, 36.2% lower than the all-time record set in 1983, Bloomberg reported. The U.S. Federal Communications Commission won't stop Sinclair Broadcasting from televising "Stolen Honor", a documentary critical of Senator Kerry's anti-war activities after returning home from the Vietnam War, Bloomberg reported. SunTrust Banks said the SEC started an informal inquiry into its recent announcement the bank would restate profit for this year's first two quarters, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly lower today as declines in my wireless and restaurant longs more than offset gains in my alternative energy and internet longs. I took profits in a few semiconductor longs in the afternoon as they hit stop-losses, leaving the Portfolio 75% net long. The tone of the market deteriorated further in the afternoon and the advance/decline line finished at its lows for the day. Investors appear to be worried over the mounting number of lawsuits plaguing corporate America, President Bush's recent decline in the Polls and continuing high energy prices. I still expect U.S. stocks to trade mixed-to-weaker over the near-term before embarking on a significant move higher in the latter part of the month.
NASDAQ 1,903.02 -.91%
Leading Sectors
Airlines +2.68%
Oil Service +1.82%
Energy +.95%
Lagging Sectors
Semis -3.22%
Disk Drives -4.75%
Insurance -6.50%
Other
Crude Oil 54.51 -.46%
Natural Gas 6.71 -1.34%
Gold 419.00 -.12%
Base Metals 112.89 -.48%
U.S. Dollar 87.62 -.30%
10-Yr. T-note Yield 4.02% -.90%
VIX 16.43 +6.55%
Put/Call 1.07 +.94%
NYSE Arms 1.64 +20.59%
After-hours Movers
JNPR -6.31% on profit-taking after beating 3Q estimates and raising 4Q guidance.
RMBS +4.62% after beating 3Q estimates.
MGAM -12.89% after cutting 4Q estimates.
PHTN -8.52% after cutting 4Q forecast.
SUNW +4.03% after beating 1Q estimates.
CVH +8.47% on rebound after sell-off related to FHCC acquisition.
CREE -4.02% after missing 1Q estimates and lowering 2Q guidance.
NFLX -34.14% after missing 3Q estimates substantially and saying AMZN will start video service.
CNET -11.99% after meeting 3Q estimates and lowering outlook.
Recommendations
Goldman reiterated Underperform on CNET and Outperform on SVU.
After-hours News
U.S. stocks finished lower today on concerns over lawsuits, energy prices and political worries. After the close, Todd Thomson, CFO of Citigroup, said he expects credit quality to stay strong, though he doesn't expect it to improve enough to warrant another large release of reserves, CNBC reported. President Bush and Senator Kerry's third tv debate last night drew 51.2 million viewers, Nielsen Media Research said. Google introduced software that lets users search for files from their own computers, as well as the Web, entering a new area of competition with Microsoft, Bloomberg reported. The U.S. budget deficit rose to $412.6 billion, below mid-year estimates of $445 billion, in the year ended Sept. 30 as tax receipts rose more than expected on faster U.S. economic growth, Bloomberg said. The budget deficit is now 3.75% of U.S. GDP, 36.2% lower than the all-time record set in 1983, Bloomberg reported. The U.S. Federal Communications Commission won't stop Sinclair Broadcasting from televising "Stolen Honor", a documentary critical of Senator Kerry's anti-war activities after returning home from the Vietnam War, Bloomberg reported. SunTrust Banks said the SEC started an informal inquiry into its recent announcement the bank would restate profit for this year's first two quarters, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly lower today as declines in my wireless and restaurant longs more than offset gains in my alternative energy and internet longs. I took profits in a few semiconductor longs in the afternoon as they hit stop-losses, leaving the Portfolio 75% net long. The tone of the market deteriorated further in the afternoon and the advance/decline line finished at its lows for the day. Investors appear to be worried over the mounting number of lawsuits plaguing corporate America, President Bush's recent decline in the Polls and continuing high energy prices. I still expect U.S. stocks to trade mixed-to-weaker over the near-term before embarking on a significant move higher in the latter part of the month.
MId-day Update
S&P 500 1,106.91 -.61%
NASDAQ 1,908.23 -.64%
Leading Sectors
Oil Service +2.46%
Airlines +1.72%
Energy +1.68%
Lagging Sectors
Semis -2.94%
Disk Drives -4.11%
Insurance -5.92%
Other
Crude Oil 54.40 +1.42%
Natural Gas 6.78 -1.04%
Gold 419.30 +1.13%
Base Metals 112.89 -.48%
U.S. Dollar 87.61 -.31%
10-Yr. T-note Yield 4.03% -.57%
VIX 15.94 +3.37%
Put/Call 1.19 +12.26%
NYSE Arms 1.47 +6.62%
Market Movers
SNDK -25.1% after missing estimates and lowering 4Q guidance and multiple downgrades.
AAPL +12.9% after substantially beating 4Q estimates, raising 1Q outlook and multiple upgrades.
GM -5.1% after missing 3Q estimates substantially, lowering 04 guidance, S&P credit downgrade and announcing 12,000 job cuts in Europe.
FHCC +15.2% after CVH agreed to buy it for about $1.8B. in cash and stock.
NVLS -9.6% after meeting 3Q estimates and lowering 4Q guidance substantially.
AIG -4.5% on news that Eliot Spitzer named it in a lawsuit for "steering and bid rigging."
CAAS +42.0% on continuing optimism over its addition into the Halter USX China Index.
EYET +13.4% on ACL news.
ADBL +15.8% on AAPL earnings report.
RNVS +18.3% after saying AstraZeneca will continue as planned with Phase III trials to determine Cerovive's effect on disability and neurological recovery in acute ischemic stroke patients.
PPDI +8.4% after beating 3Q estimates.
SYNA +8.6% on AAPL earnings report.
IMDC +4.7% on JP Morgan upgrade to Overweight.
PII +4.5% after beating 3Q estimates and raising 04 guidance.
MLI -12.0% after disappointing 3Q results and worries over slowing sales to China.
ACL -12.3% after saying its treatment for the leading cause of blindness among the elderly wasn't better than Novartis AG's drug.
CVH -9.7% on FHCC purchase.
MMC -11.3% on Spitzer lawsuit.
QLGC -7.5% after beating 2Q estimates, but Merrill downgrade to Neutral.
LIN -8.2% after lowering 3Q forecast and multiple downgrades.
*Alternative Energy stocks up across the board on high oil prices and positive commentary.
Economic Data
Trade Balance for August was -$54.0B versus estimates of -$51.4B and -$50.5B in July.
Import Price Index for September rose .2% versus estimates of a .5% increase and a 1.4% gain in August.
Initial Jobless Claims for last week were 352K versus estimates of 2859K and 2856K the prior week.
Continuing Claims were 2845K versus estimates of 2859K and 2856K prior.
Recommendations
Goldman Sachs reiterated Attractive view of Chemical industry. Goldman reiterated Outperform on ASN, AMGN, BIIB, DNA, GILD, AIG, DIS, DO, RIG and UNH. Goldman reiterated Underperform on CVH and FHCC. Citi SmithBarney rated VRSN Buy, target $26. Citi reiterated Buy on WMT, target $65. Citi sees modest earnings upside surprises at TYC, CBE, ROK, EMR, ITT. Citi reiterated Buy on LRCX, target $35. Citi reiterated Sell on SNDK, target $21. Citi reiterated Buy on ALL, target $55. Citi reiterated Buy on TLAB, target $11. Citi reiterated Buy on ARLP, target $67. Citi reiterated Buy on LLTC, target $44. IMDC and AAPL raised to Overweight at JP Morgan. PPG raised to Buy at Bank of America, target $68. LIN cut to Underperform at Bear Stearns. AAPL raised to Outperform at Bear Stearns. LSTR raised to Overweight at JP Morgan.
Mid-day News
U.S. stocks are modestly lower mid-day on continuing fears over high energy prices, lawsuits and earnings. Hennes & Mauritz's expansion to Italy and Eastern Europe comes as Europe's largest clothing retailer still seeks to meet financial goals in the U.S., the NY Times said. FedEx will open 150 branches in the Serbian sector of Bosnia, also known as Republika Srpska, under an agreement with the Bosnian postal services, the AP reported. Vietnam prisoners of war who appear in a documentary called "Stolen Honor" criticizing Senator Kerry have joined forces with the anti-Kerry Swift Boat Veterans for Truth to campaign against Kerry, the Washington Post reported. Citigroup, the world's largest bank, said third-quarter profit rose 13%, buoyed by revenue from consumer lending and share sales in Asia, Bloomberg said. Nokia said profit will probably drop for a second consecutive quarter as it cuts prices to win back market share, Bloomberg reported. UnitedHealth Group, the biggest U.S. health insurer, said third-quarter profit rose 47% after the company controlled costs and gained customers through the July purchase of Oxford Health Plans, Bloomberg reported. Bank of America said quarterly profit rose 29% as it boosted lending and earned more fees from consumer banking, Bloomberg said. Lehman Brothers retained first place as the top stock research firm for a second year in an annual money-manager survey by Institutional Investor magazine. Merck CEO Gilmartin said the drugmaker may accelerate new-drug development and cost-cutting after the withdrawal of its Vioxx painkiller because of a link to heart risks, Bloomberg reported. Crude oil is rising after an Energy Dept. report showed that U.S. supplies of distillate fuels, including heating oil and diesel, fell last week, Bloomberg reported. General Motors cut its 2004 profit forecast after posting its first loss on North American car manufacturing in six years, Bloomberg said. New York Attorney General Spitzer sued Marsh & McLennan and arrested two American International Group executives in his first prosecution of the insurance industry, Bloomberg said.
BOTTOM LINE: The Portfolio is unchanged mid-day as strength in my alternative energy and internet longs is offsetting weakness in my restaurant and wireless longs. I have not traded today and the Portfolio is still 100% net long. While the tone of the market is negative, declines are muted on light volume. Interest rates are falling again as investors continue to speculate high energy prices will slow world growth substantially. On the positive side, companies with good earnings reports are being rewarded substantially and measures of investor anxiety are rising again. I expect U.S. stocks to rise modestly from current levels into the close on short-covering.
NASDAQ 1,908.23 -.64%
Leading Sectors
Oil Service +2.46%
Airlines +1.72%
Energy +1.68%
Lagging Sectors
Semis -2.94%
Disk Drives -4.11%
Insurance -5.92%
Other
Crude Oil 54.40 +1.42%
Natural Gas 6.78 -1.04%
Gold 419.30 +1.13%
Base Metals 112.89 -.48%
U.S. Dollar 87.61 -.31%
10-Yr. T-note Yield 4.03% -.57%
VIX 15.94 +3.37%
Put/Call 1.19 +12.26%
NYSE Arms 1.47 +6.62%
Market Movers
SNDK -25.1% after missing estimates and lowering 4Q guidance and multiple downgrades.
AAPL +12.9% after substantially beating 4Q estimates, raising 1Q outlook and multiple upgrades.
GM -5.1% after missing 3Q estimates substantially, lowering 04 guidance, S&P credit downgrade and announcing 12,000 job cuts in Europe.
FHCC +15.2% after CVH agreed to buy it for about $1.8B. in cash and stock.
NVLS -9.6% after meeting 3Q estimates and lowering 4Q guidance substantially.
AIG -4.5% on news that Eliot Spitzer named it in a lawsuit for "steering and bid rigging."
CAAS +42.0% on continuing optimism over its addition into the Halter USX China Index.
EYET +13.4% on ACL news.
ADBL +15.8% on AAPL earnings report.
RNVS +18.3% after saying AstraZeneca will continue as planned with Phase III trials to determine Cerovive's effect on disability and neurological recovery in acute ischemic stroke patients.
PPDI +8.4% after beating 3Q estimates.
SYNA +8.6% on AAPL earnings report.
IMDC +4.7% on JP Morgan upgrade to Overweight.
PII +4.5% after beating 3Q estimates and raising 04 guidance.
MLI -12.0% after disappointing 3Q results and worries over slowing sales to China.
ACL -12.3% after saying its treatment for the leading cause of blindness among the elderly wasn't better than Novartis AG's drug.
CVH -9.7% on FHCC purchase.
MMC -11.3% on Spitzer lawsuit.
QLGC -7.5% after beating 2Q estimates, but Merrill downgrade to Neutral.
LIN -8.2% after lowering 3Q forecast and multiple downgrades.
*Alternative Energy stocks up across the board on high oil prices and positive commentary.
Economic Data
Trade Balance for August was -$54.0B versus estimates of -$51.4B and -$50.5B in July.
Import Price Index for September rose .2% versus estimates of a .5% increase and a 1.4% gain in August.
Initial Jobless Claims for last week were 352K versus estimates of 2859K and 2856K the prior week.
Continuing Claims were 2845K versus estimates of 2859K and 2856K prior.
Recommendations
Goldman Sachs reiterated Attractive view of Chemical industry. Goldman reiterated Outperform on ASN, AMGN, BIIB, DNA, GILD, AIG, DIS, DO, RIG and UNH. Goldman reiterated Underperform on CVH and FHCC. Citi SmithBarney rated VRSN Buy, target $26. Citi reiterated Buy on WMT, target $65. Citi sees modest earnings upside surprises at TYC, CBE, ROK, EMR, ITT. Citi reiterated Buy on LRCX, target $35. Citi reiterated Sell on SNDK, target $21. Citi reiterated Buy on ALL, target $55. Citi reiterated Buy on TLAB, target $11. Citi reiterated Buy on ARLP, target $67. Citi reiterated Buy on LLTC, target $44. IMDC and AAPL raised to Overweight at JP Morgan. PPG raised to Buy at Bank of America, target $68. LIN cut to Underperform at Bear Stearns. AAPL raised to Outperform at Bear Stearns. LSTR raised to Overweight at JP Morgan.
Mid-day News
U.S. stocks are modestly lower mid-day on continuing fears over high energy prices, lawsuits and earnings. Hennes & Mauritz's expansion to Italy and Eastern Europe comes as Europe's largest clothing retailer still seeks to meet financial goals in the U.S., the NY Times said. FedEx will open 150 branches in the Serbian sector of Bosnia, also known as Republika Srpska, under an agreement with the Bosnian postal services, the AP reported. Vietnam prisoners of war who appear in a documentary called "Stolen Honor" criticizing Senator Kerry have joined forces with the anti-Kerry Swift Boat Veterans for Truth to campaign against Kerry, the Washington Post reported. Citigroup, the world's largest bank, said third-quarter profit rose 13%, buoyed by revenue from consumer lending and share sales in Asia, Bloomberg said. Nokia said profit will probably drop for a second consecutive quarter as it cuts prices to win back market share, Bloomberg reported. UnitedHealth Group, the biggest U.S. health insurer, said third-quarter profit rose 47% after the company controlled costs and gained customers through the July purchase of Oxford Health Plans, Bloomberg reported. Bank of America said quarterly profit rose 29% as it boosted lending and earned more fees from consumer banking, Bloomberg said. Lehman Brothers retained first place as the top stock research firm for a second year in an annual money-manager survey by Institutional Investor magazine. Merck CEO Gilmartin said the drugmaker may accelerate new-drug development and cost-cutting after the withdrawal of its Vioxx painkiller because of a link to heart risks, Bloomberg reported. Crude oil is rising after an Energy Dept. report showed that U.S. supplies of distillate fuels, including heating oil and diesel, fell last week, Bloomberg reported. General Motors cut its 2004 profit forecast after posting its first loss on North American car manufacturing in six years, Bloomberg said. New York Attorney General Spitzer sued Marsh & McLennan and arrested two American International Group executives in his first prosecution of the insurance industry, Bloomberg said.
BOTTOM LINE: The Portfolio is unchanged mid-day as strength in my alternative energy and internet longs is offsetting weakness in my restaurant and wireless longs. I have not traded today and the Portfolio is still 100% net long. While the tone of the market is negative, declines are muted on light volume. Interest rates are falling again as investors continue to speculate high energy prices will slow world growth substantially. On the positive side, companies with good earnings reports are being rewarded substantially and measures of investor anxiety are rising again. I expect U.S. stocks to rise modestly from current levels into the close on short-covering.
Wednesday, October 13, 2004
Wednesday Close
S&P 500 1,113.65 -.73%
NASDAQ 1,920.53 -.24%
Leading Sectors
Restaurants +2.09%
Airlines +2.09%
Semis +1.78%
Lagging Sectors
Homebuilders -2.23%
Commodity -2.76%
Iron/Steel -4.63%
Other
Crude Oil 53.64 +2.15%
Natural Gas 6.94 +4.58%
Gold 417.30 +.65%
Base Metals 113.43 -8.06%
U.S. Dollar 87.87 -.17%
10-Yr. T-note Yield 4.05% -1.04%
VIX 15.42 +2.46%
Put/Call 1.06 +7.07%
NYSE Arms 1.36 -22.29%
After-hours Movers
SNDK -18.97% after missing estimates and lowering 4Q guidance.
NVEC +3.44% after saying it received an initial order from Starkey Laboratories for custom-designed ultra-miniature spintronic sensor integrated circuits.
AAPL +6.69% after substantially beating 4Q estimates and raising 1Q outlook.
NVLS -5.88% after meeting 3Q estimates and lowering 4Q guidance substantially.
Recommendations
Goldman reiterated Outperform on ALL, WMT, KR and KRB.
After-hours News
U.S. stocks finished modestly lower today over worries that high energy prices would slow future economic growth. After the close, a majority of the FCC voted to conditionally approve Cingular Wireless's planned purchase of AT&T Wireless Services, Reuters said. Apple Computer said fourth-quarter profit more than doubled on surging sales of its iPod digital music player, Bloomberg said. The Australian dollar traded close to its lowest in a week after prices of the country's raw material exports such as copper and nickel plunged the most in more than a decade, Bloomberg said. Progressive Corp., the third-largest U.S. auto insurer, said third-quarter profit rose 22%, Bloomberg reported.
BOTTOM LINE: The Portfolio finished lower today on weakness in my shipping and steel longs. I exited a shipping long in the afternoon and added IGT long. I am using a stop-loss of $31 on this position and the Portfolio is still 100% net long. The tone of the market improved a bit in the afternoon as volume increased and the advance/decline improved somewhat. Most measures of investor anxiety rose again today, which is a positive. As well, Apple Computer's VERY strong report after the close is one positive data point for the U.S. consumer. I expect stocks to rise tomorrow on short-covering after the Presidential debate and release of the weekly oil inventory data.
NASDAQ 1,920.53 -.24%
Leading Sectors
Restaurants +2.09%
Airlines +2.09%
Semis +1.78%
Lagging Sectors
Homebuilders -2.23%
Commodity -2.76%
Iron/Steel -4.63%
Other
Crude Oil 53.64 +2.15%
Natural Gas 6.94 +4.58%
Gold 417.30 +.65%
Base Metals 113.43 -8.06%
U.S. Dollar 87.87 -.17%
10-Yr. T-note Yield 4.05% -1.04%
VIX 15.42 +2.46%
Put/Call 1.06 +7.07%
NYSE Arms 1.36 -22.29%
After-hours Movers
SNDK -18.97% after missing estimates and lowering 4Q guidance.
NVEC +3.44% after saying it received an initial order from Starkey Laboratories for custom-designed ultra-miniature spintronic sensor integrated circuits.
AAPL +6.69% after substantially beating 4Q estimates and raising 1Q outlook.
NVLS -5.88% after meeting 3Q estimates and lowering 4Q guidance substantially.
Recommendations
Goldman reiterated Outperform on ALL, WMT, KR and KRB.
After-hours News
U.S. stocks finished modestly lower today over worries that high energy prices would slow future economic growth. After the close, a majority of the FCC voted to conditionally approve Cingular Wireless's planned purchase of AT&T Wireless Services, Reuters said. Apple Computer said fourth-quarter profit more than doubled on surging sales of its iPod digital music player, Bloomberg said. The Australian dollar traded close to its lowest in a week after prices of the country's raw material exports such as copper and nickel plunged the most in more than a decade, Bloomberg said. Progressive Corp., the third-largest U.S. auto insurer, said third-quarter profit rose 22%, Bloomberg reported.
BOTTOM LINE: The Portfolio finished lower today on weakness in my shipping and steel longs. I exited a shipping long in the afternoon and added IGT long. I am using a stop-loss of $31 on this position and the Portfolio is still 100% net long. The tone of the market improved a bit in the afternoon as volume increased and the advance/decline improved somewhat. Most measures of investor anxiety rose again today, which is a positive. As well, Apple Computer's VERY strong report after the close is one positive data point for the U.S. consumer. I expect stocks to rise tomorrow on short-covering after the Presidential debate and release of the weekly oil inventory data.
Mid-day Update
S&P 500 1,111.12 -.96%
NASDAQ 1,917.8 -.43%
Leading Sectors
Airlines +1.85%
Restaurants +1.38%
Semis +1.28%
Lagging Sectors
Homebuilders -2.64%
Commodity -3.24%
Iron/Steel -5.44%
Other
Crude Oil 52.68 +.36%
Natural Gas 6.77 +2.02%
Gold 414.10 -.60%
Base Metals 113.43 -8.06%
U.S. Dollar 88.25 +.26%
10-Yr. T-note Yield 4.07% -.61%
VIX 15.44 +2.59%
Put/Call .96 -3.03%
NYSE Arms 1.27 -27.43%
Market Movers
YHOO +3.3% after beating 3Q estimates and raising 4Q guidance.
MCD +3.4% after raising 3Q estimates.
ACN -11.5% after missing 4Q estimates, lowering 1Q/05 outlook and downgrade to Hold at Deutsche Bank.
ASKJ +6.0% on strong YHOO report.
LNCR +15.4% after a U.S. government agency recommend higher-than-expected payments for services to Medicare patients and UBS upgrade to Buy.
HURN +22.2% on strong demand for its IPO.
JUPM +12.4% on strong YHOO report.
ENER +12.4% after positive article in the Wall Street Journal.
ITRI +15.9% after boosting 3Q estimates substantially.
SONC +6.9% after beating 4Q estimates and raising 1Q guidance.
MSTR +4.2% after FBI said it would use its business intelligence platform to support the Bureau's Investigative Data Warehouse.
MMSI -14.0% after lowering 3Q forecast.
POT -4.7% on Scotia Capital downgrade to Sector Underperform.
JNY -7.4% after lowering 3Q, 4Q and 05 guidance.
*Base Metals down across the board on profit-taking and fears that supply will exceed demand in 05.
Economic Data
None of note.
Recommendations
N cut to Underweight at Prudential, target $30. ZQK rated Overweight at Prudential, target $30. EPD raised to Outperform at Raymond James, target $26. CREO raised to Sector Outperform at CIBC. Goldman Sachs reiterated Outperform on MERQ, MSFT, YHOO, PETC, INTC, PFE, CSCO, NFX and ACN. Goldman cut DE to Underperform and reiterated Underperform on AG, CNH, HMT. Citi SmithBarney rated SEPR Sell, target $40. Citi rated ENDP, target $25. Citi reiterated Buy on FITB, target $58. Citi reiterated Buy on INTC, target $25.50. Citi reiterated Buy on MER, target $73. Citi reiterated Buy on LRCX, target $33. Citi reiterated Buy on CSCO, target $30. Citi reiterated Buy on PETC, target $42. Citi reiterated Buy on LLTC, target $44. Goldman reiterated Attractive view of steel sector, favorites are STLD, ISG, NUE and X.
Mid-day News
U.S. stocks are lower mid-day on worries over future economic growth and higher oil prices. A Virginia high school has spent $1.4 million to issue laptop computers to its 2,100 students, one of a growing number of schools trying to make sure all its students have equal access to technology, the Washington Post reported. The IRS has new powers to crack down on questionable tax shelters, transactions meant to help people avoid taxes, in legislation approved by the Senate this week and expected to be signed by President Bush, the Wall Street Journal reported. Iraq's interim Prime Minister Allawi demanded that the insurgent-held city of Fallujah turn over suspected al-Qaeda associate al-Zarqawi or be invaded, Agence France-Presse reported. The median home price in LA country was $407,000 in September, up 21.1% from a year earlier, Bloomberg said. Harvard University's Stem Cell Institute scientists asked the university's ethical review board for approval to clone embryos for use in stem-cell research, the Boston Globe reported. Shaw's Supermarkets plans to start selling groceries over the Internet, and its parent company, Albertson's, will spend $500 million on new global positioning and wireless systems to prepare for the future, Bloomberg reported. NBC attracted its smallest audience in at least five years during the first three weeks of the tv season, Bloomberg said. JP Morgan Chase President Dimon said the second-largest U.S. bank may make acquisitions to boost its consumer and commercial-banking franchises abroad and in the domestic market, Bloomberg reported. Merck said short-term studies show the company's planned successor to Vioxx, Arcoxia, doesn't carry the same risks, Bloomberg said. The U.S. Financial Accounting Standards Board delayed until next June a rule that will force companies to make worker stock options an expense, saying firms need more time to comply with other regulations, Bloomberg said. Shares of Alcoa, U.S. Steel, Phelps Dodge and other metal producers fell amid speculation increases in supply will more than offset demand next year, Bloomberg reported. The New York Yankees' victory over the Boston Red Sox last night attracted the highest tv ratings in the biggest U.S. markets since 1993 for the opening game of the American League Championship Series, Bloomberg reported.
BOTTOM LINE: The Portfolio is slightly lower mid-day as declines in my steel and shipping longs are more than offsetting gains in my internet and telecom equipment longs. I have not traded today and the Portfolio is still 100% net long. The declines in base metal stocks are significant. However, it is unclear at this point whether this is just a correction after substantial gains or the beginning of a downtrend. I suspect the former. I have taken profits in most of my base metal long positions over the last few weeks leaving just a few small longs in steel. The overall tone of the market is negative today, however tech is outperforming. I expect U.S. stocks to rise modestly from current levels into the close on short-covering ahead of the Presidential debate and numerous economic reports.
NASDAQ 1,917.8 -.43%
Leading Sectors
Airlines +1.85%
Restaurants +1.38%
Semis +1.28%
Lagging Sectors
Homebuilders -2.64%
Commodity -3.24%
Iron/Steel -5.44%
Other
Crude Oil 52.68 +.36%
Natural Gas 6.77 +2.02%
Gold 414.10 -.60%
Base Metals 113.43 -8.06%
U.S. Dollar 88.25 +.26%
10-Yr. T-note Yield 4.07% -.61%
VIX 15.44 +2.59%
Put/Call .96 -3.03%
NYSE Arms 1.27 -27.43%
Market Movers
YHOO +3.3% after beating 3Q estimates and raising 4Q guidance.
MCD +3.4% after raising 3Q estimates.
ACN -11.5% after missing 4Q estimates, lowering 1Q/05 outlook and downgrade to Hold at Deutsche Bank.
ASKJ +6.0% on strong YHOO report.
LNCR +15.4% after a U.S. government agency recommend higher-than-expected payments for services to Medicare patients and UBS upgrade to Buy.
HURN +22.2% on strong demand for its IPO.
JUPM +12.4% on strong YHOO report.
ENER +12.4% after positive article in the Wall Street Journal.
ITRI +15.9% after boosting 3Q estimates substantially.
SONC +6.9% after beating 4Q estimates and raising 1Q guidance.
MSTR +4.2% after FBI said it would use its business intelligence platform to support the Bureau's Investigative Data Warehouse.
MMSI -14.0% after lowering 3Q forecast.
POT -4.7% on Scotia Capital downgrade to Sector Underperform.
JNY -7.4% after lowering 3Q, 4Q and 05 guidance.
*Base Metals down across the board on profit-taking and fears that supply will exceed demand in 05.
Economic Data
None of note.
Recommendations
N cut to Underweight at Prudential, target $30. ZQK rated Overweight at Prudential, target $30. EPD raised to Outperform at Raymond James, target $26. CREO raised to Sector Outperform at CIBC. Goldman Sachs reiterated Outperform on MERQ, MSFT, YHOO, PETC, INTC, PFE, CSCO, NFX and ACN. Goldman cut DE to Underperform and reiterated Underperform on AG, CNH, HMT. Citi SmithBarney rated SEPR Sell, target $40. Citi rated ENDP, target $25. Citi reiterated Buy on FITB, target $58. Citi reiterated Buy on INTC, target $25.50. Citi reiterated Buy on MER, target $73. Citi reiterated Buy on LRCX, target $33. Citi reiterated Buy on CSCO, target $30. Citi reiterated Buy on PETC, target $42. Citi reiterated Buy on LLTC, target $44. Goldman reiterated Attractive view of steel sector, favorites are STLD, ISG, NUE and X.
Mid-day News
U.S. stocks are lower mid-day on worries over future economic growth and higher oil prices. A Virginia high school has spent $1.4 million to issue laptop computers to its 2,100 students, one of a growing number of schools trying to make sure all its students have equal access to technology, the Washington Post reported. The IRS has new powers to crack down on questionable tax shelters, transactions meant to help people avoid taxes, in legislation approved by the Senate this week and expected to be signed by President Bush, the Wall Street Journal reported. Iraq's interim Prime Minister Allawi demanded that the insurgent-held city of Fallujah turn over suspected al-Qaeda associate al-Zarqawi or be invaded, Agence France-Presse reported. The median home price in LA country was $407,000 in September, up 21.1% from a year earlier, Bloomberg said. Harvard University's Stem Cell Institute scientists asked the university's ethical review board for approval to clone embryos for use in stem-cell research, the Boston Globe reported. Shaw's Supermarkets plans to start selling groceries over the Internet, and its parent company, Albertson's, will spend $500 million on new global positioning and wireless systems to prepare for the future, Bloomberg reported. NBC attracted its smallest audience in at least five years during the first three weeks of the tv season, Bloomberg said. JP Morgan Chase President Dimon said the second-largest U.S. bank may make acquisitions to boost its consumer and commercial-banking franchises abroad and in the domestic market, Bloomberg reported. Merck said short-term studies show the company's planned successor to Vioxx, Arcoxia, doesn't carry the same risks, Bloomberg said. The U.S. Financial Accounting Standards Board delayed until next June a rule that will force companies to make worker stock options an expense, saying firms need more time to comply with other regulations, Bloomberg said. Shares of Alcoa, U.S. Steel, Phelps Dodge and other metal producers fell amid speculation increases in supply will more than offset demand next year, Bloomberg reported. The New York Yankees' victory over the Boston Red Sox last night attracted the highest tv ratings in the biggest U.S. markets since 1993 for the opening game of the American League Championship Series, Bloomberg reported.
BOTTOM LINE: The Portfolio is slightly lower mid-day as declines in my steel and shipping longs are more than offsetting gains in my internet and telecom equipment longs. I have not traded today and the Portfolio is still 100% net long. The declines in base metal stocks are significant. However, it is unclear at this point whether this is just a correction after substantial gains or the beginning of a downtrend. I suspect the former. I have taken profits in most of my base metal long positions over the last few weeks leaving just a few small longs in steel. The overall tone of the market is negative today, however tech is outperforming. I expect U.S. stocks to rise modestly from current levels into the close on short-covering ahead of the Presidential debate and numerous economic reports.
Wednesday Watch
Earnings of Note
Company/Estimate
ACN/.28
AAPL/.18
HDI/.75
LRCX/.58
NYT/.32
NVLS/.38
SNDK/.34
QLGC/.36
PGR/1.69
Splits
MIK 2-for-1
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on FSH and GCI.
Late-Night News
Asian indices are mixed as strength in technology shares in the region is offsetting weakness from energy worries. North Korea is believed to have as many as nine nuclear weapons after producing plutonium for the past 20 years, the Chosun Ilbo reported. Coca-Cola began operating a $20 million bottling plant in northeastern China's Jilin province, aiming to take market share from rival PepsiCo, the China Daily reported. AU Optronics and four other flat-panel display makers in Taiwan may have cut their spending plans for next year by $5.9 billion compared with their forecasts given in the first half this year, the Economic Daily News said. Denny's(DNNY) customers are buying more of its higher-priced meals, which benefits operating margins, the Wall St. Journal reported. Afghanistan's successful presidential election is an example for the future of Iraq and shows democracy is able to flourish anywhere in the world, said U.S. Secretary of State Colin Powell. Iraqi insurgents in Fallujah are turning against the foreign guerillas who have been their allies in fighting U.S. troops and the interim government, the Washington Post reported. Lehman Brothers is moving beyond bond trading in a effort to become a top-tier investment bank without a merger, the Wall Street Journal reported. Australian Prime Minister Howard's victory in an election last weekend shows Australians endorse the government's plan to keep troops in Iraq, Foreign Minister Downer wrote in the Wall Street Journal. Microsoft has arranged with enough partners that it is positioned to achieve its goal of making the PC the command console for entertainment in the home, Bill Gates told the Wall Street Journal.
Late-Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated +.20%.
NASDAQ 100 indicated +.59%
BOTTOM LINE: I expect U.S. equities to open modestly higher in the morning, led by technology shares. The fact that Iraqi insurgents are turning against foreign fighters in Iraq is a very positive development. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
ACN/.28
AAPL/.18
HDI/.75
LRCX/.58
NYT/.32
NVLS/.38
SNDK/.34
QLGC/.36
PGR/1.69
Splits
MIK 2-for-1
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on FSH and GCI.
Late-Night News
Asian indices are mixed as strength in technology shares in the region is offsetting weakness from energy worries. North Korea is believed to have as many as nine nuclear weapons after producing plutonium for the past 20 years, the Chosun Ilbo reported. Coca-Cola began operating a $20 million bottling plant in northeastern China's Jilin province, aiming to take market share from rival PepsiCo, the China Daily reported. AU Optronics and four other flat-panel display makers in Taiwan may have cut their spending plans for next year by $5.9 billion compared with their forecasts given in the first half this year, the Economic Daily News said. Denny's(DNNY) customers are buying more of its higher-priced meals, which benefits operating margins, the Wall St. Journal reported. Afghanistan's successful presidential election is an example for the future of Iraq and shows democracy is able to flourish anywhere in the world, said U.S. Secretary of State Colin Powell. Iraqi insurgents in Fallujah are turning against the foreign guerillas who have been their allies in fighting U.S. troops and the interim government, the Washington Post reported. Lehman Brothers is moving beyond bond trading in a effort to become a top-tier investment bank without a merger, the Wall Street Journal reported. Australian Prime Minister Howard's victory in an election last weekend shows Australians endorse the government's plan to keep troops in Iraq, Foreign Minister Downer wrote in the Wall Street Journal. Microsoft has arranged with enough partners that it is positioned to achieve its goal of making the PC the command console for entertainment in the home, Bill Gates told the Wall Street Journal.
Late-Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated +.20%.
NASDAQ 100 indicated +.59%
BOTTOM LINE: I expect U.S. equities to open modestly higher in the morning, led by technology shares. The fact that Iraqi insurgents are turning against foreign fighters in Iraq is a very positive development. The Portfolio is 100% net long heading into tomorrow.
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