S&P 500 1,106.49 +.26%
NASDAQ 1,953.62 +1.07%
Leading Sectors
Airlines +4.21%
Semis +3.97%
Internet +3.22%
Lagging Sectors
Telecom -1.06%
HMOs -2.0%
Disk Drives -2.03%
Other
Crude Oil 54.47 unch.
Natural Gas 7.70 unch.
Gold 425.60 unch.
Base Metals 113.84 +1.05%
U.S. Dollar 86.09 +.08%
10-Yr. T-note Yield 3.99% +.38%
VIX 14.54 -2.09%
Put/Call .78 -10.34%
NYSE Arms 1.12 +.90%
After-hours Movers
GOOG +7.98% after beating 3Q revenue estimates substantially.
NAV -4.97% after saying the SEC requested information on its pension-fund accounting.
AMZN -8.94% after missing 3Q estimates and lowering 05 outlook.
BRCM -4.33% after beating 3Q estimates and lowering 4Q guidance.
SYNA +9.85% after beating 1Q estimates and raising 2Q outlook.
MCK +4.87% after beating 2Q estimates substantially.
WEBX -10.49% after meeting 3Q estimates and lowering 4Q guidance.
Recommendations
Goldman Sachs reiterated Outperform on IR, GLK, ALK and CAT. Goldman reiterated Underperform on SGP. Shares of Sysco(SYY), North America's largest food-service distributor, may rise about 30% when the U.S. economy improves and oil prices decline, Business Week reported. Mine Safety Appliances(MSA), which makes and sells body-protection gear in 120 countries, is expected to further benefit from spending on security, Business Week reported. Transocean(RIG), which specializes in drilling for oil in deep water and harsh environments, may see a boost in business because of higher oil prices, Business Week reported.
After-hours News
U.S. stocks finished mostly higher today on continuing strength in the technology sector. After the close, Oregon and other U.S. states may establish new rules meant to force insurance brokers to disclose fees they get for selling policies, following a decision by California to do so, Dow Jones reported. Microsoft said first-quarter profit rose 11% as sales of Windows corporate network software increased, Bloomberg said. Boeing said it has received a request from the SEC related to the way it accounts for pension and other retirement-benefit plans, Bloomberg said. Google said net income more than doubles to $52 million after sales of Web advertising rose, Bloomberg said. Intel canceled plans to develop new chips for large, flat-panel televisions, Bloomberg reported. Amazon said 2005 sales will trail analyst estimates, sending its shares lower after-hours, Bloomberg said. MedImmune will deliver another 1 million doses of its FluMist nasal spray flu vaccine to help ease a U.S. shortage, after restarting a Philadelphia plant, Bloomberg reported. Lehman Brothers, the most accurate forecaster of exchange rates in the third quarter, predicts the dollar will decline to $1.32 per euro in a year from $1.26 today, Bloomberg said.
BOTTOM LINE: The Portfolio finished substantially higher today on strength in my internet, semiconductor and software longs. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. The tone of the market improved throughout the day as volume increased and the advance/decline finished at its daily highs. While trading over the near-term could be choppy, I continue to believe stocks will begin moving meaningfully higher before the election and longer-term investors should use any weakness to build positions in favorite longs. I also still believe technology stocks will outperform throughout the quarter.
Thursday, October 21, 2004
Mid-day Update
S&P 500 1,100.54 -.28%
NASDAQ 1,936.81 +.20%
Leading Sectors
Airlines +3.28%
Semis +2.48%
Software +2.25%
Lagging Sectors
Telecom -1.61%
HMOs -1.68%
Disk Drives -2.98%
Other
Crude Oil 54.40 -.02%
Natural Gas 7.82 +2.45%
Gold 424.90 +.02%
Base Metals 113.84 +1.05%
U.S. Dollar 85.97 -.44%
10-Yr. T-note Yield 3.98 -.05%
VIX 15.05 +1.28%
Put/Call .85 -2.30%
NYSE Arms 1.30 +17.12%
Market Movers
VRSN +18.7% after beating 3Q estimates, raising 4Q outlook and 05 guidance.
CTXS +12.9% after beating 3Q estimates and raising 4Q guidance.
ALTR +6.0% after beating 3Q estimates.
ALGN -32.0% after missing 3Q estimates.
EBAY +7.0% after beating 3Q estimates and giving positive guidance.
RST +23.7% after Blackstone Group LP agreed to buy it for about $1.25 billion.
AVCT +15.3% after beating 3Q estimates.
GOOG +4.7% on optimism over 3Q report after the close.
MHK +7.4% after beating 3Q estimates substantially and reiterating 4Q guidance.
LM +9.4% after beating 2Q estimates.
CAI +7.9% after beating 1Q estimates and raising 2Q outlook.
SYMC +7.5% after beating 2Q estimates, announcing 2-for-1 split and boosting stock buyback program.
MACR +12.7% after beating 2Q estimates and raising 3Q outlook.
CTXS +12.3% after beating 3Q estimates and raising 4Q guidance.
ALDN +12.8% after beating 3Q estimates and raising 4Q guidance.
WSH +7.3% after saying the company found no evidence of bid-rigging that rival Marsh & McLennan was accused of last week.
IMN -14.3% after missing 3Q estimates and lowering 4Q outlook.
DV -26.0% after missing 1Q estimates and multiple downgrades.
ADS -14.3% after missing 3Q estimates and lowering 04 outlook.
CDI -14.6% after missing 3Q estimates and multiple downgrades.
S -7.8% after missing 3Q estimates and lowering 04 outlook.
RARE -7.4% after meeting 3Q estimates and lowering 4Q and 1Q guidance.
Economic Data
Initial Jobless Claims for last week were 329K versus estimates of 345K and 354K the prior week.
Continuing Claims for last week were 2798K versus estimates of 2840K and 2806K prior.
Leading Indicators for September fell .1% versus estimates of a .1% decline and a .3% decrease in August.
Philly Fed. for October was XX.X versus estimates of 18.0 and a reading of 13.4 in September.
Recommendations
Goldman Sachs reiterated Outperform on AMGN, BAX, UST, UNH, UPS, CAT, SYMC, HOT, CIT, IR, SUN and Underperform on VRSN, S and SGP. Citi SmithBarney upgraded INTX to Buy, target $18. Citi upgraded EBAY to Buy, target $115. Citi reiterated Buy on AMGN, target $90. Citi reiterated Buy on BRCD, target $8.25. Citi reiterated Buy on EXTR, target $11. Citi reiterated Buy on PTV, target $27. Citi reiterated Buy on NWL, target $25. Citi reiterated Buy on DIS, target $30. Citi reiterated Buy on BG, target $50. Citi reiterated Buy on BK, target $37. Citi reiterated Buy on ACL, target $77. Citi reiterated Buy on JPM, target $46. Citi reiterated Buy on MOLXA, target $32. Citi reiterated Buy on TER, target $19. Citi reiterated Buy on RYL, target $125. STI raised to Buy at Bank of America, target $74. DVA rated Buy at Bank of America, target $38. RCI rated Buy at Bank of America, target $37. MNST raised to Overweight at Morgan Stanley. STZ raised to Buy at Legg Mason, target $46. CL raised to Buy at Merrill Lynch, target $50. TDS cut to Underweight at JP Morgan. USM cut to Underweight at JP Morgan. FSL rated Underweight at JP Morgan.
Mid-day News
U.S. stocks are quietly mixed mid-day as strength in the technology sector is being offset by continuing legal worries in the insurance industry. China's government is encouraging the country's companies to invest in Canada's resource industry to obtain raw materials needed to fuel its growth, the Globe and Mail reported. Wal-Mart Stores canceled an order for a book by Jon Stewart and the writers of "The Daily Show" after executives found it contained phony, naked pictures of U.S. Supreme Court justices, the AP reported. LA City Council approved an $11 billion proposal to update LA Intl. Airport by relocating runways, adding terminals and building a central passenger check-in facility, the LA Times said. Rents in San Francisco, which dropped for the past four years, are climbing as an improving job market boosts demand for apartments, the San Francisco Chronicle said. Massachusetts will add a type of hologram and other new features to driver licenses to thwart terrorists and identify theft, the Boston Globe reported. UPS, the world's largest package-delivery company, said third-third quarter net income rose 20% to $890 million, Bloomberg reported. U.K. Prime Minister Blair will redeploy 850 troops now in southern Iraq to a region controlled by U.S. forces, Bloomberg reported. Caterpillar said third-quarter net income more than doubled as global economic improvement helped sales of its mining trucks and excavators, Bloomberg reported. The number of Americans filing first-time jobless claims declined to the lowest level in six weeks, suggesting an improving labor market, Bloomberg said. Donald Trump's Trump Hotels & Casino Resorts said it will seek Chapter 11 bankruptcy protection as part of an agreement with bondholders to reduce debt by $400 million, Bloomberg reported. The Federal Reserve Bank of Philadelphia's gauge of manufacturing in the region rose to 28.5 in October, substantially above economists' expectations, from 13.4 the month before, Bloomberg reported.
Bottom Line: The Portfolio is higher mid-day on strength in my internet, software and semi longs. I have not traded today and the Portfolio is still 125% net long. The underlying tone of the market is positive today as most stocks are higher and volume is above average. As well, most measures of investor anxiety are rising, interest rates are falling and technology stocks continue to outperform. I continue to believe the recent consolidation in the major U.S. indices is a last chance for investors to acquire stocks at discount prices this year. Equities should begin to moving meaningfully higher next week and throughout the remainder of the quarter as investors begin to anticipate an acceleration of economic growth as a result of the conclusion of the election, diminishing domestic terrorism fears, corporate tax incentives, year-end budget flushes and low interest rates. These factors should allow most companies to substantially exceed recently lowered fourth quarter estimates.
NASDAQ 1,936.81 +.20%
Leading Sectors
Airlines +3.28%
Semis +2.48%
Software +2.25%
Lagging Sectors
Telecom -1.61%
HMOs -1.68%
Disk Drives -2.98%
Other
Crude Oil 54.40 -.02%
Natural Gas 7.82 +2.45%
Gold 424.90 +.02%
Base Metals 113.84 +1.05%
U.S. Dollar 85.97 -.44%
10-Yr. T-note Yield 3.98 -.05%
VIX 15.05 +1.28%
Put/Call .85 -2.30%
NYSE Arms 1.30 +17.12%
Market Movers
VRSN +18.7% after beating 3Q estimates, raising 4Q outlook and 05 guidance.
CTXS +12.9% after beating 3Q estimates and raising 4Q guidance.
ALTR +6.0% after beating 3Q estimates.
ALGN -32.0% after missing 3Q estimates.
EBAY +7.0% after beating 3Q estimates and giving positive guidance.
RST +23.7% after Blackstone Group LP agreed to buy it for about $1.25 billion.
AVCT +15.3% after beating 3Q estimates.
GOOG +4.7% on optimism over 3Q report after the close.
MHK +7.4% after beating 3Q estimates substantially and reiterating 4Q guidance.
LM +9.4% after beating 2Q estimates.
CAI +7.9% after beating 1Q estimates and raising 2Q outlook.
SYMC +7.5% after beating 2Q estimates, announcing 2-for-1 split and boosting stock buyback program.
MACR +12.7% after beating 2Q estimates and raising 3Q outlook.
CTXS +12.3% after beating 3Q estimates and raising 4Q guidance.
ALDN +12.8% after beating 3Q estimates and raising 4Q guidance.
WSH +7.3% after saying the company found no evidence of bid-rigging that rival Marsh & McLennan was accused of last week.
IMN -14.3% after missing 3Q estimates and lowering 4Q outlook.
DV -26.0% after missing 1Q estimates and multiple downgrades.
ADS -14.3% after missing 3Q estimates and lowering 04 outlook.
CDI -14.6% after missing 3Q estimates and multiple downgrades.
S -7.8% after missing 3Q estimates and lowering 04 outlook.
RARE -7.4% after meeting 3Q estimates and lowering 4Q and 1Q guidance.
Economic Data
Initial Jobless Claims for last week were 329K versus estimates of 345K and 354K the prior week.
Continuing Claims for last week were 2798K versus estimates of 2840K and 2806K prior.
Leading Indicators for September fell .1% versus estimates of a .1% decline and a .3% decrease in August.
Philly Fed. for October was XX.X versus estimates of 18.0 and a reading of 13.4 in September.
Recommendations
Goldman Sachs reiterated Outperform on AMGN, BAX, UST, UNH, UPS, CAT, SYMC, HOT, CIT, IR, SUN and Underperform on VRSN, S and SGP. Citi SmithBarney upgraded INTX to Buy, target $18. Citi upgraded EBAY to Buy, target $115. Citi reiterated Buy on AMGN, target $90. Citi reiterated Buy on BRCD, target $8.25. Citi reiterated Buy on EXTR, target $11. Citi reiterated Buy on PTV, target $27. Citi reiterated Buy on NWL, target $25. Citi reiterated Buy on DIS, target $30. Citi reiterated Buy on BG, target $50. Citi reiterated Buy on BK, target $37. Citi reiterated Buy on ACL, target $77. Citi reiterated Buy on JPM, target $46. Citi reiterated Buy on MOLXA, target $32. Citi reiterated Buy on TER, target $19. Citi reiterated Buy on RYL, target $125. STI raised to Buy at Bank of America, target $74. DVA rated Buy at Bank of America, target $38. RCI rated Buy at Bank of America, target $37. MNST raised to Overweight at Morgan Stanley. STZ raised to Buy at Legg Mason, target $46. CL raised to Buy at Merrill Lynch, target $50. TDS cut to Underweight at JP Morgan. USM cut to Underweight at JP Morgan. FSL rated Underweight at JP Morgan.
Mid-day News
U.S. stocks are quietly mixed mid-day as strength in the technology sector is being offset by continuing legal worries in the insurance industry. China's government is encouraging the country's companies to invest in Canada's resource industry to obtain raw materials needed to fuel its growth, the Globe and Mail reported. Wal-Mart Stores canceled an order for a book by Jon Stewart and the writers of "The Daily Show" after executives found it contained phony, naked pictures of U.S. Supreme Court justices, the AP reported. LA City Council approved an $11 billion proposal to update LA Intl. Airport by relocating runways, adding terminals and building a central passenger check-in facility, the LA Times said. Rents in San Francisco, which dropped for the past four years, are climbing as an improving job market boosts demand for apartments, the San Francisco Chronicle said. Massachusetts will add a type of hologram and other new features to driver licenses to thwart terrorists and identify theft, the Boston Globe reported. UPS, the world's largest package-delivery company, said third-third quarter net income rose 20% to $890 million, Bloomberg reported. U.K. Prime Minister Blair will redeploy 850 troops now in southern Iraq to a region controlled by U.S. forces, Bloomberg reported. Caterpillar said third-quarter net income more than doubled as global economic improvement helped sales of its mining trucks and excavators, Bloomberg reported. The number of Americans filing first-time jobless claims declined to the lowest level in six weeks, suggesting an improving labor market, Bloomberg said. Donald Trump's Trump Hotels & Casino Resorts said it will seek Chapter 11 bankruptcy protection as part of an agreement with bondholders to reduce debt by $400 million, Bloomberg reported. The Federal Reserve Bank of Philadelphia's gauge of manufacturing in the region rose to 28.5 in October, substantially above economists' expectations, from 13.4 the month before, Bloomberg reported.
Bottom Line: The Portfolio is higher mid-day on strength in my internet, software and semi longs. I have not traded today and the Portfolio is still 125% net long. The underlying tone of the market is positive today as most stocks are higher and volume is above average. As well, most measures of investor anxiety are rising, interest rates are falling and technology stocks continue to outperform. I continue to believe the recent consolidation in the major U.S. indices is a last chance for investors to acquire stocks at discount prices this year. Equities should begin to moving meaningfully higher next week and throughout the remainder of the quarter as investors begin to anticipate an acceleration of economic growth as a result of the conclusion of the election, diminishing domestic terrorism fears, corporate tax incentives, year-end budget flushes and low interest rates. These factors should allow most companies to substantially exceed recently lowered fourth quarter estimates.
Thursday Watch
Earnings of Note
Company/Estimate
ADVS/.02
AMZN/.17
AIG/.98
BRCM/.34
BEBE/.27
CAT/1.36
CLS/.08
CELG/.19
KO/.47
DECK/1.36
LLY/.68
GILD/.21
GOOG/.56
HYSL/.31
GDT/.60
IR/1.16
MSFT/.30
MCHP/.29
MYG/.18
KRB/.56
MRK/.71
MEDI/-0.21
MCK/.24
OSTK/-.20
PSFT/.14
TDW/.30
UPS/.72
XLNX/.23
Splits
None of note.
Economic Data
Initial Jobless Claims for last week estimated at 345K versus 352K the prior week.
Continuing Claims estimated at 2840K versus 2845K prior.
Leading Indicators for September estimated down .1% versus down .3% in August.
Philadelphia Fed. for October estimated at 18.0 versus 13.4 in September.
Recommendations
Goldman Sachs reiterated Outperform on ALL, FS, EBAY, HOT, MERQ, GLK, UTX and Underperform on OMI, RNWK, SLG, CVD, EK, AZR.
Late-Night News
Asian indices are mixed as strength in Taiwan is being offset by weakness in Japan. ID Biomedical said it is talking with the FDA about importing 1.2 million surplus doses of flu shots into the U.S. from Canada, Bloomberg reported. The U.K. will grant a U.S. request for 650 British troops to be redeployed in Iraq to an area south of Baghdad, the Financial Times reported. Donald Trump is planning to allow bondholders to take control of his Trump Hotels & Casino Resorts rather than take the private or seek investors, the Deal.com reported. STMicroelectronics NV, Europe's biggest semiconductor maker, said fourth-quarter sales may not rise from the third period, citing "uncertainty" in the market for mobile phones, Bloomberg said. Japanese exports accelerated in September, easing concern that record oil prices are curbing overseas demand for the nation's semiconductors, flat-panel screens and digital cameras, Bloomberg reported. Coca-Cola raised the average price of soft drinks last quarter, prompting consumers to switch to less costly PepsiCo drinks and store brands like Wal-Mart's Dr. Thunder, Bloomberg said.
Late-Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.28%
BOTTOM LINE: I expect U.S. equities to open higher in the morning, led by technology shares, on short-covering, bargain-hunting and better earnings reports. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
ADVS/.02
AMZN/.17
AIG/.98
BRCM/.34
BEBE/.27
CAT/1.36
CLS/.08
CELG/.19
KO/.47
DECK/1.36
LLY/.68
GILD/.21
GOOG/.56
HYSL/.31
GDT/.60
IR/1.16
MSFT/.30
MCHP/.29
MYG/.18
KRB/.56
MRK/.71
MEDI/-0.21
MCK/.24
OSTK/-.20
PSFT/.14
TDW/.30
UPS/.72
XLNX/.23
Splits
None of note.
Economic Data
Initial Jobless Claims for last week estimated at 345K versus 352K the prior week.
Continuing Claims estimated at 2840K versus 2845K prior.
Leading Indicators for September estimated down .1% versus down .3% in August.
Philadelphia Fed. for October estimated at 18.0 versus 13.4 in September.
Recommendations
Goldman Sachs reiterated Outperform on ALL, FS, EBAY, HOT, MERQ, GLK, UTX and Underperform on OMI, RNWK, SLG, CVD, EK, AZR.
Late-Night News
Asian indices are mixed as strength in Taiwan is being offset by weakness in Japan. ID Biomedical said it is talking with the FDA about importing 1.2 million surplus doses of flu shots into the U.S. from Canada, Bloomberg reported. The U.K. will grant a U.S. request for 650 British troops to be redeployed in Iraq to an area south of Baghdad, the Financial Times reported. Donald Trump is planning to allow bondholders to take control of his Trump Hotels & Casino Resorts rather than take the private or seek investors, the Deal.com reported. STMicroelectronics NV, Europe's biggest semiconductor maker, said fourth-quarter sales may not rise from the third period, citing "uncertainty" in the market for mobile phones, Bloomberg said. Japanese exports accelerated in September, easing concern that record oil prices are curbing overseas demand for the nation's semiconductors, flat-panel screens and digital cameras, Bloomberg reported. Coca-Cola raised the average price of soft drinks last quarter, prompting consumers to switch to less costly PepsiCo drinks and store brands like Wal-Mart's Dr. Thunder, Bloomberg said.
Late-Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.28%
BOTTOM LINE: I expect U.S. equities to open higher in the morning, led by technology shares, on short-covering, bargain-hunting and better earnings reports. The Portfolio is 125% net long heading into tomorrow.
Wednesday, October 20, 2004
Wednesday Close
S&P 500 1,103.66 +.04%
NASDAQ 1,932.97 +.52%
Leading Sectors
Oil Service +3.35%
HMOs +2.72%
Energy +2.18%
Lagging Sectors
Internet -.77%
Banks -.80%
Airlines -1.23%
Other
Crude Oil 54.92 +3.06%
Natural Gas 7.62 +6.98%
Gold 425.00 +.05%
Base Metals 112.66 -.49%
U.S. Dollar 86.35 -.56%
10-Yr. T-note Yield 3.98% -1.29%
VIX 14.85 -1.85%
Put/Call .87 -6.45%
NYSE Arms 1.11 -18.38%
After-hours Movers
MERQ +4.54% after beating 3Q estimates and raising 4Q guidance.
VRSN +7.36% after beating 3Q estimates, raising 4Q outlook and 05 guidance.
MACR +7.55% after beating 2Q estimates and raising 3Q guidance.
TSRA +8.30% after beating 3Q estimates and raising 4Q outlook.
CTXS +8.56% after beating 3Q estimates and raising 4Q guidance.
DRIV +3.96% after beating 3Q estimates, raising 4Q, 04 and 05 outlooks.
EBAY +3.11% after beating 3Q estimates and giving positive guidance.
POWI -4.89% after beating 3Q estimates and lowering 4Q guidance.
ERES -19.79% after missing 3Q estimates, lowering 4Q and 05 outlooks.
EPIC -7.93% after beating 3Q estimates substantially and reiterating 4Q and 05 guidance.
Recommendations
Goldman Sachs reiterated Outperform on PFE, MERQ, SYMC, EBAY and AMGN. Goldman reiterated Underperform on TER and VRSN.
After-hours News
U.S. stocks finished modestly higher today on a late-afternoon rally, led by energy stocks and a rebound in healthcare shares. After the close, Walt Disney's ABC tv network won't broadcast the Miss America beauty pageant next year, leaving the contest without a network TV contract for the first time in 50 years, the AP reported. T-Online Intl. AG said it plans to develop a product to compete with Apple Computer's iPod music player, the Financial Times Deutschland said. Scientists say they've fine-tuned the map of the human genome and improved the understanding of the genetic roosts for disorders including breast cancer and diabetes, according to a study in the Oct. 21 issue of the journal Nature. The UN hasn't sent enough election experts to help prepare the country for voting planned for January to choose a new government, Iraqi Foreign Minister Zebari said. PeopleSoft's founder Duffield opposes a possible sale to Oracle and plans acquisitions to expand the company and increase its price tag, the Financial Times Deutschland said. The growing number of obese Americans and the rising cost of caring for them is responsible for 27% of the increases in health-care costs since 1987, according to a study in the journal Health Affairs. EBay said third-quarter earnings surged 77% as the number of listings rose and the company expanded its PayPal e-mail payment service in Europe, Bloomberg said. A Blackstone Group LP affiliate agreed to buy Boca Resorts, an owner of luxury resorts in Florida, for about $1.25 billion, Bloomberg reported.
BOTTOM LINE: The Portfolio finished modestly higher today as strength in my retail and semiconductor longs more than offset weakness in my wireless and Russian ADR longs. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. The tone of the market improved substantially throughout the day even as energy prices rose and earnings worries persisted. Today was likely very disappointing for the Bears and should spur further short-covering. If after-hours trading is any indication, tomorrow should be a good day for the Bulls.
NASDAQ 1,932.97 +.52%
Leading Sectors
Oil Service +3.35%
HMOs +2.72%
Energy +2.18%
Lagging Sectors
Internet -.77%
Banks -.80%
Airlines -1.23%
Other
Crude Oil 54.92 +3.06%
Natural Gas 7.62 +6.98%
Gold 425.00 +.05%
Base Metals 112.66 -.49%
U.S. Dollar 86.35 -.56%
10-Yr. T-note Yield 3.98% -1.29%
VIX 14.85 -1.85%
Put/Call .87 -6.45%
NYSE Arms 1.11 -18.38%
After-hours Movers
MERQ +4.54% after beating 3Q estimates and raising 4Q guidance.
VRSN +7.36% after beating 3Q estimates, raising 4Q outlook and 05 guidance.
MACR +7.55% after beating 2Q estimates and raising 3Q guidance.
TSRA +8.30% after beating 3Q estimates and raising 4Q outlook.
CTXS +8.56% after beating 3Q estimates and raising 4Q guidance.
DRIV +3.96% after beating 3Q estimates, raising 4Q, 04 and 05 outlooks.
EBAY +3.11% after beating 3Q estimates and giving positive guidance.
POWI -4.89% after beating 3Q estimates and lowering 4Q guidance.
ERES -19.79% after missing 3Q estimates, lowering 4Q and 05 outlooks.
EPIC -7.93% after beating 3Q estimates substantially and reiterating 4Q and 05 guidance.
Recommendations
Goldman Sachs reiterated Outperform on PFE, MERQ, SYMC, EBAY and AMGN. Goldman reiterated Underperform on TER and VRSN.
After-hours News
U.S. stocks finished modestly higher today on a late-afternoon rally, led by energy stocks and a rebound in healthcare shares. After the close, Walt Disney's ABC tv network won't broadcast the Miss America beauty pageant next year, leaving the contest without a network TV contract for the first time in 50 years, the AP reported. T-Online Intl. AG said it plans to develop a product to compete with Apple Computer's iPod music player, the Financial Times Deutschland said. Scientists say they've fine-tuned the map of the human genome and improved the understanding of the genetic roosts for disorders including breast cancer and diabetes, according to a study in the Oct. 21 issue of the journal Nature. The UN hasn't sent enough election experts to help prepare the country for voting planned for January to choose a new government, Iraqi Foreign Minister Zebari said. PeopleSoft's founder Duffield opposes a possible sale to Oracle and plans acquisitions to expand the company and increase its price tag, the Financial Times Deutschland said. The growing number of obese Americans and the rising cost of caring for them is responsible for 27% of the increases in health-care costs since 1987, according to a study in the journal Health Affairs. EBay said third-quarter earnings surged 77% as the number of listings rose and the company expanded its PayPal e-mail payment service in Europe, Bloomberg said. A Blackstone Group LP affiliate agreed to buy Boca Resorts, an owner of luxury resorts in Florida, for about $1.25 billion, Bloomberg reported.
BOTTOM LINE: The Portfolio finished modestly higher today as strength in my retail and semiconductor longs more than offset weakness in my wireless and Russian ADR longs. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. The tone of the market improved substantially throughout the day even as energy prices rose and earnings worries persisted. Today was likely very disappointing for the Bears and should spur further short-covering. If after-hours trading is any indication, tomorrow should be a good day for the Bulls.
Mid-day Update
S&P 500 1,101.65 -.14%
NASDAQ 1,929.06 +.32%
Leading Sectors
Oil Service +3.45%
HMOs +2.67%
Energy +2.0%
Lagging Sectors
Banks -1.17%
I-Banks -1.27%
Airlines -2.30%
Other
Crude Oil 54.80 +2.83%
Natural Gas 7.59 +6.56%
Gold 427.00 +1.28%
Base Metals 112.80 -.36%
U.S. Dollar 86.17 -.77%
10-Yr. T-note Yield 4.00% -.76%
VIX 15.01 -.79%
Put/Call .80 -13.98%
NYSE Arms 1.15 -15.44%
Market Movers
CFC -11.7% after missing 3Q estimates, lowering 04 guidance and boosting dividend.
MOT -5.7% after missing 3Q estimates slightly and reiterating 4Q outlook.
ERTS -4.6% after meeting 2Q estimates and lowering 3Q guidance.
JAKK -31.0% after World Wrestling Entertainment sued the maker of its action figures, alleging the company violated anti-bribery laws.
SGTL +22.0% after beating 3Q estimates and raising 4Q outlook.
FILE +18.2% after substantially beating 3Q estimates.
ATMI +12.7% after beating 3Q estimates.
PLCE +16.0% after saying it agreed to purchase the Disney Store chain in North America for an undisclosed amount.
AAP +11.7% after meeting 3Q estimates, reaffirming 4Q outlook and Goldman rating of Outperform.
CHRW +6.2% after beating 3Q estimates and Legg Mason upgrade to Hold.
ARTC +9.2% after meeting 3Q estimates and reaffirming 04/05 outlook.
ASTE -22.9% on disappointing 3Q results.
TSS -12.4% after beating 3Q estimates, but Citi downgrade to Sell.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on FSL, AA, CFC, SBC, PFE, NRG, STN and FON. Goldman reiterated Underperform on INFA, UNM, CL, PRXL and AMCC. Goldman rated AAP Outperform. Citi SmithBarney upgraded DO to Buy, target $40. Citi upgraded OVNT to Buy, target $41. Citi reiterated Buy on STZ, target $47. Citi reiterated Sell on MEDI, target $19. Citi reiterated Buy on ERTS, target $60. Citi reiterated Buy on MDU, target $28. Citi reiterated Buy on AVO, target $46. Citi reiterated Buy on MAN, target $56. Citi reiterated Buy on FNM, target $81. Citi reiterated Buy on MO, target $65. Citi reiterated Buy on FON, target $24. PCLE, KR raised to Overweight at JP Morgan. CTCO, CTL, CMS rated Overweight at JP Morgan. SWY, CTB, CBB cut to Underweight at JP Morgan. MVK raised to Buy at Deutsche Bank, target $31. FON raised to Buy at Bank of America, target $23. SBC rated Buy at Legg Mason. PKG raised to Outperform at CSFB, target $25. CBD raised to Overweight at Morgan Stanley. MET raised to Buy at Merrill Lynch, target $43. PDLE rated Overweight at Prudential, target $27. OSCI rated Overweight at Prudential, target $8. TELK rated Underweight at Prudential, target $13. CELG rated Overweight at Prudential, target $68. CAL, DAL cut to Underperform at Bear Stearns.
Mid-day News
U.S. stocks are quietly mixed as gains in technology shares are offsetting losses in financials. The world's 1,500 oil tankers are booked up and their rates are rising to meet the growing global demand for oil, especially from China, the NY Times said. Connecticut Attorney General Blumenthal issued subpoenas to health insurers, employee-benefit providers and auto insurers as regulators widened their investigation of insurance practices, the NY Times said. New York is ending a program of allowing homeless families in city shelters to apply for U.S. rent vouchers or public housing, in favor of offering rent assistance for as long as five years, the NY Times reported. Target and Wal-Mart are putting more emphasis on selling products under their own store brands as they seek to set themselves apart from competitors, the NY Times said. Apple Computer reached an agreement with the rock band U2 to sell customized IPod digital music players emblazoned with the band's logo, the NY Post reported. California Governor Schwarzenegger plans to visit Ohio to campaign for President Bush, the San Francisco Chronicle reported. Bonds of Marsh & McLennan are trading at yields comparable to junk debt, and may weaken further, on concern a lawsuit filed by New York Attorney General Spitzer will cost it business, Bloomberg said. Iranian President Khatami today rejected calls from European nations to halt a nuclear program, raising the odds that the UN Security Council will have to consider the matter as early as next month, Bloomberg reported. An index of U.S. mortgage applications rose last week by the most in two months as a drop in borrowing costs boosted home purchases and refinancing, Bloomberg reported. Crude oil futures are rising after an Energy Department report showed that U.S. inventories of heating oil fell for a third week, Bloomberg reported.
Bottom Line: The Portfolio is unchanged mid-day as strength in my retail and semiconductor longs is being offset by weakness in my wireless and Russian ADR longs. I added a few longs into this mornings weakness bringing the Portfolio to 125% net long. One of my new longs is DITC and I am using a stop-loss of $24.50 on this position. Today's action is relatively positive considering higher energy prices and some earnings disappointments. Technology shares continue to outperform and exhibit bullish bullish behavior. I expect U.S. shares to rise into the close on short-covering and bargain-hunting.
NASDAQ 1,929.06 +.32%
Leading Sectors
Oil Service +3.45%
HMOs +2.67%
Energy +2.0%
Lagging Sectors
Banks -1.17%
I-Banks -1.27%
Airlines -2.30%
Other
Crude Oil 54.80 +2.83%
Natural Gas 7.59 +6.56%
Gold 427.00 +1.28%
Base Metals 112.80 -.36%
U.S. Dollar 86.17 -.77%
10-Yr. T-note Yield 4.00% -.76%
VIX 15.01 -.79%
Put/Call .80 -13.98%
NYSE Arms 1.15 -15.44%
Market Movers
CFC -11.7% after missing 3Q estimates, lowering 04 guidance and boosting dividend.
MOT -5.7% after missing 3Q estimates slightly and reiterating 4Q outlook.
ERTS -4.6% after meeting 2Q estimates and lowering 3Q guidance.
JAKK -31.0% after World Wrestling Entertainment sued the maker of its action figures, alleging the company violated anti-bribery laws.
SGTL +22.0% after beating 3Q estimates and raising 4Q outlook.
FILE +18.2% after substantially beating 3Q estimates.
ATMI +12.7% after beating 3Q estimates.
PLCE +16.0% after saying it agreed to purchase the Disney Store chain in North America for an undisclosed amount.
AAP +11.7% after meeting 3Q estimates, reaffirming 4Q outlook and Goldman rating of Outperform.
CHRW +6.2% after beating 3Q estimates and Legg Mason upgrade to Hold.
ARTC +9.2% after meeting 3Q estimates and reaffirming 04/05 outlook.
ASTE -22.9% on disappointing 3Q results.
TSS -12.4% after beating 3Q estimates, but Citi downgrade to Sell.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on FSL, AA, CFC, SBC, PFE, NRG, STN and FON. Goldman reiterated Underperform on INFA, UNM, CL, PRXL and AMCC. Goldman rated AAP Outperform. Citi SmithBarney upgraded DO to Buy, target $40. Citi upgraded OVNT to Buy, target $41. Citi reiterated Buy on STZ, target $47. Citi reiterated Sell on MEDI, target $19. Citi reiterated Buy on ERTS, target $60. Citi reiterated Buy on MDU, target $28. Citi reiterated Buy on AVO, target $46. Citi reiterated Buy on MAN, target $56. Citi reiterated Buy on FNM, target $81. Citi reiterated Buy on MO, target $65. Citi reiterated Buy on FON, target $24. PCLE, KR raised to Overweight at JP Morgan. CTCO, CTL, CMS rated Overweight at JP Morgan. SWY, CTB, CBB cut to Underweight at JP Morgan. MVK raised to Buy at Deutsche Bank, target $31. FON raised to Buy at Bank of America, target $23. SBC rated Buy at Legg Mason. PKG raised to Outperform at CSFB, target $25. CBD raised to Overweight at Morgan Stanley. MET raised to Buy at Merrill Lynch, target $43. PDLE rated Overweight at Prudential, target $27. OSCI rated Overweight at Prudential, target $8. TELK rated Underweight at Prudential, target $13. CELG rated Overweight at Prudential, target $68. CAL, DAL cut to Underperform at Bear Stearns.
Mid-day News
U.S. stocks are quietly mixed as gains in technology shares are offsetting losses in financials. The world's 1,500 oil tankers are booked up and their rates are rising to meet the growing global demand for oil, especially from China, the NY Times said. Connecticut Attorney General Blumenthal issued subpoenas to health insurers, employee-benefit providers and auto insurers as regulators widened their investigation of insurance practices, the NY Times said. New York is ending a program of allowing homeless families in city shelters to apply for U.S. rent vouchers or public housing, in favor of offering rent assistance for as long as five years, the NY Times reported. Target and Wal-Mart are putting more emphasis on selling products under their own store brands as they seek to set themselves apart from competitors, the NY Times said. Apple Computer reached an agreement with the rock band U2 to sell customized IPod digital music players emblazoned with the band's logo, the NY Post reported. California Governor Schwarzenegger plans to visit Ohio to campaign for President Bush, the San Francisco Chronicle reported. Bonds of Marsh & McLennan are trading at yields comparable to junk debt, and may weaken further, on concern a lawsuit filed by New York Attorney General Spitzer will cost it business, Bloomberg said. Iranian President Khatami today rejected calls from European nations to halt a nuclear program, raising the odds that the UN Security Council will have to consider the matter as early as next month, Bloomberg reported. An index of U.S. mortgage applications rose last week by the most in two months as a drop in borrowing costs boosted home purchases and refinancing, Bloomberg reported. Crude oil futures are rising after an Energy Department report showed that U.S. inventories of heating oil fell for a third week, Bloomberg reported.
Bottom Line: The Portfolio is unchanged mid-day as strength in my retail and semiconductor longs is being offset by weakness in my wireless and Russian ADR longs. I added a few longs into this mornings weakness bringing the Portfolio to 125% net long. One of my new longs is DITC and I am using a stop-loss of $24.50 on this position. Today's action is relatively positive considering higher energy prices and some earnings disappointments. Technology shares continue to outperform and exhibit bullish bullish behavior. I expect U.S. shares to rise into the close on short-covering and bargain-hunting.
Wednesday Watch
Earnings of Note
Company/Estimate
ALTR/.18
AMGN/.62
CAI/.62
CHIR/.06
COF/1.30
DBD/.67
GLW/.11
CA/.16
CL/.58
EK/.72
EBAY/.27
GD/1.50
HET/1.04
HON/.43
JPM/.73
LIN/.38
LU/.03
MERQ/.24
ODP/.27
OSI/.52
PFCB/.28
PFE/.54
PMCS/.04
SEBL/.05
SYMC/.39
VRSN/.16
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on WFC, AFL, BSX, DO, STLD, FON, FORM and ZION. Goldman reiterated Underperform on MMC.
Late-Night News
Asian indices are lower on concerns that high energy prices are crimping growth in the region. U.K. ruling Labour party lawmakers are calling for vote in Parliament before the government agrees to a U.S. request for vote in Parliament before the government agrees to a U.S. request for British troops to be deployed to an area south of the Iraqi capital Baghdad, the BBC reported. XM Satellite Radio Holdings will announce an agreement with Major League Baseball to broadcast games starting in 2006, according to the Sports Business Daily. Kohlberg Kravis Roberts and Carlyle Group have returned $15.6 billion to investors in the past 18 months in two of the biggest ever pay-outs in the private equity industry, the Financial Times reported. The Chinese government may sign a 20-year contract to buy $14.6 billion of iron ore from Australian companies, the Australian Financial Review said. Whole Foods Market is seeking sites in London to open three or four superstores as part of a plan to expand into Europe, the Financial Times reported. Bank of America, JP Morgan Chase and other banks are pitching working ranches and farms as alternative investments, the Wall Street Journal said. Ex-Enron Chairman Ken Lay will face one criminal trial by himself and another with ex-Enron CEO Skilling, the AP reported. California insurance regulators will hire securities fraud specialist law firm Lerach Coughlin Stoia Geller Rudman & Robbins LLP for a possible investigation of insurance companies and payments to brokers, the Wall Street Journal reported. Pfizer will begin an ad campaign today for its Celebrex pankiller in U.S. newspapers and magazines and in tv commercials, the Wall Street Journal reported. Anheuser-Busch may pay as much as $1 billion for a stake in China's Henan Jinzing Beer Group, Agence France-Presse reported. Fannie Mae said the SEC opened a formal investigation after its federal regulator reported accounting errors, Bloomberg said.
Late-Night Trading
Asian Indices are -1.75% to -.50% on average.
S&P 500 indicated -.15%.
NASDAQ 100 indicated -.21%
BOTTOM LINE: I expect U.S. equities to open lower in the morning on weakness in Asia, worries over oil inventories, concerns over mounting lawsuits and earnings. However, stocks should attempt to rally later in the day on short-covering, declining energy prices, diminishing domestic terrorism fears, bargain hunting and optimism over better economic growth after the election. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
ALTR/.18
AMGN/.62
CAI/.62
CHIR/.06
COF/1.30
DBD/.67
GLW/.11
CA/.16
CL/.58
EK/.72
EBAY/.27
GD/1.50
HET/1.04
HON/.43
JPM/.73
LIN/.38
LU/.03
MERQ/.24
ODP/.27
OSI/.52
PFCB/.28
PFE/.54
PMCS/.04
SEBL/.05
SYMC/.39
VRSN/.16
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on WFC, AFL, BSX, DO, STLD, FON, FORM and ZION. Goldman reiterated Underperform on MMC.
Late-Night News
Asian indices are lower on concerns that high energy prices are crimping growth in the region. U.K. ruling Labour party lawmakers are calling for vote in Parliament before the government agrees to a U.S. request for vote in Parliament before the government agrees to a U.S. request for British troops to be deployed to an area south of the Iraqi capital Baghdad, the BBC reported. XM Satellite Radio Holdings will announce an agreement with Major League Baseball to broadcast games starting in 2006, according to the Sports Business Daily. Kohlberg Kravis Roberts and Carlyle Group have returned $15.6 billion to investors in the past 18 months in two of the biggest ever pay-outs in the private equity industry, the Financial Times reported. The Chinese government may sign a 20-year contract to buy $14.6 billion of iron ore from Australian companies, the Australian Financial Review said. Whole Foods Market is seeking sites in London to open three or four superstores as part of a plan to expand into Europe, the Financial Times reported. Bank of America, JP Morgan Chase and other banks are pitching working ranches and farms as alternative investments, the Wall Street Journal said. Ex-Enron Chairman Ken Lay will face one criminal trial by himself and another with ex-Enron CEO Skilling, the AP reported. California insurance regulators will hire securities fraud specialist law firm Lerach Coughlin Stoia Geller Rudman & Robbins LLP for a possible investigation of insurance companies and payments to brokers, the Wall Street Journal reported. Pfizer will begin an ad campaign today for its Celebrex pankiller in U.S. newspapers and magazines and in tv commercials, the Wall Street Journal reported. Anheuser-Busch may pay as much as $1 billion for a stake in China's Henan Jinzing Beer Group, Agence France-Presse reported. Fannie Mae said the SEC opened a formal investigation after its federal regulator reported accounting errors, Bloomberg said.
Late-Night Trading
Asian Indices are -1.75% to -.50% on average.
S&P 500 indicated -.15%.
NASDAQ 100 indicated -.21%
BOTTOM LINE: I expect U.S. equities to open lower in the morning on weakness in Asia, worries over oil inventories, concerns over mounting lawsuits and earnings. However, stocks should attempt to rally later in the day on short-covering, declining energy prices, diminishing domestic terrorism fears, bargain hunting and optimism over better economic growth after the election. The Portfolio is 100% net long heading into tomorrow.
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