Thursday Close

S&P 500 1,183.55 +.14%
NASDAQ 2,104.28 +.22%

Leading Sectors
Oil Service +2.43%
Semis +1.32%
Energy +.92%

Lagging Sectors
Retail -.60%
Drugs -1.28%
Iron/Steel -1.34%

Other
Crude Oil 46.22 unch.
Natural Gas 6.83 -.63%
Gold 442.50 -.09%
Base Metals 119.70 +.91%
U.S. Dollar 83.87 +.70%
10-Yr. T-note Yield 4.11% -.37%
VIX 12.98 -1.74%
Put/Call .61 -6.15%
NYSE Arms .93 +24.0%

After-hours Movers
MRVL +6.4% after beating 3Q estimates.
ADSK +6.7% after beating 3Q estimates, eliminating dividend, announcing 2-for-1 split and boosting guidance.
UNM +7.4% after settling with state and federal regulators who were investigating allegations the company improperly stopped paying benefits to clients.
SRNA +10.7% after beating 3Q estimates and raising 4Q guidance.
INCX +17.31% after beating 3Q estimates and raising 4Q outlook.
SIRI +18.2% after naming former Viacom President Mel Karmazin CEO.
BCSI -11.0% after missing 2Q estimates and lowering 3Q guidance.
LONG -6.46% after disappointing 3Q results.

Recommendations
Goldman Sachs reiterated Underperform on MMC, UNM and Outperform on ENH, DIS, DKS. BioLase Technology(BLTI), which makes laser dental and cosmetic systems, is luring investors following changes in its management and the introduction of a new product, Business Week reported. Tractor Supply(TSCO) shares may rise after the company increased prices in response to higher costs of fuel, steel and freight, Business Week reported.

After-hours News
U.S. stocks finished modestly higher today on led by a rebound in semiconductor shares and strength in the energy sector. After the close, Nike founder Phil Knight resigned as president and CEO of the company, the Wall Street Journal reported. Sirius Satellite Radio name former Viacom President Karmazin as CEO, Ad Age reported. Matsushita Electric, NEC and NTT DoCoMo have developed an operating platform using Linux for 3G phones, the Financial Times reported. Most German companies with U.S. stock market listings would like to quit the NYSE due to the increased cost of complying with U.S. regulations, the Financial Times said. Formosa Plastics' two naphtha cracking plants in Texas shut from Nov. 16 because of power outage, causing U.S. ethylene prices to rise by $50/ton, the Economic Daily News said. China's central bank my raise interest rates again as rising costs of steel, fuel and other raw materials stoke inflation concern, the Hong Kong Economic Journal reported. HannStar Display President Ding-hui expects the flat panel display industry to recover as early as March next year after clients digest their inventories, the Commercial Times reported. Disney said fiscal fourth-quarter profit rose 24% as its ESPN cable sports network boosted results, Bloomberg said. Genentech and OSI Pharmaceuticals said their Tarceva lung cancer drug won U.S. Food and Drug Administration approval. Vodafone, Telefonica SA, BT Group and France Telecom pledged to increase dividends and share buybacks, Bloomberg reported.

BOTTOM LINE: The Portfolio finished higher today on strength in my semi, oil service, wireless, RFID and telecom equipment longs. I did not trade in the afternoon, thus leaving the Portfolio 100% net long. The tone of the market improved into the afternoon. Technology shares continue to display bottoming characteristics. The Bears must be very disappointed that AMAT's results were unable to send semis lower. Moreover, after-hours action bodes well for tech stocks tomorrow. I would still like to see measures of investor anxiety rise from current levels. Hopefully this will happen shortly to set table for another significant move upwards I foresee over the coming weeks.

Mid-day Update

S&P 500 1,182.59 +.05%
NASDAQ 2,099.27 -.02%

Leading Sectors
Oil Service +.91%
Airlines +.77%
HMOs +.40%

Lagging Sectors
Retail -.58%
Iron/Steel -1.31%
Broadcasting -1.62%

Other
Crude Oil 45.75 -2.33%
Natural Gas 6.85 -5.95%
Gold 441.10 -.90%
Base Metals 119.70 +.91%
U.S. Dollar 83.89 +.71%
10-Yr. T-note Yield 4.13% +.09%
VIX 13.06 -1.14%
Put/Call .69 +6.15%
NYSE Arms .86 +14.67%

Market Movers

Economic Data
Initial Jobless Claims for last week were 334K versus estimates of 330K and 337K the prior week.
Continuing Claims were 2792K versus estimates of 2800K and 2808K prior.
Leading Indicators for October fell .3% versus estimates of a .1% fall and a .3% decrease in September.
Philadelphia Fed. for November fell to 20.7 versus estimates of 23.1 and a reading of 28.5 in October.

Recommendations

Mid-day News

Bottom Line: The Portfolio is modestly higher mid-day on gains in my wireless and RFID longs. I have not traded today and the Portfolio remains 100% net long. The tone of the market is mildly negative as most stocks are falling on lighter volume. I am not paying too much attention to most economic numbers at this point due to the fact that most still reflect pre-election worries. I expect data to show U.S. economic acceleration within the next few weeks. Stocks will likely trade mixed into the close as falling energy prices offset economic worries. As well, measures of investor anxiety are still showing too much complacency.

Thursday Watch

Earnings of Note
Company/Estimate
ARO/.54
ADSK/.34
CLE/.29
DKS/.04
DITC/.27
ELBO/.29
GPS/.28
LTD/.10
MRVL/.21
NOVL/.05
VIP/1.94
DIS/.17
WSM/.23

Splits
FINL 2-for-1

Economic Data
Initial Jobless Claims for last week estimated at 330K versus 333K the prior week.
Continuing Claims are estimated at 2800K versus 2813K prior.
Leading Indicators for October are estimated down .1% versus a .1% decline in September.
Philadelphia Fed. for November estimated at 23.1 versus 28.5 in October.

Recommendations
Goldman Sachs reiterated Outperform on DHR, DO, RIG, XRX, AHC, DVN, MUR, NFX, PXD, SUN, XOM and Underperform on CVH.

Late-Night News
Asian indices are quietly mixed on a continuing consolidation of recent gains. Saddam Hussein diverted money from the UN oil-for-food program to pay millions of dollars to families of Palestinian suicide bombers who carried out attacks on Israel, the Sidney Morning Herald reported. Reuters Group Plc, the world's biggest publicly traded provider of financial information, may say it will start a fixed income trading system, the Financial Times said. European governments must cut bureaucracy to encourage drug development and accept the price they pay for medicines, the Financial Times said, citing a World Health Organization report. The U.S. and Australia won a trade complaint against European Union rules that protect traditional food names such as "feta" cheese and "Parma" ham, Bloomberg said. Iran must understand it is time to help Iraq as its neighboring country prepares to hold elections in January, U.S. Secretary of State Colin Powell said.

Late-Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated -.16%.
NASDAQ 100 indicated -.41%

BOTTOM LINE: I expect U.S. equities to open modestly lower and trade mixed into the afternoon. The Portfolio is 100% net long heading into tomorrow.

Wednesday Close

S&P 500 1,181.94 +.55%
NASDAQ 2,099.68 +1.01%

Leading Sectors
Semis +2.86%
Disk Drives +2.81%
Boxmakers +2.35%

Lagging Sectors
Biotech -.08%
Utilities -.90%
Airlines -1.07%

Other
Crude Oil 46.60 -.51%
Natural Gas 7.27 -.18%
Gold 445.10 unch.
Base Metals 118.62 +1.27%
U.S. Dollar 83.33 -.56%
10-Yr. T-note Yield 4.13% -1.78%
VIX 13.21 unch.
Put/Call .65 -5.80%
NYSE Arms .75 -55.62%

After-hours Movers
NFLX +10.3% after boosting 4Q subscriber growth and revenue estimate.
ISSC +9.8% after strong 4Q results.
HOTT +5.95% after meeting 3Q estimates.
NABI -12.6% after announcing disappointing results from its Phase II clinical trial for Altastaph.
MGAM -9.78% after meeting 4Q estimates and raising 1Q guidance.
CRM -9.3% on profit-taking after beating 3Q estimates and raising 05 guidance.

Recommendations
Goldman Sachs reiterated Underperform on PVH.

After-hours News
U.S. stocks finished higher today on strong economic reports, falling interest rates and optimism in the technology sector. After the close, senior presidential adviser Karl Rove called Nebraska Senator Ben Nelson, a Democrat, a few days ago to ask if he would like to succeed Ann Veneman as Agriculture Secretary, CNN reported. Pakistan's government said India's withdrawal of a first group of soldiers from Jammu and Kashmir with help the peace process between the South Asian neighbors, Agence France-Presse rerpoted. U.S. lawmakers agreed on a plan to ban taxes until 2007 on Internet access provided by companies such as MSN and AOL, Bloomberg said. Medtronic, the world's largest maker of devices that regulate heart rhythm, said fiscal second-quarter profit rose 13% because of higher sales of defibrillators, Bloomberg reported. Applied Materials, the world's biggest maker of semiconductor-production equipment, said fourth-quarter profit rose to its highest level in four years on demand from computer-chip makers for new machines, Bloomberg reported.

BOTTOM LINE: The Portfolio finished higher today on strength in my retail, semi, steel and RFID longs. I exited an internet long in the afternoon and added NTE long, thus leaving the Portfolio 100% net long. I am using a $18.75 stop-loss on this position. The tone of the market deteriorated modestly throughout the afternoon on rising oil prices and profit-taking. However it was still a very good day for the Bulls considering recent gains. I continue to expect U.S. stocks to rally, at least through year-end, as accelerating economic growth results in companies easily beating recently lowered 4Q estimates. Shorts will continue to cover, funds will chase performance and new inflows will result in continued bargain-hunting on the long-side.

Mid-day Update

S&P 500 1,187.25 +1.0%
NASDAQ 2,109.52 1.49%

Leading Sectors
Semis +4.14%
Disk Drives +3.82%
Boxmakers +3.0%

Lagging Sectors
Hospitals +.41%
Airlines +.20%
Utilities -.55%

Other
Crude Oil 46.08 -.02%
Natural Gas 7.14 +.22%
Gold 445.00 +1.02%
Base Metals 118.62 +1.27%
U.S. Dollar 83.37 -.51%
10-Yr. T-note Yield 4.14% -1.55%
VIX 13.00 -1.59%
Put/Call .63 -8.70%
NYSE Arms .52 -68.64%

Market Movers
S +22.5% after Kmart agreed to buy the company for $11 billion to create the third-biggest U.S. retailer. KMRT +17.6%.
HPQ +5.1% after beating 4Q estimates and raising 1Q/2Q 05 guidance.
NTAP +16.6% after beating 2Q estimates and raising 3Q outlook.
MO +4.6% after cigarette makers asked a federal appeals court to block the Justice Department from using an organized crime statute to get $280 billion from the industry in a civil court lawsuit now on trial in Washington.
MSO +17.0% on optimism over greater sales due to S/KMRT merger.
INSP -9.1% on Merriman Curhan downgrade to Neutral.

Economic Data
Consumer Price Index for October rose .6% versus estimates of a .4% rise and a .2% gain in September.
CPI Ex Food & Energy for October rose .2% versus estimates of a .1% increase and a .3% rise in September.
Housing Starts for October were 2027K versus estimates of 1960K and 1905K in September.
Building Permits for October were 1984K versus estimates of 2000K and 1998K in September.
Industrial Production for October rose .7% versus estimates of a .4% gain and a .1% rise in September.
Capacity Utilization for October was 77.7% versus estimates of 77.4% and 77.3% in September.

Recommendations
-Goldman Sachs reiterated Outperform on MERQ and BAX.
-Citi Smith Barney said to switch from RSAS to VRSN, target $38. Citi reiterated Buy on KMB, target $72. Citi reiterated Buy on MAR, target $63. Citi reiterated Buy on WTS, target $35. Citi reiterated Buy on HD, target $48. Citi reiterated Buy on SPLS, target $37. Citi reiterated Buy on WMT, target $65. Citi reiterated Buy on JCP, target $50.
-JP Morgan raised RSG to Overweight. JP Morgan rated HGR Underweight.
-Prudential Equity downgraded WMT to Underweight, target $57.
-Bear Stearns raised CTMI to Outperform, target $18.
-Merrill Lynch raised DOW to Buy, target $65.
-Morgan Stanley raised UTSI to Overweight, target $28.70.
-Raymond James raised TSRA to Outperform, target $40.

Mid-day News
U.S. stocks are higher mid-day on optimism over the prospects for technology shares and better economic growth. Microsoft will buy a stake in Vintela, which makes software to connect Windows operating system computers with those running other systems such as Linux or Unix, the Wall Street Journal reported. About 205,000 nurses have been hired by U.S. hospitals and medical facilities since 2001, lured by higher wages and better benefits, and more are needed to ease a shortage, the Wall Street Journal reported. SBC Communications plans immediately to charge a fee for Internet phone calls connected through its local phone network, and may have the fee in place by tomorrow, the Wall Street Journal reported. Trump Hotels & Casino Resorts will file for Chapter 11 bankruptcy protection as early as Monday, the Philadelphia Inquirer reported. Iran is producing enriched uranium at a secret facility in Tehran that United Nations inspectors haven't been told about, according to an Iranian opposition group, the NY Times reported. Motorola expects sales of new cell phones to more than quadruple in 2005, Reuters reported. A Walt Disney promotion of its ABC show "Desperate Housewives" that featured partial nudity during a Monday Night Football broadcast will be reviewed by the U.S. FCC, CNBC reported. SBC Communications selected Microsoft to provide the software for a tv-over-Internet service, Bloomberg said. U.S. housing starts rose 6.4% in October to the highest level of the year, suggesting home construction is helping drive economic growth, Bloomberg reported. U.S. industrial production increased by the most in three months in October, helped by a jump in manufacturing of automobiles and home electronics, Bloomberg said. Kmart, the retailer controlled by billionaire Edward Lampert, agreed to buy Sears for $11 billion to create the third-biggest U.S. retailer, Bloomberg said. JetBlue Airways may accelerate plans to begin flights to Chicago by bidding on Midway Airport gates leased by bankrupt ATA Holdings, Bloomberg said. U.S. Treasury notes rose after the CPI failed to increase as much as some traders expected, Bloomberg reported.

Bottom Line: The Portfolio is substantially higher mid-day on strength in my retail, semi, wireless and steel longs. I have not traded today and the Portfolio is still 100% net long. The tone of the market is very strong today as volume very healthy and many more stocks are advancing than declining. Interest rates are falling again, notwithstanding the Bears and pundits attempts to paint inflation as a serious problem. It is very good to see the outperformance by semis and this should continue through year-end as accelerating demand eliminates most of the inventory issues plaguing these stocks. I expect U.S. equities to trade mixed into the close as positive news is offset by low levels of investor anxiety.

Wednesday Watch

Earnings of Note
Company/Estimate
AMAT/.26
BKST-.33
GME/.24
INTU/-.27
HOTT/.27
MDT/.45
PETM/.24
OSIP/-1.17
MGAM/.22
TOO/.27
TLB/.50

Splits
None of note.

Economic Data
Consumer Price Index for October estimated up .4% versus a .2% increase in September.
CPI Ex Food & Energy for October estimated up .1% versus a .3% gain in September.
Housing Starts for October estimated at 1950K versus 1898K in September.
Building Permits for October estimated at 2000K versus 1998K in September.
Industrial Production for October estimated up .4% versus a .1% gain in September.
Capacity Utilization for October estimated at 77.4% versus 77.2% in September.

Recommendations
Goldman Sachs reiterated Outperform on DHR, JTX, GE and Underperform on HRB. Banc of America upgraded FD to Buy.

Late-Night News
Asian indices are mostly higher on strength in technology shares in the region. ING Groep NV, the biggest Dutch financial services company, is in talks to sell its U.K. fund management unit in two parts to Massachusetts Mutual Life Insurance and Northern Trust, the Financial Times reported. AU Optronics said there are signs prices of flat panel displays are bottoming out, Commercial Times reported. SBC Communications will pay Microsoft $400 million for software for sending television content over high-speed data lines, the NY Times reported. Caterpillar is named on a list of U.S. companies and products being targeted by the European Union as likely to face punitive customs duties in 2005 in response to the U.S.'s so-called Byrd Amendment, the Financial Times reported. The U.S. Senate finance committee will push ahead with proposals for changes to the tax system and won't wait for the conclusions of a commission, the Financial Times reported. The Chicago Board of Trade may meet investment banks today to discuss plans for a share sale that could value the exchange at as much as $2 billion, the Financial Times reported. FedEx has asked the Indian government for approval to set up a wholly owned subsidiary in the country, the Economic Times reported.

Late-Night Trading
Asian Indices are -.25% to +.75% on average.
S&P 500 indicated +.15%.
NASDAQ 100 indicated +.29%

BOTTOM LINE: I expect U.S. equities to open modestly lower on inflation worries and trade mixed-to-higher into the afternoon on falling energy prices and stronger economic reports. The Portfolio is 100% net long heading into tomorrow.