IndicesS&P 500 1,208.43 +.40%
Dow 10,810.87 +.42%
NASDAQ 2,063.49 +.57%
Russell 2000 637.02 +.47%
DJ Wilshire 5000 11,914.71 +.46%
S&P Barra Growth 582.20 +.38%
S&P Barra Value 622.91 +.60%
Morgan Stanley Consumer 589.18 +.67%
Morgan Stanley Cyclical 773.69 +.23%
Morgan Stanley Technology 475.09 +.42%
Transports 3,757.05 +.42%
Utilities 353.03 +.04%
Put/Call .89 +30.88%
NYSE Arms .91 -36.81%
Volatility(VIX) 12.01 -.58%
ISE Sentiment 134.00 -33.66%
US Dollar 82.82 +.38%
CRB 305.51 +.17%
Futures Spot Prices Crude Oil 51.60 -.29%
Unleaded Gasoline 139.50 -1.19%
Natural Gas 6.66 -.97%
Heating Oil 145.90 +.33%
Gold 433.70 -.91%
Base Metals 128.00 -.23%
Copper 146.40 -2.30%
10-year US Treasury Yield 4.36% -.32%
Leading Sectors Airlines +3.49%
Retail +2.06%
Semis +1.34%
Lagging Sectors Iron/Steel -1.76%
Energy -2.05%
Oil Service -2.32%
Market MoversBIIB +4.0% on rebound after yesterday’s decline and Smith Barney upgrade to Buy.
OVTI -15.5% after beating 3Q estimates, raising 4Q eps guidance, lowering 4Q revenue outlook and Jefferies downgrade to Hold.
PSS +17.83% after beating 4Q estimates and reporting strong February same-store-sales.
ESLR +14.38% after beating 4Q estimates and California Governor Schwarzenegger said he would support a bill that provides funding for 1 million solar roofs in the state.
NETL +11.48% after saying that its NL5000 processors are shipping in production volume in the Extreme Networks’ BlackDiamond 10K core switch.
UVN +12.7% after beating 4Q estimates and maintaining 1Q outlook.
COGT +11.74% after announcing new follow-on contracts from the Italian National Police and Los Angeles County Sheriff’s Department.
FD +6.02% on multiple upgrades.
BJ +8.7% after beating 4Q estimates.
NTES +4.04% on positive comments from Piper Jaffray Conference.
SPW +4.27% on Merrill Lynch upgrade to Buy.
INCX -37.0% after meeting 4Q estimates and lowering 1Q outlook substantially.
MSA -16.98% after missing 4Q estimates and multiple downgrades.
Market InternalsNYSE Unusual VolumeNASDAQ Unusual VolumeNASDAQ 100 HeatmapDJIA Quick ChartsChart ToppersHot SpotsOption DragonEconomic Data - Construction Spending for January rose .7% versus estimates of a .4% increase and a 1.2% rise in December.
- ISM Manufacturing for February fell to 55.3 versus estimates of 56.9 and a reading of 56.4 in January.
- ISM Prices Paid for February fell to 65.5 versus estimates of 68.0 and a reading of 69.0 in January.
Recommendations- Goldman Sachs: Reiterated Outperform on DEX and USB. Reiterated Underperform on MMC.
- Smith Barney: Said the market has overreacted to the BIIB/ELN news. Upgraded BIIB to Buy, target $49. Upgraded SONS to Buy, target $7.10. Reiterated Buy on NT, target $4. Reiterated Buy on SCH, target $14.50. Reiterated Buy on FD, target $80. Reiterated Buy on CD, target $28. Reiterated Buy on MGA, target $95. Reiterated Buy on PLUG, HYGS and Sell on FCEL, BLDP.
- Prudential: Rated SAPE Overweight, target $11.
- Oppenheimer: Raised ECA to Sector Outperform, target $82.
- JP Morgan: Raised CY, ONNN, INTC and FCS to Overweight. Rated OPEN Overweight.
- Deutsche Bank: Downgraded PCU to Sell, target $47. Raised FD to Buy, target $68. Rated SHO to Buy, target $24.
- Bear Stearns: Rated GENZ Outperform, target $65. Raised FD to Outperform.
- UBS: Raised XMSR to Buy, target $40.50. Raised SIRI to Buy, target $6.75.
- CSFB: Rated GWR Outperform, target $30.
- Merrill Lynch: Raised JNJ to Buy, target $75. Raised SPW to Buy, target $55.
Mid-day News US stocks are higher mid-day as reports showed a measure of inflation declined and construction gained steam. US shopping mall developers are planning to have fewer department stores per mall, as sales have fallen in recent years, the NY Times reported. Toys “R” Us has shortlisted four potential bidders for its retail business and is asking them to raise their offers, the Wall Street Journal reported. JP Morgan will announce today that it’s spinning off its private-equity unit into an independent arm, the Wall Street Journal reported. Federated Department Stores’ $11 billion acquisition of May Department Stores will probably reduce advertising revenue at US newspapers, the Wall Street Journal reported. The FDA’s procedure for approving promising treatments for serious conditions quickly is under review, the Wall Street Journal said. US shopping malls are using discounters such as Target and Wal-Mart, or high-end retailers, as anchors to replace traditional department stores, the Wall Street Journal reported. E*Trade Financial plans to give clients with $50,000 or more in assets or that make 15 trades per quarter a second layer of security when accessing their accounts, the Wall Street Journal reported. Life expectancy of men and women in the US has risen to a record 77.6 years in 2003, as death rates from the most common illnesses such as heart disease and cancer declined as medical technology improved, the National Center for Health Statistics reported. News Corp.’s Fox television network probably had the highest number of viewers for primetime programming in February, the Wall Street Journal said. Time Warner’s CNN has agreed to air commercials for Grey Goose vodka, making it the first national cable news channel to advertise for liquor, the NY Times reported. Hollywood’s two big acting unions approved a new contract that calls for a raise of 9% over three years, the LA Times reported. Biogen Idec’s board approved $4.6 million in bonuses and some officials sold stock before providing the FDA with information of a death related to its Tysabri drug, Reuters reported. French President Chirac’s approval rating fell by 3 percentage points to 45% in February, the Liberation reported. Israel’s plan to withdraw from the Gaza Strip is boosting investment and tourism that may push 2005 economic growth as high as 6%, Bloomberg reported. Exxon Mobil plans to sell its stake in China Petroleum & Chemical for as much as $1.4 billion, twice the investment cost four years ago, Bloomberg said. Toyota Motor is introducing today its first Lexus luxury car equipped with a diesel engine to capture sales in the fastest growing segment of the European car market, Bloomberg reported. Brazil’s economy grew 4.9% in the fourth quarter, capping the strongest annual expansion in a decade, Bloomberg reported. IAC/InterActiveCorp agreed to buy Cornerstone Brands for $720 million to expand its catalog and Internet retail offerings, Bloomberg said. Trading at the Chicago Mercantile Exchange rose 50% form a year earlier to a daily record last month as the biggest US futures market handled more interest-rate futures contracts, Bloomberg reported. US construction spending rose .7% in January to a record as residential, commercial and public building increased, Bloomberg said. Manufacturers said business cooled in February for the third straight month, Bloomberg reported. US corporate leaders plan to invest more in new plants and equipment as confidence in the economy rises to the highest level in at least two years, a survey of CEOs found. Intel will outline plans today to speed up work on new processors and convince customers the company has recovered from delays that hurt sales last year, Bloomberg reported. Fidelity Investments said it made permanent expense reductions on six US stock index funds in a continued bid to undercut competitors’ prices, Bloomberg said. Ford Motor said US sales of cars and trucks fell 2.9% in February, while DaimlerChrysler said sales rose 5.5%, Bloomberg said. Iran refused to let UN inspectors make another visit to a military base that the US says is being used in nuclear weapons research, the IAEA said. US steel prices may fall this year because distributors of the metal bought more than they need from producers including Nucor and US Steel, traders and executives said. The euro is falling the most in a week against the US dollar as German unemployment rose to a post WWII high, Bloomberg reported.
BOTTOM LINE: The Portfolio is substantially higher mid-day on gains in my biotechnology, alternative energy and semi longs. I have not traded today, thus the Portfolio’s market exposure remains 50% net long. The tone of the market is modestly positive today as the advance/decline line is higher, almost ever sector is gaining and volume is decent. Losses are almost completely confined to commodity-related shares, which is a positive. Measures of investor anxiety are mixed. I continue to expect alternative energy stocks to outperform on multiple catalysts. As well, semi and retail should strengthen through week’s end on positive commentary from conferences and stronger-than-expected economic reports. I expect US stocks to trade mixed-to-higher from current levels into the close as optimism over US economic growth and stabilizing long-term interest rates mostly offsets worries over stubbornly high energy prices.
