Wednesday Close

Indices
S&P 500 1,207.01 -1.02%
Dow 10,805.62 -.98%
NASDAQ 2,061.29 -.59%
Russell 2000 631.08 -1.08%
DJ Wilshire 5000 11,884.12 -1.03%
S&P Barra Growth 581.11 -.90%
S&P Barra Value 621.48 -1.13%
Morgan Stanley Consumer 585.15 -.86%
Morgan Stanley Cyclical 773.63 -1.0%
Morgan Stanley Technology 475.25 -.23%
Transports 3,840.09 -.83%
Utilities 353.97 -1.89%
Put/Call .95 +9.20%
NYSE Arms .91 -29.46%
Volatility(VIX) 12.70 +2.42%
ISE Sentiment 171.00 -2.84%
US Dollar 81.63 -.43%
CRB 313.70 +.34%

Futures Spot Prices
Crude Oil 54.27 -.91%
Unleaded Gasoline 151.75 -1.0%
Natural Gas 6.84 -.58%
Heating Oil 151.90 -.88%
Gold 441.10 -.41%
Base Metals 131.29 +.03%
Copper 149.40 -.63%
10-year US Treasury Yield 4.52% +2.93%

Leading Sectors
Networking +1.20%
Telecom -.15%
Semis -.25%

Lagging Sectors
Homebuilders -2.21%
Oil Service -2.78%
Energy -2.80%

After-hours Movers
ADRX +4.59% after beating 4Q estimates.
GYMB -4.3% after saying restatement cut 04 results.
MATK -12.3% on disappointing 1Q results.
EAT -6.95% after cutting 3Q and 4Q guidance.
ENCY -5.8% after saying it will off $100 million in convertible notes.

Evening Review
Detailed Market Summary
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
Futures Recap
S&P 500 Gallery View
Timely Economic Charts
PM Market Call
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
- Goldman Sachs: Reiterated Outperform on MO, GD and XOM. Reiterated Underperform on RAI. Lowered Gaming Manufactures to Cautious from Neutral, favorite is GTK and least favorite is MGAM.
- Banc of America: Downgraded PHCC to Sell, target $21. Upgraded WOOF to Buy, target $24. Downgraded HSIC to Sell, target $33.50.
- UBS: Raised STR to Buy, target $75.

After-hours News
US stocks finished lower today on heightened worries over rising long-term interest rates. After the close, OPEC should more than double its spare capacity of oil to provide a buffer against any problems, the Financial Times reported, citing the IMF’s World Economic Outlook. Morgan Stanley is being urged to sell its Discover credit-card division, the Financial Times reported. The NY-based Gambino organized crime family was infiltrated by an undercover FBI agent as part of a two-year investigation that yielded indictments against 32 members and associates, including it top four leaders, Bloomberg reported. President Bush said concerns about higher oil and pas prices are hurting the economy and urged Congress to pass energy legislation that has faltered for almost four years, Bloomberg said. US Treasury Notes fell today, pushing the 10-year note’s yield to its highest since July, strong US growth and higher energy prices fanned concerns inflation will accelerated, Bloomberg reported. Emerging-market bonds tumbled, led by Brazil and South Africa, on concern higher yields in the US will reduce the attractiveness of developing nations’ debt, Bloomberg reported. Manufacturers in parts of the US found it easier to pass on rising material and labor costs to customers in January and February, the Fed said in its Beige Book report, Bloomberg reported. MBIA said it received a subpoena from federal prosecutors in NY about reinsurance agreements in 1998 that prompted the company yesterday to restate seven years of profit, Bloomberg reported.

BOTTOM LINE: The Portfolio finished unchanged today as gains in my Biotech, Semi and Chinese ADR longs offset losses in my Computer, Software and Healthcare longs. I exited a few longs from various sectors in the afternoon as they hit stop-losses and added to my AAPL long, thus leaving the Portfolio 75% net long. The tone of the market deteriorated into the afternoon as the advance/decline line finished at its daily lows, almost every sector declined and volume was decent. Technology stocks outperformed substantially while commodity-related and interest-rate sensitive stocks underperformed throughout the day. Measures of investor anxiety were mostly higher into the close. Overall, today’s market action was negative, however most losses were contained to sectors with recent outsized gains. At this point, I still anticipate a resumption of the current rally when interest rates and oil stabilize.

Mid-day Report

Indices
S&P 500 1,211.82 -.62%
Dow 10,836.80 -.70%
NASDAQ 2,065.74 -.38%
Russell 2000 633.84 -.65%
DJ Wilshire 5000 11,934.01 -.62%
S&P Barra Growth 583.61 -.48%
S&P Barra Value 623.63 -.79%
Morgan Stanley Consumer 585.02 -.88%
Morgan Stanley Cyclical 775.81 -.72%
Morgan Stanley Technology 475.91 -.09%
Transports 3,852.23 -.51%
Utilities 355.93 -1.34%
Put/Call .98 +12.64%
NYSE Arms .68 -47.29%
Volatility(VIX) 12.55 +1.21%
ISE Sentiment 178.00 +1.14%
US Dollar 81.51 -.57%
CRB 313.34 +.22%

Futures Spot Prices
Crude Oil 55.45 +1.58%
Unleaded Gasoline 155.30 +1.15%
Natural Gas 6.88 +.48%
Heating Oil 154.85 +1.62%
Gold 442.90 +.41%
Base Metals 131.29 +.03%
Copper 150.30 +.23%
10-year US Treasury Yield 4.46% +1.64%

Leading Sectors
Networking +1.17%
Energy +.37%
Semis +.14%

Lagging Sectors
Homebuilders -1.48%
Restaurants -1.79%
Airlines -2.21%

Market Movers
HLTH +13.6% after meeting 4Q estimates and raising 05 guidance.
GLK +18.65% after Crompton Corp.(CK) agreed to buy it for about $1.55 billion in stock, creating the third-biggest US publicly traded specialty chemicals maker. CK +8.69%.
ISE +53.44% on strong demand for IPO.
RETK +22.12% after Oracle said it plans to make a $504 million takeover offer for it, sparking a bidding war with larger competitor SAP AG.
CMTL +10.67% after beating 2Q estimates and announcing 3-for-2 split.
NPSP -13.36% after announcing that an order for additional Space Based Augmentation System equipment was received from Raytheon Company in support of the Indian GAGAN program.
NDN -10.85% after CFO resigned after 3 months and Johnson Rice downgrade to Underweight.
HAR -9.31% on Fulcrum downgrade to Neutral.
OSTK -5.93% after Piper Jaffray lowered estimates due to higher advertising costs.
CMC -5.4% on continued weakness in metal stocks.
LVS -4.69% after missing 4Q estimates.
NEW -4.89% on rise in long-term interest rates.

Mid-day Overview
Market Internals
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon
Real-time Intraday Chart/Quote

Economic Data
None of note

Recommendations
- Goldman Sachs: Reiterated Outperform on MDT, LVS, CZN, HEW, TPX, STR and BSX. Reiterated Underperform on EW and THC.
- Smith Barney: Upgraded XLNX to Buy, target $38. Upgraded GTK to Buy, target $29. Upgraded MEE to Buy, target $54. Reiterated Buy on ACI, target $54. Reiterated Buy on CNX, target $57. Reiterated Buy on MSFT, target $31. Reiterated Sell on FCEL, target $7. Reiterated Buy on NPSP, target $20. Reiterated Buy on THC, target $16. Reiterated Buy on RSH, target $36. Reiterated Sell on LRY, target $35.
- JP Morgan: Raised URI to Overweight.
- CIBC: Rated RRI Sector Outperform.
- Bear Stearns: Raised NTE to Outperform, target $35. Raised COF to Outperform, target $95. Downgraded SID to Underperform.
- Prudential: Rated GR Overweight, target $43.
- Oppenheimer: Raised FD to Buy.

Mid-day News
US stocks are lower mid-day on continuing worries over higher interest rates and energy prices. Nokia Oyj expects the mobile music business to be worth “billions of euros” once demand for the services picks up, Taloussanomat reported. Delta Air Lines will stop selling food on many of its flights next month, giving customers a choice of free snacks instead, and it will remove pillows this month, the NY Times reported. Rising prices of commodities such as oil and copper reflect a strong global economy and may have a minimal effect on inflation, the NY Times reported. Plan International, Christian Children’s Fund and Save the Children US are among US charities opening their books for the first time to let outsiders verify that they’re spending donations as promised, the Wall Street Journal reported. Investing in plants that turn corn into ethanol has become popular in the US Midwest, the Wall Street Journal reported. More US hotels are allowing pets and adding perks for them in an effort to boost occupancy rates, the NY Times reported. Europeans are buying second homes in the US because their purchasing power has been boosted by a decline in the value of the dollar, the Wall Street Journal reported. China’s coal exports rose 34% to 6.74 million metric tons in January from a year earlier, the Tex Report said. Toys “R” Us has received an unexpected bid for the whole company, including its Babies “R” Us unit, the NY Post reported. French defense minister Alliot-Marie will seek support for European plans to lift an arms embargo against China when she visits the US this week, the NY Times reported. Microsoft Chairman Bill Gates said the US economy is “very strong” and customers are increasingly willing to spend money on new technology projects and investments, Bloomberg reported. Anthony Bolton, whose Fidelity Special Situations Fund has risen almost 90% since stock markets peaked in 2000, said Chinese stocks will probably produce “very good money” for investors in the next three years, Bloomberg said. German Chancellor Schroeder’s government may lower its forecast for 2005 economic growth for the fourth time in a year as domestic demand fails to accelerate, Bloomberg reported. The US economy will probably expand at a faster rate in the first quarter than previously estimated because of higher company spending on plant and equipment, a Bloomberg survey of economists found. IBM said the planned sale of its personal computer unit to China’s Lenovo Group was cleared by a US government committee, Bloomberg said. Qualcomm’s Paul Jacobs, who takes over as CEO from his father in July, said he plans to make acquisitions to add features such as games and video on mobile telephones, Bloomberg said. Social Security is a “Ponzi scheme” that uses current workers’ money to pay retirees, and President Bush’s plan to add individual accounts would fix that problem, Nobel Prize-winning economist Milton Friedman said, Bloomberg reported. Two more friends of former ImClone Systems CEO Waksal were accused of insider trading, the same allegation that led to Martha Stewart’s conviction of obstruction of justice charges, Bloomberg said. Crude oil is rising to a 4-month high, after a report showing a US inventory increase failed to damp concern about supply shortfalls this summer, Bloomberg said. US 10-year T-notes are falling, pushing yields to the highest since August, as oil and gasoline prices near record highs fanned concern inflation will accelerated, Bloomberg reported. Dan Rather’s departure tonight as the anchor of the “CBS Evening News” provides Viacom with the opportunity to remake a broadcast that has the lowest rating in 24 years and garners 13% less for advertisements than competitor NBC, Bloomberg said.

BOTTOM LINE: The Portfolio is slightly higher mid-day as gains in my Chinese ADR, Semi and Biotech longs are more than offsetting losses in software and healthcare longs. I have not traded today, thus leaving the Portfolio’s market exposure at 100% net long. The tone of the market is modestly negative as the advance/decline line is lower, sector performance is mostly negative and volume is light. Measures of investor anxiety are mixed. Technology stocks are outperforming and consumer-related stocks are underperforming as interest rates and gas rise. Today’s overall market action is disappointing for the Bulls, however losses could be worse considering the jump in rates and energy. I continue to expect NSM, ALTRA and INTC will echo the recent positive comments made by XLNX which should further spur tech shares. I expect US stocks to trade mixed from current levels into the close as optimism over US economic growth, short covering and bargain hunting offset worries over higher energy prices and interest rates.

Wednesday Watch

Late-Night News
Asian indices are higher, led by commodity producers in the region. New China Life Insurance Co. Ltd., China Reinsurance Co. Ltd. and two other insurers started buying domestic stocks yesterday, China Securities Journal reported. Wal-Mart Stores is among retailers asking US Congress to lengthen the legal workday for truckers to 16 hours from 14 hours, the AP reported. China's corporate pension funds may start buying stocks from markets as early as June, the Securities Times reported. Semiconductor Manufacturing International Corp. said it may buy billions of dollars of chip-making equipment from a partnership of Japanese companies and the nation's government, the Financial Times reported. Leading US companies say they will cut their workforce in Germany and withdraw production there due to high regulatory costs and a rigid labor market, the Financial Times said. Australia's dollar rose to a one-year high after prices of commodities the country sells abroad such as gold and copper surged, improving economic growth prospects, Bloomberg reported. IBM will provide hardware and software to run Warner Bros. Online's game based on "The Matrix" movies, Bloomberg reported. Time Warner unit AOL will begin offering Internet telephone service, according to Level 3 Communication, which signed an agreement with AOL to provide Voice over Internet Protocol technology, Bloomberg said.

Late Recommendations
- Goldman Sachs: Reiterated Outperform on SAP.
- Morgan Stanley: Said the Taiwan dollar is overvalued after it broke NT$31 against the US dollar.

Night Trading
Asian Indices are unch. to +.50% on average.
S&P 500 indicated +.01%.
NASDAQ 100 indicated +.10%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/Estimate
AMT/-.17
ADRX/.12
BBI/.04
CWTR/.25
COO/.54
IPG/.22
MATK/.23
KWK/.24
TLB/.29

Splits
None of note

Economic Data
Fed's Beige Book

BOTTOM LINE: I expect US equities to open modestly lower in the morning on continuing worries over high energy prices. The Bloomberg Crude Oil % Bulls Reading actually fell last week to 47.46% from 51.85%. The % Bulls was 73.33% right before oil peaked last October. This fact, along with strong technicals and fundamentals leads me to believe oil is headed higher in the near-term. However, I continue to think most commodities, including crude, will begin heading lower sometime during the next 2 quarters. This should provide a big boost to stocks in the second half of the year. The Portfolio is 100% net long heading into tomorrow.

Tuesday Close

Indices
S&P 500 1,219.43 -.48%
Dow 10,912.62 -.22%
NASDAQ 2,073.55 -.80%
Russell 2000 637.98 -.91%
DJ Wilshire 5000 12,008.00 -.53%
S&P Barra Growth 586.40 -.47%
S&P Barra Value 628.61 -.49%
Morgan Stanley Consumer 590.24 -.39%
Morgan Stanley Cyclical 781.41 -.20%
Morgan Stanley Technology 476.35 -.99%
Transports 3,872.17 -.10%
Utilities 360.80 -.68%
Put/Call .87 +14.47%
NYSE Arms 1.29 +67.53%
Volatility(VIX) 12.40 +1.14%
ISE Sentiment 176.00 +4.14%
US Dollar 81.98 -.98%
CRB 312.65 +1.06%

Futures Spot Prices
Crude Oil 54.55 -.07%
Unleaded Gasoline 153.60 +.05%
Natural Gas 6.86 +.26%
Heating Oil 152.55 +.11%
Gold 441.50 +.09%
Base Metals 131.25 +.98%
Copper 149.60 -.23%
10-year US Treasury Yield 4.38% +1.71%

Leading Sectors
Defense +.27%
Insurance +.08%
Commodity +.07%

Lagging Sectors
Homebuilders -1.88%
Gaming -1.94%
Iron/Steel -2.29%

After-hours Movers
- RETK +16.7% after Oracle said it plans to make a $504 million takeover offer for it, sparking a bidding war with larger competitor SAP AG.
- NGPS +4.2% after announcing that an order for additional Space Based Augmentation System equipment was received from Raytheon Company in support of the Indian GAGAN program.
- MMSI +6.52% after beating 4Q estimates and raising 05 outlook.
- HLTH +5.7% after meeting 4Q estimates and raising 05 guidance.
- WPTE -8.8% after missing 4Q estimates and lowering 1Q outlook.
- SEAC -5.6% after missing 4Q estimates and lowering 1Q guidance.

Evening Review
Detailed Market Summary
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
Futures Recap
S&P 500 Gallery View
Timely Economic Charts
PM Market Call
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
- Goldman Sachs: Reiterated Outperform on TAP and MO.

After-hours News
US stocks finished modestly lower today on worries over rising energy prices and interest rates. After the close, Iraq’s national security adviser said ousted dictator Saddam Hussein could go on trial by the end of the year, the NY Times reported. Russian Defense Minister Ivanov raised the prospect of withdrawing from the 1987 Intermediate-Range Nuclear Forces treaty with the US, the Financial Times said. Oracle Corp. said it plans to offer $9 a share for Retek Inc., which provides software to retailers, Bloomberg said. Commuters in the northeastern US heading home tonight are facing airport delays and other transportation hurdles as a snowstorm moves up the Atlantic coast, Bloomberg reported. Republican lawmakers revived legislation that would allow Americans to put $5,000 a year in tax-sheltered investment accounts, a bid to lift personal savings rates, Bloomberg said. Israel will probably transfer security control of the West Bank cities of Jericho and Tulkarm to the Palestinians in the next few days, Bloomberg reported. Directors of Kerr-McGee Corp. approved plans to spin off or sell the company’s chemicals business and buy back $1 billion in shares, Bloomberg said. Wm. Wrigley Jr. Co. plans to expand beyond chewing-gum business though won’t make any large acquisitions, the Financial Times reported. Iran will make reforms to make its oil projects more attractive to international energy groups and to increase returns on investments, the Financial Times said.

BOTTOM LINE: The Portfolio finished slightly lower today as losses in my Homebuilding, Gaming and Semi longs mostly offset gains in my Chinese ADR, Biotech and Alternative Energy longs. I exited a few longs from various sectors in the afternoon as they hit stop-losses, thus leaving the Portfolio 100% net long. The tone of the market deteriorated into the afternoon as the advance/decline line finished at its daily lows, almost every sector declined and volume was light. Measures of investor anxiety were mostly higher. Technology stocks underperformed throughout the day on disappointing comments from Texas Instruments. Overall, today’s market action was mildly negative as the major US indices consolidated recent gains on low volume. Stocks will likely continue to trade mixed in the near-term until oil and interest rates stabilize.

Mid-day Report

Indices
S&P 500 1,222.83 -.20%
Dow 10,942.41 +.05%
NASDAQ 2,083.42 -.32%
Russell 2000 640.81 -.47%
DJ Wilshire 5000 12,043.08 -.24%
S&P Barra Growth 588.30 -.14%
S&P Barra Value 630.06 -.26%
Morgan Stanley Consumer 591.23 -.22%
Morgan Stanley Cyclical 782.60 -.05%
Morgan Stanley Technology 478.71 -.50%
Transports 3,879.87 +.10%
Utilities 361.44 -.50%
Put/Call .84 +10.53%
NYSE Arms 1.09 +41.56%
Volatility(VIX) 12.33 +.57%
ISE Sentiment 196.00 +15.98%
US Dollar 82.01 -.94%
CRB 312.10 +.88%

Futures Spot Prices
Crude Oil 54.75 +1.60%
Unleaded Gasoline 153.50 +1.97%
Natural Gas 6.84 +1.88%
Heating Oil 152.20 +2.42%
Gold 439.80 +.92%
Base Metals 131.25 +.98%
Copper 149.90 +.17%
10-year US Treasury Yield 4.37% +1.57%

Leading Sectors
Defense +.46%
Energy +.35%
Insurance +.20%

Lagging Sectors
Gaming -1.41%
Restaurants -1.47%
Iron/Steel -2.24%

Market Movers
AAPL -4.33% on competitive worries.
X -3.5% on worries over slowing Chinese demand.
ADLR +21.21% after it and partner GalxoSmithKline said a study showed their drug Entereg helped patients with pain from bowel dysfunction.
NVDA -4.38% on profit-taking.
GRU +27.82% after announcing that it has signed an agreement with Google to include Google’s contextual AdSense advertising on its information pages, as well as the integration of Google search into its Answers.com product.
CKP +16.16% after meeting 4Q estimates and raising 05 outlook.
SNE +4.0% on optimism over new CEO.
EXM -15.52% after announcing 5.9M share secondary.
PRFT -11.86% after announcing 5.03M share secondary.
WRES -12.87% after 4Q estimates, giving disappointing outlook and KeyBanc downgrade to Hold.

Mid-day Overview
Market Internals
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Hot Spots
Option Dragon
Real-time Intraday Chart/Quote

Economic Data
None of note.

Recommendations
- Goldman Sachs: Reiterated Outperform on PFE, FSH, KR, AIG, DKS, LVS and CZN. Reiterated Underperform on THC and DJ. Reaffirmed Attractive View of Hospital sector.
- Smith Barney: Reiterated Buy on COO, target $93. Reiterated Sell on PP, target $33. Reiterated Buy on TXN, target $32. Expects to see lower dayrates for oil tanker companies in the second quarter and believes earnings for most of these companies will trail last year’s levels.
- Banc of America: Upgraded SMTC to Buy, target $23.
- JP Morgan: Raised PNCL to Overweight.
- UBS: Raised KAR to Buy, target $30. Raised YHOO to Buy, target $41.
- CIBC: Raised GSIC to Sector Outperform, target $18.
- Morgan Stanley: Raised COF to Overweight, target $79. Raised CDN to Overweight, target $18.
- Thomas Weisel: Raised APSG to Outperform.

Mid-day News
US stocks are mostly lower mid-day on worries over rising energy prices and long-term interest rates. Devon Energy may halt its operations in Syria amid mounting US political pressure on Syrian leaders, Asharq al-Awsat reported. OPEC is unlikely to change output when it meets in Iran next week, Dow Jones reported. Limited Brands, which owns Victoria’s Secret and Bath & Body Works chains, is focusing on skin-care products and cosmetics to avoid fluctuations in apparel prices and slow growth, the Wall Street Journal reported. Boeing expects its satellite division to make a profit in 2005 after years of losses, the Wall Street Journal reported. The US Financial Accounting Standards Board is proposing to force mergers-and-acquisitions fees to be booked as expenses, which would affect the reporting of profit for companies making acquisitions, the Wall Street Journal reported. US gains in energy efficiency and manufacturing rationalization have mitigated the negative impact of rising oil prices on economic growth, the Wall Street Journal reported. Interpublic Group won the $300 million global advertising account for Intel Corp., beating WPP Group Plc in a competitive pitch, Adweek said. Tata Steel, India’s second-biggest steelmaker, may raise prices of its products in April, the Press Trust of India reported. The US economy is showing good prospects for growth, with increased business investment and signs of relatively tame inflation, although some analysts are concerned about the global economy, the NY Times reported. Warner Music Group, the world’s fourth-largest record company, plans an IPO in the next 30-60 days that may raise $750 million to $1 billion, the NY Post reported. Boeing learned that former CEO Stonecipher was having an affair with an employee from an anonymous tip accompanying an excerpt of a graphic e-mail he wrote, the Wall Street Journal reported. Gtech Holdings filed a libel lawsuit over a campaign by Scientific Games to derail its bid for a contract in Mexico, the Wall Street Journal reported. Blockbuster Inc. is discussing a settlement to end investigation in at least 37 states over its “End of Late Fees” tv ad campaign, Reuters reported. Democratic lawmakers have been told by advisers that their united opposition to some of President Bush’s Social Security proposals haven’t paid off politically because voters don’t think Democrats have an alternative, the Washington Post reported. Imad Moustapha, Syria’s ambassador to the US, told MSNBC today “the sooner, the better” for the country’s withdrawal of its forces from neighboring Lebanon. Robert Friedman, the former CIO of Michael Price’s mutual fund company, is starting his first global stock hedge fund, Bloomberg reported. Italian Foreign Minister Fini said the fatal shooting by US soldier of an Italian intelligence officer in Baghdad was an accident, disputing charges by an anti-war journalist injured in the attack, Bloomberg said. The cleric-backed coalition that won the most seats in Iraq’s Jan. 30 election may join forces with the second-placed Kurdish Alliance, Ahmad Chalabi said. ValueAct Capital Partners LP, one of Martha Stewart Living Omnimedia’s largest shareholders, cut its stake to less than 1% from 6.1% in December, Bloomberg reported. Qualcomm named Paul Jacobs to succeed his father Irwin as CEO, Bloomberg said. President Bush said Syria must withdraw its troops and intelligence forces from Lebanon before that nation’s elections in May, Bloomberg reported. France’s main unions will stage a one-day national strike on March 10, even as unemployment in the country recently rose to 10%, to protest government plans to loosen the mandatory 35-hour workweek and to demand higher pay, Bloomberg said. Former President Clinton will have surgery on March 10 in NY to remove fluid and scar tissue in his chest cavity from open-heart surgery last September that is causing discomfort, Bloomberg reported. Crude oil is rising to within $1 of an all-time high in NY on speculation that OPEC will do little to rein in prices at a meeting next week, Bloomberg reported. The US dollar is falling to a two-month low against the euro after European Central Bank policy maker Wellink suggested to the Financial Times Deutschland the bank may raise its benchmark interest rate, Bloomberg said.

BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my Chinese ADR, Alternative Energy and Biotech longs are offsetting losses in my Gaming, Homebuilding and Semi longs. I took profits in a few longs from various sectors this morning and added a few new tech longs, thus leaving the Portfolio’s market exposure at 125% net long. One of my new longs is AAPL and I am using a $38 stop-loss on this position. The tone of the market is modestly negative as the advance/decline line is lower, sector performance is mostly negative and volume is light. Measures of investor anxiety are mostly higher. Today’s overall market action appears to be a further healthy consolidation on light volume after recent gains. The mildly negative reaction by the semis to TXN’s mid-quarter update is a positive. NSM and INTC should give a more positive assessment of business conditions later in the week. While I believe steel stocks will see a substantial correction later in the year, the latest pullback is likely a buying opportunity near-term. I expect US stocks to trade mixed from current levels into the close as optimism over US economic growth, short covering and bargain hunting offset worries over higher energy prices and interest rates.

Tuesday Watch

Late-Night News
Asian indices are mostly higher, led by Chinese stocks after Merrill Lynch recommended the country's shares. Lehman Brothers Holdings may be in exclusive talks with InterContinental Hotels Group Plc over $1.9 billion of the world's largest hotel company's assets, the London-based Times said. A Washington-based civil liberties group plans to file a FTC complaint early tomorrow against Web sites it says are incorrectly claiming to offer legal music downloads, the AP reported. UK e-commerce companies received 50% more private equity funding in 2003 than during the dot-com bubble of 2000, the Financial Times said, citing the British Venture Capital Association. Microsoft and SAP AG will be among companies targeting orders from smaller businesses at this year's Cebit technology fair in Germany as more exhibitors attend the show and resume spending on software and services. China unveiled a proposed anti-secession bill that would sanction the use of force to prevent independence by Taiwan in the event that efforts to secure peaceful reunification are unsuccessful, Bloomberg reported. China will allow investors to trade foreign currencies in the country for the first time in May, Dow Jones Newswires reported. The US Environmental Protection Agency proposed changes yesterday to the country's Lead and Copper Rule that would require utilities to conduct stricter lead testing for drinking water, the Washington Post said. Arizona Senator Kyl said Senate Republicans are drafting a budget plan that provides $70 billion in tax cuts during the next five years, $30 billion less than the White House requested.

Late Recommendations
- Goldman Sachs: Reiterated Outperform on RE, DKS, ENH, STR and MSFT.
- Merrill Lynch: Recommended investors buy shares of Chinese stocks as faster-than-expected economic growth will boost profits.

Night Trading
Asian Indices are -.50% to +.75% on average.
S&P 500 indicated -.16%.
NASDAQ 100 indicated -.29%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
CNBC Guest Schedule

Earnings of Note
Company/Estimate
CKP/.30
CZN/.12
CMS/.18
FCEL/-.41
KR/.34
LVS/.16
THC/-.09
HLTH/.13

Splits
AEOS 2-for-1
CBH 2-for-1
PENN 2-for-1

Economic Data
None of note.

BOTTOM LINE: I expect US equities to open modestly lower. However, stocks may rally later in the day on short-covering, bargain hunting, optimism over the US economy and weaker energy prices. The Portfolio is 125% net long heading into tomorrow.