Jobless Claims Remain Low

- Initial Jobless Claims for last week rose to 310K versus estimates of 318K and 305K the prior week.
- Continuing Claims rose to 2603K versus estimates of 2591K and 2571K prior.
- The Help Wanted Index for June rose to 38 versus estimates of 38 and a reading of 37 in May.

BOTTOM LINE: The number of Americans filing first-time claims for unemployment rose to 310,000, suggesting employers are adding workers as manufacturing rebounds and retail remains strong. The four-week moving-average of claims fell to 318,250 from 318,500. The insured unemployment rate, which tracks the US jobless rate, stayed at 2.0%. Payroll gains have averaged 181,330 this year versus 183,000 for all of 2004.

Links of Interest

Market Snapshot
Detailed Market Summary
Market Internals
Economic Commentary
Movers & Shakers
IBD New America
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
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Option Dragon
Real-time Intraday Chart/Quote

Thursday Watch

Late-Night Headlines
Bloomberg:
- The US government announced it agreed on a "framework" for a partnership to address climate change with China, Australia and three other countries that will help companies find a "profitable way" to cut greenhouse gases.
- US negotiators will today begin drafting principles that may lead to an accord with North Korea over the destruction of the communist state's nuclear weapons, said a senior official.
- The US House of Representatives approved the Central American Free Trade Agreement, overcoming objections by unions, sugar producers and textiles makers in what became the most contentious trade fight in Congress in a decade.

London-based Times:
- A record number of hedge funds were started up in the first six months of 2005, attracting over $13 billion in new capital, citing a survey by data provider Eurohedge.
- Morgan Stanley CEO Mack plans to turn around the bank's Dean Witter brokerage arm by cutting jobs and pursuing wealthier clients.

Financial Times:
- Cnooc Ltd. is considering a pledge to sell all Unocal's US assets, including

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on MUR, DO, MCK, MWV, SBUX and WLP.
- Reiterated Underperform on GM and APU.

Night Trading
Asian Indices are unch. to +.75% on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated +.09%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
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Earnings of Note
Company/EPS Estimate
ATVI/-.02
AET/1.08
AMT/-.08
ABX/.08
BZH/2.05
CELG/.14
DOW/1.22
XOM/1.24
KLAC/.48
MRO/1.57
MFE/.25
MERQ/.33
MGM/.43
NOC/.88
PD/4.25
SYMC/.25
WFMI/.57
XMSR/-.70

Upcoming Splits
None of note

Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 318K versus 303K the prior week.
- Continuing Claims are estimated to rise to 2591K versus 2577K prior.

10:00 am EST
-The Help Wanted Index for June is estimated to rise to 38 versus a reading of 37 in May.

BOTTOM LINE: Asian indices are higher on more earnings optimism in the region. I expect US equities to open modestly higher on gains in Asia and strong earnings reports. The Portfolio is 100% net long heading into the day.

Stocks Finish at Session Highs, Led Again by Tech

Indices
S&P 500 1,236.79 +.46%
DJIA 10,637.09 +.54%
NASDAQ 2,186.22 +.47%
Russell 2000 674.88 +.04%
DJ Wilshire 5000 12,334.91 +.40%
S&P Barra Growth 593.62 +.49%
S&P Barra Value 638.73 +.42%
Morgan Stanley Consumer 587.41 +.48%
Morgan Stanley Cyclical 760.52 +.47%
Morgan Stanley Technology 503.84 +.97%
Transports 3,761.69 +.54%
Utilities 393.94 +.43%
Put/Call .79 -5.95%
NYSE Arms .88 -14.27%
Volatility(VIX) 10.36 -5.73%
ISE Sentiment 178.00 -1.66%
US Dollar 89.73 -.30%
CRB 307.10 +.32%

Futures Spot Prices
Crude Oil 59.04 -.27%
Unleaded Gasoline 170.60 +.60%
Natural Gas 7.65 +2.99%
Heating Oil 161.35 +.61%
Gold 431.30 +.47%
Base Metals 125.49 +1.07%
Copper 162.65 +1.28%
10-year US Treasury Yield 4.25% +.70%

Leading Sectors
Internet +1.57%
Wireless +1.52%
Telecom +1.42%

Lagging Sectors
Disk Drives -1.27%
Restaurants -1.28%
Steel -1.40%

Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
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In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on CL, K, BXP, HOT, AHC and STR.
- Reiterated Underperform on RAI and BA.

Afternoon/Evening Headlines
Bloomberg:
- GM will end on Aug. 1 a program that gives employee discounts to all US buyers as it clears out this year’s models and prepares to offer lower prices on their 2006 replacements.
- Citigroup’s Sanford Weil said he will complete his term as chairman of the biggest US financial-services company, ending his plans to leave early and start a buyout fund.

CNBC:
- Cnooc Ltd., which is competing with Chevron to acquire Unocal, may raise its bid.

BOTTOM LINE: The Portfolio finished substantially higher today on gains in my Medical, Biotechnology, Semiconductor and Retail longs and Oil Tanker shorts. I did not trade in the afternoon, thus leaving the Portfolio 75% net long. The tone of the market was slightly positive today as the advance/decline line finished modestly higher, most sectors rose and volume was slightly above average. Measures of investor anxiety were mostly lower into the close. Overall, today’s market action was positive. It appears as though the major averages will penetrate the upper end of their recent trading ranges imminently.

Stocks Higher Mid-day on "Goldilocks" Beige Book Report

Indices
S&P 500 1,237.07 +.40%
DJIA 10,630.16 +.47%
NASDAQ 2,183.91 +.36%
Russell 2000 672.91 -.25%
DJ Wilshire 5000 12,322.11 +.30%
S&P Barra Growth 593.46 +.46%
S&P Barra Value 638.16 +.33%
Morgan Stanley Consumer 587.56 +.50%
Morgan Stanley Cyclical 760.47 +.48%
Morgan Stanley Technology 503.50 +.90%
Transports 3,755.86 +.39%
Utilities 393.51 +.34%
Put/Call .79 -5.95%
NYSE Arms .84 -17.95%
Volatility(VIX) 10.52 -4.28%
ISE Sentiment 188.00 +3.87%
US Dollar 89.73 -.30%
CRB 307.28 +.38%

Futures Spot Prices
Crude Oil 59.40 +.34%
Unleaded Gasoline 172.00 +1.37%
Natural Gas 7.65 +3.03%
Heating Oil 161.70 +.83%
Gold 430.90 +.37%
Base Metals 125.49 +1.07%
Copper 162.45 +1.15%
10-year US Treasury Yield 4.26% +.84%

Leading Sectors
Wireless +1.35%
Telecom +1.35%
Drugs +1.33%

Lagging Sectors
Oil Tankers -1.16%
Steel -1.50%
Disk Drives -1.62%

BOTTOM LINE: The Portfolio is substantially higher mid-day on gains in my Semiconductor, Medical, Retail longs and Oil Tanker shorts. I added to a few existing longs and added MDRX long today, thus leaving the Portfolio 100% net long. I am using a stop-loss of $16 on this position. The tone of the market is slightly positive as the advance/decline line is about even, most sectors are higher and volume is about average. Measures of investor anxiety are lower. Today’s overall market action is positive considering the rise in long-term rates. It appears as though investors liked the Fed’s Beige Book report that portrayed a “Goldilocks” style US economy. I expect stocks to trade higher into the afternoon on short-covering.

Today's Headlines

Bloomberg:
- US lawmakers may finish an agreement on a $286.5 billion highway bill today, ending a 22-month impasse on legislation that distributes gasoline taxes to states for road construction, House and Senate aides said.

Wall Street Journal:
- The US economy is in a stronger position than a few years ago, because of the economic policies pursued by President Bush, said Ben Bernanke, Alan Greenspan’s likely replacement.
- Investors in June withdrew about $2.3 billion from Standard & Poor’s Depository Receipts.
- Comcast may mount a challenge to Walt Disney’s ESPN.
- Coca-Cola, PepsiCo and other soft-drink companies may voluntarily restrict the sale of their beverages in schools.
- Boeing is doing such a good business that the company helped to reduce the US trade deficit by 6%, mostly on exports of aircraft and aircraft parts.

NY Times:
- The New York City Taxi and Limousine Commission yesterday said it supported a plan to introduce six hybrid taxicabs as early as this fall.

Reuters:
- China’s central bank “intervened” in the final minutes of trading today to push its currency to the lowest since the country revalued the yuan on July 21. The People’s Bank of China was demonstrating to investors that it doesn’t want the currency to rise further for now.