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Friday Watch

Late-Night Headlines
Bloomberg:
- Japanese Prime Minister Junichiro Koizumi will apologize for the suffering his country inflicted on neighboring Asian nations during the World War II period.

Wall Street Journal:
- Saudi Arabia will invest about $50 billion in energy development in the next five years, more than double what it spent in the past five.
- NYSE CEO Thain plans to use the proposed merger with electronic rive Archipelago Holdings to dislodge some 480 stock-trading specialists.

Yomiuri:
- Japan will accept a Chinese proposal to discuss joint development of a gas field in an area of the East China Sea claimed by both countries.

South China Morning Post:
- Lenovo Group Ltd., China's biggest personal-computer maker, has been overtaken by Hewlett-Packard as the top seller in Aisa Pacific, citing an industry survey.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on TMK, BLS, ROH, XRX, DHR, ACS, GOOG, TPX, ZION and ADP.
- Reiterated Underperform on TCO, DCLK, PRXL, ATI and AEIS.

Business Week:
- Shares of Tibco Software(TIBX) may be worth as much as $15 a share in an acquisition, citing Willilam Harnisch, founder of Peconic Partners.
- Shares of Bioenvision(BIVN) are expected to rise amid anticipation that its drug to treat childhood leukemia will be approved by European regulators soon.

Night Trading
Asian Indices are +.50% to +.75% on average.
S&P 500 indicated -.20%.
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
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
EK/.33
FISV/.52
FO/1.02
IP/.30
LEA/.03
LSCC/-.07
MYG/.20
OSTK/-.11
RDC/.22

Splits
None of note

Economic Releases
None of note

BOTTOM LINE: Asian indices are higher, led by exporters, after US stocks had their biggest gains in 18 months, spurring optimism growth in the world's largest economy will be sustained. I expect US equities to open modestly higher in the morning on strength in the technology sector. The Portfolio is 75% net long heading into tomorrow.

Thursday Close

Indices
S&P 500 1,159.95 +1.97%
DJIA 10,218.60 +2.06%
NASDAQ 1,962.41 +2.54%
Russell 2000 598.98 +2.40%
DJ Wilshire 5000 11,431.55 +1.92%
S&P Barra Growth 562.38 +2.29%
S&P Barra Value 593.15 +1.66%
Morgan Stanley Consumer 579.02 +1.92%
Morgan Stanley Cyclical 715.55 +2.82%
Morgan Stanley Technology 443.07 +3.25%
Transports 3,513.02 +3.47%
Utilities 364.94 +1.27%
Put/Call .84 +3.70%
NYSE Arms .53 -71.80%
Volatility(VIX) 14.41 -14.83%
ISE Sentiment 126.00 -5.97%
US Dollar 83.70 +.22%
CRB 306.71 -.09%

Futures Spot Prices
Crude Oil 54.30 +.18%
Unleaded Gasoline 162.45 +.28%
Natural Gas 7.06 +.53%
Heating Oil 153.20 -.13%
Gold 434.40 unch.
Base Metals 125.70 -2.16%
Copper 148.00 -.24%
10-year US Treasury Yield 4.29% +2.61%

Leading Sectors
Airlines +3.68%
Oil Tankers +3.55%
Wireless +3.24%

Lagging Sectors
Papers +.05%
Restaurants -.18%
Gold & Silver -1.09%

Evening Review
Detailed Market Summary
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Daily ETF Performance
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Market Wrap CNBC Video(bottom right)
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Timely Economic Charts
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After-hours Movers
Real-time/After-hours Stock Quote
In Play

Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on AMGN, ALK, YUM, ODP and GOOG.
- Reiterated Underperform on JBLU and NFB.

Business Week:
- Asta Funding(ASFI), which purchases debt, may boost 2005 earnings by 20% as it profits from a new bankruptcy law.

Afternoon/Evening Headlines
Bloomberg:
- Hynix Semiconductor has agreed to pay $185 million to settle US charges that the company engaged in a conspiracy to fix prices of dynamic random access memory computer chips.
- Qwest Communications International will raise its bid for MCI Inc. to $30 a share, or $9.75 billion, to derail MCI’s agreement to be bought by Verizon Communications.
- Google said first-quarter profit rose six-fold as sales of online advertising outside the US surged and new features lured more Web surfers.
- News Corp.’s Fox Sports offered the NFL an equity stake in its proposed sports channel.

BOTTOM LINE: US stocks finished sharply higher today on optimism over earnings and fewer worries that the US economy is slowing too rapidly. The Portfolio finished unchanged today as gains in my Networking and Homebuilding longs offset losses in my Oil Tanker and Computer Hardware shorts. I exited a few shorts as they hit stop-losses and added a few new longs from various sectors in the afternoon, thus leaving the Portfolio 75% net long. One of my new longs is FFIV and I am using a $43.50 stop-loss on this position. The tone of the market strengthened into the afternoon as the advance/decline finished at its daily highs, almost every sector rose and volume was above average. Measures of investor anxiety were mixed. However, the AAII % Bulls rose 123.54% this week to 36.84%. Overall, today’s market action was very positive, considering the rise in long-term rates, a bounce in energy prices from daily lows and yesterday’s decline. While I feel strongly that US stocks have seen their lows for the year, the major indices will likely trade only modestly higher until the Fed starts making less hawkish comments and oil falls back below the psychologically important $50/bbl level. I expect these events to occur within the next couple of months and further spur US equities. As I stated a few days ago, longer-term investors should use any further weakness to begin acquiring shares of favorite longs.

Mid-day Scoreboard

Indices
S&P 500 1,154.04 +1.45%
DJIA 10,161.81 +1.48%
NASDAQ 1,950.89 +1.94%
Russell 2000 596.77 +2.02%
DJ Wilshire 5000 11,376.27 +1.43%
S&P Barra Growth 559.12 +1.69%
S&P Barra Value 590.28 +1.17%
Morgan Stanley Consumer 576.83 +1.53%
Morgan Stanley Cyclical 710.54 +2.10%
Morgan Stanley Technology 439.95 +2.53%
Transports 3,499.40 +3.08%
Utilities 364.02 +1.02%
Put/Call .84 +3.70%
NYSE Arms .70 -62.71%
Volatility(VIX) 14.87 -12.12%
ISE Sentiment 127.00 -5.22%
US Dollar 83.74 +.26%
CRB 305.61 -.45%

Futures Spot Prices
Crude Oil 53.25 -1.44%
Unleaded Gasoline 159.20 +.87%
Natural Gas 6.98 -1.09%
Heating Oil 150.90 +.02%
Gold 434.40 -.53%
Base Metals 125.70 -2.16%
Copper 148.40 -1.69%
10-year US Treasury Yield 4.29% +2.51%

Leading Sectors
Airlines +3.85%
Wireless +2.66%
Semis +2.53%

Lagging Sectors
Restaurants -.36%
Papers -.58%
Gold & Silver -1.19%

BOTTOM LINE: US stocks are sharply higher mid-day on better-than-expected economic reports, strong earnings outlooks and lower commodity prices. The Portfolio is slightly lower on losses in my Oil Tanker and Computer Hardware shorts. I added a few new tech longs this morning, thus leaving the Portfolio 50% net long. One of my new longs is EBAY and I am using a $31 stop-loss on this position. The tone of the market is positive as the advance/decline line is strong, almost every sector is higher and volume is above average. Measures of investor anxiety are mixed. Today’s overall market action is very positive, considering the rise in long-term rates and yesterday’s declines. I expect US stocks to trade mixed-to-higher into the close on short-covering and bargain-hunting.

Today's Headlines

Bloomberg:
- Saudi Arabia and the rest of OPEC can do little to lower record crude oil prices as banks, hedge funds and investors pile into “overheated futures markets,” said Saudi Arabia’s oil minister.
- The number of US workers filing initial jobless claims for unemployment benefits fell last week to a 10-week low of 296,000, a figure that was distorted by this year’s early Easter holiday, the Labor Dept. said.
- Shire Pharmaceuticals said it will buy US biotech company Transkaryotic Therapies for $1.6 billion to acquire treatments for a rare illness and anemia.
- Anheuser-Busch said Warren Buffett’s Berkshire Hathaway has become a “significant shareholder” of the company.
- Manufacturing in the Philadelphia region unexpectedly expanded at a faster pace this month as orders and shipments accelerated. The benchmark 10-year T-note fell the most in a month on the news.

Wall Street Journal:
- China’s 60 million retail investors, many of whom lost their life savings after stock markets declined, are stepping up pressure on the government to tighten market regulation.
- US high school students are taking summer trips to Senegal to work on AIDS projects and special courses to bolster their resumes years before they apply to college.
- Altria Group is nearing a deal with the Chinese government to allow Marlboro cigarettes to be made and sold in China.
- Sony will be closely watched by rivals when the company starts selling a new line of rear-projection televisions based on a light-reflecting semiconductor chip later this year.
- The FCC faces opposition form the broadcasting industry to tougher enforcement of rules against profanity and sexual content.
- News Corp. plans to offer television spots on its Fox channel that can be digitally changed to include content familiar to particular viewers.

NY Times:
- Clothing sellers in NY’s Garment District are unable to predict costs and maintain steady supplies because of potential tariffs on imports from China factories.

NY Post:
- DoubleClick is close to being bought by the San Francisco buyout firm Hellman & Friedman for about $1.2 billion.

AFP:
- France will continue to push the European Union to lift its arms embargo against China and doesn’t object to the Chinese government’s Taiwan anti-secession law.

Xinhua News Agency:
- China’s government will spend $15 billion of foreign reserves to bail out Industrial & Commercial Bank of China to help boost the lender’s core capital adequacy ratio to 6%.

Economic Releases

- Initial Jobless Claims for last week fell to 296K versus estimates of 330K and 332K the prior week.
- Continuing Claims fell to 2638K versus estimates of 2655K and 2655K prior.
- Leading Indicators for March fell .4% versus estimates of a .3% decline and a .1% rise in February.