Wednesday, June 23, 2004

Mid-day Update

S&P 500 1,135.47 +.09%
NASDAQ 2,004.78 +.53%

Leading Sectors
Nanotechnology +3.63%
Networking +3.50%
Iron/Steel +1.74%

Lagging Sectors
Insurance -.56%
Foods -.61%
Broadcasting -.63%

Crude Oil 37.58 -1.75%
Natural Gas 6.36 -.81%
Gold 395.40 -.03%
Base Metals 108.11 +1.12%
U.S. Dollar 89.37 -.06%
10-Yr. T-note Yield 4.69% -.55%
VIX 14.52 +1.47%
Put/Call .94 +17.50%
NYSE Arms .74 +12.12%

Market Movers
CECO -17.7% after the company said it received a formal order of investigation from the SEC.
OSUR +25.8% after the FDA approved its test to detect HIV Type 2 in saliva.
PFGC -18.09% after cutting 2Q, 3Q and 4Q forecasts.
RJR +4.0% after winning FTC approval to acquire Brown & Williamson and saying it may sell some less popular cigarette brands to compete against Philip Morris.
MYL -9.2% after withdrawing its earnings forecast and suing the FDA after the agency delayed approval of the company's version of the Duragesic pain-relief skin patch.
IBPI -69.0% after saying it halted a trial of it iseganan drug for preventing pneumonia because participants who got the medicine had higher rates of pneumonia and death.
NVEC +14.22% on continued short squeeze following its announcement of a new patent.
MINI +15.07% after raising 2Q and 04 guidance.
TASR +8.02% on rumors of a deal with Sharper Image to sell a consumer version of its stun gun.

Economic Data
None of note.

Goldman Sachs reiterated Outperform on KRI, PFGC, NKE and GCI. Goldman reiterated Attractive coverage view on Paper stocks, favorites are DTC, SPP and IP. Citi SmithBarney reiterated Buy ratings on FON, APCS and TEL. Citi reiterated Buy on GE, target $36. Citi reiterated Buy on MDC, target $100. Citi reiterated Buy on MWD, target $72. Citi reiterated Buy on GS, target $117. Citi reiterated Sell on IM, target $13. SFNT raised to Buy at Legg Mason, target $32. STA cut to Underweight at Morgan Stanley.

Mid-day News
U.S. stocks are mostly higher today as continued strength in computer networking shares boosts the entire tech sector. The U.S. military's Central Command has informally asked for as many as 25,000 more soldiers to send to Iraq, the Baltimore Sun reported. The Recording Industry Association of America filed lawsuits against 482 more computer users yesterday for alleged illegal Internet music copying, the AP reported. Saudi Arabia's leader, King Fahd, today offered an amnesty to suspected terrorists who turn themselves in within a month, Agence France-Presse reported. Tenet Healthcare, the U.S. hospital chain facing allegations it defrauded the government, doubled a junk-bond sale to $1 billion last week to give the company its biggest cash reserves since at least 1990, Bloomberg said. Eight U.K. servicemen who were seized by Iran with their naval vessels on a waterway between Iran and Iraq will be freed today, the U.K. and Iranian governments said. The SEC approved a pilot program that would ease short-selling restrictions on 1,000 stocks, Bloomberg reported. Shares of, an Internet-based seller of business software, rose as much as 43% in their first trading after the company boosted its IPO to $110 million, Bloomberg said. Crude oil futures are falling after the Energy Department reported that U.S. inventories increased more than expected last week, Bloomberg reported. President Bush said the U.S. would add Vietnam to the list of countries under a pilot program to treat HIV and AIDS patients, and said the U.S. is committed to ending the modern-day "plague," Bloomberg reported. Bank of America will spit its stock 2-for-1 and boost the quarterly dividend 13% to .90/share, Bloomberg said.

BOTTOM LINE: The Portfolio is having a very good day today as a few of my semiconductor, security and base metal longs are rising substantially. I added a few new longs in various sectors this morning, leaving the Portfolio with 125% net long market exposure. One of my new longs is TLAB and I am using a stop-loss of $8 on this position. I expect stocks to rise modestly into the close on short-covering, falling energy prices and declining interest rates.

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