Monday, June 21, 2004

Monday Close

S&P 500 1,130.30 -.42%
NASDAQ 1,974.38 -.62%

Leading Sectors
Nanotechnology +2.58%
Utilities +.59%
Tobacco +.36%

Lagging Sectors
Oil Service -1.0%
Internet -1.17%
HMO's -2.10%

Crude Oil 37.75 -.05%
Natural Gas 6.31 -.46%
Gold 394.40 -.03%
Base Metals 109.83 +.46%
U.S. Dollar 89.26 +.01%
10-Yr. T-note Yield 4.68% -.46%
VIX 15.26 +1.80%
Put/Call .76 -7.32%
NYSE Arms 1.31 +63.75%

After-hours Movers
GLYN +49.6% after Dick's Sporting Goods(DKS) agreed to buy it for $305 million is cash.
TBUS +22.5% after announcing it received an order for security-related equipment that will be used during the Olympic Games.
DKS +6.99% after saying GLYN acquisition will boost 04 earnings.
PLMO +19.7% after beating 4Q estimates and raising 1Q forecast substantially.
LABS +4.74% after saying it will be added to the S&P SmallCap 600.

Recommendations has a positive column on BBBY saying its sell-off is overdone. Goldman Sachs raised their long-term growth rate forecast for AVP to 15-17%, reiterated Outperform.

After-hours News
U.S. stocks finished slightly lower today on weakness in healthcare and energy shares. After the close, InterActiveCorp expects to make more acquisitions, Chairman and CEO Barry Diller said in an interview with CNBC. Erectile dysfunction in diabetic men may be a warning of "silent" heart disease, according to a study in the June 22 online version of the Circulation Journal. General Electric and Honeywell International reached separate agreements to provide equipment to Chinese companies and will sign the contracts tomorrow at a ceremony in Beijing with U.S. Commerce Secretary Donald Evans, Bloomberg reported. Cablevision, the largest cable-tv operator in the New York area, began offering a $90-a-month package of TV, telephone and Web-access service to lure customers from satellite and phone competitors, Bloomberg reported. California Governor Schwarzenegger signed new casino agreements with five Indian tribes to provide $1 billion to the state next year, meeting a campaign promise to tap gabling money to fill budget deficits, Bloomberg reported. The U.S. Senate killed an attempt by Democrats to give journalists access to the arrival of coffins carrying war dead home from Iraq, Bloomberg reported. The U.S. and the European Union agreed on terms for EU construction of its Galileo satellite navigation system, boosting a technology market that could grow to $300 billion by 2020 and benefiting companies such as Trimble Navigation and Garmin Ltd, Bloomberg reported.

BOTTOM LINE: The Portfolio finished near its highs for the day on strength in my base metal, security and telecom equipment longs and weakness in my Chinese ADR and software shorts. I added a few new healthcare IT and Oil Service shorts in the afternoon, leaving the Portfolio with 75% net long market exposure. One of my new shorts is PTEN and I am using a $33.25 stop-loss on this position. A number of stocks experienced eye-popping gains today, notwithstanding the market's overall quietly weak performance. This is positive for market psychology as it appears that good news is beginning to be rewarded again in a substantial fashion. NVEC, TASR and PLMO were a few of the highly-shorted companies that reported great news today and rose significantly. If my Portfolio were positioned substantially short right now I would be very worried over this type of action. As well, interest rates and energy prices continue to head lower which makes me more confident that the market is consolidating before a significant move up within the next few weeks.

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