Wednesday, June 23, 2004

Wednesday Close

S&P 500 1,144.06 +.85%
NASDAQ 2,020.98 +1.35%

Leading Sectors
Networking +4.38%
Disk Drives +4.02%
Nanotechnology +4.02%

Lagging Sectors
Foods +.01%
Broadcasting -.11%
Gaming -.13%

Crude Oil 37.62 +.13%
Natural Gas 6.42 +.08%
Gold 395.40 -.03%
Base Metals 108.11 +1.12%
U.S. Dollar 89.43 -.01%
10-Yr. T-note Yield 4.69% -.46%
VIX 13.98 -2.31%
Put/Call .82 +2.50%
NYSE Arms .60 -9.09%

After-hours Movers
OVTI +11.15% after beating 4Q estimates, restating 1-3 quarters.
MLHR -4.73% after missing 4Q forecast and widening 1Q forecast.
T -4.14% after lowering 04 forecast.
MU -3.88% after beating 3Q earnings estimates but missing revenue estimates.
BBBY -3.14% after beating 1Q estimates and maintaining 2Q guidance.

Goldman Sachs said Sprint's announcement of its EV-DO rollout will benefit LU, NT and MOT. Goldman says SBC's announcement of an incremental $4-6 billion in capex over the next 5 years will benefit TLAB, ALA and CIEN. Goldman reiterated Outperform on NT, CSCO and JNPR.

After-hours News
U.S. stocks finished higher today, led by technology shares, as interest rates and oil prices fell. After the close, the BBC said it plans to start an Arabic-language television channel to broadcast 24-hour news across the Middle East, the Financial Times said. MasterCard will team up with NameProtect, a private U.S. online fraud detection company, to fight illegal misuse of the Internet, the London-based Times said. Comdex, once the biggest U.S. technology trade show, has been canceled this year because companies' budgets were "better suited" to hosting an event in 2005, Bloomberg reported. U.S. Treasuries rose in New York for a second day in three after the government sold $25 billion of two-year notes at the highest yield since June 2002, Bloomberg reported. FedEx raised its earnings forecast for the fiscal year and said fourth-quarter profit climbed 47% on an expanding global economy, Bloomberg said. Time Warner may form a partnership to offer wireless service to its cable television customers, Bloomberg reported. Six former executives of Enron and Merrill Lynch face additional charges in their fraud trial scheduled to begin August 16, Bloomberg said. Delta Air Lines' $11.8 billion in debt securities was downgraded by Moody's Investors Service because of concerns that losses will continue and cash flow will be reduced without labor and operating cost reductions, Bloomberg reported. An AOL software engineer was arrested and charged today with scheming to steal the Internet provider's subscriber list and send "massive amounts" of spam, Bloomberg reported.

BOTTOM LINE: The Portfolio finished substantially higher today. I covered several shorts and added a few new longs in various sectors in the afternoon, bringing the Portfolio's market exposure to 150% net long. One of my new longs is ACH and I am using a stop-loss of $47 on this position. The summer rally I anticipated appears to have begun in earnest today. I expect this rally will continue in fits and starts for the next several weeks.

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