Wednesday, January 26, 2005

Wednesday Close

Indices
S&P 500 1,174.07 +.48%
Dow 10,498.59 +.35%
NASDAQ 2,046.09 +1.29%
Russell 2000 616.57 +1.66%
DJ Wilshire 5000 11,544.35 +.61%
S&P Barra Growth 564.78 +.35%
S&P Barra Value 605.03 +.62%
Morgan Stanley Consumer 582.64 -.01%
Morgan Stanley Cyclical 748.27 +.36%
Morgan Stanley Technology 467.70 +1.94%
Transports 3,537.40 +.20%
Utilities 337.39 +1.69%
Put/Call .80 unch.
NYSE Arms 1.14 +35.71%
Volatility(VIX) 13.44 -4.41%
ISE Sentiment 202.00 +57.81%
US Dollar 83.30 -.82%
CRB 287.77 +.44%

Futures Spot Prices
Crude Oil 49.06 +.57%
Unleaded Gasoline 136.25 +.24%
Natural Gas 6.41 +.34%
Heating Oil 140.96 +.45%
Gold 426.70 -.05%
Base Metals 121.04 +1.30%
Copper 143.50 -.03%
10-year US Treasury Yield 4.19% +.09%

Leading Sectors
Semis +2.61%
Software +2.30%
Biotech +2.17%

Lagging Sectors
Foods +.04%
Restaurants -.03%
Boxmakers -.84%

After-hours Movers
SWIR -30.4% after missing 4Q estimates and lowering 1Q outlook.
VRSN -11.30% on profit-taking after beating 4Q estimates.
PHTN -13.66% after missing 1Q estimates and lowering 2Q guidance substantially.
OPEN -7.47% after announcing it intends to commence an offering of senior subordinated convertible notes.
NAVR -8.8% on profit-taking after beating 3Q estimates.
JDSU -6.94% after missing 2Q estimates and lowering 3Q outlook substantially.
GNSS -5.87% after missing 3Q revenue estimate and lowering 4Q guidance range.
NETL +20.37% on strong 4Q results.
DRIV +8.49% after beating 4Q estimates and raising 1Q/05 guidance.
SWFT +5.57% after substantially beating 4Q estimates.
RBAK +7.52% after beating 4Q estimates.
PSSI +4.59% after beating 3Q estimates and raising 05 guidance.
GMR +4.77% after saying it will pay a dividend based on most of its cash flow starting in the second quarter of this year.

Detailed Market Summary
Market Wrap CNBC Video(bottom right)
Futures Recap
NASDAQ 100 After-hours Indicator
Real-time/After-hours Stock Quote

Afternoon Recommendations
Goldman Sachs reiterated Outperform on N, GCI, COH, IBM and GILD. Goldman reiterated Underperform on AKS, ABY and NFB.

After-hours News
US stocks finished higher today, led by gains in technology and small-cap shares. China’s first priority is to broaden the exchange rate for its currency from the US dollar to a more flexible basket of currencies, said Fan Gang, director of the National Economic Research Institute in Beijing. The European Union may offer to train as many as 800 high-level civilian personnel, including administrators and judges, to build up Iraq’s institutions, the Financial Times reported. Crude oil fell for the first day in four after a government report showed an unexpectedly large rise in US inventories last week and OPEC’s president signaled that the group wouldn’t cut production, Bloomberg reported. Starbucks said first-quarter earnings rose 31% after it raised prices and added sandwiches and flavored coffees, Bloomberg reported.

BOTTOM LINE: The Portfolio finished unchanged today as gains in my internet longs offset losses in my software shorts. I added a few new longs in the afternoon, thus leaving the Portfolio 100% net long. One of my new longs is FFIV and I am using a $47 stop-loss on this position. The tone of the market improved throughout the afternoon as tech and small-caps outperformed, the advance/decline line finished at its highs, almost all sectors participated, good news was rewarded and volume increased. While stocks may consolidate a bit on rising apprehension ahead of the weekend, I anticipate further gains next week on a relatively successful Iraqi election and increasing optimism over President’s Bush’s ability to pass meaningful reforms.

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