Sector Investing

[ReturntoSender]

U.S. stocks rebounded from losses, lifting the DJIA by almost 200 points in the last two hours of trading. Bank of America and other financial stocks gained. The rally began after the S&P 500 held above its average price for the past 200 days. Traders track such levels on stock charts to gauge the market's momentum, and the S&P 500's ability to stay above 1078 showed that the decline was running out of steam. The DJIA rose 25 points (+0.3%) to 10,045. The benchmark earlier fell as low as 9852, a loss of 1.7 percent. The S&P 500 added 1 point (+0.2%) to 1097.. The Nasdaq lost 5 points (-0.3%) to 1925, its fourth loss in five days, after Cisco's earnings failed to impress investors. Advancing and declining stocks were about even on the New York Stock Exchange. Some 1.7 billion shares changed hands on the Big Board, 14 percent more than the three-month daily average. Since reaching a 23-month high on Feb. 11, the S&P 500 has shed 5.2 percent, while the Dow has lost 6.5 percent from its 31- month high the same day. The Nasdaq has retreated 11 percent since its two-and-a-half year high set on Jan. 26.

Strong Sectors: biotech, broker/dealer, oil services, insurance
WeakSectors: semiconductor, gold, tobacco, personal services, chemicals

Top Stories . . . World oil demand this year will rise the most since 1988 as economic growth accelerates and consumption surges in China, the International Energy Agency said. Crude oil traded to 13-year highs.

The dollar had its biggest decline against the euro in a week after the U.S. trade deficit unexpectedly widened to a record $46 billion.

The U.S. trade deficit grew in March to a record $46 billion as the highest oil prices in more than two decades and increased consumer spending boosted the value of imports, the Commerce Department reported in Washington.

Citigroup, the world's biggest financial-services company, agreed to buy Principal Financial Group's residential-mortgage business for $1.26 billion, as rising interest rates increase the value of servicing existing mortgages.

Upcoming Event . . . I will be speaking at a two day financial freedom seminar this weekend. It should be a fun event in San Jose. This is not a pure investment seminar. Some of the topics that will be covered over the two days include how to get started, find money, tax savings, property management, foreclosures, 1031 exchanges, property analysis, creative financing, negotiating skills, partnerships, networking, and of course some real estate investment angles. For more information go to http://sjrei.net/financialfreedom.html

Quotes of Note . . . ``There's still a lot of anxiety, particularly with crude oil above $40 a barrel. And certainly, Cisco didn't exactly knock the cover off the ball.'' Keith Keenan, head of trading at Wall Street Access, which trades for 60 mutual funds and hedge funds in New York.

Gurus . . . Economist Irwin Kellner says there is a rule of thumb that every penny per gallon that gasoline prices rise takes $1 billion out of the economy. Since the end of 2001, gasoline prices have jumped by over 80-cents a gallon, effectively negating more than one quarter of the $316 billion in stimulus that was provided by the three Federal tax cuts.

Sy Harding publishes a newsletter based on the seasonal patterns. He says the success of the November-thru-April period is because investors have more cash to invest from year-end bonuses and tax refunds. When the spring arrives, and the flow of extra money dries up, it deprives investors of money and mutual funds of money to buy the dips.

Barron's Online highlights Daniel Rice, a manager of State Street Research Global Resources fund, for his stock pick's. Mr. Rice has delivered market-busting returns for his shareholders by keeping a steady eye on company's tied to three fossil fuels -- oil, natural gas and coal. In 2003, Mr. Rice's fund gained 60% and though the stock market has lost ground this year, fund is up more than 5%. Over the past 5 years, the fund has averaged a stellar 25% annualized return. Mr. Rice's favorite coal co right now is CONSOL Energy. He likes to play high oil prices through Plains Exploration & Production. Mr. Rice's favorite sector is oil services and favorite stock in this sector is Patterson-UTI Energy.

Tax Breaks . . . The Wall Street Journal reports that a package of corporate-tax breaks and other changes cleared the Senate as lawmakers embraced an election-year chance to help domestic manufacturers, U.S. multinational company's, and the energy industry while closing numerous business tax shelters. The heart of the bill, which faces an uncertain future in the House, is the repeal of an export-tax incentive that the World Trade Organization ruled illegal, resulting in stiff tariffs on U.S. exports to the European Union.

Mortgages . . . Demand for U.S. mortgage loan refinancings plummeted last week amid a rise in mortgage rates, but applications for loans to buy homes rose, an industry trade group said on Wednesday. The Mortgage Bankers Association said on Wednesday its measure of demand for mortgage refinancings, the refinancing index, fell 13.2% to 2,184.6 in the week ended May 7. Average interest rates on 30-year mortgages rose 22 basis points to 6.32%, the highest level so far in 2004, the MBA said. The MBA's mkt index, a measure of overall lending activity, fell 5% to 742.2, and the group's purchase index, a gauge of requests for loans to buy homes, rose by 2.4% to 494.3 from 482.5 in the prior week. Overall lending activity dropped 5% according to the group's market index and the purchase index rose by 2.4% in the week to the second highest level on record up to 494.3 from 482.5.

China . . . Over the past week, senior Chinese leaders have given additional clarity on China’s ongoing policy-induced slowdown. The recent steps constitute a constructive, incremental monetary tightening. They should moderate China’s fixed asset investment growth without causing a broad, sharp economic slowdown. Expect China’s reported year-over-year real GDP growth to slow to roughly 8% by late 2004 and into 2005, down from the 9.7% year-over-year growth rate recorded in the first quarter of 2004.

There has been an adverse market reaction to China-related news since mid-April has largely been due to uncertainty, not the actual measures. Premier Wen Jiabao’s remarks in Europe over the past week and comments from President Hu Jintao are helping clarify the leadership’s policy. The measures signaled thus far imply a continuation of the incremental monetary tightening begun in mid-2003. They focus on areas where imperfect information and an underdeveloped price mechanism have caused sector-specific bubbles in China’s economy.

Financials . . . Morgan Stanley upgrades Capital One to Overweight from Equal-Weight and raises their target to $71 from $69. The firm cites valuation, as the stock has sold off by 16%, compared to 3% for the S&P 500 in the past month.

The WSJ reports, citing people familiar with the matter, that General Electric is nearing an agreement to buy Boeing's commercial-finance portfolio for about $2 billion. The deal, which still is being negotiated, would include Boeing leases and loans on such heavy equipment as ships, drilling rigs, trucks and office equipment. People familiar with the deal say it could close within the next week.

Prudential upgrades Bank of America to Overweight from Neutral Weight and raises their target to $86 from $84, given expectations for faster than expected merger savings. The firm says BAC has a more stable mgmt, an easier to understand structure, less regulatory risk, better positioning for higher rates, and (vs Citi) a more certain expense driven earnings outlook.

Citigroup will acquire Principal Residential Mortgage, one of the largest independent mortgage servicers in the US. The company originates, purchases, sells and services home loans, consisting primarily of conventional, conforming, fixed-rate prime mortgages. It is owned by The Principal Financial Group. The transaction includes $6.9 billion in assets and also includes $137 million of franchise premium. It is expected to be accretive to Citigroup's 2004 earnings.

There has been a “rush to judgment” in extrapolating Citigroup’s record $2.65 billion settlement of the WorldCom litigation and its more than $5 billion addition to its reserves for other litigation to other banks. Although the lead plaintiff in the WorldCom litigation is seeking to settle with other banks on some of the same terms that Citigroup agreed to, argue that Citigroup’s multiple roles as debt underwriter, merger adviser, and champion of WorldCom’s stock through a highly visible equity research analyst made Citigroup uniquely vulnerable once WorldCom entered bankruptcy court. In addition, Citigroup’s eagerness to settle the litigation was driven partly by concern about its retail brokerage franchise and how yet another public airing of conflicts between investment banking and equity research would affect that business’s continuing recovery from a three-year bear market. Most banks don’t havea retail brokerage business as important to its earnings as Citigroup’s, and therefore those banks may be willing to take a harder line in settlement discussions than Citigroup did. Expect that other banks will also ultimately settle litigation stemming from the collapse of WorldCom, Enron, and Parmalat, most analysts doubt that any other bank will post a charge that wipes out one quarter’s worth of its earnings, as Citigroup’s did.

Capital One reported monthly managed data for April. The data showed continued improvement in credit quality. Managed loan growth was weak, but we believe growth was somewhat understated as a result of a stronger US dollar relative to UK pounds and CDN dollars during April. In April, the managed chargeoff rate decreased to 4.70% from 4.74% in March. Dollar chargeoffs increased very slightly (less than $1 million) in April. The managed 30+ delinquency rate decreased to 3.69% at the end of April from 3.80% at the end of March. Managed loans grew by $183 million, or 26 bp (3.06% annualized) from March to April. Excluding the estimated

effect of a stronger dollar, managed loans increased by 67 bp (8.06% annualized ). The US dollar strengthened by 3.6% against the UK Pound and by 4.7% against the Canadian Dollar in April. At March 31, the company had $8.3 billion of international loans. The managed chargoff rate and the delinquency rate are the lowest since the company began reporting monthly managed data (still a good idea). The delinquency rate is the lowest since 1995, according to the company. Much of the improvement in credit quality is attributable to the mix shift up market in US cards as well as diversification into non-card lending, though the improved economy helped.

Oil & Gas . . . Saudi Arabia said today that it stood ready and able to boost oil output to meet global demand growth, but only after consultation with fellow OPEC exporters. "We will make sure there is no shortage in the market. If there is a need, and in coordination with OPEC, we will increase our production," a senior Saudi oil official told Reuters. OPEC will discuss the Saudi proposal at an informal meeting in Amsterdam on May 22-24 and then finalise any decision when it meets on June 3 in Beirut.

Defense & Aerospace . . . Northrop Grumman 2- declares a 2-for-1 stock split and approves a 15% quarterly dividend increase to $0.46 (1.9% yield) from $0.40 on a pre-split basis.

Retail . . . Prudential upgrades Abercrombie to Overweight from Neutral-Weight following stronger than expected results; firm also cites the following factors: 1) 320 basis points of gross margin upside versus their estimate; 2) improving sales trends, as comps in the ANF adult biz were positive in the last 2 weeks of April, and the girls biz improved with new deliveries; 3) comps that have been above expectations in 3 of last 4 months and easier comparisons going forward; 4) a new growth vehicle on the horizon; 5) conservative ests and significant earnings power in the story; and 6) attractive valuation. Target is $39.

What is driving Retail (mostly Apparel) . . . . Demographic, cultural, and societal trends have a powerful effect on consumer preferences; the value-conscious, channel-neutral

consumer is just one example.

Retail Opportunities: Baby Boomers, Gen Y, Hispanics, and Asians. In 2003, the largest generational segments were the baby boomers and Gen Yers, both with 26% of the population. In addition, the future growth rates are the largest for the older-than-55 group, while the 38-55 demographic is shrinking (and so may the retailers that target this group)! Finally, Asians and Hispanics have the highest projected population growth rates across all ethnicities.

Pop Culture Is Driving Consumer Interest. Urban brands, preppy fashions, low-carb foods, and personal care products (particularly for males) are all the rage.

Powerful Digital Products and Fashion Cycles Are Creating Impressive Demand Trends. The digital products cycle is resonating with the consumer, driven primarily by the convergence of media and technology. In apparel, the impressive fashion cycle is leveraging sales and promoting firming pricing power. Vibrant colors from the apparel world are also penetrating the world of home décor . the kitchen in particular.

Labor Market Recovery Bodes Well for Career Wear and the Lower-to-Middle Income Demographic. The improving employment picture is reviving the once-quiet world of career wear and sets a compelling backdrop for spending by the lower-to-middle income demographic for the remainder of 2004.

Strategies to Grow Retail after Top Line Post-Store Saturation

Enhance the Current Offering. Retailers that can offer customers a broader assortment and/or customizable products will win the battle for shopping dollars. Old Navy often markets and merchandises directly to the Hispanic consumer when the demographics support such a strategy.

Make Product and Brand Extensions. For example, as store growth slowed, Gap introduced Gap Body, and Victoria’s Secret launched its perfume and beauty aid lines.

Launch Second Concepts. For example, in 2000, realizing that store saturation was fast approaching with 265 core A&F stores, the company rolled out Hollister. By 2003, Abercrombie was operating 357 A&F and 172 Hollister stores, which represents compound annual growth rates of 10% and 225%, respectively.

Invest in Store Remodels and Refurbishments. When stores reach maturity, they often achieve a base same-store sales level of approximately 2%-3%. Updating the store format often increases store productivity. Look at the remodeling of the Express and Express Men’s concepts by Limited.

Relocate Stores. What might have been the right location several years ago may no longer work today. In the early 1990s, Circuit City expanded quicker and earlier than Best Buy and thus has a greater percentage of less attractive B and C locations in its portfolio. However, it now plans to relocate about one-third of its store base (approximately 200 locations) over the coming years in order to level the playing field with Best Buy.

Restaurants . . . Jack In The Box reported earnings of $0.53 per share, $0.10 better than the consensus of $0.43. Revenues rose 11.6% year/year to $517.3 million versus the $507.0 million consensus. The company sees 3rd quarter EPS of approximately $0.53 versus the consensus of $0.46. For 2004 company sees EPS of $2.14, ex items, vs the Reuters Research consensus of $1.92.

Apparel . . . JP Morgan believes that investor concerns over the slowing European market which sparked from 1st quarter weakness at Reebok, Adidas, and Foot Locker is valid, but overblown as it relates to NKE. The firm does not believe weakness in Europe presents significant risk to their earnings forecast for NKE, as a slowing growth rate for this region has already been assumed given a decelerating backlog for the last 3 qtrs. With NKE now trading at 16.1x their 2005 EPS estimate, firm says the stock seems to assume significant downward earnings revisions, and they would be buyers of NKE ahead of Foot Locker's earnings release on May 19, which they expect to reassure the mkt. Maintains Overweight.

Healthcare . . . Smith Barney upgrades Humana to Hold from Sell based on valuation, as the stock is now below their $18 target (up from $17).

Smith Barney upgrades Coventry Health to Buy from Hold and raises their target to $54 from $51 based on: 1) firm assigns a B+ to CVH reserves in their proprietary "Reserves Revisited" report available on Thursday; 2) attractive valuation, as the stock is trading 1 point above the low-end of its 7-year normal range, and trades at 10.5x their 2005 EPS estimate versus 10.9x for group; 3) firm expects 30% EPS growth in 2004 and 15% in 2005; 4) potential upside from acquisitions.

KeyBanc/McDonald downgrades Weight Watchers to Hold from Buy following in-line results and below-consensus 2004 guidance. The firm says that near-term, the recovery in attendance has become less certain due to the proliferation of low carb food products introduced by packaged foods company's, and the confusion in the marketplace is causing many dieters to switch to unstructured self-help diets under the misconception that low-carb food consumption alone will produce weight loss. Also, firm says management indicated that it has a 3-point plan to help reverse the negative attendance trends, but was vague regarding details and timing.

Biotech . . . Maxim Pharm announced the results of an international Phase 3 clinical trial testing the combination of Ceplene plus interleukin-2 in 320 patients with acute myeloid leukemia in complete remission. The company meets the primary endpoint of the Phase 3 trial as patients treated with the Ceplene/IL-2 combination therapy experienced a statistically significant increase in leukemia-free survival. AML is the most common form of acute leukemia in adults and is typically treated with chemotherapy, but the majority of patients will ultimately relapse. The prognosis for AML patients after relapse is dismal, with few long-term survivors.

Media . . . Stifel Nicolaus notes that Sirius reported that it reached the 400k subscriber mark after the close yesterday, which implies that SIRI has added 49k subscribers so far in the qtr. Firm says their first impression of this number was that SIRI is pacing to miss their 2nd quarter subscriber addition estimate of 135k, as the co has only hit 36% of their estimate yet is now 44% into the number of days in the qtr; however, firm says a deeper analysis of sales data reveals that in each of the past two years June was a disproportionate percent of the quarterly retail sales for XM Satellite Radio and SIRI combined, at about 44%; thus, firm estimates that in prior quarters about 37% of product sales were made through May 10. The data also indicated that April and May were below March data, which is roughly in-line where SIRI is right now. Given a lag between product sales and activations, firm says SIRI is on track to slightly miss or meet their 2nd quarter subscriber number, which they believe is roughly in-line with the Street.

AmTech says they expect 3 things from YHOO's analyst day tomorrow: 1) lots of discussion about the breadth of YHOO's product offering, with the implication that it is broader than Google; 2) a focus on growth in int'l mkts; and 3) new long-term margin guidance, which they think will in the range of 40-45% EBITDA (YHOO did 38% in March, exceeding prior guidance of 30-35%). Firm expects the analyst day to be positive but do not expect numbers to be raised afterwards. While YHOO remains their top internet stock with a 12-month horizon, they would not encourage purchase purely for a trade into the analyst day.

Prudential downgrades Washington Post to Underweight from Neutral-Weight as the firm thinks the stock price is overvalued at this time relative to its peers. Broadcasting is expected to face tough comps in 2005 as the firm forecasts an incremental $34.5 million of Olympic and political related ad revenue in 2004. The firm expects 2005 operating profit growth to moderate as several years of cost controls help give margins a boost in 2004.

Napster, a subsidiary of Roxio, has signed a worldwide distribution deal with UK independent labels body AIM, the Association of Independent Music. Initially, 50,000 tracks from 50 of AIM's 800 member companies will be made available for digital downloading and streaming through the new Napster service when it launches in the UK this summer. Napster members in the US will also gain access to this content, as soon as repertoire is uploaded.

Hotel & Leisure . . . Isle of Capri will still seek approval to build a casino in a Chicago suburb despite Illinois Attorney General Lisa Madigan's decision to revoke the license won by ISLE in a controversial March auction. Co says it is greatly disappointed, but not surprised, and takes great issue with her mischaracterizations of ISLE and its management. Co says this process has become a game of political one-up-man-ship.

Telecom . . . Raymond James upgrades Triton PCS to Outperform from Market Perform following mixed 1st quarter results. While firm believes that TPC will continue to see turbulence in 2004 due to the proposed Cingular/AT&T Wireless merger, they believe that the market has overreacted and the potential rewards now outweigh the risks. Target is $7.

Network Equipment . . . Cisco results were in line with most previews. Revenue of $5.62 billion was better than the consensus of $5.55 billion. This revenue represents a quarter/quarter increase of 4.1%. Gross margin was 68.8%, up sequentially from 68.5% in the last quarter. Operating margin was flat at 30.6%. Pro Forma EPS was $0.19, or a penny better than our and

consensus estimates. Book to bill was 1. Major positive standouts include: More optimistic outlook as result of better business activities, Cisco will hire 1000 in R&D and Sales in 2004. Deferred revenue up 7% across the board. Margin improved through cost reduction despite lower prices. Market share gains in enterprise markets. Concerns: Inventory increased 20% quarter/quarter, could be vulnerable to risks of slow downs if expectations of better demands does not materialize. Router sales decline by 9%, despite booking up 10%. Carrier sales were relatively sluggish, especially in optical. Linksys – slower growth of 5% quarter/quarter. China/AP was a bit soft. Overall, we are still impressed by Cisco’s favorable market position, positive outlook, and excellence in execution. Analysts are increasing 2004 & 005 revenue estimates modestly to $22 billion and $24.9 billion. Analysts are also raising estimates of 2004 EPS by 1 penny to $0.74, and FY2005 EPS by 3 pennies to $0.84. Cisco is trading 5.6x 2005E revenue and 26.5x FY2005 EPS. Our DCF analysis suggests that Cisco’s stock is discounting 11% annual growth over the next 10 years. This appears slightly aggressive, given the growth limitations of a large company, peak margins, and high stock options expense. However, Cisco deserves a premium.

Oppenheimer upgrades Scientific-Atlanta to Buy from Neutral and raises their 2005 EPS estimate above consensus, citing the following factors: 1) the shipment of "significant" quantities of HD-capable set-tops to several customers in Japan, 2) the decision by Time Warner to test the Explorer 8000 for potential deployment in its Motorola-based systems, 3) Pioneer's announcement last week that it is withdrawing from the cable set-top mkt, and 4) a potential increase in interest rates, which could add to SFA's earnings given its $1.2 bln cash position. Target is $38.

Morgan Stanley upgrades Adtran to Equal-Weight from Underweight; after significant underperformance over the past 12 months, firm believes that current valuation should enable ADTN shares to trade in-line with the wireline equipment industry; firm would be buyers of the stock in the high teens.

Qualcomm issued upside guidance for 3rd quarter. The company sees EPS of $0.51-0.53, excluding company's QSI segment versus consensus of $0.50. For 2004, company sees EPS of $2.00-2.05, consensus $2.00. Improved outlook is due to greater than expected WCDMA royalties, faster migration to 6000 series MSMs and stronger orders for CSM products.

The analyst community is generally positive after reviewing Cisco's April qtr results, which beat consensus and seemed to be in-line with the real expectations of the mkt. Gross margins of 68.8% exceeded even the more bullish estimates, with opex growth coming in at 4.9% vs guidance of 5-7%. Also, several firms are pointing to book-to-bill that was close to 1, vs below 1 over the last several qtrs. Surprisingly, inventory grew 20% sequentially to $1.12 billion from $933 million in 2nd quarter 2004. JP Morgan notes that while this may sound like a strange positive given that rev only grew 4%, the last time inventories grew much faster than rev was in July 2003, when inventory grew 14.1% quarter/quarter versus only 1.8% for rev; in the following qtr, rev grew 8.5%, far above guidance of 2-4%. Despite all the positives, the shares did end up down 2.3% in after hours trading, which is mainly attributed to views that 4th quarter 2004 revenue guidance of 3-5% sequential growth was a bit disappointing given the additional positive commentary provided throughout the conference call. Also, the sequential opex guidance of 2-4% growth was somewhat heavier than consensus of a 2% decline, as the co is planning to add more headcount and a 20% rise in inventory to address higher lead times. Overall, we are not seeing any rating changes, but some firms are making minor upward adjustments to their estimates.

Motorola extends its infrastructure product portfolio with the introduction of four new products for Hybrid Fiber Coaxial networks. These products form an essential foundation for broadband operators to reliably deploy advanced services -- enabling them to deliver Motorola's "connected home" experience to subscribers.... Co also announces that it and Padcom, a provider of connectivity software for mobile workers, will be using Padcom's TotalRoam solution to integrate Motorola's advanced private voice and data networks with public wide area and local area wireless networks.

Barron's Online highlights Alcatel, which announced this month sales could rise as much as 10% this year after weathering 3 years of red ink, thanks to rising capital spending by telecom's. However, investors appear to have already anticipated a turnaround, with Alcatel's ADR's almost doubling since a 52-week low last May. What's more, investors are counting on continued good news at a time when competition is growing from low-cost Chinese competitors and only modest spending increases are expected from customers. "Competition is severe," in China says Gauri Pavate, an analyst with Gartner Dataquest. Worldwide average equipment rev per DSL line dropped to $76 last year, from about $100 in 2002. Alcatel expects gross margins to hold steady this year at about 36%, but pricing pressure could easily threaten margins. In North America, the cable service providers have about 60% of the high-speed Internet market and they are looking to woo the Bells' phone customers with voice service via coaxial cable. While DSL is playing catch up, cable's advance is a negative for Alcatel, says Steve Rago, an analyst at iSuppli. And wireless subscriber growth in North America is easing, as carriers like Verizon expect to hold spending at current levels. That could be a problem, since mobile equipment comprised 28% of Alcatel's sales last year. Like the U.S., Western Europe's wireless market is fairly mature, with subscriber growth expected to grow by just 1% through 2007, according to In-Stat/MDR. According to the article, Alcatel's stock isn't cheap trading at about twice its historic five-year median P/B ratio of 2.5x. The company, which has about $7 billion in cash and owes about the same amount.

Semiconductors . . . Goldman views Cisco's comments on its earnings call as generally constructive for communications semis; while much focus has been on CSCO 's inventory level (which increased 8 days Quarter/Quarter), firm notes that CSCO indicated that it maintains a strategic approach to inventories and will likely continue to increase inventories in the near-term given its view of continued tight supply and optimism regarding customer demand; firm maintains a favorable bias towards Marvell and Agere. JP Morgan says they are becoming concerned about the large inventory buildup and the high potential of double ordering in the communications supply chain, and estimates that total inventory days in the wireline supply chain increased a whopping 24 days sequentially, from 86 days in 4th quarter 2003 to 110 days in 1st quarter 2004, well above the normalized level of 85 days. Firm says the reason they got more bullish on Xilinx and became more positive on the comm semi space last year was due to inventory being worked down, but now it appears there could be an inventory correction looming. Firm remains Overweight XLNX, but believes it will be difficult for the stock to get back to its previous high.

Software . . . Microsoft and SAP announce plans to work closer together to improve products and simplify access over the Internet. The two companies detailed a road map for deeper integration between Microsoft .NET and SAP NetWeaver, the company’s respective strategic platform initiatives, allowing customers to get more out of business-critical SAP applications and technologies running in collaboration with Microsoft .NET.

Atari to will develop and license games for Nokia's N-Gage platform. The first Atari titles for the N-Gage are expected to be released in 2005 and will include Civilization, a strategy game, and DRIV3R, the latest installment of Atari's hugely successful driving adventure franchise.

Hot Items - Check out the "Hot Items" page (updated daily)


--------------------------------------------------------------------------------

Disclaimer: Due to the nature of the Internet, RobBlack.com and Goodwyn, Long & Black (GLB) does not make specific trading recommendations or give individualized market advice. Information contained in this publication is provided as an information service only. RobBlack.com and (GLB) recommends that you get personal advice from an investment professional before buying or selling stocks or other securities. The securities markets and especially Internet stocks are highly speculative areas for investments and only you can determine what level of risk is appropriate for you. Also, readers should be aware that GLB, its employees and affiliates may own securities that are the subject of reports, reviews or analysis within this publication. We obtain the information reported herein from what it deems reliable sources, no warranty can be given as to the accuracy or completeness of any of the information provided or as to the results obtained by individuals using such information. Each user shall be responsible for the risks of their own investment activities and, in no event, shall GLB or its employees, agents, partners, or any other affiliated entity be liable for any direct, indirect, actual, special or consequential damages resulting from the use of the information provided. Rob Black and (GLB) carry positions in many of the names reported on. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. RobBlack.com and Goodwyn, Long & Black Investment Inc. relies on information provided by corporations, news services, in-house research, published brokerage research, Edgar filings, and also may include information from outside sources and interviews conducted by ourselves. Readers should not rely solely on the information contained in this publication, but should consult with their own independent tax, business and financial advisors with respect to any investment opportunity, including any contemplated investment in any security.

http://www.robblack.com/rb_marketwrap.shtml