CSFB- Midday report
ECONOMIC FOCUS TODAY
US Leading Indicators Fell for a Second Straight Month, as Expected
* The US index of leading economic indicators fell 0.2% in March, in line with expectations. This was the second straight monthly decline, but it looks like old news considering that some of the components are enjoying a post-Iraq rebound in April (i.e. stocks and consumer expectations are up; 10-year/funds spread wider). The biggest negatives for March were building permits and jobless claims.
TRADING COMMENTARY
EXCHANGE TRADED FUNDS: Active 2-way in QQQ, with buyers on the highs. Seeing buyers in XLF (-0.3%) and DIA (+0.2%).
PROGRAM TRADING: Light flows; over the day VWAP trading.
OPTIONS: Seeing buyers of Jan 10 EP (+10%) calls, and buyers of Jan 7.50 TYC (+2%) puts.
INTERNATIONAL: Europe is closed. In Asia, TSM (+2%) strong after local strength for the past two trading days. Samsung earnings were slightly weaker, but guidance and the tone on the conf call were both positive.
CASH TRADING
HEALTHCARE: Major pharma names act well off MRK (+2%) earnings with the exception of SGP (-0.5%) after new CEO announced, but earnings release was pushed back. DRG Index (+0.8%) trading near the top of its range. Hospitals mixed ahead of earnings this week from HCA (+0.4%), HMA (-0.6%), TRI (-1%). HGSI (+4%) strong after receiving fast track approval for its Lupus treatment.
ENERGY: Crude is stronger ahead of OPEC Meeting on Thursday.
UTILITIES: UTY Index (-0.1%) can't break through the 255 level. Seeing some institutional sellers and hedge fund buyers in the group.
RETAIL: Seeing buyers below the market, but trading is quiet. Easter sales not expected to have an impact, but today WMT (-0.8%) and JCP (-1.8%) announced Same Store Sales will be at the low end of the range. Competitor downgrade putting pressure on FD (-0.7%), JCP. Seeing buyers in BBY (-0.5%). OTC names mixed to weaker.
SOFTWARE: SYMC (-1%) weaker ahead of earnings on Wednesday. ISSX (+11%) strong after better than expected quarter. Seeing buyers in DCTM (+10%) after earnings on Thursday after the close.
INTERNET: Group is strong, seeing short covering and institutional buying. EBAY (+1%) reports tomorrow after the close. OVER (+12%) outperforming.
SEMICONDUCTORS: Thin trading in the group. Earnings this week from several mid-cap companies.
CONTRACT MANUFACTURING: Earnings this week from SANM (-1.7%) and FLEX (+0.1%).
MACHINERY/CONGLOMERATES: OSK (-9%) weak after not being selected as a U.S. Army supplier. WHR (+0.7%) strong off short covering after earnings; the company gave weaker guidance. Seeing buyers in TYC (+1.8%).
HOMEBUILDERS: Group is mixed on light volume.
FINANCIALS: Group is mixed overall.
