Apple Surprises!

Stocks were lower, with the Dow suffering its
biggest loss in two months. 
The Nasdaq was off 1.5% and closed
below its 200-day moving average. The SOX, too, closed below its 200-day MA.
The day started off slightly lower on a
disappointing retail sales report and lowered guidance from Harley Davidson, and
the selling accelerated after the 5-year treasury auction. March retail
sales rose 0.3%, less than expected. Ex-auto, +0.1%.The EIA said crude
inventories rose +3.6 million barrels;  gas inventories rose +0.8 million
barrels.

Two key investment bankers–Joseph Perella and Terry Meguid–are leaving
Morgan Stanley

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. No clues yet as to who else might be leaving with
them.

Harley Davidson
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reported earnings that beat expectations but
guided lower. The company now sees net growth of 5 – 8%.

McDonalds’s
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raised Q1 guidance and now sees 0.56; same store
sales rose 6.8%.

Imclone
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pushed back its Erbitux approval filing and now
says it will seek approval by the end of the year. Fulcrum, Oppenheimer and CSFB
all downgraded the stock.

The FDA denied Inamed’s
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application to return silicon
breast implants to the US market.

Here are some earnings highlights for the remainder of the week (including
estimates):

Advanced Micro Devices
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missed by 0.06 but beat on revenues. Gross
margins were below expectations. The company sees Q2 processor sales flat to
down. The stock was halted at press time.

Apple
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beat by 0.10 at 0.34, beat on revenues, beat iPod
expectations and guided Q3 higher.

Thursday

Southwest
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  0.05

Sun Micro
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  0.00

Pepsi
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  0.51

Friday

Citigroup [C|C]  1.02 

General Electric
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  0.37

Strong sectors were:  Pharmaceuticals
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+1.37%  
Healthcare

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+0.66%  

Weak sectors were:   Semis
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-2.71%   
Transports

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-2.31%   Chemicals
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-2.52%    

Dow  -104.04 10,403.93
Nasdaq -31.03 1934.37
S&P 500 -13.97 1173.79

The dollar was +0.03 at
84.45

Crude Oil was -1.40 at
52.13

Gold was +1.20 at 428.80

ce=”Arial” size=”2″ face=”Arial”>Volume was 2 billion on the NYSE and 1.7
billion on the Nasdaq

Market breadth was positive.

NYSE Issues
Advancing 961 Up Vol 380
Declining 2335 Down Vol 1493
2.42 3.92
Nasdaq
Advancing 909 Up Vol 271
Declining 2172 Down Vol 1384
2.38 5.10

Stocks in the News

Prudential raised Wal-Mart
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to ‘neutral’ from ‘sell.’ The
stock made a multi-year low  yesterday.

Slumberger
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was raised to ‘outperform’ at Wachovia.

Biogen
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a Tysabri trial was successful; the drug is still
off the market.

Computer Associates
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doubled its dividend and authorized a $400
million stock buyback.

Murphy Oil
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guided lower for Q1. The company now sees 1.10
-1.15 vs the 1.34 expectation.

Brice Wightman