These 5 Stocks May Benefit Under The New Budget

Stocks
recovered from early morning losses.
The Institute
of Supply Management index rose by 0.2 to 63.6 — the best number since
1983. President Bush sent Congress a $2.4 trillion budget for 2005, including
cuts in domestic programs and increased military spending which would increase
by 7%, excluding money needed to keep troops in Iraq that will create a $521
billion deficit. Bush’s $401.7 billion military budget increases spending on
missile defense and on modernizing the Army, and companies such as Lockheed
Martin

(
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, General Dynamics
(
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, Raytheon
(
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, and Northrup Grumman
(
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and Boeing
(
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stand to benefit from the increased spending.

Dow Component International
Paper

(
IP |
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reported fourth-quarter earnings of $48 million on sales of
$6.5 billion. Halliburton
(
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is under investigation once again for
overcharging the US military for the number of meals it served in Kuwait. The
company’s contractor billed 42,042 meals a day on average, but served only
14,053 meals, a monthly price difference of $3.5 million.

Dow
+38.08

10526.26
S&P 500
+7.75
1138.90
Nasdaq
+12.69

2078.84

The day’s leading sectors are
Biotechs
(
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+2.01%, Health Products
(
RXP.X |
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+1.50%, Healthcare
(
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+1.24%, and Telecoms
(
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+1.17%

Weak today are Amex Gold
Bugs

(
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-1.20%, and Gold and Silver
(
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-1.27%.

Economic news releases included
Personal income up 0.2%, with Personal Spending up 0.4%, both in line with
estimates. Construction spending numbers were disappointing at +0.4% and the ISM
index rose to 63.6.

10-year Notes are -25
at 113 115

The dollar
is +0.31 at 87.73

Gold is -5.10 at 397.80

Crude Oil is +0.19 at
32.29

Volume is 680,000,000 on
the NYSE, and 890,000,000 on the Nasdaq.

Market breadth is positive.

NYSE Issues
Advancing 1751 Up Vol
409
Declining 1367 Down Vol
241
Ratio 1.31 1.70
Nasdaq
Advancing 1643 Up Vol
560
Declining 1384 Down Vol
268
Ratio 1.22 2.13

Top Dow stocks are:

SBC Comm [SBC|SBC],
+2.89% at 26.28, Boeing
(
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, +2.08% at 42.617, Wal-Mart
[WMT|WMT
], +1.78% at
54.84, American Express [AXP|AXP
]
+1.56% at 52.61.

Stocks in the news:

Ford
(
F |
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was downgraded by Deutsche Bank
to sell on a loss of confidence in Ford’s ability to meet its mid-decade
earnings. The auto maker’s price target was also lowered, to $12.

ScanSoft
(
SSFT |
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jumped 10% on raised
fourth-quarter earnings and revenue numbers. It now expects to earn 5 cents a
share on revenue of $46 million. The company cited strong sales of its
SpeechWorks and imaging products.

Time Warner Telecom
(
TWTC |
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reported a
fourth-quarter loss of $21.3 million on revenue of $169.4 million, due to lower
revenue from WorldCom and a decrease in inter-carrier fees.

Boston Scientific
(
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reported
fourth-quarter earnings of $137 million on revenue of $939 million, well ahead
of analysts’ consensus.

bricew@tradingmarkets.com