Choppy Trading Ahead of Long Weekend

Good morning and welcome to the last day of the trading week. I've often said that weeks shortened by holidays or special events are some of the most difficult to trade, and this week has not been an exception to that rule. There are a number of headlines to deal with this morning, and some of the more important ones include the following:

- Target (TGT) announced late yesterday that it will sell its Marshall Fields unit to May Dept Stores (MAY).

- The Semiconductor Industry Association predicted 28.6% growth for 2004. However, the report also calls for 4.2% growth in 2005, and a decline of 0.8% in 2006 suggesting that this year will be the peak in the chip cycle. In addition, chip firm National Semi (NSM) reported Q4 EPS of $0.32 vs. $0.29.

- Merrill Lynch took down their estimates on brokers Schwab (SCH), eTrade (ET), & Ameritrade (AMTD) due to weaker than anticipated trading volumes

- UBS raises the oilfield services group from neutral to buy while upgrading Schlumberger (SLB), Nabors (NBR), Noble Drilling (NE), Smith International (SII), BJ Services (BJS), and Ensco International (ESV).

- The Bank of England raised interest rates 25 bps to 4.50% noting that inflationary pressures are likely to build.

- The New York Times has reported that Libya intelligence operatives had a plot to assassinate Saudi Prince Abdullah. U.S. officials have been building stronger ties with the country in recent months due to a belief that Libya had changed.

- According to the International Energy Agency, world oil demand will rise by its highest level since 1980 based on a growing world economy and consumption in Brazil, India, China, and the U.S. The IEA is now looking for daily use of gasoline, diesel, and other fuels to rise 2.3 million barrels to 81.1 million

Today will be a tricky day as we head into a long weekend with higher than usual terrorism risk due to Reagan's funeral. While we are firmly in the green at the start, I expect the trading day to be extremely choppy so be careful if you're trying to grind out some trades.