April 4th 2011

Payrolls Lifted the Mood
The Dow 30 finished up 56.99 points or 0.46% at 12,376.72 while the S&P 500 index gained 0.50% or 6.58 points at 1,332.41. The tech stocks also rose as represented by the NASDAQ Composite which finished at 2,789.60, 8.53 points or 0.31% higher. Leading the Dow 30 on Friday was CAT (1.59%), followed by GE (1.45%) and HD (1.35%). At the bottom of the table were INTC (-2.28%), AA (-1.08%) and CSCO (-0.64%). For the whole week, T was the top performer with gains of 6.14%, while CAT at the second spot with 3.69% increase. VZ was the next with 3.16% gains. HPQ plunged 3.64%, the worst Dow 30 performer, followed by INTC with 3.19% decline, and CSCO at the third from the bottom with losses of 1.39%. US stocks got a lift from the better-than-expected nonfarm payrolls. Payrolls counted for 216K in March, up from 194K in February and better than the consensus count of 194K. Unemployment also ticked lower at 8.8% in March from 8.9% in February, against the expected rise to 9.0%. Other economic data showed ISM for manufacturing edged lower from 61.4 to 61.2 in March, less than the anticipated 61.3, while the construction spending declined 1.4% in February, worse than the expected rise of 0.1%. Spending was down 1.8% in January. Also, motor vehicle sales were down to 13.1M from 13.4M, in line with the consensus. Japan’s quake had put dents on the sales of Japanese cars such as Toyota, Honda, and Nissan. The coming week will be quiet on the economic data front. There’s going to be no economic data on Monday, but the coming week will feature ISM for non-manufacturing sector, seen up from 59.7 in February to 60.0 in March. FOMC minutes will be released on Tuesday, while the jobless claims data is expected on Thursday, as usual. Consumer credit will due on Thursday as well. The wholesale inventories for February will wrap up the week. Usual issues will remain such as MENA tensions, the end of QE2 chatter, what’s left of Japan’s nuclear disaster, and the Eurozone fiscal crisis.

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.DJI 12,376.72 (+56.99 ● +0.46%) .SPX 1,332.41 (+6.58 ● +0.50%) .IXIC 2,789.60 (+8.53 ● +0.31%)

April 4th 2011

Corporate News
Southwest Airlines has cancelled flights of its 737s due to a hole in the fuselage. Meanwhile, BA received order for 15 Next-Generation 737s from Turkish Airlines, while Jackson Square Aviation said that 777-300ER has been delivered to Air France. CSCO’s WebEx solutions have been picked by BA again. CSCO shares have been considered as undervalued by Pacific Crest as the sell-off is overdone. By FY2013, CSCO’s switching business could triple in revenues, while non-switch could be more than double in FY2011. JPM’s $20B loan to T has been syndicated to 11 other banks such as Citigroup, BAC, and Morgan Stanley. DIS to start the construction of its theme park in Shanghai on April 8th. GE’s Jeff Immelt said that the nuclear complex in Japan had been built decades ago, so GE would not be held liable for the damages. On the recent tax issue, Immelt said that GE follows all tax regulations and had huge losses as well during the financial crisis. MMM bought assets from Zargis Medical such as TELESTETH online auscultation software, STETHASSIST software and heart sound analysis software. The terms of the transaction were not disclosed. iPhone sales at VZ outlets have been outsold by HTC’s Thunderbolt. Elsewhere, President Obama announced that VZ, along with T, FedEx, PepsiCo, and UPS have agreed to utilized more than 20,000 advanced tech vehicles which will cut gasoline use by 7M gallons.

2

.DJI 12,376.72 (+56.99 ● +0.46%) .SPX 1,332.41 (+6.58 ● +0.50%) .IXIC 2,789.60 (+8.53 ● +0.31%)

April 4th 2011

Stock Focus: Home Depot, Inc.
HD Last Mar 28th 1.35% $37.56 WTD 0.37% YTD 7.13% MTD 1.35% 12-Month 6.61% Resistances Supports Outlook POSITIVE Comment
BUY while above 35.43, PT 40.74, risk < 34.07

37.87 36.81

38.08 36.62

38.45 36.03

39.52 35.43

40.74 34.07

HD has been gyrating in a congestion zone between 37.87 and 36.62 recently, and is expected to break the resistance at 37.87 and move higher, aiming at 39.52 first and 40.74, afterwards. With all indicators suggesting POSITIVE readings, it would take a dive below 34.07 to negate the POSITIVE outlook. Look to BUY with tight stop below 34.07, with PT set at 39.52 or 40.74. Risk < 34.07.
3 .DJI 12,376.72 (+56.99 ● +0.46%) .SPX 1,332.41 (+6.58 ● +0.50%) .IXIC 2,789.60 (+8.53 ● +0.31%)

April 4th 2011

Price Performance - as of Apr 1st 2011
Code AA AXP BA BAC CAT CSCO CVX DD DIS GE HD HPQ IBM INTC JNJ JPM KFT KO MCD MMM MRK MSFT PFE PG T TRV UTX VZ WMT XOM Last 17.47 45.36 74.01 13.37 113.12 17.04 108.32 55.19 42.85 20.34 37.56 40.98 164.27 19.72 59.49 46.35 31.61 67.22 75.99 93.13 33.07 25.48 20.38 62.08 30.62 59.71 85.32 38.47 52.13 84.68 Dy -1.08% 0.35% 0.11% 0.30% 1.59% -0.64% 0.77% 0.40% -0.56% 1.45% 1.35% 0.02% 0.74% -2.28% 0.41% 0.54% 0.80% 1.33% -0.13% -0.40% 0.18% 0.35% 0.34% 0.78% 0.03% 0.39% 0.79% -0.18% 0.15% 0.65% WTD 2.22% -0.50% 0.91% 0.22% 3.69% -1.39% 1.44% 2.01% -0.28% 2.99% 0.37% -3.64% 1.29% -3.19% 0.86% 1.07% 1.12% 3.07% 0.98% 0.93% 1.54% -0.55% 0.15% 1.97% 6.14% 1.24% 2.16% 3.16% -0.42% 1.27% MTD YTD 12-Mos -1.08% 13.52% 30.08% 0.35% 5.68% -1.65% 0.11% 13.41% 2.18% 0.30% 0.22% -25.01% 1.59% 20.78% 66.13% -0.64% -15.77% -36.72% 0.77% 18.71% 33.01% 0.40% 10.65% 38.53% -0.56% 14.24% 16.31% 1.45% 11.21% 7.85% 1.35% 7.13% 6.61% 0.02% -2.66% -21.15% 0.74% 11.93% 27.34% -2.28% -6.23% -13.66% 0.41% -3.82% -7.48% 0.54% 9.26% 8.85% 0.80% 0.32% 6.79% 1.33% 2.20% 25.76% -0.13% -1.00% 7.65% -0.40% 7.91% 5.03% 0.18% -8.24% -5.62% 0.35% -8.71% -16.57% 0.34% 16.39% 21.89% 0.78% -3.50% -0.13% 0.03% 4.22% 17.50% 0.39% 7.18% 17.68% 0.79% 8.38% 13.84% -0.18% 7.52% 33.11% 0.15% -3.34% -2.82% 0.65% 15.81% 24.95%

4

.DJI 12,376.72 (+56.99 ● +0.46%) .SPX 1,332.41 (+6.58 ● +0.50%) .IXIC 2,789.60 (+8.53 ● +0.31%)

April 4th 2011

Analysts' Upgrades & Downgrades
Code CSCO n Sector-wide Previous Current Outperform n Downgrade n Initiation US Economic Calendar Report Period Actual Forecast Personal income Feb 0.3% 0.4% Consumer spending Feb 0.7% 0.6% Core PCE price index Feb 0.2% 0.2% Pending home sales Feb 2.1% n/a Case-Shiller home prices Jan -1.0% n/a Consumer confidence March 63.4% 62.3 ADP employment March 201K 205K Jobless claims 26-Mar 388K 380K Chicago PMI March 70.6% 68.9% Factory orders Feb -0.1% 0.5% Nonfarm payrolls March 216K 185K Unemployment rate March 8.8% 9.0% Average hourly earnings March 0.0% 0.2% ISM March 61.2% 61.3% Construction spending Feb -1.4% 0.1% Motor vehicle sales March 13.1 mln 13.1 mln Pacific Crest n Upgrade House Ratings Price Target Previous Current $25.00

Date 28-Mar 28-Mar 28-Mar 28-Mar 29-Mar 29-Mar 30-Mar 31-Mar 31-Mar 31-Mar 1-Apr 1-Apr 1-Apr 1-Apr 1-Apr 1-Apr

Time 8:30 AM 8:30 AM 8:30 AM 10:00 AM 9:00 AM 10:00 AM 8:15 AM 8:30 AM 9:45 AM 10:00 AM 8:30 AM 8:30 AM 8:30 AM 10:00 AM 10:00 AM TBA

Previous 1.2% 0.2% 0.2% -2.8% -1.0% 72.0 217K 382K 71.2% 3.1% 194K 8.9% 0.0% 61.4% -1.8% 13.4 mln

Date 5-Apr 5-Apr 7-Apr 7-Apr 8-Apr

Time 10:00 AM 2:00 PM 8:30 AM 3:00 PM 10:00 AM

US Economic Calendar Report Period ISM Non-Manufacturing Mar FOMC Minutes 15-Mar Jobless Claims 2-Apr Consumer Credit Feb Wholsesale Inventories Feb

Actual

Forecast 60.0%

Previous 59.7% 388K $5B 1.1%

n/a n/a

Disclaimer: This report is provided for information purposes only. It is not an offer to sell or to buy any securities. This report has been prepared based on sources believed to be reliable, but there is no assurance or guarantee regarding its completeness and accuracy. The author accepts no responsibility or liability arising from any use of the report.

5

.DJI 12,376.72 (+56.99 ● +0.46%) .SPX 1,332.41 (+6.58 ● +0.50%) .IXIC 2,789.60 (+8.53 ● +0.31%)

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