Stocks hold their gains....

At the close:

Dow +131
Nas +55
S&P +20 to 1144

Surprisingly nice rally.  Not sure whether to trust it or not...it just seems that arbitrarily, shorts start to cover at around 3:30 yesterday and they have been afraid to jump back in and short again.  Like taking a "W" in the NFL, we'll take a day like this.  Maybe it can feed on itself for tomorrow.

More on Morgan Stanley...

Morgan Stanley (MS +4.2%) is romping again after telling Fox's Charlie Gasparino that their Q3 looks "solid" and likely will beat Goldman's (GS) numbers estimates for them. It's a vague reminder of the March 2009 rally which began with Citi's leak that its Q1 numbers would be great.

At 3:45 pm...

Stocks climbing in the last hour.  Looks like the shorts are clearly taking a day off after yesterday's face ripping, last hour rally.

Dow +112
Nas +53
S&P +18 to 1142

Banks are even joining the party.  Morgan Stanley is now up 0.49 to 14.50.  That stock had been as low as 11.58 yesterday before 3 pm.  Nice little 20% move in one day.
 

Coal Stocks bouncing...

Coal stocks are having a nice day after the Wall Street Journal reported that the Environmental Protection Agency may ease rules, allowing power plants to emit more pollutants than previously permitted. A proposal is expected as early as this week, the report said, citing people familiar with the matter.

Patriot Coal +0.81 to 9.27
Walter Energy +0.82 to 59.01
Peobody Energy +0.98 to 34.60
Arch Coal +0.79 to 15.28

At 2:30 pm...

Stocks are drifting even higher....led by oil and commodity stocks. 

Dow +80
Nas +45
S&P +12 to 1136

Gold and Silver both higher as well.  Technology has gained ground this afternoon, led by a big reveral in Apple.  Apple traded as low as 360 this moring.  It is now back up to 378.

Foreclosure backlog deepens...

As the foreclosure backlog continues to build up, delinquent borrowers are spending even more time in their homes without making mortgage payments.

Once borrowers start missing payments, they spend an average of a year and nine months, or 611 days, in foreclosure before banks repossess their homes, according to LPS Mortgage Monitor. That's more than twice as long as three years ago, when the average was 251 days. Earlier his year, the average was 523 days.

"The number of defaults in the pipeline has been huge and we had more problem loans than ever before," said Herb Belcher, who supervises analytics for Lender Processing Services (LPS), which provides mortgage industry information and analytics to big banks.

With so many bad loans, servicers have had to prioritize which ones they can deal with and which ones to push aside.

"It's like your boat has all these holes in it and is taking in water. You have to plug up the worst holes first," said Belcher.

Dems propose 5% Millionaire tax...

Senate Democrats propose a 5% tax on people earning more than $1M a year to help fund the cost of President Obama's jobs bill. Sen. Schumer explains the surtax would include dividends and capital gains, and would stay in place for 10 years.

At 1:15 pm....

Stocks are spinning their wheels today as traders are pushing the latets losers higher and the latest gainers lower.  The averages are still holding on to earlier gains, but the rally is fading slowly.  Not sure what to expect in the next few hours.

Dow +30
Nas +25
S&P +6 to 1129

Banks are still weak...I doubt stocks are going anywhere unless the banking sector improves.

Friendly's files for bankruptcy...

Friendly Ice Cream Corp., which employs roughly 10,000 people and operates more than 400 restaurants known for sundaes and hamburgers, filed for Chapter 11 bankruptcy protection Wednesday.

In a struggle familiar to many restaurant chains, the Wilbraham, Mass., restaurant chain has seen sales crimped as fewer people dine out, just as rising prices for corn, butter and other ingredients drained its cash.

The Wall Street Journal late last month reported the restaurant chain was preparing for a possible bankruptcy filing.

Friendly's is a privately held company.

REIT's selling off...

Not sure why, but REITs are selling off across the board of late.  Up until two weeks ago, this was one of the strongest groups.  Here are just a few:

Simon Property Group (SPG) -3.21 to 107.58
Vornado Realty (VNO) -2.62 to 69.43
Avalon Bay (AVB) -5.32 to 11.67

Here are the charts:

At 11:00 am...

Stocks are broadly higher, only a few of the banks are selling down.

Dow +75
Nas +30
S&P +9 to 1133

This is setting up for another crazy afternoon.

RIMM up on takeout rumors...

Research In Motion (RIMM) is up over 10% this morning on continued M&A speculation after an article suggests Vodafone (VOD) may be interested in the company.

The stock is currently up 3.00 to $24.00

Bristol-Myers hitting new highs...

Bristol Myers continues to hit new highs this morning...and in this market, that is an amazing feat.

The stock is currently up 0.23 to a new 52-week high of 32.35

Bristol-Myers (BMY) is close to completing a groundbreaking treatment for Hepatitis C that could be launched by 2015 and produce as much as $2.9B in global sales five years later, according to a Citi analyst. Hepatitis C is the primary cause of liver transplants in the U.S. and is expected to become a larger public health issue as baby boomers age.

How's this for a chart:

Samsung and Apple battle over patents...

Samsung Electronics said it would file for a sales ban on Apple's new iPhone with courts in France and Italy as the phone infringed its patents, widening its legal battle with Apple.

Separately, the company beefed up its new iPhone with faster chips and better cameras, seeking to set its handset apart from the rising tide of Google (GOOG) Android smartphones.

Oracle cancels Saleforce.com presentation...

Oracle (ORCL) has stoked some controversy in the tech world by canceling a keynote due to be given today by Salesforce.com (CRM) CEO Mark Benioff at Oracle's OpenWorld conference. Oracle could be upset about Benioff's recent dismissal of its cloud offerings as a "false cloud," though some tech pundits seem to be in agreement.

Oracle CEO Larry Ellison and Salesforce CEO Mark Benioff are good friends, which makes this even more interesting.

Costco misses forecasts...

Costco Wholesale Corp. (COST). The company missed forecasts for fourth quarter profit and sales and said it will increase its annual membership fee for a little more than 22 million members. Net income was $478 million, or $1.08 a share, compared with $432 million, or 97 cents a share a year ago.


Costco is down 2.02 to 79.60 this morning.

At 10:00 am....

Stocks are mixed but improving.

Dow +6
Nas -3
S&P +1 to 1124

Commodity stocks leading the market higher.

Ag stocks catching a bid...

Following Monsanto's better than expected release, agriculture stocks are rising this morning.

CF Industries (CF) +3.60 to 127.72
Terra Nitrogen (TNH) +2.50 to 135.50
Monsanto (MON) +1.88 to 64.85
Mosaic (MOS) +1.11 to 50.17

Today's little tidbit....

Yesterday's last-hour reversal marked only the 10th time since 1985 that the S&P 500 was down 1% or more at 3 PM and finished the day with a gain. But such rallies rarely show any follow-through; of the previous nine, only two sparked a positive return the next day, and three during the next week.

Apple continues to sell off...

Apple is selling off further following the new iPhone 4S announcement.

The stock is opening down 8.36 to 364 this morning.  The stock is now down over 40 points in three trading sessions.

Today's Upgrades and Downgrades...

These are some of this Wednesday’s top analyst upgrades, downgrades, and initiations seen having an impact from Wall Street research calls.


Apple Inc. (NASDAQ: AAPL) Reiterated Overweight at JPMorgan; Reiterated Outperform at Credit Suisse; Reiterated Buy at Canaccord Genuity.
Apollo Group Inc. (NASDAQ: APOL) Raised to Outperform with $47 target at Credit Suisse.
Federated Investors, Inc. (NYSE: FII) named Bear of the Day at Zacks.
Google Inc. (NASDAQ: GOOG) Cut to Hold at Stifel Nicolaus.
Hewlett-Packard Co. (NYSE: HPQ) Cut to Underweight at JPMorgan.
Hess Corp. (NYSE: HES) maintained Buy but cut target to $85 at Argus.
The Home Depot, Inc. (NYSE: HD) Cut to Neutral at Goldman Sachs.
Mednax Inc. (NYSE: MD) Started as Neutral with $67 target at Credit Suisse.
Netflix, Inc. (NASDAQ: NFLX) Started as Neutral at Stern Agee.
Oracle Corporation (NASDAQ: ORCL) Reiterated Buy at Canaccord Genuity.
Plains All American LP (NYSE: PAA) named Bull of the Day at Zacks.
PP&L Corporation (NYSE: PPL) reiterated Buy with $31 target at Argus.
Walt Disney Co. (NYSE: DIS) Raised to Buy at Citigroup.
Yandex N. V. (NASDAQ: YNDX) Started as Underperform at Credit Suisse.
Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) Cut to Sell at Citigroup.

Analysts defend the new iPhone...

Though Apple (AAPL) fell yesterday on iPhone 4S disappointment, many analysts are coming to its defense. Needham touts the device's Siri voice assistant software; Piper still sees plenty of pent-up demand; and Jefferies expects the low-cost 3GS to produce high margins, while reiterating its belief China Telecomm will do an iPhone launch in Q1 2012.

I think if they would have just called the new phone the iPhone 5, the stock would be higher now.

American Airlines trying to stay afloat...

Shares of American Airlines (AMR) gain 5.4% premarket, continuing to recover from Monday's steep selloff as negotiations with its pilots union progresses. As for AMR restructuring, insiders agree it looks to be off the table: "They don’t even speak the B-word."

Monsanto beats earnings estimates...

Monsanto (MON): FQ4 EPS of -$0.22 beats by $0.05. Revenue of $2.25B (+15.1% Y/Y) beats by $360M.  Sees FY12 mid-teens earnings growth to a range of $3.34-$3.44 EPS, boosted by above normal business in Latin America for Q1. The Seeds and Genomics segment is expected to kick in single-digit unit growth to derive gross profit in a range of $5.7B-$5.85B for the year.

Monsanto is up over $1 premarket.

JP Morgan downgrades HP...

JPMorgan downgrades Hewlett Packard (HPQ) to Underweight and halves its price target to $20. Firm believes HP's earnings and revenue growth will trail its peers, and is concerned the Autonomy acquisition sets an expensive, unfavorable precedent for future deals.

Good Morning...

U.S. stock index futures are pointing to a lower open on Wall Street this morning, which - based on recent action - may mean absolutely nothing.

The markets were headed for a down session Tuesday when some potentially positive news out of Europe sparked a reversal, helping stocks finish sharply higher.

One piece of European news that won't help the investor mood in the U.S. today is a Moody's downgrade of Italy, with the rating agency cutting Italian government bond ratings by three notches with a negative outlook.

Costco (COST) is a stock to watch this morning, with an early earnings report that shows its fourth quarter profit fell slightly short of forecasts.

Chemical maker Monsanto (MON) is also out with its earnings report this morning, while hotel operator Marriott (MAR) is among those set to release its quarterly numbers after the closing bell.

Bank of New York Mellon (BK) is on our watch list today as well, as New York State accuses the bank of defrauding foreign exchange customers, seeking a recovery of $2 billion.  The bank says the state fundamentally misunderstands the forex market and that it's confident it will prevail in the case.

We'll also watch shares of Yahoo (YHOO), on reports that it's preparing to send out financial information to potential buyers in the coming days.

Hewlett-Packard (HPQ) shares are also worth watching, as new CEO Meg Whitman says she would like to make a decision on whether to sell the company's PC division by the end of October.

And we'll track shares of Yum Brands (YUM), whose shares slipped after hours as U.S. revenue slumped and worldwide restaurant margins edged lower during the company's fiscal third quarter.