Toll Bros. Misses, But Sees Glimmers of Hope...

Number-one U.S. luxury homebuilder Toll Brothers (TOL) posted a $0.61/share loss, exceeding the -$0.44 expected by analysts. The loss included a $245M writedown, net of which Toll earned $0.35/share. Net contracts signed fell 50% to $375M; backlog fell 42% to $2.4B.

CEO Robert Toll was again critical of the media's relentless 'drumbeat' recession talk, which he said dampens consumers' moods and keeps them from buying. Toll said selling remains weak, but that it sees a few "glimmers of hope."

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• Dollar Tree Stores Inc. (DLTR). Projected to post a Q4 profit of $1.02 a share, up 5.73% from $0.96 earned per share same time previous year.

• Dress Barn Inc. (DBRN). Estimated to report a Q2 profit of $0.06 a share, down 75% from the same quarter last year when the company earned $0.24.

• Limited Brands (LTD). Forecast to post Q4 earnings of $0.91 a share, a decrease of 15.37% from the same quarter last year when the company earned $1.08.

• McDermott International Inc. (MDR). Expected to report Q4 earnings of $0.65 a share, a change of 77.26% from the same quarter last year when the company earned $0.37.

• Noble Energy Inc. (NBL). Expected to report Q4 earnings of $1.63 a share, a change of 57.86% from the same quarter last year when the company earned $1.03.

• Owens Corning Inc. (OC). Likely to report a Q4 profit of $0.19 a share, against a loss of $0.16 earned the same quarter last year.

• Petrohawk Energy Corp. (HK). Likely to report a Q4 profit of $0.15 a share, a change of 143.33% from the same quarter last year when the company earned $0.06.

• Public Storage (PSA). Estimated to report a Q4 profit of $0.28 a share, compared to a loss of $0.48 same quarter last year.

• Salesforce.com (CRM). Expected to report Q4 earnings of $0.04 a share.

• Washington Post Co. (WPO) is expected to report Q4 earnings of $8.85 a share, a change of -3.80% from the same quarter last year when the company earned $9.20.

IBD's Top 10 Stocks....

From the Monday Special Edition of Investor's Business Daily, here are their Top 10 Rated Stocks:

1. Dryships (DRYS)
2. Potash (POT)
3. Bucyrus International (BUCY)
4. Intuitive Surgical (ISRG)
5. CF Industries (CF)
6. China Medical (CMED)
7. Titan Machinery (TITN)
8. FC Stone Group (FCSX)
9. Research in Motion (RIMM)
10. Vimple Comunications (VIP)

Tuesday's Summary....

U.S. Markets:

Dow +114.70 (+0.91%)
Nasdaq +17.51 (+0.75%)
S&P 500 +9.49 (+0.69%)

News That Moved the Market:

IBM Announcements Push Markets Higher. Some days you take what you can get and do not ask why. Despite a deluge of bad news this morning (see below), the markets traded higher as investors focused on IBM's (IBM, +3.9%) announcement of a new $15 billion buyback plan and increased outlook. After the news came out in during mid-morning trading, stocks took off. IBM increased its EPS estimate for 2008 by $0.05, and said it has seen strength in foreign markets and received a boost from acquisitions.

Weak Data From All Directions. The Labor Department reported the Producer's Price Index came in at 1.0%, while core-PPI increased by 0.4%. Both readings were well ahead of expectations and put the Fed in a tough position of fending off inflation while trying to stimulate growth. The Conference Board reported consumer confidence fell to a 5-year low, and the S&P/Case-Shiller home price index showed that prices plummeted 8.9% in the fourth quarter of 2007, compared to the year before. With signs of a weak economy and increasing inflation, fears of stagflation jumped.

Target Sees Tough First Half of 2008. Target (TGT, +3.1%) reported earnings before the bell that beat expectations by a penny, but said it expects to see "a challenging economic climate at least through the first half of the year." The company has seen shoppers buying more necessities and less higher margin items such as clothing.

Quick Tics:

Google (GOOG, -4.6%) continued its drop today on news that its pay-per-click advertising may be weakening.

Radio Shack (RSH, +21.5%) jumped after better than expected fourth quarter financial results.

Crude finished up 1.9% to $101.09, a new closing high.

Tomorrow Notable Earnings:

Toll Brothers(TOL) Before Open
Nortel Networks (NT) Before Open
Dollar Tree Stores (DLTR) Time Not Supplied

Economic Events:

8:30 AM: Durable Goods
10:00 AM: New Home Sales
10:30 AM: Crude Inventories

Beats and Raises Portfolio....

Reviewing earnings reports since January 1....

Here is an updated list of companies that have Beat Earnings Expectations AND have Raised Guidance for 2008.

These stocks are acting really well in here:

Potash (POT)
Terex (TEX)
Intuitive Surgical (ISRG)
Hewlett-Packard (HPQ)
Medco Health (MHS)
Buffalo Wild Wings (BWLD)
Gamestop (GME)
Mosanto (MON)
JC Penney (JCP)
Zimmer Holdings (ZMH)
Sohu (SOHU)
Dolby Labs (DLB)
Research in Motion (RIMM)
Express Scripts (ESRX)
Boeing (BA)
Chattem (CHTT)
Corning (GLW)
IBM (IBM)

Today's Upgrades...

List of Companies Upgraded this Morning:

Kendle (KNDL) by First Analysis Sec
EMC Corp (EMC) by Cowen & Co
AthenaHealth (ATHN) by Piper Jaffray
Brinks (BCO) by Jefferies & Co
MasterCard (MA) by Credit Suisse
Repsol SA (REP) by Bear Stearns
Occidental Petro (OXY) by Oppenheimer
OmniVision (OVTI) by Jefferies & Co
Rite Aid (RAD) by JP Morgan
Quantum (QTM) by JP Morgan
Hutchinson (HTCH) by JP Morgan
PG&E (PCG) by JP Morgan
Teradyne (TER) by Oppenheimer

Today's Downgrades....

List of Stocks Downgraded this Morning:

World Wrestling (WWE) by B. Riley & Co
Granite City Food & Brewery (GCFB) by Feltl & Co.
Steel Dynamics (STLD) by UBS
Gerdau AmeriSteel (GNA) by UBS
Ryder System (R) by Stifel Nicolaus
Del Monte (DLM) by Wachovia
Automatic Data Processing (ADP) by Banc of America Sec
Paychex (PAYX) by Banc of America Sec

ISRG: Setting up for a Breakout....

Intuitive Surgical (ISRG) is forming a very interesting pattern on the daily chart. Looks like a snake coiling up, ready to break higher.

The stock is up 3.49 to $297.04. It is down from a 52-week high of $359 set in December.

This is another stock that beat estimates and raised guidance for 2008. If you want clean stocks in this market, those are two criteria you want to see.

Check Out Imclone (IMCL)

That's right...Martha Stewart's favorite stock...

IMCL is up 1.44 to $45.84 this morning. The stock is making a run to push thru resistance in the $45-46 area.

The stock was just upgraded to Outperform by Cowen and Company on Friday.

Technical Alert: Cree Inc. Breaking out...

Cree Inc. (CREE) is breaking out to new highs this morning. The stock is currently up 1.76 to $34.55. It hit $35 earlier.

The stock had significant resitance at $34.

Terex Continues to Break Out...

Terex (TEX) is continuing to break higher this morning, for the 6th straight session.

The stock is up 1.66 to $70.76

Frontier Misses but Stock Rises...

Frontier Oil Corp.'s (FTO) fourth-quarter net income fell to $43.4 million, or 41 cents a share, from $52.4 million, or 47 cents a share, a year earlier. A Thomson Financial survey of analysts, on average, projected earnings of 46 cents a share for the quarter.

The Houston refiner's fourth-quarter results included a hedging loss of $31.5 million, or 30 cents a share, compared with the gain of $6.9 million, or 6 cents a share, a year ago. Revenue rose to $1.32 billion from $1.09 billion a year ago.

FTO is up 1.01 to $38.65 right now.

IBM Plans $15B Buyback...Boosts Guidance...

International Business Machines Corp. (IBM) said Tuesday its board authorized the repurchase of $15 billion in shares, which could boost its earnings for 2008. The new plan is in addition to the $400 million left on a previous buyback plan. IBM said it plans to make about $12 billion in stock repurchases in 2008. The company said expected buyback activity could add about 5 cents a share to 2008 earnings, and now expects a profit of at least $8.25 a share for the year. Analysts surveyed by FactSet Research expect 2008 earnings of $8.21 a share.

IBM had boosted guidance back on January 18, when they reported earnings. I guess analysts were a bit skeptical and delayed making adjustments in their estimates....

IBM stock is up 3 to $113.14. It is breaking out above resistance it had in the $112 area.

Sirius / XM Update...

Sirius (SIRI) remains optimistic it will hear favorable information in the near future regarding long-awaited merger with XM (XMSR), SIRI CEO Mel Karmazin says on conference call. He won't provide 2008 guidance until there's regulatory clarity, which "hopefully will be very shortly." CEO says he hasn't had additional contact with Justice Dept. "We wait by our telephone, but we really have not heard anything from them. It has been more radio silence than anything else," Karmazin says. Reiterates SIRI's costs would increase if merger isn't approved.

Both stocks have been going nowhere since the merger possibility was announced: Siri is at $3.01 and XMSR is at $12.90

Google Advertising Slows...

The Street is surprised at Google's (GOOG) sharply lower paid-click-through rates and slower search growth in January, based on comScore report. Percentage of GOOG's paid-advertiser clicks dropped to 10.4% in January from 12.4% in December, reaching the lowest rate since comScore began tracking in July 2006. BMO Capital believes data just reflects GOOG culling "accidental clicks" to improve search quality.

Bear Stearns calls it a "concerning data point" that jibes with what Internet marketers have been saying: "that they were not seeing a high volume of clicks from consumers possibly due to the economic slowdown."

GOOG stock is down 6.9% to $453, lowest since last April.

Target 4Q Net Down...

Target 4Q Net Down 8.1% On Retail Weakness
Target's fiscal 4Q net income falls 8.1% to $1.03 billion, or $1.23 a share, as credit-card operations could not offset losses in Target's core retail operations.

Analysts were expecting earnings $1.22 a share.

Target is trading higher by .50 to $53.77

Technical Alert: Google Breaking Down....

Google broke down yesterdy in the midst of a strong market. The stock closed just below previous support which was at $490. This morning Google is going to open at $461.

That is not good at all....If you are in Google...be careful...this stock could come down very fast.

Futures Reverse on PPI Number....

US Producer Prices Up 1%, Core Gains 0.4%
U.S. wholesale prices surge more than anticipated in January and core inflation also climbs above expectations, according to more data revealing price pressures amid the economic slowdown. In the 12 months ending in January, prices climbed 7.4% on an unadjusted basis.

Stock futures reversed corse on the news, they are now considerably lower.

Nordstrom Beats Buts Sees Tough 2008...

Nordstrom (JWN) posted Q4 EPS of $0.92, beating consensus estimates of $0.88. Revenue fell 4.4% to $2.51B, just short of the $2.53B consensus. Looking ahead, Nordstrom sees Q1 EPS of $0.49-0.54 (vs. $0.59 consensus) and full-year EPS of $2.75-2.90 (vs. $2.98 consensus). Same-store sales will be flat to -2%, it said. "Certainly, it's a difficult environment. ... The higher-end consumer is slowing spending a bit," analyst Dan Geiman said.

Foster Wheeler Misses....

Foster Wheeler Ltd. (FWLT). The Clinton, NJ-based engineering and construct company today said adjusted fourth-quarter income dropped to $80.6 million, or 56 cents a share, compared with $85.9 million, or 60 cents a share, a year-ago.

Revenue for the quarter rose to $1.47 billion from last year's $1.19 billion.

The company was anticipated to earn 76 cents a share. The stock is down 7 points to $72.50 premarket.

Earnings Due Today....

COMPANIES REPORTING EARNINGS:

• Autodesk Inc. (ADSK). Expected to report a Q4 profit of $0.54 a share, according to analysts polled by Thomson Financial. This is an increase of 16.96% from $0.46 earned per share same time previous year.

• DreamWorks Animation SKG (DWA). Expected to post a Q4 profit of $0.72 a share.

• El Paso Corp. (EP). Forecast to report a Q4 profit of $0.29 a share, compared to a $0.25 per share loss posted same time previous year.

• Frontier Oil Corp. (FTO). Projected to report Q4 earnings of $0.46 a share, down 32.75% from $0.69 per share earned same time previous year.

• H.J. Heinz Co. (HNZ). Projected to post a Q3 profit of $0.67 a share, which is largely unchanged from $0.66 earned per share same time previous year.

• Macy's Inc. (M). Expected to report Q4 earnings of $1.60 a share, a 3.5% fall from $1.66 earned per share same time previous year.

• Sempra Energy (SRE). Forecast to report Q4 earnings of $1.05 a share, down 26.41% from $1.42 earned per share same time previous year.

• Target (TGT). Forecast to post Q4 earnings of $1.22 a share, down 5.12% from $1.29 per share earned same time previuos year.

• Tenet Healthcare Corp. (THC). Expected to report a Q4 loss of $0.03 a share.

• Warnaco Group (WRNC). Estimated to report a Q4 profit of $0.38 a share, a decline of 30.73% from $0.55 earned per share smae time previous year.

Sony and Sharp in LCD Panel Venture...

Sony (SNE) and Sharp say they have agreed to jointly produce LCD panels for televisions using a state-of-the-art Sharp plant currently under construction in western Japan. Venture to be established in April 2009, production by March 2010.

RadioShack 4Q Net Up 20% On Cost Cuts

RadioShack (RSH) posts a 20% increase in fiscal 4Q net income to $101 million, or 77 ¢ a share, as the retailer's turnaround effort continues to take hold despite falling wireless-phone sales. Analysts expected earnings of 72¢ a share

January Foreclosure Filings Surge 57%...

Foreclosure filings for January jump 57% to 233,001 from a year earlier and 8% from December. RealtyTrac CEO says on-month slowdown may signal homeowner aid is working. Nevada has the highest foreclosure rate, trailed by California.

MBIA Eliminates Dividend...

Standard & Poor's rewards bond insurer for raising $2.6 billion in capital by affirming the company's triple-A financial-strength rating while keeping its outlook "negative." MBIA also eliminates its dividend to preserve $174 million.

Home Depot Net Falls 27%, Issues Weak Outlook...

Home Depot (HD) posts 4Q earnings of $671 million, or 40¢ a share, due in part to higher operating costs. Revenue increases 1.5% to $17.66 billion, but fall 4.7%, excluding an extra week during the quarter. Th retailer forecasts fiscal-year earnings from continuing operations to slump 19%-24% on a total sales decline of 4%-5%.

HD was expected to earn 43 cents a share. The stock is down slightly in premarket trading.

Morning Bullets....

---Bond insurer MBIA Inc. (MBI) late Monday eliminated its quarterly dividend and said it would not do any new structured finance business for about six months as it struggles to keep enough capital to retain its treasured AAA credit rating. Shares are up 23.2% in Frankfurt.

---Merrill Lynch & Co. (MER) late Monday restated its cash flows for fiscal 2005 and 2006, and said the restatements were the result of errors that offset each other. Elsewhere, the bank said Tuesday it dismissed two private bankers in Asia due to "serious breaches of internal policy." Frankfurt shares are currently up 3.3%.

---International Business Machines Corp. (IBM) is set to launch the next generation of its mainframe computer line Tuesday, which analysts expect to provide a boost to the company's hardware and software sales, the Wall Street Journal reported. Shares are up 0.7% in Frankfurt.
---Home Depot Inc.'s (HD) fiscal fourth-quarter net income fell 27% to $671 million, or 40 cents a share, from $925 million, or 46 cents a share, a year earlier, due in part to higher operating costs. Stock is up 1.8% in Frankfurt.

---Elsewhere on the earnings calendar, investors will keenly watch reports from Macy's Inc. (M), Target Corp. (TGT) H.J. Heinz Co. (HNZ) and CBS Corp. (CBS).

Technical Watch: Zimmer Holdings (ZMH)

Zimmer Holdings is another one of our stocks that recently beat earnings estimates AND guided higher.

Now, take a look at the chart. The stock is setting up a nice cup and handle formation. The heavy resistance is in the $79 area. The stock closed up 1.94 today to $77.91. Another day like today might do it.

What to look for in the morning....

AutoZone (AZO), CBS Corp. (CBS), HJ Heinz (HNZ), Home Depot (HD), and Target (TGT) are all scheduled to announce their latest results tomorrow morning before the opening bell.

The January Producer Price Index kicks off tomorrow's economic readings (8:30 AM ET). The consensus is calling for an increase of 0.4% in the index.

Once trading is underway, market participants will be looking for the January New Home Sales report (10:00 AM ET). Existing home sales for January, which were announced this morning, posted a less severe downturn than economists expected.

Federal Reserve Governor Kohn speaks on U.S. economy and monetary policy in NC (12:15 PM ET).

Nice Day for the Markets...

U.S. Markets:

Dow +189.20 (+1.53%)
Nasdaq +24.13 (+1.05%)
S&P 500 +18.69 (+1.38%)

News That Moved the Market:

Disaster Averted, For Now. The markets were boosted Monday on news that ratings agency S&P took MBIA (MBI, +19.7%) off CreditWatch and assigned it a negative outlook. In addition, S&P affirmed its AAA rating on Ambac (ABK, +15.9%), but added the company was still on CreditWatch. The announcement by no means qualifies as a signal that all is now well, but was more of a sign that S&P was giving the bond insurers more time to sure up funds and a downgrade is not as imminent as some fear. Downgrades can still occur, but as long as these companies keep their AAA rating, banks do not have to writedown the securities backed by these companies on their books.

Better Than Expected Housing Data. Existing home sales dropped 0.4% to an annual rate of 4.89 million, which was a 9-year low, but ahead of the 1.8% drop economists were expecting. Inventories of unsold homes increased to 10.3 months, still an enormous figure, but the better than expected data brought some hope that perhaps a bottom is nearing. Before the bell, Lowe's (LOW, +3.8%) reported a 33% decrease in net income and slashed its outlook, but the positive housing data allowed housing related companies to turn around and rally.

Getty Images Agrees to $2.1 Billion Buyout. Getty Images (GYI, +29.5%) agreed to be acquired by private-equity firm Hellman & Friedman LLC for $34/share. The purchase price represents a 55% premium from where Getty was trading when it announced it would be seeking strategic alternatives and could put itself up for sale on January 18th.

EA Makes Play For Take-Two. Take-Two Interactive (TTWO, +55.0%) rejected Electronic Arts' (EA, -5.2%) $26/share buyout bid, saying the bid undervalued the company. The $2 billion bid is not expected to be the last by EA, and the new price should come before April 29th, when Take-Two releases its newest installment of Grand Theft Auto.

Quick Tics:

--Visa could raise as much as $17 billion in its IPO.

--The Wall Street Journal reported Goldman Sach's (GS,-0.2%) could post its smallest quarterly profit in three years in March.

Tomorrow Notable Earnings:

CBS (CBS) Before Open
Home Depot Inc (HD) Before Open
Macy's, Inc. (M) Before Open
Target Corporation (TGT) Before Open
Office Depot Inc. (ODP) Before Open
DreamWorks Animation SKG, Inc. (DWA) After Close

Economic Events:

8:30 AM: PPI
10:00 AM: Consumer Confidence

S&P Affirms Ratings on MBIA and AMBAC...

Standard & Poor's is maintaining its top rating on the nation's two biggest bond insurers, MBIA and Ambac. MBIA shares rise 18% and Ambac gains 12%.

The market has rallied on this news.

Ag Stocks on Fire ....Again....

Potash (POT) +6.85 to $163.90

Monsanto +4.64 to $121.31

Mosaic (MOS) +6.42 to $115.37

Breakout Alert: Terex (TEX)

Check out the chart on Terex (TEX). The stock is breaking out of three month base today. It had resistance at $68, it is currently up 1.00 to $68.57.

Terex Corporation manufactures a broad range of equipment for use in various industries, including the construction, infrastructure, quarrying, surface mining, shipping, transportation, refining and utility industries.

Last week they beat earnings estimates and guided higher....

Downgrades this morning...

Here is a list of Stocks Downgraded by Analysts this Morning....

Roper Inds (ROP) by Sterne Agee
Calgon Carbon (CCC) by Brean Murray
Sunstone Hotel (SHO) by Stifel Nicolaus
LaSalle Hotel (LHO) by Stifel Nicolaus
Hersha Hospitality Trust (HT) by Stifel Nicolaus
MEMC Elec (WFR) by JMP Securities
Syntel (SYNT) by Wachovia
Medicure (MCU) by Merriman Curhan Ford
Glimcher Realty (GRT) by RBC Capital Mkts
Aventine Renewable Energy (AVR) by Soleil
SPX Corp (SPW) by JP Morgan
Motorola (MOT) by Oppenheimer
Borg Warner (BWA) by Deutsche Securities
General Motors (GM) by Deutsche Securities
Smith Micro Software (SMSI) by JP Morgan
Peabody Energy (BTU) by UBS
Alpha Natural Resources (ANR) by UBS
James River Coal (JRCC) by UBS
New York Times (NYT) by Deutsche Securities

Upgrades this morning...

Here's a list of Analyst Upgrades this Morning...

Take-Two (TTWO) by Sterne Agee
CoStar Group (CSGP) by Needham & Co
Penn Natl Gaming (PENN) by Brean Murray
Juniper Networks (JNPR) by RBC Capital Mkts
Semgroup Energy (SGLP) by Citigroup
Citizens Rep Bancorp (CRBC) by JP Morgan
Lloyds TSB plc (LYG) by Lehman Brothers
Mechel Steel (MTL) by Deutsche Securities
ESS Tech (ESST) by Jefferies & Co
YUM! Brands (YUM) by UBS
Hain Celestial (HAIN) by UBS
DTS (DTSI) by Deutsche Securities
Genentech (DNA) by Rodman & Renshaw

Apple Downgraded....

Shares of Apple Inc. are slipping in premarket trading Monday, with BMO Capital Markets lowering its price target onexpectations that valuation multiples will decline. Analyst Keith Bachman at BMO cut his price target to $140 from $160. He alsoraised his 2008 earnings estimate to $5.09 a share from $4.90 but cut his 2009 forecast to $6.26 a share from $6.30.

The mean estimates of analysts surveyed byThomson Financial are for 2008 earnings of $5.13 a share and 2009 earnings of$6.30 a share. The stock is down 40% since the end of 2007.

Bachman said that while his estimates stay "roughly the same," he loweredhis valuation multiple assumption given that the company's three growth drivers-- iPods, iPhones and CPUs -- has now turned to one -- CPUs.

Boston Scientific Receives Defibrillator Approval...

Boston Scientific Corp. (BSX) Monday received approval from the Food and Drug Administration for its Confient implantablecardioverter defibrillator, its Livian cardiac resynchronization therapydefibrillator and its upgraded Latitude patient management system.

All three products are part of the company's cardiac rhythm managementbusiness. Both the Confient and Livian defibrillators allow physicians to managetheir patients wirelessly on the Latitude patient management system.

Shares of the Natick, Mass.-based medical devices company closed Friday at$12.31.

Shades of Tyco....

Countrywide Financial Corp. (CFC), reacting to negative publicity, canceled plans to host a posh ski trip for about 30 mortgage bankers at the Ritz-Carlton Bachelor Gulch ski resort in Avon, Colo., a spokesman said.

The New York Times first reported the cancellation of the trip last week. It was mentioned and criticized on CNBC on Friday.

The cancellation comes as Countrywide tries to damp down widespread criticism of its lending practices, which have led to a surge of foreclosures. The company's chief executive, Angelo Mozilo, is due to appear Thursday at a hearing of the U.S. House Oversight and Government Reform Committee, chaired by California Democrat Henry Waxman, who is raising questions about compensation packages for top executives of companies involved in the mortgage crisis.
The list price for a regular room on a weekday night at the Ritz in Avon starts at $750. But a Countrywide spokesman said the company would have paid "much less" than that.

The three-night event -- for smaller mortgage banks known as "correspondents" that sell home loans to Countrywide -- was to include two four-hour business meetings along with skiing and dinner at upscale restaurants, including the Spago restaurant, whose menu includes Kobe steak with wasabi potato puree for $105.

Angry Shareholders at Yahoo...

Yahoo (YHOO) is facing a barrage of lawsuits from shareholders who say the company is breaching its fiduciary duty by trying to repel a $46B deal with Microsoft (MSFT).

Ambac rescue at Hand...

Sources say Ambac Financial Group (ABK) is drawing nearer to sealing a $3B capital injection that will allow it to restructure, and save its critical AAA rating. The plan involves a $2.5B stock issue to existing shareholders at a discount, backed by bankers including Citigroup (C), UBS AG (UBS), Wachovia (WB) and Royal Bank of Scotland (RBS), who would commit to buying any shares unsold. Ambac will also sell $500M of debt. Banks are exposed to companies like Ambac and MBIA (MBI) who insure some of their riskier portfolio assets, such as CDOs. A sharp downgrade to the insurers could trigger a fire-sale of such assets.

Markets soared into positive territory during Friday's final minutes when news of the potential rescue broke.

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• FirstEnergy (FE) Forecast to report Q4 earnings of $0.92 a share, according to analysts polled by Thomson Financial. This is an increase of 9.52% from $0.84 earned per share same time previous year.

• LDK Solar Co. (LDK). Expected to report Q4 earnings of $0.41 a share.

• Nordstrom Inc. (JWN). Expected to report Q4 earnings of $0.88 a share, a decrease of just 0.67% from $0.89 per share earned same time previous year.

• Orient-Express Hotels (OEH). Estimated to report Q4 earnings of $0.19 a share, down 15.45% from $0.22 earned per share same time previous year.

• Shanda Interactive Entertainment (SNDA). Estimated to post Q4 earnings of $0.45 a share.

• Sotheby's (BID). Likely to post Q2 earnings of $1.47 a share, up 35.83% from $1.08 earned same time previous year.

US Stock Futures Higher This Morning...

U.S. stock futures on Monday extended the last session's rally on hopes of an imminent bailout of troubled bond insurer Ambac Financial Group Inc. (ABK), with Genentech Inc. (DNA) set to gain after the biotech won surprise backing for use of a cancer drug.

U.S. stocks ended higher on Friday, with hopes that several big banks will soon announce a bailout of bond insurer Ambac Financial driving gains. The Dow industrials ended up 96 points, the S&P 500 rose 10 points and the Nasdaq Composite rose 3 points.

That rally carried over to international markets, with the FTSE 100 up 1.7% in London and the Nikkei 225 jumping 3.1% in Tokyo.

VISA Starts Setting Terms for IPO....

Visa May Raise $17B In IPO. Underwriters for the world's largest payment-card company set the terms of the company's planned initial public offering at 406 million class A shares with an estimated price range of $37 to $42 a share.

Still no date, though...I'm sure we'll be hearing more about this in the coming days...weeks...

Lowe's Earnings Decline...

Lowe's Cos.' (LOW) fiscal fourth-quarter earnings slid to $408 million, or 28 cents a share, from $613 million, or 40 cents, a year earlier, hurt in part by declines in the housing market. A Thomson Financial survey of analysts, on average, projected earnings of 25 cents a share for the quarter. Analysts' estimates usually exclude one-time items.

The company expects first quarter total sales to rise about 2% on earnings of about 38 cents to 42 cents a share. Lowe's said the "next several quarters will be challenging on many fronts as industry sales are likely to remain soft."

YUM Brands Upgraded to Buy at UBS...

Yum Brands was upgraded to buy from neutral atUBS on expectations that the fast food operators organic growth, profit margins and return on invested capital (ROIC) will all improve significantly by 2010. UBS said it expects organic revenue will see growth of 7% by 2010, up from around 5% today.

Yum Brands owns the Pizza Hut, KFC and Taco Bell chains as well as Long JohnSilver's and A&W All American Food.

The broker maintained its 12-month price target of $43. The stock closedFriday at $34.85.

Electronic Arts Offers $2B for Take-Two....

EA (ERTS) makes unsolicited $2 billion cash offer to buy Take Two Interactive (TTWO) publisher of the hit Grand Theft Auto videogame after that company's board last week rejected the proposal as insufficient. The $26-a-share offer is a 50% premium over Friday's closing price.

Word is Take-Two is not interested....

What's Going on This Week....

Monday Feb 25

-- Lowe's Companies and Nordstrom report earnings, shedding more light on consumer spending. Lowe's is expected to post a 56% drop in fourth-quarter earnings per share, Nordstrom a slight drop.

-- Fed Governor Randall Kroszner will discuss risk management at the Global Association of Risk Professionals Annual Risk Convention in New York.

-- Fed Governor Frederic Mishkin discusses stabilizing inflation in Greenville, N.C.

Tuesday Feb 26

-- H.J. Heinz is expected to report earnings of 66 cents a share, flat from a year ago. Retailers Home Depot and Macy's are likely to post declines of 14% and 4%, respectively.

-- The January producer price index, offering the latest read on inflation, is expected to jump 0.4%, while the core index adds only 0.2%.

-- Analysts will ponder "The Future of Coal-Fired Power Generation: What Does the Market Think?" during a seminar presented by the New York Society of Security Analysts.

-- Fed Vice Chairman Donald Kohn will discuss the economy and monetary policy at the University of North Carolina.

-- Deputy U.S. Trade Representative John Veroneau will discuss "The Challenges of Global Sovereign Investment" at a meeting in New York sponsored by the U.S. Council for International Business.

Wednesday Feb 27

-- Fed Chairman Bernanke delivers his semi-annual testimony on monetary
policy before the House Financial Services Committee.

-- The horrid housing market is expected to produce a first-quarter loss of
44 cents a share for Toll Brothers, down from a 33-cent gain last year.

-- Analysts estimate durable goods sales fell by 3.5% in January, a big
change from December's 5.2% increase.

-- Keefe, Bruyette & Woods opens its two-day regional bank conference in
Boston.

-- Wachovia kicks off its three-day homebuilding and building-products
conference in Las Vegas.

Thursday Feb 28

-- The first read on the fourth quarter's gross domestic product is
reported, with analysts expecting a rise of only 0.7%.

-- Fed Chairman Bernanke makes his second presentation on monetary policy,
this time before the Senate Banking panel.

-- American International Group is expected to announce fourth-quarter
earnings after the market closes. It previously disclosed that outside
accountants were forcing a $5.2 billion write-down for the third quarter.
Investors wonder if there will be more.

-- Robbins & Myers will split its stock two-for-one.

-- Genoptix is expected to sell 4.2 million shares held by existing
shareholders through Lehman Brothers.

Friday Feb 29

-- January's personal income growth is expected to fall to 0.2%, from 0.5%
in December, while consumer spending is expected to remain at 0.2%.

-- Atlanta Fed President Dennis Lockhart discusses subprime mortgages.

-- Treasury auctions: M63

Companies That Are Raising Their Dividends...

Here is a list of companies who have announced that they will raise their dividend this quarter:

AMB Property Corp-AMB
Avista Corp-AVA
Blackrock Inc-BLK
Canadian Pac Railway-CP
Coca-Cola Co-KO
Equus Total Return-EQS
FBL Fin'l Group A-FFG
Foot Locker Inc-FL
Genuine Parts Co-GPC
Integrys Energy Group-TEG
Interface Inc A-IFSIA
Kimberly-Clark Corp-KMB
Nam Tai Electronic-NTE
Nordstrom Inc-JWN
Nu Skin Enterprises - NUS
Nucor Corp-NUE
PPL Corp-PPL
Pacific Cont'l Corp-PCBK
RenaissanceRE Hldg-RNR
Rogers Communications B-RCI
S.Y. Bancorp-SYBT
Sealed Air Corp-SEE
Sherwin-Williams-SHW
Tennant Co-TNC
Tim Hortons Inc-THI
UST Inc-UST
Westar Energy Inc-WR
World Wrestling Entertainment-WWE

Barron's Says Disney is Undervalued....

Barron's says Disney (DIS) stock as cheap as it's been in the last 20 years. While not immune to a U.S. economic downturn, investors and analysts have overcompensated for the company's cyclical exposure: Only 22% of Disney's revenue is from reception-vulnerable advertising. Theme parks, which contribute another 30%, continue to see solid booking trends, with an 89% occupancy rate last quarter.

Trading at 14.4 times next years' earnings, shares are at their lowest point in 18 years. The multiple is about equal with that of the S&P 500 average, which sounds ok until you realize Disney normally trades at an average 30% premium. Even better, CEO Robert Iger has succeeded in building a Disney "more diversified, better- managed, less cyclical and more disciplined in its brand development and capital-allocation strategies" than the company Walt built. Iger's 'franchise'-centric philosophy has executives focused on developing brand franchises, such as the exceptionally successful Hannah Montana, whose secondary products become revenue producers for other Disney units.

Morgan Stanley's Benjamin Swinburne gives the company a sum-of-parts value of $43/share ($32.57), which he equates to a $36 stock price after applying a 15% conglomerate discount.

Friday's Trading Summary...

U.S. Markets:

Dow +96.72 (+0.79%)
Nasdaq +3.57 (+0.16%)
S&P 500 +10.58 (+0.79%)

News That Moved the Market:

Scary Session Finishes With Happy Ending. With little news after Thursday's disastrous Philly Fed figures, the markets drifted lower throughout the morning before finding support in the afternoon. In the last minutes of the session, CNBC reporter Charles Gasparino announced that a source had told him a bailout plan for troubled bond insurer Ambac (ABK, +16.0%) was close to being completed and could be announced early next week. Though the details were sketchy, MarketWatch added the plan may include eight banks that are major counterparties to Ambac. The list includes Citigroup (C, +0.3%), Barclays (BCS, +3.4%), UBS (UBS, +3.0%), and Wachovia (WB, +2.9%), among others. The markets shot up on the news, with the S&P gaining 2% after the announcement. The deal is not complete and could fall apart, but if the deal is announced, investors would feel as if a major disaster would have been averted and could start putting money back in financials.

Weak Outlook At Intuit. Intuit Inc. (INTU, -9.2%), maker of small business software such as QuickBooks and TurboTax, announced fiscal second quarter results which were in-line with analysts' forecasts, however, the company lowered its fiscal third-quarter EPS estimates. There were some interesting comments make by CEO Brad Smith: "Small businesses are out there competing in this market and the small business customers we serve are very much like consumers… A lot of small businesses today will operate their business with lines of credit, credit cards, home equity loans, and we know the condition there."

Quick Tics:

Fannie Mae (FNM, -0.9%) and Freddie Mac (FRE, -4.1%) were both downgraded at Merrill Lynch citing bad business conditions.

Next week's important economic figures include PPI (Tuesday), Durable Goods (Wednesday), Preliminary GDP (Thursday), and Personal Income and Outlays (Friday).

Monday's Notable Earnings:

Nordstrom (JWN) After CloseLowe's Companies (LOW) Time Not Supplied

Economic Events:

10:00 AM: Existing Home Sales

Stocks to Watch on Monday....

Fashion specialty retailer Nordstrom Inc. (JWN) is expected to report fourth-quarter earnings of 90 cents a share, according to analysts polled by FactSet Research.

Lowe's Companies (LOW), the second-largest home improvement retailer in the world, is projected to report fourth-quarter earnings of 25 cents a share.

Sotheby's Holdings, Inc (BID) is forecast to post earnings of $1.49 a share in the fourth quarter.

LDK Solar Co. (LDK), manufacturer of multicrystalline solar wafers, is expected to report fourth-quarter earnings of 41 cents a share.

FirstEnergy (FE), a diversified energy company, is forecast to report earnings of 94 cents a share in the fourth quarter.

Shanda Interactive Entertainment (SNDA), a China-based interactive entertainment media company, is estimated to post earnings of 45 cents a share in the fourth quarter.

Tesco (TESO), manufacturer of technology-based solutions for the upstream energy industry, is likely to report earnings of 22 cents a share in the fourth quarter.

After Friday's closing bell, Genentech Inc. (DNA) said the U.S. Food and Drug Administration granted an accelerated approval for Avastin, in combination with paclitaxel chemotherapy, for the treatment of patients who have not received chemotherapy for their metastatic breast cancer. Accelerated approval means that the FDA must still review data on the drug before granting full market approval. The approval is based on a Phase III study that showed that Avastin in combination with paclitaxel chemotherapy resulted in a 52% reduction in the risk of disease progression or death. Avastin is already FDA-approved for colorectal cancer and non-small-cell lung cancer.

How to Accept an Oscar....

Whether you're accepting an Oscar or any other award, preparation is the key to being quotable. Toastmasters International President Chris Ford says, "Every acceptance speech should demonstrate gratitude, recognition and sincerity -- and good delivery." He offers the following tips for adding rhythm and pacing to your award acceptance speech:

-- Write your speech as a script, and memorize it!

-- Pause, smile and count to three before saying anything. ("One one-thousand, two one-thousand, three one-thousand. Pause. Begin.)

-- Begin by addressing the audience. It buys you time and calms your nerves. Remember, the audience is rooting for you.

-- Practice, practice, practice! Rehearse with a timer and allow time for the unexpected.

-- Control filler words (ums and ahs; "you knows"). To do so, see above points: Practice, pause and breathe.

-- Keep names to a minimum and get them right!

-- Include a brief but touching anecdote or little-known fact regarding the role or job you are recognized for.

-- Mainly, your acceptance speech should represent you -- as a professional and as a person.

-- Concentrate on your message. You have important thoughts to convey, so focus on your speech, not on the audience.

-- Make your last line expendable, in case you are cut off.

Trading Resumes in Genentech....

The stock is up 6.25 to $78 in after market trading...

Reason For Late Move....

Ambac Bailout May Be Announced Next Week
New York State Insurance Department's plan to bail out troubled bond insurer Ambac Financial could be announced Monday or Tuesday, reports CNBC's Charlie Gasparino, citing conversations with "bankers working on the deal."

FDA Approves Genentech's Avastin Drug...

Genentech, Inc. (NYSE:DNA) today announced that the U.S. Food and Drug Administration (FDA) granted accelerated approval for Avastin(R) (bevacizumab), in combination with paclitaxel chemotherapy, for the treatment of patients who have not received chemotherapy for their metastatic HER2-negative breast cancer.

This is huge surprise for Genentech...

Genentech Stock Halted....

DNA is halted with news pending.

It last traded at $71.60

Stocks Turn Green....

The Dow Jones Industrial Average recovers from a triple-digit decline to trade positive on news of a potential bailout of troubled bond insurer Ambac. Stocks had been lower most of the day amid nervousness about the economy and downgrades of federal home lenders Fannie Mae and Freddie Mac.

Today's Downgrades....

Agnico-Eagle (AEM) by Salman to Hold from Buy

Barrick Gold (ABX) by UBS to Neutral from Buy

Best Buy (BBY) by Morgan Stanley to Underweight from Equal Weight

ChoicePoint (CPS) by GARP to Neutral from Buy

Fannie Mae (FNM) by Merrill Lynch to Sell from Neutral

Freddie Mac (FRE) by Merrill Lynch to Sell from Neutral

Freeport-McMoran (FCX) by Desjardins to Hold from Buy

Gilead (GILD) by Sanford Berstein to Mkt Perform from Outperform

Goldcorp (GG) by R James to Mkt Perform from Outperform

Goldcorp (GG) by Salman to Hold from Buy

Kinross Gold (KGC) by Genuity to Hold from Buy

Kinross Gold (KGC) by UBS to Neutral from Buy

Nicor Inc (GAS) by Baird to Neutral from Outperform

Today's Upgrades...

American Equity (AEL) by KeyBanc to Buy from Hold

Bristow Grp (BRS) by C. Suisse to Neutral from Underperform

DCP Midstream (DPM) by Wachovia to Outperform from Mkt Perform

DirecTV (DTV) by Cowen & Co to Outperform from Neutral

Discover Fnl Svcs (DFS) by Morgan Stanley to Overweight from Underweight

Dynavax Tech (DVAX) by Oppenheimer to Outperform from Perform

Health Management (HMA) by Raymond James to Mkt Perform from Underperform

Hillenbrand (HB) by Hilliard Lyons to Buy from Neutral

ImClone Sys (IMCL) by Cowen & Co. to Outperform from Neutral

Switch & Data (SDXC) by Raymond James to Strong Buy from Outperform

Williams Cos (WMB) by RBC to Outperform from Sector Perform

Earnings Reports Due on Monday....

American Tower Corp. (AMT) 4Q .08 6:00AM
Atlas Pipeline Partners L.P. (APL) 4Q .62 AMC
China TechFaith Wireless Commun Tech (CNTF) 4Q .04 AMC
Donaldson Co. Inc. (DCI) 2Q .42 AMC
EXCO Resources Inc. (XCO) 4Q .06 AMC
FirstEnergy Corp. (FE) 4Q .94
Grant Prideco Inc. (GRP) 4Q 1.09
Greatbatch Inc. (GB) 4Q .22 4:00PM
GulfMark Offshore Inc. (GLF) 4Q 1.13 6:00AM
Henry Schein Inc. (HSIC) 4Q .82 BMO
Hilb Rogal & Hobbs Co. (HRH) 4Q .55 AMC
Human Genome Sciences Inc. (HGSI) 4Q (.54) AMC
Keryx BioPharms Inc. (KERX) 4Q (.44)
LDK Solar Co. Ltd. (LDK) 4Q .41 AMC
Lowe's Cos. (LOW) 4Q .25
Nationwide Health Ppties Inc. (NHP) 4Q .33 AMC
Nordstrom Inc. (JWN) 4Q .90
ONEOK Inc. (OKE) 4Q .94 AMC
ONEOK Partners L.P. (OKS) 4Q 1.20 AMC
Orient Express Hotels Ltd. (OEH) 4Q .20 AMC
Perfect World Co. Ltd. (PWRD) 4Q .28 BMO
Shanda Interactive Entertain Ltd. (SNDA) 4Q .45 AMC
Sirtris Pharms Inc. (SIRT) 4Q (.34) AMC
Tesco Corp. (TESO) 4Q .22 BMO
TNS Inc. (TNS) 4Q .21 AMC
USEC Inc. (USU) 4Q .09 AMC
Verenium Corp. (VRNM) 4Q (.20) AMC
Zebra Tech Corp. (ZBRA) 4Q .43 BMO

S&P Slashes GMAC Ratings...

Standard & Poor's cut its rating on GMAC three notches deeper into junk territory and warns the finance company may not be able to remain a better credit risk than its former parent, GM. Ratings agency says further downgrades are possible.

Short List of Stocks to BUY.....

Reviewing earnings reports since January 1. Here is a list of companies that have Beat Earnings Expectations AND have Raised Guidance for the future.

These are stocks you want to BUY if given an opportunity on a pullback...

Potash (POT)
Terex (TEX)
Intuitive Surgical (ISRG)
Hewlett-Packard (HPQ)
Medco Health (MHS)
Buffalo Wild Wings (BWLD)
Gamestop (GME)
Mosanto (MON)
JC Penney (JCP)
Zimmer Holdings (ZMH)
Sohu (SOHU)
Dolby Labs (DLB)
Research in Motion (RIMM)
Express Scripts (ESRX)
Boeing (BA)
Chattem (CHTT)
Corning (GLW)
IBM (IBM)

Latest Apple Patent Filing....

A new Apple (AAPL) patent describes a large touch-based system designed to be used with both hands simultaneously. Perhaps a competitor to Microsoft's delayed Surface?

ImClone Gets Upgraded...

Cowen and Co. upgraded biotech company ImClone Systems (IMCL) to outperform from neutral, saying that based on conversations with physician consultants, it believes Erbitux's prospects for gaining significant market share in the treatment of lung cancer are quite good.

Medical Device Makers Celebrate Victory...

Since Wednesday's Supreme Court ruling protecting medical device maker Medtronic (MDT) from personal injury lawsuits, lawyers and judges have been busily reexamining similar cases against companies like Johnson & Johnson (JNJ), Boston Scientific (BSX) and St. Jude Medical (STJ) to decide whether the suits should be closed down.

Microsoft Opens Source Code...

In the hopes of encouraging programmers to build add-ons to its products, Microsoft (MSFT) announced broad steps to open up its source code. Microsoft hopes the move will give it leverage against rival online software suites that make it easy to build plug-ins that enhance usability and function. Developers and regulators were pleased by the move, although some were skeptical of Microsoft's commitment to interoperability.

Jeff Bezos Selling Shares of Amazon....

Shares in Amazon.com Inc. (AMZN) fell 5.1% Thursday after the Internet retailer revealed that founder and Chief Executive Jeff Bezos sold more than $135 million worth of shares, his first insider sale in more than three years.

Nothing wrong with this....I guess he's learned from the past.

Chesapeake Energy Beats Estimates...

Chesapeake Energy Corp. (CHK, $44.18), the largest independent U.S. natural gas producer, reported fourth-quarter net income of $303 million, falling from $471 million a year ago. After paying preferred stock dividends and including losses on the conversion of preferred stock, earnings fell to 33 cents a share from 96 cents a share. Excluding one-time items, the company earned $466 million, or 93 cents a share, from ongoing operations. Revenue rose 12% to $2.09 billion.

Analysts surveyed had predicted the company would earn 82 cents a share on $1.96 billion in revenue.

This has been a hot stock lately with the latest move in Natural Gas prices.

Intuit Earnings Miss Estimates..

Intuit Inc. (INTU). The Mountain View, CA.-based provider of business and financial management software said late Thursday its second-quarter net profit dipped to $115.2 million, or $0.34 a share, from $145.4 million, or $0.40 a share, in the year-ago period. Total net revenue rose to $834.9 million from $750.6 million in the previous year period.

The company was expected to earn 36 cents a share.

Have you noticed how much they jacked up the price on Turbotax this year???

Fannie and Freddie Downgraded to Sell...

Merrill Lynch downgraded government-sponsored agencies Fannie Mae (FNM) and Freddie Mac (FRE) to sell from neutral Friday, saying that despite recent selling pressure, the share prices don't fully reflect "the severity or duration of the financial headwinds facing the companies." Further deterioration in financial market conditions and worsening credit performance will undermine fundamentals and the market’s assessment of Fannie and Freddie's respective financial position, Merrill Lynch analysts wrote in a note to clients.

Express Scripts Beats Estimates...

Express Scripts Inc. (ESRX). The Maryland Heights, Mo.-based provider of pharmacy benefit management services late Thursday said fourth-quarter adjusted earnings rose to $174.2 million, or 68 cents a share, compared with $139.9 million, or 51 cents a share, a year earlier. The company was expected to earn 64 cents a share.

Revenue for the period ended Dec. 31 rose to $4.69 billion from last year's $4.5 billion. For 2008, the company expects earnings from continuing operators of $2.92 to $3 a share.

The stock is trading up 1 to $66 premarket. This has been one of the top performing groups out there over the past thee years. Medco Health and CVS Caremark are the other two top players.

Thursday's Summary....

U.S. Markets

Dow -142.96 (-1.15%)
Nasdaq -27.32 (-1.17%)
S&P 500 -17.50 (-1.29%)

News That Moved the Market

Markets Drop On Philly Fed. Sellers dominated the market Thursday, with all 10 sectors finishing in negative territory. The bears took control after the Philadelphia Fed Manufacturing Survey came in at -24, showing continued contraction in the region's manufacturing. The reading was well below the -10 analysts expected, fueling speculation that we may not be able to avert a recession. The Philly Fed Survey has recently been a strong barometer of the country's manufacturing activity. With little news expected Friday, look for this number to stay with investors and traders through the start of tomorrow's' session.

Microsoft Opens Up. Microsoft (MSFT, -0.4% ) announced it would enhance interoperability by increasing the openness of its products. The move should make it easier for outside programmers to create applications that work with Microsoft's products, mainly Vista, and ease tensions with the EU anti-trust regulators.

Gold Shines. Gold futures hit an all-time high of $958.40/ouce, before settling up $11.40 to $949.20. After yesterday's higher than expected CPI reading and further weakness in the U.S. dollar, gold was bid up by investors and traders. "This type of inflation environment is one in which commodities thrive in -- at least until growth rates start to falter," said Edward Meir, an analyst at MF Global.

Research in Motion (RIMM, +9.0%) traded higher after increasing its forecast for subscriber growth...

Crude Oil fell $0.32 to $97.91/barrel after higher than expected inventories…

Cisco (CSCO, -0.0%) was upgraded to a Buy from Neutral at Citigroup.

Fed Forecasts Lower US Growth, Higher Inflation...

A new forecast by the Federal Reserve suggests the U.S. can expect both slower growth and higher inflation this year. The central bank cut its prediction for growth to between 1.3% and 2% this year, half a point lower than predicted in October.

The Fed raised the forecast for core inflation by 0.3 per cent, to between 2% and 2.2%.

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• Chesapeake Energy (CHK). Projected to report Q4 earnings of $0.81 a share, according to analysts polled by Thomson Financial. This is a decline of 10.11% from $0.90 earned per share same time the previous year.

• Chemed (CHE). Estimated to post Q4 earnings of $0.88 a share, up 20.14% from $0.73 earned per share same time last year.

• DTE Energy (DTE). Forecast to report earnings of $0.78 a share, which is largely unchanged from $0.77 earned per share same time the year previous.

• Eaton Vance (EV). Projected to report q1 earnings of $0.49 a share, up 88.85% from $0.26 earned per share same time last year.

• Emcor (EME). Likely report Q4 earnings of $0.66 a share, up 64.25% from $0.40 earned per share same time the previous year.

• Esterline Technologies (ESL). Forecast to report Q1 earnings of $0.59 a share.

• Express Scripts (ESRX). Expected to post Q4 earnings of $0.64 a share, an increase of over 26% from $0.51 earned per share same time the previous year.

• Intuit (INTU). Estimated to post Q2 earnings of $0.36 a share, down 19.33% from $0.45 earned same time the previous year.

• JC Penney (JCP). Forecast to post Q4 earnings of $1.77 a share, a decline of 11.45% from $2.00 earned per share same time the previous year.

• MGM Mirage (MGM). Projected to post Q4 earnings of $0.56 a share, up 5.47% from 40.53 per share earned same time the previous year.

• Odyssey Re Holdings (ORH). Expected to report Q4 earnings of $0.92 a share against $0.92 earned per share same time the previous year.

• OSI Pharmaceuticals (OSIP). Likely to report a Q4 profit of $0.29 a share, against a loss of $0.01 per share same time last year.

• Roper Industries (ROP). Expected to post Q4 earnings of $0.75 a share, an increase of 16.72% from $0.64 earned same time previous year.

• Safeway (SWY). Expected to report Q4 profit of $0.68 a share, which is a rise of 11.47% from $0.61 earned per share same time the previous year.

Terex Beats and Guides Higher...

Terex Corp. TEX) late Wednesday reported fourth-quarter net income of $174 million, or $1.67 per share, up from $100.9 million, or 97 cents a share, last year.The Westport, Conn.-based diversified manufacturer said revenue in the three months ended Dec. 31 rose to $2.59 billion from $2.03 billion.The mean estimate of analysts polled by Thomson Financial was for a per-share profit of $1.40 on revenue of $2.35 billion.

Terex expects 2008 earnings of $6.65 to $7.15 a share on revenue of $10 billion to $10.5 billion.Analysts are looking for a 2008 profit of $6.68 a share on revenue of $9.77 billion.

Shares of Terex closed at $62.21 and climbed 5% in after-hours trade.

TV Ads Losing Effect...Marketers Move to Internet....

62% of marketers believe TV ads have become less effective in the past two years, Forrester Research says, perhaps a byproduct of digital recordings, ad zappers, or our waning attention spans. Conversely, 87% plan to boost spending on internet advertising.

RIMM Raises Forecast...

BlackBerry maker Research In Motion Ltd. (RIMM) raised its forecast for fourth quarter net subscriber account additions, putting them about 15-20% higher than the 1.82 million net subscriber account additions it projected in December.

The Waterloo, Ont. company said its BlackBerry subscriber account base is expected to total about 14 million at the end of the fourth quarter. Research In Motion said the seasonal slowdown in net subscriber account additions that it had expected in the new year didn't occur.

The company also confirmed its fourth-quarter revenue guidance of $1.80-$1.87 billion and earnings guidance of 66-70 cents a share. Research In Motion, which makes wireless products for the mobile communications market, will report results for the fourth quarter ending March 1 on April 2.

RIMM is trading up 6 to $103.50 premarket.

Wednesday's Summary....

U.S. Markets

Dow +90.04 (+0.73%)
Nasdaq +20.90 (+0.91%)
S&P 500 +11.25 (+0.83%)

News That Moved the Market

Markets End Higher After FOMC Minutes Released. The markets were able to end the day with gains after investors mulled over the latest FOMC minutes. The Fed said it was ready to continue easing rates, but once the economy resumes some momentum, but it will look to swiftly increase rates again. It also projected the economy's growth to slow to 1.2%-2.0%, a drop from the 1.8%-2.5% it forecasted in October. Inflation was a hot topic, as the Fed still expected the economic slowdown to help dampen such pressures, however, it was clear in the minutes this view was not shared by all members. Dallas Fed president Richard Fisher voted against the last rate cut, believing the upside risks to inflation trumped downside risks to growth. In all, the minutes had both good and bad points, but investors keyed in on the fact the Fed was ready to cut rates again to spur growth and avoid a recession.

Inflationary Pressures Remain. Before the Minutes were release, the Labor Department announced consumer prices jumped 0.4%, while core prices increased 0.3%. The figures were greater than expected, and revealed the economic slowdown had failed to alleviate inflationary pressures. Year-over-year, CPI increased 4.3%, while core CPI climbed 2.5%. The Fed will now have to be extremely careful easing rates, and must look to increase rates again as soon as it thinks the economy can handle it.

Another Record Day For Crude. Oil marched higher, closing at $101.32, an all-time record. Greater demand along with a further weakening dollar were catalysts for the increase. Some experts believe the only thing that will ultimately end crude's rally is a serious world economic downturn.

Quick Tics: The Commerce Department reported a small gain in housing starts…Hewlett-Packard (HPQ, +7.9%) reported a stellar quarter and forecasted higher earnings for next quarter than analysts expected…KKR Financial Holdings (KFN, 1.9%) will delay repaying debt on asset-backed paper and will enter restructuring negotiations….The prices wars in telecom took their toll on the companies involved including AT&T (T, -4.3%) and Verizon (VZ, -0.3%).

Tomorrow Notable Earnings :

Safeway (SWY) Before Open

Economic Events:

8:30 AM: Jobless Claims
10:00 AM: Leading Indicators
10:00 AM: Philadelphia Fed
10:30 AM: Crude Inventories

My Space Getting Into Music....

News Corp. (NWS) is in talks with major music labels about a venture that would offer music through 1) ad-based downloads and 2) streaming to a PC. The labels have been offered an equity stake in the site, MySpace Music. Social networks Imeem and Last.fm already have streaming deals with music labels. Labels approached include Vivendi's Universal, Warner (WMG), EMI Group, and Sony (SNE) BMG. Complications include Universal Music's outstanding copyright infringement suit against MySpace.

Copycat Carriers....

In a game of Tuesday-tag, Verizon Wireless (VZ) launched a $100/month unlimited U.S. calling plan. AT&T (T) was soon to follow. Not to be outdone, T-Mobile (DT) jumped on the bandwagon late in the day, and kicked in unlimited text and picture messaging. Shares fell. T -5.25%; VZ -6.6%; DT -2.6%. Sprint (S), the only major carrier left out (thus far) still dropped 3.55%. Besides each other, the group also compete with VoIP providers like Comcast (CMCSA) and Vonage (VG), who offer unlimited plans for as little as $25.

Sony and Toshiba Join Forces....

Sony Corp. (SNE). The Japanese electronics company will receive 90 billion yen for its high-performance semiconductor operations from rival Toshiba Corp. (TOSBF), Toshiba said today. Despite being fierce competitors in other areas, the two companies said they had firmed up a deal to form a semiconductor joint venture owned 60% by Toshiba and 40% by Sony.

Garmin Jumps After Beating Expectations...

Garmin Ltd. (GRMN). The George Town-based provider of provider of navigation, communications and information devices today said fourth-quarter net income rose to $307.3 million, or $1.39 a share, from $180.3 million, or 82 cents a share, in the same quarter a year earlier.

Revenue rose to $1.22 billion from $611 million a year ago, with North American sales seeing the largest percentage jump year-over-year. For 2008, the company expects earnings to exceed $4.40 a share with revenue expected to top $4.5 billion.

The stock is up 6 points to $72.50 premarket. It is still way down off its 52-week high of $125 hit in late October.

Crocs Disappoints Traders...

Crocs Inc. (CROX). The Niwot, Colorado-based footwear company said late Tuesday net income rose to $38.3 million, or $0.45 a share, from $20.8 million, or $0.26 a share, a year earlier.

The company said revenue nearly doubled to $224.8 million from $112.9 million a year ago. It reaffirmed its 2008 earnings and revenue forecasts of $2.70 a share and $1.16 billion, respectively.

Analysts were expecting $0.44. Nonetheless...the stock got pounded in after hours trading last night. The is down 15% to $27.80 premarket.

Earnings This Week...

Major companies tentatively scheduled to report quarterly earnings this week:

Wednesday

Allied Capital Corp. (ALD) 4Q .27
Career Education Corp. (CECO) 4Q .31
Constellation Energy Partners LLC (CEP) 1Q .44
Garmin Ltd. (GRMN) 4Q 1.13 BMO
Health Mgmt Associates Inc. (HMA) 4Q .08 AMC
LodgeNet Interactive Corp. (LNET) 4Q (.45) AMC
Netease.com Inc. (NTES) 4Q .30 AMC
Oceaneering Intl Inc. (OII) 4Q .81 5:00PM
Suntech Power Hldgs Co. Ltd. STP) 4Q .38 BMO
Synopsys Inc. (SNPS) 1Q .34 AMC
Terex Corp. (TEX) 1Q 1.38 AMC
Tim Hortons Inc. (THI) 4Q .41 BMO
TJX Cos. (TJX) 4Q .61 9:30AM
Transocean Inc. (RIG) 1Q 3.32
Ultra Petroleum Corp. (UPL) 4Q .31
Watson Pharms Inc. (WPI) 4Q .32 BMO
Wellcare Health Plans Inc. (WCG) 1Q) .73 Unspecified

Thursday

Allianz SE (AZ) 4Q .37 1:30AM
Barrick Gold Corp. (ABX) 4Q .53 BMO
Chesapeake Energy Corp. (CHK) 4Q .81 AMC
Cleveland-Cliffs Inc. (CLF) 4Q 1.68 AMC
Continental AG (CTTAY) 4Q 3.28
DTE Energy Co. (DTE) 4Q .84
EMCOR Grp Inc. (EME) 4Q .65
Express Scripts Inc. (ESRX) 4Q .65 AMC
Goldcorp Inc. (GG) 4Q .17 BMO
Intuit Inc. (INTU) 2Q .34 AMC
J.C. Penney Co. Inc. (JCP) 4Q 1.74
Kaydon Corp. (KDN) 1Q .62 7:00AM
Kinross Gold Corp. (KGC) 4Q .08 AMC
Mgm Mirage (MGM) 4Q .57
Newmont Mining Corp. (NEM) 4Q .42
OSI Pharms Inc. (OSIP) 4Q .29 AMC
Quest Diagnostics Inc. (DGX) 4Q .78 BMO
Safeway Inc. (SWY) 4Q .68
Vasco Data Security Intl Inc. (VDSI) 4Q .20
VCA Antech Inc. (WOOF) 4Q .26 4:00PM
WebMD Health Corp. (WBMD) 4Q .29 4:00PM
Williams Cos. (WMB) 4Q .48 BMO

Friday

Life Time Fitness Inc. (LTM) 4Q .48
Newpark Resources Inc. (NR) 4Q .09 6:00AM
PG&E Corp. (PCG) 4Q .56
Rogers Commun Inc. (RCI) 4Q .42 BMO
St. Mary Land & Exploration Co. (SM) 4Q .89
Westwood One Inc. (WON) 4Q .04

Whole Foods 1Q Net Falls 27%...

Whole Foods (WFMI), the organic food retailer reports net income of $39.1 million, or 28¢ a share, as its acquisition of Wild Oats Markets weighs on results. Revenue rises 31% to $2.46 billion.

Analysts expected earnings of 36¢ a share on revenue of $2.42 billion.

That's a Revenue miss. The stock closed yesterday at $38.32 It as critical support in the $35 area.

Microsoft Hires Group To Help Oust Yahoo Board

Microsoft is getting ready to take its bid for Yahoo right to the Web portal's shareholders, even as analysts wait for a higher offer. Microsoft hires proxy group to help oust Yahoo's 10-member board, all of whom are up for re-election.

This could get interesting...

Hewlett-Packard Gains On Bullish 2008 Outlook

Hewlett-Packard (HPQ) net income rises 38% to $2.1 billion, or 80¢ a share, as revenue increases 13% to $28.5 billion on strong notebook PC sales and growth in its international business. Non-GAAP profit is 86¢ a share.

Analysts expected a profit of 81¢ a share and $27.6 billion in sales.

H-P also raises its 2008 guidance, lifting shares 5% in pre-market trading.

Transocean Gets Large Contract From Anadarko...

Transocean Inc. (RIG) late Tuesday said it hasbeen awarded a three-year contract extension for its drillship Deepwater Millennium from Anadarko Petroleum Corp. (APC), beginning in June 2010. The estimated revenue which could be generated over the three-year contractperiod is about $586 million, Houston-based Transocean said. The Deepwater Millennium is capable of operating in water depths of up to 10,000 feet.

Transocean shares closed yesterday up 58 cents at $129.65. Anadarko's stock finished up $1.59 at $60.53.

Tuesday's Summary....

U.S. Markets

Dow -10.99 (-0.09%)
Nasdaq -15.60 (-0.67%)
S&P 500 -1.21 (-0.09%)

News That Moved the Market

Another Afternoon Sell-Off. Erasing a positive start spurred by Wal-Mart's (WMT, +0.4%) better than expected quarterly report, the markets folded under selling pressure in afternoon trading. News that a refinery owned by Alon USA Energy (ALJ, -5.4%) exploded yesterday in Texas, along with worries that OPEC may cut output at its next meeting in March pushed crude prices up 4.7% to close at $100.01/barrel. Unrest in Nigeria also played a role in the energy rally. For today at least, the economic slowdown decreasing demands for crude took a back seat to other news. Though the losses do not look so bad, consider that the S&P closed 1.0% lower from its session high, while the Nasdaq lost 2.0% from its high.

HP Comes Through. Hewlett-Packard (HPQ, +0.66% day, +4.4% A.H.) jumped in after hours trading after reporting better than expected results. Hewlett was able to find success by cutting costs and racking up strong sales outside the U.S. The company's EPS forecast for next quarter beat analysts' estimates by a penny.

Lehman To Report Larger Writedown. The Wall Street Journal reported Lehman Bros. (LEH,-2.2%) is now facing a $1.3 billion writedown. Though the number is not as massive as some of its counterparts, it is still bigger than the company estimated and created whispers that perhaps the company is not managing their risk as well as anticipated or that the market for commercial real estate loans, which Lehman owns a great deal of, is deteriorating.

Cell Phone Price Wars Heat Up. Verizon (VZ, -6.6%) announced it will offer a $99.99/month package with unlimited minutes. As a result, AT&T(T, -5.3%) also came out with a similar deal, sparking fears of a nasty price war in the cell phone provider industry. The Telecom sector finished 5.1% lower.

Tomorrow Notable Earnings:

Host Hotels & Resorts Inc.(HST) Before Open
BNP PARIBAS (BNP.PA) Before Open

Economic Events:

8:30 AM: CPI
8:30 AM: Housing Starts
8:30 AM: Building Permits
10:30 AM: Crude Inventories
2:00 PM FOMC Minutes

Microsoft Has no Plans to Boost Yahoo Offer...

Microsoft (MSFT) chairman Bill gates said Monday the company is not in private discussions with Yahoo! (YHOO) about an increase to its $31/share buyout offer. Gates also said the company plans to invest heavily in web search in an attempt to compete with Google (GOOG), even if it fails to acquire Yahoo.

Lehman May Take Bigger-Than-Expected Hit...

Sources say Lehman Brothers' (LEH) is sitting on a large portfolio of deteriorating commercial real-estate loans, which may lead the firm to write down $1.3B in Q4, more than recent estimates of $800M-$1B.

While the size of the writedown is relatively small compared to those of Merrill Lynch (MER), Citigroup (C) and UBS (UBS), it may indicate that even firms that apparently avoided major missteps are finding it increasingly difficult to emerge unscathed from the debt market crisis.

Onyx's Nexavar Fails Lung Cancer Trial...

Onyx Pharma (ONXX) off 19% at $36.20 after a lung cancer trial of flagship drug Nexavar is halted because of increased death in patients taking the drug. Data was highly anticipated by investors as lung cancer was seen as key growth driver for Nexavar, which is already approved in more than 60 countries for advanced kidney cancer and in US and Europe for liver cancer. Nexavar was seeking to compete with Genentech's (DNA) Avastin in lung cancer - second most common cancer in US and leading cause of cancer.

Big question is whether this ruling will affect clearance for Kidney and Liver cancer use.

Sony's Blu-Ray Takes Over...

Sony Corp. (SNE). The Japanese consumer electronics giant may have won the DVD-format war with Blu-ray technology after rival Toshiba Corp (TOSBF) said today it will withdraw from the the HD DVD business. Toshiba said it will stop developing new HD DVD players and recorders and will no longer make HD DVD players and recorders by the end of March 2008.

The move follows Wal-Mart's (WMT) announcement Friday it will shift exclusively to selling movies in the Blu-ray format. In the same week, major electronics seller Best Buy Co. Inc. (BBY) and online video rental giant Netflix Inc. (NFLX) declared their allegiance to Blu-ray.

This is a very interesting looking stock. They seem to be winning in various categories now...

Abbott Labs Gets FDA Approval for Simcor...

Abbott Laboratories (ABT) said it has received U.S. Food and Drug Administration (FDA) approval for its cholesterol treatment Simcor.

Simcor has been approved for use to lower levels of elevated total cholesterol, LDL "bad" cholesterol and triglycerides, and to raise HDL "good" cholesterol in patients with complex lipid disease when treatment with simvastatin or Niaspan monotherapies are not considered adequate, the Illinois-based pharma company said.

The stock is up a point to $56.50 premarket. It has tried twice to break out about $60, but has failed. That is the level where I would put a buy order.

Earnings Today....

COMPANIES REPORTING EARNINGS

• Chiquita Brands International Inc. (CQB). Likely to report a Q4 loss of $0.10 a share, according to analysts polled by Thomson Financial.

• Crocs Inc. (CROX). Expected to post Q4 earnings of $0.45 cents a share.

• Fossil Inc. (FOSL). Expected to report Q4 earnings of $0.67 a share.

• Hewlett-Packard (HPQ). Expected to report Q1 profit of $0.81 a share.

• Martha Stewart Living Omnimedia (MSO). Expected to report Q4 earnings of $0.65 a share.

• Marvel Entertainment Inc. (MVL). Expected to post Q4 earnings of $0.29 a share, up 106.43% from $0.14 earned same time last year.

• NutriSystem (NTRI). Forecast to post Q4 earnings of $0.29 a share.

• Penske Automotive Group (PAG). Expected to report Q4 earnings of $0.33 a share.

• Whole Foods Market (WFMI). Likely to report Q1 earnings of $0.36 a share.

Medco Health Beats and Raises....

Medco Health Solutions said fourth-quarter netincome fell to $207.6 million, or 38 cents a share, from $228.8 million, or 39cents a share, a year ago. Excluding the amortization of intangible assets, the pharmacy benefitsmanager said it earned 43 cents a share.

Revenue for the three-month period rose 4.1% to $11.4 billion, citing highermail-order volume associated with new clients and price inflation bypharmaceutical manufacturers on brand-name drugs.

The mean estimate of analysts polled by Thomson Financial was for earningsof 41 cents a share on revenue of $11.45 billion. The company lifted its 2008 outlook, saying it now expects to earn in therange of $2.07 to $2.11, up from a previous forecast of $1.95 to $2.01 a share.

A Beat and a Raise....keep an eye on this stock...

Steel Firms Agree on Iron Ore Price Hike...

Steelmakers in Japan, South Korea and Germany agree to price hikes of at least 65% for iron ore, the main raw material in steel, but it remained unclear if that figure would set the benchmark across the industry.

Steel stocks to keep an eye on:

Cleveland Cliffs (CLF)
Rio Tinto (RTP)
US Steel (X)
AK Steel (AKS)
Might as well add Freeport McMoRan (FCX)

Martha Stewart Buys Out Emeril...

Martha Stewart To Buy Lagasse Properties. Martha Stewart Living Omnimedia is expected to acquire Emeril Lagasse's extensive media and licensed properties for $45 million in cash and $5 million in stock, The Wall Street Journal reports.

Too bad Rachael Ray is the hot commodity right now...

Wal-Mart Q Net Rises....

Retailer posts profit of $4.1 billion, or $1.02 a share, as total revenue climbs 9.5% to $107.43 billion. Latest period includes a net charge of 2¢ a share. Revenue gains 8% to $107.4 billion.

Analysts expected earnings of $1.02 a share on revenue of $106.92 billion. Same-store sales for the quarter, excluding fuel, increase 1.7%. Retailer offers cautious outlook.

Castro Resigns as Cuban President...

Ailing leader Fidel Castro resigns after nearly a half-century as president of the communist country, saying he won't accept a new term when parliament meets this week. Move positions his brother Raul for permanent succession to the presidency.

Stock Futures are up premarket as a result...