Today's Upgrades...

List of Stocks Upgraded this Morning:

Buffalo Wild Wings (BWLD) by SMH Capital
Mercantile Bank (MBWM) by Stifel Nicolaus
Imclone (IMCL) by Citigroup
National City (NCC) by RBC Capital Mkts
Bunge (BG) by JP Morgan
Massey Energy (MEE) by JP Morgan
International Coal (ICO) by JP Morgan
Sanderson Farms (SAFM) by JP Morgan
Tyson Foods (TSN) by JP Morgan
AstraZeneca (AZN) by HSBC Securities
Countrywide (CFC) by Wachovia

VISA Opens at $59.50

Currently trading down to $56.00

Exxon Dealt Blow in Fight With Venezuela...

U.K. courts lifted a $12B freeze on Venezuela's assets and ordered ExxonMobil (XOM) to pay some fees. The legal battle began after Venezuela nationalized several oil projects. The ruling judge noted Petróleos de Venezuela SA, or PDVSA, isn't based in England and has no significant assets in the U.K. and is therefore not under its jurisdiction.

All the Apple You Can Eat...

Sources say Apple's (AAPL) iTunes online music store is considering teaming up with big music distributors to offer customers "all you can eat" iPods for a premium tacked on to the device purchase. The model would rival Nokia's (NOK) "comes with music" deal with Universal, but Apple is reportedly offering music companies just $20 per device, vs. Nokia's $80.

Apple is also considering a monthly/yearly iTunes subscription model. Market research has shown customers would pay up to $100, or $7-8/month, for unlimited access.

Yahoo Plays Hard to Get...

Yahoo (YHOO) challenged Microsoft (MSFT) by reaffirming its 2008 financial guidance, and projecting strong revenue and cash-flow growth for 2009 and 2010 -- based on which shares could be worth north of $40/share vs. Microsoft's $31 cash and stock offer which is now worth about $29.50. Citigroup's Mark Mahaney said the 2009-10 numbers would not be easy to hit, but thinks the deal will ultimately close at more than $31/share.

Meanwhile Chinese internet company Alibaba, 39% owned by Yahoo, said it is in advanced talks to finance a buyback of Yahoo's stake should Microsoft's bid prevail.

VISA Starts Trading Today....

Visa Inc. The San Francisco-based credit card giant late Tuesday priced its initial public offering of 406 million shares at $44 each, raising $17.86 billion. The pricing came in above the expected range of $37 to $42 a share.

The company's shares will begin trading today on the New York Stock Exchange under the ticker symbol "V."

Adobe Posts Strong Earnings...

Adobe Systems Inc. (ADBE). The San Jose, Calif-based design and publishing software maker late Tuesday said first-quarter net income rose to $219.37 million, or $0.38 a share, from $143.85 million, or $0.24 a share, a year ago. For the quarter to Feb. 29, revenue rose to $851.96 million from $620.29 million.

For the second quarter, Adobe said it is targeting revenue of $855-$885 million. For 2008, it reaffirmed target revenue growth of about 13% and EPS of $1.45-$1.51.

Adobe stock is up 1.90 to $33.60 in premarket trading.

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• Charming Shoppes Inc. (CHRS). Expected to report Q4 loss of $0.19 a share, according to the analysts polled by Thomson Financial. This is against a profit of $0.19 a share earned same quarter last year.

• Cintas Corp. (CTAS) Expected to report Q3 earnings of $0.54 a share.

• Discover Financial Services (DFS). Expected to report Q1 profit of $0.40 per share.

• Guess? Inc. (GES). Expected to report a Q4 profit of $0.57 per share.

• Herman Miller Inc. (MLHR). Expected to report Q3 earnings of $0.59 a share.

• Morgan Stanley (MS). Expected to report a Q1 profit of $1.03 per share.

• Nike Inc. (NKE). Expected to report Q3 profit of $0.81 per share, up 17.66% from the same quarter last year when the company earned $0.69.

• Ross Stores Inc. (ROST). Expected to report Q4 profit of $0.70 per share.

Today's Top Stories....

• Staples plans hostile bid for Dutch rival - report

• Venezuela wants to return to arbitration with ExxonMobil

• NASDAQ OMX to form Europe-wide market for blue chips

• Total buys 30% stake from Chevron in Alaska exploration zone

• Japan's Takeda Pharma in talks to buy out U.S. JV with Abbott - report

• China's Alibaba planning to buy out Yahoo stake - report

• PetroChina FY net up slightly as crude output rises only 1%

• General Mills Q3 net rises to $430 million

• Apple in talks with music cos to offer free iTunes access - report

• JP Morgan cuts Kraft Foods to 'neutral' from 'overweight'

• Bear Stearns to reimburse indemnified employees for legal costs

Nice Day for the Market...

U.S. Markets

Dow +420.41 (+3.51%)
Nasdaq +91.25 (+4.19%)
S&P 500 +54.14 (+4.24%)

News That Moved the Market

Markets Sizzles With More Confidence In Financials. Markets began the session with healthy gains after both Goldman Sachs (GS, +16.3%) and Lehman (LEH, +43.3%) reported better than expected quarters and reassured investors that they were well capitalized. Heading into the FOMC announcement, the Dow was up nearly 300 points. The Fed's decision to cut rates by 75 basis points caused a sell-off, as most expected a full-point cut, but the markets quickly recovered and finished the day at new highs.

Fed Details. The Fed cut both the fed funds rate and discount rate by 75 basis points to 2.25% and 2.50%, respectively. Two members voted against the cut, Dallas Fed President Fisher and Philadelphia Fed President Plosser, who preferred easing less. The statement acknowledged the uncertainty surrounding inflation, but said it expects inflation to moderate over time, keeping the door for further cuts if necessary. The Fed also assured that it will act in a timely manner if more price instability creeps up.

Quick Tics:

The Financial Sector increased 8.5% on the day, its largest jump in 8 years...

Adobe (ADBE, +3.4% day; +4.7% A.H.) reported sales jumped 37% and affirmed revenue would increase 13% this year…

Housing starts fell 0.6% last month, which was better than economists expected...

Bear Stearn's (BSC, +22.9%) jumped after more stockholders hinted they would vote against the JP Morgan (JPM, +6.0%) buyout.

Tomorrow Notable Earnings:

General Mills, Inc.(GIS) Before Open
Morgan Stanley (MS) Before Open
Nike (NKE) After Close

Economic Events:

10:30 AM: Crude Inventories

Fed Cuts Rates Another 75 Basis Points...

Federal Reserve slashes its key interest rate to 2.25% and signals more reductions are likely, unloading heavy artillery in its effort to keep the credit crunch from triggering a prolonged recession.

Rates are back to June 2004 levels.

Kirby Corp Lifts Guidance...

Kirby Corp. (KEX) expects first-quarter net income to exceed 66 cents a share, above its previous forecast range of 57 cents to 62 cents. The Houston tank barge and towing vessel operator said the guidance reflects strong demand for both marine transportation and diesel engine service operations.

On average, analysts polled by Thomson Financial expect per-share earnings of 60 cents.

Lehman Jumps on Earnings Report...

Lehman Brothers (LEH) - brokerage's net slides 57% to $489 million, or 81¢ a share, as results are hurt by net mark-to-market adjustments of $1.8 billion. Revenue falls by 31% to $3.51 billion.

But shares gain 15% pre-market as results top estimates.

Goldman Beats Street....

Financial-services firm Goldman Sachs (GS) reports net earnings of $1.51 billion, or $3.23 a share. Net revenue drops to $8.34 billion from $12.73 billion. CEO says market conditions "are clearly very difficult," as firm takes net losses on residential mortgages and securities of $1 billion, while credit products included a loss of roughly $1 billion.

Wall Street expected EPS of $2.58.

Rite Aid Warns....

Shares of Rite Aid (RAD) fell 6.3% after the drugstore operator warned it would lose more than a previous forecast of $0.27-0.31 during the fiscal year ended March 1. Rite Aid said it cannot estimate its exact loss, but noted that weaker earnings are forcing it to reduce by up to $1B ($1.38/share) a deferred tax credit it no longer thinks it will be able to take advantage of.

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• AAR Corp. (AIR). Expected to report Q3 profit of $0.46 per share, according to analysts polled by Thomson Financial.

• Adobe Systems Inc. (ADBE). Expected to report Q1 profit of $0.45 per share.

• Darden Restaurants Inc. (DRI). Expected to report Q3 earnings of $0.82 per share.

• Goldman Sachs Group Inc. (GS). Expected to report Q1 profit of $2.58 per share.

• Healthways Inc. (HWAY). Expected to report Q2 profit of $0.33 per share, which is a 10.33% increase from the same quarter last year when the company earned $0.30.

• Lehman Brothers Holdings Inc. (LEH). Expected to report Q1 profit of $0.72 per share.

Today's Top Stories....

• New York Fed called on banks to support Lehman Bros. - report

• NYSE Euronext announces $1 billion share buyback; hikes annual dividend

• Goldman Sachs raised to 'outperform' at Wachovia on strong capital position

• Bear Stearns shareholder Joe Lewis seeks to block JP Morgan takeover - report

• BlackRock explores solutions for fund shareholders hit by auction-rate failures

• AstraZeneca could pay £14.25/shr for Shire and still create value - UBS

• Vodafone to axe 450 head office jobs • Deutsche Bank sued by auction-rate securities investors

Monday's Trading Summary...

U.S. Markets

Dow +21.16 (+0.18%)
Nasdaq -35.48 (-1.60%)
S&P 500 -11.54 (-0.90%)

News That Moved the Market

Don't Panic. When the opening bell rang, many expected today to be a bloodbath. Bear Stearns's (BSC, -84.0%) liquidity crisis and sale to JP Morgan (JPM, +10.3%) for about $240 million shocked most investors and left many wondering what bank was next. To stem the fears, the Fed reacted with assertiveness, lowering its discount rate by a quarter of a point to 3.25% and offering lending to a greater number of companies, including investment banks. Though foreign markets lost ground overnight, the Fed's actions were enough to reduce nervousness and actually convince some that the Fed will back this market and not let it nosedive. Trading turned around midday and a late rally allowed the markets to end basically flat. Tomorrow's Fed announcement will be important, with the market now expecting a full-point cut.

Lehman May Be Next. Lehman Brothers (LEH, -19.1%) stock dropped as speculation increased that it may be the next to fold. The move came after CEO Richard Fuld said the Fed's "move improves the liquidity picture and, from my perspective, takes the liquidity issue for the entire industry off the table." The idea that the company's CEO would have to say something like that, especially after Bear's CEO's gave a similar statement last week, scared investors and drove them to sell their Lehman positions. Tomorrow, Lehman reports its latest earnings.

Quick Tics:

Commodities had a weak session, with the 4.6% decline in the CRB Index…

To this point, Bear Stearns's book value was reported to be $84 per share at the end of the fourth quarter.

Tuesday's Notable Earnings:

Adobe Systems (ADBE) Time Not Supplied
Goldman Sachs (GS) Before Open
Lehman Brothers (LEH) Before Open
Gamestop Corp. (GME) Time Not Supplied

Economic Events:

8:30 AM: Housing Starts
8:30 AM: PPI
10:00 AM: State Street Investor Confidence Index
2:15 PM: FOMC Announcement

Afternoon Update....

Dow -146
S&P - 29
Nasdaq -51

After gapping lower, the market actually went positive just before noon. Since then we have drifted back lower.

My take: This market is pretty much washed out. Not that we can't go lower, but long term, we have a serious buying opportunity here. The Fed is not going to let the entire US Financial system collapse. However, this is how assets are currently being priced. Bear Stearns was always the type of company that had an air of shadiness about them....and they probably got what they had coming to them.

Tomorrow the Fed meets on interest rates. No doubt they will try to shock the market back to life again. It's too bad they didn't react quicker...if you remember I was pushing for them to act on rates the first week of January...they waited until the third week...and basically created this run on the bank mentality.

If history holds up...and it should...this looks like an inflection point...a place to buy and NOT a place to sell. Hang in there and I think you will be better off a year from now.

Look for bargains.

Market Gaps Lower....

Dow -152
S&P - 22
Nasdaq -38

Following Bear Stearns collapse the market is lower. The big question is whether there are any other collapses in the wings.

The Fed meets tomorrow...should be an interesting meeting.

Fed Cuts Discount Rate....

At the same time it was backstopping J.P. Morgan's buyout of Bear Stearns, the Fed also stepped in to prop up the broader credit crunch. The Fed dropped its discount window rate -- at which intstitutions borrow directly from the Fed -- by 25 BP to 3.25%, and extended the maximum loan term to 90 days from 30. In an unprecedented move, it also opened up the window to securities dealers for at least the next six months.

The move to waive the usual restriction on Fed lending to banks was approved unanimously by the five FOMC governors.

Bear Stearns Taken Out by JP Morgan...

Bear Stearns (BSC) shocked Wall Street by selling itself Sunday for just $2/share to J.P. Morgan & Chase (JPM), the bank that stepped up Friday to bail it out in tandem with the New York Federal Reserve. In order to make the deal palatable, the Fed will assume risk on up to $30B of Bear Stearns' riskiest assets, including $20B of mortgage-backed securities. "

Despite recent events, the health of franchise and the prime brokerage and clearing business is in good shape," a JPM executive said Sunday. JPM does, however, assume some of Bear's large positions. It's unlikely other bidders will emerge, due to the degree of uncertainty surrounding Bear's positions.

Free Cash Flow "BUYS"

Barron's interviews free-cash guru Bruce Berkowitz, CEO of Fairholme Capital Management, whose no-load Fairholme Fund boasts returns of 16.27% since its 1999 inception. Berkowitz advocates buying stocks capable of reacting to a variety of economic conditions, with an emphasis on companies with above-average free cash flow.

Stocks he likes:

Conglomerates Berkshire Hathaway (BRK.A) and Leucadia National (LUK) -- "they are always playing defense, because you never know when something bad will happen." Berkshire is still "reasonably priced," and stands to have "one more good growth spurt" as it capitalizes on current economic soft spots.

WellCare Health Plans (WCG) -- shares plunged when its headquarters were raided by federal agents in October. Past history shows that after a fine and some executive firings, firms in similar situations move on. With $5/share ($37) of free cash flow, it's too cheap.

Mohawk Industries (MHK) -- despite a rough residential real-estate market, MHK can earn $7/share of free cash flow. CEO Jeffrey Lorberbaum is growing the business while cutting costs.

St. Joe (JOE) -- an international airport is being built in the middle of its Florida land. Long-term, its holdings of oceans, rivers, lakes and sand make it a "very, very valuable company."

Sears (SHLD) -- despite recent turmoil, CEO Eddie Lampert understands retail. Sears' properties provide a downside cushion; shares are priced for a worst-case outcome.

Friday's Trading Summary...

U.S. Markets

Dow -194.65 (-1.60%)
Nasdaq -51.12 (-2.26%)
S&P 500 -27.34 (-2.08%)

News That Moved the Market

With A Name Like Bear, Why Didn't I Buy Puts? Financial news continues to determine the direction of the market and today's news was bad. Before the open, information was released that Bear Stearns (BSC, -47.4%) would receive emergency funding from the Fed through JP Morgan (JPM, -4.1%). The Fed used a little-known law that allows it to lend funds to companies after a special FOMC vote. The funds went through JP Morgan because it was operationally simpler than a direct loan, according anonymous staff member. The Fed made a pivotal decision to save Bear, understanding that a major bank going under would create an enormous financial crisis. JP Morgan is also looking to purchase at least some parts of Bear, and will help the troubled brokerage to locate additional funding. T he markets fell sharply on the news, with the VIX jumping to a 7-week high.

CPI Shows Tame Inflation. Though the news was forgotten after Bear Stearn's bombshell, the Labor Department announced this morning that inflation had moderated last month. The CPI and core-CPI, which does not include food and energy costs, both came in flat. The data said energy prices fell 0.5%, which surprised many considering the huge run up in energies recently. Most economists believe the Fed will lower interest rates by half a point next week.

Lehman Obtains Credit Line. Lehman Bros. (LEH, -14.6%) got a $2 billion, three year credit line from 40 banks. Lehman dropped dramatically after Bear Stearn's news came out. We will get a look at Lehman's numbers next week, when it reports its latest quarterly earnings.

Quick Tics:

Microsoft (MSFT, -2.3%) and Yahoo (YHOO, -2.9%) met earlier this week without reaching an agreement on Microsoft's merger proposal…

Gold hit an all-time high of $1,007.30 today...

Boeing (BA, +2.7%) traded higher after getting an upgrade from Morgan Stanley (MS, -4.9%).

Monday's Notable Earnings

Bear Stearns (BSC) Before Open

Economic Events:

8:30 AM: NY Empire State Index
9:00 AM: Net Foreign
9:15 AM: Capacity Utilization
9:15 AM: Industrial Production

Gold and Oil Soar...

Gold (GLD) topped $1,000/ounce Thursday and crude (USO) hit a record $111, as a weak U.S. dollar, concerns over a shaky U.S. economy, and inflationary fears saw investors moving money to tangible assets. "The funds keep throwing big-time money at commodities," a gold analyst said. Some experts say the gold rush is likely far from over, while noting sentiment can and does change quickly.

Zumiez 4Q Net Climbs 10%...

Zumiez's (ZUMZ) net income rose despite challenges late in quarter and the surf-and-skate company said it remains "upbeat" about its prospects going forward. The company offered 2008 guidance bracketing analysts' expectations, sending shares up after-hours. Zumiez's net income rose 10% to $12.4 million, or 42 cents a share, up from $11.3 million, or 39 cents a share, a year earlier. Revenue grew 13% to $126.6 million from $112.4 million while same-store sales rose 4%, compared with a 12% rise a year earlier.

Analysts' latest mean estimates were for earnings of 38 cents a share on revenue of $126 million. Gross margin slid to 38.4% from 39.3%.

Looking ahead, Zumiez, which has most of its stores in the West, expects fiscal year per-share earnings of 90 cents to 93 cents on same-store sales flat or up in the low single digits. Analysts' mean estimate was for fiscal year earnings of 92 cents.

Aeropostale Beats Estimates...

Aeropostale (ARO) reported net income of $64.7 million, or 95 cents a share, up 13% from $57.3 million, or 72 cents a share, a year earlier. The quarter for all three firms ended Feb. 2. Excluding items, earnings rose to 93 cents a share from 67 cents.

Aeropostale in January raised its earnings guidance to 87 cents a share.

Analysts' latest mean estimate was for earnings of 88 cents a share, according to a poll by Thomson Financial.

Genentech Boosts 2008 Forecast...

Biotech company Genentech (DNA) now expects 2008 earnings excluding items of $3.35 to $3.45 a share, revised from a prior forecast of $3.30 to $3.45 a share.

CPI Shows Inflation Slowing...

Consumer prices were unexpectedly flat last month, paving the way for a large interest rate reduction by the Fed next week to shore up the economy. Wall Street economists had expected a sharper 0.2% rise in both the headline and core indexes.

Bear Stearns to Get Financing From JP Morgan...

J.P. Morgan Chase says it agreed, in combination with the Federal Reserve Bank of New York, to provide secured financing to Bear Stearns as needed for an initial period of up to 28 days. Bear Stearn's CEO Alan Schwartz says the firm's liquidity position in the last 24 hours has significantly deteriorated. Bear Stearns shares are down 43%.

Today's Top Stories....

• Carlyle studying ways to compensate Carlyle Capital investors - report

• Target, JP Morgan in talks on credit card deal - report

• Exxon Mobil upgraded to ‘outperform’ at Credit Suisse

• Boeing upgraded to 'overweight' from 'equal-weight' at Morgan Stanley

• Napster and Telefonica's O2 link up to offer 5 million tracks - report

• Steris names Michael Tokich as CFO; to buy back up to $300 million of stock

Thursday's Market Summary....

U.S. Markets

Dow +35.50 (+0.29%)
Nasdaq +19.74 (+0.88%)
S&P 500 +6.71 (+0.51%)

News That Moved the Market

Market Gets a Boost From Standard & Poor's. Stocks began the session lower after a couple pieces of negative news, but were able to recover nicely following S&P's report that the bulk of the writedowns from subprime securities may be behind us. The ratings agency did increase its estimate for the total amount of the writedowns by $20 billion to $285 billion, but investors focused on the news that the end of this subprime mess could be in sight.

Another Fund Goes Under. Late Wednesday Carlyle Capital, a bond fund affiliated with the private-equity firm Carlyle Group, announced it had failed to find new financing or strike new a deal with its lenders, and would have to give up all its current assets. The collapse of the fund weighed on stocks in Europe and pushed U.S. futures into negative territory before the open. The fund, which had received more than $400 million in margin calls since March 5th, was severely crippled by the declines in demand and price of mortgage-backed securities.

Retail Sales Tumble. Retail sales unexpectedly decreased by 0.6% last month, raising fears of a recession. Economists were anticipating an increase of 0.1%. The figure is a key indicator of the strength for the U.S. consumer, and this report showed that perhaps a weaker economy combined with record high commodity prices are taking their tole. U.S. consumer spending makes up 70% of the GDP.

Quick Tics:

Time Warner (TWX, -1.7%) agreed to buy social networking site Bebo for $850 million…

Gold traded above $1,000 for the first time, but ended the session up $13.30 at $933.80/ounce...

Visa's $16 billion IPO, set for March 20th, is oversubscribed.

Tomorrow Notable Earnings

AnnTaylor Stores (ANN) Before Open
Liz Claiborne (LIZ) Before Open

Economic Events:

8:30 AM: CPI
10:00 AM: Michigan Sentiment-Prel.

Updating our Beats and Raises Portfolio...

Here is an updated list of companies that have Beat Earnings Expectations AND have Raised Guidance for 2008. These are the kind of stocks that should lead the market higher in a recovery:

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)
Netflix (NFLX)
EOG Resources (EOG)
Joy Global (JOYG)
Ciena (CIEN)
Steel Dynamics (STLD)
JA Solar (JASO)
Mastercard (MA)

Key Reversal.....

The market is now trading higher after gapping down lower this morning. At one point the Down was down over 250 points. Currently, the Dow is up 33 points.

This is key as the market is now shaking off bad news...something we haven't seen since before Christmas... Maybe a bottom is in.

Today's Upgrades...

Stocks that have been Upgraded this morning:

UnionBanCal (UB) by Punk, Ziegel & Co
JA Solar (JASO) by Needham & Co
Unisource Energy (UNS) by Soleil
Leap Wireless (LEAP) by Wachovia
Millennium Pharm (MLNM) by Piper Jaffray
Humana (HUM) by UBS
JA Solar (JASO) by Lehman Brothers
NIDEC (NJ) by JP Morgan
GSI Commerce (GSIC) by Jefferies & Co
Wimm-Bill-Dann Foods (WBD) by Credit Suisse
Monsanto (MON) by Banc of America Sec
AstraZeneca (AZN) by UBS

Carlisle Capital on Verge of Collapse...

Carlyle Capital, managed by private-equity firm Carlyle Group LLC, says it expects its lenders will soon seize "substantially all" of its remaining assets after banks including Deutsche Bank (DB) and J.P. Morgan (JPM) refused to extend it new financing terms.

The firm's leveraged $22B portfolio consists entirely of securities issued by government-sponsored lenders Fannie Mae (FNM) and Freddie Mac (FRE), the value of which has plummeted in recent weeks.

Southwest Airlines Grounded...

Southwest Airlines (LUV) grounded 38 of its older planes amid government and internal probes over "ambiguity" in its inspection protocols. The groundings reduce its scheduled flights by 4%; the company said the aircraft would be reinspected Wednesday and return to service by this morning.

Last week the FAA confronted Southwest with a $10.2M fine for missing deadlines to inspect planes for fuselage cracks and continuing to fly them after acknowledging the oversight.

Paulson to Address Credit Crunch...

The Working Group on Financial Markets, led by Treasury Secretary Henry Paulson, will today release its recommendations to avoid a repetition of the liquidity freeze now threatening the U.S. economy. Highlights include "strong nationwide licensing standards" for mortgage brokers; a clearer differentiation in credit ratings between bonds and complex, riskier structures coupled with greater disclosure by rating agencies; and increased regulation of the dealings of issuers of mortgage-backed securities.

US Dollar Dives...

The dollar fell to 12-year lows against the yen, dropping to less than 100 yen, and hit record lows against the euro, as Asian/European markets and U.S. equity futures dived in overnight trading [see below], raising concerns of more turmoil in the financial markets. "Investors are getting out of dollar assets and this is going to lead to a dollar crash," a Tokyo currency manager said.

On four previous occasions since 1995, Japanese authorities have sold the yen when it approached the 100 mark to support its country's exports.

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• Aeropostale Inc. (ARO). Expected to report Q4 earnings of $0.88 a share, according to analysts polled by Thomson Financial.

• Flanders Corp. (FLDR). Expected to post Q4 profit of $0.15 per share.

• TICC Capital Corp. (TICC). Expected to report Q4 profit of $0.34 per share, which is a decrease of 12.82% from the same quarter last year when the company earned $0.39 a share.

Today's Top Stories....

• Dollar tumbles below 100 yen for first time in 12 years

• Treasury secretary Henry Paulson to propose revamp of credit rules - report

• Treasury deputy secretary Robert Kimmitt says U.S. economy should pick up in Q2

• Home foreclosure filings rise 60% in Feb.

• Abbott's diabetes treatment gets FDA nod

• Electronic Arts makes $26-a-share hostile bid for Take-Two Interactive

• Monsanto upgraded to 'buy' at Banc of America

• AIG cut to equal-weight from overweight at Morgan Stanley; target cut to $50

• Tyco Electronics to buy back additional $500 million of stock

Wednesday's Summary....

U.S. Markets

Dow -46.57 (-0.38%)
Nasdaq -11.89 (-0.53%)
S&P 500 -11.88 (-0.90%)

News That Moved the Market

Stocks Fizzle Out. A late sell-off ensured the market would finish lower; one day after the Dow was up more than 4%. Stocks did trade higher for a large part of the session, but could not gain any momentum and looked overextended after huge gains yesterday. Oil topped $110/barrel for the first time, despite a greater than expected build in inventories. Instead of trading lower, investors seemed to have a "buy on the dip" mentality, pushing oil up another $1.17 to finish at $109.92. Government data showed speculators and fund managers are making bets for higher oil, with net long positions tripling in the last month. The rally should end when hedge funds and speculators decide to start taking profits, and will depend less on economic data, as exhibited today.

Target In Talks To Sell Half of Credit Card Division. Mega-retailer Target (TGT, -0.95% day; +1.45% A.H.) announced after the close it is in negotiations to sell about half of its credit-card loans for $4 billion. The potential acquirer was not named. The money could be used for stock buybacks, increasing shareholder value, and would create more stability on Target's balance sheet.

Quick Tics:

Caterpillar (CAT, +3.6%) and G.E. (GE, +1.7%) were both up after each company released positive outlooks…

Eliot Spitzer resigned as New York Governor after news surfaced yesterday of his connection to a prostitution ring…

Humana (HUM, -13.7%) dropped after cutting its earnings outlook.

Tomorrow Notable Earnings

Aeropostale, Inc. (ARO) Time Not Supplied

Economic Events:

8:30 AM: Retail Sales
8:30 AM: Jobless Claims
8:30 AM: Import and Export Prices
10:00 AM: Business Inventories

Finally the Fed Gets it Right...

The Fed said it will inject another $200B into the economy, lending money against mortgage-backed debt for 28 days, vs. the current overnight. The move sparked a 3.6% gain in the Dow, its biggest rally in five years. The Fed hopes the additional liquidity will help Wall Street bankers cushion their books against loan defaults and depressed debt securities.

The odds of a 75 BP cut to the Fed's current 3% target on March 18 fell to 64%; it had previously been fully priced-in.

Most importantly, the Market is actually showing respect for this latest move by the Fed. A huge rally yesterday and what is shaping up to be a follow-up rally today...

Technical Watch: Zimmer Holdings...

Check out the Daily chart on Zimmer Holdings (ZMH). The stock has formed a near perfect "cup and handle" formation.

The point to BUY would be if the stock breaks clearly above the $79-80 area.

The stock is up 1.05 to $76.15 this morning....and ticking higher.

Steel Dynamics Raises Guidance...

Steel Dynamics Inc. (STLD). the Fort Wayne, Ind.-based steel company late Tuesday said it now expects first-quarter earnings of $1.25 to $1.30 a share, up from its previous outlook of $1.10 to $1.20 a share, based on higher-than-anticipated flat-rolled steel pricing and improved scrap-processing results.

The current mean estimate of analysts polled by Thomson Financial is for a per-share profit of $1.18 for the quarter. Additionally, the company said it now expects full-year 2008 earnings of $5.25 to $5.75 a share, up from its prior forecast of $5 to $5.50 a share. Analysts are looking for earnings of $5.40 a share for the year.

JA Solar Earnings In-Line, Raises Guidance...

JA Solar Holdings Co.'s (JASO) fourth-quarter net income rose 34% on a boon in shipments and despite losses from currency fluctuations, which the company said it is addressing going forward.
The company also projected 2008 revenue well above analysts' expectations and boosted its production target for the year. Shares rose to $15.90 during recent premarket trading after closing at $14.58 on Tuesday.

JA Solar's stock had been down more than 40% the past two months. JA Solar, a Chinese manufacturer of high-performance solar cells, posted net income of $13.5 million, or 9 cents a share, compared with $10.1 million, or 11 cents a share, a year earlier. Shares outstanding were 36% higher in the recently ended quarter. Revenue more than tripled to $144.2 million.

The mean estimates of analysts surveyed by Thomson Financial were for earnings of 9 cents a share on revenue of $118 million.

Take Two Raises Guidance...

By raising its annual guidance Tue, video game maker Take-Two Software (TTWO) could force Electronic Arts (ERTS) to hike its $2B bid for the company, argues research firm Wall Street Strategies. Citing a better than expected 1Q and surprisingly strong preorders for a game to be released in a few weeks, Take-Two said it now expects fiscal 2008 earnings of $1.35 to $1.55 a share on revenue of $1.25B to $1.4B.

The company had expected per-share earnings of $1.30 to $1.50. Analysts expected per-share earnings of $1.35 on revenue of $1.36 billion. "Without a doubt the saga surrounding ERTS' bid is about to get a bit more complex," wrote the Wall Street Strategies research firm.

Humana Warns...

Humana (HUM) stock gets crushed again in premarket trading Wed, dragging down the entire managed care sector, after the company cuts its 1Q and 2008 earnings guidance. HUM recently down 26% at $35. The stock fell 24% Tue, after peer WellPoint's (WLP) earnings warning raised fears that unexpectedly high medical costs could mean weakening profits across the health insurance sector.

Aetna falls 6.2% to $40, WellPoint edges down an additional 1.6% to $46.49, UnitedHealth Group (UNH) loses another 10% to $34.51.

Also in premarket, Cigna (CI) falls 12%, Coventry Health Care (CVH) down 7.4%. (MRL).

Caterpillar Reaffirms Forecast...

Caterpillar Sees $60B In Revenue In 2010
Heavy-equipment maker reaffirms its 2008 per-share earnings and revenue forecast, and says it also expects revenues approaching $60 billion by 2010 and per-share earnings growth of 15% to 20% from 2005 through 2012. Shares rise 2% pre-market.

Cleveland Cliffs to Split Stock....

Cleveland-Cliffs Inc. (CLF). The Cleveland, OH-based mining company late Tuesday declared a two-for-one stock split, payable May 15 to shareholders of record as of May 1.

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• American Eagle Outfitters Inc. (AEO). Expected to report Q4 earnings of $0.66 a share, according to analysts polled by Thomson Financial.

• Gymboree Corp. (GYMB). Expected to post Q4 profit of $0.95 a share, up 13.10% from the same quarter last year when the company earned $0.84.

• Men's Wearhouse Inc. (MW). Expected to report Q4 earnings of $0.17 a share.

Today's Top Stories....

• Mortgage applications for week to March 7 fall 1.9% on lower refinancing

• Boeing reiterates 787 schedule after Goldman Sachs warns of further delays - report

• Wyeth withdraws application for EU approval of hot flashes treatment

• Coach names ex-COO of Limited Brands its executive officer, effective March 17

• Kroger cut to 'underweight' by JP Morgan on likely underperformance

• Ruddick upped to 'overweight' at JP Morgan on growth prospects

• Toyota to raise monthly salaries by average 7,900 yen

• AstraZeneca's Seroquel patent infringement trial to start Aug. 11

Tuesday's Summary....

U.S. Markets

Dow +416.7 (+3.55%)
Nasdaq +86.4 (+3.98%)
S&P 500 +47.4 (+3.71%)

News That Moved the Market

Markets Surge. Tuesday's gains were the most since 2003. The market was propelled higher after the Fed announced a new Term Security Lending Facility, allowing borrowers to pledge a large assortment of debt securities as collateral including privately rated AAA mortgage backed securities. The plan will increase liquidity and generate more value for mortgage backed securities, which have become a thinly traded asset. The plan includes also raising the swap lines with the ECB and Swiss National Bank, putting an extra $12 billion into the U.S. markets. The markets opened sharply higher, and finished strong, with financials (+7.4%) leading the charge. Volume was high and for any technical analysis followers, Tuesday's jumps may have also created a double bottom, a very bullish signal.

Wellpoint Causes Health Insurer Sell-Off. Wellpoint (WLP, -28.31%) slashed its full-year guidance to $5.76 - $6.01/share from $6.41/share. The new forecast was well below analysts' estimates and caused a massive sell-off of all the large health insurers; UnitedHealth Group (UNH, -15.2%) and Humana (HUM, -24.7%) finished with massive losses as well.

Quick Tics:

Google's (GOOG, +6.3%) acquisition of DoubleClick was approved by European regulators…

Crude-oil futures ended the session at a new record closing high of $108.75/barrel..

Texas Instruments (TXN, -3.0%) lowered its first-quarter earnings forecast, the company's shares hit a 52-week low.

Wednesday's Notable Earnings

Hot Topic (HOTT) After Close
American Eagle Outfitters Inc (AEO) Before Open

Economic Events:

10:30 AM: Crude Inventories

Sorry...Been out all day at a conference....

Maybe I should go back out....

Nice rally...Dow up 350 and gaining into the close. Look for a follow thru rally tomorrow and then it might be time to put more money to work.

Monday's Trading Summary...

U.S. Markets

Dow -153.54 (-1.29%)
Nasdaq -43.15 (-1.95%)
S&P 500 -20.00 (-1.55%)

News That Moved the Market

Financials Push Markets Down Further. Stocks finished sharply lower Monday, with more bad news coming out of the financial sector. Bear Stearns (BSC, -11.1%) fell the most in 10 years after rumors spread that the company has liquidity issues. "There's an insolvency rumor and concerns on liquidity, that they just have no cash," said Michael Mainwald, head of equity trading at Lek Securities Corp. A spokesman for Bear said that there is "no truth" to the rumors, but the trust in the banks has disappeared in the last couple months and investors were noticeably rattled. Citigroup (C, -5.8%) fell under $20, to its lowest levels since 1998.

Lehman Brothers (LEH, -7.3%) announced plans to cut another 5% of its work force, citing weak credit markets and a slowing economy. Markets finished near their lows, with the financial sector ending down 2.0%.

Blackstone's Profits Plunge. Blackstone (BX, +2.9%) reported an 89% decrease in profits this morning. The company was hurt by its holdings in FGIC, the troubled bond insurer. The company's stock hit an all-time low, before finding bidders late in the session, and said it sees difficult market conditions continuing in 2008.

FBI Targets Countrywide, Subprime Lenders. Countrywide (CFC, -14.0%) lost more ground after The Wall Street Journal reported the company, along with 15 other subprime lenders, is under an FBI investigation. The FBI is taking a broad look at the subprime industry as a whole for fraud and other unlawful practices. The investigation is still in its early stages.

Goldman Sees FOMC Cutting Rates By 1.0% In Two Meetings. Goldman Sachs (GS, -2.8%) sees the FOMC dropping interest rates a full point by late April. There were talks of an intermeeting cut before next week's official FOMC meeting, but few really believe the Fed would think the situation is so dire, that it could not wait one week.

Quick Tics:

McDonalds (MCD, +2.9%) reported strong same store sales growth

NY Governor Eliot Spitzer has been linked to a prostitution ring

Oil closed up nearly 3% to $107.90/barrel.

TomorrowNotable Earnings

Boston Beer Company (SAM) Time Not Supplied
J. Crew Group, Inc. (JCG) After Close
Take-Two Interactive Software (TTWO) After Close
The Kroger Co. (KR) Before Open

Economic Events:

8:30 AM: Trade Balance

FBI Probes Countrywide...

The FBI has opened a criminal inquiry to probe whether Countrywide Financial (CFC) intentionally misrepresented its financial condition in SEC filings. The FBI is investigating more than a dozen subprime lenders' origination and securitization processes, and probing possible conflicts of interest between lenders and investors.

If Countrywide is found guilty of fraud, it could scuttle a planned $4B acquisition of the company by Bank of America (BAC).

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• Foot Locker Inc. (FL). Expected to report Q4 earnings of $0.44 a share, according to analysts polled by Thomson Financial. This is a decrease of 36.71% from the same quarter last year when the company earned $0.70.

• Inter Parfums Inc. (IPAR). Expected to post Q4 earnings of $0.34 a share, up 25.93% from the same quarter last year when the company earned $0.27.

• The Blackstone Group (BX). Expected to post Q4 earnings of $0.29 a share.

• Vail Resorts (MTN). Expected to report Q2 earnings of $1.35 a share.

This Morning's Top Stories...

• Morgan Stanley cuts 2008 earnings estimates on raft of large-cap banks

• Chevron to develop LNG facility in Australia

• Siemens eager to settle with SEC before presidential election - report

• Nationwide Financial Services gets buyout offer from parent

• Wyeth to invest $280 million in Chinese nutritional manufacturing plant

Ciena Net Income Nearly Triples...

Ciena posts net income to $28.8 million, or 28¢ a share, amid increasing demand for gear allowing network operators to handle more traffic at lower costs. Excluding items, EPS jumps to 47¢; analysts expected 40¢. Shares rise 4% pre-market.

C'mon Ciena...we're not supposed to have good news...only the bad stuff...

Fed Moves to Bolster Liquidity...

To address heightened liquidity pressures in term funding markets, the Fed will increase the amounts outstanding in the Term Auction Facility to $100 billion. It also will initiate a series of term repurchase transactions that are expected to amount to $100 billion.

US Payrolls Fall, Raising Odds for Recession...

U.S. recession fears mount as employment falls by 63,000 in February, its fastest rate in five years, suggesting that the housing and credit crunch is gripping the broader economy. Unemployment rate surprisingly ticks down to 4.8%, triggered by a 450,000 decline in the size of the labor force, not a rise in employment. Data support expectations for additional Fed rate cuts.

Marvell Beats, but Conference Call Spooks...

Marvell (MRVL) blasted past expectations with Q4 EPS of $0.20 vs. consensus of $0.11 and revenue of $845M vs. consensus of $783M. After gaining 6% in AH trading, things got ugly during the conference call after MRVL said 2008 costs would be higher than expected, and declined to offer a full-year forecast due to broad economic uncertainty.

Shares ended -5.4% in extended trading.

National Semi Soars on Margin Surprise...

National Semiconductor (NSM) posted FQ3 EPS of $0.28, better than consensus estimates of $0.24. Revenue was just short at $453.4M. NSM sees Q4 revenue of $440M-$460M, short of consensus estimates of $470.3M. NSM said Q3 bookings declined sequentially by approximately 14%, due primarily to weak orders for wireless handsets and personal mobile devices. But gross margins "held up well," it said, at 64.3%, up from 59.8% Y/Y.

Shares jumped 9.5% in AH trading.

Retail Sales Encourage....

Retail sales in February largely beat expectations. Same-store sales were up 1.9%, led by a 2.6% increase at Wal-Mart (WMT). Still, stores continue to expect a rough spring, and a number of retailers have stopped reporting monthly comps in order to focus on long-term strategy. "These month-to-month blips don't change the trend," economist Frank Badillo said. "

Shoppers are intent on slowing their spending, and that will continue in the months ahead." Analysts noted sales at discounters (WMT, FDO) were stronger than at middle-end retailers (TGT, JCP, KSS).

iPhone SDK Wows...

Apple's iPhone SDK impressed developers, who said the tool addresses all three core groups: Developers, IT departments, and end-users. Developers liked the functionality of iPhone APIs, and the ability to store data using popular SQL Lite. Apple is licensing technology from Microsoft (MSFT) that will enable it to interact with Microsoft Exchange, and will enable "wipe and lock" and "on-device data encryption" along with other IT tools.

Consumers get push email that turns the iPhone into an instant BlackBerry (RIMM) rival. What's still missing? Multiple carriers, and corporate management tools.

Sony, Microsoft Talk Blu-Ray....

Sony (SNE) is in talks with Microsoft (MSFT) about a Xbox 360 Blu-ray drive. On the one hand, Sony has touted the now de-facto standard Blu-ray as one of its PS3's advantages over the Xbox; on the other, the revenue from a Microsoft deal might be irresistible. Sony also said it has had discussions with Apple (AAPL), which has yet to offer Blu-ray drives on its computers.

Thursday's Market Summary....

U.S. Markets

Dow -214.60 (-1.75%)
Nasdaq -52.31 (-2.30%)
S&P 500 -29.36 (-2.20%)

News That Moved the Market

More Financial Woes Hit Stocks. The markets opened down and never were able to recover after numerous companies in the financial sector came out with bad news. Thornburg Mortgage (TMA, -51.5%) plummeted after its ratings were downgraded by the main ratings agencies. The company disclosed it was not able to meet a margin call of $28 million, triggering defaults in other lending agreements. Washington Mutual (WM, -8.1%) fell following S&P's downgrade of the company, citing a "severe residential mortgage credit cycle" as the catalyst for decision. WaMu was placed on CreditWatch with negative implications. Major indices finished near their lows, w ith the Dow closing just above 12,000. Whether it holds it tomorrow will be an important mental threshold for investors.

Foreclosures Spike. U.S. mortgage foreclosures hit all-time high at the end of last year, according to the Mortgage Bankers Association. New foreclosures increased to 0.83% of all home loans last quarter, with late payment jumping to a 23-year high.

Citi To Cut Mortgage Holdings by 20%. Citigroup (C, -4.4%) announced it will decrease its mortgage assets by $45 billion over the next year. The company will make fewer loans that it cannot sell.

Retail Sales Better Than Expected. Wal-Mart (WMT, +0.86%) reported higher than expected February sales, as more consumers turned to the low cost retailer. U.S. retailers' same store sales increased by 1.9%, beating estimates. About 60% of retailers reported higher than anticipated sales.

Quick Tics:

Merrill Lynch (MER, -7.0%) will exit the subprime lending industry

Crude increased to $105.47, up $0.95.

Tomorrow Notable Earnings

NONE

Economic Events:

8:30 AM: Jobs Report
3:00 PM: Consumer Credit

A Commodity Linked CD....

Now I've seen it all. Take a look at this CD that just came out. It is tied to the performance of Commodities.

Silverton Bank Commodity Linked CD

Maturity 9/30/2013

If held to maturity, purchasers get their original investment back plus a return of 125% of a basket tied to the performance of the following commodities:

Crude Oil, Coal, Copper, and the Live Cattle Index.

Smells like a top in Commodities to me.....

More Doom and Gloom...

The percentage of mortgages that were in foreclosure hit a record high in the fourth quarter, while mortgage delinquencies rose to a 23-year high, the Mortgage Bankers Association said Thursday. A record 2.04% of U.S. mortgages were somewhere in the foreclosure process at the end of the year, while a record-high 0.83% of loans entered foreclosure in the fourth quarter, the trade group's quarterly survey found. More homeowners fell behind on payments as well, with 5.82% of loans past due in the quarter. That was the highest delinquency rate since 1983. MBA Chief Economist Doug Duncan said declining home prices were the driving force behind the foreclosure record.

Really??? This is surprising....I would have thought it was more like 60% of the mortgages out there are in the foreclosure process....:-)

Will there be ANY Banks or Mortgage Companies This Time Next Year???

Maybe all of them will go out of business.... People will no longer be able to buy a home and we will have to keep our money in our mattresses.

That's the mentality now!!!

This is about the worst sentiment I've ever seen on a sector. I would say we are VERY close to a complete washout...which means we are VERY close to a bottom.

Technical Alert: Akamai Breaking Out...

Akamai (AKAM) is breaking out of a nice cup and handle formation this morning.

The stock is up .91 to $35.72 on decent volume. While the stock looks good here, a break above longer term resistance at $38 would be a more significant BUY signal.

Joy Global In-Line, But Raises Guidance...

Joy Global Corp.'s (JOYG) fiscal first-quarter net income rose 19% as sales climbed amid demand sparked by the continuing commodities boom abroad and "improving conditions" in the U.S. coal market.

The company boosted its fiscal-year earnings outlook, saying due to high coal prices the outlook for mining equipment looks "robust." Joy said global capacity constraints leave the U.S. the only country with the potential to substantially boost coal output - just as markets around the world are begging for more. "The U.S. has gone from being a regional market to being the swing supplier to the international coal market," the company said. U.S. coal exports rose 10 million tons in 2007, and Joy expects that rise to continue.

The heavy-mining equipment manufacturer reported net income for the quarter ended Feb. 1 of $71.1 million, or 65 cents a share, compared with $59.7 million, or 51 cents a share a year earlier. The latest quarter's results included 1 cent in earnings from discontinued operations. Revenue rose 14% to $640.3 million.

The mean per-share earnings estimate of analysts polled by Thomson Financial was 65 cents on revenue of $639 million.

Blockbuster Reports In-Line Earnings...

Blockbuster Inc.'s (BBI) fourth-quarter net income more than tripled as operating expenses fell and rental revenue jumped 11%. The company said its 2007 was a year of "transition" and that it expects to return to profitability in 2008 - forecasting net income where analysts had seen a loss. Blockbuster's shares rose in premarket trading.

The movie rental company reported net income of $41 million, or 18 cents a share, compared with $11.2 million, or 4 cents a share, a year earlier. Excluding charges, per-share earnings rose to 26 cents from 11 cents. Revenue grew 3.6% to $1.57 billion.

The mean per-share earnings estimate of analysts polled by Thomson Financial was 18 cents on revenue of $1.44 billion.

Makes sense....People aren't going to stop watching movies....they'll just stay at home and rent...NetFlix beat estimates recently and raised their guidance....looks like a trend to me.

ViewSonic Pulls IPO...

ViewSonic Corp. The Walnut, CA-based provider of visual display technology Wednesday withdrew its $143.75 million worth intial public offering with the U.S. Securities and Exchange Commission, saying the current market terms are not attractive.

Earnings Today....

COMPANIES REPORTING EARNINGS

Blockbuster Inc. (BBI). Expected to report Q4 earnings of $0.18 a share, according to analysts polled by Thomson Financial. This is an increase of 101.11% from the same quarter last year when the company earned $0.09.

Casey's General Stores Inc. (CASY). Expected to post Q3 earnings of $0.28 per share, up 25.45% from the same quarter last year when the company earned $0.22.

Joy Global Inc. (JOYG). Expected to post Q1 earnings of $0.65 per share, up 27.06% from the same quarter last year when the company earned $0.51.

Marvell Technology Group Ltd. (MRVL). Expect to report Q4 earnings of $0.11 per share, an increase of 266.67% from the same quarter last year when the company earned $0.03.

National Semiconductor Corp. (NSM). Expected to report Q3 earnings of $0.24 per share, up 6.82% from the same quarter last year when the company earned $0.22.

The Cooper Cos. Inc. (COO). Expected to post Q1 earnings of $0.45 per share, down 6.04% from the same quarter last year when the company earned $0.48.

Wind River Systems Inc. (WIND). Expected to post Q4 earnings of $0.09 per share, down 15.00% from the

Headlines That May Move the Market.....

-Wal-Mart Feb. same-store sales up 2.6%, ahead of Wall St. view

-Oil soars above $105 a barrel as NY blast sparks jitters

-Euro hits new high of $1.5347 against dollar ahead of ECB decision

-Joy Global Q1 net rises to $71 million

-Limited Brands Feb. same-store sales down 9%

-Afren to buy Devon Energy's interest in Cote d'Ivoire for $205 million

-Ingersoll-Rand backs 2008 earnings, revenue forecasts

-McDermott raised to 'buy' at Citi on Qatar project hopes, good results

-Novartis cancer drug Gleevec may harm fetus development - study

-McAfee plans further acquisitions

-Saks cut to 'neutral' at Bank of America; price target slashed to $13

TiVo Pares Losses....

Shares of TiVo Inc. (TIVO) rose 4.8% to $8.53 after the company reported that its fourth-quarter loss narrowed to 6 cents a share from 20 cents a share in the prior year, on better-than-anticipated sales of its standard digital video recorders.

Analysts polled by FactSet Research were expecting a loss of 11 cents a share.

The Alviso, Calif., digital recording technology company's service and technology revenue rose to $58.1 million from $57 million. For the quarter ending in April, TiVo expects to post a net loss of $1 million to $3 million on service and technology revenue of $53 million to $55 million.

Coldwater Creek Tumbles....

Shares of Coldwater Creek Inc. (CWTR) dropped to $4.37 after the company released disappointing first-quarter guidance. The company expects to report a first-quarter loss of 14 cents to 17 cents a share, below analysts' average estimate of a per-share loss of 4 cents.

The company also reported a fourth-quarter net loss of 19 cents a share compared with a net income of 17 cents a share a year earlier. Revenue totaled $345.5 million, decreasing from $366.6 million a year ago, the Sandpoint, Idaho apparel retailer said.

Analysts had forecast a net loss of 19 cents a share.

Harris Corp Raises Guidance..

Shares of Harris Corp. (HRS) rose 4.2% to $49.48 after the company said it expects fiscal 2009 earnings of $4 to $4.10 a share on revenue of $5.7 billion to $5.8 billion, driven by growth across all operating segments as a result of demand for its information-technology products and services.

Analysts had expected, according to a poll by Thomson Financial, earnings of $3.95 a share on $5.71 billion in revenue.

The Melbourne, Fla., communications equipment said it expects to finish fiscal 2008 with a substantial backlog, which is expected to drive double-digit revenue growth in RF Communications in fiscal 2009. The company also said it expects top-line growth and improved operating performance in its two commercial businesses in the fiscal year ending June 30, 2009.

Thornburg Crushed After Hours....

Shares of Thornburg Mortgage Inc. (TMA) plunged 44% to $1.92 in after-hours trading after the home-mortgage lender late Wednesday disclosed that its failure to meet a $28 million margin call caused a series of cross-defaults. Thornburg also said JPMorgan Chase Bank N.A., which made the original margin call, will "exercise its rights."

In Wednesday's disclosure, Thornburg didn't specify those rights, but in a previous filing with the Securities and Exchange Commission the company said that the lender has the "right to liquidate pledged collateral." Thornburg said it was loaned $320 million under reverse repurchase agreements made with JPMorgan.

The notice of default from JPMorgan triggered cross-defaults "under all of the Company's other reverse repurchase agreements and its secured loan agreements," the company said in Wednesday's filing. Thornburg offered no description of the amounts involved in the cross-defaults, but said its "obligations under those agreements are material."

PetsMart Profit Margin Falls...

PetSmart Inc. (PETM), which is hurting from soft consumer spending, posted a 2% drop in fiscal fourth-quarter net income as its profit margin fell and said it would slow capital spending as it tries to improve performance at its stores.

The nation's largest pet-food and supplies chain said Wednesday that net income for the quarter ended Feb. 3 fell to $75.4 million from $77 million. Earnings per share rose to 59 cents a share from 56 cents a share.

In January, PetSmart slashed its earnings forecast by 13 cents a share to a range of 57 cents to 61 cents a share, blaming weak sales and a challenging retail climate.

The latest results included costs to exit the State Line Tack business. Excluding those costs and an extra week of sales, earnings came to 52 cents a share. Net sales in the latest quarter rose 14% to $1.33 billion, with a $90 million benefit from an extra week of sales.

The latest forecast from analysts polled by Thomson Financial was for earnings, excluding items, of 59 cents a share on revenue of $1.33 billion.

Wednesday's Summary....

U.S. Markets

Dow +41.19 (+0.34%)
Nasdaq +12.53 (+0.55%)
S&P 500 +6.95 (+0.52%)

News That Moved the Market

Markets End Up After Digesting Ambac News. The markets finished the day up, but that was not before it tested the previous day's lows. For much of the day, most of the attention went to Ambac (ABK, -19.8%), which announced plans to raised $1.5 billion through sales of common shares and equity units. After the announcement, markets seemed disappointed with the news. Investors were looking for a true bailout that would solidify the company's balance sheet and extinguish concerns that Ambac would lose its AAA rating. Though S&P and Moody's did say they would probably confirm the bond insurer's AAA rating, the let down from the announcement pushed the markets down in the middle of the day. But like yesterday, the bottom fishers grabbed control in the afternoon and pushed the major indices back into the green to end the day.

Oil Rallies Off Inventory Decline. Crude spiked to a new record high of $104.95, before closing at $104.45. The jump was caused by OPEC's announcement that it will leave productions levels unchanged and an unexpected decline in inventories.

ISM Services Data Gives Market Hope. Before the bell the ADP Employment Report showed an unexpected decline in payrolls. Markets mostly shrugged off the figure and will pay much closer to Friday's Job's Report. The Institute for Supply Management services index data was better than expected and provided a much needed positive piece of economic data; markets were higher immediately after the announcement. Factory orders were also released, and were in-line with forecasts.

Quick Tics:

The Fed Beige Book survey showed economic growth has slowed, with 8 of the 12 Fed regional banks noticing a "weakening in the pace of business activity."

Goldman Sachs (GS, +0.7%) CEO Lloyd Blankfein believes the credit-market contraction is at least half way over.

Big Lots (BIG, +22.2%) jumped after increasing its 2008 profits forecasts.

Tomorrow Notable Earnings

Marvell Technology Group Ltd. (MRVL) After Close
National Semiconductor (NSM) After Close
Urban Outfitters (URBN) Before Open

Economic Events:

Chain Store Sales
Bank of England and European Central Bank Announcements
8:30 AM: Job Claims
10:00 AM: Pending Home Sales

US Stock Lose Gains on Ambac Disappointment...

Shares turn lower as details of Ambac's big bailout plan disappoint. Several sectors have fall into the red, including financials and both consumer staples and discretionary. Dow falls 50 points after being up more than 100 points earlier.

Updating our Beats and Raises Portfolio...

Here is an updated list of companies that, since January 1, have Beat Earnings Expectations AND have Raised Guidance for 2008.

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)
Netflix (NFLX)
EOG Resources (EOG)

These stocks are all down over the last week, might be an opportunity to Buy quality...

Earnings Due Today....

COMPANIES REPORTING EARNINGS

ADC (ADCT). Expected to report Q1 profit of $0.18 per share, according to analysts polled by Thomson Financial.

Brown Shoe Co. (BWS). Projected to report Q4 earnings of $0.37 a share.

Chico's FAS (CHS). Expected to report a Q4 loss of $0.15 a share.

Coldwater Creek (CWTR). Forecast to break even in Q4.

Comtech Telecommunications (CMTL). Likely to report Q2 earnings of $0.79 a share.

H&R Block (HRB). Estimated to post Q3 earnings of $0.06 a share, a decrease of 25% from the same quarter last year when the company earned $0.08.

PetSmart (PETM). Expected to post Q4 earnings of $0.62 a share, up 13.89% from the same quarter last year when the company earned $0.54.

Longs Drug Stores (LDG). Likely to report Q4 earnings of 40.97 a share.

Saks Inc. (SKS). Forecast to report Q4 earnings of $0.20 a share.

Tivo (TIVO). Likely to post a Q4 loss of $0.11 a share.

Yahoo in Talks with Time Warner..

The latest on Yahoo (YHOO) has it in talks with Time Warner (TWX) to take over its AOL unit, in exchange for which TWX would receive a sizeable minority stake in Yahoo. The combined company could save $1B annually. Oh, and Yahoo is still talking to News Corp. (NWS) to take over MySpace etc. for a stake in Yahoo.

With all these complex negotiations, it now seems likely Yahoo will push off a March 14 deadline by when Microsoft (MSFT) must make a push to take over the board, in order to get greater clarity on its defense stance. Many doubt a YHOO/AOL merger will float.

Apple Has No Plans for Buyback or Dividend...

Apple says at its annual shareholder meeting that it has no plans for a stock buyback or dividend. Apple also said it plans to sell the iPhone in Asia this year, targeting India and China.

Costco Reports In-Line Earnings...

Costco Wholesale Corp. (COST) posted a 31% increase in fiscal second-quarter net income on strong international growth and continued consumer flight toward discount retailers.
For the period ended Feb. 17, net income was $327.9 million, or 74 cents a share, compared with $249.5 million, or 54 cents a share, a year earlier.

Last year's second quarter included $53.4 million in charges.

The wholesale-club giant's revenue increased 12% to $17 billion as same-store sales rose 7%.
Chief Financial Officer Richard Galanti said in December that a Wall Street forecast of 74 cents a share for the quarter "sounds good," saying the retailer had "gotten off to a good start" in the period.

The latest mean estimates of analysts polled by Thomson Financial were for earnings of 74 cents a share on revenue of $16.9 billion.

Tuesday's Summary....

U.S. Markets

Dow -45.10 (-0.37%)
Nasdaq +1.68 (+0.07%)
S&P 500 -4.59 (-0.34%)

News That Moved the Market

Financial Rollercoaster Continues. The markets bounced back after strong selling in the first half of the session. Citigroup (C, -4.3%) was under pressure early after the head of Dubai International Capital said the bank needs more funds and Merrill Lynch (MER, +2.5%) lowered its earnings forecast for Citi. Shares of the mega bank hit a nine-year low before Citigroup responded to the news by saying it is comfortable with its capital levels and would not seek new funds. The markets rallied hard after Citi came out with the release and The Financial Times reported bond insurer Ambac (ABK, +7.2%) is close to an agreement to receive a capital infusion . The deal could announce the deal as early as Wednesday. Though there was a lot of other news, this market showed today that the financial headlines truly spark rallies and sell-offs.

Intel Decreases Profitability Forecast. Intel (INTC, +0.05%) lowered its gross profit-margin forecast for Q1, citing lower flash memory prices. The company now sees margins coming in between 53%-55%, down from 55%-57%.

Housing Still Troubled, Bernanke Wants Banks To Do More. Fed Chairman Ben Bernanke caused a sell-off early in the market when he said foreclosures in the troubled U.S. housing market were likely to continue. He suggested banks write down the principal amount on mortgage loans for home owners who are at risk of defaulting. "Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure," he explained.

Quick Tics:

Jackson Hewitt Tax Service Inc. (JTX, -32.6%) reported a 34% drop in fiscal Q3 earnings

Cisco's (CSCO, -0.5%) CEO John Chambers helped the rally by saying the difficulties in the market would likely be "short-lived and shallow".

Commodities sold-off on demand concerns.

Tomorrow Notable Earnings:

Chico's FAS, Inc. (CHS) Before Open
Saks Incorporated (SKS) Before Open

Economic Events:

8:15 AM: ADP Employment Report
8:30 AM: Productivity and Costs
10:00 AM: Factory Orders
10:00 AM: ISM Non-Mfg Survey
10:30 AM: Crude Inventories
2:00 PM: Beige Book

US Stocks Recover....

U.S. stocks recover from their lows as investors grow hopeful that a rescue package could be crafted for No. 2 bond insurer Ambac Financial. And technology stocks got a boost after Cisco Systems CEO John Chambers says he is "even more comfortable" with networking giant's revenue forecasts. Nasdaq turns positive, and the Dow trades down about 76 points.

Technical Alert: Dow nears January lows....

The Dow is currently down 200 points to 12,059.

On January 22 and 23, the Dow closed right at the 12,000 level. A close under 12000 would be very negative for the market.

The S&P is currently at 1310. That is exactly where it closed on January 22 and 23.


This is the Retest everyone has been waiting for....We need to hold up here.

The Bearish Victory.....

by Jeff Miller

The disparity between expectations and data continues. Those with a bearish bent argue that there is already a recession, it will be terrible, it is not priced into the market, earnings estimates must move much lower, and there will be a general calamity on the scale of the 70's stagflation or even the Great Depression. Wow!

When stocks move lower, it seems to prove the point. This is most interesting and worth some thought.

Anyone who claims to provide a market edge, almost by definition, must find occasions when the market is wrong and the analyst has a superior viewpoint. The most bearish economic pundits now get to claim victory -- even if the economy never enters a recession!

It is not necessary to be right on the facts to be right on the market. As the market moves lower, there is a building sentiment that it "must test the January lows." This advice is usually offered in a deep and stern voice. If enough people believe it, it happens. It is seen as proof of the economic forecasts.

We are now a few points away from those lows in the S&P 500 and even closer in the Nasdaq.


Exactly my thoughts....

Upgrades this morning...

Here is a list of stock Upgraded by Analysts this morning...

Leapfrog (LF) by BMO Capital Markets
Quiksilver (ZQK) by Caris & Company
Saks (SKS) by Bear Stearns
Dillard's (DDS) by Credit Suisse
Crosstex Energy (XTEX) by RBC Capital Mkts
Vonage (VG) by Bear Stearns
Limelight Networks (LLNW) by Jefferies & Co
Diebold (DBD) by Robert W. Baird

Downgrades this morning...

Stocks that have been Downgraded this morning...

W&T Offshore WTI) by BMO Capital Markets
Barnes & Noble (BKS) by Credit Suisse
Thornburg Mortg (TMA) by RBC Capital Mkts
Goodrich Petroleum (GDP) by BMO Capital Markets
Barnes & Noble (BKS) by JP Morgan
Novell (NOVL) by Jefferies & Co
EOG Resources (EOG) by Oppenheimer
Diebold (DBD) by Jefferies & Co
ConocoPhillips (COP) by Lehman Brothers
Best Buy (BBY) by Banc of America Sec

Staples Down After Cutting 2008 Guidance

Shares of Staples Inc. (SPLS) fell 3.6% to $21.69 after the office-supplies retailer posted a drop in fiscal fourth-quarter net income and cut it 2008 guidance as it expects a "challenging" economic climate to continue.

The company reported fourth-quarter net income of $333.2 million, or 47 cents a share, compared with $336.5 million, or 46 cents a share a year earlier. The per-share earnings figure is higher because Staples' shares count fell 3.2%.

Revenue rose 0.7% to $5.32 billion. The latest mean per-share earnings estimate of analysts polled by Thomson Financial was 47 cents on revenue of $5.37 billion.

The company now expects a percentage gain in 2008 per-share earnings in the high-single digits on sales up in the mid-single digits. Analysts had projected per-share earnings growth of 11% to $1.42 on a 7% sales increase to $19.41 billion.

Citi Down as Merrill Cuts Estimates...

Shares of Citigroup Inc. (C) fell 2.8% to $22.45 before the opening bell Tuesday after Merrill Lynch cut its 2008 earnings estimates for the banking giant and forecast another very large writedown of Citi's subprime-related exposures.

Citing "continued deterioration in U.S. residential and commercial mortgage markets, corporate dept markets and key investment-banking categories," Merrill reduced first-quarter estimates to a loss of $1.66 a share, from its previous forecast for profit of 55 cents. Full-year 2008 earnings were cut to 24 cents a shares from $2.74 a share.

"We remain concerned about loss provision potential, the direction of long-term strategy, and weak markets for the Capital Markets businesses," Merrill Lynch said in a note to clients.

Intel Lowers Outlook...

Intel Corp. (INTC). The Santa Clara, Calif.-based chip maker said late Monday it is lowering its first-quarter gross margin forecast to 54%, plus or minus a point, from its previous forecast of 56%, plus or minus a couple of points, due to lower-than-expected prices for NAND flash memory chips. The company said all other expectations are consistent with the first-quarter outlook the company provided in January.

Will Verizon Make a Move on Sprint???

With shares of Sprint Nextel (S) so low, the time may be ripe for Verizon (VZ) to pursue it. Even at a 20% premium, VZ would be paying $450/customer, vs. the whopping $1,860 Cingular paid AT&T Wireless in 2004.

China Mobile Ready to Talk to Apple...

China Mobile (CHL) is not in talks with Apple (AAPL) to distribute the iPhone, but says it would like to be. Revenue sharing is assumed to be one of the issues holding up talks, which could see Apple gain access to China Mobile's 350 million subscribers.

Municipal Bonds VERY Attractive....

Munis: Dislocation of a lifetime. Seasoned muni bond investors say current yields -- 16% higher than Treasurys in 30-year debt and 60% higher on two-year notes (!) -- present the opportunity of a lifetime; tax exempt munis usually trade at a 10-20% discount to Treasurys. Prices are being lower by hedge funds who are now forced to sell their holdings to unwind complex bets gone bad.

I heard this yesterday from a friend in the Bond Business...