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...

Gamestop Raises Guidance....

GameStop Corp. (GME) raised its fourth-quarter per-share earnings by 2 cents to a range of $1.11 to $1.12 from previously raised guidance of $1.09 to $1.10. The Grapevine, Texas, video game and entertainment software retailer also raised its earnings estimate by 2 cents to $1.77 to $1.78 for the fiscal year ended Feb. 2. Preliminary fourth-quarter same-store sales are forecasted to have come in at 17.4%,above expectations.

This was announced at 10 am, after the market had already opened....unusual. The stock has jumped up 1.32 to $47.04.

More Merger Talk in Airline Industry...

United, Continental talks advance. United Airlines (UAUA) and Continental (CAL) are in advanced negotiations and could move quickly if and when Delta (DAL) and Northwest (NWA) strike a deal. The two must wait for DAL/NWA because Northwest can potentially block any deal involving Continental until it merges itself. Meanwhile, United is still considering a bid for Delta if Delta fails to close a deal with Northwest; the two discussed a tie-up last month.

I Love This....

Greenspan: Recession knocks at the door. Former Fed chairman Alan Greenspan says the U.S. is on the edge of recession, and that the odds of an economic downturn are greater than 50-50. Home prices will continue to fall, which has already begun to take a toll on consumer spending.


Wow...he's really going out on a limb here....50-50 chance???

Wal-Mart Target Raised...

Wal-Mart Stores Inc. (WMT). The Bentonville, Arkansas-based retailer's price target was raised today to $55 from $54 by Lehman Brothers (LEH). Wal-Mart's 2008 earnings forecast was also raised ahead of the discount retailer's full-year and fourth quarter results next Tuesday. The broker said it now anticipates the company to earn $3.35 a share in 2008, up from a prior estimate of $3.30. It maintained its overweight stance on the stock.

Lehman said the company will benefit in 2008 from initiatives to improve profitability, returns and generate stronger cash returns. The broker added that it expects Wal-Mart's sales to receive a boost from tax rebates, which households are expected to receive in May. For the fourth quarter, Lehman expects the company to post earnings of $1 a share on revenue of $105.7 billion.

Chipotle Earnings Jump 62%; Shares Fall

Chipotle Mexican Grill Inc.'s (CMG) fourth-quarter net income climbed 62% as the company continued double-digit percentage same-store sales growth.

But its shares fell 14% in after-hours trading as the results failed to meet Wall Street expectations.

The burrito restaurant chain reported net income of $17.5 million, or 53 cents a share, up from $10.8 million, or 33 cents a share, a year earlier. Results included a 1-cent tax charge.
Revenue jumped 31% to $288.9 million. Same-store sales grew 10.6% on an increase in customer visits.

Analysts' mean estimates were for earnings of 55 cents a share on revenue of $289 million, according to a poll by Thomson Financial.

So....they missed by a penny and they sell the stock off 15%.

Dryships Profits and Revenues Soar...

DryShips Inc. (DRYS) late Thursday reportedfourth-quarter net income of $195.2 million, or $5.37 per share, which includesa capital gain on the sale of one vessel of $31.5 million, 87 cents a share. Excluding the gain, the Greece-based marine transport company's profit wouldhave been $163.7 million, or $4.50 a share.

The mean estimate of analysts polled by Thomson Financial was for aper-share profit of $4.04 a share. Time charter equivalent revenue in the three months ended Dec. 31 rose to $223.5 million versus the consensus analyst estimate of $209 million. In the same period last year, DryShips earned $35.9 million, or $1.02 ashare, on revenue of $74 million.

The company's shares closed at $84.25. The stock traded up to $90 in the aftermarket.

Priceline.Com 4Q Beats Views

Priceline.com's profit rises to $32.9 million, or 68¢ cents a share, as revenue increases to $334.9 million. Excluding one-time items, company reports profit of 96¢ a share. Analysts expected earnings of 84¢ on revenue of $329 million.


Priceline stock (PCLN) has been a great performer, doubling in the last year. It is currently down 20 points from its high hit in December and looks like it is getting ready to break out to higher ground.

Buffet Quietly Buying Kraft Foods...

Berkshire Hathaway, the closely watched investment vehicle of billionaire Warren Buffett, discloses yesterday that it was quietly accumulating shares of Kraft Foods in 2007, amassing an 8.6% stake by the end of the year.