Daily Summary....

U.S. Markets

Dow +133.40 (+1.09%)
Nasdaq -0.02 (-0.00%)
S&P 500 +9.73 (+0.73%)

News That Moved the Market

Buffet Causes Rally. The markets were positive for most of the day off news that Warren Buffet offered through Berkshire Hathaway (BRK.A, -0.2%) to assume $800 billion in municipal bond liabilities from MBIA (MBI, -15.3%), Ambac (ABK, -15.1%), and FGIC Corp. The offer should dissolve fears of a large municipal bond sell off, but Buffet said he would not touch the companies' troubled structured-finance business. Berkshire said it would take on the liabilities for the specific bonds in exchange for 1.5 times the premium the companies had received. This was not a bail out and still leaves the bond insurers at risk to lose their AAA ratings. Despite this, the markets reacted extremely positively to the news, trading higher, but on light volume. A late day sell off erased gains for the Nasdaq, but other major indices finished with well into the green.
GM Reports Largest Annual Decline. GM (GM, -1.9%) reported a loss of $38.7 for last year, and still seems far away from reaching real sustainable profitability. However, it announced it would be offering buyouts to 74,000 United Auto Workers members to lower costs.

Paulson Announces Foreclosure Freeze. Treasury Secretary Henry Paulson and a group banks responsible for half the U.S. mortgage market announced plans to offer 30 day foreclosure freezes. The plan is to help and encourage troubled homeowners to contact their mortgage banks to modify their loans. So far, only 16% of homeowners who were sent a letter explaining they were at risk of foreclosure have contacted a lender.

After Hours. Applied Materials (AMAT, -2.0% day; +4.8% A.H) reported higher profits than anticipated by analysts.

Tomorrow Notable Earnings

Coca-Cola (KO) Before Open
Waste Management (WMI) Before Open
Baidu (BIDU) After Close

Economic Events:

8:30 AM: Retail Sales
10:00 AM: Business Inventories
10:30 AM: Crude Inventories

Wynn Beats but Stock Falls...

Shares of Wynn Resorts Inc. (WYNN) fell 4.8% to $114.06 despite the casino operator reporting fourth-quarter results that beat Wall Street's view.

The Las Vegas company swung to a fourth-quarter profit of $65.5 million, or 57 cents a share, from a year-earlier loss of $55.4 million, or 55 cents a share. Revenue rose to $711.3 million from $563.6 million. Excluding items, earnings were 72 cents a share.

Analysts expected, on average, earnings of 68 cents a share on revenue of $692 million.

The stock has made a nice move from $95 to $120 since January 22 bottom.

Buffalo Wild Wings Up; 4Q EPS Beats Street View...

Shares of Buffalo Wild Wings Inc. (BWLD) rose 11% to $26.05 in after-hours trading Tuesday after the restaurant chain operator reported fourth-quarter earnings that beat analysts' estimates.

The Minneapolis company said its fourth-quarter net income fell to $6.01 million, or 34 cents a share, from $6.8 million, or 38 cents a share, a year earlier. The company said its revenue increased 9.7% to $91.4 million from $83.3 million.

Analysts polled by Thomson Financial had expected, on average, earnings of 31 cents a share on revenue of $92 million.

Buffalo Wild Wings also said it expects company-owned, same-store sales increase of 4.1% for the first quarter and franchise, same-store sales growth of 1.3%, and believes a 25% net income growth target is in reach.


Makes me hungry. Anyone know where one of these are around here???

Stocks Finish Mixed...

US stocks finished mixed despite rising most of the day after a survey of top economists by the Federal Reserve Bank of Philadelphia said the U.S. will escape a recession. Another bit of good news was Warren Buffett's offer to aid the municipal bond businesses of three troubled bond insurers.

The Dow rose 133.40 points to 12373.41 after having risen as much as 229 points, the S&P 500 rose 9.73 points to 1348.86, and the Nasdaq Composite fell 0.02 points to 2320.04.

Economists Don't See Recession...

The U.S. is likely to escape a recession, a Philadelphia Fed survey of top economists finds, with the GDP rising by 0.7% in the 1Q and by 1.3% in the 2Q. On an annual average over annual average basis, GDP is seen rising by 1.8% in 2008.

A recession would have declining GDP.

Very Strange Tape....

Dow +103
S&P +5
Nasdaq -6

Dow stocks are holding their gains, but we have had a massive selloff (and reversal) this afternoon in the highest flying Tech stocks....

Makes no sense....

Looks to me like some hedge fund is liquidating itself....

Market Strong this Morning....

Dow +204
S&P +19
Nasdaq +24


NYSE Market Beadth Statistics (as of Noon)

Advances 2,438 (74%)
Declines 792 (24%)
Unchanged 67 (2%)

Up Volume 1,165 (85%)
Down Volume 202 (15%)
Unch. Volume 4 (0%)

New Hi's 46
New Lo's 69


The key stat to pay attention to is the Up Volume to Down Volume Ratio. A reading of 9-1 (90%) is historically very positive for the market. Two such readings within a 60 day period typically marks a turnaround in the market's direction.

US Mortgage Crisis Spreads To Prime Borrowers

At the end of September, nearly 4% of prime mortgages were past due or in foreclosure, according to the Mortgage Bankers Association, The Times reported. That was the highest rate since the group started tracking prime and subprime mortgages separately in 1998.

The delinquency and foreclosure rate for all mortgages, 7.3%, is higher than at any time since the group started tracking that data in 1979, largely as a result of the surge in subprime lending during the last few years. The default rate for prime mortgages is still far lower than for subprime loans, about 24% of which are delinquent or in foreclosure.

Monsanto Boosts View on Roundup, Corn Sales...

Monsanto (MON), the Agribusiness giant boosts its fiscal 2008 per-share earnings estimate by 20¢ a share to $2.70 to $2.80 a share. Wall Street expects $2.81. Hike comes on a "revival" in its Round-Up business and strong early-season corn orders.

This looks like a hot sector with Potash (POT), Monsanto and Mosaic (MOS) as the leaders.

Monsanto stock is up 2.65 to $116.70 in premarket trading.

GM Reports Earnings...

Shares of General Motors Corp. (GM) slipped 2.7% to $26.40 before the opening bell Tuesday even as the auto maker posted better-than-expected fourth-quarter results and cut a deal with the United Auto Workers union on a buyout for hourly workers.

GM's shares rose 5.1% Monday amid rising expectations ahead of the earnings report.

GM said it swung to a fourth-quarter loss $722 million or $1.28 a share, as the weak U.S. auto market and the slowing economy challenge the auto maker's turnaround, despite growth in emerging markets.

However, earnings excluding charges came in at $46 million, or 8 cents a share, ahead of the average forecast from analysts polled by Thomson Financial for a loss of 54 cents a share. GM's fourth-quarter results also reflect a $1.6 billion tax benefit.

Buffet Offers to Reinsure Muni Bonds....

Billionaire investor, Warren Buffett, talking on CNBC, offered to provide reinsurance on up to $800 billion in municipal bonds to Ambac, MBIA and FGIC. Deal would only cover insurers' safest investments and not trouble complicated financial instruments.

I'm sure we'll be hearing more about this today.....

Potash Corp Upgraded To Buy From Hold By Citigroup

Citigroup raises their price target on the fertilizer maker to $178 from their previous target of $147.

The company's CEO appeared on Fast Money last night and was very positive about the future of the fertilizer business.

The stock is up 3 points to $147 premarket.

Schering-Plough Beats Estimates...

Schering-Plough beats by $0.03, beats on revs (SGP) 20.62 : Reports Q4 (Dec) earnings of $0.27 per share, excluding non-recurring items, $0.03 better than the First Call consensus of $0.24; revenues rose 40.5% year/year to $3.72 bln vs the $3.1 bln consensus.

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• Applied Materials (AMAT). Expected to post Q1 profit of $0.20 a share, according to analysts polled by Thomson Financial. This is a decrease of 28.21% from $0.28 earned per share same time last year.

• Bob Evans Farms (BOBE). Expected to post Q3 profit of $0.54 per share, up 9.8% from $0.49 earned per share same time last year.

• Cephalon Inc. (CEPH). Expected to report Q4 profit of $0.78 a share, a decrease of 26.79% from $1.06 earned per share same time last year.

• Ecolab Inc. (ECL). Expected to post Q4 profit of $0.40 a share, up 16.76% from $0.34 earned per share same time last year.

• Molson Coors Brewing Co. (TAP). Expected to report Q4 earnings of $0.65 a share.

• Omnicom Group (OMC). Expected to post Q4 profit of $0.95 a share, a rise of 17.28% from $0.81 earned per share same time last year.

• Teradata (TDC). Expected to report Q4 earnings of $0.39 a share.

• Wyndham Worldwide (WYN). Expected to post Q4 profit of $0.46 a share, up 3.41% from $0.44 earned per share same time last year.

• Wynn Resorts Ltd. (WYNN). Expected to report Q4 profit of $0.68 a share, up 28.49% from $0.53 earned per share same time last year.

• XTO Energy Inc. (XTO). Expected to post Q4 profit of $0.92 a share, which is largely unchanged from the profits reported same time last year.

Oil Price Jumps Again on Chavez Threats...

The price of crude oil rose a day after Venezuelan President Hugo Chavez issued a new threat to cut oil exports to America. U.S. crude rose by $2.24 to $94.01, while London Brent rose $1.60 to $93.54.

AIG Loss Disclosure May Put CEO's Job in Jeopardy...

American International Group recently disclosed that its losses may be much larger than the $1.6 billion it previously estimated. That disclosure may cost Martin Sullivan, AIG's chief executive, his position. For now, a company representative says Sullivan is not leaving, but declined to comment on whether he would follow in the path of other high-profile CEOs at Citigroup and Merrill Lynch.

Microsoft Responds to Yahoo Rejection....

MSFT issued the following statement in response to Yahoo!'s rejection of Microsoft's offered acquisition:

"Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties. We are offering shareholders superior value and the opportunity to participate in the upside of the combined company... Furthermore, the combination will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising. The Yahoo! response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!'s shareholders are provided with the opportunity to realize the value inherent in our proposal."