IBD's Top 10 Stocks....

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

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

Tuesday's Summary....

U.S. Markets:

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

News That Moved the Market:

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

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

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

Quick Tics:

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

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

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

Tomorrow Notable Earnings:

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

Economic Events:

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

Beats and Raises Portfolio....

Reviewing earnings reports since January 1....

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

These stocks are acting really well in here:

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

Today's Upgrades...

List of Companies Upgraded this Morning:

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

Today's Downgrades....

List of Stocks Downgraded this Morning:

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

ISRG: Setting up for a Breakout....

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

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

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

Check Out Imclone (IMCL)

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

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

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

Technical Alert: Cree Inc. Breaking out...

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

The stock had significant resitance at $34.

Terex Continues to Break Out...

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

The stock is up 1.66 to $70.76

Frontier Misses but Stock Rises...

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

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

FTO is up 1.01 to $38.65 right now.

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

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

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

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

Sirius / XM Update...

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

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

Google Advertising Slows...

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

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

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

Target 4Q Net Down...

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

Analysts were expecting earnings $1.22 a share.

Target is trading higher by .50 to $53.77

Technical Alert: Google Breaking Down....

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

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

Futures Reverse on PPI Number....

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

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

Nordstrom Beats Buts Sees Tough 2008...

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

Foster Wheeler Misses....

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

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

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

Earnings Due Today....

COMPANIES REPORTING EARNINGS:

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

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

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

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

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

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

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

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

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

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

Sony and Sharp in LCD Panel Venture...

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

RadioShack 4Q Net Up 20% On Cost Cuts

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

January Foreclosure Filings Surge 57%...

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

MBIA Eliminates Dividend...

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

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

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

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

Morning Bullets....

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

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

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

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