Rumors swirl on Radware (RDWR)

We've heard this story before, but rumors are out there that Radware (RDWR) will be taken out very shortly.  The stock is up 4-5 points in the last three days, after holding 20% gains when these rumors first surfaced on Sept 14.

The stock is currently at $39.10  Rumored take out price is $47.

Today's Upgrades and Downgrades...

Airgas Inc. (NYSE: ARG) Raised to Outperform at Baird.


Bank of Ireland (NYSE: IRE) Cut to Underweight at Morgan Stanley.

Broadcom Corporation (NASDAQ: BRCM) Started as Neutral at Nomura; Raised to Positive at Susquehanna.

Calpine Corporation (NASDAQ: CPN) Started as Outperform at Oppenheimer.

Celgene Corporation (NASDAQ: CELG) Started as Outperform at Wells Fargo.

CIT Group, Inc. (NYSE: CIT) Started as Neutral at Credit Suisse.

DryShips, Inc. (NASDAQ: DRYS) Raised to Outperform at Credit Suisse.

Gilead Sciences Inc. (NASDAQ: GILD) Started as Outperform at Wells Fargo.

Intel Corporation (NASDAQ: INTC) Started as Buy at Nomura.

Lululemon Athletica (NASDAQ: LULU) Raised to Hold at Jefferies.

Marvell Technology Group Ltd. (NASDAQ: MRVL) Started as Neutral at Nomura.

NVIDIA Corporation (NASDAQ: NVDA) Started as Neutral at Nomura.

Procter & Gamble (NYSE: PG) Raised to Buy at Goldman Sachs.

QUALCOMM Incorporated (NASDAQ: QCOM) Started as Neutral at Nomura.

Research in Motion Ltd. (NASDAQ: RIMM) Reiterated Outperform and target raised to $75 at Raymond James.

Texas Instruments Inc. (NYSE: TXN) Started as Reduce at Nomura.

Latest Short Interest - from Bloomberg

• Short Interest in the SP500 for the period ending Nov. 30th declined 3.51%.

The largest decreases came from Healthcare (dn. 7.68%) Consumer Discretionary (dn. 7.09%) and financials (dn. 6.35%)

3 sectors showed an increase in Short Interest, IT (+2.85%) Telecom (+2.11%) and Industrials (+0.19%)

• Largest Increases: KSS (+157.9%) RSG (+89.9%) INTC (+80.97%) AIZ (+72.21%) PWR (+63.79%) IR (+63.34%) COL (+62.87%) RF (+49.5%) HAR (+45.91%) MJN (42.81%)

• Largest Decreases: APA (dn. 64.08%) MYL (dn. 61.26%) PGR (dn. 34.95%) APC (dn. 30.2%) MHP (dn. 29.8%) MAT (dn. 29.17%) ED (dn. 28.88%) BTI (dn. 28.75%) NEE (dn. 28.48%) AEP (dn. 27.37%)

Green Mountain Coffee warns...

Green Mountain Coffee Roasters (GMCR 31.98, -5.44, -14.54%)  declined 15% in the premarket. The Waterbury, Vt., coffee producer issued a softer profit forecast and withdrew its shipment guidance for its K-Cup coffee packs.

Earnings Next Week...

Corporate Events Calendar – Week of Mon Dec 13


• Mon Dec 13: analyst meetings (Air Liquide, BCR, EW); sales (GWW)

• Tues Dec 14: earnings before the open (BBY, FDS, SAFM); earnings after the close (HOV); analyst meetings (BMC, BRCM, CRL, FSLR, GE, KO, NVS, ONXX, PPG)

• Wed Dec 15: earnings before the open (JOYG); earnings after the close (NDSN); analyst meeting (AVT, CBR, DAL, DG, DGI, DHR, HON, LII)

• Thurs Dec 16: earnings before the open (ABC, ATU, DFS, FDX, GIS, PIR, RAD); earnings after the close (ACN, LUB, ORCL, RIMM, SMOD, TTWO, ZQK); analyst meetings (ATHN, CNC, IRDM, PG)

• Fri Dec 17: analyst meetings (CCE, ITT, PNR)

Latest Fund Flows

Fund Flows – from JPMorgan’s E Beinstein - For the week ending 12/8/10, all fund categories experienced inflows; HY, Equity, and Money Markets significant ones. HG had inflows of $400mn this week vs an inflow of $56mn last week. The last outflow was during the week of 11/3/10 of -$258mm. HY funds had inflows of $1bn this week vs an outflow of - $1.2bn last week. Equity funds had inflows of $8bn this week (3rd largest inflow this year) vs an outflow of -$1.6bn last week. Money markets had an inflow of $25bn this week (largest this year) vs an outflow of -$2.8bn last week.

Stocks to Watch

• Apple Inc. (AAPL). The component suppliers for the PC maker’s iPad are gearing up for a new round of production in the first quarter, sources said on Friday, with one saying the product will be a revamp of the popular tablet computer including front- and back-mounted cameras.

• Bank of America Corp. (BAC). The bank and financial holding company restarted about 16,000 home foreclosure cases across the United States on Monday, the Wall Street Journal said.

• Borders Group Inc. (BGP). The bookseller said on Thursday it is trying to obtain new financing to avoid violating the terms of its credit agreements early next year.

• Cablevision Systems Corp. (CVC), F5 Networks Inc (FFIV), Netflix Inc (NFLX) and Newfield Exploration Co (NFX). The four companies will join the benchmark S&P 500 index after the closing bell on Dec. 17, S&P said in a statement on Thursday. Netflix, F5 Networks and Newfield Exploration will replace Office Depot Inc (ODP), The New York Times Co (NYT) and Eastman Kodak Co (EK) in the S&P 500. Cablevision Systems will replace King Pharmaceuticals Inc (KG) as King Pharma's takeover by Pfizer Inc (PFE) is expected to be completed soon, S&P said.

• Cisco Systems Inc. (CSCO). The network equipment maker company’s CEO John Chambers on thursday said, the company would likely gain share in the overall market, including the public sector, where it suffered a fall in orders last quarter.

• Green Mountain Coffee Roasters Inc. (GMCR). The coffee company gave a weak first-quarter profit outlook due to higher marketing costs and an expected volatility in coffee costs, becoming the latest coffee company to take a hit due to soaring prices. The company, which raised coffee prices in October in response to rising coffee costs, expects a first-quarter adjusted profit of 14-18 cents a share.

• JPMorgan Chase & Co. (JPM). The bank is hiring 100 corporate bankers outside the United States, in a bet that loan demand in the rest of the world will grow faster than in the bank's home base.

• Microsoft Corp. (MSFT). The world's largest software company said November month was the best on record for xbox sales, helped by Kinect. 1.37 million of xbox consoles were sold, the company said. Separately, Microsoft, Adobe (ADBE) and other U.S. software manufacturers are pressing the Obama administration for a deal with China next week that could spur billions of dollars of additional U.S. software exports, an industry official said on Thursday.

• Sony Corp. (SNE). The electronic equipment maker on Friday said it shipped more than 5.5 million copies of Gran Turismo 5, the latest version of its motor-racing game franchise, in its first 12 days on sale.

• United Technologies Corp. (UTX). The diversified manufacturer set a wide 2011 profit target range, warning that a fluctuating euro and uncertain global economic recovery could hamper it from hitting its long-term earnings growth target of 10 percent or more. The company expected a profit of $5.05 to $5.35 per share in 2011.

FDIC keeps Insured level at $250K

Deposit insurance gets permanent increase – reconciliation conference members on Tues agreed to permanently increase deposit insurance for bank customers (from $100K to $250K); the move was unexpected. 

This move could hurt stocks....

PIMCO likes stocks...

PIMCO’s Gross says his firm is moving into equities - "We are making a move into equities...we are recognizing the global market place is not just bond related,"; Gross says equities look attractive - "Corporate equities, however, in terms of valuation are selling at very low (price-earnings) ratios.”

S&P Rebalancing this Friday...

S&P rebalance - The quarterly share rebalance for the S&P 500, S&P MidCap 400, S&P SmallCap 600 Indices will take place at the close of business Friday, June 18, 2010.

BP Update....

BP Plc. (BP). The oil major said on Monday the oil spill in the Gulf of Mexico had already cost it $1.6 billion and that it would begin operating an additional mechanism to capture more crude from the leaking well in the coming days.

Blockbuster moves closer to Bankruptcy...

Blockbuster (BBI). The movie rental chain is in talks with bondholders to get a $150 million debtor-in-possession loan, a sign it could be closer to seeking Chapter 11 protection, the WSJ reported on Friday.

Apple - HTC battle heats up....

Apple Inc. (AAPL). A U.S. trade panel will investigate allegations made by HTC Corp that the company infringes its technology, as HTC seeks to win a ban on the U.S. sale of iPhones, iPads and iPods.

Avandia exposes patients to greater health risks...

GlaxoSmithKline Plc. (GSK). The drugmaker’s Avandia diabetes drug exposed patients to greater health risks including heart attacks, and even death, the WSJ said on Friday, citing a U.S. Food and Drug Administration scientist's study.

They keep trying to knock Apple down...

Apple Inc. (AAPL). The Federal Bureau of Investigation has opened a probe into a security breach of Apple’s iPad that exposed personal information of AT&T Inc (T) customers, including those of several high-ranking government officials.

Thursday's Market Breadth....Decisively Positive..

10 am update

At 10:10 am:

Dow +19
Nas -7
S&P +1.66

This is a key day as we need to stop this recent slide.  We are way overdone, but as of yet, no investors are willing to step in and Buy.

Analyst Upgrades and Downgrades...

Altera Corp. (ALTR) price target cut to $26.60 from $31.70; rating outperform at Macquarie


• Amazon.com Inc. (AMZN) price target cut to $150 from $155 at BofA Merrill

• Baker Hughes Inc. (BHI) price target cut to $47 from $61; rating cut to market perform from outperform at FBR

• Diamond Offshore Drilling (DO) rating cut to sell from neutral at Goldman Sachs

• eBay Inc. (EBAY) price target cut to $27 from $28 at BofA Merrill

• Ensco Plc. (ESV) price target cut to $55 from $63 at FBR

• Expedia Inc. (EXPE) price target cut to $29 from $30 at BofA Merrill

• Google Inc. (GOOG) price target cut to $630 from $685 at BofA Merrill

• Halliburton Co. (HAL) price target to $38 from $44 at FBR

• Nabors Industries (NBR) rating raised to buy from neutral at Goldman Sachs

• Noble Corp. (NE) rating cut to neutral from buy at Goldman Sachs

• Rowan Companies Inc. (RDC) price target cut to $24 from $26 at FBR

• Schlumberger (SLB) price target cut to $85 from $96 at FBR

• Yahoo (YHOO) price target cut to $20 from $21 at BofA Merrill

NY & Co. trims forcasts...

New York & Co. Inc. (NWY). The women's apparel chain on Monday widened its second-quarter loss outlook and also said it now expects about flat same-store sales for the second-quarter, compared with a rise in comparable-store sales it forecast last month.

First Solar responds to high demand in Europe...

First Solar Inc. (FSLR). The world's lowest-cost photovoltaic solar manufacturer on Tuesday said it plans to double production capacity at its German plant in Frankfurt an der Oder, to cater to strong European demand. The company said it is in advanced talks with German authorities to obtain the regulatory permits and financial framework for the expansion.

Earnings Expected Today....

• Bob Evans Farms Inc. (BOBE). Expected to report Q4 earnings of 63 cents a share, according to Thomson Reuters I/B/E/S

• Pall Corp. (PLL). Expected to report Q3 earnings of 50 cents a share

• Take Two Interactive Software Inc. (TTWO). Expected to report Q2 earnings of 27cents a share

• Talbots Inc. (TLB). Expected to report Q1 earnings of 16 cents a share

• Texas Instruments Inc. (TXN). Expected to report Q2 earnings of 61 cents a share

US Dollar ETF....

The other place to hide...

Here's a nice chart....Natural Gas...

This makes alot of sense as there will undoubtedly be a push toward "cleaner" fuels after the Gulf dissaster. 

You know it's a bad market when....

No real surprises, as Apple's (AAPL -0.9%) new iPhone 4, introduced today, boasts a thinner design with 100 new features, including video chat, a front-facing camera and better battery life. Steve Jobs: "Beyond a doubt, the most precise thing and one of the most beautiful things we’ve ever made."

Market Breadth is getting ugly, however Volume has been low compared to recent past.  This means there are clearly no buyers around.

I don't like Mondays....

Market recap: Stock losses accelerated after a new report showed continued weakness in borrowing among U.S. consumers. It was all the excuse needed in this shaky market to send shares reeling to session lows. Decliners routed advancers on the NYSE by about four to one.

At the close:

Dow -1.16% to 9816.
S&P -1.35% to 1050.
Nasdaq -2.04% to 2174.

Wellpoint has been rising on takeover speculation.  It may be tough for it to move much as it has alot of overhead reisitance to break thru.

We were stopped out of Encore Capital at $19.30 on Friday. 

Same story with VMware.

Akamai continues to move higher in a poor market.  Once again the stock was higher early on Friday then succombed to the pressure late.  Good looking stock.

Stocks on sale....

Salesforce.com made a new high intraday, but sold off late to close right at its previous breakout level below $90.

Selling Overblown....

After a somewhat weaker jobs report, traders sent the market much lower today.  To me the selling was not justified, it seemed more like a panic selloff.  We are now back at the level we saw in the "flash crash" last month.
The selloff gives some discount prices to enter some leading stocks in here. Over the weekend, I'll give you some stocks to look at.  Have a nice weekend.

How bad is this Oil Spill...

The general consensus that the BP (BP) oil spill is the worst-ever environmental disaster is "wildly overblown," a University of Alabama professor says. The amount spilled is tiny in comparison to the amount spilled by rigs and tankers around the world every year, he says, and it's not even the worst spill ever in the Gulf of Mexico.

Noon Update....

Stocks lower following disappointing jobs report.  Traders clearly wanted to take the market lower and sure enough...

Dow -212
Nas -41
S&P -22

Dell may go private....

DELL – Michael Dell remarked late in trading on Thurs at the Bernstein Conf that he has considered taking the company private; Dell says "not necessarily" a high probability that company would do a big acquisition.

Start Buying Natural Gas stocks....

Clean Energy – Majority Leader Reid says the Senate will start debating a comprehensive clean energy bill next month.

Earnings due next week...

Mon June 7: earnings after the close (FCEL, CWST)

Tues June 8: earnings before the open (DG, TLB); earnings after the close (TTWO, PLL),

Wed June 9: earnings before the open (RGEN, MTN, CIEN, BFB).
Earnings after the close (SHFL, MW).

Thurs June 10: earnings before the open (LULU, DLM);
earnings after the close (NSM, FNSR, ARST)

The latest on BP's efforts...

BP – the co said it has successfully placed a containment cap on the oil well; the coast guard said "It will be some time before we can confirm that this method will work and to what extent it will mitigate the release of oil into the environment,"; once the cap is fully in place, the plan is to start funneling some of the crude to a ship on the surface.

Analyst Downgrades...

• Abercrombie & Fitch Co. (ANF) price target cut to $41 from $44; rating neutral at UBS

• Aflac Inc. (AFL) price target cut to $48 from $58; ratng neutral at UBS

• Suntech Power (STP) price target cut to $9 from $16; rating market weight at Thomas Weisel

• Walgreen Co. (WAG) price target cut to $36 from $40; rating hold at Jefferies

ULTA on a roll....

Ulta Salon, Cosmetics & Fragrance Inc. (ULTA). The company on Thursday posted a higher-than-expected first-quarter profit, helped by improved merchandise margins, and the company forecast strong second-quarter results. The company posted first-quarter net income of 23 cents a share, compared with 8 cents a share, a year ago.

Ulta Salon sees second-quarter adjusted profit between 19 cents and 21 cents a share, on net sales of $311 million to $317 million.  Analysts were expecting earnings of 15 cents a share on revenue of $308.1 million.

It's national donut day!!!

Krispy Kreme giving away one free donut of your choice...

McDonald's recalls glasses....

McDonald's (MCD) recalls 12M "Shrek"-themed drinking glasses after discovering the cups contain the toxic metal cadmium. Cadmium is a known carcinogen that can cause bone softening and severe kidney problems.

Steel stocks hard to figure....

Goldman drops U.S. Steel (X) from its Conviction Buy list, citing a trio of negatives: weak European credit markets; a Chinese tightening; and now the Gulf oil crisis. The downgrade is Goldman's fifth switch on X during 2010 - as good a read as any on this year's economic uncertainty.

Jobs report disappointing...

Stock futures dive following strong but disappointing jump in payrolls. The key disappointment was in private payrolls, strategist T.J. Marta says. "While we did get the census hiring, the private economy is not hiring the way we would have liked." Census hirings accounted for 411K of the 431K new jobs reported.

This could hurt blackberry and Iphone subscribers...

AT&T shifts away from unlimited data plans. AT&T (T) announced yesterday that it will no longer sell unlimited internet data plans to new customers with smartphones and iPads (AAPL), opting instead for usage-based pricing that charges heavy bandwidth users more. Analysts said the move will bring some much-needed common sense to the wireless industry, and likely marks the beginning of the end for unlimited data plans.

VMware (VMW)...

Looks like a twin of CRM...

Salesforce.com (CRM)...

Pretty nice looking chart here.....

Market closes slightly higher...

Market recap: Stocks bounced around and finally ended in marginally positive territory in cautious trading ahead of tomorrow's jobs report. The major averages were boosted by a continued rebound in the tech and energy sectors, and NYSE advancers outnumbered decliners by about three to two.

At the close:

Dow +5.74
Nas +21.96
S&P +4.45

BP making progress....

BP (BP) says it achieves an "important milestone" on shearing a pipe from the blown-out Gulf well and that it could take 12-24 hours to determine success in capping the wellhead.

Bad news for drillers...

MMS stops issuing permits for new oil and gas drilling in the Gulf of Mexico regardless of water depth, effectively extending the earlier suspension of permits for deepwater drilling into shallow waters.

I need to get in the Govt. Contacting business...

Apart from Boeing's (BA) $1.7B contract to work on the FAA's GPS-based "NextGen" air traffic control system, another $2.5B is yet to be awarded on two more contracts. The program has a $7B ceiling - largest ever for the FAA - and General Dynamics (GD) and ITT (ITT) won contracts last week as well.

Mortgage Rates still low....

Mortgage rates were little changed from last week, Freddie Mac reports, with 30-year fixed-rate loans sitting at 4.79% with 0.8 points, vs. a year-ago 5.29%.

Bad news for commodities...

CEOs of Freeport-McMoran (FCX -2.4%) and Codelco say China’s plans to curb its economy threaten to reduce copper demand, further lowering commodities prices that have already slumped on Europe's economic concerns. China is a "risk to the world’s marketplace in the near term," FCX's Adkerson says, but its inflation fight "will likely lead to a more sustainable situation going forward."

Fed almost ready to start raising rates...

The U.S. economy is almost strong enough to allow the Fed to begin raising interest rates, but we're not quite there yet, Atlanta Fed President Dennis Lockhart says. "As the economy continues to improve and financial markets find firmer ground, extraordinarily low policy rates will not be needed to promote recovery and will become inconsistent with maintaining price stability."

Might be a good time to lock in a mortgage or car loan.

Kindle to go on sale at Target this Sunday...

Starting Sunday, feel free to pick up a Kindle (AMZN) at your local Target (TGT). Until now, the e-reader was only available through Amazon's website but the company is looking to get an edge on competition from the iPad (AAPL), Nook (BKS), Sony Reader (SNE),

Market rallies to close higher...

The stock market rebounded today after a jump in pending home sales raised optimism about the economy.

The gains Wednesday allowed stocks to recover the losses from the day before, when the government announced investigations into the Gulf oil spill. A rebound in energy stocks led the way.

The National Association of Realtors' index of contracts for home purchases rose 6 percent in April as buyers raced to secure a tax credit.

The Dow Jones industrials rose 226 points to 10,250, the third biggest gain of 2010. The Standard & Poor's 500 index is up 28 at 1,098. The Nasdaq composite index is up 59 at 2,281.

Five stocks rose for every one that fell on New York Stock Exchange. Volume totaled 1.4 billion shares, in line with Tuesday.

Noon Update....

Nice rally so far this mornin, however, we re just making back what was taken away in the last 30 minutes on Tuesday....Commodities and Tech leads the way.

Dow +99.69
Nas +30.03
S&P +13.42

Goldman thinks Monsanto is washed out...

Goldman Sachs upgrades Monsanto (MON) to Conviction Buy from Neutral. Monsanto has been the second-worst performing stock in the S&P 500 this year, but "bad news is exhausted" and investor sentiment is bottoming.

Wednesday's Economic Calendar...

May Auto sales
7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
7:45 ICSC Retail Store Sales
8:30 Hearing: Credit Ratings Credibility
8:55 Redbook Chain Store Sales
10:00 Pending Home Sales

Obama targets RIG...

Transocean Ltd. (RIG). Obama administration on Tuesday sought to challenge the company’s bid to limit its liability for its role in the gushing oil well it drilled in the Gulf of Mexico for BP Plc (BP).

Monsanto and Dow reach license agreement...

Monsanto Co. (MON). The company and Dow Chemicals’ (DOW) Dow agrosciences on Wednesday reached a new licensing agreement on Roundup ready 2 Yield soybean technology. Under the agreement Monsanto grants Dow AgroSciences a non-exclusive, royalty-bearing license in U.S. to develop, produce, sell and sublicense seed and germplasm with Roundup Ready 2 Yield technology.

Jos.A Bank reports impressive earnings...

JoS A Bank Clothiers Inc. (JOSB). The men's apparel and accessories retailer on Wednesday reported an increase in its first-quarter earnings and sales. The company reported earnings of 85 cents a share, an increase of 37 percent from 62 cents a share, from a year ago period. The company’s total sales for the quarter increased 10 percent to $178.1 million.

Google sets sights on Microsoft Windows..

Google Inc. (GOOG). The web search group expects to release its Chrome computer operating system in the "late fall", a top executive said on Wednesday, as it aims a competitive strike at rival Microsoft's (MSFT) Windows. The Chrome system will designed initially to work on laptop PCs.

BP tries to reassure investors...

BP Plc (BP). The oil major forged ahead with its latest effort to curb the flow of oil spewing into the Gulf of Mexico on Wednesday. And also the company will seek to patch up its battered share price by reassuring investors the cost of cleaning up the oil spill in the Gulf of Mexico is manageable and will not affect dividends.

Steve Jobs comments on Foxconn deaths...

Apple Inc. (AAPL). The company’s CEO Steve Jobs finds "troubling" a string of worker deaths at Foxconn, the contract manufacturer that assembles the company's iPhones and iPads, but said its factory in China "is not a sweatshop."

Amgen gets approval for osteoporosis drug...

Amgen Inc. (AMGN). U.S. FDA approved on Tuesday the sale of the company’s osteoporosis drug Prolia to help prevent fractures in post-menopausal women just days after the medicine received European approval. Amgen said the drug will be available within the next two weeks and cost $825 per 60 milligram injection based on wholesale acquisition cost.

Market Breadth Numbers...

Market Recap...

Market recap: Stocks moved sharply lower in the final hour of trading after staying in positive territory for most of the session, as BP's (BP -15%) woes dragged down the energy sector and new Middle East tensions added to the late selloff. Decliners led advancers on the NYSE by nearly five to one.

Tenet Healthcare looking at Healthscope...

Tenet Healthcare (THC) confirms it is discussing a potential acquisition of Healthscope, Australia's second-largest private hospital company.

BP still trying...

BP (BP) is in the middle of a major pipe cut to attempt to contain the Gulf oil spill, the Coast Guard says, contradicting reports that the company had curtailed efforts to end flow from the well. BP says its "top kill" attempt to seal the well may have failed due to a ruptured disk inside the well.

Lunchtime Update....

Lunchtime Update:

Dow +40.73
Nas +1.50
S&P -1.20

Winners:

AAPL +7.40
GOOG +3.50

Losers:

RIG -4.40
BP -5.11
APC -7.55

Keep an eye on Synaptics...

SYNA - Synaptics is demonstrating its newest touch technology branded as TouchPad-IS at COMPUTEX 2010. The company claims is the first "fully capable, multi-finger PC touchpad. The new touchpad can accurately recognize four-finger gestures and demonstrate demonstrate Synaptics SmartSense technology, which prevents activation of the cursor when you accidentally touch it.

Nvidia favors Google's Android OS....

In Computer World magazine, NVDA says Google’s Android will become the OS of choice for tablets; Windows is too large and feature-rich for smartphones according to NVDA.

Amazon working on new version of Kindle....

AMZN - Amazon.com in August will unveil a thinner version of its Kindle electronic-book reader, with a screen that turns pages faster and has a sharper display; the co is also hard at work on a color-screen version and one w/touch responses.

This weekend's IBD additions and deletions....

IBD 100 List:

Additions - TPX, TSCO, PVH, JOSB, JCG, WHR, PNRA.

Deletions - ULTA, FDO, ANN, ROST, IMAX, CAKE, BBBY.

Earnings this week....

Tues June 1:
After the close (LGF, PSS, SNDA).

Wed June 2:
Before open (DAKT, SCVL, CSIQ); After the close (HOV)

Thurs June 3:
Before the open (STP, CHRS, AGYS, JOYG, UTIW, JOSB, AHO)
After the close (SNIC, CMTL, ZQK, SAI, KKD, COO)

Fri June 4:
Before the open (CMED)

Boeing wins Russian order....

Boeing (BA). The aircraft maker has won an order from a Russian state company for up to 65 planes, nearly half its net order level for 2009, beating European rival Airbus and a Russian manufacturer.

Blackstone set to buy out the Shack...

Blackstone Group LP (BX). The private equity firm has emerged as a leading participant to buy electronics retailer RadioShack Corp (RSH) after an initial round of bids were completed last week, the New York Post said, citing sources familiar with the matter.

RadioShack is up over $1 premarket to $21.50

Astra Zeneca suffers slight setback...

AstraZeneca (AZN). The Anglo-Swedish drugmaker’s drive to extend the life of its blockbuster acid reflux drug Nexium through new uses was set back on Tuesday after U.S. regulators delayed approval of a drug combining it with aspirin. Nexium faces the loss of patent protection in key markets and the company is developing novel formulations to extend its franchise.

Top Kill efforts fail....

BP (BP) is sliding over 10% premarket after its weekend announcement that 'top kill' efforts had failed. Its next attempt to stem the Gulf of Mexico leak, using robots, could end up making the leak worse and a permanent fix is still months away.

HP to cut 3,000 jobs...

According to their 8-K filing, Hewlett-Packard (HPQ) is cutting a net of 3,000 jobs and taking a $1B charge.

IPad sales reach 2 Million....

Sales of Apple's (AAPL) iPad have topped two million in less than sixty days, exceeding the sales rate for the company's Mac laptops and desktops and for the original iPhone, though falling short of the sales rate for the iPhone 3G. The news could prompt analysts to upwardly revise their sales projections, giving an already buoyant stock a further lift.

Market Breadth Numbers...

Things were going well on Friday until the announcement of Spain's debt downgrade. Alot of nervous nellies out there.

Ideas for the weekend: ULTA

Ulta Salon, Cosmetics & Fragrance, Inc. operates as a retailer of prestige, mass and solon products in the united States. The company was founded in 1990, operates 346 stores in 36 states and has a market cap of $1.35 billion.

Shares of ULTA gapped open higher on March 11 after the company reported Q4 results that eclipsed expectations. Revenue for the quarter was up 16% from last year to $396.4 million. Earnings also came in strong at 34 cents, 13% ahead of the Zacks Consensus Estimate. The company has surprised in each of the last four quarters by an average of 4 cents, or 53%.

Ulta gained in a couple of key categories, with operating income up 60% to $34 million and same-store sales up 6.2%. Free cash flow was $105 million.

Looking forward Ulta is ready to capitalize on its upward momentum, with plans to open 46 stores, remodel 13 and relocate 6 in 2010.

Estimates Jump
Estimates have been on the rise for the last few months, with the current year adding 15 cents to 85 cents. The next-year estimate is up 23 cents to $1.04, a solid 22% growth projection.

Netapp, Inc.

NetApp is seen riding a wave of growing corporate IT spending, including stronger demand for data storage products as companies embrace cloud computing which allows businesses to access computing power through a network instead of in-house data centers.

Companies are also embracing virtualization which enables them to tap disparate computer systems on their premises or in hosted data centers as one network and use that computing capacity based on needs.

NetApp reported fiscal fourth-quarter income of $145.1 million, or 40 cents a share, compared with a profit of $68.4 million, or 21 cents a share, for the year-earlier period. Revenue rose to $1.17 billion from $879.6 million. Adjusted income was 50 cents a share.

SXC Health Solutions

SXC Health Solutions

•The company logged some triple-digit earnings growth gains last year. Earnings growth has slowed in recent quarters, but at 34% last quarter it's still above the 25% minimum typically seen in winning growth stocks.

•Sales growth has accelerated during the past two quarters, which is a positive.

•For the full year, analysts see earnings rising just 8%, so that's something to factor in. And they predict earnings will rise 30% next year.

Market closes lower ahead of long weekend....

Stocks closed out their worst May since 1962 by sliding again on more unsettling news about Europe.

Closing numbers:

Dow -122.36
Nas -20.64
S&P - 13.65

What You Talkin' About Willis???

Gary Coleman, the child star of the TV sitcom Diff'rent Strokes, died Friday after suffering an intercranial hemorrhage. He was 42.  Utah Valley Regional Medical Center spokeswoman Janet Frank says life support was terminated and Coleman died at 12:05 p.m.  Coleman was hospitalized Wednesday after falling and suffering a head injury at his home south of Salt Lake City, according to family members.

Truly one of the classic TV characters of all time....

Fitch Downgrades Spain Debt....

This shouldn't be any real surprise, but the Dow sold off over 100 points in 5 minutes as this news hit the wire.  Traders are really whipping this market around.  There is no conviction, it seems...so it's probably best at this point to ignore it and just go home for the weekend.

At 1:15 pm:

Dow -99
Nas -24
S&P -11

Time Warner (TWX) needs to be more aggressive...

The WSJ’s Heard on the Street thinks that Time Warner needs to be more aggressive in packaging its digital entertainment; for example – creating a subscription only model for HBO in order to compete with NFLX.

Rough Hurrican Season Forecast....

US warns of worst hurricane season since 2005 – The Atlantic storm season could be the most intense since 2005 when Hurricane Katrina killer over 1,000 people and disrupted oil production in the Gulf, according to the NOAA. The NOAA is forecasting 14-23 named storms, of which 8-14 could develop into hurricanes, close to 2005’s record of 15.

Does this include all the Oil spilling into the Gulf???

OPEC crude-oil output rose to a 17 month high in May according to a Bloomberg survey. Production rose 187K barrels.

Dow on Pace for Worst May in 48 years....

Dow on pace for worst May since 1962


May action:
 
DJIA -6.80%
SP500 -7.10%
Nas -7.46%,

Latest numbers show outflows out of equity funds...

Fund Flows - US equity funds (including ETFs) saw sharp outflows again this week of -$13.7b, the second consecutive week of large outflows. The large outflows over the past two weeks totaling -$21.2b have wiped out most of the inflows over the prior 13 weeks; Excluding the impact of ETFs, the outflows were still significant at -$4.2b

After an Hour of Trading.....

Dow -33.79
Nas -4.38
S&P -2.84

Gainers:

NFLX +4.15 to $113
AAPL +4.64 to $259
JCG + 2.13 to $46
SXCI + 1.32 to $74
ULTA +1.16 to $25.75

Sweatshop has a Heart Afterall....

Faced with an escalating management crisis following a spate of worker suicides, iPhone maker Foxconn Technology Group will increase employees' wages at its China operations by 20%, according to media reports Friday.

Commodity Stocks Downgraded...

• AK Steel (AKS) price target cut to $17 from $22; rating hold at Deutsche Bank

• Monsanto Co. (MON) price target cut to $60 from $82; rating buy at Deutsche Bank

• Nucor Corp. (NUE) price target cut to $50 from $53; rating buy at Deutsche Bank

• United States Steel Corp. (X) price target cut to $65 from $85; rating buy at Deutsche Bank

J Crew Beats and Raises...

J Crew Group Inc. (JCG). The apparel retailer posted a first-quarter profit on Thursday that topped Wall Street estimates and raised its full-year outlook. The company boosted its full-year earnings forecast to $2.35 to $2.45 per share from $2.20 to $2.30 per share previously.

CVS Overcharging for Prescriptions...

CVS Caremark Corp. (CVS). The company has been charging some customers of its SilverScript Medicare prescription-drug programs higher prices than they were promised when they signed up for the plans in late 2009, the WSJ reported on Thursday.

Apple Launches IPad overseas...

Apple Inc. (AAPL). The company’s iPad launched in overseas store shelves on Friday, with buyers storming Japanese and Australian shops to be among the first outside the United States to snap up the long awaited tablet PC.

Market Breadth Numbers...

Impressive Breadth numbers. Nasdaq Advancing Volume 21 times Declining Volume. Market made a little bump higher in the last hour as it became apparent that there would be no selloff. Shorts decided to cover before the close. We need to see a few of these type days in a row to shift the sentiment to positive.

Market closes broadly higher....

Market recap: Stocks zoomed higher and closed at session highs after China reassured investors that it doesn't plan to sell its massive holdings of European debt. Advancers outnumbered decliners more than seven to one on heavy volume.

Dow +284 to 10258
Nas +81 to 2277
S&P +35 to 1103

Lincoln Mercury line to be dropped by Ford....

Mercury is set to join Pontiac, Saturn, Oldsmobile and Plymouth in the great junkyard in the sky, as Ford (F) prepares to kill its "forgotten" 70-year-old brand.

Hopefully they won't get rid of the Mercury girl (Jill Wagner) on their commercials...

I-Phones Being Used more by Businesses....

AT&T Inc (T) said on Thursday that 40 percent of its iPhone sales since the beginning of the year have been to business customers, suggesting that the phone is encroaching on an area dominated by Research in Motion's (RIMM) BlackBerry.

AT&T also generates almost half of its total revenue from business customers, said Ron Spears, the head of the company's business services, at an investor conference.

The company would not say how many iPhones it sold during that period.

Analysts estimate that AT&T, which started selling iPhone in 2007, has about 15 million iPhone users or 17 percent of its total customer base. RIM reported a total customer base of about 41 million for the BlackBerry in its most recent quarterly report.

Earnings Preview for Novell....

Novell (NOVL) is expected to report Q2 earnings after the market close on Thursday, May 27, with a conference call scheduled for 5 pm ET.

Guidance
The consensus estimate is 7c for EPS and $204.85M for revenue, according to First Call. A number of private equity firms have been "kicking the tires" on Novell after the company announced in March that it will review alternatives to enhance shareholder value, including a potential sale of the company. This comes after Elliott Associates' $2B bid was rejected as "inadequate". Elliott already owns 8.5% of Novell. Since then, the Wall Street Journal reported that 20 bidders have been eyeing the company. Last week was the deadline for interested parties to submit bids, but the auction is expected to take longer.

Novell has four separate businesses, each of which could be attractive to a rival technology company. Speculation is that it's unlikely that a tech company would bid for all of Novell. A private equity firm could break up Novell, and either sell off the pieces or run them as standalone businesses. Given this latest auction action, Q2 results will be irrelevant. Nevertheless, management provided Q2 guidance on their last earnings call for a non-GAAP operating margin of 12%-15% and revenue similar to Q1's $202.4M. Novell came in a bit light last quarter, so expectations aren't high for a Q2 upside.

MSFT NOT presenting at AAPL conference...

Microsoft (MSFT) uses its Twitter account to dispel speculation Steve Ballmer will be taking the stage at Apple's (AAPL) June 7 developer conference: "Steve Ballmer not speaking at Apple Dev Conf. Nor appearing on Dancing with the Stars. Nor riding in the Belmont. Just FYI."

Noon Update...

The stock market continues to trade near its session high as only a handful of names are weak with losses. In turn, stocks remain on track for their best single-session percentage gain in two weeks. Despite such an accomplishment, the stock market is up only slightly more than 0.5% week-to-date and down almost 8% month-to-date. Trading volume is strong this session. Advancing volume currently outnumbers declining volume by more than 10-to-1 on the Big Board.

DJ30 +213.19
NASDAQ +58.71
SP500 +25.35

Mortgage Rates Dropping...

The recent flight to safety in Fixed Income is driving down mortgage rates for the fifth straight week, to an average 4.78% for a 30-year fixed-rate loan, Freddie Mac reports.

What the Hell???

A Foxconn Technology worker tried to kill himself Thursday, becoming the 13th person to commit suicide or attempt to do so this year at the company, which makes high-tech products for industry giants such as Apple, Dell and Hewlett-Packard, state media said.

Police said the man survived after cutting himself in his dormitory room at the factory, the official Xinhua News Agency reported. It said the 25-year-old man, surnamed Chen, migrated from central Hunan province and began working at Foxconn two months ago.

The 12 previous suicide attempts at Foxconn Technology Group's operations in southern China involved workers who jumped from buildings. Two survived. Another worker killed himself in January at a factory in northern China.

On Wednesday night, a 23-year-old worker from the northwestern province of Gansu killed himself by leaping from a dormitory balcony. Hours earlier, Foxconn Chairman Terry Gou had led a media tour of the industrial park and promised to work harder to prevent more deaths. Gou said he couldn't sleep at night and dreaded answering his phone in off hours, fearing more news about deaths.

Gou said the company would do everything possible to prevent more deaths. Safety nets were being installed on buildings and more counselors were being hired. He also said all the employees were being divided into 50-member groups, whose members would watch for signs of emotional trouble within their group.

Labor activists accuse the company of having a rigid management style, a too-fast assembly line and overwork. Foxconn denies the allegations.

OMG....

Google has started a trading floor to manage its $26.5 billion in cash and short-term investments.

This strikes me as being quite funny...

Crystal was robbed....

Lee DeWyze won the 9th season of “American Idol” in the final episode for judge Simon Cowell. The ratings for “American Idol” will be down ~9% this season, which Fox Chairman Peter Rice said is “pretty good”, compared to other shows. Cowell plans to return to Fox next year with his new show, “The X Factor.”

Moody's still not out of the woods....

Greenlight’s David Einhorn is still shorting Moody's (MCO). Einhorn has been critical on Moody’s decision making process, and noted that S&P has some of the same problems. Einhorn also believes that the European debt crisis could also bring more problems for the rating agencies.

Monsanto down as Roundup patent expires...

Monthly chart on Monsanto doesn't look pretty since announcement that Roundup patent is expiring.

Disney axes the Soap Channel...

DIS will close their 10 year old cable channel SoapNet, which will be replaced by Disney Junior in 2012. Programming on the Disney Channel and ~24 Playhouse Disney international channels will be re- branded as Disney Junior next year.

I was wondering if anyone actually watched reruns of Soaps at night.

What up with Yahoo???

Stock is down fractionally this morning while the rest of Tech is rallying big time. You have to wonder about Carol Bartz directing F-Bombs at a reporter in a live interview on Tuesday.

There has to be some hidden pressure there....

Oil Rig Insurance rises....

WR Berkley (WRB) is boosting premiums on deep water oil rig insurance by ~40% after the large oil spill in the Gulf.

No surprise here, but at least you now have a name.

Austrailia may soften mine tax....

Australia may soften blow of mine tax – Australia left the possibility of concessions to its 40% super profits tax after newspapers said it would change the way the tax is calculated to give a little support to miners. The gov’t currently defines “super profits” as any return on assets above 5.3%, but that could be doubled to 12%.

This would be big, as many mining stocks have sold off hard since the tax was proposed. Stocks like Rio Tinto (RTP), Cliffs (CLF) and Freeport (FCX) should be beneficiaries.

Caterpillar sold out of mining equipment....

CAT - Mining equipment sold out until next year – Not even halfway through 2010, CAT has already sold out of some of its largest mining vehicles due to rising commodity prices and is now taking orders for 2011 delivery. Although the momentum was strong early this year, recent price drops in commodities over the past few weeks might suggest the rally is short lived.

Netapp gets two upgrades....

Netapp Inc. (NTAP) price target raised to $39 from $36; rating neutral at BOFA Merrill. Price target raised to $38 from $36; rating equal-weight at Barclays

Coinstar lowers forecast....

Coinstar Inc. (CSTR). The redbox owner sold its electronic payment services business to InComm for $40 million and cut its second-quarter forecast to account for the sale. The company now expects earnings from continuing operations of 28 cents to 32 cents a share, on revenue of $363 million to $383 million for the quarter.

Not sure why they reported this the way they did. The company IS receiving $40 Million in Cash...unless they made a bad deal, this is probably good news.

Earnings released last night....

Jo-Ann Stores Inc.(JAS) said its first-quarter profit more than doubled to $18.2 million, or 66 cents a share, from $8.6 million, or 33 cents, a year ago. Revenue rose 4.4% to $480.3 million from $460 million. Same-store sales increased 4.1% from a year earlier.

McKesson Corp. (MCK) said it raised the quarterly dividend by 50% to 18 cents a share. The dividend will be paid on July 1 to shareholders of record on June 10.

NetApp Inc. (NTAP) reported fiscal fourth-quarter income of $145.1 million, or 40 cents a share, compared with a profit of $68.4 million, or 21 cents a share, for the year-end period. Revenue rose to $1.17 billion from $879.6 million.

Jamba Inc. (JMBA), parent of the Jamba Juice smoothie retail chain, reported a first-quarter net loss of $7 million, or 13 cents a share. In the year-earlier period, Jamba lost $10.2 million, or 19 cents a share. Sales fell to $80.4 million from $88.8 million partly due to a lower store count.

Earnings due today....

Costco (COST) is expected to report earnings of 66 cents a share in the first quarter, according to analysts surveyed by FactSet Research.

Tiffany (TIF) is forecast to report earnings of 35 cents a share in the first quarter.

J.Crew (JCG) is projected to report earnings of 57 cents a share in the first quarter.

H.J. Heinz Co. (HNZ) is likely to report earnings of 64 cents a share in the first quarter.

Guess Inc. (GES) is expected to report earnings of 49 cents a share in the first quarter.

Jones Soda to be sold in WalMart stores....

Jones Soda (JSDA) up a whopping 62% premarket after inking a deal with Wal-Mart (WMT) to sell its products in WMT's 3,800 U.S. stores. Jones says customers' biggest complaint had been "that people can’t find Jones Soda near them."

JNJ could face criminal charges...

FDA is considering criminal charges against Johnson & Johnson (JNJ) following its wide-ranging recall of children's Tylenol and other medicines.

Costco Beats....

Costco beats by $0.02, reports revs in-line (COST) 55.98 : Reports Q3 (May) earnings of $0.68 per share, $0.02 better than the Thomson Reuters consensus of $0.66; revenues rose 12.5% year/year to $17.78 bln vs the $17.62 bln consensus. Comparable sales for 3Q increased 10%.

Good Morning...

At 8:35 am:

S&P futures vs fair value: +15.00. Nasdaq futures vs fair value: +31.30. Stock futures are off of their morning highs, but they continue to trade with strength in the wake of the latest dose of data. The second estimate for first quarter GDP showed that the economy expanded at an annualized rate of 3.0%, which is down from the 3.2% increase that came with the advance estimate.

Final Market Breadth Numbers...

Breadth was positive all day until the final hour. ...you can see the Nasdaq Declining Volume overtook Advancing Volume. We are in one of those periods where no one has any conviction...so traders are opening positions premarket and closing them out before the market closes. Kind of irritating.

What was that????

The market sells off in the last hour to close down on the day. Program trading is in high gear!!!

Dow - 69 to 9974
Nas - 15 to 2195
S&P -6 to 1068

Ulta Salon, Cosmetics....

Here's another favorite stock. Nice weekly chart. Stock is climbing again today despite getting a downgrade this morning from Thomas Weisel.

J Crew Downgraded at BMO....

J. Crew Group may have a solid following among consumers, with a strong product lineup and brand identity, but BMO Capital said Wednesday that the retailer may have maxed out its growth opportunities for now.

THE OPINION: Analyst John Morris said J. Crew has delivered above-average returns recently as it captured market share from department stores but its strengths are already recognized in its stock price. And the company faces a tough second half of the year if the overall retail business slows.

THE STOCK: J. Crew's stock fell $1.96, more than 4 percent, to $42.73 in midday trading Wednesday. Morris lowered his rating on the company to "Market Perform" from "Outperform" and lowered his price target from $55 to $48. He also lowered its 2010 guidance to $2.45 from $2.50 and 2011 estimate to $2.82 from $2.92.

Apple overtakes Microsoft in Market Cap....

Apple, the maker of iPods, iPhones and iPads, overtook Microsoft, the computer software giant, on Wednesday to become the world’s most valuable technology company.

In intraday trading shortly after 2:30 p.m., Apple shares rose 1.8 percent, which gave the company a value of $227.1 billion. Shares of Microsoft declined about 1 percent, giving the company a market capitalization of $226.3 billion. (Let's see if it holds up).

The only American company valued higher is Exxon Mobil, with a market capitalization of $282 billion.

Why the VMWare move???

VMware Inc. shares rose Wednesday after an analyst upgraded the virtual desktop service provider, saying the company is in a better position than many other software companies.

THE SPARK: In a note to investors Wednesday, RBC Capital Markets analyst Robert Breza upgraded VMware shares to "Outperform" from "Sector Perform" and raised his price target by $12 to $75.

THE BIG PICTURE: Companies are shifting toward virtualization because it helps them cut data center costs. Instead of needing one server for each task, software such as that offered by VMware lets one server computer do many more things simultaneously. Virtualization is also extending beyond servers in data centers to applications and even whole desktops.

THE ANALYSIS: Breza said VMware is "one of the best-positioned software companies" and he expects it to gain from several technology trends in the next several years, such as growth in cloud-computing applications. He also thinks its enterprise license agreement is "under-appreciated by investors" and could result in the company raising its earnings estimates this year.

NCR continues to go after DVD market....

Blockbuster's DVD vending machines will be installed at more than 100 grocery stores in Texas.

NCR Corp., which operates the rental kiosks for Blockbuster, said Wednesday that the machines will come to 105 Tom Thumb and Randalls stores in Dallas, Austin and Houston by the end of May as replacements for existing DVDPlay kiosks.

NCR bought DVDPlay in December, and since then has been working to replace DVDPlay kiosks with Blockbuster Express kiosks.

The kiosk rollout is part of Blockbuster's effort to catch up with Redbox, the Coinstar Inc. subsidiary that pioneered $1-per-night rentals from vending machines.

Market still up, but fading....

Stocks are paring their gains on Wednesday after investors bought shares of beaten-down companies following recent losses, and after new home sales rose last month to their highest in almost two years.

SXC Health Solutions...

SXCI is another stock I love.

SXC Health Solutions Corp. provides pharmacy benefit management (PBM) services and healthcare information technology solutions in North America. Very strong earnings and revenue growth.

VM Ware Chart is looking strong....

The stock is now up 4.00 today to $65.30. You can see it is breaking out to New Highs.

Amazon Kindle Losing momentum...

AMZN – from WSJ Heard on the Street; the Kindle is losing momentum to Apple and its
iPad and Touch; AMZN mgmt appeared to lower expectations for the Kindle at its
shareholder meeting Tues; AMZN valuation still rich.

New Home Sales Better than Expected...

Apr. New Home Sales: +14.8% to 504K vs. 425K expected, 439K (revised) in March. Months' supply 5 vs. 6.7 prior. Median price $198,400.

Here's a Strange Story for you....

Apple Inc. said Wednesday that it is independently investigating how one of its Taiwan suppliers is dealing with nine suicides among its workers in China.

The object of the investigation is Hon-Hai Precision Industry Inc., which does business as Foxconn and assembles Apple (NASDAQ:AAPL) products including the iPhone and MacBook. It also does work for Dell Inc., Sony Corp. and Nokia Corp.

The Apple investigation comes after nine Hon-Hai workers in Shenzhen died from falls at buildings that have been confirmed as suicides. This has raised concerns about working conditions in the factories.

Hon Hai founder and chairman Terry Gou on Wednesday outlined a series of safety precautions the company is instituting, including installing 1.5 million square meters of safety nets around the outsides of all worker dormitories.

He has rejected characterizations of his factories as "sweat shops" and said it is difficult to manage a work force of 800,000 people, but the company is taking steps.

Upcoming Earnings...

Wed May 26:
After the close (NetApp, Verifone);

Thurs May 27:
Before the open (Lenovo, Genesco, Heinz, Big Lots, Costco);
After the close (Blue Coat Systems, J. Crew);

Fri May 28:
Before the open (Mentor Graphics)

Toll Brothers with Mixed Results...

Toll Brothers (TOL):
Mixed result here as the earnings miss, revenue miss, gross margin miss, higher charges, and lower closings; however, The new orders number was well ahead of the street and the company's outlook was pretty upbeat.

FQ2 EPS of -$0.24 misses by $0.01. Revenue of $311M (-21.9%) vs. $322M.

Top Hedge Fund Holdings....

Every quarter, Goldman Sachs puts out the list of the top holdings owned by hedge funds. The top holdings are what you would expect: Apple (AAPL), Bank of America (BAC), Microsoft (MSFT), Google (GOOG), and JP Morgan (JPM).

The 12 new holdings on the list are:

CIT Group (CIT)
CF Industries (CF)
Aclon (ACL)
Coca Cola Enterprises (CCE)
Kraft (KFT)
Xerox (XRX)
Assured Guaranty (AGO)
Baidu (BIDU)
Equinix (EQIX)
Gilead Sciences (GILD)
Liberty (LBTYA)
News Corp (NWSA)

American Eagle Reports In-Line....

American Eagle Outfitters (AEO): Q1 EPS of $0.17 in-line. Revenue of $659.5M (+7.8%) vs. $656M.

Shares -6.1% premarket.

Futures Point to Higher Opening...

Stock futures are near their morning highs in the minutes that follow the latest dose of durable goods orders data. Durable goods orders for April spiked 2.9%, which is much stronger than the 1.5% increase that had been widely expected.

Mortgage Applications up....

MBA Mortgage Applications: +11.3% vs. -1.5% last week.

Thirty-year fixed mortgage rate decreased to 4.80% from 4.83%.

Closing Market Breadth Figures

Quite a reversal from how we looked in the morning. At one point Declining Volume on the NYSE outnumbered Advancing Volume by a 15-1 ratio.

Short-Sellers head for the exits....

Obvious short covering rally in the last hour, as traders fear that we may get some sort of stimulus announcement from European central banks, overnight.

The S&P finishes positive after one of the nastiest starts I've seen in a while.

We need some follow thru tomorrow to crush those shorts who remain.

Too many Bears....

This rush to jump on the bearish bandwagon is not typical of what happens at major market tops, Mark Hulbert says; such tops are far more often characterized by a more stubborn bullishness. In any case, it's rare for the advisory consensus to be right about the market's direction.

He's right.

A Major Afternoon Rally...

Dow only down 50 points with 25 minutes left.

Some Insider Buying....

Some interesting insider buying amid the bloodshed: Ormat Technologies (ORA), Tupperware (TUP), Comcast (CMCSA) and JB Hunt (JBHT), companies that are good economic barometers whose stocks already looked cheap from a fundamentals level even before recent insider activity.

Netflix Target Raised....

FBR Capital analyst Heath Terry this morning repeated his Outperform rating on Netflix (NFLX), while lifting his price target on the shares to $130, from $100.

“We continue to believe that Netflix is in the sweet spot of its growth phase: closing rental stores and expanding streaming options are driving significant subscriber growth, while the impact of rising content costs is more than offset by declining fulfillment costs,” he writes.

In particular, Terry says that the success of the company’s Apple iPad app and the coming addition of apps for the iPhone and iPod Touch, “should drive meaningful incremental subscriber growth, lower churn, and lower subscriber acquisition costs.”

Concludes Terry: “With growth accelerating in the quarters ahead and consensus expectations still withinmanagement’s typically conservative guidance, we believe that the potential for upside to consensus expectations far outweighs the risk to the down side.”

Of course, the focus today is on the macro, not the micro. Ergo, NFLX is down $1.67, or 1.6%, to $99.95.

Lunchtime update....

12:30 pm : Trade remains choppy and generally listless, but stocks continue to trim their losses. Despite such a feat, the major equity averages are still down markedly for this session. This session's slide, on top of those registered in recent weeks, has put the S&P 500 on pace for a monthly loss of more than 10%, which would challenge the 11% drop in February 2009 for the stock market's worst monthly performance of the past 15 months.

Looks to me like we are vastly oversold....

Transocean's Legal Action "Inappropriate"...

As senators press the DOJ to investigate Transocean (RIG +1.2%), Associate Attorney General Thomas J. Perrelli says the rig owner's legal action to limit its liability to $27M is "inappropriate" and that the administration thinks it can recover "every dime" of taxpayer expense from the BP spill.

Here's the News...

The U.S. Food and Drug Administration approved Genzyme's(GENZ) Lumizyme as a treatment for Pompe disease, a rare genetic disorder, the agency said Tuesday in a statement.

The FDA decision to approve Lumizyme came earlier than expected.

Currently, the only other treatment for Pompe disease available in the U.S. is Myozyme, also made by Genzyme.

In Pompe disease, a gene mutation prevents the body from making an enzyme, necessary for proper muscle functioning. Without the enzyme action, glycogen builds up in the cells and, ultimately, weakens the heart and muscles.

Genzyme spikes...no news yet...

Genzyme (GENZ) stock is spiking +2.34 to $50.70 all of a sudden.

No news yet...stay tuned.

Verizon's version of I-Phone will hurt AT&T...

AT&T could lose as many as 40% of iPhone users once Verizon starts selling a version of
the phone, according to Davenport analyst F. Drake Johnstone.

Upcoming Earnings...

Tues May 25:

Earnings after the close:
TIVO

Wed May 26:

Earnings before the open:
Cable & Wireless
Burberry
SCMR
TOL
BMO

Earnings after the close:
NTAP
PAY
AINV

Crude Prices Tumbling...

July crude oil has traded in negative territory all session and hit morning lows of $67.15 per barrel around 9:00am ET. The energy component has since recovered a portion of its losses, but remains well in the red at $68.00 per barrel, down 3.1%.

Just released: Home Price Index....

The FHFA's Home Price Index for March increased 0.3%, which is a bit of a surprise since a flat reading that had been widely expected. It also marks an improvement from the 0.4% decline for the prior month.

Consumer Confidence is High....

May Consumer Confidence Index: 63.3 vs. 58.8 expected and 57.7 in April.

Consumer confidence posted its third consecutive monthly gain, and although still weak by historical levels, appears to be gaining some traction.

NCR looks to compete with Coinstar....

The nation's biggest ATM maker wants to compete with Coinstar.

NCR (NCR), the company that makes automatic teller machines and kiosks is ready to do some transacting for themselves.

They've already rolled out DVD-kiosks across the United States to prove they're serious... desiring a piece of an industry expected to grow 37% this year to $1.3 billion.

But don't run out and risk the house on these guys just yet. You will want to play it safe.

We're still slightly concerned that they don't have any agreements with studios... yet. But that shouldn't be a long-term issue, as they plan to offer something that Coinstar does not: sales.
NCR wants to "use the kiosks to sell DVDs, giving the studios a chance to recoup lost DVD sales revenue and possibly encourage impulse DVD purchases,” according to CNN.

And that alone could prove to be a gold mine.

Toyota suspends sales of Lexus sedans...

Toyota Motor Corp. (TM). The automaker said it had temporarily suspended sales of certain Lexus LS sedans following a steering-related recall. The decision announced on Monday marks the third time in recent months that Toyota has told dealers to stop selling vehicles in the wake of a recall.

From our Market Strategist....

As noted many times, the major difference between today and fall 2008/winter 2009 is the recovering American economy. According to a survey by the National Association for Business Economics, the American economy is expected to expand by 3.2% this year and next. In February this same group projected a 3.1% growth rate.

If the economy does grow at this pace, this would be the strongest consecutive periods of expansion since 2003 and 2004. Wow!

Yesterday stocks were again volatile. In my view the economic data was largely dismissed and all focused upon the happenings in Europe. What will happen today? There is more housing data, a regional manufacturing index, inflation and confidence surveys released. All can influence trading.

Last night the foreign markets were down. London was down 2.66%, Paris down 3.47% and Frankfurt down 2.76%. Japan was down 3.06% and Hang Sang down 3.47%.

The Dow should open sharply lower on mounting concern that Europe debt crisis will endanger the global recovery. The Korean situation is also increasing nervousness. There are reports that North Korea ordered its troops last week to prepare for combat. The 10-year is up 21/32 to yield 3.12%.

Kent Engelke
Chief Economic Strategist/Managing Director
Capitol Securities Management

On the positive side....

The delinquency rate for auto loan payments dropped markedly in Q1, falling to 0.66% from 0.83% Y/Y. Similar improvements in credit card and mortgage delinquency rates suggest consumers are finally starting to climb out from under their debt loads.

PVH beats but guides lower....

Phillips-Van Heusen Corp (PVH). The company beat Wall Street estimates in its first quarter, but a second quarter profit forecast lighter than some analysts anticipated. The company's adjusted earnings was 83 cents per share -- above the 79 cents per share expected, on average, by analysts, according to Thomson Reuters.

DSW Beats Expectations...

DSW Inc. (DSW). The shoe retailer on Tuesday posted first-quarter profit that beat market expectations, boosted by strong merchandise margins, and the shoe retailer backed its 2010 earnings view. The company reported net income of 67 cents a share up from 16 cents a share, a year earlier.

Dell unveils its version of the "IPad"

Dell (DELL) unveils the Streak this morning, an Android-based tablet with a 5-inch screen. The Streak goes on sale in the U.K. in June, and in the U.S. later this summer, as Dell makes its assault on the tablet market with its 'mini-iPad.'

AutoZone Beats....

AutoZone Inc. said Tuesday its net income rose 17 percent in its fiscal third quarter on strong sales of automotive replacement parts and several new store openings.

The results breezed past analyst projections.

The company said its net income rose to $202.7 million, or $4.12 per share, in the three months ended May 8 from $173.7 million, or $3.13 per share, a year ago.

Revenue rose 10 percent to $1.82 billion from $1.66 billion a year ago.

Analysts surveyed by Thomson Reuters expected earnings of $3.59 per share on $1.71 billion in sales, on average.

Shares of AutoZone closed Monday at $184.25, up 17 percent for the year.

Futures look ugly....

Ahead of the opening bell, Dow futures are down 221, or 2.2 percent, to 9,822. Standard & Poor's 500 index futures are down 27.90, or 2.6 percent, to 1,043.10, while Nasdaq 100 index futures are down 42.00, or 2.3 percent, to 1,770.50.

Tuesday's expected sell-off follows a sharp, late-session drop Monday. The Dow lost 80 points in the last 15 minutes of trading Monday to close down nearly 127 points. The index is now trading at its lowest levels since February.

More on Medtronic....

NEW YORK (AP) -- Medtronic Inc., the world's largest medical-device company, says its fourth-quarter profit surged from results a year ago that had been depressed by a large license payment.

Medtronic says its revenue rose 10 percent, helped by higher sales of implantable heart devices as rival Boston Scientific suspended its U.S. sales of such devices for a month. Boston Scientific made changes to some of its devices without telling regulators.

Medtronic, which is based in Minneapolis, says it earned $954 million, or 86 cents per share, in the quarter ended April 30. That's up from $103 million, or 9 cents per share.

Medtronic says its earnings per share was 89 cents per share excluding one-time costs. That is a penny a share higher than analysts expected.

Its revenue rose to $4.2 billion. Analysts expected $4.19 billion in revenue.

Earnings Before the Market....

Trina Solar (TSL): Q1 EPS of $0.66 beats by $0.05. Revenue of $337M (+155%) vs. $330M.

Medtronic (MDT): FQ4 EPS of $0.90 beats by $0.02. Revenue of $4.2B (+9.6%) in-line.

Mad Money Recap...

Here's what Jim Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Monday evening.

Macy's (M): "Everyone knows I like Macy's, but not at the exclusion of TJX Companies (TJX). I'm going to say buy TJ Maxx and don't buy Macy's."

World Wrestling Entertainment (WWE): "If you look at the combination of the dividend and the stock, you've got a winner."

Caterpillar (CAT): "I feel that this is still not at the yield I want. I like it at 3.5% yield. Let's wait a couple more points."

MGM Mirage (MGM): "I think that Vegas is having another downturn. Macau is on fire, though. I'm a seller on MGM and a buyer of Wynn Resorts (WYNN)."

Vodafone Group (VOD): "I don't have a catalyst there. I like Verizon (VZ)."

Hitachi (HIT): "I think Japan is a no-growth environment and I'm not a buyer."

WalMart to cut I-Phone Prices in Half...

Wal-Mart says it's cutting the price of the most up-to-date iPhone in half. That's another sign Apple is getting ready to unveil a new model.

Wal-Mart says that starting Tuesday the iPhone 3GS with 16 gigabytes of storage space will cost $97 with a two-year contract with AT&T. It currently costs $197.

Leaked prototypes for an updated iPhone surfaced on blogs recently. The price cut could signal retailers are clearing the shelves to make room for a new Apple smart phone.

Apple declined to comment on whether it's planning to release a new iPhone soon, or whether it will also sell the iPhone 3GS for less.

The company's annual developer conference kicks off June 7. Apple unveiled the iPhone 3GS at the same event last year.

Medtronic to Report Tuesday before the open...

Medtronic (MDT) is expected to report Q4 earnings on Tuesday, May 25 before the market open with a conference call scheduled for 8 am ET.

Guidance:
Analysts are looking for EPS of 88c on revenue of $4.19B. The consensus range is 86c-91c for EPS, and $4.11B-$4.27B for revenue. The company raised the lower end of its FY10 EPS guidance to $3.20-$3.22 in late February.

Positive catalysts for Medtronic this quarter include the product recalls that its competitor Boston Scientific (BSX) is currently experiencing, expanding global sales in the ICD market, domestic and international demand for the Endeavor stent, and sales of its new heart valve products. Negative catalysts for the quarter may be seen coming from a maturing domestic ICD market with slowing sales growth.

Market Recap....

Market recap: Stocks plummeted in the final half-hour of trading, knocked down by concerns about Europe's Banks and Washington's Lawmaking.

NYSE decliners outnumbered advancers two to one.

At the close:
Dow -1.27% to 10064.
S&P -1.31% to 1073.
Nasdaq -0.69% to 2214.
Treasurys: 30-year -0.33%. 10-yr -0.09%. 5-yr -0.08%.
Commodities: Crude +0.03% to $70.06. Gold +1.44% to $1193.00.
Currencies: Euro -1.51% vs. dollar. Yen -0.67%. Pound -0.17

Will Amazon buy out Netflix???

For what it's worth, a recent poll by TheStreet.com suggests that Netflix will not be bought by
Amazon.

http://www.thestreet.com/_yahoo/story/10764150/1/netflix-wontbe-
bought-by-amazon-poll-says.html

Disney's Toy Story 3...Coming June 18

Toy Story 3 will be the first film to use Dolby Surround 7.1 for sound effects, an
improvement over the current 5.1 setup.

The film will debut on June 18th.

IBD Top 100 Deletions...

J Crew (JCG)
Tractor Supply (TSCO)
Fossil Inc. (FOSL)
Whirlpool (WHR)
Phillips Van Heusen (PVH)
TRW Automotive (TRW)

Limewire in Trouble...

LimeWire creator Mark Groton is profiled in the NYT, he is facing up to $450M in damages for copyright infringement.

http://www.nytimes.com/2010/05/24/business/media/24limewire.html?ref=media

IBD Top 100 Additions....

New to the Top 100:

Dollar Tree (DLTR)
Aeropostale (ARO)
Polaris Industries (PII)
O'Reilly Automotive (ORLY)
Family Dollar (FDO)
Life-time Fitness (LTM)
DSW Shoe Warehouse (DSW)
Ann Taylor (ANN)
Ross Stores (ROST)
IMAX Theatres (IMAX)
Cheesecake Factory (CAKE)
Bed, Bath and Beyond (BBBY)

Stocks to Watch This Morning

• American International Group Inc. (AIG). U.S. Treasury is re-looking at plans to float the Asian unit of AIG in case a bid by Prudential (PUK) to buy the AIA fails, two British newspapers reported on Sunday. Separately, the company welcomed the Justice Department decision, not specifically identified, in which published reports indicate that federal prosecutors will not charge company executives over credit default swaps.

• BHP Billiton Ltd/Plc (BHP). The global miner wants to take advantage of the current market weakness and is looking worldwide for acquisition opportunities to grow its business, a senior company official said on Monday. The company also said that the recent giant oil spill in the Gulf of Mexico has brought some delays to its projects and could hit its production growth forecast of 10 percent for the year ending June 10, and estimates of 8-10 percent next year. Separately, the company set out its case for changes to Australia's proposed new mining tax in talks with government officials on Friday, saying any tax should be based on the value of commodities produced. Meanwhile, BHP said it still sees returns on its petroleum operations in Western Australia and the Gulf of Mexico as competitive, amid tax and regulatory debates affecting the two regions.

• British Petroleum (BP). The British oil major sharply reduced its estimate on Monday of how much oil it is siphoning off each day from a ruptured well in the Gulf of Mexico that has been spewing oil for a month and threatening ecological disaster. Separately, BP will press ahead with a series of short-term options, including one this week, to try to plug its gushing Gulf of Mexico oil well, and these will be attempted before it completes an expected relief well in August, BP Managing Director Bob Dudley said on Sunday.

• Burger King Holdings (BKC). The hamburger chain’s franchisees have won the right to argue in court that the company acted in bad faith when it added its double cheeseburger to its $1 Value Menu.

• Campbell Soup Co. (CPB). The largest soup maker on Monday posted higher sales in its key U.S. soup market, helped by increased promotional spending. The company's third-quarter earnings were 54 cents a share, before items.

• EMC Corp. (EMC). The company's shares, which have already jumped 50 percent in the past year, could climb even more fueled by a recovering economy and strong demand for storage capacity from its corporate customers, according to a story in Barron's.

• Equity One Inc. (EQY). The shopping center owner said on Sunday it would buy Capital Shopping Centres Group Plc's U.S. unit in a $258.3 million deal, helping the company expand into California. The transaction will give British company 4.1 million shares of Equity One common stock and 10.9 million joint venture units.

• First Solar (FSLR). The producer of solar modules, which plans to build the world's largest solar power plant in Inner Mongolia, could hear from China in coming months the amount of subsidy it will get, the company's president said.

• Fluor Corp. (FLR). The company on Monday said it won a series of contracts from Ma`aden and Alcoa (AA) joint venture to provide program management consultancy, engineering, procurement and construction management services for projects related to the development of the integrated Ras Az`Zawr aluminum complex. The company said it expects to book about $3 billion covering four separate scopes of work.

• Marriott International Inc. (MAR). The largest U.S. hotel chain aims to double the number of Marriott brand hotels in China within five years and intends to introduce a lower-priced hotel brand in the near future. Marriott, which currently manages 46 hotels in China, expects to have 60 hotels by the end of the year and 90 in five years, making China its second-largest market by number of hotels, Arne Sorenson, Marriott's president, said in Shanghai on Monday.

• Morgan Stanley (MS). China's securities regulator has started to review the company’s application to sell its roughly $1 billion stake in Chinese investment bank China International Capital Corp, state media reported on Monday. If the application process goes smoothly, Morgan Stanley could obtain regulatory approval to sell its 34.3 percent stake in CICC within around three months, the official Shanghai Securities News said, citing unnamed sources.

• News Corp. (NWSA). An Italian court on Monday rejected an appeal against the sale of satellite TV soccer rights to News Corp unit Sky Italia, averting possible financial problems for Italian clubs. The appeal was filed by Conto TV, a small satellite operator. Conto claimed the way Serie A rights for the next two seasons were sold to Sky Italia was unfair.

• Rio Tinto (RTP). The global miner described Australia as its top sovereign risk on Monday and said it was reviewing all investments there as its raised pressure on Canberra to overhaul its planned new mining tax.

• Royal Dutch Shell (RDSa). The oil major has started commissioning the first phase of its multi-billion dollar Pearl gas-to-liquids project in Qatar, an executive of the plant said on Monday. The GTL plant, which Shell describes as the world's largest energy project, has a price tag of up to $19 billion.

• Sherwin-Williams Co. (SHW). The largest U.S. paint maker on Monday said it will buy wood coatings maker Becker Acroma Industrial Wood Coatings for an undisclosed sum, in a bid to expand its global footprint. The deal, subject to regulatory approvals, is slated to close in the third aquarter

• Sony Corp. (SNE). The company’s CEO is set to meet rival Samsung Electronics, for possible alliances, as the Japanese consumer electronics maker aims to turn its TV business profitable with aggressive sales targets.

• Sprint Nextel (S). Shares of the carrier could rise to about $6 a share, helped by the introduction of a mobile phone that works on it's new high-speed network, according to business weekly Barron's. The newspaper said in its May 24 edition that Sprint's total subscriber base could grow as it takes the lead with a phone that runs on its "4G" network, which it promises will deliver speeds up to 10 times faster than existing networks.

• UAL Corp. (UAUA). A U.S. Senate subcommittee is set to examine the proposed airline deal between the company’s United Airlines and Continental Airlines (CAL) on Thursday that will study the implications for airline consumers.

• Verizon Communications Inc. (VZ). The company won final U.S. regulatory approval on Friday to sell 4.8 million rural phone lines to Frontier Communications Corp (FTR) for about $5.25 billion in stock.

• Walt Disney Co. (DIS). Billionaire Ron Burkle and Hollywood producer Harvey Weinstein on Friday said they were continuing efforts to buy the company's Miramax Films, playing down media reports that the long-gestating deal had fallen through.

• Whirlpool Corp. (WHR). The Indian unit of global appliances maker plans to hike product prices by 2-3 percent in the next 2 months, a top official said. The firm has also revised its investment in India to 4 billion rupees over 3 years, starting this fiscal. The firm also plans to launch a new range of higher end washing machines by September this year and boost distribution.