Friday's Trading Summary...

U.S. Markets:

Dow +96.72 (+0.79%)
Nasdaq +3.57 (+0.16%)
S&P 500 +10.58 (+0.79%)

News That Moved the Market:

Scary Session Finishes With Happy Ending. With little news after Thursday's disastrous Philly Fed figures, the markets drifted lower throughout the morning before finding support in the afternoon. In the last minutes of the session, CNBC reporter Charles Gasparino announced that a source had told him a bailout plan for troubled bond insurer Ambac (ABK, +16.0%) was close to being completed and could be announced early next week. Though the details were sketchy, MarketWatch added the plan may include eight banks that are major counterparties to Ambac. The list includes Citigroup (C, +0.3%), Barclays (BCS, +3.4%), UBS (UBS, +3.0%), and Wachovia (WB, +2.9%), among others. The markets shot up on the news, with the S&P gaining 2% after the announcement. The deal is not complete and could fall apart, but if the deal is announced, investors would feel as if a major disaster would have been averted and could start putting money back in financials.

Weak Outlook At Intuit. Intuit Inc. (INTU, -9.2%), maker of small business software such as QuickBooks and TurboTax, announced fiscal second quarter results which were in-line with analysts' forecasts, however, the company lowered its fiscal third-quarter EPS estimates. There were some interesting comments make by CEO Brad Smith: "Small businesses are out there competing in this market and the small business customers we serve are very much like consumers… A lot of small businesses today will operate their business with lines of credit, credit cards, home equity loans, and we know the condition there."

Quick Tics:

Fannie Mae (FNM, -0.9%) and Freddie Mac (FRE, -4.1%) were both downgraded at Merrill Lynch citing bad business conditions.

Next week's important economic figures include PPI (Tuesday), Durable Goods (Wednesday), Preliminary GDP (Thursday), and Personal Income and Outlays (Friday).

Monday's Notable Earnings:

Nordstrom (JWN) After CloseLowe's Companies (LOW) Time Not Supplied

Economic Events:

10:00 AM: Existing Home Sales

Stocks to Watch on Monday....

Fashion specialty retailer Nordstrom Inc. (JWN) is expected to report fourth-quarter earnings of 90 cents a share, according to analysts polled by FactSet Research.

Lowe's Companies (LOW), the second-largest home improvement retailer in the world, is projected to report fourth-quarter earnings of 25 cents a share.

Sotheby's Holdings, Inc (BID) is forecast to post earnings of $1.49 a share in the fourth quarter.

LDK Solar Co. (LDK), manufacturer of multicrystalline solar wafers, is expected to report fourth-quarter earnings of 41 cents a share.

FirstEnergy (FE), a diversified energy company, is forecast to report earnings of 94 cents a share in the fourth quarter.

Shanda Interactive Entertainment (SNDA), a China-based interactive entertainment media company, is estimated to post earnings of 45 cents a share in the fourth quarter.

Tesco (TESO), manufacturer of technology-based solutions for the upstream energy industry, is likely to report earnings of 22 cents a share in the fourth quarter.

After Friday's closing bell, Genentech Inc. (DNA) said the U.S. Food and Drug Administration granted an accelerated approval for Avastin, in combination with paclitaxel chemotherapy, for the treatment of patients who have not received chemotherapy for their metastatic breast cancer. Accelerated approval means that the FDA must still review data on the drug before granting full market approval. The approval is based on a Phase III study that showed that Avastin in combination with paclitaxel chemotherapy resulted in a 52% reduction in the risk of disease progression or death. Avastin is already FDA-approved for colorectal cancer and non-small-cell lung cancer.

How to Accept an Oscar....

Whether you're accepting an Oscar or any other award, preparation is the key to being quotable. Toastmasters International President Chris Ford says, "Every acceptance speech should demonstrate gratitude, recognition and sincerity -- and good delivery." He offers the following tips for adding rhythm and pacing to your award acceptance speech:

-- Write your speech as a script, and memorize it!

-- Pause, smile and count to three before saying anything. ("One one-thousand, two one-thousand, three one-thousand. Pause. Begin.)

-- Begin by addressing the audience. It buys you time and calms your nerves. Remember, the audience is rooting for you.

-- Practice, practice, practice! Rehearse with a timer and allow time for the unexpected.

-- Control filler words (ums and ahs; "you knows"). To do so, see above points: Practice, pause and breathe.

-- Keep names to a minimum and get them right!

-- Include a brief but touching anecdote or little-known fact regarding the role or job you are recognized for.

-- Mainly, your acceptance speech should represent you -- as a professional and as a person.

-- Concentrate on your message. You have important thoughts to convey, so focus on your speech, not on the audience.

-- Make your last line expendable, in case you are cut off.

Trading Resumes in Genentech....

The stock is up 6.25 to $78 in after market trading...

Reason For Late Move....

Ambac Bailout May Be Announced Next Week
New York State Insurance Department's plan to bail out troubled bond insurer Ambac Financial could be announced Monday or Tuesday, reports CNBC's Charlie Gasparino, citing conversations with "bankers working on the deal."

FDA Approves Genentech's Avastin Drug...

Genentech, Inc. (NYSE:DNA) today announced that the U.S. Food and Drug Administration (FDA) granted accelerated approval for Avastin(R) (bevacizumab), in combination with paclitaxel chemotherapy, for the treatment of patients who have not received chemotherapy for their metastatic HER2-negative breast cancer.

This is huge surprise for Genentech...

Genentech Stock Halted....

DNA is halted with news pending.

It last traded at $71.60

Stocks Turn Green....

The Dow Jones Industrial Average recovers from a triple-digit decline to trade positive on news of a potential bailout of troubled bond insurer Ambac. Stocks had been lower most of the day amid nervousness about the economy and downgrades of federal home lenders Fannie Mae and Freddie Mac.

Today's Downgrades....

Agnico-Eagle (AEM) by Salman to Hold from Buy

Barrick Gold (ABX) by UBS to Neutral from Buy

Best Buy (BBY) by Morgan Stanley to Underweight from Equal Weight

ChoicePoint (CPS) by GARP to Neutral from Buy

Fannie Mae (FNM) by Merrill Lynch to Sell from Neutral

Freddie Mac (FRE) by Merrill Lynch to Sell from Neutral

Freeport-McMoran (FCX) by Desjardins to Hold from Buy

Gilead (GILD) by Sanford Berstein to Mkt Perform from Outperform

Goldcorp (GG) by R James to Mkt Perform from Outperform

Goldcorp (GG) by Salman to Hold from Buy

Kinross Gold (KGC) by Genuity to Hold from Buy

Kinross Gold (KGC) by UBS to Neutral from Buy

Nicor Inc (GAS) by Baird to Neutral from Outperform

Today's Upgrades...

American Equity (AEL) by KeyBanc to Buy from Hold

Bristow Grp (BRS) by C. Suisse to Neutral from Underperform

DCP Midstream (DPM) by Wachovia to Outperform from Mkt Perform

DirecTV (DTV) by Cowen & Co to Outperform from Neutral

Discover Fnl Svcs (DFS) by Morgan Stanley to Overweight from Underweight

Dynavax Tech (DVAX) by Oppenheimer to Outperform from Perform

Health Management (HMA) by Raymond James to Mkt Perform from Underperform

Hillenbrand (HB) by Hilliard Lyons to Buy from Neutral

ImClone Sys (IMCL) by Cowen & Co. to Outperform from Neutral

Switch & Data (SDXC) by Raymond James to Strong Buy from Outperform

Williams Cos (WMB) by RBC to Outperform from Sector Perform

Earnings Reports Due on Monday....

American Tower Corp. (AMT) 4Q .08 6:00AM
Atlas Pipeline Partners L.P. (APL) 4Q .62 AMC
China TechFaith Wireless Commun Tech (CNTF) 4Q .04 AMC
Donaldson Co. Inc. (DCI) 2Q .42 AMC
EXCO Resources Inc. (XCO) 4Q .06 AMC
FirstEnergy Corp. (FE) 4Q .94
Grant Prideco Inc. (GRP) 4Q 1.09
Greatbatch Inc. (GB) 4Q .22 4:00PM
GulfMark Offshore Inc. (GLF) 4Q 1.13 6:00AM
Henry Schein Inc. (HSIC) 4Q .82 BMO
Hilb Rogal & Hobbs Co. (HRH) 4Q .55 AMC
Human Genome Sciences Inc. (HGSI) 4Q (.54) AMC
Keryx BioPharms Inc. (KERX) 4Q (.44)
LDK Solar Co. Ltd. (LDK) 4Q .41 AMC
Lowe's Cos. (LOW) 4Q .25
Nationwide Health Ppties Inc. (NHP) 4Q .33 AMC
Nordstrom Inc. (JWN) 4Q .90
ONEOK Inc. (OKE) 4Q .94 AMC
ONEOK Partners L.P. (OKS) 4Q 1.20 AMC
Orient Express Hotels Ltd. (OEH) 4Q .20 AMC
Perfect World Co. Ltd. (PWRD) 4Q .28 BMO
Shanda Interactive Entertain Ltd. (SNDA) 4Q .45 AMC
Sirtris Pharms Inc. (SIRT) 4Q (.34) AMC
Tesco Corp. (TESO) 4Q .22 BMO
TNS Inc. (TNS) 4Q .21 AMC
USEC Inc. (USU) 4Q .09 AMC
Verenium Corp. (VRNM) 4Q (.20) AMC
Zebra Tech Corp. (ZBRA) 4Q .43 BMO

S&P Slashes GMAC Ratings...

Standard & Poor's cut its rating on GMAC three notches deeper into junk territory and warns the finance company may not be able to remain a better credit risk than its former parent, GM. Ratings agency says further downgrades are possible.

Short List of Stocks to BUY.....

Reviewing earnings reports since January 1. Here is a list of companies that have Beat Earnings Expectations AND have Raised Guidance for the future.

These are stocks you want to BUY if given an opportunity on a pullback...

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)

Latest Apple Patent Filing....

A new Apple (AAPL) patent describes a large touch-based system designed to be used with both hands simultaneously. Perhaps a competitor to Microsoft's delayed Surface?

ImClone Gets Upgraded...

Cowen and Co. upgraded biotech company ImClone Systems (IMCL) to outperform from neutral, saying that based on conversations with physician consultants, it believes Erbitux's prospects for gaining significant market share in the treatment of lung cancer are quite good.

Medical Device Makers Celebrate Victory...

Since Wednesday's Supreme Court ruling protecting medical device maker Medtronic (MDT) from personal injury lawsuits, lawyers and judges have been busily reexamining similar cases against companies like Johnson & Johnson (JNJ), Boston Scientific (BSX) and St. Jude Medical (STJ) to decide whether the suits should be closed down.

Microsoft Opens Source Code...

In the hopes of encouraging programmers to build add-ons to its products, Microsoft (MSFT) announced broad steps to open up its source code. Microsoft hopes the move will give it leverage against rival online software suites that make it easy to build plug-ins that enhance usability and function. Developers and regulators were pleased by the move, although some were skeptical of Microsoft's commitment to interoperability.

Jeff Bezos Selling Shares of Amazon....

Shares in Amazon.com Inc. (AMZN) fell 5.1% Thursday after the Internet retailer revealed that founder and Chief Executive Jeff Bezos sold more than $135 million worth of shares, his first insider sale in more than three years.

Nothing wrong with this....I guess he's learned from the past.

Chesapeake Energy Beats Estimates...

Chesapeake Energy Corp. (CHK, $44.18), the largest independent U.S. natural gas producer, reported fourth-quarter net income of $303 million, falling from $471 million a year ago. After paying preferred stock dividends and including losses on the conversion of preferred stock, earnings fell to 33 cents a share from 96 cents a share. Excluding one-time items, the company earned $466 million, or 93 cents a share, from ongoing operations. Revenue rose 12% to $2.09 billion.

Analysts surveyed had predicted the company would earn 82 cents a share on $1.96 billion in revenue.

This has been a hot stock lately with the latest move in Natural Gas prices.

Intuit Earnings Miss Estimates..

Intuit Inc. (INTU). The Mountain View, CA.-based provider of business and financial management software said late Thursday its second-quarter net profit dipped to $115.2 million, or $0.34 a share, from $145.4 million, or $0.40 a share, in the year-ago period. Total net revenue rose to $834.9 million from $750.6 million in the previous year period.

The company was expected to earn 36 cents a share.

Have you noticed how much they jacked up the price on Turbotax this year???

Fannie and Freddie Downgraded to Sell...

Merrill Lynch downgraded government-sponsored agencies Fannie Mae (FNM) and Freddie Mac (FRE) to sell from neutral Friday, saying that despite recent selling pressure, the share prices don't fully reflect "the severity or duration of the financial headwinds facing the companies." Further deterioration in financial market conditions and worsening credit performance will undermine fundamentals and the market’s assessment of Fannie and Freddie's respective financial position, Merrill Lynch analysts wrote in a note to clients.

Express Scripts Beats Estimates...

Express Scripts Inc. (ESRX). The Maryland Heights, Mo.-based provider of pharmacy benefit management services late Thursday said fourth-quarter adjusted earnings rose to $174.2 million, or 68 cents a share, compared with $139.9 million, or 51 cents a share, a year earlier. The company was expected to earn 64 cents a share.

Revenue for the period ended Dec. 31 rose to $4.69 billion from last year's $4.5 billion. For 2008, the company expects earnings from continuing operators of $2.92 to $3 a share.

The stock is trading up 1 to $66 premarket. This has been one of the top performing groups out there over the past thee years. Medco Health and CVS Caremark are the other two top players.

Thursday's Summary....

U.S. Markets

Dow -142.96 (-1.15%)
Nasdaq -27.32 (-1.17%)
S&P 500 -17.50 (-1.29%)

News That Moved the Market

Markets Drop On Philly Fed. Sellers dominated the market Thursday, with all 10 sectors finishing in negative territory. The bears took control after the Philadelphia Fed Manufacturing Survey came in at -24, showing continued contraction in the region's manufacturing. The reading was well below the -10 analysts expected, fueling speculation that we may not be able to avert a recession. The Philly Fed Survey has recently been a strong barometer of the country's manufacturing activity. With little news expected Friday, look for this number to stay with investors and traders through the start of tomorrow's' session.

Microsoft Opens Up. Microsoft (MSFT, -0.4% ) announced it would enhance interoperability by increasing the openness of its products. The move should make it easier for outside programmers to create applications that work with Microsoft's products, mainly Vista, and ease tensions with the EU anti-trust regulators.

Gold Shines. Gold futures hit an all-time high of $958.40/ouce, before settling up $11.40 to $949.20. After yesterday's higher than expected CPI reading and further weakness in the U.S. dollar, gold was bid up by investors and traders. "This type of inflation environment is one in which commodities thrive in -- at least until growth rates start to falter," said Edward Meir, an analyst at MF Global.

Research in Motion (RIMM, +9.0%) traded higher after increasing its forecast for subscriber growth...

Crude Oil fell $0.32 to $97.91/barrel after higher than expected inventories…

Cisco (CSCO, -0.0%) was upgraded to a Buy from Neutral at Citigroup.

Fed Forecasts Lower US Growth, Higher Inflation...

A new forecast by the Federal Reserve suggests the U.S. can expect both slower growth and higher inflation this year. The central bank cut its prediction for growth to between 1.3% and 2% this year, half a point lower than predicted in October.

The Fed raised the forecast for core inflation by 0.3 per cent, to between 2% and 2.2%.

Earnings Due Today....

COMPANIES REPORTING EARNINGS

• Chesapeake Energy (CHK). Projected to report Q4 earnings of $0.81 a share, according to analysts polled by Thomson Financial. This is a decline of 10.11% from $0.90 earned per share same time the previous year.

• Chemed (CHE). Estimated to post Q4 earnings of $0.88 a share, up 20.14% from $0.73 earned per share same time last year.

• DTE Energy (DTE). Forecast to report earnings of $0.78 a share, which is largely unchanged from $0.77 earned per share same time the year previous.

• Eaton Vance (EV). Projected to report q1 earnings of $0.49 a share, up 88.85% from $0.26 earned per share same time last year.

• Emcor (EME). Likely report Q4 earnings of $0.66 a share, up 64.25% from $0.40 earned per share same time the previous year.

• Esterline Technologies (ESL). Forecast to report Q1 earnings of $0.59 a share.

• Express Scripts (ESRX). Expected to post Q4 earnings of $0.64 a share, an increase of over 26% from $0.51 earned per share same time the previous year.

• Intuit (INTU). Estimated to post Q2 earnings of $0.36 a share, down 19.33% from $0.45 earned same time the previous year.

• JC Penney (JCP). Forecast to post Q4 earnings of $1.77 a share, a decline of 11.45% from $2.00 earned per share same time the previous year.

• MGM Mirage (MGM). Projected to post Q4 earnings of $0.56 a share, up 5.47% from 40.53 per share earned same time the previous year.

• Odyssey Re Holdings (ORH). Expected to report Q4 earnings of $0.92 a share against $0.92 earned per share same time the previous year.

• OSI Pharmaceuticals (OSIP). Likely to report a Q4 profit of $0.29 a share, against a loss of $0.01 per share same time last year.

• Roper Industries (ROP). Expected to post Q4 earnings of $0.75 a share, an increase of 16.72% from $0.64 earned same time previous year.

• Safeway (SWY). Expected to report Q4 profit of $0.68 a share, which is a rise of 11.47% from $0.61 earned per share same time the previous year.

Terex Beats and Guides Higher...

Terex Corp. TEX) late Wednesday reported fourth-quarter net income of $174 million, or $1.67 per share, up from $100.9 million, or 97 cents a share, last year.The Westport, Conn.-based diversified manufacturer said revenue in the three months ended Dec. 31 rose to $2.59 billion from $2.03 billion.The mean estimate of analysts polled by Thomson Financial was for a per-share profit of $1.40 on revenue of $2.35 billion.

Terex expects 2008 earnings of $6.65 to $7.15 a share on revenue of $10 billion to $10.5 billion.Analysts are looking for a 2008 profit of $6.68 a share on revenue of $9.77 billion.

Shares of Terex closed at $62.21 and climbed 5% in after-hours trade.

TV Ads Losing Effect...Marketers Move to Internet....

62% of marketers believe TV ads have become less effective in the past two years, Forrester Research says, perhaps a byproduct of digital recordings, ad zappers, or our waning attention spans. Conversely, 87% plan to boost spending on internet advertising.

RIMM Raises Forecast...

BlackBerry maker Research In Motion Ltd. (RIMM) raised its forecast for fourth quarter net subscriber account additions, putting them about 15-20% higher than the 1.82 million net subscriber account additions it projected in December.

The Waterloo, Ont. company said its BlackBerry subscriber account base is expected to total about 14 million at the end of the fourth quarter. Research In Motion said the seasonal slowdown in net subscriber account additions that it had expected in the new year didn't occur.

The company also confirmed its fourth-quarter revenue guidance of $1.80-$1.87 billion and earnings guidance of 66-70 cents a share. Research In Motion, which makes wireless products for the mobile communications market, will report results for the fourth quarter ending March 1 on April 2.

RIMM is trading up 6 to $103.50 premarket.

Wednesday's Summary....

U.S. Markets

Dow +90.04 (+0.73%)
Nasdaq +20.90 (+0.91%)
S&P 500 +11.25 (+0.83%)

News That Moved the Market

Markets End Higher After FOMC Minutes Released. The markets were able to end the day with gains after investors mulled over the latest FOMC minutes. The Fed said it was ready to continue easing rates, but once the economy resumes some momentum, but it will look to swiftly increase rates again. It also projected the economy's growth to slow to 1.2%-2.0%, a drop from the 1.8%-2.5% it forecasted in October. Inflation was a hot topic, as the Fed still expected the economic slowdown to help dampen such pressures, however, it was clear in the minutes this view was not shared by all members. Dallas Fed president Richard Fisher voted against the last rate cut, believing the upside risks to inflation trumped downside risks to growth. In all, the minutes had both good and bad points, but investors keyed in on the fact the Fed was ready to cut rates again to spur growth and avoid a recession.

Inflationary Pressures Remain. Before the Minutes were release, the Labor Department announced consumer prices jumped 0.4%, while core prices increased 0.3%. The figures were greater than expected, and revealed the economic slowdown had failed to alleviate inflationary pressures. Year-over-year, CPI increased 4.3%, while core CPI climbed 2.5%. The Fed will now have to be extremely careful easing rates, and must look to increase rates again as soon as it thinks the economy can handle it.

Another Record Day For Crude. Oil marched higher, closing at $101.32, an all-time record. Greater demand along with a further weakening dollar were catalysts for the increase. Some experts believe the only thing that will ultimately end crude's rally is a serious world economic downturn.

Quick Tics: The Commerce Department reported a small gain in housing starts…Hewlett-Packard (HPQ, +7.9%) reported a stellar quarter and forecasted higher earnings for next quarter than analysts expected…KKR Financial Holdings (KFN, 1.9%) will delay repaying debt on asset-backed paper and will enter restructuring negotiations….The prices wars in telecom took their toll on the companies involved including AT&T (T, -4.3%) and Verizon (VZ, -0.3%).

Tomorrow Notable Earnings :

Safeway (SWY) Before Open

Economic Events:

8:30 AM: Jobless Claims
10:00 AM: Leading Indicators
10:00 AM: Philadelphia Fed
10:30 AM: Crude Inventories

My Space Getting Into Music....

News Corp. (NWS) is in talks with major music labels about a venture that would offer music through 1) ad-based downloads and 2) streaming to a PC. The labels have been offered an equity stake in the site, MySpace Music. Social networks Imeem and Last.fm already have streaming deals with music labels. Labels approached include Vivendi's Universal, Warner (WMG), EMI Group, and Sony (SNE) BMG. Complications include Universal Music's outstanding copyright infringement suit against MySpace.

Copycat Carriers....

In a game of Tuesday-tag, Verizon Wireless (VZ) launched a $100/month unlimited U.S. calling plan. AT&T (T) was soon to follow. Not to be outdone, T-Mobile (DT) jumped on the bandwagon late in the day, and kicked in unlimited text and picture messaging. Shares fell. T -5.25%; VZ -6.6%; DT -2.6%. Sprint (S), the only major carrier left out (thus far) still dropped 3.55%. Besides each other, the group also compete with VoIP providers like Comcast (CMCSA) and Vonage (VG), who offer unlimited plans for as little as $25.

Sony and Toshiba Join Forces....

Sony Corp. (SNE). The Japanese electronics company will receive 90 billion yen for its high-performance semiconductor operations from rival Toshiba Corp. (TOSBF), Toshiba said today. Despite being fierce competitors in other areas, the two companies said they had firmed up a deal to form a semiconductor joint venture owned 60% by Toshiba and 40% by Sony.

Garmin Jumps After Beating Expectations...

Garmin Ltd. (GRMN). The George Town-based provider of provider of navigation, communications and information devices today said fourth-quarter net income rose to $307.3 million, or $1.39 a share, from $180.3 million, or 82 cents a share, in the same quarter a year earlier.

Revenue rose to $1.22 billion from $611 million a year ago, with North American sales seeing the largest percentage jump year-over-year. For 2008, the company expects earnings to exceed $4.40 a share with revenue expected to top $4.5 billion.

The stock is up 6 points to $72.50 premarket. It is still way down off its 52-week high of $125 hit in late October.

Crocs Disappoints Traders...

Crocs Inc. (CROX). The Niwot, Colorado-based footwear company said late Tuesday net income rose to $38.3 million, or $0.45 a share, from $20.8 million, or $0.26 a share, a year earlier.

The company said revenue nearly doubled to $224.8 million from $112.9 million a year ago. It reaffirmed its 2008 earnings and revenue forecasts of $2.70 a share and $1.16 billion, respectively.

Analysts were expecting $0.44. Nonetheless...the stock got pounded in after hours trading last night. The is down 15% to $27.80 premarket.

Earnings This Week...

Major companies tentatively scheduled to report quarterly earnings this week:

Wednesday

Allied Capital Corp. (ALD) 4Q .27
Career Education Corp. (CECO) 4Q .31
Constellation Energy Partners LLC (CEP) 1Q .44
Garmin Ltd. (GRMN) 4Q 1.13 BMO
Health Mgmt Associates Inc. (HMA) 4Q .08 AMC
LodgeNet Interactive Corp. (LNET) 4Q (.45) AMC
Netease.com Inc. (NTES) 4Q .30 AMC
Oceaneering Intl Inc. (OII) 4Q .81 5:00PM
Suntech Power Hldgs Co. Ltd. STP) 4Q .38 BMO
Synopsys Inc. (SNPS) 1Q .34 AMC
Terex Corp. (TEX) 1Q 1.38 AMC
Tim Hortons Inc. (THI) 4Q .41 BMO
TJX Cos. (TJX) 4Q .61 9:30AM
Transocean Inc. (RIG) 1Q 3.32
Ultra Petroleum Corp. (UPL) 4Q .31
Watson Pharms Inc. (WPI) 4Q .32 BMO
Wellcare Health Plans Inc. (WCG) 1Q) .73 Unspecified

Thursday

Allianz SE (AZ) 4Q .37 1:30AM
Barrick Gold Corp. (ABX) 4Q .53 BMO
Chesapeake Energy Corp. (CHK) 4Q .81 AMC
Cleveland-Cliffs Inc. (CLF) 4Q 1.68 AMC
Continental AG (CTTAY) 4Q 3.28
DTE Energy Co. (DTE) 4Q .84
EMCOR Grp Inc. (EME) 4Q .65
Express Scripts Inc. (ESRX) 4Q .65 AMC
Goldcorp Inc. (GG) 4Q .17 BMO
Intuit Inc. (INTU) 2Q .34 AMC
J.C. Penney Co. Inc. (JCP) 4Q 1.74
Kaydon Corp. (KDN) 1Q .62 7:00AM
Kinross Gold Corp. (KGC) 4Q .08 AMC
Mgm Mirage (MGM) 4Q .57
Newmont Mining Corp. (NEM) 4Q .42
OSI Pharms Inc. (OSIP) 4Q .29 AMC
Quest Diagnostics Inc. (DGX) 4Q .78 BMO
Safeway Inc. (SWY) 4Q .68
Vasco Data Security Intl Inc. (VDSI) 4Q .20
VCA Antech Inc. (WOOF) 4Q .26 4:00PM
WebMD Health Corp. (WBMD) 4Q .29 4:00PM
Williams Cos. (WMB) 4Q .48 BMO

Friday

Life Time Fitness Inc. (LTM) 4Q .48
Newpark Resources Inc. (NR) 4Q .09 6:00AM
PG&E Corp. (PCG) 4Q .56
Rogers Commun Inc. (RCI) 4Q .42 BMO
St. Mary Land & Exploration Co. (SM) 4Q .89
Westwood One Inc. (WON) 4Q .04

Whole Foods 1Q Net Falls 27%...

Whole Foods (WFMI), the organic food retailer reports net income of $39.1 million, or 28¢ a share, as its acquisition of Wild Oats Markets weighs on results. Revenue rises 31% to $2.46 billion.

Analysts expected earnings of 36¢ a share on revenue of $2.42 billion.

That's a Revenue miss. The stock closed yesterday at $38.32 It as critical support in the $35 area.

Microsoft Hires Group To Help Oust Yahoo Board

Microsoft is getting ready to take its bid for Yahoo right to the Web portal's shareholders, even as analysts wait for a higher offer. Microsoft hires proxy group to help oust Yahoo's 10-member board, all of whom are up for re-election.

This could get interesting...

Hewlett-Packard Gains On Bullish 2008 Outlook

Hewlett-Packard (HPQ) net income rises 38% to $2.1 billion, or 80¢ a share, as revenue increases 13% to $28.5 billion on strong notebook PC sales and growth in its international business. Non-GAAP profit is 86¢ a share.

Analysts expected a profit of 81¢ a share and $27.6 billion in sales.

H-P also raises its 2008 guidance, lifting shares 5% in pre-market trading.

Transocean Gets Large Contract From Anadarko...

Transocean Inc. (RIG) late Tuesday said it hasbeen awarded a three-year contract extension for its drillship Deepwater Millennium from Anadarko Petroleum Corp. (APC), beginning in June 2010. The estimated revenue which could be generated over the three-year contractperiod is about $586 million, Houston-based Transocean said. The Deepwater Millennium is capable of operating in water depths of up to 10,000 feet.

Transocean shares closed yesterday up 58 cents at $129.65. Anadarko's stock finished up $1.59 at $60.53.

Tuesday's Summary....

U.S. Markets

Dow -10.99 (-0.09%)
Nasdaq -15.60 (-0.67%)
S&P 500 -1.21 (-0.09%)

News That Moved the Market

Another Afternoon Sell-Off. Erasing a positive start spurred by Wal-Mart's (WMT, +0.4%) better than expected quarterly report, the markets folded under selling pressure in afternoon trading. News that a refinery owned by Alon USA Energy (ALJ, -5.4%) exploded yesterday in Texas, along with worries that OPEC may cut output at its next meeting in March pushed crude prices up 4.7% to close at $100.01/barrel. Unrest in Nigeria also played a role in the energy rally. For today at least, the economic slowdown decreasing demands for crude took a back seat to other news. Though the losses do not look so bad, consider that the S&P closed 1.0% lower from its session high, while the Nasdaq lost 2.0% from its high.

HP Comes Through. Hewlett-Packard (HPQ, +0.66% day, +4.4% A.H.) jumped in after hours trading after reporting better than expected results. Hewlett was able to find success by cutting costs and racking up strong sales outside the U.S. The company's EPS forecast for next quarter beat analysts' estimates by a penny.

Lehman To Report Larger Writedown. The Wall Street Journal reported Lehman Bros. (LEH,-2.2%) is now facing a $1.3 billion writedown. Though the number is not as massive as some of its counterparts, it is still bigger than the company estimated and created whispers that perhaps the company is not managing their risk as well as anticipated or that the market for commercial real estate loans, which Lehman owns a great deal of, is deteriorating.

Cell Phone Price Wars Heat Up. Verizon (VZ, -6.6%) announced it will offer a $99.99/month package with unlimited minutes. As a result, AT&T(T, -5.3%) also came out with a similar deal, sparking fears of a nasty price war in the cell phone provider industry. The Telecom sector finished 5.1% lower.

Tomorrow Notable Earnings:

Host Hotels & Resorts Inc.(HST) Before Open
BNP PARIBAS (BNP.PA) Before Open

Economic Events:

8:30 AM: CPI
8:30 AM: Housing Starts
8:30 AM: Building Permits
10:30 AM: Crude Inventories
2:00 PM FOMC Minutes

Microsoft Has no Plans to Boost Yahoo Offer...

Microsoft (MSFT) chairman Bill gates said Monday the company is not in private discussions with Yahoo! (YHOO) about an increase to its $31/share buyout offer. Gates also said the company plans to invest heavily in web search in an attempt to compete with Google (GOOG), even if it fails to acquire Yahoo.

Lehman May Take Bigger-Than-Expected Hit...

Sources say Lehman Brothers' (LEH) is sitting on a large portfolio of deteriorating commercial real-estate loans, which may lead the firm to write down $1.3B in Q4, more than recent estimates of $800M-$1B.

While the size of the writedown is relatively small compared to those of Merrill Lynch (MER), Citigroup (C) and UBS (UBS), it may indicate that even firms that apparently avoided major missteps are finding it increasingly difficult to emerge unscathed from the debt market crisis.

Onyx's Nexavar Fails Lung Cancer Trial...

Onyx Pharma (ONXX) off 19% at $36.20 after a lung cancer trial of flagship drug Nexavar is halted because of increased death in patients taking the drug. Data was highly anticipated by investors as lung cancer was seen as key growth driver for Nexavar, which is already approved in more than 60 countries for advanced kidney cancer and in US and Europe for liver cancer. Nexavar was seeking to compete with Genentech's (DNA) Avastin in lung cancer - second most common cancer in US and leading cause of cancer.

Big question is whether this ruling will affect clearance for Kidney and Liver cancer use.

Sony's Blu-Ray Takes Over...

Sony Corp. (SNE). The Japanese consumer electronics giant may have won the DVD-format war with Blu-ray technology after rival Toshiba Corp (TOSBF) said today it will withdraw from the the HD DVD business. Toshiba said it will stop developing new HD DVD players and recorders and will no longer make HD DVD players and recorders by the end of March 2008.

The move follows Wal-Mart's (WMT) announcement Friday it will shift exclusively to selling movies in the Blu-ray format. In the same week, major electronics seller Best Buy Co. Inc. (BBY) and online video rental giant Netflix Inc. (NFLX) declared their allegiance to Blu-ray.

This is a very interesting looking stock. They seem to be winning in various categories now...

Abbott Labs Gets FDA Approval for Simcor...

Abbott Laboratories (ABT) said it has received U.S. Food and Drug Administration (FDA) approval for its cholesterol treatment Simcor.

Simcor has been approved for use to lower levels of elevated total cholesterol, LDL "bad" cholesterol and triglycerides, and to raise HDL "good" cholesterol in patients with complex lipid disease when treatment with simvastatin or Niaspan monotherapies are not considered adequate, the Illinois-based pharma company said.

The stock is up a point to $56.50 premarket. It has tried twice to break out about $60, but has failed. That is the level where I would put a buy order.

Earnings Today....

COMPANIES REPORTING EARNINGS

• Chiquita Brands International Inc. (CQB). Likely to report a Q4 loss of $0.10 a share, according to analysts polled by Thomson Financial.

• Crocs Inc. (CROX). Expected to post Q4 earnings of $0.45 cents a share.

• Fossil Inc. (FOSL). Expected to report Q4 earnings of $0.67 a share.

• Hewlett-Packard (HPQ). Expected to report Q1 profit of $0.81 a share.

• Martha Stewart Living Omnimedia (MSO). Expected to report Q4 earnings of $0.65 a share.

• Marvel Entertainment Inc. (MVL). Expected to post Q4 earnings of $0.29 a share, up 106.43% from $0.14 earned same time last year.

• NutriSystem (NTRI). Forecast to post Q4 earnings of $0.29 a share.

• Penske Automotive Group (PAG). Expected to report Q4 earnings of $0.33 a share.

• Whole Foods Market (WFMI). Likely to report Q1 earnings of $0.36 a share.

Medco Health Beats and Raises....

Medco Health Solutions said fourth-quarter netincome fell to $207.6 million, or 38 cents a share, from $228.8 million, or 39cents a share, a year ago. Excluding the amortization of intangible assets, the pharmacy benefitsmanager said it earned 43 cents a share.

Revenue for the three-month period rose 4.1% to $11.4 billion, citing highermail-order volume associated with new clients and price inflation bypharmaceutical manufacturers on brand-name drugs.

The mean estimate of analysts polled by Thomson Financial was for earningsof 41 cents a share on revenue of $11.45 billion. The company lifted its 2008 outlook, saying it now expects to earn in therange of $2.07 to $2.11, up from a previous forecast of $1.95 to $2.01 a share.

A Beat and a Raise....keep an eye on this stock...

Steel Firms Agree on Iron Ore Price Hike...

Steelmakers in Japan, South Korea and Germany agree to price hikes of at least 65% for iron ore, the main raw material in steel, but it remained unclear if that figure would set the benchmark across the industry.

Steel stocks to keep an eye on:

Cleveland Cliffs (CLF)
Rio Tinto (RTP)
US Steel (X)
AK Steel (AKS)
Might as well add Freeport McMoRan (FCX)

Martha Stewart Buys Out Emeril...

Martha Stewart To Buy Lagasse Properties. Martha Stewart Living Omnimedia is expected to acquire Emeril Lagasse's extensive media and licensed properties for $45 million in cash and $5 million in stock, The Wall Street Journal reports.

Too bad Rachael Ray is the hot commodity right now...

Wal-Mart Q Net Rises....

Retailer posts profit of $4.1 billion, or $1.02 a share, as total revenue climbs 9.5% to $107.43 billion. Latest period includes a net charge of 2¢ a share. Revenue gains 8% to $107.4 billion.

Analysts expected earnings of $1.02 a share on revenue of $106.92 billion. Same-store sales for the quarter, excluding fuel, increase 1.7%. Retailer offers cautious outlook.

Castro Resigns as Cuban President...

Ailing leader Fidel Castro resigns after nearly a half-century as president of the communist country, saying he won't accept a new term when parliament meets this week. Move positions his brother Raul for permanent succession to the presidency.

Stock Futures are up premarket as a result...

Gamestop Raises Guidance....

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

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

More Merger Talk in Airline Industry...

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

I Love This....

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


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

Wal-Mart Target Raised...

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

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

Chipotle Earnings Jump 62%; Shares Fall

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

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

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

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

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

Dryships Profits and Revenues Soar...

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

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

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

Priceline.Com 4Q Beats Views

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


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

Buffet Quietly Buying Kraft Foods...

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

GMAC Majority Owner Warns of Trouble Ahead

GMAC LLC, the auto and mortgage lender owned by Cerberus Capital and General Motors Corp., may face "substantial difficulty" if credit markets do not improve, Cerberus founder Stephen Feinberg said. GMAC posted a $724 million fourth-quarter loss and was downgraded by Moody's Investors Service as borrowers increasingly fell behind on payments.

Are you kidding me??? GMAC has been having severe troubles for at least 9 months...They've been shutting offices down everywhere. This is no surprise...

Thursday's Market Summary....

U.S. Markets:

Dow -175.26 (-1.40%)
Nasdaq -41.39 (-1.74%)
S&P 500 -18.35 (-1.34%)

News That Moved the Market:

Stocks Fall As Bernanke Predicts Difficult Beginning to 2008. Markets sold off Thursday, as Fed Chairman Ben Bernanke acknowledged that growth in the coming quarters will be slower. Along with Treasury Secretary Paulson, Bernanke testified in front of Congress, saying growth should decrease in 2008, but the Fed and government would work hard to make sure that the rate cuts and economic stimulus will have their intended effects on the U.S. economy. Though none of what was said today was unexpected, it seemed like a good reason for many to take profits from the recent rally.

UBS Dives Into the Red. Swiss bank UBS (UBS, -8.2%) announced a $11.3 billion writedown, confirming the company's first full-year loss in 10 years. UBS added that it still has significant exposure to the mortgage market in the U.S. and more major writedowns were not out of the question.

FGIC Loses Aaa Rating. FGIC Corp., the fourth largest bond insurer, lost its Aaa bond insurance rating at Moody's. The company was about $4 billion short of the amount of capital needed. However, Moody's also said MBIA (MBI, +8.7%) and Ambac (ABK, +12.4%) are better positioned "from a capitalization and business franchise perspective" compared to FGIC, lessening fears other larger bond insurers will share FGIC's fate.

Comcast Brings Back Dividend. Comcast (CMCSA, +8.0%) surged higher after the company reported a 54% increased in earnings and its first dividend in 10 years. The company also sees revenue in 2008 rising 8%-10%.

Tomorrow Notable Earnings:

Abercrombie & Fitch Co.(ANF) Before Open

Economic Events:

8:30 AM: Empire State Mfg Survey
8:30 AM: Import and Export Prices
9:00 AM: Industrial Production
10:00 AM: Consumer Sentiment

Bernanke Sees 'Sluggish' Growth But Pickup In Late '08

Fed Chairman Ben Bernanke keeps the door open to further interest rate reductions, saying downside risks to economic growth remain from housing, employment and credit markets. But he appears more upbeat on economy's prospects for later this year and next when combination of fiscal and monetary stimulus kicks in.

The market obviously hates this guy. Every time he speaks on TV they sell off the market. Before the meeting..the Dow was up 35-50 points. It is now down 138 points.

Abnormal Move: Wellcare

Wellcare (WCG) up 3.70 to $52.29

This has been a wild ride, but this stock is ticking higher on no news this morning. In the past two months, the stock has ticked up (like this) ahead of a contract renewal announcement...each time, filed on Friday after the close.

On Friday, January 11, after the close...the company reported a Medicare contract renewal in 5 states. The following Monday, the stock gapped up 5 and closed 10 points higher on the day. Could we get a repeat??

Jobless Claims Fall....

US weekly jobless claims fell 9,000 to 348,000. The number of people filing new claims for unemployment insurance fell for the second week in a row while the four-week moving average for initial claims rose to its highest level in over two years, the Labor Department said today.

Nvidia Revenues Surge...

Graphics chip-maker Nvidia Corp. (NVDA) posted a 58% jump in fiscal fourth-quarter net income, as a 37% surge in revenue offset rising costs. The fabless semiconductor company reported net income of $257 million, or 42 cents a share, for the quarter ended Jan. 27, compared with $163.5 million, or 27 cents a share, a year earlier. Excluding acquisition and stock-based compensation expense, earnings came to 49 cents a share. Revenue in the latest quarter rose to $1.2 billion from $878.9 million.

Analysts polled by Thomson Financial had expected the Santa Clara, Calif., company to post earnings, excluding items, of 47 cents a share on revenue of $1.19 billion.

NVDA is down 2.85 to $24.15 this morning. It was actually up to $27 yesterday after the close. Looks like an overreaction selloff to me.

Goldman Downgrades Intel....

Shares of Intel Corp. slipped in premarket trading Thursday after Goldman Sachs removed the semiconductor giant's stock from its conviction buy list, citing concerns over the impact of macroeconomic issues on business demand.

Baidu Beats Estimates...

China's #1 search engine, Baidu.com (BIDU), said Q4 earnings grew 79%. EPS of $0.87 on revenue of $79.3M beat analyst estimates of $0.72 on $77.1M in revenue.

Looking ahead, Baidu sees Q1 2008 revenue of $73.1-75.1M, lower than the $77.9M analysts had been looking for. Shares gained almost 5% in AH trading.

ValueClick Revenues Ahead of Estimates...

Internet ad firm ValueClick (VCLK) reported late Wed. Q4 EPS of $0.18, in line with estimates. Revenue of $183.1M was stronger than the $175.77M analysts expected. ValueClick predicted Q1 EPS of $0.15-0.16, lower than consensus of $0.18, and Q1 revenue of $166M-$170M vs. consensus estimates of $175.45M.

Shares were up strongly after the company announced it settled an FTC probe with a $2.9M payment, without conceding that it violated any law.

Back to the Northwest / Delta Deal....

Sources say Air France-KLM will take a stake on unknown size in a combined Delta Air Lines (DAL) and Northwest (NWA) in exchange for a board seat. Delta and Northwest have agreed on major terms, including keeping Delta's name and headquarters, sources say.

Comcast Beats....

Comcast (CMCSA), #1 U.S. cable operator, said Q4 profits jumped 54%. EPS of $0.20 on revenue of $8.01B beat consensus estimates of $0.17 on revenue of $7.9B.

Comcast said it will repurchase another $6.9B in shares by end of 2009; initiated an annual dividend of $0.25; and said 2008 free cash flow should grow at least 20%.

This stock has fallen from a high of $29 in July 07 to yesterday's close of $17.81. It is up to $19.04 premarket.

Paulson Says US Will Avoid Recession...

Treasury Secretary Henry Paulson will tell Congress the U.S. economy is sound, despite expectations of significant housing market softness. The economy will continue to grow, albeit at a slower pace. Current initiatives may help mitigate the situation, "and we remain open to other good ideas as we move forward," he will say, according to prepared notes.

Yahoo offering stake to News Corp., others....

Days after its board rejected a $44.6 billion takeover offer from Microsoft, Yahoo is talking about selling a stake to News Corp. The position that could be more than 20% would allow Yahoo to stay independent while giving News Corp. substantial control over a range of Internet properties and advertising opportunities, according to the Wall Street Journal, which is owned by News Corp.

Yahoo is also talking with Google Inc. and Time Warner Inc.'s AOL.

Daily Summary....

U.S. Markets

Dow +178.83 (+1.45%)
Nasdaq +53.89 (+2.32%)
S&P 500 +18.35 (+1.36%)

News That Moved the Market

Retail Sales Shines. A better than expected retail sales figure fueled another rally Wednesday, the third gain in as many days for the Dow. The Commerce Department announced retail sales jumped by 0.3%, well ahead of the 0.3% decline expected. Auto and gasoline sales were the main catalysts for the number beating expectations. Though auto companies reported earlier in February that monthly sales declined from last month, the report showed motor vehicle sales increased by 0.6% by dollar value. On the news, markets traded higher, as investors seemed convinced that they can rely on the American consumer, even in such trying circumstances.

NY State Attorney General Targets Health Insurers. New York Attorney General Andrew Cuomo announced plans to sue UnitedHealth Group (UNH, -2.7%), the U.S.'s largest health insurer, and subpoena 16 other insurers to investigate illegitimate reimbursement practices. Cuomo said UnitedHealth limited payments to customers by claiming their medical charges were too high.

News Corp and Yahoo in Talks. In a new wrinkle to the story, Yahoo (YHOO, +1.0%) is now in talks with News Corp. (NWS, -0.5%) about a potential strategic alliance to fend off Microsoft's (MSFT, +2.2%) bid. Rupert Murdoch's media giant is exploring merging some of its online properties, including MySpace, with Yahoo in exchanging for a stake possibly greater than 20%. Details of the potential deal are still unclear, but it is hard to see News Corp. going through with a deal, especially because it is already struggling to integrate the Wall Street Journal.

Bush Signs Stimulus Plan. President Bush signed into law the $168 billion stimulus plan aimed to help the U.S. economy avoid a recession. Expect to receive rebates some time in May.

Tomorrow Notable Earnings

Comcast Corporation (CMCSA) Before Open
UBS (UBS) Before Open

Economic Events:

8:30 AM: Jobless Claims
8:30 AM: Trade Balance

Palm Pumps Centro; Analysts Wary...

Palm (PALM) CEO Ed Colligan said in an interview Wednesday sales of Centro, Palm's entry-level smart phone, have exceeded expectations. He said he believes Palm finally has the product it needs to penetrate the consumer market and conquer Europe, while downplaying the effects economic softness could have on consumer sales. Some analysts are skeptical the long-awaited device can spark a turnaround at the troubled company.

T-Mobile Dumps Google for Yahoo...

T-Mobile parent Deutsche Telecom (DT) said Tuesday it will drop Google (GOOG) in favor of Yahoo (YHOO) as search engine for its websites, making Yahoo the primary search engine for about 80 million European subscribers.

Convenient news for Yahoo...considering the Microsoft bid going on right now...

Boom in Display Screens Eases Applied Materials' Slump

Applied Materials (AMAT) reported a 35% drop in fiscal Q1 earnings, but orders were up 13% from Q4, well ahead of the company's forecast 5-15% decline. Shares gained 4.76% after hours.

The company is also shifting their attention to the Solar market. Applied's solar operations represents only a sliver of the company's total revenue, but it's growing at a rapid rate, especially in comparison to the company's sluggish core business of making chip equipment.
Applied Materials has aggressively moved into the solar market, seeking to become the industry's biggest equipment supplier.

That's two hot markets: Solar and Display Screens....

RIMM Explains Outage....

Research In Motion (RIMM). The Canadian wireless communication solutions company said late Tuesday an early investigation of Monday's Blackberry service disruption indicated a problem with an internal data routing system within the Blackberry service infrastructure that had been recently upgraded. The upgrade was part of RIM's efforts to increase overall capacity, the company said.

Sounds like our company's email "upgrade" that we had in January that shut down our email for a week.

First Solar Blows Away Estimates...

First Solar Inc. (FSLR). The Phoenix-based solar electric power module maker said fourth-quarter net income rose to $62.9 million, or $0.77 a share, beating the mean estimate of analysts polled by Thomson Financial of $0.53 a share. A year ago, the company posted net income of $8 million, or $0.11 a share, in the quarter. Revenue rose to $200.8 million from $52.7 million.

FSLR is up 25 points to $200 in premarket trading. This is a hot, but dangerous group. Long term, probably a good place to put money.

Blue Nile Falls on 1Q Outlook....

Shares of Blue Nile Inc. (NILE) fell 19% to $43.61 after the online jewelry retailer forecast first-quarter results that missed analysts' expectations. The Seattle company said it expects first-quarter earnings between 11 cents and 14 cents a share and sales to be "relatively flat" with first-quarter results. Analysts expect, on average, earnings of 23 cents a share on revenue of $82 million.

The company also said its fourth-quarter net income rose 31% to $7.5 million, or 45 cents a share, from $5.8 million, or 35 cents a share, a year earlier. Revenue increased 23% to $111.9 million. Analysts expected, on average, earnings of 44 cents a share on revenue of $113 million.

In addition, the board authorized an additional $100 million to repurchase shares of its common stock over the next two years. The company also named President Diane Irvine to the additional role of chief executive. She succeeds Mark Vadon, who was named executive chairman.

I could swear Blue Nile's CEO was just on CNBC two weeks ago saying how great business was......anyway....this is a retailer, right...retailers are supposed to have flat to lower earnings in the quarter following the Xmas Quarter...what are these analysts thinking??? This is probably an overreaction and a buying opportunity.

Venezuela Suspends Exxon Oil Shipments

Venezuela says it will suspend oil shipments to Exxon Mobil in an escalating dispute that pits the world's biggest oil company against a country with one of the planet's biggest reserves of oil and a major supplier to the U.S.

Oil has spiked over the last few days from the high 80's to $93.11 this morning as a result of this situation.

ERTS Pledges 50% Higher Revenues in 3 Years...

Electronic Arts Inc. (ERTS), seeking to bolster investor enthusiasm after several years of lackluster financial performance, said it plans to exceed $6 billion in annual revenue in three years, or more than 50% higher than expected revenue for its current fiscal year.
Such an increase would restore solid growth at EA, maker of well-known videogame franchises such as Madden NFL football and the Sims. In recent years, EA has shown little in profits and revenue growth as it struggled with high development costs, poor reviews and weak sales for some games.

Investors reacted positively to the news, sending EA's shares up $2.50, or 5.4%, to $48.85 in trading on the Nasdaq Stock Market.

At an event for Wall Street analysts at its Silicon Valley campus in Redwood City Tuesday, a new management team at EA -- including John Riccitiello, who joined EA as chief executive last April -- for the first time collectively presented its plans for the coming years. In their presentations, Riccitiello and other executives announced plans to contain costs for games by sending more development overseas, improve the quality of its titles and to make new games that are easier to play for consumers who aren't avid gamers.

"Our company has not delivered in the last three years in any way acceptable for shareholders," Riccitiello said.


This guy sounds like a politician, with these promises. He must think they have some hot games in the pipeline.

Ambac Turns Down Buffett Reinsurance Offer

Says it welcomes any "constructive offers to deal with the current uncertain environment." But deal offered by Buffett's Berkshire Hathaway "would result in little to no net capital relief to support Ambac's ratings."


Buffett is wanting to purchase the Municipal Bond Insurance Portion of Ambac's portfolio...Problem is that Municipal Bonds are highly unlikely to default. That is the most reliable part of the business.

Legg Mason urges Microsoft to enhance offer for Yahoo

Legg Mason, Yahoo's second largest shareholder, said it wants Microsoft to increase its offer. Prominent Legg Mason fund manager Bill Miller said "Microsoft will need to enhance its offer if it wants to complete a deal." But he also said it "will be hard for Yahoo to come up with alternatives that deliver more value than Microsoft will be willing to pay."

Yahoo's stock is up from $19 to $29 since the deal was announced. Yahoo better not get too greedy or they may find their stock right back down near $20 again.

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."