Friday Morning, November 17th
SITE NEWS
New IceMD Recording:
Stress Management;
Dow Stock News
AT&T Inc. (T) completed its acquisition of Dobson Communications Corp. (DCEL), which provides wireless communication services under the Cellular One brand.
AT&T will immediately begin integrating Dobson into its operations, merging product portfolios, customer care initiatives and wireless networks. AT&T said it expects to realize "significant" synergies, about $2.5 billion, as a result of the acquisition.
AT&T expects almost all of its products and services to be available at Dobson retailers by Dec. 9 and sees the rebranding process being complete by the end of the second quarter of 2008. - MarketWatch
Reuters reports that Microsoft (MSFT) aims to be one of the top two companies in online advertising in the next three to five years.
HPQ - upgraded to Overweight at Morgan Stanley
HPQ Hewlett-Packard Credit Suisse Price Target Raised Outperform $52 to $60
Ice Man Stocks
Breakouts the Ice Man may consider trading:
MELI - 48.16
ESRX - 65.80
Regular Trades the Ice Man may consider:
RBN - 68.50
TMTA - 10.60
LDK - closed at high
SWWC - 12.50
SEPR - 28
FSLR - 200 if bases for 1 week
Depressed stocks the Ice Man may buy:
GOOG - 616 Gap
FMCN - 52.75 Gap
SLB - 86 Gap
NEM - 46.45 Gap
STV - 28 Gap
NCTY - down big after the close of the market
ADSK - down big after the close of the market
AU - 43.10 Gap
Breakdown Shorts:
MA - Breaking 180
Dollar Man Ideas:
ALLI - 7.60
Media Commentators
Cramer's Comments:
Bullish: PWR, ACM
Ice Cold Commentators
Break Man Video Summary:
Break out buy (or short sell) watch list for short term gains November 16 includes: WON, CFC, WYN, TXN, SANM, CMVT, TRB, JTX.
Several candidates for break out or short sell plays for at least short term gains by buying the break out (or selling the break down) on good volume and closing at least some on the first day.
Swing Man Market Recap:
Stocks ended lower again Thursday as the pattern of late day selling continues to weigh on the market. The SPX opened lower where it found some pivot support near 1462. From these levels the market worked its way higher as it managed to move into positive ground early Thursday morning. The SPX reached 1473 at 10:30 which turned out to be the intraday high. The market pulled back thereafter but managed to hold above the 1462 pivot support area until around 2:30 when another wave of late afternoon selling took the market lower once again. At the close the DOW/SPX were down 1.10% while the NDX/NAZ fell 0.80%. Bonds continued to rally by gaining nearly one point. Crude oil declined 60 cents and Gold bullion lost $25.00 during today´s session. Short term momentum reached extremely oversold levels on the SPX at today´s lows of 1444 but moved up some as the SPX closed at 1451. Please note that tomorrow is another options expiration day.
Simply put, the recent action in the marketplace has been extremely bearish. The market continues to exhibit distributive trends with early morning bounces giving way to late day selling which is the norm in a down trend. On Tuesday, the market put together a strong one day compression bounce only to see it be eroded over the following two trading days. This type of action is reminiscent of what occurred back in the 2000-2003 bear market. With that said, there are some major price supports at 1410-30 on the SPX and 12,700-13,000 on the Dow which need to be monitored closely in the coming days. If these levels are significantly breached over the near term, the potential for a deeper bear market move will be greatly increased. While the market currently has a bearish tone, the story is not yet over so let´s not get too presumptive at this stage.
On a positive note, we are starting to see some early signs that pessimism is beginning to ramp up once again. The most recent results from the Investor Intelligence Survey shows the bull to bear spread has narrowed from 42% to 24% over the past three weeks. While the most recent reading is considered to be neutral it shows that sentiment is rapidly deteriorating. In addition, the 21 day put/call ratio is once again showing readings exceeding 1.0 level and the intraday put/call reading are starting to spike upward again on down days. For example, Thursday the final put/call reading came in at 1.31. Finally, while the daily index charts look ominous, the 60 minute charts actually look quite favorable. Many 60 minute index and sector charts are now displaying very strong positive divergence which suggests that a decent bounce may again be on the horizon. Thus, you may want to consider some long ideas for a quick trade if this plays out.
In summary, it´s still unclear how things will play out. The breakdown seen in many of the leading stocks and key sectors certainly raises a red flag and that´s led us being relatively cautious of late. We continue to believe that capital preservation is essential during periods such as these as we await better opportunities to become more aggressive. Keep a close eye on the key support levels highlighted above over the coming days.
Good Trading.
CNBC Fast Money Review
1. FINANCIALS FALL…AGAIN
The headline: WFC Says Housing Slump Is Worst Since Great Depression; LEH, Leaderless C, Financials Sell Off After Brief Recovery This Week
Karen Finerman is bullish on BCS after the bank had a $2.7 billion write-down that was not as bad as many feared.
Guy Adami said he would buy MO as a defense play against weakness in financials and the broader market.
2. PENNEY FROM HELL
The headline: JCP Plunges After Reporting Weaker-Than-Expected Revenue, Slashing Forecast
Jeff Macke advises this loss underlines how brutal a time it is for retailers. His advice is to avoid the group for the next few weeks when a “drumbeat of negativity’ is likely to continue.
Pete Najarian blames high oil prices for finally putting a dent in consumer discretionary spending.
3. STARBUCKS
The headline: SBUX Shares Fall After Hours on Lowered ‘08 Forecast
Jeff Macke said Starbucks can blame the loss on dairy prices all it wants. But the company´s business model is the problem. This stock should be avoided at all costs, he said, calling it a “value trap’ that´s going nowhere fast.
Guy Adami says Plus, a 3% short interest indicates there´s plenty more room to go down
4. SUN STOCKS ON FIRE
The headline:STP, LDK, Solar Stocks Working Even as Crude Oil Retreats; STP Shares Soar After Earnings Burn Through Expectations
Pete Najarian said the solar stocks that have enough silicon inventory are doing fine. But the ones that don´t use the commodity at all are in the best shape. That said, he thinks this group still has room to go higher. $100 oil or $80 oil doesn´t make a difference.
Guy Adami would buy ESLR, a name that´s down 26% since his call to take profits. It´s come back down enough that it´s time to get back in ESLR, he said.
5. GOLD´S BIGGEST DROP IN A YEAR
The headline: Commodity Stocks Lead Market Lower as Gold Futures Plunge 3%; Oil Keeps Sliding, Down 0.7% to $93.43
Guy Adami said Gold historically moves lower very quickly. Remember that, while technically a commodity, gold is more of a trading vehicle.
Pete Najarian says gold itself has no actual use, it makes its value as a commodity questionable. The best commodity to peg to is probably oil.
6. POPS AND DROPS
PETM popped 7%: Macke likes the stock long-term.
RAH popped 10%: Finerman likes the deal.
SWY popped 2%: Macke recommends the grocer´s long term.
AMD popped 3%: Adami recommends selling the rally.
HAS popped 2%: Macke likes this stock because parents will always buy toys for their kids.
AMAT dropped 3%: Najarian doesn't like this stock.
GLD dropped 3%: Guy Adami says avoid this falling knife.
RIMM dropped 7%: Najarian says stay away.
7. YOUR FIRST MOVE FOR FRIDAY
Macke recommended buying QQQQ as a bearish play.
Guy Adami preferred USB because Warren Buffet doubled his stake in the company.
Karen Finerman said to play defense with MO.
Pete Najarian liked ISIS as a diabetes play and possible takeover target.
News and Events Digest
Breaking News
Canadian Solar Inc. said Friday it agreed to deliver solar modules with 60 megawatts worth of annual generating capacity for projects in Spain, expanding its footprint in a key market. - AP
Siemens paid millions of euros in bribes to officials in Nigeria, Russia and Libya as it sought to win contracts, a court ruled. - WSJ
Google is preparing a bid to buy wireless spectrum at a January FCC auction. The bid could run $4.6 billion or higher. - WSJ
Flowserve Corp. (FLS) has signed a memorandum of understanding with the China National Nuclear Corp., and SUFA Technology Industry Co., to explore forming a joint venture partnership in Suzhou, China. The Irving, Texas, company, which makes fluid-handling equipment said the joint venture would produce nuclear valves exclusively for the Chinese domestic nuclear market. - MarketWatch
Garmin Ltd. (GRMN) announced today that its subsidiaries, Garmin International Inc and Garmin Corporation, have signed a six-year extension to their agreement with NAVTEQ, a leading provider of digital map data for location based solutions and vehicle navigation. The agreement allows Garmin to continue using NAVTEQ data through 2015, with an option to renew for an additional four-year period. In addition, the parties have agreed to pursue expanded points of cooperation that will result in improved mapping quality and coverage worldwide, and will drive further device innovation into the future. The parties did not disclose specific details of the agreement.
Amazon.com Inc. is expected to unveil its long-awaited e-book reader at a media event Monday in New York, according to CNet Networks Inc.'s technology news site. - CNNMoney
Media Summary
According to Reuters, the pace of capital spending in China rose quickly, making a rate increase likely.
Reuters writes that an investigation into the finances of Fannie Mae (FNM) is likely after Fortune magazine questioned the company's accounting.
Reuters reports that Starbucks (SBUX) reported its first traffic drop.
Reuters writes that US sales of game console jumped sharply lead by the Nintendo Wii.
Reuters reports that sales of Sony's (SNE) PS3 more than doubled in the US after the company cut the price of the product.
The Wall Street Journal says that Gannett's (GCI) USA Today will cut nearly 10% of its editorial staff.
The New York Times writes that online video is stealing viewer from TV.
The FT writes that China is worried that a US economic slowdown could hurt the Asian country's growth rate.
The FT reports that Ford (F) will not close five US plants as part of a deal with the UAW.
Barron's writes that BEA Systems (BEAS) earnings topped forecasts.
IPO Central:
Shares of 3Par Inc. are expected to debut Friday after the data storage company's initial public offering priced at $14 per share -- above the expected range -- for proceeds of about $95 million.
The company had anticipated its offering of 7.5 million shares to price between $11 and $13 each.
Shares will trade on the New York Stock Exchange Arca under the symbol "PAR." - AP
Economic Data:
9:00 Net Foreign Purchases
9:15 Industrial Production
9:15 Capacity Utilization
Upgrades and Downgrades by Sector:
Advertising
HOLL Hollywood Media Roth Capital Downgraded from Buy to Hold $6
Aerospace
GR Goodrich Friedman Billings Price Target Raised Outperform $69 to $83
Aircraft Asset Mngmt
AER AerCap Friedman Billings Initiated at Outperform $28
Airlines - Freight
FDX FedEx Robert W. Baird Downgraded from Outperform to Neutral $125 to $113
Advertising
HOLL Hollywood Media Roth Capital Downgraded from Buy to Hold $6
Aerospace
GR Goodrich Friedman Billings Price Target Raised Outperform $69 to $83
Aircraft Asset Mngmt
AER AerCap Friedman Billings Initiated at Outperform $28
Airlines - Freight
FDX FedEx Robert W. Baird Downgraded from Outperform to Neutral $125 to $113
Airlines-Lease,Fin
AYR Aircastle Friedman Billings Initiated at Mkt Perform $30
GLS Genesis Lease Friedman Billings Initiated at Mkt Perform $21
Audio-Video Equipmnt
HAR Harman Credit Suisse Resumed Coverage Outperform $100
Broadband Svcs
CLWR Clearwire Wachovia Downgraded from Outperform to Mkt Perform
Business Services
WNS WNS Deutsche Securities Upgraded from Hold to Buy $25
NUAN Nuance Communications Kaufman Bros Price Target Raised Buy $20 to $24
MDCA MDC Partners RBC Capital Mkts Initiated at Outperform $17
NCTY The9 Ltd Citigroup Downgraded from Buy to Hold
Chemicals
IOSP Innospec JP Morgan Upgraded from Neutral to Overweight
NCX NOVA Chemicals Banc of America Sec Upgraded from Sell to Neutral
Chemicals-Ethanol
VSE VeraSun Energy Credit Suisse Upgraded from Underperform to Neutral $12
Computer Hardware
EXFO EXFO Jefferies & Co Initiated at Hold
Computer Software
CRM Salesforce.com RBC Capital Mkts Price Target Raised Sector Perform $45 to $55
CRM Salesforce.com Cantor Fitzgerald Price Target Raised Hold $58 to $61
CRM Salesforce.com Friedman Billings Price Target Raised Underperform $29 to $35
CRM Salesforce.com Broadpoint Capital Price Target Raised Buy $58 to $63
SCHW Charles Schwab Credit Suisse Price Target Raised Outperform $26 to $28
BBBB Blackboard Sun Trust Rbsn Humphrey Initiated at Neutral
ADSK Autodesk Kaufman Bros Downgraded from Buy to Hold $55
ADSK Autodesk Needham & Co Downgraded from Strong Buy to Buy
ATVI Activision Piper Jaffray Downgraded from Buy to Neutral $26 to $22
THQI THQ Inc Piper Jaffray Downgraded from Buy to Neutral $30
UNCA Unica Wachovia Downgraded from Outperform to Mkt Perform
OPWV Openwave RBC Capital Mkts Cut Price Target Sector Perform $5.50 to $5
Finance Companies
STV China Digital TV Piper Jaffray Initiated at Buy $43
GCA Global Cash Access Deutsche Securities Downgraded from Buy to Hold $12 to $7
Foods
PEET Peet's Coffee Piper Jaffray Price Target Raised Buy $29 to $32
Gaming Operations
PGIC Progressive Gaming Brean Murray Cut Price Target Buy $8 to $5
Healthcare
INFN Infinera JP Morgan Initiated at Overweight
APPX APP Pharma CIBC Wrld Mkts Cut Price Target Sector Perform $24 to $12
GNPI Genius Products Roth Capital Cut Price Target Buy $4.50 to $4
NUVA NuVasive Wachovia Downgraded from Outperform to Mkt Perform
Industrial Equipment
KTEC Key Technology Needham & Co Price Target Raised Buy $30 to $36
Insurance
AOC Aon Stifel Nicolaus Upgraded from Hold to Buy $55
CB Chubb Bernstein Upgraded from Mkt Perform to Outperform
CNA CNA Financial Bernstein Upgraded from Mkt Perform to Outperform
Major Pharmaceutical
PWR Quanta Services Sun Trust Rbsn Humphrey Downgraded from Buy to Neutral
Manufacturing
TYC Tyco Citigroup Upgraded from Sell to Hold
DSTI DayStar Technologies Northland Securities Coverage Dropped
Motion Pictures
RGC Regal Entertainment Stifel Nicolaus Initiated at Hold
Oil and Gas
COP ConocoPhillips Deutsche Securities Upgraded from Sell to Hold $80 to $85
CVX Chevron Deutsche Securities Upgraded from Sell to Hold $85 to $95
MRO Marathon Oil Deutsche Securities Upgraded from Hold to Buy $67 to $75
SUN Sunoco Bernstein Upgraded from Mkt Perform to Outperform
TRV Travelers Bernstein Upgraded from Mkt Perform to Outperform
Personal Svcs-Fitness
LTM LIFE TIME Fitness Piper Jaffray Cut Price Target Neutral $64 to $58
Pharmaceuticals
European Pharmaceuticals downgraded to Underweight at Bear Stearns
Recreation
EK Eastman Kodak JP Morgan Initiated at Underweight
Regional Banks
WFC Wells Fargo Keefe Bruyette Downgraded from Outperform to Mkt Perform
ZION Zions Bancorp Friedman Billings Cut Price Target Mkt Perform $65 to $60
Restaurants
STAR Starent Networks Lehman Brothers Upgraded from Equal-weight to Overweight
MAIN Main Street Capital Morgan Keegan Initiated at Outperform
RUTH Ruths Chris Steak House Deutsche Securities Initiated at Hold $12
TXRH Texas Roadhouse Deutsche Securities Initiated at Buy $15
SBUX Starbucks Robert W. Baird Downgraded from Outperform to Neutral $38 to $24
SBUX Starbucks RBC Capital Mkts Cut Price Target Outperform $37 to $26
SBUX Starbucks Friedman Billings Cut Price Target Mkt Perform $26 to $22
SBUX Starbucks CIBC Wrld Mkts Cut Price Target Sector Outperform $32 to $27
Retail Trade
JCP JC Penney Credit Suisse Upgraded from Underperform to Neutral $42
HGG HHGregg JP Morgan Initiated at Overweight
GME Gamestop Piper Jaffray Downgraded from Buy to Neutral $68 to $59
TGT Target UBS Downgraded from Buy to Neutral
KSS Kohl's Stifel Nicolaus Cut Price Target Buy $70 to $60
KSS Kohl's Credit Suisse Cut Price Target Neutral $47 to $44
Semiconductors
BRCM Broadcom Credit Suisse Upgraded from Underperform to Neutral $22 to $35
RFMD Piper Jaffrey Thinks the stock is a Buy
MSCC Microsemi JP Morgan Downgraded from Overweight to Neutral
VIMC Vimicro Roth Capital Cut Price Target Hold $5 to $4.50
Solar Energy
STP Suntech Power Lehman Brothers Price Target Raised Overweight $65 to $80
Tech - Satellites
CPBY China Public Security Technology Brean Murray Price Target Raised Buy $10 to $12
Technology
A Agilent Credit Suisse Price Target Raised Neutral $35 to $38
TEL Tyco Electronics RBC Capital Mkts Price Target Raised Outperform $41 to $43
TEL Tyco Electronics Credit Suisse Price Target Raised Outperform $39 to $40
Telecommunications
CNTF China Techfaith Wireless Jefferies & Co Upgraded from Hold to Buy $8.65
WIN Windstream Bear Stearns Downgraded from Outperform to Peer Perform
Transportation
DRYS DryShips Cantor Fitzgerald Price Target Raised Buy $114 to $133
Travel Services
EXPE Expedia Citigroup Upgraded from Hold to Buy
Utilities
HE Hawaiian Electric Robert W. Baird Upgraded from Neutral to Outperform $27
Water Treatment Eq
BWTR Basin Water Nollenberger Capital Cut Price Target Buy $18 to $13