Tuesday Morning, December 18th

   Dow Stock News

GM – price target raised to $31 at Smith Barney

   Ice Man Stocks

Dollar Man Ideas:

USU above 9.50
SCA above 4.65

Dividends:

CHN 9.00 12/19
TRF 5.40 12/19
IPSU 12.50 12/20

   Media Commentators

Cramer's Comments:

Bullish: FSLR, MHS, RIG, BMRN

   Ice Cold Commentators

Break Man Video Summary:

Break out buy (or short sell) watch list for short term gains December 18 includes: ABAX, MDG, CYH, HSY, TCK, ROC, ADBE, BYI, DD.

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:

I will keep tonight´s message very brief since I just returned home after having oral surgery late this afternoon.  For you benefit, I have included numerous charts for you to review. Please take some time to familiarize yourself with these charts.

The market experienced another weak day as many major indexes lost support of the respective 20 day moving averages and continued lower throughout the trading session.  As I stated last evening, the bears are in control and the trend is undeniably lower at this stage.  The message the index charts are portraying is that that lower prices are likely on the horizon.  With the markets extremely oversold in the near term, one should expect a bounce to occur shortly.  However, such a bounce is likely to be sold since there are no positive divergences in place on the index charts.  Please respect the message the market is sending and make sure you are properly positioned in this environment.

Good Trading.

   CNBC Fast Money Review

1. DOW CLOSES ON LOW, DOWN 173 PTS

The headline: Economic concerns and credit market worries drag down the Dow 173 points.

The Dow fell below its 100-day moving average, a key technical level watched by traders explains CNBC´s Mary Thompson in a special report. Typically it suggests more weakness to come.
Karen Finerman feels there´s definitely value out there. Stocks are cheaper, right now and she intends to start buying when stocks reach her target level.

2. RAW WOUNDS

The headline: Raw Materials Stocks Lead Market Lower As Gold, Copper Hit New Lows.

Dylan Ratigan explains as the dollar stabilizes, gold skid to a 2-week low Monday, and oil prices fell. Also copper prices dipped to a 9-month low on fears of weaker demand.
Guy Adami likes the space and suggests FCX at $90 is a buy.
Pete Najarian reveals he´s seeing options action in NEM. Investors are buying March calls, he explains which suggests to him that NEW could move higher if gold starts to bounce.
Guy Adami doesn´t agree. Stay away, he says.
Jeff Macke says play GLD instead.

3. JUDGEMENT WEEK FOR BROKERS

Expect a bonanza of broker earnings this month with GS reporting Tuesday, MS on Wednesday and BSC on Thursday. How should you trade it?

Karen Finerman reminds the traders that she remains long Goldman short LEH going into earnings. She´s nervous but isn't changing her position.
Guy Adami says avoid BSC like the plague.
Pete Najarian said the options market is suggesting a 7% move in the Goldman stock.

4. BUY OR SELL: EMERGING MARKETS AT THE END OF THE YEAR?

As 2007 draws to a close, how should you play emerging markets? Find out from Tim Seymour.

Momentum has been broken and a bunch of big houses have begun to downgrade emerging markets, explains Seymour. Morgan Stanley came out with a big sell and Deutsche Bank talked about caution.
From a technical perspective I think EEM, EWZ and PZE all probably have 5% -10% downside, he reveals.
Also, the other thing to watch is liquidity,’ Seymour adds. Some of the emerging markets close for a week at a time, so be careful.
Jeff Macke adds I want to see more pain before I get long emerging markets.’

5. OIL FALLS, BUT REFINERS NEVER FINER

The headline: TS, VLO, Refiners Pop Even As Crude Oil Falls For 3rd Straight Day.

Karen Finerman likes the refiners as the crack spread continues to get wider.
Guy Adami prefers HOC in the space.

6. POPS AND DROPS

LTR popped 2%. Jeff Macke likes the move.
AOC popped 1%. Guy Adami says it´s hard to argue against this story.
HOG popped 2%: Jeff Macke says “Dead cat bounce!’
AEO popped 4%. The teen retailer got an upgrade at Bear Stearns, where the analyst predicted the stock could rise nearly 50% in 2008.
ABK popped 17%. Jeff Macke says sell the pop.
CAT dropped 3%. Guy Adami says if you think the global story is in tact, you can buy.
DRYS dropped 14%. Pete Najarian says this could be a buying opportunity.

7. YOUR FIRST MOVE FOR TUESDAY

Jeff Macke recommends selling BBY if their earnings are strong and the stock rallies.
Guy Adami prefers HOC as a refiner play.
Karen Finerman likes kidney dialysis provider DVA which she considers recession-resistant.
Pete Najarian thinks ASML is a short - based on put activity he´s seeing in the options market.

   News and Events Digest

Breaking News

Goldman Sachs to buy back 15% and announced stellar earnings.

Forest Laboratories Inc. (FRX) and Mylan Inc. (MYL) said that beta blocker Bystolic has been approved by the U.S. Food and Drug Administration for the treatment of hypertension. Forest will market Bystolic in the U.S. and will pay Mylan undisclosed royalty payments as part of their collaboration agreement. Forest expects Bystolic to be available in January. – MarketWatch

Apple (AAPL) is making plans to take the iPhone into Japan and has held talks with NTT DoCoMo, The Wall Street Journal Asia reported, citing people familiar with the situation. Apple Chief Executive Steve Jobs recently met with NTT DoCoMo's president, Masao Nakamura, to discuss a deal to offer its iPhone in Japan through Japan's dominant mobile operator, the report said. Apple has also been talking to No. 3 operator Softbank Corp., the report said. - MarketWatch

Blyth Inc., which makes candles and other household goods, on Monday introduced a program to buy back an additional 6 million of its own shares.

The share repurchase program will begin once a previous plan to buy back 12 million shares is complete. As of Oct. 31, 8.1 million shares had been repurchased under that program for about $185 million, Blyth said. – AP

Chevron (CVX) said Tuesday it inked a 30-year production-sharing contract with China National Petroleum Corp. (CNPC). The contract covers the joint development of the Chuandongbei natural gas area in central China. Chevron will take over the role of operator and hold a 49% participating interest and CNPC will hold a 51% interest in the project. "The signing of this contract demonstrates our worldwide focus on large-scale exploration and production projects, and our long-term strategy to grow our business in China," said Dave O'Reilly, chairman and chief executive officer of Chevron Corporation, during a signing ceremony in Beijing. "Chevron is pleased to bring our technological expertise and strong emphasis on safety, efficiency and reliability to develop the Chuandongbei gas project in partnership with CNPC." Financial terms of the deal weren't disclosed. – MarketWatch

Media Summary

According to Reuters, December home builder sentiment hit a new low.

Reuters writes that PC chip makers may have hit a bottom and hope for a recovery in the first half of next year.

Reuters writes that a new Goldman Sachs (GS) hedge fund will open for business with over $6 billion.

The Wall Street Journal writes the ECB guaranteed it will supply euro-zone financial institutions unlimited two-week funds at a fixed rate.

The Wall Street Journal reports that Apple (AAPL) has been meeting with Docomo (DCM) and Softbank and launching the iPhone in Japan.

The Wall Street Journal writes that XM Satellite (XMSR) and Universal Music have settled a copyright infringement suit.

The Wall Street Journal writes that Adobe (ADBE) earnings topped forecasts

The Wall Street Journal writes that Qwest (Q) will upgrade a significant part of its network to fiber to increase connection speeds.

The New York Times reports that Congress may give substantial incentives to ethanol companies to increase the rate at which the industry is growing.

The FT writes that Loews will spin off Lorillard.

Barrons' reports that Micron (MU) fell because of concern about falling DRAM pricing.

Bloomberg writes that the world economy is facing the risk of both recession and faster inflation.

M&A Activity:

Waste Industries USA Inc. (WWIN) said it agreed to be acquired by a private investor group for about $544 million, or $38 a share. The Raleigh, N.C., regional solid waste service company said the investor group includes Lonnie Poole, Jr., the company's founder and chairman; Jim Perry, the company's president and chief executive and financial partners Macquarie Infrastructure Partners and Goldman Sachs. The price per share is a 33% premium to Waste Industries's closing price of $28.47 on the last trading day on Oct. 22, prior to initial offer. The deal is expected to close during the first half of 2008 and is subject to approval by Waste Industries shareholders. - MarketWatch

Royal Philips Electronics (PHG) said Tuesday that it will buy clinical IT and service provider Visicu Inc. (EICU) for $12 a share, or $430 million in total. Philips said that by integrating Visicu's remote patient monitoring and clinical decision support technology with its patient monitors, both companies expect to accelerate growth. The board of Visicu gas approved the transaction and has recommended that shareholders vote their shares in favor of the merger. Based in Baltimore, Maryland, Visicu is a leader in clinical IT systems. The deal is expected to close in the first quarter of 2008. – MarketWatch

IPO Central:

Glasshouse Technologies Inc. on Tuesday filed a $100 million initial public offering with underwriters Goldman Sachs and J.P. Morgan. The Framingham, Mass. provider of information technology consulting, technology integration and managed services plans to trade on the Nasdaq under the symbol GLAS. Glasshouse reported a loss of $14 million on revenue of $41 million in the nine months ended Sept. 30, compared to a loss of $9.8 million on revenue of $29 million in the year-ago period. Shareholders in the firm include Kodiak Venture Partners, Sigma Partners, GrandBanks Capital, Paladin Capital Group and Globespan Capital Partners. – MarketWatch

NetSuite (N) on Tuesday increased the estimated price range of its initial public offering to $16-$19 from $13-$16 a share. The San Mateo, Calif. business software maker kept the size of the IPO at 6.2 million shares. At the midpoint of the range, the IPO will raise $109 million with underwrites Credit Suisse and W.R. Hambrecht. It's due to price later this week for its debut on the New York Stock Exchange. Oracle founder Larry Ellison owns about 61% of the company. - MarketWatch

Economic Data:

Economic Calendar:

8:30 Housing Starts

8:30 Building Permits

   Upgrades and Downgrades by Sector:

Application Software:
ADBE – upgraded to Buy at DBAB

Internet Retail:
EBAY – initiated with a Buy at Piper

Diversified Machinery:
IR – initiated with a Buy at DBAB

Oil & Gas:
KWK – initiated with a Buy at Smith Barney

Shippers:
DRYS – Jefferies loves the company here

Biotech
 BDSI BioDelivery Services Merriman Curhan Ford Initiated at Buy
 ZGEN Zymogenetics Banc of America Sec Downgraded from Buy to Neutral $16 to $12

Business Services
 HURN Huron Consulting Stifel Nicolaus Initiated at Buy $87
 TSS Total System Susquehanna Financial Initiated at Positive
 NSRGY Nestle UBS Downgraded from Buy to Neutral
 GPN Global Payment Susquehanna Financial Initiated at Negative
 HPY Heartland Payment Systems Susquehanna Financial Initiated at Negative

Computer Hardware
 JBL Jabil Circuit Credit Suisse Cut Price Target Outperform $28 to $24

Computer Software
 ADBE Adobe Systems Deutsche Securities Upgraded from Hold to Buy
 SYMC Symantec Bear Stearns Upgraded from Underperform to Peer Perform
 ADBE Adobe Systems Kaufman Bros Downgraded from Buy to Hold $52 to $43
 TT TransTech KeyBanc Capital Mkts Downgraded from Aggressive Buy to Hold
 TT TransTech Lehman Brothers Downgraded from Overweight to Equal-weight

Construction
 TEX Terex Credit Suisse Price Target Raised Outperform $80 to $98

Entertainment CNK Cinemark Wachovia Initiated at Outperform

Finance Companies
 ASFI Asta Funding Kaufman Bros Downgraded from Buy to Hold $55 to $40

Gold and Silver Mining
 RGLD Royal Gold HSBC Securities Upgraded from Neutral to Overweight

Healthcare
 FRX Forest Labs Soleil Upgraded from Hold to Buy $47
 BRL Barr Pharma Banc of America Sec Initiated at Buy $60
 MYL Mylan Labs Banc of America Sec Initiated at Buy $18
 TEVA Teva Pharm Banc of America Sec Initiated at Buy $55

Healthcare Equipment
 ICXT ICX Technolgies Needham & Co Initiated at Buy $18

Healthcare Facilities
 DVA DaVita Oppenheimer Upgraded from Neutral to Buy $65
 SUNH Sun Healthcare Credit Suisse Initiated at Outperform $20
 PSYS Psychiatric Solutions Credit Suisse Initiated at Underperform $30

Healthcare Services
 LNCR Lincare Oppenheimer Downgraded from Buy to Neutral

Heavy Machinery
 IR Ingersoll-Rand Deutsche Securities Upgraded from Hold to Buy

Insurance
 AZ Allianz AG Lehman Brothers Downgraded from Overweight to Equal-weight

Manufacturing
 LII Lennox Intl KeyBanc Capital Mkts Price Target Raised Buy $41 to $44
 MFLX Multi-Fineline Banc of America Sec Initiated at Buy $23

Multi-National Banks
 MI Marshall & Ilsley Deutsche Securities Downgraded from Buy to Hold

Oil and Gas
 ATW Atwood Oceanics Banc of America Sec Upgraded from Neutral to Buy $61 to $112
 GLF Gulfmark Offshore Banc of America Sec Upgraded from Neutral to Buy $47 to $57
 OXY Occidental Petro Friedman Billings Upgraded from Underperform to Mkt Perform $56 to $87
 HES Hess Friedman Billings Price Target Raised Mkt Perform $73 to $97
 KWK Quicksilver Resrcs UBS Price Target Raised Buy $75 to $76
 MRO Marathon Oil Friedman Billings Price Target Raised Mkt Perform $50 to $65
 MUR Murphy Oil Friedman Billings Price Target Raised Mkt Perform $64 to $81
 DO Diamond Offshore Banc of America Sec Initiated at Buy $109 to $159
 DVR Cal Drive Intl Banc of America Sec Initiated at Buy $17 to $19
 NE Noble Corp Banc of America Sec Initiated at Buy $55 to $68
 RIG Transocean Banc of America Sec Initiated at Buy $112 to $175
 GRP Grant Prideco Citigroup Downgraded from Buy to Hold $72 to $61

Paper and Packaging
 IP Intl Paper Credit Suisse Upgraded from Neutral to Outperform $39
 AIN Albany Intl Credit Suisse Price Target Raised Outperform $43 to $50

Recreation
 DWA Dreamworks Animation Stifel Nicolaus Cut Price Target Buy $38 to $31

Regional Banks
 MBFI MB Financial JP Morgan Initiated at Overweight
 WFC Wells Fargo Bear Stearns Cut Price Target Outperform $43 to $35

REITs
 EQR Equity Res Lehman Brothers Upgraded from Equal-weight to Overweight
 AREX Approach Resources KeyBanc Capital Mkts Initiated at Buy $16
 AREX Approach Resources Wachovia Initiated at Outperform
 AREX Approach Resources JP Morgan Initiated at Overweight
 AEC Associated Estates Robert W. Baird Downgraded from Outperform to Neutral $15 to $12
 AVB AvalonBay Robert W. Baird Downgraded from Outperform to Neutral $130 to $105
 CLI Mack-Cali Realty Lehman Brothers Downgraded from Equal-weight to Underweight
 CUZ Cousins Prop Lehman Brothers Downgraded from Overweight to Equal-weight
 CPT Camden Property Robert W. Baird Cut Price Target Neutral $70 to $55
 ESS Essex Property Robert W. Baird Cut Price Target Neutral $127 to $108
 HME Home Prop of NY Robert W. Baird Cut Price Target Neutral $55 to $47
 MAA Mid-America Aptmt Robert W. Baird Cut Price Target Neutral $56 to $49
 UDR United Dominion Robert W. Baird Cut Price Target Neutral $27 to $24

Savings & Loan
 WGBS WaferGen Bio-Systems Rodman & Renshaw Initiated at Mkt Outperform $7

Semiconductors
 CRUS Cirrus Logic Jefferies & Co Upgraded from Hold to Buy $6
 WFR MEMC Elec Lehman Brothers Price Target Raised Overweight $90 to $110
 AFOP Alliance Fiber Optic Roth Capital Initiated at Buy $2.80
 TRID Trident Microsystems Roth Capital Downgraded from Buy to Hold $14 to $7.50

Solar Energy
 JASO JA Solar Lehman Brothers Price Target Raised Equal-weight $65 to $80
 STP Suntech Power Lehman Brothers Price Target Raised Overweight $80 to $100

Technology-Banking
 YTEC Yucheng Technologies Susquehanna Financial Initiated at Positive

Telecommunications
 EQ Embarq JP Morgan Upgraded from Neutral to Overweight
 FRP Fairport Comms JP Morgan Upgraded from Underweight to Neutral
 ARRS Arris UBS Price Target Raised Neutral $14 to $11.50
 ANEN Anaren Microwave Broadpoint Capital Initiated at Buy $20
 NWK Network Equip Broadpoint Capital Initiated at Buy $15
 CACS Carrier Access Needham & Co Downgraded from Buy to Hold
 WIN Windstream JP Morgan Downgraded from Neutral to Underweight

Transportation
 HOS Hornbeck Offshore Banc of America Sec Initiated at Buy $46 to $55

Utilities
 NWEC Northwestern KeyBanc Capital Mkts Initiated at Buy $33
 DYN Dynegy Credit Suisse Cut Price Target Neutral $10 to $8.50

Ideas from other sites:

Why There's More Upside for Chinese Stocks

If you're feeling a little nervous about the markets ... you're far from alone.
U.S. stocks have been struggling ever since the Federal Reserve Bank disappointed investors with a measly 25-basis-point interest rate cut last week.
After nose-diving by almost 300 points last Tuesday, and posting further losses for the rest of the week, the Dow Jones Industrial Average fell another 172 points yesterday.
The gauntlet of bad news — falling real estate prices and retail sales, rising inflation and energy prices, and the continued saga of billions in subprime write-downs — has investors feeling the pain.
And some of that pain has washed across the Pacific Ocean and infected Asian markets. The Shanghai Composite Index surged from 2,695 at the beginning of the year to a record high of 6,124 on October 16. Then over the next 30 days, it lost more than 1,000 points.
Ever since, a chorus line of "I-told-you-so" naysayers have been all too eager to pronounce the end to the bull market. And while the Shanghai index has bounced around, it hasn't done much overall.
So is the China correction finished or about to get a lot worse? My answer is simple ...
The Chinese Market Is About
To Get a Whole Lot Better
China's surging economy is proof that the partial adoption of a market economy has been a booming success. The rising Chinese economic tide has lifted millions of Chinese out of poverty, and is the greatest economic success story of our times.
But a bear market in the country's stocks would wipe out years of savings, scare small investors away (perhaps forever), and derail China's economic juggernaut.
This point is not lost on the leaders of the Communist Party. They want to avoid any event that would jeopardize their agenda to boost China's standard of living, economic growth, and inflows into the country's capital markets.
Internal Sponsorship

U.S. Labor Department Reports ...
Inflation Taking Off Like A MOON SHOT!
In November …

    » Wholesale prices jumped higher and faster than at any time in 34 years!
    » Production materials soared faster than at any time in 33 years!
    » Unfinished energy products rocketed faster than at any other time in history!

This is just the beginning of the loss in buying power I've been warning you about! Here's how to protect and multiply your wealth as inflation sinks its teeth into the U.S. economy ...
Click here for more information ...
 
It's why the 17th Party Congress in October pledged to let people accumulate their "asset wealth." In other words, keep their stock portfolios rising in value.
And remember, China is a communist country. Don't think for a second that the Chinese leaders can't do whatever they want. They can — and do — manipulate markets. It's business as usual for them.
The Communist Party has absolute control of everything from prices of food and oil to the content of newspapers and television shows.
Needless to say, I expect the Chinese government to act aggressively in stabilizing or even propping up their stock market. For starters ...
Chinese Officials Are Publicly Stating
That Stocks Have More Upside!
On November 30, a commentary in Securities Times, a major securities daily that is used to voice the wishes of Chinese market regulators, clearly stated that the Chinese stock market is NOT over-valued or developing a bubble.
Li Yang, the director of the Institute of Finance and Banking under the Chinese Academy of Social Sciences (CASS), said that applying western P/E ratios to Chinese stocks is a mistake. He argued that China is an emerging economy, which makes it an entirely different animal.
Yang said that by leveraging the rapid growth of China's economy and continued appreciation of the yuan, most listed companies are expected to report handsome profit growth, which will bring down their P/E ratios.
Li Yang publicly stated that Chinese stocks are nowhere near being overvalued.
His conclusion ...

    "China's stock market in 2007 is one of a fast-running bull. The running speed of the bull is slowing down but it is still a bullish market. The market will remain bullish ahead of the Olympic Games."

But don't make the mistake of assuming that 'jawboning' from Chinese government officials is as powerless as it is in the U.S. The difference is that in China, the Communist politicians CAN and DO back up their jawboning with timely policy action.
Example ...
This Move by Foreign Exchange Officials
Could Drive Chinese Stocks to the Moon
On December 9, the State Administration of Foreign Exchange (SAFE) announced that it was going to triple the quota for qualified foreign institutional investors (QFII) putting money into Chinese stocks listed on the Shanghai and Shenzhen stock exchanges.
See, while you and I aren't allowed to invest directly on mainland China stock exchanges, the big institutional investors — like Goldman Sachs and Merrill Lynch — can through the QFII program.
Previously, they were limited to $10 billion. Now, another $20 billion will likely flood into Chinese stocks!
I'm confident that's what's going to happen. After all, investors haven't lost their appetite for Chinese investments one bit. Just last week, two new Chinese companies went public on the New York Stock Exchange and skyrocketed!
Last Tuesday, Vance Info Technologies (NYSE: VIT), an IT services and software company, jumped 17% on its first day of trading. Separately, Chinese residential real estate developer Xinyuan Real Estate (NYSE: XIN) roared ahead 20% on its debut.
 
And while those numbers are impressive, the IPO market is even hotter in China itself:

    * China Shipping Container Lines, the second-largest shipping company in Asia, raced ahead by 75% on its first day on the Shanghai stock exchange.

    * China Railway, Asia's biggest construction company, rose 69% on its Shanghai debut.

    * Petro China, the company that Warren Buffet recently sold, skyrocketed 163% on its first Shanghai trading day!

I have no doubt that strong demand for Chinese stocks plus the expansion of the QFII program will be like throwing gasoline on an already red-hot fire.
Listen, the U.S. stock market is ugly and about to get uglier, but do not make the deer-in-the-headlights mistake of inaction. Instead, consider reducing your exposure to domestic weakness and put your money to work in places that are still expanding.