Wednesday Morning, July 18th

Drugmaker Pfizer Inc. said Wednesday its second-quarter profit fell 48 percent year-over-year, hurt by the loss of patent exclusivity for its Zoloft and Norvasc drugs and by sluggish sales of blockbuster cholesterol drug, Lipitor, in the U.S. Despite that, Pfizer reaffirmed its guidance for 2007 and 2008 financial results.

Net income slid to $1.27 billion, or 18 cents per share, from $2.42 billion, or 33 cents per share, a year ago. Excluding items, adjusted profit fell 20 percent to $2.94 billion, or 42 cents per share, from $3.66 billion, or 50 cents per share, a year ago. - AP

JPMorgan Chase & Co. on Wednesday said its profit jumped 20 percent in the second quarter, as the nation's third-largest bank benefited from a surge in investment banking fees.

The New York-based bank said net income totaled $4.2 billion, or $1.20 a share, in the April to June period, up from $3.5 billion, or 99 cents a share, in the same period a year earlier. Revenue rose to $18.91 billion, up from $15.09 billion a year earlier. - AP

Altria Group Inc. (MO) on Wednesday said second-quarter net income fell to $2.22 billion, or $1.05 a share, from $2.71 billion, or $1.29 a share, in the year-ago period. The results include 12 cents a share in asset impairments and other costs. On an adjusted basis, it earned $1.15 a share. Analysts, on average, expected it to earn $1.13 a share, according to Thomson Financial. Net revenue rose to $18.81 billion from $17.15 billion. Altria, whose brands include Marlboro, Parliament and Virginia Slims, revised its profit forecast from continuing operations for the year to a range of $4.05 to $4.10 a share, reflecting 15 cents in additional charges for asset impairment and exit costs, down from its previously announced range of $4.20 to $4.25 a share. - MarketWatch

   Ice Man Stocks

Regular Trades:

SAI - 18.62 = 19.50 G
VCLK - 31
SPSN - 12
MNT - 42.10
RSYS - 12.90
RTEC - 18.25
VTAL - 21

Depressed:

AVR - 15.70 G
NAT - 41.75 G, 40.90 G
IMMR - 15 G
TSL - 58.10 G
HOKU - 11.15 G

Dollar Man:

CRWN - 7.50
ENCY - 2.10

   Media Commentators

Cramer's Comments:

Bullish: SPR, ABB

   IPO Central

India's HDFC Bank Ltd. (HDB) priced 6.59 million American depositary receipts at $92.10 each in a bid to raise $609 million in its initial public offering debuting Wednesday. - MarketWatch

Dice Holdings Inc. (DHX) priced 16.7 million shares at $13 for proceeds of $217 million in its initial public offering on Wednesday. The New York-based job marketplace Web site operator priced at the top of its $11-$13 range with underwriter Credit Suisse. - MarketWatch

Bear Stearns said two hedge funds it runs are now worth nearly nothing, as the downturn in bonds tied to subprime mortgages gets deeper and goes global. - WSJ

Telecommunications equipment giant Ericsson (ERIC) on Wednesday said it's won a $2 billion contract to expand the network of India's No. 1 operator Bharti Airtel into more rural areas. The contract is Ericsson's largest to date. - MarketWatch

EV Energy Partners (EVEP) said it's reached a deal to acquire oil and natural gas properties in the Permian Basin. The purchase price is $160 million, the Houston-based limited partnership said. The properties encompass 142 wells operating in Texas and New Mexico. Pending completion of the deal in September, EV Energy Partners said that its board of directors will be able to declare a further increase in the quarterly distribution rate, beginning with the payout for the fourth quarter of 2007. EV Energy Partners is buying the Permian Basin properties from a company sponsored by EnCap, the private-equity firm specializing in the independent sector of the U.S. oil and gas industry. - MarketWatch

Inspire Pharmaceuticals Inc., (ISPH) the Durham, N.C., biopharmaceutical producer, said on Wednesday that it agreed to sell $75 million of exchangeable preferred stock to Warburg Pincus. Each of the preferred shares is exchangeable for 100 common shares, Inspire said. The transaction, based on a price of $5.35 per Inspire common share, is expected to close this week. Inspire common shares closed Tuesday at $5.09. Inspire said it would use the funds to help commercialize AzaSite, its treatment for bacterial conjunctivitis, to fund several Phase III drug-development programs, and general purposes. Inspire also named Jonathan S. Leff, a managing director of Warburg Pincus, to the board. - MarketWatch

   News and Events Digest

Breaking News

Bear Stearns said two hedge funds it runs are now worth nearly nothing, as the downturn in bonds tied to subprime mortgages gets deeper and goes global. - WSJ

Telecommunications equipment giant Ericsson (ERIC) on Wednesday said it's won a $2 billion contract to expand the network of India's No. 1 operator Bharti Airtel into more rural areas. The contract is Ericsson's largest to date. - MarketWatch

EV Energy Partners (EVEP) said it's reached a deal to acquire oil and natural gas properties in the Permian Basin. The purchase price is $160 million, the Houston-based limited partnership said. The properties encompass 142 wells operating in Texas and New Mexico. Pending completion of the deal in September, EV Energy Partners said that its board of directors will be able to declare a further increase in the quarterly distribution rate, beginning with the payout for the fourth quarter of 2007. EV Energy Partners is buying the Permian Basin properties from a company sponsored by EnCap, the private-equity firm specializing in the independent sector of the U.S. oil and gas industry. - MarketWatch

Inspire Pharmaceuticals Inc., (ISPH) the Durham, N.C., biopharmaceutical producer, said on Wednesday that it agreed to sell $75 million of exchangeable preferred stock to Warburg Pincus. Each of the preferred shares is exchangeable for 100 common shares, Inspire said. The transaction, based on a price of $5.35 per Inspire common share, is expected to close this week. Inspire common shares closed Tuesday at $5.09. Inspire said it would use the funds to help commercialize AzaSite, its treatment for bacterial conjunctivitis, to fund several Phase III drug-development programs, and general purposes. Inspire also named Jonathan S. Leff, a managing director of Warburg Pincus, to the board. - MarketWatch

Economic Data:

8:30 CPI

8:30 Housing Starts

8:30 Building Permits

10:30 Crude Inventorie

   Upgrades and Downgrades by Sector:

Dick Bove, an analyst at Punk Ziegel, cut his ratings on the five top U.S. brokerage firms to sell, and said the apparent meltdown of two hedge funds run by Bear Stearns are likely an industrywide problem. "I do not view this as a Bear Stearns problem but a systemic one," Bove said. He added that, "This opens investors to sizable losses which, at this moment, simply cannot be calculated." Bove downgraded the following stocks to sell from market perform BSC, MS, GS, LEH, MER. Bove lowered his ratings on BAC, JPM, and C to market perform from buy.

Warner Music Group WMG Pali Research Sell » Neutral
Sanofi-Aventis SNY HSBC Securities Neutral » Overweight

Morgan Stanley MS Punk, Ziegel & Co Mkt Perform » Sell
Merrill Lynch MER Punk, Ziegel & Co Mkt Perform » Sell
Lehman Brothers LEH Punk, Ziegel & Co Mkt Perform » Sell
Goldman Sachs GS Punk, Ziegel & Co Mkt Perform » Sell
Bear Stearns BSC Punk, Ziegel & Co Mkt Perform » Sell
Bank of America BAC Punk, Ziegel & Co Buy » Mkt Perform
ACA Capital ACA Credit Suisse Outperform » Neutral
DaVita DVA Deutsche Securities Buy » Hold $64 » $61
Peabody Energy BTU Citigroup Buy » Hold
Foundation Coal FCL Citigroup Buy » Hold
Arch Coal ACI Citigroup Buy » Hold
Everest Re RE Bear Stearns Outperform » Peer Perform
Novartis AG NVS Credit Suisse Neutral » Underperform
Metabasis Therapeutics MBRX Rodman & Renshaw Mkt Outperform » Mkt Perform
Syniverse Holdings SVR Matrix Research Sell » Strong Sell
Republic Services RSG Friedman Billings Outperform » Mkt Perform $32 » $34
Kindred Healthcare KND Wachovia Mkt Perform » Underperform
Keystone Auto KEYS BB&T Capital Mkts Buy » Hold
IndyMac Banc IMB Lehman Brothers Overweight » Equal-weight
Intel INTC JMP Securities Mkt Outperform » Mkt Perform
Universal Forest UFPI Wachovia Mkt Perform » Underperform

Initiated

Infinera INFN Citigroup Hold $26
Flagstar Bancorp FBC Lehman Brothers Equal-weight $19
Limelight Networks LLNW Jefferies & Co Hold $20
FBR Capital Markets FBCM Jefferies & Co Buy $19
Yingli Green Energy YGE CIBC Wrld Mkts Sector Perform
Penwest Pharma PPCO Cowen & Co Outperform
Einstein Noah BAGL Cowen & Co Outperform
Great Wolf Resorts WOLF Morgan Joseph Buy $18
Limelight Networks LLNW Friedman Billings Outperform $25
Aries Maritime Transport RAMS Credit Suisse Neutral $10
Tsakos Energy TNP Credit Suisse Outperform $78
Teekay Shipping TK Credit Suisse Neutral $60
Seaspan SSW Credit Suisse Neutral $31
Quintana Maritime QMAR Credit Suisse Outperform $19
Overseas Shipholding OSG Credit Suisse Neutral $82
Diana Shipping DSX Credit Suisse Outperform $27
Danaos DAC Credit Suisse Outperform $37
Akamai Tech AKAM Friedman Billings Outperform $64
TorreyPines Therapeutics TPTX RBC Capital Mkts Outperform $12
Limelight Networks LLNW Piper Jaffray Market Perform
Einstein Noah BAGL Piper Jaffray Outperform
Infinera INFN Citigroup Hold $26
Flagstar Bancorp FBC Lehman Brothers Equal-weight $19
Limelight Networks LLNW Jefferies & Co Hold $20
FBR Capital Markets FBCM Jefferies & Co Buy $19
Yingli Green Energy YGE CIBC Wrld Mkts Sector Perform
LDK Solar LDK CIBC Wrld Mkts Sector Outperform $44
Praxair PX CIBC Wrld Mkts Sector Outperform $100
Wabtec WAB KeyBanc Capital Mkts / McDonald Buy $47
Greenbrier Comp GBX KeyBanc Capital Mkts / McDonald Buy $47
Freightcar America RAIL KeyBanc Capital Mkts / McDonald Buy $60
PAETEC Holding PAET Merriman Curhan Ford Buy

Coverage Resumed

Coca-Cola(b;) KO HSBC Securities Neutral $54 » $57

Coverage Reit/Price Tgt Changed

United Dominion UDR KeyBanc Capital Mkts / McDonald Buy $33 » $35
Intel INTC Stifel Nicolaus Buy $27 » $31
FMC Tech FTI Stifel Nicolaus Buy $84 » $101
Elec For Imaging EFII Soleil Buy $30 » $33
US Bancorp USB RBC Capital Mkts Outperform $38 » $37
State Street STT RBC Capital Mkts Sector Perform $67 » $78
Polaris Inds PII RBC Capital Mkts Sector Perform $52 » $54
LCA Vision LCAV RBC Capital Mkts Sector Perform $41 » $45
Fulton Fincl FULT RBC Capital Mkts Underperform $13 » $12
Equity Lifestyle Properties ELS RBC Capital Mkts Sector Perform $56 » $58
ADTRAN ADTN Kaufman Bros Buy $30 » $32
Forest Labs FRX HSBC Securities Neutral $58 » $50
New Oriental Education & Technology EDU Brean Murray Buy $56 » $60
US Bancorp USB Friedman Billings Outperform $40 » $38
PPD Inc. PPDI Friedman Billings Outperform $46 » $41
j2 Global JCOM Friedman Billings Outperform $36 » $41
Regions Fincl RF Friedman Billings Mkt Perform $38 » $37
ADTRAN ADTN Robert W. Baird Neutral $26 » $28
Oculus Innovative Sciences OCLS Rodman & Renshaw Mkt Outperform $13 » $16
ADTRAN ADTN Friedman Billings Mkt Perform $27 » $29