Wednesday Morning, September 5th
Dow Stock News
MO - downgraded to Neutral at Goldman Sachs with $76 price target
HD - resumed with a Buy rating at Goldman Sachs with $42 price target
BA - initiated with a Hold at DBAB with $104 price target
The FT reports that Microsoft (MSFT) lost a bid for part of its Office software to become an international standard.
The New York Times reports that GM (GM) tightened production for the fourth quarter due to poor credit markets.
Reuters write that auto sales were down in the US during August, but sales at GM (GM) rose.
Reuters writes that Intel (INTC) will respond to regulator's questions about its joint venture with ST Micro (STM).
Ice Man Stocks
Breakouts the Ice Man may consider trading:
CSCO - 32.50
MEDX - 18
SMSC - 38
Regular Trades the Ice Man may consider:
ALK - 26
GOOG - 528
IFN - 48
HMY - 9.65
JRT - 13.20
Depressed stocks the Ice Man may buy:
TGT - 60.10 Gap
Dollar Man Ideas:
CSUN - 6.30
PWER - 4.55
Media Commentators
Cramer's Comments:
Bullish: HPQ, PEET, CG
Louis Navallier:
Positive: CAE, CMTL, MTW, MDR, PCR, SNA, VDSI
Cautious: UBB, JLL
Ice Cold Commentators
Break Man Video Summary:
Break out buy (or short sell) watch list for short term gains September 5 includes: INTC, AKS, AMX, PGI, ORCL, VRSN, JNPR, IBM, CCE, AGU.
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.
CNBC Fast Money Review
1. RALLY BACK FROM VACATION
The headline: Dow Jumps 91 Points on First Trading Day of September... Despite September's Gloomy Past, Market Kicks off Month With Rally.
Najarian: Broker, tech, and energy stocks pushed the S&P 500 up 1.1% Tuesday. Adds that although the brokers showed strength they are still down for the year.
Macke: Says not to get giddy over the bounce.
Adami: Likes the brokers going into earnings, especially GS.
Karen Finerman: Is cautious and selling the rally.
2. TECH
The headline: Tech Stocks Lift Market After Industry Group Reports Strong July Global Chip Sales
Najarian: Global chip sales jumped 3.2% in July, signaling strong consumer electronics growth. He likes IBM, DELL and HPQ.
Macke: Likes INTC, CSCO and MSFT because he feels they are under-owned and away from the subprime mess.
Adami: Prefers NVDA.
3. YAHOO JUMPS 8%
The headline: YHOO Soars After Bear Stearns Names It Top Pick For Next 12 - 16 Months
Dylan Ratigan: explains that Bear Stearns said Yahoo might attract a Microsoft bid.
Macke: Doesn´t believe it and calls YHOO stock a sell.
Najarian: Believes YHOO is a buy into January.
4. The Top 3
1. Third Time A Charm
Chart watchers on are keeping a close eye one on number that may dictate the market's fate. Since falling through 1490 in July, The S&P 500 has attempted and failed twice to break back above that key level. Tuesday it closed less than a point from that milestone. Will the third time be a charm?
Macke: Explains that 1490 is a very important technical level. If the market closes above 1490 he feels that will be a bullish sign because it means stocks were able to break through the resistance.
Adami: Says if you´re an investor who is bullish get long today and if you´re an investor who is bearish get short today. But either way he feels the stop is 1490.
Najarian: Likes what he´s seeing in technology as well as energy. However, he doesn´t think the financials are out of the woods.
2. Back To School Report Card
While the kids are just starting school, the retailers are about to get their report cards. Thursday we learn from TGT and WMT whether parents loaded up on backpacks, jeans and cell phones for the kids. So what´s the trade ahead of the numbers?
Macke: Leave WMT for dead and cautiously optimistic on GPS.
Karen Finerman: Doesn´t think the consumer is dead and likes TGT as well as ODP for back-to-school sales.
Adami: Prefers AXP for credit card sales.
Najarian: Likes UA for football season.
3. Is Dealmaking On Permanent Vacation
M&A in August plunged 64% from the prior month and so far this year, about 20% of acquirers have pulled out of existing takeovers. Some investors are betting deals for FDC and TXU may be the next to fall through. Typically dealmaking rebounds in September, but will things be different this year?
Najarian: Likes the TXU deal.
Adami: Says HLT is a buy as an M&A play.
Karen Finerman Is a buyer of AL.
Macke: Says he´s afraid of the TRB deal and also recommends staying away from former takeover names such as DDS and M.
5. APPLE
The headline: AAPL Surges After Piper Jaffray Analyst Predicts Strong iPhone Sales This Quarter
Najarian: Explains that The Street is excited to see new iPod models that are scheduled to premiere at a "special event" Wednesday.
6. Pops and Drops
GM popped 4%: Adami thinks that GM´s 0% incentives have something to do with the pop.
DAI popped 4%: Karen Finerman explains DAI is involved in a big buyback, which she likes.
JAVA popped 3%: Macke likes JAVA as a long-term investment
TXN popped 3%: Najarian thinks there´s still room for chips to go higher.
LEH popped 3%: Karen Finerman prefers Goldman Sachs, which she calls a better name.
MAT dropped 2% after hours: Macke believes MAT could be in huge trouble for Christmas.
DDS dropped 7%: Macke says leave this stock for dead.
CAR dropped 3%: Adami doesn´t like Avis.
7. Wal-Mart and The Financials
Karen Finerman: Wal-Mart, in the long-term she thinks you will make money on it.
Macke: Wal-Mart, get long Target (TGT) instead.
Najarian: Financials expects another shoe to drop in the financials. He´s particularly concerned about LEH because of their bond exposure.
Adami: Financials, Likes GS.
8. The Final Word: Your First Move For Wednesday
Macke: Recommends Short Dow30 ProShares (DOG) as a bet against The Dow.
Karen Finerman: Likes LTD because they sold off their slow growing businesses.
Adami: Thinks HPQ will go higher.
Najarian: Prefers HLTH.
News and Events Digest
Breaking News
Mattel announced its third major toy recall this summer, this one including its Barbie brand. The recall covers about 775,000 Chinese-made toys believed to contain unsafe levels of lead paint. - WSJ
Yahoo agreed to buy online advertising company BlueLithium for about $300 million in a move to expand its ad reach. - WSJ
NBC Universal will sell episodes of its new fall shows and other programs through Amazon.com's download store. - WSJ
Media Summary:
According to Reuters, Mattel (MAT) recalled another 800,000 toys made in China due to high levels of lead paint.
Reuters reports that Apple (AAPL) will announce a new line of iPods which may include one with wireless download features.
Reuters writes that NBC has reached a deal with Amazon (AMZN) to run its content on the web company's new TV product.
The Wall Street Journal writes that federal and state regulators are urging banks to restructure mortgages to help homeowners avoid defaults.
The Wall Street Journal writes that Broadcom (BRCM) won the right to sue push its antitrust claims against Qualcomm (QCOM) in an appelate court ruling.
The New York Times writes that China is fighting back at critics of its product quality.
The New York Times writes that new studies of drug coated stents doe not resolve the issue of their safety.
Barron's reports that Palm (PALM) has cancelled the launch of its laptop mobile system.
M&A Activity:
Ventana Medical Systems Inc. (VMSI), which makes cancer diagnostic equipment, is expected to announce Wednesday that it will acquire Spring Bioscience, a developer of antibodies, for $28.9 million in cash, The New York Times reported on its Web site Tuesday. - MarketWatch
Cognos (COGN) the world leader in business intelligence and performance management solutions, and Applix, Inc. (APLX), a publicly held company based in Westborough, Massachusetts and an industry leader in analytics, today jointly announced the execution of a definitive agreement for Cognos to acquire Applix. With this acquisition, Cognos expects to further extend its position as a leading independent provider of financial performance management.
MGIC Investment Corp. (MTG) and Radian Group Inc. (RDN) agreed to terminate their planned merger, citing market conditions "that have made combining the companies significantly more challenging."
MTG, a Milwaukee mortgage insurer, and Radian, a Philadelphia mortgage insurer, said their outstanding litigation against each other will be dropped. - MarketWatch
Recent Stock Split Announcements:
On August 29, Deere & Company (NYSE:DE) announced that its board of directors proposed a 2:1 stock split pending shareholder approval on November 14, 2007.
On September 4, Waccamaw Bankshares, Inc. (Nasdaq:WBNK) announced that its board of directors approved an 11:10 stock split to be payable on September 18, 2007.
Companies that have previously announced stock splits which become effective in the next several trading days.
Ex-Date Split Symbol Company
9/5 3:2 NEOG Neogen Corporation
9/10 2:1 KHD KHD Humboldt Wedag Intl.
9/11 2:1 NVDA Nvidia Corporation
9/11 2:1 MDR McDermott International, Inc.
9/11 2:1 MTW Manitowoc Company, Inc.
Economic Data:
10:00 Pending Home Sales
10:30 Crude Inventories
2:00 Fed´s Beige Book
Upgrades and Downgrades by Sector:
Solar:
Oppenheimer sees positives from the Milan Conference: they like WFR, LDK, and STP: they are warming up to SOLF and YGE: they don´t like FSLR
Consumer Packaging Goods:
The Sector as a whole has been upgraded to Overweight at Bernstein.
Advertising
VCLK ValueClick Citigroup Upgraded from Hold to Buy
AQNT aQuantive Susquehanna Financial Coverage Dropped
Aerospace
GR Goodrich Deutsche Securities Initiated at Buy $73
Airlines - Passenger
GOL Gol Intelligent Airlines Calyon Securities Downgraded from Buy to Add $41 to $26
TAM TAM S.A. Calyon Securities Downgraded from Buy to Add $41 to $26
Apparel
GES Piper Jaffrey Riterated Outperform
CTRN Citi Trends Cowen & Co Resumed Coverage Outperform
GES DBAB Price Target Raised $62
Beverages
FMX Morgan Stanley Upgraged to Overweight
Biotech
CVTX Cantor Fitzgerald Price Target Raised $36.00
GENR Genaera Rodman & Renshaw Initiated at Mkt Outperform $8
IMCL Imclone Piper Jaffray Initiated at Outperform $40
Broadcasting
TIVO TiVo Susquehanna Financial Coverage Dropped
Brokerage Services
GS Citigroup Raising estimates Due to sale of assets.
CS Credit Suisse Lehman Brothers Downgraded from Overweight to Equal-weight
LEH Citigroup Cut Price Target $80 to $65
Bus Svc-Recruiting
DHX Dice Holdings JP Morgan Initiated at Overweight
Computer Software
CHKP Check Point Sftwr Friedman Billings Upgraded from Mkt Perform to Outperform $22 to $28
OMTR Omniture RBC Capital Mkts Initiated at Outperform
TLEO Taleo RBC Capital Mkts Initiated at Outperform
Education
CPLA Capella Education Stifel Nicolaus Price Target Raised Buy $48 to $60
Finance Companies
LULU Lululemon Athletica CIBC Wrld Mkts Initiated at Sector Outperform $39
DB Deutsche Bank AG Lehman Brothers Downgraded from Overweight to Underweight
MMPI Meruelo Maddux Friedman Billings Cut Price Target Outperform $11.50 to $10
Gaming - Chinese
PWRD Perfect World Credit Suisse Initiated at Outperform
Health-Beauty Prod
IPAR Inter Parfums Cowen & Co Resumed Coverage Outperform
Healthcare Equipment
MS Citigroup says best risk/reward
ATSI ATS Medical RBC Capital Mkts Initiated at Outperform $4
CPHD Cepheid UBS Downgraded from Buy to Neutral
Household Goods
TPX Tempur-Pedic JP Morgan Upgraded from Neutral to Overweight
Manufacturing
RBC Regal-Beloit Morgan Joseph Price Target Raised Buy $60 to $63
SCT Scottish Re UBS Cut Price Target Neutral $5.40 to $3.70
Media Services
NWS.A News Corp Stifel Nicolaus Initiated at Buy $28
Medical Equipment
NSTR Northstar Neuroscience RBC Capital Mkts Initiated at Outperform
Mining - Steel & Iron
STLD Steel Dynamics UBS Upgraded from Neutral to Buy
Motion Pictures
DISK Image Entertainment Susquehanna Financial Coverage Dropped
IMAX Imax Susquehanna Financial Coverage Dropped
KDE 4 Kids Entertainment Susquehanna Financial Coverage Dropped
LGF Lions Gate Entain Susquehanna Financial Coverage Dropped
NOOF New Frontier Media Susquehanna Financial Coverage Dropped
WWE World Wrestling Susquehanna Financial Coverage Dropped
Oil and Gas
STO Citigroup Upgraded to Buy
BP BP Bernstein Upgraded from Mkt Perform to Outperform
CHK Chesapeake Energy Fortis Bank Upgraded from Hold to Buy $38 to $40
Paper and Packaging
TIN Temple-Inland Credit Suisse Cut Price Target Outperform $70 to $66
Personal Services
CLUB Town Sports Intl BB&T Capital Mkts Initiated at Buy $25
LTM LIFE TIME Fitness BB&T Capital Mkts Initiated at Buy $65
Publishing
PLA Playboy Susquehanna Financial Coverage Dropped
Recreation
MVL Marvel Enterprises Susquehanna Financial Coverage Dropped
Restaurants
EAT Brinker SMH Capital Price Target Raised Buy $32 to $35
DPZ Domino's Pizza Citigroup Initiated at Buy
Retail Services
TA TravelCenters of America Morgan Keegan Initiated at Outperform
Retail Trade
MHS Medco Health Solutions Cowen & Co Upgraded from Neutral to Outperform
BKE The Buckle Susquehanna Financial Initiated at Positive
RL Polo Ralph Lauren Citigroup Initiated at Buy $94
SHRP Sharper Image Kevin Dann Cut Price Target Hold $10 to $6
VVTV ValueVision Susquehanna Financial Coverage Dropped
Savings & Loan
BRKL Brookline Bancorp Friedman Billings Downgraded from Outperform to Mkt Perform $13 to $12
Semiconductors
IFX Infineon Credit Suisse Upgraded from Neutral to Outperform
ISIL Intersil CIBC Wrld Mkts Price Target Raised Sector Outperform $38 to $40
RFMD Oppenheimer Likes the name here
SIMO Silicon Motion CIBC Wrld Mkts Initiated at Sector Outperform $28
TRID Trident Microsystems Deutsche Securities Initiated at Buy $23
Specialty Funds
MF MF Global BMO Capital Markets Initiated at Outperform
Tech - Satellites
CPBY China Public Security Technology Brean Murray Initiated at Buy $10
GEOY GeoEye Matrix Research Initiated at Strong Buy
Telecommunications
PCS MetroPCS Jefferies & Co Upgraded from Hold to Buy $38 to $35
FNSR Finisar Needham & Co Downgraded from Strong Buy to Buy $4