Wednesday Morning, October 24th
SITE NEWS
New IceMD Recording:
If it Ain´t Broke, Don´t Fix It;
Ice Cold Stocks welcomes "Oscar Carboni, the Futures Analyst" to its growing list of excellent stock commentators. Recently, Oscar has been featured in the New York Post and Crain's NY Business. Now, you can now learn about Oscar's unique "hybrid style" of analysis at Ice Cold Stocks. Watch his daily video here: http://icecoldstocks.com/futures.html
Dow Stock News
Boeing said Wednesday earnings rose 59% thanks to higher commercial airplane deliveries in the third quarter, and the aircraft maker lifted its earnings outlook for the year. - MarketWatch
T - price target raised to $47 at Smith Barney
DuPont (DD) today announced that its Board of Directors has approved an 11 percent increase in the company's quarterly cash dividend. The dividend will increase from $0.37 to $0.41 per share for fourth quarter common stock, payable Dec. 14, to stockholders of record Nov. 15. This is the 413th consecutive quarterly dividend since the company's first dividend in the fourth quarter of 1904.
Verizon´s growth is a complicating factor in the vote by Cablevision's shareholders on whether to accept the Dolan family's $10.6 billion offer to take the company private. - WSJ
The FT writes that Wal-Mart (WMT) is shifting its focus outside to outside the US.
Reuters writes that Wal-Mart (WMT) is making a bid to convince Wall St. that it is still a growth company.
The Wall Street Journal writes that Cisco (CSCO) has bought WiMax euiment start-up Navini, aligning itself with Intel (INTC) as a proponent of the new tech.
MRK Merck Bernstein Initiated at Outperform
PFE Pfizer Bernstein Initiated at Mkt Perform
Ice Man Stocks
For a printable version of the Ice Man's picks, click here.
Breakouts the Ice Man may consider trading:
BG - 110.50
EWZ - 80.85
HWAY - 58.50
Regular Trades the Ice Man may consider:
NCTY - 32.55
JBHT - 29.05
CVTX - Closed Well
LCC - 29.70
AMR - 25
AKAM - 35
AATI - 12.15
Dollar Man Ideas:
UTVG - 4.75
NINE - 6.05
EPG - 5.50
CPHI - 4.05
Wednesday Split Update:
Recent Stock Split Announcements:
On October 18, Actuant Corporation (NYSE:ATU) announced that its board of directors approved a 2:1 stock split to be payable on November 8, 2007.
On October 18, Met-Pro Corporation (NYSE:MPR) announced that its board of directors approved a 4:3 stock split to be payable on November 14, 2007.
On October 23, Twin Disc, Inc. (Nasdaq:TWIN) announced that its board of directors approved a 2:1 stock split to be distributed on December 31, 2007.
On October 23, Rollins, Inc. (NYSE:ROL) announced that its board of directors approved a 3:2 stock split to be distributed on December 10, 2007.
Companies that have previously announced stock splits which become effective in the next several trading days.
Ex-Date Split Symbol Company
10/29 2:1 CSNT Crescent Banking Company
10/29 2:1 ARD Arena Resources, Inc.
11/2 6:5 MNRK Monarch Financial Holdings
11/9 2:1 ATU Actuant Corporation
Media Commentators
Cramer's Comments:
Bullish: SGR, CSCO
Bearish: Sell AMZN, Sell ½ AAPL and RIMM
Ice Cold Commentators
Swing Man Market Recap:
On the heels of last nights earnings reports, the market gapped up Tuesday morning and rallied until just past 10:00 when the SPX hit 1516. A fade the gap pullback followed as the SPX retrenched back to 1504 by about 11:30 Tuesday morning. Buyers then regained control for the rest of the trading session as the SPX gradually worked its way higher to close near its daily highs at 1520. Once again, the market was led higher Tuesday by the tech dominated NDX and Nasdaq. The NDX actually posted a new yearly high by advancing over 2% on the day while the other major indexes remain well below their recent highs.
The technicals were positive, but only in the last half hour did they really show strength. On the Nasdaq, advancing stocks outnumbered declining stocks by nearly a 3 to 2 ratio with up/down volume about 2 to 1 positive. Total volume on the Nasdaq was a respectable 2.25 billion shares. However, the number of new lows (181) on the Nasdaq actually exceeded the number of new highs (117) which indicates that fewer stocks are participating in the recent advance. The NYSE volume came in just shy of 1.3 billion with a better than 2 to 1 positive ratio on the day.
However, Tuesday's upbeat tone has quickly dissipated with several prominent companies reporting disappointing earnings. Some of the stocks being hit hard in after hours trading include: AMZN, RVBD, BRCM, ALTR, and JNPR. Since these are all tech related firms look for the Nasdaq/NDX to come under pressure early Wednesday with the Nasdaq 100 futures currently showing a 15 point decline. Please take a look at the semiconductor (SOX) chart below since it has been acting poorly of late.
Over the past week, I have been stating to keep things light as the market was approaching significant resistance while at the same time market participants were becoming complacent. Another reason for reducing the number of trades was that the market was approaching the heart of earnings season. During this time frame, the market is often whipsawed up and down. For example, Monday night we received some favorable earnings reports while Tuesday the blunt of the announcements were quite poor.
Finally, let's quickly review what to look focus on in the near term. We need to see if the anticipating selling will create some positive divergences on our 60 minute index charts which could serve as a lower risk entry point for a few long trades. Since the MACD's on the 60 minute charts did manage to impulse up nicely on this rally, future selling may produce the positive divergences we've been hoping to materialize. It may or may not develop, but we should continue to closely monitor how this plays out going forward. Please do not rush out and buy under this assumption - let the market show us this is in place before acting. This has not been an easy trading environment and thus my insistence on remaining cautious. Let's take it one day at a time.
Good Trading.
CNBC Fast Money Review
1. AMAZON
The headline: Amazon Shares Drop 8% After Hours Despite Blockbuster Results.
Najarian said AMZN's 10% jump during the trading day was cut after hours as expectations got out of control.
However, he emphasized the stock is still higher on the day.
Macke said the stock is a “buy’ if it dips 10 points!
2. WHAT DID BROWN DO FOR THE STREET?
The headline: UPS Profit Tops Estimates, But Shares Finish Flat On Outlook.
Adami explained that UPS foresees its slowest Q4 profit growth in 4 years; however, the company believes strength in international business will offset weak U.S. sales. He likes this stock as a play on online retail.
3. BLACKBERRY IN CHINA
The headline: RIMM Soars 10% On Deal To Sell Blackberry In China.
Najarian said that Research In Motion
is pairing with ALU to distribute Blackberry In China. He´s enthusiastic about the deal, but does not recommend chasing this stock at current levels.
4. FREIGHT WATCHERS
The headline: Buffett Stock BNI Profit Climbs 8% On Wheat, Corn, Agricultural Shipments.
Finerman doesn´t recommend chasing BNI.
Guy Adami added that CSX looks attractive to him.
5. JUNIPER
The headline: Juniper Networks Tumbles After Hours As Earnings Miss High End Of Estimates.
Adami recommended owning JNPR on the pullback.
6. TAKE YOUR POSITION: THURSDAY
The headline: EMC And VMW To Report Earnings Thursday Before The Bell.
Adami said he thinks EMC still has legs.
Najarian is anticipating good things from VMW.
7. POPS AND DROPS
APOL popped 10%: Adami, the buyback was bullish.
BP popped 2%: Finerman: With the bar for the oil companies so low, BP got a “little relief pop.’
SPWR popped 7%: Najarian: Solar is still “the real deal.’
SII popped 4%: Najarian: The sector is taking a breath
and investors should expect more gains.
TXN dropped 8%: Najarian: The industry is too competitive and the downgrades won´t help anything. “Stay away.’
CFC dropped 4%: Macke: Subprime is far from over and CFC is on the front lines.
LVLT dropped 24%: Macke: There is nothing in LVLT to believe in.
8. YOUR FIRST MOVE FOR WEDNESDAY
Macke recommended MSFT two days ahead of its earnings.
Adami says WMT was beginning to look interesting after it got hit Tuesday.
Finerman recommends WNG only for a trade as it asks shareholders to vote on a rival takeover bid.
Najarian unloaded his CY holdings, but would get right back in on any dips.
News and Events Digest
Breaking News
Occidental Petroleum Corp. (OXY) Wednesday reported third-quarter earnings of $1.32 billion, or $1.58 a share, up from $1.17 billion, or $1.36 a share, a year earlier, spurred by increases in worldwide crude oil prices. Excluding items, the company said 'core' earnings were $1.21 billion, or $1.45 a share, up from $1.10 billion, or $1.28 a share, last year. The Los Angeles oil and gas exploration and production company said net sales for the third quarter rose to $4.84 billion from $4.40 billion in the 2006 quarter. Analysts surveyed by Thomson Financial on average had been expecting earnings of $1.30 a share on net sales of $3.73 billion. Analysts' earnings forecasts typically exclude unusual items. Oil and gas segment earnings were $2.03 billion in the third quarter, up from $1.79 billion a year earlier. - MarketWatch
Well Point (WLP) said net income was $868 million, or $1.45 a share, during the quarter, vs. $810.8 million, or $1.29 a share, a year ago. Operating revenue was $14.97 billion vs. last year's 14.22 billion, while revenue including investment gains was $15.23 billion. The latest earnings included a net gain of a penny a share from realized investment gains. Analysts polled by Thomson Financial had expected earnings of $1.44 a share on sales of $15.3 billion. - MarketWatch
The Children's Place Retail Stores Inc.(PLCE), operator of the Disney store chain, said that it has engaged Lehman Brothers as its financial adviser while it undertakes a review of its strategic options. The board and management team are assessing a wide variety of options to improve the firm's business and competitive position. These options may include potential organizational and operational improvements, a recapitalization, or other transactions. The board has not set any specific timeline for the completion of the review. - MarketWatch
ATW - rigs in high demand said an article in the IBD
Harmonic Inc., a provider of broadcast and on-demand video delivery systems, said Tuesday it plans to offer 12.9 million common shares under a shelf registration already filed with the Securities and Exchange Commission.
Harmonic expects to grant underwriters an over-allotment option to purchase up to an additional 1.9 million common shares. All of the shares are being sold by Harmonic. - AP
Freight and logistics company Con-way Inc.'s net income fell 41 percent in the third quarter due to restructuring costs and weak demand, the company said Tuesday.
Profit amounted to $37.3 million, or 78 cents per share, versus $63 million, or $1.24 per share, a year earlier. Revenue rose 3 percent to $1.11 billion from $1.08 billion. Results included restructuring and acquisition costs of $7 million, or 9 cents per share. Analysts polled by Thomson Financial expected earnings of 97 cents per share on revenue of $1.11 billion, on average. - AP
Merrill Lynch & Co Inc. (MER) on Wednesday reported $7.9 billion in write-downs for the third-quarter as shaky risk management and bad bets on mortgages and leveraged loans for corporate takeovers triggered the company's first loss in six years. - Reuters
AsiaInfo Holdings, Inc. (ASIA) a leading provider of telecom software solutions and IT security products and services in China, today announced that it has signed a contract with China Telecom, the world's largest wireline telecommunications and broadband services provider, to provide billing solutions for its ongoing extended TD-SCDMA trial.
Media Summary:
According to Reuters, shares in Amazon (AMZN) dropped on concerns about margins in it latest earnings.
Reuters writes that RIM (RIMM) will start to market its Blackberry in China.
Reuters reports that Oracle (ORCL) has set a deadline of Sunday on its bid to buy BEA (BEA).
Reuters writes that Google (GOOG) has cut a deal with Nielsen on TV audience data.
The Wall Street Journal writes that Merrill Lynch (MER) wrotes down $7 billion in its last quarter.
The Wall Street Journal writes that owners of structured investment vehicles need to find investors for $100 billion in debt that comes due in the next few months.
The Wall Street Journal has aaked Glaxo (GSK) to put a warning lable about heart attack risks on its diabetes drug Avandia
The Wall Street Journal writes that Qualcomm (QCOM) is announcing new chips to let laptop computers use multiple cellular data services, hoping to outflank a high-profile alternative called WiMAX.
The Wall Street Journal writes that Countrywide (CFC) is seeing option adjustable-rate mortgages go bad in addition to other types of loans in its portfolio.
The New York Times writes that Amgen (AMGN) won a patent battle with Roche over the European company's anemia drug
Barron's writes that shares in Infinera (INFN) fell on poor sales figures.
Economic Data:
10:00 Existing Home Sales
10:30 Crude Inventories
Upgrades and Downgrades by Sector:
Biotech
AMGN Amgen Credit Suisse Upgraded from Neutral to Outperform $56 to $65
ILMN Illumina Caris & Company Price Target Raised Buy $60 to $65
SGEN Seattle Genetics Caris & Company Price Target Raised Buy $11 to $13
BIIB Biogen Idec HSBC Securities Downgraded from Overweight to Neutral
IMCL Imclone Friedman Billings Cut Price Target Mkt Perform $45 to $42
Brokerage Services
TROW T. Rowe Price Friedman Billings Price Target Raised Mkt Perform $50 to $57
PFWD Phase Forward Friedman Billings Price Target Raised Mkt Perform $16.50 to $19
OMC Omnicom CIBC Wrld Mkts Cut Price Target Sector Outperform $64 to $62
RVBD Riverbed Technology Robert W. Baird Cut Price Target Neutral $46 to $42
Computer Services
SVVS SAVVIS Comm Stanford Research Downgraded from Buy to Hold
Computer Software
CTXS Citrix Systems Friedman Billings Upgraded from Mkt Perform to Outperform $42 to $50
ARTG Art Technology Boenning & Scattergood Price Target Raised Market Outperform $4 to $5
ENTU Entrust Dougherty & Company Price Target Raised Buy $3.50 to $4
EPIQ EPIQ Systems Northland Securities Price Target Raised Outperform $20 to $21
Consumer Services:
NTRI - Smith Barney shows checks as stabilizing
Drug Manufacturers:
AZN - downgraded to Sell at Merrill
Environmental
Prod WCN Waste Connections Credit Suisse Price Target Raised Neutral $35 to $36
WWIN Waste Holdings Friedman Billings Cut Price Target Mkt Perform $37 to $36.75
Finance Companies
WDR Waddell & Reed Friedman Billings Price Target Raised Mkt Perform $27 to $32
Gaming Operations
MGM MGM Mirage Calyon Securities Price Target Raised Add $94 to $105
Healthcare
CYTR CytRx Broadpoint Capital Initiated at Buy $8
RIGL Rigel Pharms CIBC Wrld Mkts Initiated at Sector Outperform $16
Healthcare Equipment
BCR C.R. Bard Piper Jaffray Downgraded from Outperform to Market Perform
BCR C.R. Bard Bear Stearns Downgraded from Outperform to Peer Perform
Heavy Machinery
CR Crane Friedman Billings Cut Price Target Outperform $54 to $53
Insurance
CB Chubb Friedman Billings Price Target Raised Outperform $65 to $66
SEAB Seabright Insurance Holdings Friedman Billings Price Target Raised Outperform $22 to $23
DFG Delphi Fin Friedman Billings Cut Price Target Outperform $48 to $46
Jewelry
CTHR Charles & Colvard Northland Securities Downgraded from Outperform to Market Perform $7 to $4
Major Pharmaceutical
PHRM Pharmion HSBC Securities Price Target Raised Overweight $55 to $60
SGP Schering-Plough Bernstein Initiated at Outperform
WYE Wyeth Bernstein Initiated at Outperform
LLY Eli Lilly Cowen & Co Downgraded from Outperform to Neutral
Metals - Mfg
ZINC Horsehead Holding Friedman Billings Price Target Raised Outperform $27 to $30
Mfg-Instruments
TRMB Trimble Navigation Needham & Co Downgraded from Buy to Hold
Motion Pictures
BBI Blockbuster JP Morgan Downgraded from Overweight to Neutral
Multi-National Banks
BK Bank of NY HSBC Securities Price Target Raised Neutral $48.54 to $51
Oil and Gas
SII Smith Intl Calyon Securities Upgraded from Neutral to Add $76
WFT Weatherford Credit Suisse Upgraded from Neutral to Outperform $69 to $82
Friedman Billings has downgraded: BEXP, CRK, C0XG, ME, NBL, PPP, PQ, PTSG, and RRC;
Paper and Packaging
PTV Pactiv Corp Deutsche Securities Upgraded from Hold to Buy $39 to $35
Pharmaceutical
SCRX Sciele Pharma Roth Capital Price Target Raised Buy $30 to $33
Regional Banks
FMER FirstMerit Corp JP Morgan Upgraded from Underweight to Neutral
PRSP Prosperity Bancshares Stifel Nicolaus Downgraded from Buy to Hold
WB Wachovia Banc of America Sec Downgraded from Buy to Neutral
ZION Zions Bancorp Banc of America Sec Downgraded from Buy to Neutral
TCB TCF Financial Friedman Billings Cut Price Target Mkt Perform $27 to $24
WSBC WesBanco Inc Friedman Billings Cut Price Target Mkt Perform $29 to $24
Restaurants
PNRA Panera Bread Friedman Billings Price Target Raised Mkt Perform $46 to $48
BWLD Buffalo Wild Wings Morgan Keegan Downgraded from Outperform to Mkt Perform
CAKE Cheesecake Factory Friedman Billings Cut Price Target Outperform $33 to $30
Retail Trade
FLWS 1-800-FLOWERS Brean Murray Price Target Raised Buy $12.50 to $13.50
NKE Nike Caris & Company Price Target Raised Buy $65 to $70
Savings & Loan
WBS Webster Financial Friedman Billings Cut Price Target Mkt Perform $44 to $36
Semiconductors
BTUI BTU Int'l Needham & Co Upgraded from Hold to Buy $15
NVLS Novellus Needham & Co Upgraded from Hold to Buy $37
QLGC QLogic Caris & Company Upgraded from Average to Above Average $16 to $17.50
QLGC QLogic RBC Capital Mkts Upgraded from Sector Perform to Outperform
STM STMicroelectronics Robert W. Baird Upgraded from Neutral to Outperform $17 to $22
SYMM Symmetricom Cantor Fitzgerald Upgraded from Hold to Buy $7
ANAD Anadigics Needham & Co Price Target Raised Buy $16 to $21
BRCM Broadcom Needham & Co Price Target Raised Buy $38 to $43
BRCM Broadcom CIBC Wrld Mkts Price Target Raised Sector Outperform $40 to $43
CYMI Cymer Stifel Nicolaus Price Target Raised Buy $51 to $55
CYMI Cymer Brean Murray Price Target Raised Buy $56 to $59
EMKR Emcore Roth Capital Initiated at Buy $13.80
BRCM Broadcom Wachovia Downgraded from Outperform to Mkt Perform
BRCM Broadcom Deutsche Securities Downgraded from Buy to Hold $47 to $40
BRCM - Smith Barney sees this mornings decline as a buying opportunity
Telecommunications
VOD Vodafone PLC JP Morgan Upgraded from Neutral to Overweight
HLIT Harmonic Brean Murray Price Target Raised Buy $12 to $13.50
MICC Millicom Morgan Joseph Price Target Raised Buy $104 to $130
RIMM Research In Motion UBS Price Target Raised Buy $125 to $150
CELL Brightpoint Bear Stearns Initiated at Outperform $20
PLT Plantronics Robert W. Baird Downgraded from Outperform to Neutral $31 to $32
CMCSA Comcast Kaufman Bros Cut Price Target Buy $33 to $30
LVLT Level 3 Credit Suisse Cut Price Target Outperform $8 to $5
Transpo-Railroads
BNI Burl Nrth Santa Fe Credit Suisse Downgraded from Outperform to Neutral $93 to $91
Transportation
EXM Excel Maritime Carriers Oppenheimer Downgraded from Buy to Neutral
Utilities
D Dominion Credit Suisse Upgraded from Neutral to Outperform $88 to $95
ED Con Edison Credit Suisse Price Target Raised Neutral $47 to $50
EIX Edison Credit Suisse Cut Price Target Outperform $63 to $60
PCG PG&E Credit Suisse Cut Price Target Outperform $54 to $52
Waste Management:
SGR - upgraded to Neutral at Goldman Sachs
Networking and Communications Devices:
RVBD - price target lowered to $36 at Jefferies