Wednesday Morning, November 14th
SITE NEWS
New IceMD Recording:
MRSA Tricks Our Immune System;
Dow Stock News
The Wall Street Journal writes that AT&T (T) and Disney (DIS) have invested in a technology company that can detect pirated movies being sent over the internet.
The New York Times writes that, despite strong reviews, GM (GM) is having trouble increasing sales of some of its models.
The FT reports that John Thain, head of the NYSE, was not on the short list of candidates to run Citigroup (C).
MSFT - upgraded at CIBC
KO Coca-Cola Credit Suisse Initiated at Outperform $68
Ice Man Stocks
Breakouts the Ice Man may consider trading:
GFIG - 97.50
STT - 80
CEL - 29
CSCA - 13.75
Regular Trades the Ice Man may consider:
GHL - 75
ZNH - 53 Bid = 57
IOC - 23.15
VAR - 50
Depressed stocks the Ice Man may buy:
EXM - 43.10
Dollar Man Ideas:
WON - 3
TGIC - 9.85
USBE - 8.10
VRAZ - 5.55
Media Commentators
Cramer's Comments:
Bullish: ONXX, GME, JCP, SHLD, AAPL, RIMM, GOOG, DNA, CELG;
Ice Cold Commentators
Break Man Video Summary:
Break out buy (or short sell) watch list for short term gains November 14 includes: AG, HOFT, O, HCC, MPG, UEPS, GSB. ENDP.
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 gapped up Tuesday morning on overnight buying in the stock index futures. Within the first few minutes the SPX rallied nearly 20 points above Monday's close to 1456. The market then experienced a slight pullback until 11:00 when the SPX hit 1452. From this level, the market worked its way higher for the rest of the day. By 1:30, the SPX broke thru pivot resistance at 1462 and was fast approaching the next pivot resistance at 1484 near the close. For the day the DOW/SPX were higher by 2.70%, and the Nasdaq/NDX rocketed up 3.85%. The Nasdaq gained nearly 90 points during the trading session. Short term momentum is rising and is nearing overbought levels. Tomorrow morning the government will release core PPI and retail sales data.
Monday night, due to the proximity of support and the positive divergence shown on the 60 minute charts, we stated that the table was set for the market to make a stand at these levels. The market responded to these factors with a strong snap back rally. When a market has been sold off severely over such a short period of time, it´s very common to see what unfolded Tuesday. You need to keep Tuesday´s up move in perspective with the selling over the past few sessions. The next several days will go a long way to help us determine where the market is likely headed over the next several weeks. Many of the indexes appear set to move back up over the next few days and test their now declining 20 day MA´s where they will likely find stiff resistance. Looking further down the line, it will be important to monitor the next move back down from a technical perspective. In a bullish scenario, a move down off the 20 day moving averages will see positive divergences form on the daily charts. Specifically, we will be closely watching the oscillators to see if they confirm the move lower. This would indicate the action in the MACD´s is reflexive (meaning weak) versus an impulsive move down which would serve to indicate deeper selling ahead.
In summary, the market responded Tuesday where it needed to for the bulls to have a chance. With that said, the bulls still are not out of the woods. For now let´s watch and see now this bounce plays out. Subsequently, we need to closely examine the nature of the next move down since it will be the key factor in determining where the market is likely headed for the balance of this year. Nothing is yet clear so continue to take things lightly until the market flashes us a clear signal.
Good Trading.
CNBC Fast Money Review
1. GOLDMAN LEADS BANK BOUNCE
The headline: GS Leads Rally In Financials After CEO Blankfein Puts Subprime Exposure Concerns To Rest.
Guy Adami explains that Goldman Sachs soared 8% on the
news.
Karen Finerman adds that GS led the entire financial space higher.
Pete Najarian feels ETFC is the other side of this story. The CEO pulled out of a Merrill conference Wednesday and shares rallied after hours on speculation E*Trade could be a takeover target.
Guy Adami, Jeff Macke and Pete Najarian all add that they don´t believe the bottom is in financials, yet.
2. WAL-MART LEADS RETAIL REBOUND
The headline: WMT Leads Retail Rally After Earnings, Revenue Beat Street Estimates.
Karen Finerman explains Wal-Mart boosted its full-year forecast, and brightened its holiday sales picture.
Jeff Macke feels Wal-Mart used to be a great merchant, but not anymore.
3. STICK WITH TECH?
As AAPL and RIMM jockey to dominate the smart phone market in China and MSFT reveals new plans at a shareholder´s meeting - what will drive tech shares the rest of the year?
Jim Goldman thinks tech is oversold. As evidence, he says GOOG jumped despite negative news out of Europe Tuesday and VMW popped even after ORCL said it would develop competing virtualization software.
Jeff Macke doesn´t agree. He says investors who are looking for buys should be selective and look at MSFT.
Guy Adami thinks CSCO above 29 is a buy.
4. DEAD CAT BOUNCE
Volatility plunged Tuesday as the stock market mounted its 2nd-biggest gain of the year. Should you sell this
rally?
Jeff Macke recommends selling the S&P rally and buying future dips.
Karen Finerman explains that she focuses a lot on the Volatility Index. And every time it spikes up high in a down market, she sells her puts.
Pete Najarian doesn´t recommend trying to pick a top or bottom. Instead he recommends setting price limits and not letting your emotions drive your behavior.
Guy Adami recommends UN specifically, because of its price action in this volatile tape.
5. BRAZIL
The headline: Brazil ETF (EWZ) Jumps 9% As Global Markets Rise
Guy Adami thinks it might be time to
take profits in emerging markets.
6. POPS AND DROPS
SIRI popped 6%: Macke thinks the bottom is in SIRI.
CLWR popped 8%: Najarian notices call buying activity
VOD popped 9%: Adami likes VOD as a trade
CROX popped 10%: Finerman says she´s long CROX
ADSK popped 7%: Najarian thinks software is coming back and ADSK is a stock worth watching.
OWW popped 11%: Adami doesn´t love the stock.
FOSL popped 17%: Macke thinks FOSL is on fire, but cautions investors that specialty retail
often drops in the long-term.
7. YOUR FIRST MOVE FOR WEDNESDAY
Adami likes MSFT
Finerman prefers KALU.
Najarian says ESLR is a buy.
Jeff Macke doesn´t have a stock pick.
News and Events Digest
Breaking News
Dwight Schar, the chief executive of home builder NVR Inc. (NVR) has made the largest share purchase on record by a company insider despite the stock's pullback and the housing slump, The Wall Street Journal reported Wednesday. According to a Nov. 7 regulatory filing, the CEO between Nov. 5 and Nov. 7 bought 117,508 shares of the company valued at about $52 million. Shares of NVR closed Tuesday at $512, down about 21% so far this year. - MarketWatch
HSBC Holdings on Wednesday said it would have to write off a further $3.4 billion from its U.S. business during the third quarter, but said profit before tax will increase because of strong growth from Asia and the Middle East. - MarketWatch
Label maker Avery Dennison Corp. (AVY) said it's priced an offering of 8 million units at $50 each. Each unit will initially consist of a contract to purchase Avery Dennison common stock and a 1/20 undivided beneficial ownership interest in a $1,000 principal amount senior note due November 15, 2020. - MarketWatch
EnerNoc Inc. (ENOC) said its secondary public offering of 2.5 million common shares has been priced at $43 each. The Boston-based company has earmarked proceeds to fund the expansion of its business into new regions and add to its customer base, to fund research and development, to provide funds for acquisitions and for other general corporate purposes. EnerNoc, a developer and provider of "clean" energy systems, said the offering encompasses 2 million shares offered by certain stockholders as well as 500,000 shares offered by the company. - MarketWatch
Pittsburgh drug maker Mylan (MYL) said it priced its 1.86 million convertible preferred stock offering at $1,000 per share and its 53.5 million common stock offering at $14 a share. Each share of preferred stock will automatically convert on November 15, 2010, into between approximately 58.5480 shares and 71.4286 shares of MYL common stock. The offerings will generate net proceeds of approximately $2.5 billion after underwriters discounts and expenses, without giving effect to the exercise of the over-allotment options. Mylan intends to use the net proceeds of the offerings to prepay a portion of the bridge loans that were borrowed to finance in part its acquisition of Merck KGaA's generics business. - MarketWatch
Taser (TASR) announces that it received three significant orders from law enforcement agencies. The first order received was from the Houston Police Department in Houston, TX, for 480 TASER X26 Electronic Control Devices and related accessories. The second order was from the Suffolk Police Department in Suffolk, VA, for 140 TASER X26 ECDs, 140 TASER CAM recording systems, and related accessories. The third order was from the Hamilton County Sheriff's Department in Chattanooga, TN, for 110 TASER X26 ECDs, 110 TASER CAM systems, and related accessories. - Briefing
Media Summary
According to Reuters, executives at Ford (F) say that they see a tough US market and will cut production as necessary.
Reuters reports that Northern Rock received an injunction from the publication of memos sent to potential buyers.
Reuters writes that executives at the largest drug companies say they are facing their toughest environment ever.
The Wall Street Journal writes that HSBC (HBC) has taken a $3.4 billion charge for its US consumer finance business.
The Wall Street Journal writes that American cars still lag those from Japan and Europe for predicted resale value.
Former book executive Judith Regan filed a $100 million lawsuit against News Corp (NWS).
Barron's reported a rumor that Comcast (CMCSA) might buy WiMax company Clearwire (CLWR).
CNN Money reports that the mortgage markets will get worse in 2008.
M&A Activity:
Qualcomm Inc. (QCOM) said Wednesday that it plans to acquire Firethorn Holdings LLC, an Atlanta-based mobile-banking technology company, for about $210 million in cash. As a result of the deal, Qualcomm expects about 2 cents dilution to pro forma earnings per share in its 2008 fiscal year and a neutral impact in fiscal year 2009. The wireless technology company expects the acquisition to be completed within 30 days. - MarketWatch
Wednesday Split Update:
Summary Of Recent Stock Split Announcements:
On November 7, Foster Wheeler Ltd. (Nasdaq:FWLT) announced that its board of directors approved a 2:1 stock split pending shareholder approval on January 8, 2008.
On November 8, ROFIN-SINAR Technologies Inc. (Nasdaq:RSTI) announced that its board of directors approved a 2:1 stock split to be distributed on December 5, 2007.
On November 12, DryShips, Inc. (Nasdaq:DRYS) announced that its board of directors approved a 3:1 stock split pending shareholder approval on November 19, 2007.
Companies that have previously announced stock splits which become effective in the next several trading days.
Ex-Date Split Symbol Company
11/15 4:3 MPR Met-Pro Corporation
11/15 2:1 TNP Tsakos Energy Navigation Limited
11/16 2:1 CRS Carpenter Technology Corp.
11/19 4:1 APAGF Apco Argentina, Inc.
11/20 2:1 D Dominion Resources, Inc.
11/27 2:1 IDXX IDEXX Laboratories, Inc.
Economic Data:
8:30 Retail Sales
8:30 PPI
10:00 Business Inventories
Upgrades and Downgrades by Sector:
Aircraft
Asset Mngmt AER AerCap Calyon Securities Cut Price Target Buy $32 to $30
Airlines - Passenger
LFL Lan Airlines S.A. Deutsche Securities Upgraded from Hold to Buy $17
Beverages
PEP PepsiCo Credit Suisse Initiated at Outperform $87
CCH Coca-Cola Hellenic HSBC Securities Cut Price Target Neutral $60 to $41
Biotech
GILD Gilead Sciences Stifel Nicolaus Price Target Raised Buy $49 to $52
CRXL Crucell N.V. Needham & Co Cut Price Target Buy $35 to $26
Business Services
INWK InnerWorkings Jefferies & Co Upgraded from Hold to Buy $17
HINT Hill International Boenning & Scattergood Price Target Raised Market Outperform $12 to $13
Computer Hardware
XRTX Xyratex BMO Capital Markets Cut Price Target Market Perform $20 to $18
Computer Software
ADSK Autodesk Jefferies & Co Upgraded from Hold to Buy $45 to $55
ORCL Oracle CIBC Wrld Mkts Upgraded from Sector Perform to Sector Outperform $24
ORCL Oracle Broadpoint Capital Upgraded from Neutral to Buy $24
GUID Guidance Software Roth Capital Price Target Raised Buy $15 to $16
Cruise Lines
CCL Carnival Wachovia Initiated at Outperform
Educational Services
UTI Universal Technical Institute Piper Jaffray Upgraded from Market Perform to Outperform
Ethanol
BIOF Biofuel Energy Soleil Upgraded from Hold to Buy $7.60
Finance Companies
BEN Franklin Resources JP Morgan Upgraded from Underweight to Neutral
NEWS Newstar Financial William Blair Upgraded from Mkt Perform to Outperform
Foods
ANDE Andersons Banc of America Sec Upgraded from Neutral to Buy
HSY Hershey Foods Bear Stearns Downgraded from Peer Perform to Underperform
PPC Pilgrim's Pride BMO Capital Markets Cut Price Target Market Perform $36 to $30
Healthcare
ARTE Artes Medical Stifel Nicolaus Downgraded from Buy to Hold
ARTE Artes Medical Cowen & Co Downgraded from Outperform to Neutral
ISRG ISRG - use pullback to buy says OPCO Use
Information Tech
GNET Global Traffic Network JMP Securities Initiated at Mkt Outperform $8
Mining Non-Ferr Metal
RTP Rio Tinto PLC Bernstein Downgraded from Outperform to Mkt Perform
LMC Lundin Mining Credit Suisse Initiated at Outperform
Motion Pictures
FUN Cedar Fair Wachovia Initiated at Outperform
Oil and Gas
ENP Encore Energy UBS Upgraded from Neutral to Buy
EOG EOG Resources Citigroup Upgraded from Sell to Hold
KWK Quicksilver Resrcs Citigroup Upgraded from Hold to Buy
Paper and Packaging
IP Intl Paper Citigroup Upgraded from Hold to Buy
Recreation
HAS Hasbro Wachovia Initiated at Outperform
MAT Mattel Wachovia Initiated at Outperform
RCRC RC2 Wachovia Initiated at Outperform
Recreational Vehicles
WMAR West Marine Morgan Joseph Upgraded from Hold to Buy $12
Regional Banks
BAC Bank of America Punk, Ziegel & Co Upgraded from Mkt Perform to Buy
REITs
AHR Anthracite Capital Friedman Billings Upgraded from Mkt Perform to Outperform $12.50
Retail Services
TA TravelCenters of America UBS Downgraded from Buy to Neutral
Retail Trade
ARO Aeropostale Caris & Company Price Target Raised Average $21 to $23
LZB La-Z-Boy Morgan Keegan Downgraded from Mkt Perform to Underperform
SKX Skechers USA CL King Initiated at Accumulate $27
Security Systems
BCO Brinks Friedman Billings Price Target Raised Outperform $75 to $80
Semiconductors
AXTI AXT Inc Roth Capital Upgraded from Hold to Buy $6 to $6.40
OVTI OmniVision CIBC Wrld Mkts Upgraded from Sector Perform to Sector Outperform $25
ATML Atmel Kaufman Bros Initiated at Buy $6
SWKS Skyworks Kaufman Bros Initiated at Buy $10
Steel and Iron
DSUP Dayton Superior Robert W. Baird Cut Price Target Outperform $16 to $9
Telecommunications
JCOM j2 Global Jefferies & Co Upgraded from Hold to Buy $32
Telecommunications
Q Qwest Citigroup Upgraded from Sell to Hold
CNTF China Techfaith Wireless Brean Murray Downgraded from Buy to Hold
TEF TEF - downgraded to Neutral at Goldman Sachs Downgraded
Transportation
EGLE Eagle Bulk Shipping UBS Upgraded from Neutral to Buy
RCL Royal Caribbean Wachovia Initiated at Outperform