PRE-MARKET UPDATE
Equities are indicated up ahead of earnings season with both DJIA and S&P500 futures up almost 0.5%. The FTSE, DAX, and CAC in Europe were all higher by more than 1% in late-morning overseas trading. Asia was mixed with Japan's NIKKEI out, while the Hong Seng was down 0.9% and the Shanghai Composite down almost 0.6%.
Treasuries are trading lower overseas but are closed in observance of Columbus Day, so today effectively only has half of the market parties in at work. Commodities are trading up with NYMEX WTI Crude up $1.26 at $73.03 per barrel and with gold up $6.80 at $1055.70/ounce.
ECONOMIC & MACRO EVENTS
These are today’s top economic data:
NO ECONOMIC DATA because of Columbus Day
Earnings Today: Schwab (SCHW), Fastenal (FAST), JB Hunt Transport (JBHT). On deck Tuesday are CSX (CSX), Intel (INTC) and J&J (JNJ).
ANALYST UPGRADES & DOWNGRADES
Upgrades
Advanced Micro Devices (AMD) Raised to Buy at UBS.
Amgen (AMGN) Raised to Buy at UBS.
Black & Decker (BDK) Started as Overweight at Barclays.
Bristol-Myers Squibb (BMY) Added to Goldman Sachs Top M&A List.
Citrix Systems (CTXS) Raised to Hold at Jefferies.
Kroger (KR) Raised to Overweight at JPMorgan.
PG&E (PCG) Raised to Buy at Jefferies.
Polaris (PII) Raised to Buy at Citigroup.
Downgrades
Brocade Communications (BRCD) Cut to Perform at Oppenheimer.
Dr. Pepper Snapple Group, Inc. (DPS) Cut to Hold at Deutsche Bank.
Dreamworks (DWA) Cut to Market Weight at Thomas Weisel.
Estee Lauder (EL) Cut to Conviction Sell List, but was already Sell, at Goldman Sachs.
Nokia (NOK) Cut to Neutral at HSBC.
SanDisk (SNDK) Cut to Sell at UBS.
Veolia Environment (VE) Cut to Neutral at HSBC.
BULLISH EVENTS
Brocade Communications (BRCD) was listed in Barron's as the most attractive takeover target in tech/storage. We have already seen WSJ reports that H-P and Oracle were the most likely suitors, but we have also seen news that Oracle denied that it is interested. Barron's noted that IBM, Dell, EMC, and Juniper may be possible acquirers.
Nektar Therapeutics (NKTR) said that in a Phase II 208 patient study with opioid-induced constipation, NKTR-118 met the study's primary endpoint goals of increased spontaneous bowel movements over the baseline period.
U.S. Steel (NYSE: X), via the Canada unit, entered into an agreement with Consolidated Thompson Iron Mines and ArcelorMittal (MT) for the purchase by Consolidated of the U. S. Steel (Canada) 44.6% interest and Arcelor's 28.6% interest in the Wabush Mines Joint Venture. Financial terms of the transaction were not disclosed.
Onyx Pharmaceuticals, Inc. (ONXX) announced that it has signed a definitive agreement to acquire Proteolix, Inc. This is a privately held biotech focused on discovering and developing novel therapies that target the proteasome for the treatment of hematological malignancies and solid tumors.
Dell Inc. (DELL) may be getting a bit more than what was disclosed in the Perot Systems deal. Perot Systems announced that it has purchased the Chinese operations of management consulting firm BearingPoint. Financial terms were not disclosed.
BEARISH EVENTS
Exxon Mobil (XOM) may have a rival bid for its $4 billion offer for a stake in a giant oil discovery off of West Africa. The WSJ noted that China National Offshore Oil may make a rival bid.
Lazard (LAZ) is indicated lower on news that Chairman and CEO Bruce Wasserstein was hospitalized in serious condition with an irregular heartbeat.
KB Home (KBH) is being hit by an article in the WSJ. Its disclosure that the Securities and Exchange Commission is investigating its accounting practices is just the latest regulatory scrape for the homebuilder.
Central European Distribution (CEDC) is lowering its guidance. It now sees FY-2009 guidance at $2.35 to $2.50 EPS. This is versus $2.47 EPS estimates from Thomson Reuters and down from a prior range of $2.40 to $2.65 EPS.
Microsoft (MSFT) has a PR blunder on its hands, but it may not have too much fallout. It apparently lost account users' data for the T-Mobile Sidekick. The company said that stored data like contacts, calendars, photos, and more that was no longer available on the Sidekick has been entirely lost.
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