MRK, SGP getting hammered on Vytorin/Zetia efficacy data

New England Journal of Medicine study concluded that while Vytorin reduces cholesterol, it does not reduce the risk of heart disease.

"You've just seen a negative trial that should change practice, especially the way we in this country have prescribed" the drugs, Yale University cardiologist Harlan Krumholz told thousands of cardiologists. He urged doctors to go "back to statins," the class of cholesterol-lowering drugs that includes Lipitor and Zocor. Major studies have demonstrated their ability to save lives and prevent heart attacks.

Shares of MRK are down over 10% in extended trading.
SGP is poised to open 20% lower.

The week ahead: economic data, earnings reports

Monday

Chicago PMI

FUL $21.29 after hours
Analysts (6) expect 33 cents on $333 million 52wk Range: 17.02 - 31.53

Tuesday

ISM Index
March auto sales

Wednesday

Weekly oil/gas inventories

MON $114.30 premarket
Analysts (14) expect $1.72 on $3.6 billion 52wk Range: 53.95 - 129.28

BBY $40.56 premarket
Analysts (24) expect $1.65 on $13.2 billion 52wk Range: 38.75 - 53.90

RIMM $115.34 after hours
Analysts (32) expect 70 cents on $1.85 billion 52wk Range: 42.93 - 137.01

Thursday

Weekly jobless claims

AYI $42.88 premarket
Analysts (3) expect 68 cents on $470 million 52wk Range: 34.04 - 66.89

MTRX $17.36 premarket
Analysts (5) expect 28 cents on $192.6 million 52wk Range: 15.81 - 30.36

Friday

March employment

MOS $105.40 premarket
Analysts (8) expect 95 cents on $1.92 billion 52wk Range: 25.95 - 119.78

FDO $19.12 premarket
Analysts (17) expect 42 cents on $1.84 billion 52wk Range: 14.62 - 35.42

AZZ $36.38 premarket
Analysts (2) expect 59 cents on $89 million 52wk Range: 20.35 - 41.58

U.S. futures lack direction following weak Asian action

Futures: S&P: -1.9 Dow: -29 Nas: +2.0
Fair val: S&P: -1.9 Dow: -19 Nas: -3.4

Markets in Japan, China and India gave up 2%, 3% and 4% respectively, while European indices are mostly flat.

CALM posts $2.41 EPS for Q3 on $278 million in revenues

Fred Adams, chairman and chief executive officer of Cal-Maine Foods, Inc., stated, “We are very pleased with the strong results for the third quarter of fiscal 2008, reflecting record high egg prices. All of our operations ran smoothly, and we were able to take full advantage of the favorable economics in our industry. Demand was strong for eggs in both the retail and food service segments and demand was also good for shell eggs used to produce liquid, frozen, and dried egg products. Even with the higher prices, eggs still represent a good value to the consumer compared with other foods. Egg demand for the Easter holiday was also strong. The egg industry had a good inventory clean-up, and we are off to a solid start for our final quarter of the year.

“Feed costs continue to be very high and volatile with no relief in sight. U.S.D.A. statistics and egg industry projections are for egg production to be similar to 2007 levels in the year ahead.”

Adams added, “The quarter ended March 1, 2008, will be the first quarter that the Company’s new dividend policy will be in effect. The record date will be sixty days following the end of the third quarter. The response to our new dividend policy has been positive.”

CALM's dividend policy mandates a 33% payout of quarterly earnings per share.

Futures positive, Asian markets strong overnight

Futures: S&P: +8.1 Dow: +73 Nas: +13.25
Fair val: S&P: -2.2 Dow: -15 Nas: -4.6

The Shanghai Composite was up 5% and the Hang Seng gained nearly 3% with the dollar back over 100 yen. European markets are slightly higher.

CNBC reports CBOT raises margin requirements on corn, soy

The move could take some speculative froth out of grain prices.
DBA

Upgrades: HAL, VLO, PTEN, BJS, SRE, KLAC, FORM, ASML; Downgrades: MOT, STX, CPKI, AUY, WSO, QLGC

Lehman Brothers lowered price targets on GOOG, RECN, BAC and others

SOLF earnings in line on higher revenues, issues outlook

BUSINESS OUTLOOK

FIRST QUARTER 2008

Based on current operating trends and other conditions, Solarfun is providing first quarter 2008 and full year 2008 guidance as follows:

* Although the first quarter is not yet concluded, management believes that shipments for 1Q08 will continue to improve. Volumes are expected to be at least 35 MW. ASP’s should remain strong and relatively constant.

* The Company was affected by the winter weather in China in February and continues to be affected by the relatively tight supply and increasing costs of polysilicon. Therefore, management would expect these factors to have some downward pressure on gross margins for the first quarter of 2008.

FULL YEAR 2008

* Based on existing sales and pricing, contracted supply agreements, and other expected business and industry conditions, management provided the following guidance for the full year 2008: The Company has sales contracts totaling over 160 MW (a level that is over double last year’s 78.4MW) and expects prices to be flat or slightly higher from the $3.74 recorded for the full year 2007. Solarfun has secured supply of polysilicon on a contracted basis slightly exceeding its contracted sales volume.

* Capacity will increase from 240 MW to 360 MW by mid-year 2008.

* Management has seen a continued tightness of polysilicon supply and escalating prices on the spot market. With these conditions expected to exist throughout most or all of 2008, management believes some continued negative impact on gross margins from the level achieved in 2007.

CEO Harold Hoskens concluded, “2008 is a mix of opportunities and challenges. We believe Solarfun is well-positioned to continue to gain market share, expand scale, improve our manufacturing efficiencies, penetrate new markets, and develop and expand our supply chain in both China and elsewhere. Our management team, Board of Directors, and key shareholders are determined and committed to building shareholder value over the long term “

CAG reports 22 cent Q4 beat, guides 2008 above consensus

Earned 63 cents vs. 41 cent estimate.
Divesting Trading and Merchandising segment.

-- The company expects fiscal 2008 EPS to be in the range of $1.80-$1.85, excluding items impacting comparability. Given that the Trading & Merchandising transaction is expected to be completed over the next few months, Trading & Merchandising results likely will be classified as discontinued operations in future financial statements.

Truck drivers’ strike on April 1 picks up speed

By Barb Ickes | Thursday, March 27, 2008

It evidently took a few days to sink in. When my story from last week about plans for a truckers’ strike appeared Monday on the high-traffic Drudge Report Web site, the calls and e-mails poured in. The potential impact of this thing is tremendous, and people are beginning to notice.

The call for a drivers’ shutdown started small — with an owner/operator who hauls cattle in Missouri. The trucker, Dan Little, posted his plans to shut down on his Web site, and someone brought it to our attention at the Times.

Now it’s been brought to the attention of thousands, and Little’s plan to park his rig, beginning April 1, has truckers lining up across the nation to join him.

Several non-truckers wanted to know how they could help the drivers, and some people said they would park their passenger vehicles in a show of solidarity.

A clear majority of the people I heard from were sympathetic to the drivers. They said that they understand it is increasingly difficult — impossible, in many cases — to continue to operate a trucking business when most or all of the profits are going into fuel.

Here are just a few readers’ comments:
“I’m all for capitalism and free trade, but not reckless profiteering by oil
companies.”
“Everyone should call in sick April 1.”
“(The drivers) should park for a week or two and see if Congress and the president come up with any ideas when there’s no bread on the shelves.”
“Are the rich having some sort of contest to see just how much they can squeeze from each and every one of us?”
“I just drive a pick-up, but on April 1, I won’t use it.”
“Shut ’er down!”

But not all readers were sympathetic to truckers. Several called the plans for a shutdown “irresponsible.” Others pointed out that everyone, not just truckers, is paying the high fuel costs. A few said that truckers who aren’t making it are failing because they’re lousy business people.

But those in the driver’s seat — independent drivers like Dan Little — are further frustrated by the naysayers who he says don’t seem to understand how badly the pump prices are hurting them.

For instance, Little pointed out, our $50 fill-ups may seem intolerably high to many of us, but consider what it’s costing him: more than $1,200 to fill his truck, which then gets about 5 miles to the gallon.

Other truck-driving critics say it’s time to shut down the trucking industry, anyway. They say that trucking is a poor way to transport goods, and America should rely instead on railroads.

Little would like to know how that might happen.
“Where is this magic set of railroad tracks, leading to every grocery store and Wal-Mart in the country?” he asked. “Even if you could ship everything on the rail system we have, which would be impossible, how does it move from there?”

Little has said that the last thing he wants to do is hurt the country that he loves. Truck drivers are some patriotic folks, he pointed out. But many feel backed into a corner by the threat of bankruptcy. “All I know is that I have to take a stand,” he said. “My livelihood is at stake.”

As I was finishing this column, Betty Cornette called from Louisville, Ky., and said that her truck-driving brother has had to call it quits because of fuel and insurance costs.
She made this prediction: “Everybody’s going to have to suffer before they understand what’s happening to these truckers.”

Barb Ickes can be contacted at (563) 383-2316 or bickes@qctimes.com.

HURN warns ahead of Q1

Based on preliminary financial data for the quarter to date and subject to the final closing of the Company’s books and review of first quarter results by the Company’s independent auditors, Huron expects first quarter 2008 revenues before reimbursable expenses to be in a range of $138 million to $140 million, which is lower than previously provided guidance of $142 million to $147 million. The Company anticipates diluted earnings per share in a range of $0.50 to $0.57, which is lower than previously provided guidance of $0.66 to $0.70. The shortfalls in revenues and EPS are primarily attributable to continuing weakness in the Company’s Financial Consulting segment.

“While we are disappointed in the results of our Financial Consulting segment in the first quarter, we remain optimistic that this segment will regain momentum. The continuing turmoil in the financial markets should translate into an increasing level of investigations and litigation over the next 12 to 18 months,” said Gary E. Holdren, chairman and chief executive officer, Huron Consulting Group. Huron’s Financial Consulting segment represented 31% of the Company’s revenues in 2007.

DSW misses by 4 cents, cautious on coming year

Given the current economic uncertainty, at this time the Company will not provide full-year guidance for 2008. For the first half of 2008, comparable store sales are anticipated to be negative and earnings per diluted share are anticipated to be significantly below the $0.68 per diluted share reported for the first half of last year. The Company maintains its plans to open at least 30 DSW stores during the year and to launch its online business, DSW.com.

CONN beats by 6 cents, guides fiscal 2009 above consensus

Earns 57 cents vs. 51 cent estimate, guides for $1.85-$1.95 for the upcoming year.

“It is very satisfying to deliver earnings in the middle of the range we set at the beginning of the year, excluding the fair value changes, especially considering the challenging conditions in the retail marketplace we experienced this year,” said Thomas J. Frank, Sr., the Company’s Chairman and CEO. “Though our credit portfolio statistics do not yet reflect all of the improvements we have made in our collection performance, I expect to see continued improvement over the next couple of quarters.”

Today's earnings reports

DSW $17.55 premarket
Analysts (11) expect 6 cents on $334 million 52wk Range: 14.72 - 44.05

SOLF $11.46 premarket
Analysts (2) expect $1.49 on $772 million 52wk Range: 8.22 - 40.19

UTIW $16.23 premarket
Analysts (10) expect 19 cents on $1.1 billion 52wk Range: 15.59 - 30.14

ACN $35.36 after hours
Analysts (19) expect 56 cents on $5.59 billion 52wk Range: 31.91 - 44.03

XRTX $18.45 after hours
Analysts (10) expect 1 cent on $215.5 million 52wk Range: 13.34 - 24.75

RHT $18.05 after hours
Analysts (15) expect 19 cents on $141 million 52wk Range: 16.53 - 25.25

SPEC $8.96 after hours
Analyst (1) expects 16 cents on $32 million 52wk Range: 8.47 - 18.00

VCC $4.40 after hours
Analyst (1) expects revenues of $23.1 million 52wk Range: 4.00 - 8.43

U.S. futures mixed, dollar stable, oil higher

Futures: S&P: +6.8 Dow: +87 Nas: +10.8
Fair val: S&P: +7.5 Dow: +43 Nas: +16.5

European markets are an average of 1% higher, Asian markets were mixed.
An attack on one of Iraq's main oil pipelines has oil $1 higher this morning.
Over one million barrels of crude a day flows through the pipeline, which will be out of commission for at least three days.

NYC Bear Stearns protest: "Not Wall Street, MAIN Street"

RBN beats by 3 cents on higher than expected revenues, increases 2008 guidance

"Market conditions remain favorable in our key end markets with notable sales growth in global energy and chemical sectors," said Peter C. Wallace, President and Chief Executive Officer of Robbins & Myers, Inc. "We continue to improve our capabilities to meet rising customer demand, not only by making targeted investments in capital and people, but also through greater integration of our operations and process improvements associated with our lean enterprise initiatives. These improved capabilities are also helping to improve our profitability and cash flow."

The Company announced that it is increasing its full year 2008 DEPS guidance from $1.78-$1.88 to $1.82-$1.92. The Company also established third quarter 2008 DEPS guidance of $0.42-$0.47, as compared with actual results of $0.39 in the third quarter of 2007. On March 31, 2008, the escrow period related to the Company's fiscal 2006 sale of certain product lines will conclude, as will certain contingency obligations, which could result in a one-time benefit to third quarter 2008 earnings and cash flow. The Company's guidance excludes any potential impact from this matter.

Analysts expect 47 cents next quarter.

PAYX earnings in line, sounds cautious tone on economy

“Third quarter results met our expectations and we expect to achieve our eighteenth consecutive year of record revenue and net income for fiscal 2008,” commented Jonathan J. Judge, President and Chief Executive Officer of Paychex. “Our operating income, net of certain items, was very strong for the third quarter, increasing 17% over the same period last year. However, we are seeing signs of a weakening economy indicated by a more difficult than normal third quarter selling season and increases in business failures. On a positive note, checks per client have not yet shown significant weakness.”

RECN beats by 10 cents

Non-GAAP EPS = 29 cents, GAAP = 19 cents

"In spite of the recent extraordinary events affecting the world's financial markets, we continue to focus on executing our business strategy, including serving our clients and growing our revenues," said Don Murray, chairman and chief executive officer of Resources.

Net income determined in accordance with generally accepted accounting principles ("GAAP") for the third quarter ended February 29, 2008, was $8.7 million, or $0.19 per diluted share, including non-cash stock-based compensation expense of $4.8 million net of tax. This compares with GAAP net income for the third quarter ended February 28, 2007, of $13.1 million, or $0.26 per diluted share, including non-cash stock-based compensation expense of $4.0 million net of tax.

Non-GAAP net income for the third quarter of fiscal 2008 (which excludes stock-based compensation expense and the related income tax expense) was $13.5 million, or $0.29 per diluted share, compared to $17.1 million, or $0.33 per diluted share, in the prior year quarter.

ORCL EPS in line on lower than expected revenues

Shares are down nearly 10% after hours

"Oracle delivered another quarter of strong financial results and earnings growth. In Q3, we once again exceeded our non-GAAP EPS growth target of 20%," said Oracle President and CFO, Safra Catz. "For the first three quarters of this year we have grown our operating cash flow 55%, 3 times faster than at this point in the past five years."

CTRN reports 15 cent beat, guides 2008 above consensus

Fourth quarter net income of $8.4 million compared with $10.4 million last year
Fiscal 2007 net income of $14.2 million compared with $21.4 million last year
Fiscal 2008 earnings guidance of $1.10 to $1.15 per share

Bear Stearns gear on eBay in demand

This little bear is bid up to $150 right now with over a day remaining.


Other items

Tough labor market these days on Wall Street (video)

Treasury Secretary Paulson advocates more regulation for investment banks

"This latest episode has highlighted that the world has changed as has the role of other nonbank financial institutions and the interconnectedness among all financial institutions," Paulson said. "These changes require us all to think more broadly about the regulatory and supervisory framework that is consistent with the promotion and maintenance of financial stability," he added.

In extraordinary actions aimed at preventing a meltdown of the U.S. financial system, the Federal Reserve recently backed JP Morgan's takeover of Bear Stearns and agreed to provide an important multibillion dollar financial lifeline for the deal. In addition, the Fed, in the broadest use of its lending authority since the 1930s, said it would let squeezed Wall Street investment houses go directly to the Fed for emergency loans. That has long been a privilege just for commercial banks.

Paulson said he "fully supported that action" but said it also raises important policy considerations about the oversight of investment houses.

The secretary said that commercial banks' access to the Fed's emergency lending "discount window" has traditionally been accompanied by regulatory oversight and supervision. "Certainly any regular access to the discount window should involve the same type of regulation and supervision," Paulson said, in an apparent reference to the Fed's temporary extension of this emergency lending to investment houses.

And he suggested that the Fed collect as much information as necessary on investment houses to "make informed lending decisions." He said the Fed is currently working to do that. Paulson suggested the Fed, the Securities and Exchange Commission and the Commodity Futures Trading Commission also continue to work to build a framework on this.

"The combination of these steps should provide the Federal Reserve with a structure and the information that it would need to make liquidity backstop loans during periods of market instability to nonbanks," Paulson said.

Although he praised the Fed's decision to temporarily provide an short-term loans to investment houses, Paulson said it would be "premature to jump to the conclusion that all broker dealers or other potentially important financial firms in our system today should have permanent access to the Fed's liquidity facility."

At this time, the Fed's action "should be viewed as a precedent only for unusual periods of turmoil," Paulson said.

By Jeannine Aversa, AP Economics Writer

post of 3/23

EIA weekly inventories: Oil +88k; Gasoline -3.29 million; Capacity Utilization 82.2%

Expected:
Oil +1.7 million barrels
Gasoline -800k barrels
Capacity utilization: 84.3%

Motorola to split off handset unit

Shares of MOT are 5% higher in extended trading, but are down nearly 40% year-to-date.

The suburban Chicago-based cell phone maker has been under pressure from billionaire investor Carl Icahn for changes meant [to] revitalize its cell-phone business. The cell phone unit has seen its sales and stock price plummet with the company unable to produce second act to the once-popular Razr phone.

Upgrades: APA, XTO, WW, TLM, WAT, TI; Downgrades: JBL, AYR, GLS, HCBK, PFCB, CTB

Durable goods orders for February come in below expectations (-1.7% vs. +1.0%)

Futures: S&P: -5.8 Dow: -58 Nas: -5.0
Fair val: S&P: +3.4 Dow: +22 Nas: +8.0

Premarket movers: Clearwire, Clear Channel

Shares of CLWR are up 19% on reports that Comcast and Time Warner will provide joint funding for a national wireless WiMax network.

CCU is down 20% on the disintegration of a buyout deal due to lack of funding/interest.

PFSW earnings in line on lower than expected revenues, issues 2008 revenue guidance below estimate

-- Total reported revenue was $122.0 million, compared to $109.0 million for the fourth quarter of 2006;
-- eCOST.com revenue increased 35% to $28.5 million, compared to $21.1 million for the same period in the prior year;
-- Adjusted EBITDA (as defined) was $3.5 million versus $0.9 million for the same period in the prior year;
-- Net income, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $0.7 million or $0.01 per basic and diluted share, compared to a net loss of $6.5 million, or $0.14 per basic and diluted share, for the fourth quarter of 2006;
-- Non-GAAP net income (as defined) was $1.1 million or $0.02 per basic and diluted share, compared to a non-GAAP net loss of $2.5 million, or $0.05 per basic and diluted share, for the fourth quarter of 2006;

Financial Guidance for Fiscal Year 2008

PFSweb is currently targeting total consolidated revenues, excluding pass-through revenues, of approximately $445 million to $475 million and consolidated Adjusted EBITDA of $10 – $12 million for 2008. Non-GAAP net income, which excludes the impact of stock-based compensation and amortization of identifiable intangible assets, is targeted to be approximately $1 - $3 million for 2008. Our 2008 adjusted EBITDA guidance reflects the impact of restructuring one client contract. We expect this restructuring will result in lower service fee revenue under the contract and reduced capital asset charges on related equipment.

CSUN beats by 4 cents (GAAP) on higher than expected revenues

-- Revenues were US$71.5 million, representing a 1.1% increase compared
to the same period last year, and a 46.0% increase compared to the
previous quarter; core cell revenue increased 46.1% sequentially
from US$46.3 million to US$67.7 million.
-- Gross profit and gross margin were US$4.6 million and 6.4%,
respectively compared to US$1.0 million and 2.1% during the third
quarter of 2007.
-- Quarterly net loss was US$2.3 million, compared to a net loss of
US$4.4 million in the third quarter and a US$10.5 million net profit
for the fourth quarter of 2006.
-- GAAP basic and diluted net loss attributable to holders of ordinary
shares was US$0.06 per ADS in the fourth quarter compared to a net
loss per ADS of US$0.11 in the third quarter 2007.

Today's earnings reports

CSUN $7.63 premarket
Analysts (3) expect (10) cent loss on $61 million 52wk Range: 4.83 - 19.23

PFSW $0.90 premarket
Analyst (1) expects 2 cents on $127 million 52wk Range: 0.77 - 1.59

RBN $40.60 after hours
Analysts (5) expect 43 cents on $180 million 52wk Range: 18.20 - 40.77

RECN $17.22 after hours
Analysts (11) expect 19 cents on $204 million 52wk Range: 15.39 - 36.21

ORCL $21.08 after hours
Analysts (20) expect 30 cents on $5.42 billion 52wk Range: 17.89 - 23.31

CTRN $16.00 after hours
Analysts (7) expect 44 cents on $136 million 52wk Range: 10.76 - 45.15

PAYX $33.29 after hours
Analysts expect 39 cents on $533 million 52wk Range: 30.09 - 47.14

TRIS $2.22 after hours
Tri-S has no analyst coverage 52wk Range: 1.07 - 4.05

U.S. futures point to lower open on dimming hopes for European rate cuts

Futures: S&P: -3.9 Dow: -35 Nas: -3.0
Fair val: S&P: +3.4 Dow: +22 Nas: +8.0

Developments in Europe suggest an interest rate cut by the ECB or the BOE will not be forthcoming in the immediate future. Comments from both Bank of England Governor Mervyn King and European Central Bank President Jean-Claude Trichet stressed inflation concerns over growth fears, as the Ifo index of business sentiment in Germany came in stronger than expected.
The dollar weakened against the euro and sterling, sending commodities higher. This gives equities an excuse to pull back today after yesterday's shrug-off of poor consumer sentiment and sharp drop in home prices.

Hang Seng soars over 6%, Nikkei gains 2%, European indices up 3%

Futures: S&P: -2.7 Dow: -25 Nas: -5.2
Fair val: S&P: +0.2 Dow: +14 Nas: +4.7

Global investors bought equities overnight in a burst, relieving pent-up demand from the holiday weekend.
EWH EWJ FXI

Existing home sales come in better than expected, markets continue rally

S&P +41 Dow +167 Nas +20

5.03 million vs. 4.85 million expected

XHB homebuilders ETF +6.8%

Futures improving

Futures: S&P: +11.8 Dow: +87 Nas: +10.2
Fair val: S&P: +6.6 Dow: +39 Nas: +11.0

Upgrades: POT, MON, CI, GW, NCC, XRTX; Downgrades: GPS, X, WGO, WFC, LEH, SMA

Lehman Brothers upgraded several names in the semiconductor sector from Equal-weight to Overweight.

Oil poll closed

Locke on Stocks readers got it right.
55% correctly predicted the pullback in oil to $100/barrel.
Keep an eye out for the next poll.

JPM considers throwing BSC shareholders a bone

JPMorgan could increase its offer to as much as $10/share in an effort to appease irate BSC shareholders, whose votes are necessary to finalize the acquisition. Approval from the Fed for a revised deal would be required.

The week ahead: economic data

Monday

Existing home sales (4.86 mil projected)

Tuesday

Consumer confidence (75.0)

Wednesday

Durable goods (1.0%)
New home sales (580K)
Weekly oil/gas inventories

Thursday

Weekly jobless claims
Final Q4 GDP (0.6%)

Friday

Personal spending

Futures lack direction following holiday weekend

Futures: S&P: +7.8 Dow: +52 Nas: +6.8
Fair val: S&P: +6.6 Dow: +39 Nas: +11.0

The dollar is trading near 100 yen.
Commodities are stable, with gold @ $918/oz and oil @ $100 and change.
Many overseas markets remain closed.
The Nikkei was unchanged.
Shanghai lost 4.5%.

Taiwan markets cheer Ma's victory

TAIEX (^TWII) closes 4% higher on pro-China candidate's presidential win.
EWT

TAIPEI (Dow Jones)--Investors pushed Taiwan's share market and currency sharply higher Monday on hopes President-elect Ma Ying-jeou will boost the economy by improving ties with China, though some are skeptical of instant results. Despite optimism in the market over improved relations with China, "the reality is these changes may take longer than most have expected and would be just as delicate and challenging even for a Kuomintang-led administration," said Standard Chartered Bank economist Tony Phoo.
The New Taiwan dollar ended Monday at NT$30.229 to the U.S. dollar - a more than 10-year high close - with the currency market notching up record volume of US$5.0 billion. Traders reported heavy central bank intervention to support the U.S. dollar, which had closed Friday at NT$30.55.
The benchmark share index ended 4% higher at 8,865.35 in heavy volume, though off an early peak of 9,049.23. Some analysts remained upbeat on the outlook for the share market. "Too many investors have been waiting to buy Taiwan shares after the election," said Citigroup analysts. "Given the heavy outflows of last year in particular, it is likely there would be only a very mild pullback, if any, after the initial rally given the degree of pent-up demand," they added.
Still, while the Taiex may continue to gain Tuesday, "the rise won't be as big as it was today," said Mega Securities trader Alex Huang. "The market may be more rational after two days of passionate rallies" and take its main cue from whatever Wall Street does later Monday. Citigroup economist Cheng Cheng-mount said the ball was now in China's court in terms of cross-strait ties. "Ma's victory demonstrates Taiwan's goodwill to China but now we'll have to see what China does - if it continues to hold rigidly to its one-China policy" there could be some disappointment.
Although electronics shares, which account for more than half of the Taiex's value, rose 3% Monday, KGI Securities trader Raymond Chen said they might soon fall because companies are expected to report lackluster earnings in April.
Tourism companies were Monday's top performers, with their subindex up 6.8% on hopes Ma might deliver on his promise to triple the number of Chinese visitors to Taiwan to 3,000 per day from the current quota of 1,000 per day. He hasn't given a timeframe for this goal. Ambassador Hotel (2704.TW) ended 7% higher at NT$55.10 and Formosa International Hotels Corp. (2707.TW) rose 6.8% to NT$518.00. Andrew Teng, a stock trader at Taiwan International Securities, predicted the Taiex could test the 9,300 level later this week. "The strong momentum will continue through the week as foreign investors are likely to invest more in local shares," he said.
-By Jessie Ho, Wei Yi Lim, Joy C. Shaw and Alex Pevzner,
Dow Jones Newswires March 24, 2008 04:55 ET (08:55 GMT) Copyright (c) 2008 Dow Jones & Company, Inc

Businessweek: Dollar Daze in Europe

How the falling greenback is killing jobs and crimping profits on the Continent

by Jack Ewing



From a U.S. point of view, there's an upside to this story. European companies are frantically investing in U.S. production capacity, which creates jobs and helps to reduce the $740 billion current- account deficit at the root of the dollar's woes. BMW, for example, is ramping up output at its existing plant in Spartanburg, S.C., by 50%. By 2012, BMW expects to create 500 additional jobs at the factory, where it makes its X series crossover sport- utility vehicles. Volkswagen, which manufactures in Mexico, is scouting for a U.S. site. Since EADS was awarded a contract to manufacture refueling tanker planes for the U.S. Air Force, Airbus plans to build civilian and military aircraft in Alabama. Smaller companies are bolstering their U.S. operations, too. Trumpf, a German maker of lasers used to cut sheet metal, in April is christening a new factory in Connecticut, where it already has a plant.


Source: Bureau of Economic Analysis

The Week That Was: Excitement Delivered

S&P +3.2% Dow +3.4% Nas +2.1%

- The expected demise of Bear Stearns took place before the week even started
- The Fed cut the federal funds rate 75 basis points
- The government lowered capital reserve requirements for Fannie Mae and Freddie Mac
- The largest IPO in U.S. history saw V shares gain 46% from their offering price

Each one of these stories would be huge enough to dominate a normal week’s news flow. But the biggest development last week was the way in which the deal for BSC went down.
By lending J.P. Morgan $30 billion, the Federal Reserve set a precedent, assuming the title of lender of last resort for investment banks. This new expanded responsibility of the Fed includes extending use of the discount window to primary dealers, a vehicle previously granted only to regular banks, which are much more regulated than investment firms.

The implications are far-reaching, perhaps more so than can be determined. The move by the Fed opens up its balance sheet to far more risk. And the assumption by a private entity of a role better suited for the federal government begs for more oversight. Bernanke and Co. are in an incredibly tight spot, and they’re to be lauded for their ingenuity and resolve. They’ve been forced into a ‘shoot first, ask questions later’ position. The move appears to have been successful (thus far) at restoring confidence among lenders, which is critical to thawing the credit freeze. But when the ice finally melts and questions do get asked, chief among them will be what role the central bank will play going forward in the increasingly complex global economy of the 21st century.

In this interview (33:57) with Charlie Rose on Tuesday, March 18, former Fed chairman Paul Volker discusses Bear Stearns, the dollar, and the actions of the Federal Reserve.



Post of March 15th

Shares of CALM near 52-wk high, cocoa futures pause from record run

The largest specialty shell egg producer in the U.S., Cal-Maine Foods, saw fiscal 2008 Q2 profits hop 526% over 2007.

The average retail price of eggs in 2007 climbed 28.3% to $1.68 a dozen, from $1.31 in 2006.

All food prices are up, thanks to higher commodity prices and increased energy costs. But eggs rose more than any other food category last year because they're more closely tied to farm and wholesale prices, says Ephraim Leibtag, an economist at the U.S. Department of Agriculture's Economic Research Service.

Cocoa futures have enjoyed a sweet run with the other soft commodities, until this past week when they all got sheared.



Economists point to both a weaker dollar and a boom in global agricultural demand for the surge in prices for eggs and chocolate.

But what the charts fail to show is a suspicious trail of fur, and a smattering of 40-ounces empty on the curb.


(flash)

HAPPY EASTER!

Nymex 3-2-1 crack spread pops on oil pullback, contract roll-over

The dramatic drop in oil gives refiners hope that this summer's driving season will not be a total bust.

It's likely that some of the money flowing out of the crude trade could be put to work in the refiners as a way to play the other side of that trade.

TSO, HOC, VLO, WNR, ALJ

ETF recap

Some of yesterday's winners and losers

FXP +15.4%
SMN +12%
EEV +11.6%
DUG +9.5%

XME -9.2%
OIH -6.2%
MOO -6.1%
GDX -5.8%

These trends generally are poised to continue as money flows out of hot sectors.

Markets in Japan (EWJ) and Taiwan (EWT) were strong overnight.

Futures slightly higher after yesterday's selloff, commodities continue to plunge on dollar stability

Futures: S&P: +6.3 Dow: +50 Nas: +7.5
Fair val: S&P: +0.9 Dow: -12 Nas: +0.1

Yesterday's story extends into this morning as commodities continue their steep decline.
Strength in the dollar against the yen and euro was the motivating factor behind the initial decline, which has snowballed as traders run over themselves getting out the door of these weak dollar, 'safe haven' trades.
The haircuts have been swift and dramatic.
Gold @ $920 is 10% below the highs of a few days ago.
Silver @ $17.50 is 20% below its highs.
Oil @ $100 is 10% lower.
The fall in commodities should abate inflation fears somewhat and eventually be good for equities.
The unknown factor is just how much deleveraging is left to occur.

V opens @ $60

Shares of V are $2 lower on huge volume.

Precious metals pull way back, oil down 3% as dollar strengthens

Gold is down $26 @ $955/oz
Silver is down over $1 @ $18.60/oz
Platinum is down $66 @ $1885/oz

V now bid $65 before trading commences

Represents a 48% premium over the IPO price.

MA up 1.9%

Opening V bid =$58

$14 over pricing

Upgrades: FCSX, NCC, ICO, SGEN, IMCL, BWLD, SAFM; Downgrades: HD, MNST, PCLN, LAMR, SLE, KFT, RADN

Futures improve on MS results, V anticipation

Futures: S&P: +1.0 Dow: -18 Nas: -2.00
Fair val: S&P: -1.2 Dow: -4 Nas: -0.95

Oil is $2 lower and gold is off $10.

Lindsay Corp. reports 32-cent beat in Q2

LNN earned 79 cents/share on $108.4 million in revenues.

The backlog of unshipped orders at February 29, 2008 was $98.5 million compared with $38.4 million at February 28, 2007. Irrigation backlog increased $58.6 million ($55.6 million prior to the inclusion of Watertronics) on significantly improved order flow for both domestic and international markets. Infrastructure backlog increased $1.5 million.

Rick Parod, president and chief executive officer, commented, “Demand for irrigation equipment is strong globally, supported by higher commodity prices, bio fuel expansion and water initiatives. Infrastructure segment demand for the unique solutions provided by our products is also strong and we continued to realize synergies from the acquisitions in this segment during the period. Our factories responded to this demand with significant production increases. During the quarter we continued to expand the margins through improved efficiencies, volume leverage and cost reduction initiatives.”

Parod added, “With the current USDA forecast of a second consecutive year of record net cash farm income in 2008, we believe domestic demand for our irrigation products will remain robust. International demand is also expected to increase on the strength of higher agricultural commodity prices and global agricultural development. World-wide interest in the unique road safety products in our infrastructure segment provides continued opportunities for superior growth.”

Parod concluded, “We are focused on achieving growth in each of our segments organically and through acquisitions. During the quarter we acquired Watertronics, Inc., a leader in the design, manufacture, and service of water pumping stations and controls for the golf, landscape and municipal markets. This will further enhance Lindsay’s capabilities in providing innovative, turn-key solutions to customers through the integration of proprietary pump station controls and designs. I am happy to welcome their employees, distributors and suppliers to the Lindsay Corporation family. We will continue to leverage our financial flexibility to create shareholder value through a balance of organic growth opportunities, strategic acquisitions, share repurchases, and dividend payments.”

All eyes will be on the Visa (V) IPO today

Overcoming the jitters that have battered many of the lenders that issue its cards, Visa Inc. sold 406 million shares at $44 apiece late Tuesday to raise nearly $18 billion and complete the most lucrative initial public offering in U.S. history.

The price topped the range of $37 to $42 per share that Visa set three weeks ago, reflecting high demand to own a piece of a company that's promising earnings growth of 20 percent despite a credit crunch that's choking the U.S. economy.

The San Francisco-based company will make its debut with a market value of about $36 billion.
Based on the strong demand among money managers who wanted a piece of the IPO, Einhorn anticipates Visa shares will quickly soar above $50.

Visa already dwarfs its closest competitor, MasterCard Inc., whose stock has more than quintupled since that company went public less than two years ago.

But analysts say Visa priced its IPO more aggressively than MasterCard, making it less likely that its stock will appreciate as dramatically in the months ahead.

Visa processed 44 billion transactions totaling $3.2 trillion in 2006, according to the Nilson Report, an industry newsletter. MasterCard handled 23.4 billion transactions totaling $1.9 trillion in the same year.

Morgan Stanley earns $1.45 per share in Q1, beating estimates by 42 cents

John J. Mack, Chairman and CEO, said, “Despite turbulent markets, Morgan Stanley achieved strong performance across many of our businesses this quarter – delivering a Firmwide ROE of 20 percent - and continued taking important steps to position the Firm for growth as we move forward in 2008. We achieved strong results across our equities and fixed income sales and trading businesses this quarter, as we effectively capitalized on market opportunities and aggressively managed our positions. We also delivered another solid quarter in investment banking and wealth management. While many of our businesses are facing challenging market conditions that we expect to continue in the months ahead, we are satisfied with how Morgan Stanley navigated the ongoing market turbulence. Our people remain intensely focused on continuing to serve our clients, building out our global franchise and executing our growth plans in order to create long-term value for Morgan Stanley’s shareholders.”

Shares of MS are bid 5% higher in extended trading.

China Mobile (CHL) beats Q4 estimates by 15%, reports 2007 results

CHL earned $3.85 billion in Q4 vs. estimates (27) of $3.34 billion.
The world’s largest telecom company services 369 million users after adding 68 million subscribers in 2007. CHL expects to add 80 million more subscribers in 2008.

Fannie Mae (FNM) and Freddie Mac (FRE) to benefit from lower capital reserve requirements

The Office of Federal Housing Enterprise Oversight will announce today a reduction in the capital requirements for the mortgage-finance companies from 30% of assets to 20%.

The freed-up money will go toward buying mortgages of struggling homeowners to enable them to refinance into more affordable loans.

Under the deal, Fannie and Freddie will commit to raise additional capital. That could be done through special sales of stock or cuts in dividends. Together they will be expected to provide up to $200 billion in new funding for home loans, the person said.

Shares of FNM and FRE were up over 25% yesterday in anticipation of such a deal.

Asian markets finish higher on follow-through of US strength, bounce in dollar; US futures lower

Futures: S&P: -11.5 Dow: -99 Nas: -10.0
Fair val: S&P: -1.2 Dow: -4 Nas: -0.95

The Nikkei and the Hang Seng gained over 2% on strength in exporters.
After climbing from 96 yen to back over 100 yen, the dollar pulled back throughout Asian trading to below 99 yen.
European markets are soft on weakness in financials on UK banking concerns.

Visa IPO prices at $44 a share, to begin trading tomorrow under ticker symbol 'V'

Largest IPO in US history prices above the expected range of $37-$42 and values Visa at $36 billion.

Focus Media (FMCN) reports 4-cent beat on higher than expected revenues

Non-GAAP net income of 52 cents on revenues of $184.6 million.

FMCN has been wild the past few days. Gained 16% today to close @ $37.41. But that’s after losing 27% yesterday.

Shares are 10% higher after hours.

Commenting on the fourth quarter and full year 2007 results, Executive Chairman Jason Jiang said, ''Fourth quarter results far exceeded our own guidance. The upside was driven by robust growth in our in-elevator poster frame business resulting from digital Frame 2.0 upgrade, strong momentum in our mobile handset advertising business, and continued strength in our Internet advertising business. We also made improvements in our Internet advertising business model to increase the gross margin from 23.0% in the third quarter 2007 to 26.4% in the fourth quarter. The results demonstrated the strong leverage built into our business model as we move forward to become the largest digital media company in China. Based on our dialogs with our large advertising clients, we strongly believe the current growth momentum in the China advertising industry will continue after the 2008 Olympics, driven by increasing domestic consumer demand for goods and services as the Chinese economy continues to expand. Our strategy of building the largest life-style digital media platform will allow Focus Media to capture a relatively larger share of this growth. I am fully committed to building Focus Media to be one of the leading digital media companies in the world.''

BUSINESS OUTLOOK

Based on organic growth, the Company estimates its total revenues for full year 2008 to range from $900 million to $930 million, of which digital out-of-home is expected to contribute approximately 63%, Internet advertising is expected to contribute approximately 31%, and mobile handset advertising is expected to contribute approximately 6%. Net income of full year 2008 excluding share-based compensation expenses and amortization of intangible assets resulting from acquisitions (non-GAAP) is expected to be between $280 million to $300 million, taking into consideration a 15% effective income tax rate after certain government tax incentives and rebates, or $2.06 to $2.21 per fully diluted ADS based on 136 million annual average total ADS equivalent shares outstanding. In accordance with SFAS No. 123R, the Company estimates total share-based compensation expenses in 2008 will be approximately $35 million based on stock options that have been granted as of February 28, 2008. The Company expects approximately $50 million in acquisition-related intangible amortization expenses in 2008 including CGEN acquisition, subject to the finalization of the purchase price allocation for recent acquisitions.

The Company expects its capital expenditure for 2008 to be approximately $50 million, mainly for the digital Frame 2.0 upgrade and expansion in both of our residential and commercial networks and digital LED investment in our outdoor LED business.

The Company estimates its total revenues for the first quarter of 2008 will range from $160 million to $165 million. First quarter 2008 net income excluding share-based compensation expenses and amortization of intangible assets resulting from acquisitions (non-GAAP) is expected to be between $44 million and $45 million or $0.33 to $0.34 per fully diluted ADS based on 133 million average total ADS equivalent shares outstanding.

Markets cheer easing of liquidity crisis, prudence of Fed with huge rally

S&P: +54.1 Dow: +420  Nas: +91.3

Markets rallied throughout the day, only pausing briefly immediately after the Fed’s ¾-point cut in both the fed funds rate and the discount rate, before surging into the close for gains of 4%. 

Better than expected earnings releases from LEH and GS in the premarket set the tone for the day, as investment banking firms enjoyed a huge relief rally following yesterday’s massive selloff.  The implications of the Fed’s extension of the discount window to cover investment bankers seemed to fully sink into traders.  Shares of LEH surged 46%, while GS gained 16%.  Major banks took part in the rally as well.  UYG, an ultralong financial ETF, gained 16% on the day.

Fed funds futures had priced in nearly a 100% chance of a full percentage point cut today.  Initial reaction to the 75 basis point move was a pullback in equities.  But the move gives the Fed more room to cut rates in the future and boosted the dollar. Once the move was digested, the markets declared their confidence in the Fed by closing at the highs of the session.

Dollar weakness has accompanied previous Fed cuts and has stoked inflation fears. The smaller than expected cut today gave the dollar a reason to bounce 5% against the euro and 3% against the yen. Gold lost $25 to $975, but oil ignored the stronger dollar and added $3 to $109.  

Gamestop (GME) reports 2-cent beat, guides 2008 above consensus

Earned $1.14 vs. $1.12 estimates

Business Outlook

For fiscal 2008 (the 52-week year ending January 31, 2009), sales are projected to grow between 19.0% and 21.0%, with comparable store sales ranging from +10.0% to +12.0%, driven by a strong lineup of video game title releases across all platforms. Diluted earnings per share for the full year are expected to range from $2.25 to $2.34, an increase of between 25% and 30% over fiscal 2007. GameStop expects to open between 575 and 600 stores worldwide in fiscal 2008.

For the first quarter of fiscal 2008, the company expects comparable store sales to range from +24.0% to +25.0%, led by continued demand for all console and handheld systems as well as a strong slate of new video game releases, such as Nintendo’s SUPER SMASH BROS. BRAWL for the Wii, Capcom’s DEVIL MAY CRY 4 and GRAND THEFT AUTO IV from Take Two Interactive. Diluted earnings per share are expected to range from $0.32 to $0.33. This compares to earnings per share of $0.15 in the first quarter of 2007.

Looking beyond 2008, GameStop currently expects earnings per share to grow at least 25% in fiscal 2009 (the year ending January 2010) based on several key factors, including: the company’s growing worldwide retail footprint, the company’s ongoing cash generation, the continued expansion of the video game industry, and the broadening consumer base.

Futures strengthen as investment firms report no surprises

Futures: S&P: +18.9 Dow: +145 Nas: +21.2
Fair val: S&P: -0.6 Dow: -15 Nas: +2

Commodities higher, dollar stronger against the yen.

Lehman Brothers earns 81 cents, beats consensus by 9 cents

Shares of LEH are 13% higher premarket.

Chairman and Chief Executive Officer Richard S. Fuld, Jr. said, "In what remains a challenging operating environment, our results reflect the value of our continued commitment to building a diversified platform and our focus on managing risk and maintaining a strong capital and liquidity position. This strategy has allowed us to support our clients through these difficult and volatile markets, while continuing to build and strengthen our global franchise for our shareholders."

Upgrades: GMR, TK, OSG, VIP, ADS, SAP, RMG; Downgrades: MRO, SI, TU, URI, ARII, IP, DEIX

Goldman Sachs earns $3.23 in Q1, beats consensus by 65 cents

Shares of GS are 5% higher in extended trading.

“Market conditions are clearly very difficult,” said Lloyd C. Blankfein, Chairman and Chief Executive Officer. “But we saw strong customer activity across many of our franchise businesses in the first quarter. Although market conditions present many challenges at the moment, they also offer considerable opportunities.”

Futures higher ahead of FOMC meeting

Futures: S&P: +15.7 Dow: +117 Nas: +21.2
Fair val: S&P: -0.6 Dow: -15 Nas: +2

Oil is higher @ $107

Asian markets finished mostly higher
Nikkei +176
Hang Seng +300
Shanghai -151

European markets are up an average of 2%

Today’s earnings recap

HWCC +8.7% missed by a penny, slight miss on revenues, guides 2008 above consensus

FTK -15.3% missed by 2 cents, revenues in line

SDTH -12.5% EPS in line, revenues top estimate, guides for 2008 EPS of 62-65 cents

EXM -9.5% (+7% after hours) beat by 26 cents on higher revenues, declares dividend

WPCS -0.4% 5 cents on $24.8 million

Oil futures still in contango after today’s drop

The NYMEX WTI crude futures chain prices immediate forward months below the April contract, which rolls over into May on Thusday.
DUG, an ultrashort oil and gas ETF, gained over 5% today while crude fell 4%.
OIH, the oil services ETF, lost nearly 5%.
Demand for oil services with oil at $106 is no lower today than it was on Friday with oil over $110.

Technically, however, the oil service names look vulnerable to continued pressure.
Tomorrow is a pivotal day. The OIH plunged below the 50-dma, which is now below the 200-dma.


National Oilwell Varco (NOV) has a similar trend-line setup. The oil rig manufacturer has a $9 billion backlog and clear forward visibility. Past dips into the mid-$50’s have been buying opportunities. A drop under $50 would be even more so.


Transocean (RIG) is still even with its 50-dma. If the OIH continues to falter, a pullback to the 200-dma might be possible and would present an entry point.

Major indices finish mixed ahead of tomorrow’s FOMC meeting.

S&P: -11.5 Dow: +21 Nas: -35.5

Shares of broker-dealers were the most volatile and hardest hit yet again in response to the shoestring take-under of BSC backstopped by the Fed.
BSC managed to close @ $4.81 despite the $2.20 price-tag applied by JPM, which gained 10% on the day and helped the Dow. BSC shareholders do have the right to vote down this weekend’s stock deal, giving a ray of hope to equity holders for a higher bid. But JPM was granted an amazing amount of control over BSC, including the rights to Bear’s coveted Manhattan office building at 383 Madison Avenue should the deal get rejected.
Shares of LEH finished 20% lower after having been down nearly 50% intra-day.
Commodities sold off as traders booked gains from winners, freeing up cash to either cover margin calls elsewhere or buy some beaten down equities on the cheap.
Oil lost over $4 and platinum gave up over $100 or 5%.
Speculation over tomorrow’s fed funds rate cut decision is all over the map. Some suggest the Fed may cut only 50 basis points in conjunction with scheduling another meeting in three weeks, while others say 100 basis points is in order.

Markets seesaw back up during Sec. Paulson comments

S&P: -10.6 Dow: +32 Nas: -24.4

Treasury Secretary Paulson pleased with efforts to stabilize capital markets, reiterates without smiling strong dollar policy

Fed’s extension of the discount window to investment houses takes liquidity issue “off the table” says LEH

Fed Takes Bold Steps to Ease Crisis
Monday March 17, 10:57 am ET
By Jeannine Aversa, AP Economics Writer
(excerpt)

The new lending facility -- described as a cousin to the Fed's emergency lending "discount window" for banks -- is geared to give major investment houses a source of short-term cash on a regular basis -- if they need it.

That's important because those big investment houses have key roles in the financial system and if one fails or is having difficulty it could put the whole financial system in jeopardy, said Mark Zandi, chief economist at Moody's Economy.com. These big investment houses have complex relationships with many players in the system, including hedge funds, commercial banks and others.

The lending facility will be in place for at least six months and "may be extended as conditions warrant," the Fed said. The interest rate will be 3.25 percent and a range of collateral -- including investment-grade mortgage backed securities -- will be accepted to back the overnight loans.

The "discount" rate cut announced Sunday applies only to the short-term loans that financial institutions get directly from the Federal Reserve. It doesn't apply to individual borrowers.

The Fed's actions are the latest in a recent string of innovative steps to deal with a worsening credit crisis that has unhinged Wall Street.

The action comes just two days before the central bank's scheduled meeting on Tuesday, where another big cut to a key interest rate that affects millions of people and businesses is expected to be ordered. That key rate is now at 3 percent and is expected to be cut by at least three-quarters of a percentage point on Tuesday.

The Fed said in a statement that the steps are "designed to bolster market liquidity and promote orderly market functioning ... essential for the promotion of economic growth.

Fed

Lehman: We're not Bear and We're not Screwed

CNBC LEH

Markets, LEH rolling over

S&P: -30 Dow: -168 Nas: -54.6

After an impressive bounce that saw not only the Dow gain over 200 points and cross into positive territory, but also LEH recover 20% of its market cap, stock indices are substantially lower at this hour as LEH shares hit new intraday lows.

LEH -46%
MER -12%
MS -12%
GS -10%
JPM 8%
SKF financials ultrashort ETF +10%

Oil is down over $4 below $106 and commodities save gold are soft across the board as traders book profits.
DUG oil/gas ultrashort ETF +9%

The comeback continues....

S&P: -9.9 Dow: -15 Nas: -22.9

LEH -15%
MER -5%
MS -7%
GS -4%
JPM 11%
SKF financials ultrashort ETF +3%

Markets, financials well above their lows.

S&P: -19.0 Dow: -87 Nas: -36.3

LEH -23%
MER -11%
MS -9%
GS -8%
JPM +9%
SKF financials ultrashort ETF +7% 

Financials weigh heavily on futures

Futures: S&P: -33.5 Dow: -244 Nas: -45.5
Fair val: S&P: -2.3 Dow: -21 Nas: -0.2

LEH -35%
MER -16%
MS -13%
GS -11%
JPM +1%
SKF financials ultrashort ETF +14%

Upgrades: CNQR, AATI, ASH, NAT, ANN, PHTN; Downgrades: BK, GS, COH, AMTD, SCHW, STRL

Futures: S&P: -30 Dow: -214 Nas: -38.5
Fair val: S&P: -2.3 Dow: -21 Nas: -0.2

Metals have gotten weaker the past half hour.

CME Group to consummate NYMEX takeover

CME to pay $36 in cash/share of NMX and give NMX shareholders 0.1323 Class A shares of CME.

Futures off their lows, dollar stops overnight slide ; Lehman Brothers (LEH) shares plunging; Fed funds futures predict a full percentage-point cut

Futures: S&P: -27 Dow: -200 Nas: -37
Fair val: S&P: -2.3 Dow: -21 Nas: -0.2

Asian markets finish lower, European indices off 2-3%.

The $236 million take-under for BSC underscores jut how spooked the credit markets are. The Fed’s unusual move to cut the discount rate during the weekend is an attempt to provide enough liquidity to prevent more broker failures.
But as BSC shows, any lack of confidence is enough to cause a panicked run on a bank, and LEH shares are down 30% premarket. Shares of LEH are acting as BSC shares did before their collapse.
There are reports that Goldman Sachs(GS) will record a $3 billion write-down this week.
Shares of GS are bid 10% lower.

Asian markets fall as dollar touches 96 yen; gold hits $1030/oz; US futures point to steep gap lower

Futures: S&P: -38 Dow: -275 Nas: -45

Nikkei, Hang Seng down over 4%. Shanghai only down 1.6% after having underperformed vs. other Asian indices last week.

Dollar drops below 97 yen, gold pops above $1020/oz

$1 = 96.7 yen = 1.58 euro

The inter-meeting Fed cut in the discount rate to financial institutions two (2) days ahead of the FOMC meeting, coupled with the rock-bottom value assigned to the still-warm carcass of Bear Stearns, have intensified credit fears beyond the level felt on Friday.

NYSE Euronext (NYX) buys CME Group's CBOT Metals Complex

The deal for precious metals futures and options markets follows the acquisition of the AMEX in January and continues the push at NYX to expand into rapidly growing derivatives exchanges.

NYX $59.53
p/e 22.0
div yield 1.6%
52wk Range: 57.05 - 101.00

Volume at the NYSE year to date has been huge due to volatility.



OptionsExpress (OXPS) also stands to benefit from increased trading volumes.

OXPS $20.97
p/e 13.6
div yield 1.5%
52wk Range: 20.16 - 34.95

J.P. Morgan will exchange 0.05473 shares of its common stock per one share of Bear Stearns stock.

http://tinyurl.com/39l96v

JP Morgan buys Bear Stearns for $2/share: Fed lowers discount rate 1/4-point to 3.25%

That is not a typo.
JPM buys BSC for $2/share.
JPM expects the deal to 'eventually' be accretive.

http://biz.yahoo.com/ap/080316/jpmorgan_bear_stearns.html

The Week Ahead: Fed meeting, economic data, earnings reports

With a mountain of news items in store, next week promises to be just as exciting as the last. And the markets no less capricious.
The biggest story of the week (that we know of) will be the Fed rate cut decision on Tuesday. Consensus on the Street is that the federal funds rate will be cut at least 0.75% down to 2.25%, with some firms such as Citigroup expecting a full percentage point cut. Just a few days ago, on Tuesday as the markets rallied for their biggest one-day gains in five years, analysts had lowered their expectations to a half-point cut. The credit crisis at Bear Stearns quickly changed sentiment on Friday.
Bear and other investment bankers including Goldman Sachs, Lehman Brothers and Morgan Stanley will report earnings this week, giving a clearer indication of just how badly they’ve been damaged by sub-prime and the lack of credit confidence. And at least one of them (BSC) is likely to get taken out before the week is through.
The fact that US markets are closed on Good Friday could be a blessing.
On the good news front, the long-anticipated Visa IPO will price on Tuesday for Wednesday trading. The credit card transaction processor is expected to raise as much as $19 billion on 440 million shares priced between $37 and $42 in what could be the largest IPO in US history.

Monday

Industrial production
Capacity utilization

HWCC $14.44 premarket
analysts (5) expect 33 cents on $90 mil 52wk Range: 11.22 - 31.19
FTK $21.24 premarket
analysts (5) expect 19 cents on $43.4 mil 52wk Range: 11.51 - 55.00
SDTH $9.38 premarket
analyst (1) expects 14 cents on $27.6 mil 52wk Range 3.55 - 15.57
EXM $27.37 after hours
analysts (6) expect $1.45 on $55.2 mil 52wk Range: 15.81 - 81.99
WPCS $5.59 after hours
analysts (2) expect 6 cents on $25 mil company pre-warned 5 cents
52wk Range: 5.50 - 14.25
BSC $30.00 after hours
consensus estimates (14) have fallen to 84 cents on $1.35 billion but the ranges are very wide 52wk Range: 26.85 - 159.36

Tuesday

FOMC meeting
Producer Price Index
Housing starts

GS $156.86 premarket
analysts (18) expect $2.58 on $7.47 biliion 52wk Range: 155.00 - 250.70
LEH $39.26 premarket (unconfirmed reports that it’s been moved up to Monday)
consensus estimates (16) have fallen to 72 cents on $3.35 billion within wide ranges
FMCN $43.85 after hours
analysts (8) expect 48 cents on $168 mil 52wk Range: 34.57 - 66.30

Wednesday

Visa IPO

MS $39.55 premarket
analysts (18) expect $1.03 on $7.19 bil 52wk Range: 38.18 - 90.95
ALOT $9.64 premarket
Astro Med has no analyst coverage and is thinly traded 52wk Range: 8.31 - 12.12
CHL $67.72 after hours(?)
analyst (1?) expects 71 cents on $12.64 bil 52wk Range:43.82 - 104.00
PAL $7.36 after hours
no analyst coverage 52wk Range: 3.28 - 12.36

Thursday

Weekly jobless claims
Quadruple witching

WOR $16.69 premarket
analysts (8) expect 25 cents on $700 mil 52wk Range: 13.51 - 26.46
SMOD $5.89 after hours
analysts (8) expect 18 cents on $180.3 mil 52wk Range: 5.67 - 15.89

Good Friday – Markets Closed

FCFS, First Cash Financial, increases share buyback authorization to up to 3 million shares

The Board had initially authorized the repurchase of up to 1,000,000 shares in November 2007.
FCFS closed down 3.6% @ $8.22

p/e 7.65
52wk Range: 7.54 - 25.80

http://finance.yahoo.com/q?s=FCFS

Markets close down about 2% in a wild final session to what was a crazy week overall

And when all was said and done, the major indices finished virtually unchanged from last Friday’s close.
Financials were hardest hit after Bear Stearns (BSC) revealed the details of an emergency overnight bailout by JP Morgan and the NY Fed. Shares of BSC were nearly cut in half on huge volume of 186 million shares to close @ $30.00 Speculation about credit problems at BSC had circulated for days. Apparently the suspicions became self-fulfilling as a barrage of cash withdrawals quickly caused a credit squeeze at the firm.
Shares of broker Lehman Brothers (LEH) lost over 14% on very heavy volume in sympathy, suggesting that traders believe if there is another shoe to drop, it’s at LEH.
The day began with promise as February CPI data released @ 8:30 indicated that inflation surprisingly remained in check for the month. Futures pointed to a substantially higher open.
Just to keep things interesting, President Bush and Fed Chairman Ben Bernanke peppered mid-day trading with comments on the economy.

S&P: -27.3 Dow: -195 Nas: -51.1

SKF ultrashort financials ETF +6.3%

Today’s close
S&P: 1288 Dow: 11951 Nas: 2212

Last Friday’s close
S&P: 1293 Dow: 11893 Nas: 2212

Markets well off their lows, bouncing hard in last half hour

S&P: -20.2 Dow: -141 Nas: -38.1

Markets at session lows, dollar nears 99 yen, VIX volatility index spikes over 32, gold back over $1000

S&P: -37.5 Dow: -280 Nas: -69.0

Bernanke to advocate tighter mortgage lending standards during speech, Fed to act as needed on subprime

S&P: -29 Dow: -224 Nas: -51.8

Unlikely to specifically address Bear Stearns situation.

Bear Stearns plunges anew during CC after inching higher off its lows, shares down 40%, markets react negatively

S&P: -27.2 Dow: -212 Nas: -50.2

Company beset by cash redemption requests.
Situation very fluid.

BSC to have conference call @ 12:30 Eastern, Bernanke to speak on housing @ 1:00; markets little changed past hour

S&P: -23.5 Dow: -172 Nas: -41.5

Oil hovering around $110, gold pulls back below $1000.