Morning Look

"True enjoyment comes from activity of the mind and exercise of the body; the two are ever united." - Karl Wilhelm Humboldt

Morning News of Note:

• TWX: Icahn Tries to Form a Team to Take On Time Warner Carl C. Icahn, who has made a career out of agitating for change at corporations, has set his sights on an incredibly large new target: Time Warner. Mr. Icahn has been putting out feelers over the last week to other large Time Warner shareholders and hedge funds about forming a faction with enough leverage to press the board to spin off Time Warner Cable, and possibly other divisions, according to people who have been briefed on Mr. Icahn's pitch. (Full Story) NY Times
• WFMI: Think Google, With Less Hype: The Case for Whole Foods Market One of the things I most enjoy about investing is that it encourages you to be an optimist, looking for opportunities where others might see only peril and gloom. When the "news" is so often bad, it is a welcome change to seek out and invest in something positive. These thoughts were on my mind this week as I passed through the Whole Foods Market, which now has outlets in New York City just steps from both my office and my apartment. (Full Story) WSJ
• CSCO: Cisco Shares Fall as Sales Forecast Misses Estimates Shares of Cisco Systems Inc., the world's largest maker of equipment that links computers, declined in Europe after the company forecast sales this quarter that may miss analysts' estimates. The shares fell as much as 98 cents, or 5 percent, to the equivalent of $18.63 in German trading from the close of $19.61 in the U.S. yesterday. The stock traded at $18.92 as of 10:15 a.m. in Frankfurt. San Jose, California-based Cisco yesterday reported an 11 percent rise in fourth-quarter revenue and said sales growth will slow to 10 percent this quarter. (Full Story) Bloomberg
• REIT Peak: REIT Deals Stay Hot But Shares May Be Peaking A spate of recent real-estate deal news, including two rare unsolicited offers, has bankers and analysts worried that shares in real-estate investment trusts may have peaked. The three-day, 7% swoon suffered by REIT stocks on the Dow Jones REIT Equity Index beginning last Thursday added to concerns that rising interest rates would end investors' love affair with real-estate companies. "You tend to see a lot of merger activity at the tops and bottoms of market cycles," says Ross Nussbaum, a Banc of America Securities REIT analyst (Full Story) WSJ
• Bulls/Bears: Bulls 59.1% vs 59.4% wk ago, Bears 19.3% vs 19.1%, Correction 21.6% vs 20.2%

Market Comments: The market is surging higher out of the gate. I prefer markets that start out weak in the morning, and close at their highs. Yesterday, the market peaked relatively early in the day, and gave back roughly half the gains by the close. We'll have to wait and see if the late day fade pattern surfaces again.

CSCO is down $1 (-5%) after reporting that sales growth may be a little soft going forward. Retailers and housing stocks look strongest so far. Happy trading.

long TWX