Morning Look

"If birds of a feather flock together, they don't learn enough." - Robert Half

Morning News of Note:

• MWD: Morgan Stanley Now Will Keep Discover Unit Morgan Stanley said it will keep its Discover credit-card unit after all, reversing a decision earlier this year to spin it out as a public entity and further confirming that new Chief Executive John Mack wants to take advantage of the firm's multiple businesses rather than be an elite securities-only firm. Morgan Stanley also announced that it will sell its long-struggling aircraft-leasing business, a move it said likely will prompt a $1 billion after-tax charge in the third quarter. (Full Story) WSJ
• AEOS GPS: Trendy Clothes Spur Back to School Sales STUDENTS ARE JUMPING INTO BLUE JEANS and retro fashions as they prepare to hit the books again, and that should mean more greenbacks for some apparel retailers. Retail stocks have declined recently on signs of weak consumer spending. They tumbled again Tuesday when Wal-Mart lamented that high gasoline prices hurt revenues. But some retailers' shares may be unfairly depressed because of high fuel prices -- just as the summer driving season ends. Plus, the economy is holding up pretty well even as prices at the pump hit new highs. In June, consumer spending rose 0.8% even as crude oil prices topped $60 a barrel for the first time. (Full Story) BARRONS
• GOOG: Google to Sell $4.2 Bln of Shares a Year After IPO Google Inc., the world's most-used Internet search engine, plans to sell as many as 14.8 million shares in a $4.2 billion transaction a year after its initial public offering. The sale, disclosed today in a regulatory filing, follows a surge in Internet advertising that has fueled demand for the stock. The Mountain View, California-based company's shares have more than tripled since its IPO, and Google's profit jumped fivefold in its year as a public company. (Full Story)
• NOK AAPL: Nokia-NOK says that AAPL's iTunes will not be included on its N91 phone-Reuters: NOK said that its upcoming N91 multimedia phone will not include AAPL's iTunes, but because of its desigen, programs could be produced for new N-series phones to allow services like iTunes.

Market Comments: The market opens slightly lower this am, on the heels of some weak earnings reports from retailers. LTD, CLE, and BKS all made cautious comments about the retail environment this am.

GME also reported fairly weak results (guidance), but the stock quickly bottomed and is up nicely right now. MDT also reported strong results last night, pushing the stock higher.

Energy stocks continue to be sold off. Boy, people sure are quick to call a top, huh?

long GOOG, MDT