Morning Update

"You see things, and you say Why? But I dream things that never were, and I say Why not?" - George Bernard Shaw

Morning News of Note:

• TWX: Time Warner Sets Settlement Of Suit Over AOL Merger Media Conglomerate Plans Share Buyback, Swings to a $321 Million Loss for Quarter Time Warner Inc. reached a settlement with the lead group of shareholders who sued the media company after its merger with AOL. Time Warner, the world's largest media company, said it set aside $3 billion in reserves to cover litigation settlements and as a result the company swung to a second-quarter net loss of $321 million. The shareholders in the settlement claimed they lost money when Time Warner's shares declined following the AOL merger. (Full Story) WSJ
• RBK NKE: Adidas to Buy Reebok In Bid to Gain on Nike Germany's Adidas-Salomon AG agreed to buy rival Reebok International Ltd. for ?3.1 billion ($3.78 billion), in a big bid by two former giants of the athletic-footwear industry to challenge the long-running supremacy of Nike Inc. Adidas said it will pay $59 a share for Reebok - a 34% premium over the $43.95 at which its shares closed in 4 p.m. trading Tuesday on the New York Stock Exchange. (Full Story) WSJ
• YHOO MSFT GOOG: Yahoo, Microsoft Enhance Ad Focus Yahoo Inc. and Microsoft Corp. are stepping up their assaults on one of Google Inc.'s core strengths -- selling text ads linked to search terms. Yahoo Wednesday will expand the number of sites on which it will place ads through a service called the Yahoo Publisher Network. Meanwhile, Microsoft next week will announce plans to begin U.S. testing of MSN Keywords, its own system for placing ads on its MSN Internet search site. The system, which Microsoft began testing last month in France and Singapore, will debut in the U.S. in test form in October, according to Joe Doran, senior director, MSN. (Full Story) WSJ
• AAPL: Apple's Georgia laptop deal hits snag Apple announced in February that it was on the verge of striking a deal with the Cobb County School District that would eventually equip each of the district's teachers, middle- and high-school students with a laptop. The district's board gave initial approval for a first round of laptop purchases for teachers and four pilot high schools. However, opponents of the plan took the school district to court, alleging that voters weren't sufficiently informed that a 1 percent sales tax approved in 2003 would be used to start the program. (Full Story) CNET
• INTC: Intel may exit entry-level chipset mkt - Digitimes (27.56 ) Digitimes reports, based on sources, that Intel plans to phase out its 865 and 915PL/GL chipsets in the 4Q and exit the entry-level chipset mkt. Intel has only told some first-tier mobo makers and OEM clients about the decision, and the co is not expected to make a public announcement.

Market Comments: The market opened slightly lower this am, most likely on profit taking. Earnings season is winding down a bit, but there are still some important companies that have yet to report (CSCO, DELL, etc). The big economic report this week will be Friday's payroll report.

Today, the Treasury announced that they will reintroduce the 30-year bond, which has not been issued for several years. Look for that to top the headlines today, and put some pressure on long-term yields. Also, keep an eye on oil, which has topped $62. This is a headwind.

long INTC, GOOG, MSFT