Inflation going lower?

Morning News of Note:

• JNJ GDT: J&J Lowers Guidant Takeover Price to $21.5 Billion Johnson & Johnson lowered its purchase price of its proposed acquisition of Guidant Corp. to about $21.5 billion, a decrease of about 15 percent. The new price represents $63.08 a share for Guidant stock, down from the $76 a share in cash and stock that J&J agreed to pay in December, J&J said in a statement distributed by PR News Wire. (Full Story) Bloomberg
• SBC BLS: SBC Comm-SBC talk of merger with BLS-LightReading.com: With VZ's acquisition of MCIP and SBC's acquisition of T nearing completion, talk is increasing that SBC will next acquire BLS, due to the companies joint ownership of Cingular. Blair Levin, an analyst with Legg Mason, recently predicted, "The announcement that SBC is acquiring BLS will come within 24 hours after they [SBC] close the deal with T." An SBC spokesman did not comment except to say, "As far as Cingular goes, the partnership is working really well... If you were to look at a merger between SBC and BLS, there would certainly be a pretty good amount of regulatory scrutiny there."
• Natural Gas: Natural Gas: Big Worry This Winter Unexpectedly warm weather has bathed much of the United States in recent weeks, but fears persist that a classic energy shock may be unfolding as the nation heads into winter. This time, though, the coming squeeze is in natural gas rather than oil. (Full Story) NY Times
• BA: Boeing to Build Bigger 747 to Challenge Airbus A380 Boeing Co., the world's second-largest commercial planemaker, committed to building a bigger and more efficient version of the 747 to challenge Airbus SAS's A380 in the market for planes seating more than 400 passengers. Boeing announced the decision after Japan's Nippon Cargo Airlines Co. ordered eight of the cargo versions and Luxembourg's Cargolux Airlines International SA firmed up a commitment for 10 planes. (Full Story) Bloomberg
• Mad Money Summary: Cramer said that the Federal Reserve raising interest rates is a positive for the banks and purchase shares of WFC for his "ActionAlert Plus" charitable trust. Cramer also favors the health-care sector, his favorite is UNH. He believes there is a major tech rally ongoing in cell phones and electronic gadgets, his favorite in the sector is MOT. Cramer said that he would do a "'mon back" in shares of PG below $54 as a general consumer play. Cramer has switched to AMD from INTC as it is not always "buy Intel" anymore; AMD has been outperforming INTC and should continue to do so. Cramer also said that AMD, GOOG, NWS and RHAT will develop a $100 laptop computer. Cramer continues to be bullish on shares of CPST and said that WMT is using the company's micro turbines in one of their experimental stores in Colorado. ISRG's vice president, Aleks Cukic, joined Cramer by telephone last night on his show. He said that ISRG's business continues to be strong and Cramer still thinks that shares go higher saying that he is "still two thumbs up for ISRG."

Market Comments: The market is under a little pressure in early trading, but nothing major. Retailers are selling off on the reduced comps guidance from TGT. I am using the weakness in the group to add to a couple of names. Retail sales came in higher than expected (+0.9% vs. +0.3%, ex-autos). Healthcare stocks are mostly higher, as are many chip stocks and energy issues.

This mornings PPI report showed that prices rose +0.7%, but that core prices (ex-food & energy) actually fell -0.3%. Since it looks like energy prices have peaked short-term, I wonder what the next PPI and CPI readings will look like? If inflation readings start to trend lower, this would act as an additional boost for the market.

long JNJ, UNH, WFC