New high for the market

Morning News of Note:

• CSCO SFA: Cisco Agrees to Buy Scientific-Atlanta for $6.9 Billion in Cash Cisco Systems Inc. agreed to buy Scientific-Atlanta Inc. for $6.9 billion, adding the second-largest U.S. maker of set-top boxes for cable television and tapping into the growing market for Internet TV. Cisco, based in San Jose, California, will pay $43 a share, the companies said today in a Business Wire statement. The offer is 3.7 percent higher than Lawrenceville, Georgia-based Scientific- Atlanta's closing price yesterday. (Full Story) Bloomberg
• LIZ JILL: Liz Claiborne Seeks to Add J. Jill To Growing Closet Capping a two-year pursuit, apparel giant Liz Claiborne Inc. last night made a play for women's clothing retailer J. Jill Group Inc., offering $18 per share for the company, or a total of $366 million. That represents a 41% premium to J. Jill's shares at yesterday's trading close, and is 8% below the company's trading high over the last year. In an informal proposal, or "bear hug" letter, Claiborne Chief Executive Paul R. Charron extolled a combination of the two firms, arguing that Claiborne could help J. Jill "rejuvenate" its brand targeted to women older than 35. New York-based Claiborne has been a serial acquirer of small fashion labels in recent years and now sports a market capitalization of $3.8 billion on $4.85 billion of sales over the last twelve months. (Full Story) WSJ
• AT: Alltel to Acquire Midwest Wireless For $1.08 Billion Alltel Corp. is expected to announce today that it is purchasing rural cellular operator Midwest Wireless for $1.08 billion, according to a person familiar with the deal. The transaction would be the latest in a series of small cellular carriers being snapped up by larger wireless operators. For example, Sprint Nextel Corp. has acquired several of affiliates in the past few months and is expected to buy more (Full Story) WSJ
• TWX: Carl Icahn pressing Time Warner-TWX for an "overhaul"-Business Week: The article is from an interview by Business Week with Carl Icahn on November 14th. Icahn believes that TWX should break up the company and spin off its cable division to shareholders. He said that they are forming a "slate of proposed directors" to replace some members that are currently on TWX's board. Icahn believes that shares of TWX are worth $27 a share, based on the breakup value of the company.
• Mad Money Summary: Jim Cramer said that he continues to be bullish on shares of WMT last night. Cramer says that WMT is currently fighting a bill in Maryland that would require the company to spend 8% of its payroll on health benefits; WMT has hired the wife of a state senator who previously voted for the bill the first time around. Cramer says that whether WMT wins this case or not, he would buy shares as shares have "a lot more upside to it." Cramer was also bullish on shares of ALVR last night as a play on WiMax growth. Cramer believes that shares are cheap at $7.67 and have bottomed. Herb Greenberg joined Cramer last night to talk about CPST, TEX, MVL and LF. Greenberg said that he has called WMT and they do not know what Cramer was talking concerning CPST's micro turbine product being used at one of WMT's stores. Greenberg said that CPST supplies UTX, which "ended up selling that (micro turbine) to WMT." Greenberg was negative on TEX as he is still waiting for the company to restate its financials, does not see now as a good time to get back into shares of MVL and still does not like LF's FLY Pen. Commenting on a Wall Street Journal article, Cramer said "there's money to be made in heavily shorted stocks, but only the good ones." Cramer sees shares of LEND going lower as he does not like the companys loan business. He does not like shares of OVTI as he believes estimates are too high. Cramer sees RRGB & MSO's valuations as an issue and that CPN will "keep going lower and lower." He believes that shorts expect WGO to cut its numbers and that he would be short BZH and other homebuilders. Cramer did say that the shorts could be wrong in shares of EXP and he would do a "'mon back."

Market Comments: The market spiked to new yearly highs this morning. That type of strength is hard to sustain, especially on a Friday. Often the first time a market spikes to a new high, it then trails off as profit taking sets in and shorts press their bets to defend their levels. I suspect that is what is going on right now around SPX 1250. If and when this level gets pierced convincingly, I think that it will spark additional short covering.

Lots of mergers this morning (see above), which is always a plus. Also, strong earnings from SBUX and MRVL. The latter has chips stocks trading higher this morning. I will try to be back later with some stock picks for the week that look to be breaking out.

long TWX