Consumer Sentiment Up, Energy and Yields Down

Morning News of Note:

• Holiday Retail: U.S. Retailers May Meet Holiday Sales Forecasts After Discounts U.S. retailers may meet sales forecasts for the holidays as they offer discounts and extend hours in the final shopping days before Christmas. Saks Inc.'s Saks Fifth Avenue is reducing prices on some items by as much as 60 percent. Federated Department Stores Inc.'s Lord & Taylor is selling cashmere-lined leather gloves for $39.99 and $46.99, marked down from $58 and $68 and discounting sale merchandise as much as 40 percent more. (Full Story) Bloomberg
• BBY: BBY acquires Pacific Sales Kitchen and Bath Centers for $410M: BBY sees the deal adding nominally to 2H:FY07 earnings
• VZ: Verizon plans to offer mobile music downloads Verizon Wireless is expected to introduce a music download service next month that will let subscribers purchase music wirelessly over their mobile phones and transfer songs between their phones and Windows PCs, CNET News.com has learned. The new service, called V Cast Music, is scheduled to become available on Jan. 16 at Circuit City, Verizon Wireless stores and Verizon's Web site, according to documents seen by CNET News.com. It would allow customers to browse, preview, download and play music from a mobile handset and a computer. (Full Story) CNET
• ABS CVS: Albertson's Ends Sale Talks, May Divest Outlets Albertson's Inc., the second-largest U.S. grocery chain, ended talks to sell the company and may shed underperforming stores to stem market-share losses to Wal-Mart Stores Inc. Negotiations with a group of investors including Supervalu Inc. and CVS Corp. concluded because ``we did not get a bid we could accept,'' Albertson's spokeswoman Shannon Bennett said yesterday. Albertson's is in discussions about selling some assets, the Boise, Idaho-based company said in a statement (Full Story) Bloomberg
• Fund Flows: equity funds rptd outflows ($5.8bln), ex ETFs inflows $1.3bln; ETF flows: EFA inflows $289m, EZU inflows $157m, IWF inflows $150m, EEM inflows $146m, IWD inflows $144m, QQQQ inflows $140m, SPY outflows ($5.02bln, IWM outlfows ($1.64bln); ex ETFs real estate funds rpted outflows ($12m) for 13th consecutive week; tech funds rptd lgst net outflows ($200m) since 3/9/05; bond funds rptd inflows $90m, MBS fund outflows ($301m), HY outflows ($161m), money market funds rptd inflows $18.23bln -- AMG Data
• Mad Money Summary: Cramer was positive on pulp last night as he believes that a paper rally is coming. Cramer said that International Paper (IP) was not the way to play pulp and he would go with Brazil instead of America. Cramer sees Votorantim Celulose (VCP) as the stock to play for pulp. Cramer said that shares were down for the year due to bad earnings and that Votorantim was a broken stock, not a broken company. Cramer was positive on shares of ENGlobal (ENG) and sees the stock as a way to make money off of oil refining. Cramer said that ENGlobals engineering division maintains and constructs refineries and makes machinery for oil refineries as well. Cramer sees ENGlobal as a pure play for refinery infrastructure in America. Responding to a question on Halliburton (HAL), Cramer said the company will likely split into two parts and he would buy the engineering division and sell the oil services unit. Herb Greenberg was on Cramer's show last night to talk about ev3 (EVVV). Greenberg said that the only thing wrong with the company was its 30% purchase of Micro Therapeutics (MITX). Cramer commented on insider buying and said that Domino's Pizza's CFO David Mounts has purchased 10,000 shares in two days and that ITT Industries (ITT) CFO George Minnich has purchased 2,000 shares. Cramer believes that both of the companies’ shares will likely go up. Cramer summed his show up by discussing potential buying opportunities in Bausch & Lomb (BOL) and Wal-Mart (WMT). Cramer said that Bausch & Lomb announced it will have to restate earnings and that Wal-Mart announced it lost a labor case in California, Cramer does not believe that this will have an impact on numbers

Market Comments: The Michigan Sentiment index was revised to 91.5 vs. 89.0 consensus. Energy prices continue to drop, and this is pressuring oil and gas stocks. Bond yields are also notably lower, with the 10-year now at 4.40%. Both of these should be viewed as positives for the stock market.

Credit Suisse named KSS its top pick for 2006. The upgrade has the stock breaking above its recent downtrend. Yesterday, JMP Securities upped their target on GOOG to $575. This morning, the firm ups its target on MNST to $62. I'm long MNST, but that's wishful thinking.

Most of the financial markets (except stocks) close early today, so look for things to slow down to a crawl as we head into the holiday weekend.

long KSS, MNST