Fed Removes 'Accomodation'

Morning News of Note:

• PALM: Analysts See Palm Rebound at Hand Palm Inc., which has gotten little love from Wall Street this year, may be poised to get a better shake from investors in 2006. Shares of the Sunnyvale, Calif., company have taken a beating as its once-flagship personal-digital-assistant business deteriorates and its faster growing Treo smart-phone line faces pressure from new entrants. (Full Story) WSJ
• WMT: Wal-Mart to Buy Sonae's Brazil Stores for $757 Mln Wal-Mart Stores Inc., the world's largest retailer, agreed to buy Sonae SGPS SA's retail business in Brazil for about $757 million, doubling the number of stores it operates in Latin America's largest economy. The acquisition will give Bentonville, Arkansas-based Wal-Mart an additional 140 outlets that generate annual revenue of 3.1 billion reais ($1.4 billion), according to a statement from Sonae, a Portuguese company. (Full Story) Bloomberg
• CERN: Cerner's Growth Has Been Healthy, But Its Accounting Could Be Ailing Investors usually dismiss worries about aggressive accounting when they involve a fast-growing company in an exploding sector. Instead, they should wonder why such a company would resort to aggressive accounting in the first place. In a year of lackluster stock performance, Cerner has stood out. Shares of the health-care software maker are up a spectacular 81%. Fund managers want exposure to this growth sector, and if they are asking questions about Cerner, it is mostly to themselves in the dead of night. (Full Story) WSJ
• Bulls/Bears: Bulls 58.8 vs 56.2, Bears 21.6 vs 21.9, Correction 19.6 vs 21
• Mad Money Summary: Cramer was positive on shares of Corning (GLW) last night on his show for its diesel emission filtration business. Cramer believes that the products used to help reduce diesel emissions will be a billion dollar market by 2008 as new and tougher diesel emission standards go into effect in 2007. Responding to a question, Cramer said that he likes Cummins (CMI) as a play on this year’s diesel truck replacement cycle. Cramer was also positive on shares of SiRF Technology (SIRF) as the company makes the chips for Garmin's (GRMN) GPS systems. Responding to a question on NovAtel (NGPS), Cramer said that this Holiday looks like a "GPS Christmas" and he believes that NovAtel and Garmin will work but his favorite is SiRF Technology. Herb Greenberg joined Cramer on his show last night to talk about FoxHollow Technologies (FOXH), Eli Lilly (LLY) and Merge Technologies (MRGE). Greenberg has raised a red flag on FoxHollow Tech after the CEO announced his sudden retirement. Greenberg said that the CEO "loved the company" and he believes there is more to the story. Greenberg also commented on Eli Lilly and said the company's increased 2006 guidance was based on lower growth in R&D spending, a lower tax rate and a stock buyback. Greenberg said that Eli Lilly is counting on its Cymbalta drug, which he sees as a "stalled product." Greenberg was also cautious on Merge Technologies after the company reported a better than expected quarter and raised guidance, he is cautious as 39% of the company's sales came from one customer. Cramer agreed with Greenberg's caution on all three stocks. Cramer was also bullish on shares of Franklin Resources (BEN) as the company could repatriate $2B next year, which would allow the company to make acquisitions. Cramer did say that he would wait for a pullback before buying shares as they have had a nice run

Market Comments: The market is mixed in early trading, with the SPX up and the Nazz slightly lower. Oil is slightly lower at $61.25, and interest rates are significantly lower at 4.47%.

The Fed met yesterday and raised the funds rate to 4.25% as expected. But then they threw the market a little nugget by removing the reference to the word 'accomodative' in their statement.

That was all the market needed to preceive a slight change at the Fed, who has maintained the exact same language for so long. The perceived change could be the first clue that there is some light at the end of the rate hike tunnel. The market rallied on this event.

long WMT