Monday Morning Musings

Morning News of Note:

• TWX: It's Time to Take It Apart My Case for Dividing the Media Giant There has been a lot of speculation about what Time Warner should do to increase its lagging stock price, and the media giant appears to be nearing a decision on the future of one of the Washington area's most significant enterprises: AOL. Although I played a key role in bringing AOL and Time Warner together six years ago, it's now my view that it would be best to "undo" the merger by splitting Time Warner into several independent companies and allowing AOL to set off on its own path. Here's why. (Full Story) Washington Post
• MSFT: Microsoft May Give Consumers A Share in Advertising Revenue Concept Is Aimed at Luring More Users to Search Site In New Challenge to Google Microsoft Corp. may up the ante in its competition with Google Inc. by sharing some of its online-advertising revenue with consumers who use its Internet search engine. The concept, described by Microsoft Chairman Bill Gates in a presentation last week in India, is being considered as a way to draw more users to Microsoft's search business. It would mark a significant change in how a major search engine operates. (Full Story) WSJ
• BR COP: Burlington Resources Rises on Report of Conoco Bid Burlington Resources Inc. shares rose after the Wall Street Journal reported ConocoPhillips may buy the natural gas producer for more than $30 billion in the industry's biggest takeover in four years. Burlington jumped as much as 10 percent, or 6.55 euros, to 70.50 euros ($83.81) on trading of 375 shares in Germany. ConocoPhillips is in advanced talks to buy Burlington, the Wall Street Journal reported, citing unidentified people familiar with the matter. (Full Story) Bloomberg
• AMGN: Co announces interim results from an open-label study showing that long-term administration of its investigational therapy AMG 531 was generally well-tolerated and stimulated platelet production in patients with immune thrombocytopenic purpura. Overall, 85% of patients in the study achieved a platelet response, defined as doubling of the baseline platelet count and at least 50,000 platelets per microliter of blood.
• Mad Money Summary: Jim Cramer was positive on shares of Alon USA Energy (ALJ) Friday on his show. He believes the highway bill passed by Congress will help fuel construction, causing the asphalt market to be "en Fuego." Cramer believes shares of Alon could go to $26, where he would be a seller. Responding to a question, Cramer said that Florida Rock (FRK) and Vulcan Materials (VMC) are just OK for a pure play on asphalt. Responding to another question on Cemex (CX), Cramer said there are rules limiting the amount of cement that can be imported into the US but he believes they will eventually be relaxed. Cramer was also bullish on shares of Williams (WMB) and sees the company as the way to play the rise in natural gas prices. Cramer said that Williams has permission to drill up to four times as many wells on one of its prime natural gas properties and one analyst sees that adding between $1.25-$2.50 to Williams share price. Cramer also noted that Dynegy (DYN) is starting to pull things together. Cramer added Kubota (KUB) as the fifth stock in his "seven stock samurai." The four that are already in the "seven stock samurai" are Toyota Motor (TM), Honda Motor (HM), Mitsubishi UFJ Financial Group (MTU) and Kirin Brewery (KNBWY). Garmin's (GRMN) CFO Kevin Rauckman joined Cramer to talk about the company's product mix and outlook. Cramer believes that Garmin's Tomtom is the "single hottest gadget being sold for Christmas" and he believes that "Garmin is being kept down by short-sellers who disagree with me, and I think they're going to get their heads cut off."

Market Comments: The market opened on a positive note this morning, despite oil trading back above $60. COP is in talks to buy BR, which has the stock under pressure. Pretty much all sectors are higher so far, led by energy stocks and semis. Housing stocks are getting a bounce also, as bond yields are lower at 4.53%.

Speaking of bond yields, the Fed meets tomorrow and will once again bump the fed funds rate higher (4.25%). Even though the outcome of the meeting is pretty much a done deal, there is a lot of debate about what the FOMC will say in its accompanying statement. Due to that uncertainty, I doubt stocks will stage too big of a rally this morning.

WMT maintained its sales forecast at 2-4%. And a positive clinical report on ELOS has the stock moving to new highs.

long ELOS, MSFT, TWX, WMT