Morning Look

Morning News of Note:

• Holiday Shopping: A Solid but Not Spectacular Finish for Holiday Spending Visa USA said yesterday that purchases using its credit cards rose 21 percent in the week before Christmas, a sharp increase that suggested a solid - though by no means extraordinary - end to the holiday shopping season. Visa cardholders spent $13.1 billion during the week that ended Sunday, largely at electronics and home furnishing retailers, the credit and debit card company said. Online spending, a separate category, rose 48.4 percent, to $2.7 billion. (Full Story) NY Times
• FPDs: Wave of Price Cutting Hits Flat-Panel TV Sets Sales Are Seen Doubling, But Aggressive Marketing Could Shrink Profit Cycle Even as flat-panel television sets come into their own, manufacturers and retailers are cutting prices, leaving some to wonder if they are giving away the store. In Japan this year, flat-panel TV sets surpassed ordinary tube TVs in unit sales for the first time. In the past two months, they have become a dominant holiday sales item in North America and Europe. (Full Story) WSJ
• LIN: Linens 'N Things-LIN clears hurdles for leveraged buyout-TheDeal.com. Linens 'N Things (LIN) said yesterday that it has cleared two "crucial" hurdles for the proposed $1.3B leveraged buyout by private equity firm Apollo Management LP. The company will have a shareholder vote on January 30, 2006 for shareholders of record on December 15, 2005.
• Clinical Trials: Medical Journal: Drug Studies Hide Key Data Several major pharmaceutical companies are withholding important details about clinical drug trials, despite urging from federal regulators and medical-journal editors to be more forthcoming, according to a study published in this week's New England Journal of Medicine. The study says that companies including Merck & Co., Pfizer Inc., and GlaxoSmithKline PLC are obscuring basic information -- including the names of some drugs under study -- in reporting on trials of drugs to treat serious or life-threatening diseases. (Full Story) WSJ
• JNJ GDT: JNJ & GDT say proposed merger statement now effective. JNJ & GDT announced that the Securities and Exchange Commission has declared effective the S-4 Registration Statement concerning the amended and restated agreement and plan of merger between them. The merger is subject to the approval of Guidant shareholders, who will vote at a special meeting in Indianapolis, Indiana, on January 31, 2006

Market Comments: Quite open for the market. Existing home sales came in slightly below estimates, while the Chicago PMI came in above (61.5 vs. 60.0 consensus).

Not a ton of newsflow otherwise. The insider buying continues at CHK, as the CEO is acquiring a nice size position. ELOS continues to pull back, offering an attractive entry point (imo).

I would not be surprised to see the market rally a bit here, just as most have given up on the idea of any end of year rally. I know that most people did not like to hear me make mention of a possible correction in the near future, but I have to call it like I see it. With leadership in the market waning, and bearish sentiment dwindling, the odds of said correction are simply higher than they were before. Remember, it's about staying flexible.

long ELOS, JNJ