Friday, December 09, 2005

No Fireworks from Intel

Morning News of Note:
  • GM: Heard on the Street... GMAC Auction Won't Be Simple Bank Bidders Face Reserve Issues, Private-Equity Firms Can't Pile Debt on GM's Finance Operation Price might be the least thorny issue as General Motors Corp. auctions off a controlling stake in its lucrative financing unit. Initial bids for a 51% stake in General Motors Acceptance Corp., one of the world's largest finance companies with about $314 billion in assets, are due next week, according to people familiar with the matter. (Full Story) WSJ
  • GOOG: Soul of a New Machine Enamored by Google, investors have been looking at Microsoft's attempts to fight back in the search business the way teenagers look at their parents' attempts to be hip: Dad just doesn't get it. Of course, once upon a time, Microsoft got it like nobody else. And in some respects, Google has latched on to the same disruptive trend that Microsoft itself rode to spectacular success. (Full Story) WSJ
  • SNE: Sony says PS3 still on track for spring launch Sony on Thursday said it remained on track to roll out its PlayStation 3 game console by spring 2006 despite industry speculation that the scheduled launch could face delays. The timing of the release of Sony's updated PlayStation console has become a matter of speculation in the $25 billion video game industry and among the studios, hardware makers and other companies looking to handicap the battle over next-generation DVD technology. (Full Story) CNET
  • Cable: Mobility Could Be Cable's Achilles' Heel ADD YET ANOTHER POTENTIAL PROBLEM to the cable guys' list of recent woes: They may be missing the boat on the biggest trend in technology – mobility. As early as next year, cellular voice providers such as Verizon Wireless will offer phones that transmit not only voice and Internet connections, but broadcast television programs (Full Story) BARRONS
  • TSCM: THESTREET'S SWEET SPOT SHARES of financial news service, have soared recently on takeover rumors. The company was founded by frantic hedge fund manager James Cramer, who turned over day-to-day control years ago and now stars as the host of the CNBC show "Mad Money." (Full Story) NY Post
  • Mad Money Summary: Cramer was positive on shares of Charles & Colvard (CTHR) last night on his show and sees the company as a way to play the low end diamond market. Cramer said that J.C. Penney (JCP) carries the synthetic Moissanite and it is being tested at Zale (ZLC) and Helzberg, which is owned by Berkshire Hathaway (BRK.A). Cramer does not see the company penetrating the high-end diamond market and recommends shares of Anglo American (AAUK), which owns 40% of De Beers. Responding to a question, Cramer said that the short position in Charles & Colvard, feels like a Hansen (HANS) to him as shorts "don't believe it can get better." Responding to a question, Cramer said that Tiffany (TIF) could be poised for a bounce back and he is "upgrading Tiffany right here, right now." Cramer said last night that an even more precious resource than diamonds is water and sees PowerShares Water Resources (PHO) as a "brilliant way to play the water shortage." Cramer said that PHO contains Suez (SZE) and Veolia Environment (VE) but he would not pay up for shares. Responding to questions, Cramer said that Suez is the way to play the water internationally and that Walter Industries' (WLT) plan to spin off its water business is a good idea. Cramer's "pick of the week" is (CRM). Cramer said that while shares are not cheap, they are worth the premium for its growth and that the company has never had an earnings miss. Nucor (NUE) CEO Daniel DiMicco joined Cramer last night by telephone to discuss steel imports impact on the company's pricing. Mr DiMicco said that he was "very, very confident in the future of his company." Cramer said that the recent downgrade by J.P. Morgan (JPM) was wrong and he believes shares will go higher. Cramer commented on news after the close, he said that Intel's (INTC) Mid-Quarter update was not impressive, he is not impressed with Electronic Arts (ERTS) acquisition of Jamdat Mobile (JMDT) and was positive on Chesapeake Energy (CHK) as the company finally "did their gigantic equity offering that I so feared."

Market Comments: The market hung in there yesterday, when it looked like it might start to rollover. This morning it has opened relatively flat. The Michigan consumer sentiment index came in better-than-expected. Oil is relatively unchanged around $60.40, and bond yields are hovering around 4.51%.

INTC is down a bit after the company didn't raise revenue guidance last night, as many investors thought they would. The stock traded below $25 after-hours, but is closer to $25.50 today, and was trading higher for a brief period.

Financials are mostly higher so far, while energy stocks are pulling back (despite the snow blanket that has fallen over the east). I don't expect any big moves on this Friday. More consolidation would be just fine. And recent leading stocks have held up very well.

long INTC

(Disclosure: Jordan Kahn has an outside contributor relationship with His market comments can be found on Street Insight)


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