Wednesday, January 25, 2006

Hump Day

Morning News of Note:
  • GOOG: Version of Google in China Won't Offer E-Mail or Blogs Google is bringing a special version of its powerful search engine to China, leaving behind two of its most popular features in the United States. In an effort to cope with China's increasingly pervasive Internet controls, Google said Tuesday that it would introduce a search engine here this week that excludes e-mail messaging and the ability to create blogs. (Full Story) NY Times
  • Retail in India: India Approves More Involvement By Foreign Stores Single-Brand Retailers Can Directly Invest to 51%; Critics Foresee Loss of Jobs India's cabinet approved foreign direct investment in its retail market by single-brand stores, in a first step toward opening the booming sector to outside competition. The move advances the current policy, under which foreign brands such as Reebok and Nike are permitted to do business in India only through franchises or wholesale trading. The new rules will allow foreign retailers selling their own brand to own 51% of their operations in India, as long as they sell only their own merchandise. (Full Story) WSJ
  • PIXR DIS: Pixar's Magic Touch Upstart Animation Shop Became the Industry's Benchmark When Apple Computer Inc. founder Steve Jobs bought what became Pixar Animation Studios for $10 million in 1986, it was a small animation-systems firm with a few alumni from Walt Disney Co., not the least of whom included creative director John A. Lasseter. Yesterday, Disney secured the return of Lasseter and his talented team as part of a $7.4 billion deal for Pixar aimed at jump-starting the media giant's animation empire. (Full Story) Washington Post
  • Bulls vs. Bears: Bulls 53.7 vs 57.3, Bears 25.3 vs 22.9, Correction 21 vs 19.8
  • Mad Money Summary: Cramer believes its time to add Danone (DA) to your portfolio, citing a USA Today article that states we are in a yogurt-eating renaissance due to the health benefits. He was not positive on Martek Biosciences (MATK), a company that produces the omega-3 acids that are added to foods including yogurt, saying the company has been a poor performer. He was also positive on Dean Foods (DF), which makes soy yogurt, but likes Danone better. Cramer then discussed an Internet play in India, India (REDF), referring to the company as the Yahoo! (YHOO) of India, or perhaps even the Google (GOOG) of India. Talking about Indian banking, Cramer said he would sell half of HDFC Bank (HDB) and ICICI Bank (IBN). Cramer was then joined by MarketWatch columnist Herb Greenberg, who was negative on Netflix (NFLX) because the company did not raise its pretax guidance and gave "irresponsible" guidance too far into the future. Greenberg was also negative on Energy Conversion Devices (ENER), which he called a "retread stock," and Rambus (RMBS), which he believes is overvalued. In the lightning Round, Cramer was bullish on AXP, GNSS, DO, BHP, RTP, TRST, LEND, NEOL, AMGN, EOG, MSA and PALM, and was bearish on IGT, AES, BLS, SUF, ADBL, UMPQ, IRBT, PTIE and LEA.

Market Comments: The market opened higher, but has since reversed into negative territory. Existing home sales declined -5.7%, while crude oil inventories came in higher than expected. That has oil trading a touch lower, and bond yields higher at 4.43%.

JNJ bowed out of the race to acquire GDT. The shares are trading higher, but this company sure is dealing with rough times. I think they will look to make another acquisition in the medical device area. Maybe a company like STJ or BCR.

The SPX rallied just above yesterday's high, and then fell a little below yesterday's low. This sets up for a potential outside day, which would have some negative implications for the near-term direction of the market. It's still early, so let's not jump the gun. Just something to keep on your radar.


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